Russia

Russia 090326Basic Political Developments

President Dmitry Medvedev to meet OIC Secretary-General March 27

Pakistani FM leaves for Russia to attend Afghanistan moot

CIS finance ministers to agree positions for G-20 summit in London - On March 31, CIS finance ministers will meet in Moscow to agree common positions for the summit of G-20 in London.

Russia to contribute $7.5 bln to Eurasec anti-crisis fund

Medvedev to Visit Germany

Timoshenko hopes to continue talks with Russia on 5-bln-dlr loan

Russia may become Ukraine's creditor Tymoshenko

AZERBAIJAN, IRAN AND RUSSIA TO SET UP RAILWAY COMPANY

Russia hails Russian Language Year in China - Russian Deputy Prime Minister Alexander Zhukov is to visit China from Wednesday through Friday and will attend the opening ceremony of the Year of Russian Language in China.

Russian diplomat: Russia rules out its military presence in Afghanistan

AFGHANISTAN: COULD RUSSIAN TROOPS RETURN TO KABUL? - Russia will assist international military forces operating in Afghanistan, but has no intention of sending its own troops to the war torn state, Russian Deputy Foreign Minister Alexei Borodavkin has said.

Russian Foreign Minister welcomes Obama review - Russian Foreign Minister Sergei Lavrov has welcomed a U.S. review of relations with Moscow, but reiterated hostility on Thursday toward NATO expanding into the former Soviet Union.

Transcript: FT Interview with Sergei Lavrov

Another Russian-Ukrainian gas row looming?

"Combat Aviation" business-division to be formed within UAC in three years

Russian military industry cutting civilian output

New ISS crew to lift off from Baikonur Thursday

American-Russian crew ready to blast off to ISS

UPDATE 1-U.S. software mogul set to roar into space history

Ready for lift-off on the Kazakh steppe - Despite the freezing wind of the Central Asian steppe, photographers have been trying to get the best shots of a Soyuz spacecraft being slowly transported by rail to the launch site.

Putins PR Stunt - Vladimir Putin Will Talk and the Parliament Will Listen, but for Real, or for Show?

The Strange Ties between Semion Mogilevich and Vladimir Putin

Foreign forces attempt to destabilize situation in Russia Gryzlov

Chechnya counter-terrorism operation could be discussed in March

Budanov may be questioned in connection with killings, abductions in Chechnya - Investigations Committee

Kremlin denies end-date of Chechnya counter-terrorism operation

Chechen society consolidated in fighting terrorism, extremism Kadyrov

Russias GRU special-task troops run into resistance in Kabardino-Balkar republic

Bashkir Leader Decries Moscows Instrumental Approach to Federalism

Murmansk Duma votes for Dmitry Dmitriyenko as new governor

Bogdanov Joining Sochi Mayor Race - Bogdanov, 39, is the former head of the now-defunct Democratic Party of Russia, which was widely seen as a Kremlin-controlled project to draw votes away from actual opposition candidates and give voters a tame liberal option.

Fourteen dead as bus, truck collide in central Russia

14 die in Russian bus accident: ministry

Unions Urge Putin to Raise Wages

Moscow Uncertain How to React to New Russian Separatism

Ministry Tries to Make Gentlemen of Cops - The new code, distributed to senior Interior Ministry officials at an assembly last month, spells out ethical norms for police officers -- prohibiting them from, among other things, drinking at work, gambling, making crude jokes, talking on cell phones on public transportation and smoking in public.

National Economic Trends

State Will Double Its Issue Of Bonds

Russia's international reserves up $9.2 bln to $385.3 bln over week

Ivanov Wants Reserves Used Wisely

Trade Surplus Seen Exceeding $50Bln

Domestic Deposits Rise 1.5%

Govt to work bank proposals into crisis program within days Kudrin

RBC: Top 100 banks saved from bankruptcy

Business, Energy or Environmental regulations or discussions

OGK-5 Sees Net Profits Up 11%

UPDATE 1-Russia's Mechel to place preferred shares from April

MMK boosts RAS revenue 19% in 2008

Norilsk Expects 2009 Net Profit of $1 Billion, Vedomosti Says

Rusal to Slash Costs, Output - Russian Aluminum Titan Seeks to Quell Fears Over Debt

Creditor Feeding-Frenzy Around Rusal Wreck Who Bites First Gets Cash

Severstal, GAZ intend to agree on suits in amount of 400mln rubles

UralChem moves payment of $333 mln in loans to 2010-2012

UAC Will Help Leasing Unit Pay Back Bonds After Default

Carrefour to open 1st Moscow store in May sources

Tata Tea to buy stake in Russian firm - Tata Tea Ltd's overseas unit and the European Bank for Reconstruction and Development (EBRD) will acquire 51 percent in a Russian firm Grand, the two firms said in separate statements.

NBC Uni taps head of Russian channels

Russian Government Agrees to Finance Alrosa Diamond Output

State to support Russia's diamond monopoly

Foreign carmakers commission new assembly plants in Russia

BMW to Start Producing X5, X6 Models in Russia as Demand Rises

Activity in the Oil and Gas sector (including regulatory)

Gas Forum Timeline - The Gas Exporting Countries Forum, a loose group of gas suppliers including Russia, Iran and Qatar, wants to re-register as a more formal organization with a new charter by August, a government source said Wednesday.

Oil Exploration Investment Falls 16%

Russias subsoil regulator may propose new tax breaks for companies producing oil from depleted fields and low-flow wells.

Russia eyes new Turkmenistan gas pact

Russian, Turkmen Leaders Postpone Pipeline Accord

TURKMEN-RUSSIAN GAS TALKS DIFFICULT -- SOURCE

Shtokman players set for cash hunt

No delays at Shtokman

Halliburton Awarded $100 Million Multiple Services Contract in Russia

TNK-BP: In Anticipation of Profit

Gazprom

Russia threat over pipe plan - Russia's Gazprom warned Ukraine against implementing plans to modernise its pipelines without consulting Moscow, saying any such action would immediately affect gas supplies to Europe.

Russia's Gazprom warns Ukraine over pipeline plan - Gazprom, Russia's gas export monopoly, said late on Wednesday that any changes to Ukraine's pipelines, built as part of a single Soviet-era system also including Russia, would need the company's approval or risk disrupting gas production and output across Eurasia.

GAZPROM INCREASES STAKE IN ARMENIAN GAS DISTRIBUTION

Gazprom, Japans energy agency signed an agreement on scientific and technical cooperation

On working meeting between Alexey Miller and Toru Ishida

Regular meeting of Gazprom Board of Directors to take place March 31

Gazprom Space Systems was selected as the Corporate Teleport Operator of the Year

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Full Text ArticlesBasic Political Developments

President Dmitry Medvedev to meet OIC Secretary-General March 27

http://www.itar-tass.com/eng/level2.html?NewsID=13718942

MOSCOW, March 25 (Itar-Tass) -- President Dmitry Medvedev will meet with Organisation of the Islamic Conference Secretary-General Ekmeleddin Ihsanoglu on March 27.

Ihsanoglu will be in Moscow to attend a special ministerial conference on Afghanistan organised by the Shanghai Cooperation Organisation, the presidential press service said on Wednesday.

Pakistani FM leaves for Russia to attend Afghanistan moot

http://www.dailytimes.com.pk/default.asp?page=2009\03\26\story_26-3-2009_pg7_17

Staff Report

ISLAMABAD: Foreign Minister Shah Mehmood Qureshi left for Russia on Wednesday to attend the Shanghai Cooperation Organisation (SCO) conference on Afghanistan, scheduled for tomorrow (Friday) in Moscow, according to diplomatic sources.

The Moscow meeting would discuss the situation in Afghanistan and its influence on neighbouring states which are increasingly being threatened by the instability in the war-torn country and the Taliban.

SCO members and observer nations are also expected to urge the international community to boost joint efforts to counter terrorism, check illegal drug trade and trans-border crimes. NATO Secretary General Jaap de Hoop Scheffer will also attend the Moscow conference.

Qureshi would hold important bilateral meetings with his counterparts from various countries, including Afghanistan. In accordance with the resolution of the Council of Shanghai Cooperation Organization, heads of member countries dedicated to Afghanistan are to attend the conference.

CIS finance ministers to agree positions for G-20 summit in London

http://capital-en.trend.az/economy/macro/1445506.html

26.03.09 12:47

Azerbaijan, Baku, March 26 /Trend Capital, E.Ostapenko/

On March 31, CIS finance ministers will meet in Moscow to agree common positions for the summit of G-20 in London.

The summit of G-20 will take place in London on April 2, the CIS Executive Committee reported.

Countries will also review issues related to social and economic state of CIS countries and measures to overcome the global financial crisis.

This is not the first meeting of CIS finance ministers. The meeting of CIS finance ministers was founded by the decision of the CIS presidents to study the situation and make anti crisis measures on Oct. 10, 2008. The first meeting was held on Oct. 21.

All CIS countries were instructed to develop proposals to overcome financial crisis. The proposals were reviewed by the Intergovernmental Monitory Committee in December 2008, and later by the CIS Economic Council.

The CIS countries share of views on this issue permanently. Countries support the financial and banking system, guaranteeing preservation of money, placed by citizens in accounts and bank deposits, expansion of the use of national currencies in mutual trade, providing financial assistance to large enterprises, support the real sector of the economy and the important social objectives to prevent mass unemployment.

Russia to contribute $7.5 bln to Eurasec anti-crisis fund

http://en.rian.ru/russia/20090325/120736833.html

UN, March 25 (RIA Novosti) - Russia will contribute $7.5 billion to the anti-crisis fund of the Eurasian Economic Community (Eurasec), a senior diplomat said on Wednesday.

"Despite the ongoing financial and economic crisis, which has also affected Russia, we confirm our commitment to provide assistance to developing nations," First Deputy Foreign Minister Andrei Denisov said.

Russian President Dmitry Medvedev said in early February that Moscow would run the anti-crisis fund that Eurasec member states agreed to set up at a recent summit in Moscow.

The $10 billion fund is being established to counter problems in economies and financial markets of Eurasec member states.

The Eurasian Economic Community, established in 2000, comprises Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan. Three other former Soviet republics - Armenia, Moldova and Ukraine - have observer status.

Medvedev to Visit Germany

http://www.themoscowtimes.com/article/1010/42/375659.htm

BERLIN -- President Dmitry Medvedev will meet German Chancellor Angela Merkel in Berlin next week, the German government said Wednesday.Medvedev will visit the German capital next Tuesday, German government spokesman Thomas Steg said.Steg said the two leaders will use the meeting to help prepare for the April 2 summit of leaders from the Group of 20 in London on the global financial crisis.Medvedev also will meet with representatives of German business, Steg said. (AP)

Timoshenko hopes to continue talks with Russia on 5-bln-dlr loan

http://www.itar-tass.com/eng/level2.html?NewsID=13720453&PageNum=0

TOKYO, March 26 (Itar-Tass) - Ukrainian Prime Minister Yulia Timoshenko expects that she could continue talks with Russia and other countries on loans to cover the state budget deficit after getting a second credit tranche from the International Monetary Fund.

After settling the issue of the second IMF tranche, we can begin bilateral negotiations on the financing of our budget, including with Russia, Timoshenko said at a symposium here in reply to a query about prospects to get a five-billion-dollar loan from Russia. Diplomats, business people, reporters and experts took part in the symposium.

Earlier, the Ukrainian prime minister said she hoped to get a credit tranche of about two billion dollars from the IMF within the next few weeks. However, for that the Ukrainian parliament must first approve a package of measures on fight against the crisis and some amendments to the legislation.

Russia may become Ukraine's creditor Tymoshenko

http://www.interfax.com/3/482244/news.aspx

TOKYO. March 26 (Interfax) - Russia is a possible creditor for

Ukraine, according to Ukrainian Prime Minister Yulia Tymoshenko.

Speaking at a forum of the Japanese business and political elite

held in Tokyo, Tymoshenko named Russia as being among the seven

countries which Ukraine has invited to help with it with liquidating the

Ukrainian budget deficit.

This help could be provided by buying out "Ukraine's securities,"

Tymoshenko said.

Tymoshenko also said she is hoping that Ukraine can start

concluding bilateral agreements after it receives the second tranche of

an IMF loan.

AZERBAIJAN, IRAN AND RUSSIA TO SET UP RAILWAY COMPANY

http://www.eurasianet.org/departments/news/articles/eav032509c.shtml

3/25/09

Azerbaijan, Iran and Russia have decided on construction of a 375-kilometer-long railroad connecting the Azerbaijani border city of Astara with the Iranian city of Kazvin, Russian Railway representatives announced March 26.

A joint enterprise uniting the Azerbaijani, Iranian and Russian railway administrations will be set up shortly to build the railway link. All three sides will have an equal stake in the company, Russian Railway executive Sergei Stolyarov stated in comments appearing in the companys newspaper, Gudok. Stolyarov put the project cost at more than $200 million.

The project ties in with the Azerbaijani governments ongoing initiative to promote Azerbaijan as a transportation hub. The link will serve as part of the North-South Transport Corridor, a project aimed at creating a railway connection from Europe and Russia to India and Central Asia via Azerbaijan and Iran.

Russia hails Russian Language Year in China

http://news.xinhuanet.com/english/2009-03/26/content_11074716.htm

2009-03-26 09:07:42

by Xinhua writers Hai Yang, Gao Fan

MOSCOW, March 26 (Xinhua) -- Russian Deputy Prime Minister Alexander Zhukov is to visit China from Wednesday through Friday and will attend the opening ceremony of the Year of Russian Language in China.

Russia has shown great interest in the upcoming event and is confident that the Year of Russian Language in China will be a success.

This year marks the 60th anniversary of the establishment of diplomatic relations between the two countries, Russia highly appreciates the mature and firm bilateral ties, Zhukov told local media before leaving for Beijing.

Russia and China can be regarded as exemplars of friendly neighborhood and mutual respect in the international community, Zhukov said. He said that such friendship are a key factor for the construction of a fair, harmonious international order.

To hold events such as language years in both countries will not only help maintain the high level of mutual cooperation, but also promote it, he said.

Andrei Nesterenko, Russian Foreign Ministry spokesman, recently described the upcoming event as "very important." Nesterenko said it would not only enhance the bilateral relations, but also further the understanding between the two peoples, especially between their youths.

Within the framework of the Year of Russian Language, the two countries will stage a series of activities in the field of humanities. Those activities will include inviting children traumatized by the devastating earthquake in China's Wenchuan to Russian resorts, conducting knowledge contests on the Russian language for Chinese students, and launching Russian language centers in Chinese universities, Nesterenko said.

The Year of Russian Language has attracted attention from major Russian media such as the Voice of Russia, Itar-Tass, the Moskovski Komsomolez daily and state television.

The media's wide coverage of the language year event will help boost it among top leaders and among the people of both countries, said Aleksey Efimov, chief editor of the Chinese channel of the RIA Novosti website.

He believes that the event will greatly enhance mutual understanding and communications between China and Russia.

Vladimir Kurilov, president of Far Eastern State University, told Xinhua that Russia and China share a long history of friendly exchanges, and the two will grow closer as they get to know each other's languages.

"I believe that the language theme years will not be limited to education and humanities. The events will inject new vigor into the all-round cooperation between the two sides and the two peoples will get closer on the path of friendship," Kurilov said.

Chinese President Hu Jintao and his Russian counterpart Dmitry Medvedev announced the start of the Years of the Chinese and Russian Languages on the last day of 2008. China will launch the Year of Russian Language this year, while Russia will stage the Year of Chinese Language in 2010.

Russian diplomat: Russia rules out its military presence in Afghanistan

http://www.interfax.com/17/482022/Interview.aspx

Russia does not intend to resume its military presence in Afghanistan, but it will assist the international military forces deployed in that country, said Russian Deputy Foreign Minister Alexei Borodavkin in an interview with Interfax

"Russian military presence in Afghanistan is impossible. There is a consensus in Russian society on this issue, taking into account the historical record," Borodavkin said.

Talking about the International Security Assistance Force (ISAF) in Afghanistan, Borodavkin said that, "in the current conditions, these troops in fact remain a force curbing the terrorist threat."

"Their presence at this moment meets both interests of Afghanistan itself, as well as regional and in a wider context international security. Proceeding from this understanding, Russia intends to continue to provide political support to the international forces stationed in Afghanistan under a UN Security Council resolution," he said.

Peace and stability in Afghanistan meet long-term interests of both Russia and the NATO member-states, which make up a majority at the ISAF, he said.

"And vice versa, a failure of the ISAF's operation in Afghanistan and a buildup of the conflict potential near our southern borders would pose a threat to the interests of Russia's national security. This is exactly why we welcome interaction on Afghan affairs within the Russia-NATO Council format," he said.

Moscow views as unacceptable "indiscriminate actions by foreign military contingents inflicting damage on the civilian population," Borodavkin said also.

"Such excesses should be avoided in the future," he said.

At the same time Borodavkin said that Russia could consider a request to assist in the formation of the Afghanistan Armed Forces.

"As for our possible assistance in the formation of the Afghan Armed Forces, we might consider such requests from the Afghan government," Borodavkin said..

Russia could sell its trucks to Afghanistan, for instance, he said.

As for international cooperation on Afghanistan, there is a need to coordinate efforts in fighting against drug trafficking, he said.

"It would be useful for NATO to coordinate its efforts in Afghanistan with the CSTO [Collective Security Treaty Organization] in combating drug trafficking along the perimeter of its northern borders," the Russian diplomat said.

"[Drug trafficking] is one of the major Afghan problems, which spills out far beyond its borders, and ignoring it would be short-sighted, to say the least," he said.

"In our view, international military forces must be more active in fighting against drug criminals," Borodavkin said.

He said also that Russia was not against Kabul's contacts with the moderate wing of the Taliban if Kabul sees fit to seek such contacts.

"If the Afghan leadership sees fit to establish contacts with the moderate wing of the Taliban, Russia will not object to this on condition that they lay down their arms, recognize the Afghan constitution and government, and denounce any ties with Al Qaeda," Borodavkin told Interfax.

At the same time, Moscow believes it is important to stick to a clear and principled position with regard to the leaders of terrorist and extremist organizations acting in Afghanistan, Borodavkin said. "We are categorically against any agreements with them," he said.

Russian diplomat also told Interfax that so far no applications had been received from NATO member states for the transit of military cargo to Afghanistan via Russia.

"We have signed a number of bilateral inter-governmental agreements setting out easier terms for military gear and personnel transit to Afghanistan through Russia. Such agreements were signed with Germany, France and Spain. So far we have not received any application for this type of transportation from these countries," he said.

In April 2008, Russia and NATO also signed an agreement for the transit of non-military cargo to Afghanistan for the alliance forces and its member states, as well as all the countries which sent their troops to the country as part of the International Security Assistance Force (ISAF), Borodavkin recalled.

"According to the Russian regulations, ISAF's non-military cargo will be transited by Russia as commercial cargo in accordance with international and Russian customs regulations," he said.

Borodavkin said also that the authorities in Moscow hoped that an upcoming international conference on Afghanistan under the aegis of the Shanghai Cooperation Organization (SCO) will help bring stability to the country.

"The agenda of the conference will focus on searching for more effective ways to jointly counter the terrorist and drug threats. Naturally, its results, which its organizers and participants hope to receive, will objectively contribute to efforts to stabilize the situation in Afghanistan," Borodavkin said.

The conference is expected to take place in Moscow on Friday, March 27.

The fight against terrorism and drug trafficking is among the priorities on the SCO's agenda and the organization's dialogue with Afghanistan, the high-ranking diplomat said.

"Like the whole of the international community, states in Central and South Asia are seriously concerned over the threats posed by terrorism, drug trafficking and cross-border crime," he said.

The event in Moscow will involve SCO member-countries (Russia, Kazakhstan, China, Kyrgyzstan, Tajikistan and Uzbekistan), its observer-nations (India, Iran, Mongolia and Pakistan), Afghanistan, Turkmenistan, Turkey, and G8 member-states (the UK, Germany, Italy, Canada, the U.S., France and Japan), he said.

"Authoritative international organizations and associations have been invited to take part in the conference. They include the UN and its agencies, the CIS, the CSTO, the EU, NATO, the OSCE, and OIC," Borodavkin said, adding that UN Secretary General Ban Ki-moon will come to Moscow as well.

The SCO member-countries and Afghanistan plan to make a statement at the conference addressing the fight against terrorism, drug trafficking and organized crime, he said.

"It will also deal with our fundamental approaches to measures being taken by the international community and countries in various regions to neutralize these threats," the deputy foreign minister said.

An action plan outlining a wide variety of specific measures will be announced as well, Borodavkin said. "They include plans to step up the activities of the consultative mechanism of the SCO member-countries' anti-drug agency chiefs and to give it a bigger say, plans to reinforce the legal foundation for cooperation in the combat against the illegal turnover of drugs, and the idea of conducting joint anti-drug operations," the high-ranking diplomat said.

"The results of the conference will be summarized in a declaration, which will reflect the views of all participants in this forum regarding the development and improvement of multilateral cooperation to counter the threats of terrorism, drug trafficking and cross-border crime," he added.

AFGHANISTAN: COULD RUSSIAN TROOPS RETURN TO KABUL?

http://www.eurasianet.org/departments/news/articles/eav032509d.shtml

3/25/09

Russia will assist international military forces operating in Afghanistan, but has no intention of sending its own troops to the war torn state, Russian Deputy Foreign Minister Alexei Borodavkin has said.

Borodavkin said the International Security Assistance Force (ISAF) is playing a vital role in Afghanistan, but said it would be "impossible" for Russia to join the effort despite its vested interest in seeing the mission succeed. However, he left open the possibility that Russia could dispatch military advisers to help train Afghan military units.

"A Russian military presence in Afghanistan is impossible. There is a consensus in Russian society on this issue, taking into account the historical record," Borodavkin said in an interview with Russian news agency Interfax March 25. "As for our possible assistance in the formation of the Afghan Armed Forces, we might consider such requests from the Afghan government."

A Shanghai Cooperation Organization summit on Afghanistan will be held in Moscow on March 27. Both the US and Iran are expected to attend along with representatives from the European Union, NATO and the United Nations.

"The agenda of the conference will focus on searching for more effective ways to jointly counter the terrorist and drug threats," Borodavkin said.

Russian Foreign Minister welcomes Obama review

http://www.reuters.com/article/joeBiden/idUSTRE52P08220090326

Wed Mar 25, 2009 9:09pm EDT

LONDON (Reuters) - Russian Foreign Minister Sergei Lavrov has welcomed a U.S. review of relations with Moscow, but reiterated hostility on Thursday toward NATO expanding into the former Soviet Union.

"When we hear signals from Washington that they want to 'reset' our relations ... we welcome this," Lavrov told the Financial Times in an interview.

He was referring to U.S. Vice President Joe Biden's comments that the United States wanted to "hit the reset button" with Moscow.

However, he said Russia remains firmly opposed to NATO expansion into the former Soviet Union.

"Why this drive to mark geopolitical space which some people believed became vacant? ... It's moving the dividing lines which we all agreed should be eliminated," he said.

He also described U.S. President Barack Obama's video message to Iran promoting dialogue as a "very welcome step."

Lavrov said the global financial crisis needs to be dealt with by everyone following the "ground rules," adding that this will help rebuild international trust.

"We expect that collective efforts in the financial and economic sphere would give a more pragmatic, and respectively, more realistic reference frame.

"Let us remember that focusing common efforts on the real tasks of crisis recovery will help rebuild trust in the sphere of military policy, too, relieving the negative impact of unilateral ideology-driven projects and the inertia of 'zero sum games'."

(Reporting by Ben Deighton, editing by Michael Roddy)

Transcript: FT Interview with Sergei Lavrov

http://www.ft.com/cms/s/0/d32b732e-1920-11de-9d34-0000779fd2ac.html

Published: March 25 2009 18:13 | Last updated: March 25 2009 18:13

FT I know youve addressed in great detail the issue of US/Russian relations, but could you just in a minute tell us, is there a reason for hope now that relations between the United States and Russia will improve, and if so, why?

SL Well, there is always a place for hope, and certainly, when we hear signals from Washington that they want to reset our relations, meaning that they want constructive engagement and cooperation and partnership on so many issues which we really can usefully cooperate on, we welcome this. And we sense this not only in statements from Washington, but also in the exchange of messages between President Medvedev and President Obama, and also, during my first encounter with Secretary [of State Hillary] Clinton in Geneva, and we are getting ready for the first face to face meeting of our two presidents in London on 1st April.

As with Secretary Clinton, we will try to set the agenda of that meeting in a way which would allow the two presidents to give instructions to their respective teams on how to proceed with priority issues, be it strategic plans, negotiations, be it counter-terrorism, non-proliferation. Of course, speaking of strategic stability, we also took very good note of the decision of the administration to take a look into the missile defence situation. But practically on any problematic issue which we inherited from the past eight years, I understand the Obama administration is undertaking a review which we welcome.

A second opinion never hurts, not only in medicine, but also in politics. And we would like to translate those signals which both Washington and Moscow have been sending into practical work. Hopefully, this will be the outcome of the London meeting.

FT One area of disagreement in the past has been the nature of Russias relations with its immediate neighbours. How do you think the tensions in this area can be reduced?

SL Well, we dont want any disagreements in this or any other area. We naturally have a very long history of relations with these countries and these peoples. We have during centuries enriched each other in so many ways; culturally, economically, demographically I would say. And so many links exist at the moment, including from the once common economic system, infrastructure system, which is very much in place and not to use the advantages of which would be really not very smart. And down to family relations, there are so many mixed marriages and families who are composed of different nationalities who used to live in the Soviet Union and then they found themselves overnight living in a different country.

Of course, this doesnt mean that their family relations stopped. So all this explains why we certainly believe that our relations with these countries could be described as privileged relations. The word that frightened so many people, but which reflects only that it is a privileged partnership. We have special interests going deep into centuries in these countries, and they have the same deep interests in the Russian Federation, economically from the point of view of humanitarian needs of the population. Then there are links across millions of migrant workers work in Russia from these republics. So there should be no misunderstanding of what is going on in this space.

We certainly understand the legitimate interests of non regional players; Central Asia, in the Caucasus, those are places where hydrocarbons are produced, where hydrocarbons are being transported. Those are areas which are very crucial for effective fight against terrorism, drug trafficking, organised crime. So all these are very legitimate interests, because the consequences are felt well beyond this territory, in Europe and in the United States.

What we want is that these legitimate interests can be promoted openly, with full respect of the interests of all countries in this region, first of all the countries in question, and we believe its very dangerous to try to put these countries in front of a dilemma; either with us or youre against us. And there have been attempts in the past to do exactly that, basically telling them either you want to be a friend of the Russian Federation, or you want to be a friend of us, and there is no middle way. I think its an old thinking, as it were, and we should really concentrate on common challenges and common opportunities existing in this area, fully respecting the position of the countries themselves, and not creating any dividing lines there. And I believe if this is the situation, were not going to have any friction with the United States or with the European Union, or with anyone else in cooperating together with the countries of the region on so many important things.

FT And for this to happen, NATO must not enlarge into this region?

SL NATO enlargement is certainly something which we try to understand. What is being achieved by this? With the latest expansion of NATO, do people in Europe feel more secure? Why this drive to mark geo-political space which some people believed became vacant? Its again, its moving the dividing lines which we all agreed should be eliminated. Its keeping those dividing lines and moving them further to the east and any other direction, but to the east its certainly what is important for us. And the purpose of this is not clear at all.

If NATO says that NATO wants to become a modern security organisation addressing security challenges globally, then there are plenty of ways to cooperate with anyone in so many existing formats. NATO has a special relationship with countries far away from Europe; Australia, Japan, South Korea. They have joint projects and programmes which are being implemented without these countries becoming members of NATO. By the same token, Russia has partnership framework with NATO, Russia- NATO Council, and we have so many useful things on the agenda.

If you take a look at the annual list of joint projects between Russia and NATO, it contains dozens of items and issues, starting from compatibility of peacekeeping forces and peacekeeping approaches and concepts down to safety of air traffic. Counter-terrorism is a huge problem in itself. So many other things; non-proliferation, of course. Afghanistan. Indeed, its a whole lot of very important and very real things. And the same could be done and is being done between NATO and other countries in the post Soviet space who have their own special structures with Nato. But when we are told that Ukraine and Georgia will be members of NATO, as was said at the last April summit in Bucharest, we... and then we also explained that, of course, this was said because this is the will of the peoples, and we know that in the Ukraine, public opinion polls indicate very different opinion of the people. And we also know that this message from Bucharest that Georgia will be a member of NATO was indirect encouragement for Mr. Saakashvili to do what he did. So if NATO wants to expand at any cost in spite of the view of the people, or if NATO is ready to embrace a country whose current regime did not hesitate to use brutal force against civilians killing hundreds of them, then we again have questions about what is the reason for NATO expansion.

So I believe that we first have to understand what NATO is about as far as Russia is concerned. We want to understand what NATO is about, what organisation it is evolving into. We hear about the work on new strategic concept or doctrine, and we hear about some ideas being put into this process. And we certainly notice quite a number of additional scenarios for NATO to use force globally, not necessarily with going to the Security Council for endorsement. Of course, this concerns us, because its already not about NATO or NATO expansion, its about international law which we want to strengthen, not to dilute. Hopefully, when we resume our dialogue with NATO in the form of Russia- NATO Council, which unfortunately could not meet at our request during the crisis in the Caucasus, one or two delegations blocked the meeting, though the Council was created among other things to consider crisis situations, but hopefully when we resume this work, we will have an occasion not just to exchange political statements, but to sit down together and to try to discuss all these things; military doctrines, what are the strategic thinkings on both sides; whether we still want to fight common threats and challenges together and try to use existing opportunities, or something else is being contemplated.

I hope that the answer is yes to the first option and that we would come back to the basics which were reflected in the Rome declaration when the Russia-NATO Council was created, and which is indivisibility of security that no country should take steps to strengthen its security at the expense of the security of others. And also, hopefully, that Russia- NATO Council, as was stated by the heads of state and governments in Rome, is not a 26 plus one structure, but rather 27 each country participating in its national capacity so that to avoid any block instincts. Its easier said than done, but thats what was agreed at the creation of the Russia- NATO Council.

FT Is there going to be any attempt to further define what President Medvedev said at the end of August about region of privileged interest? Either what countries belong in that region, or what rights does that give Russia that other countries dont have in that region, for instance, security priority and things like that...

SL Ive already said that its mutually privileged relations, and certainly countries who are our neighbours we consider as countries with whom we do have privileged relations, just like they have privileged relations with us, which is reflected in so many ways. For example, during the time of this particular financial crisis, CIS created a new mechanism, regular meetings of ministers of finance to exchange assessments and to try to see how we can cooperate in addition to huge economic relations which we have. The Eurasian Economic Community created an emergency fund of $10 billion specifically designed to help each other at the time of this crisis. And its not only our neighbours, its also countries in other regions of the world with whom we have had relations for decades and even centuries; with some Latin American countries, Russia established diplomatic relations almost 200 years ago, 150 years ago. We have had a longstanding tradition of cooperation with the Africans since the time of their national liberation, training in the Soviet Union and in Russia dozens of thousands of citizens of Africa, Asia, Latin America. Theyre still there. They have their associations and they still have the pillars of their national economy built with the assistance of Moscow, and to ignore this would be really irresponsible.

By the way, firstly, the term itself, privileged relations, was used to describe the relations between Moscow and Paris, still in the Soviet times, and then no one really raised an eyebrow. So no, its not countries who have any monopoly on everything. As I said, we fully respect the legitimate interests of any other country. We develop relations with all those who we believe we have privileged relations with, provided we play honestly, provided we... yes, competition is the rule of today in todays world.

Completion will always be there, competition and economy, competition in various ways of life. Thats what this dialogue of civilisation and the alliance of civilisations is about. But we have to do so with mutual respect, without being thrown into the inertia of zero sum games. Its not easy. We all come from a certain historical period, but hopefully, this inertia will be overcome and we will realise that its much more productive and much more in the interests of everyone to cooperate honestly, without any hidden agendas. The time of this crisis clearly showed that when something wrong happens to everyone, people are much more ready to concentrate on real problems, not invent artificial ones. And if we manage to do something together, then hopefully this trend might continue into national political relations as well.

FT Does your point about competition also extend to pipelines? Is it okay and perfectly acceptable for Europe to build Nabucco, for example?

SL Absolutely. President Medvedev, Prime Minister Putin repeatedly stated and reiterated this again that we have nothing against Nabucco. We are not roving various capitals and telling them dont even think of Nabucco, though some of our competitors do exactly the same vis-a-vis northern stream and southern stream. We know this. Hardly anything could be hidden these days. As far as Nabucco is concerned, its exactly about the competition. What do you need for competition? Economic feasibility, financial feasibility on the product itself. If Nabucco gets all this, and this is profitable, acceptable to those who I invite to participate in this project, why should we be against it? Why should we work against it?

FT And what about military bases. There seems to be an impression that Russia wants to be consulted on if any foreign powers want to establish or keep military bases in the region.

SL I just want to have the relationship, with NATO in particular, with conviction that whatever we agree is being implemented. I wouldnt even go into the history of the last days of the Soviet Union, the withdrawal from Europe, and what promises were given at that time, because those were oral promises and our leaders of that time strongly believe that, like in ancient Russia, a word given is better than any treaty. So I wouldnt go into this history, but Russia- NATO Council founding documents, they agree with... stipulate several very important things, and heads of state put their signatures under this statement. One of them I mentioned: no country should ensure its security at the expense of the security of others. And they even went further to elaborate a bit on what this principle means, including agreement that there would be no deployment of substantial combat forces on the territory of new NATO members.

So when military bases, or American military bases were put into Bulgaria and Romania, we have been raising, invoking this provision of Russia- NATO Council, trying to understand whats the need for this bases and how this would fit into this commitment. And we were told that those basis would not represent substantial combat forces. Then you ask the question, what would represent substantial combat forces? What is the size of such a unit which would be really covered by this Russia- NATO Council understanding, but this was several years ago.

Were still trying to have some kind of agreement on the size of such a unit. So no, we dont have any veto in countries inviting foreign military to be present on their territory, its that we want to establish some rules, because some actions undertaken by NATO members we believe are creating unnecessary risks for overall stability, which we all agreed should not be undermined unilaterally.

FT Georgia is a particular case of a country with tensions. Are you at all worried that there might be another outbreak of violence perhaps this year once the snows go and the summer comes along?

SL Yes, I am worried, because when we managed to stop the attack on Tskhinvali and other settlements, human settlements on the territory of South Ossetia, when the war was stopped, we heard statements from Tbilisi to the effect that the war is not over, that the Georgian army would rebuild itself. Then we had statements from various western capitals saying that they would help restore the Georgian army. And then the comments coming from Tbilisi during the work on what is known as the Medvedev- Sarkozy plan really gave rise to concern.

So what we want now is to ensure full implementation of those arrangements which President Medvedev and President Sarkozy reached and which were lately endorsed by the European Union, namely that the European Union undertook upon itself [unclear] non-use of force against South Ossetia and Abkhazia, exactly what we wanted to achieve during last three years, but Georgian president was reluctant to do so. He even said once in an interview that he would never use force because he knows what blood means in the Caucuses. And then he continued to say that blood means not even decades but centuries.

Hes a Caucasian, hes Georgian. He I hope knows what he is talking about. But the provisions of Medvedev- Sarkozy arrangements cover not only EU acting as a guarantor of non-use of force, it also covers the EU role as monitors in the areas adjacent to South Ossetia and Abkhazia. We regularly talk to representatives of European Union, both from Brussels and those who work on the ground. And we exchange information with them, providing some facts which become known to us, and which indicate that unlike Georgian commitments to keep their army at the areas of its dominant location, there are some military activities by Georgian special forces, interior troops, very close to South Ossetia and Abkhazia.

So hopefully, the mechanism which was created at the Geneva discussions and regular meetings on the border, as agreed in Geneva, to prevent incidents, hopefully, this mechanism will work and will indeed prevent incidents and prevent certainly the occurrence, or prevent the repetition of what we witnessed. But yes, we cannot trust President Saakashvilis regime. They repeatedly violated their obligations. By the way, he started the first war, his first war, because before him, there were several leaders who started the war against South Ossetia and Abkhazia, but his first war against South Ossetia took place in August 2004, but then he was not armed enough and it was stopped very quickly and with few casualties. But since then, he has been armed beyond any reasonable defence needs and you know how he used these arms.

So because of all this, we decided that the only way to guarantee security and the very survival of South Ossetia and Abkhazians would be to recognise them at their request and to place our own military forces on their territory at their request. So this should be a very serious deterrent for anyone who would like to try to do this again. But we certainly hope that one day there will be a situation when Georgian people would have a government which really thinks about the interests of Georgia and its people, which knows how to live in peace and to have good relations with all the nations in the Caucuses. And hopefully, this day will come.

FT Do you mean with a new president?

SL Its up to the Georgian people to decide.

FT If we can ask about Iran...

SL The last one.

FT Its very high on the international agenda. The Americans look like they want to make a new effort to try and reach agreement on Irans nuclear programme. What do you think should now be done that might ease the situation, lead to a settlement, and avoid possible violent actions which have been discussed?

SL Well, I certainly believe that there is no violent solution to this problem. I certainly believe that it was a very welcome step by President Obama when he addressed his message to the Iranian leaders and the Iranian people. It was a very respectful message. It was a very forthcoming message. And it said one very important thing among others, namely that the United States was ready to discuss a very broad agenda with Iran.

We have been suggesting to the Bush administration for several years that an approach of full involvement in negotiations with Iran would certainly make a difference, and we were trying to persuade the United States to join fully the negotiations proposed to Iran by three plus three, or five plus one, whatever you call it; UK, France, Germany, Russia, China and the United States. And if the new administration in Washington can agree to join fully this proposed process, I think it would be a very important quality change. I certainly hope that parallel with this full participation in the process the United States would also promote bilateral dialogue with Iran.

But the main thing is that these proposals which three plus three moved forward some time ago, and also together with the proposed prestigious building conditions for negotiations, when we did this, we were fighting very, very hard to make sure that its not just about nuclear programme, but it also contains these positive incentives, including economy, high tech, Iran joining WTO, removing all barriers to Irans full integration in economic system. But also, ensuring that Iran would have dignified, equal place at the table when regional issues are discussed.

We managed only to agree in very a generic way to say that Iran would be invited to original dialogue. But I think when we speak about a political solution, when we speak about a comprehensive solution, we should also think of very important role which Iran, together with other countries in the region, can play to help resolve the problems of Afghanistan, the problems of Iraq; basically, almost any aspect of the Middle East agenda. And I think to engage, not to isolate Iran, would be very important.

And on the nuclear programme itself, our overriding concern is to make sure that IAEA can continue to work professionally, can continue to monitor what Iran has produced and has been doing, and IAEA doesnt have any difficulty with this. And we also believe Iran must fully cooperate with the additional requests of the Agency. Well encourage Iran once again to implement the additional protocol. We will encourage Iran to engage in dialogue with the Agency on what is called the Alleged Studies. And when weve engaged in negotiations, and when we are satisfied with the Agency assessment that Iranian nuclear programme is entirely peaceful in nature, thats our overriding goal.

Then as the three plus three agreed, our position would be that Iran should have absolutely the same rights as any other non-nuclear member of NPT. So I believe its a fair deal, and with the Americans hopefully fully engaged in the process, we can move the conditions building for negotiations.

FT And this is now achievable?

SL Well, I wouldnt be overly optimistic, because we inherited quite an agenda with mutual grievances and suspicions, but I believe an honest dialogue, openness to discuss all issues, is a very important quality change.

FT Do you see any changes in Russias approach to Iran?

SL Well, we have... all I described to you is exactly the Russian approach; as far as I understand the approach of many hands who participate in these negotiations. And we want a settlement as soon as possible, and we want a settlement to be satisfactory to everyone. Iran is our historic neighbour, historic partner. We have been cooperating bilaterally and on issues which are of crucial importance for stability in Central Asia and the Middle East, one example being very close cooperation between Moscow and Tehran, and certainly the internal conflict in Tajikistan in the middle of the 1990s. So I believe that we all should concentrate on the diplomatic efforts, and all should engage fully. Then we have much better chances than we used to have in the past.

FT Thank you very much.

SL Thank you.

Answers provided in writing to some questions submitted prior to interview

(translated from Russian)

FT What problems and opportunities does the global crisis create in foreign policy?

SL Historical experience shows that a crisis causes either a recovery or catastrophic consequences. Unfortunately, there were cases in the history of international politics of the 20th century when ways out of the crisis were found by way of war. Obviously, nobody wants that experience repeated today. And there are no visible serious reasons for such concerns. This is a considerable advantage of the present stage of the global development.

On the other hand, this unprecedented example of a global financial and economic crisis the first crisis of the globalization era that has affected all countries without exception sets new tasks of great scope for the global community. We believe that the key challenge lies in building anti-crisis interaction involving the broadest range of countries based on equality and mutual interests. Moreover, this reinstatement of control over global development must be performed at both global and regional and national levels in parallel. That will be a win-win situation for everyone.

I think it is clear that we must proceed from the reality of growing interdependence and the task of building a new sustainable and efficient international system through the universal application of ground rules common for everyone. We must not go back to the 19th century philosophy of a geopolitical concert of states. In the 21st century, we are facing common trans-boundary threats and challenges that cannot be neutralized by building holy alliances, regardless of their name.

The achievement of common goals would be helped greatly by deploying the full potential of the United Nations. This organization was created on the basis of a polycentric view of the world, but it can only start operating at its top capacity and according to its initial purpose now, in order to, among other things, help overcome the crisis on a legal and collective basis.

We expect that collective efforts in the financial and economic sphere would give a more pragmatic, and respectively, more realistic reference frame. Let us remember that focusing common efforts on the real tasks of crisis recovery will help rebuild trust in the sphere of military policy, too, relieving the negative impact of unilateral ideology-driven projects and the inertia of zero sum games.

Of course, the crisis may unite as well as divide. Some may be tempted to take care of themselves only, expecting to get unilateral benefits at the stage of post-crisis global development. I doubt that would work, and I share position of Prime Minister Gordon Brown, who warned about the danger of de-globalization.

FT What changes do you expect in the Russian-American relations under the new US president? Are any moves expected in strategic arms restrictions, placement of elements of the anti ballistic missile shield and creation of the common European security system?

SL Unfortunately, Russian-American relations have deteriorated considerably over the recent years. This is obvious for everyone. This state of affairs should be changed, and the sooner the better. The arrival of a new US administration opens good opportunities to reset our interaction.

We sincerely hope that we will be able to open a new chapter in bilateral cooperation. First contacts with representatives of Barack Obamas administration, including my meeting with Secretary of State Hillary Clinton on the 6th of March in Geneva, and the signals that we are receiving from Washington, have been reassuring. We expect that the first meeting of Presidents Dmitry Medvedev and Barack Obama in early April in London will provide constructive tone for our dialogue and permit us to start translating those signals into practical actions.

Of course, one cannot say that our views are absolutely identical. However, the main thing is that our American partners have regained the taste for positive cooperation. With the spirit of pragmatism and reliance on mutual interests prevailing over both parties, we could make serious progress in solution of the most important tasks that our countries are facing.

I am convinced that we must not miss this chance. This is the imperative of the present time, required by national interests of both countries and our special responsibility in maintenance of international security and strategic stability.

We are facing serious, painstaking work on drafting new START arrangement to replace the Treaty expiring this year. Just like our American partners, we are ready to make progress in this matter as fast as possible, look for common grounds in the sphere of antiballistic missile defence on the basis of common analysis together with the Europeans, taking into accounts interests of all stakeholders, including Russia. We are waiting for completion of disarmament team formation in Washington.

A broad field for common work is opening in the sphere of non-proliferation, were we have had traditionally good cooperation with the US. Priorities in this area include enhancement of NPT (Non-Proliferation Treaty), strengthening control over prevention of WMD transfer to the hands of private players, fighting against nuclear terrorism, and peaceful atom cooperation.

We also intend to partner with American side in search for solution to international and regional issues, including Afghan reconciliation, MES (Middle East settlement), Iranian nuclear problem, situation on the Korean Peninsula and many others.

One of the promising interaction areas is strengthening of the Euro-Atlantic security. The American side, seemingly, is abandoning the previous administrations allergy to the very idea of starting a serious discussion on that subject. Multilateral dialogue has been launched already, and we would be interested in active US involvement.

Of course, priorities of our political dialogue must not be limited to security problems, but they should cover a whole range of relations, including trade and economic cooperation. Through the years there has been progress, but the potential still hasnt been fully realised. The issue of strengthening the structure and mechanisms of our dialogue in this sphere and giving it an extra boost has been set nowadays.

So, we have a very broad agenda. I would like to reiterate that history gives us a chance to change the strategic context of Russian-American relations. We must use it.

FT What is your opinion about Russia-EU relations and relations with individual countries of the European Union? Will the work on new Russia-EU cooperation agreement be sped up?

SL In terms of their political, economic, and socio-cultural potential, Russia and EU are major geopolitical formations on the European continent. This is objective reality that predetermines the development vector of our mutual relations. There is a reason why we call ourselves strategic partners. Our partnership is not only caused by achieved results, but also by the scale of global challenges that we are facing, lack of alternatives to consolidation of efforts for development of adequate solutions to them. We are convinced that we shall still have demand for strategic partnership mechanism, and will constantly develop and improve it further. Life has given proof that Russia and EU are mutually dependent, and partnership may help us solve problems, including those emerging through the fault of the third countries. There are examples of this.

Still, there is one element that we find disturbing. When defining its position on Russia, the European Union proceeds from the smallest common denominator of the positions of all member states. While we understand the complexity of internal EU concords, we cannot but point out that this conservative approach sometimes impedes development of new initiatives and undertakings that could facilitate further deepening of our interaction in the interests of the Big Europe nations and the world as a whole.

Our work on a new basic Russia-EU agreement has progressed to the phase of drafting the contents of the future documents articles. With a constructive approach on the part of the European Union, we may expect that active negotiations will continue and lead to the signing of a strategic document that would correspond to common goals and take our cooperation to new qualitative level. We expect that the new agreement will become an instrument of real rapprochement between Russia and EU on the principles of equality, respect for interests of the parties and common approaches to key security problems.

I believe that this interview format does not allow me to speak in detail about Russias relations with individual EU member states. Understandably, they are multifaceted, diverse and showing dynamic development as a whole. However, of course, every particular case has its own country-specific features. Those ties with some of the countries have the history of many centuries.

FT Can we expect any changes in the energy sphere following the recent confrontation with Ukraine over gas? Will the list of consumers of Russian gas diversify to Asian countries, including China and India?

SL Like before, we intend to develop relations with our key partners in the energy sphere on the basis of the common principle of mutual benefit. Russia supplies energy resources to more than 20 countries of Europe and has proven its status of reliable supplier over decades. There wont be any changes there.

At the same time, the crisis over gas supplies through Ukraine has clearly demonstrated that current energy security mechanisms, like the Energy Charter Treaty, are not very effective, first of all in the transit of energy resources and suppliers rights. That is why we support their reform, and if that turns out to be impossible, we shall promote development of new international legal regimes in this sphere.

January events have shown the magnitude of related transit risks. For a long time we have been urging the European Union to create an early warning mechanism with participation of Moscow and Brussels, as well as transit countries. Unfortunately, no practical steps have been made about those proposals so far. We hope that this mechanism will be created in the end.

We assign great importance to implementation of the North Stream and South Stream gas pipelines that would diversify Russian gas transportation routes and facilitate strengthening of Russia-EU energy cooperation infrastructure as a whole.

As far as supplies of Russian gas to the Asian countries are concerned, they have started already. In mid-February, President Medvedev attended the opening ceremony of gas liquefaction factory launched within the framework of Sakhalin-2 joint venture with participation of Russia, Japan, Great Britain and the Netherlands. The first tankers carrying Russian gas have set off for Japan. Thus, Russia entered this segment of gas exports and intends to expand its presence here. There are good opportunities for building cooperation with China by means of cooperation development in gas sphere.

FT What role does Russia aspire to play in the Middle East?

SL The Middle East is a constant focus of our attention. The progress of the political process there has a serious impact on the situation outside the region, stability and security all over the world.

Russia has been continuously promoting the line of building and broadening of mutually beneficial cooperation with the countries of the Middle East, including both the Arab countries and Israel. We maintain high level of political dialogue, make regular contacts with representatives of entrepreneurial and public circles, expand economic cooperation, as well as military and technical ties.

Unfortunately, the most complex tangle of continuous conflicts in the Middle East remains a complicating factor. We aspire for peace, stability, and sustainable development benefits for all countries and nations of the region without exception.

As a permanent member the UN Security Council and participant of the Middle East Quartet of international mediators, Russia has a special responsibility for keeping peace and stability in the Middle East region. Priority tasks include achieving a comprehensive settlement in the Arab-Israeli Conflict, strengthening security in the Persian Gulf area, continuous attempts to find political and diplomatic ways of easing tension around Irans nuclear program, and the regulation of Iraq and Sudan situations. We are also ready for active cooperation on the basis of equal partnership, including within the framework of multilateral diplomacy, in the resolution of global challenges and threats that the region is currently facing, be it terrorism, WMD proliferation, environment or food crisis.

The key to stability in the Middle East is in the resolution of its central problem, the Arab-Israeli conflict. It can only be settled by political means. Moreover, it is clear that a lasting Middle Eastern solution can only be comprehensive, including Syrian and Lebanese tracks as well, and establishment of multilateral regional cooperation.

We are preparing a Moscow Conference on the Middle East to promote progress in the Middle East peace process following the Quartet agreements and the UN Security Council decisions.

Another Russian-Ukrainian gas row looming?

http://news.xinhuanet.com/english/2009-03/26/content_11073116.htm

2009-03-26 00:04:13

by Xinhua writer Hai Yang

MOSCOW, March 25 (Xinhua) -- A new round of gas controversy between Russia and Ukraine that erupted early this week has reminded people of the January dustup that left millions of Europeans without heat in the depths of winter.

Some observers believe that the dispute requires a tripartite solution, and the controversy is another strategic game in which Russia, Ukraine and the European Commission all play a part.

NEW ROW, OLD TOPIC

The dispute started with the joint declaration on the modernization of Kiev's gas transit system signed by Ukraine, the European Commission and other parties in Brussels on Monday.

Angered by the self-proclaimed "exclusion" from discussions about the document, Russian leaders took a tough stance on the issue.

Russian Prime Minister Vladimir Putin on Monday threatened to review relations with the European Union if Russia's interests were ignored. The declaration was "poorly thought out" and "unprofessional," Putin was quoted as saying by the RIA Novosti news agency.

President Dmitry Medvedev said Tuesday that Russia would not resume intergovernmental consultations with Ukraine unless some questions surrounding the declaration were clarified.

"The declaration's contents arouse at least a number of questions," Medvedev told a national Security Council meeting.

"In order to decide what the consequences of the declaration's adoption may be I suggest giving thought to postponing the consultations for a while to look into the decisions that have been made," he said.

The consultations scheduled for next week planned to focus on the extension of a Russian loan of 5 billion U.S. dollars to Ukraine, covering its gas delivery bills, RIA Novosti reported earlier this month.

Responding to the Kremlin's anger, Ukraine said on Tuesday it welcomed Russia to participate in the modernization of its gas transit system.

"Russia, like other countries, can also take part in investment projects, in reconstruction and modernization of Ukraine's gas transit system," Ukrainian Prime Minister Yulia Tymoshenko told a news conference in Kiev.

"Neither Russia nor Europe lost yesterday. Ukraine just wants to safeguard its national interests, its main gas transit pipeline," she said.

EASY SOLUTION?

Russia should let Europe do the overhaul deal and transport fuel across Ukraine, so political tensions between Russia and Ukraine do not lead to regular supply problems, said Walter Boltz, head of Austrian regulator E-Control and vice chairman of the European Regulators' Group for Electricity and Gas.

"It has to be a European solution, because the current model, where Russia is basically responsible commercially for the transit, is overlaid by all this political background ... which makes the relationship between Ukraine and Russia very difficult, very delicate and likely to erupt every other month," Boltz said, according to the Moscow Times.

Russia now supplies a quarter of the EU's gas, 80 percent of which is pumped across Ukraine.

Others believed Russia should be included into the project.

During a meeting with Russian Deputy Prime Minister Igor Sechinhere on Tuesday, Paolo Scaroni, CEO of the Italian state-owned energy company Eni, said Russia and its largest consumers must be involved in any agreement to modernize Ukraine's gas pipelines.

Any plan without involving the supplier is a waste of time and money, he told the Moscow Times.

Some observers have also warned that a new gas row could be on the horizon as Ukraine, currently struggling with the economic downturn and political impasse, finds it hard to pay the higher gas prices charged by Russia.

STRATEGIC GAS GAME

Beyond the loaves and fishes involved in the spat, some strategies have come up to the stage from behind the curtains.

Some analysts say the reason why Russia is angry over the declaration is that it sees itself shoved off a project that serves its crucial interests.

Russia's reaction has revealed its sensitiveness to the question of who wields leverage over Ukraine's gas pipeline network, the Moscow Times reported.

As some experts put it, a large strategic gas game is going on, and Russia has felt potentially threatened by the EU-Ukraine deal.

Russian political analyst Fyodor Lukyanov pointed out that the European Commission tried to turn Ukraine into an energy testing ground through the gas dispute.

Brussels apparently wants to introduce certain energy market principles to Ukraine that do not work well in the European markets, such as competition-based access to pipelines and storage tanks and transport operators independent of producers, Lukyanov was quoted as saying by the Russian daily Vremya Novostei on Wednesday.

"Combat Aviation" business-division to be formed within UAC in three years

http://www.interfax.com/3/482275/news.aspx

MOSCOW. March 26 (Interfax-AVN) - A "Combat Aviation" business-

division is expected to be formed in three years on the basis of the

Sukhoi and MIG companies within the United Aircraft Corporation, UAC CEO

Alexei Fyodorov said in an interview with the Vedomosti newspaper,

published on Thursday.

"The formation of a 'Combat Aviation' business-division was on

UAC's strategy from the very beginning. We think this will happen within

the next three years," Fyodorov said, when asked whether the appointment

of the Sukhoi holding company's head Mikhail Pogosian as MIG's general

director signals a Sukhoi-MIG merger.

"The UAC has indeed announced plans to launch inner

reorganization," Fyodorov said.

"By 2012 the UAC is expected to form business divisions of

military, civilian and transport aircraft, and they will become centers

for aircraft development and final assembly. The other functions will be

gradually handed over to third parties," he said.

"Soviet-era aircraft construction plants were self-sufficient and

covered all aspects from the production of screws to testing planes.

This practice is no longer economically viable," Fyodorov said.

"A switch to new production methods is a large-scale endeavor,

which will require serious investment," he said.

"We will not be able to do without outsourcing, although it is

clear that the pioneers will get the bumps. But in the long run, this

could have an enormous economic benefit, so we must take this road,"

Fyodorov said.

Russian military industry cutting civilian output

http://www.interfax.com/3/482198/news.aspx

MOSCOW. March 25 (Interfax-AVN) - Production at Russian defense

industry companies shrunk 3.7% in January-February 2009, year-on-year,

the Industry and Trade Ministry has reported.

"The volume of civilian output dropped sharply in the sectors of

ammunition and chemical agents, and conventional weapons, and in the

rocket-space and radio-electronic segments," the ministry said in a

statement made available to Interfax on Wednesday.

Volumes of civilian products increased only in the aircraft and

shipbuilding industries in January and February.

In the aircraft construction industry production grew by 2.7%,

year-on-year, and the growth was due to an increase in the production of

civilian items at the Kazan Helicopter Plant (by 27.8%) and at the Ulan-

Ude Aircraft Construction Plant (more than three times.)

In the shipbuilding industry, the production of civilian goods

increased nearly 2.7 times. In all, 110 ships are under construction.

In the sector of conventional weapons, the production of civilian

goods went down by 42.3% largely due to a drop in the manufacturing of

civilian products at the Dzerzhinsky rail car plant, at Kurganmashzavod,

the Izhevsk Mechanical Plant, the Nytva company and the Barnaul Machine-

Tools Plant, according to the ministry.

The output of civilian products has been growing at the Izhevsk

Machine-Building Plant, at the Ulyanovsk Cartridge Plant, the

Uraltarnsmash state-owned company, the Novosibirsk Instrument-Building

Plant and the Tula Cartridge Plant.

In the radio-electronic sector the production of civilian items

shrunk by 21.3% and in the ammunition and chemicals segment by 37%.

New ISS crew to lift off from Baikonur Thursday

http://en.rian.ru/world/20090326/120740803.html

MOSCOW, March 26 (RIA Novosti) - The 19th Expedition crew to the International Space Station (ISS) will blast off on board a Soyuz carrier rocket on Thursday from the Baikonur space center in Kazakhstan, a Russian Mission Control spokesman said.

Lift off is scheduled for 2:47 p.m. Moscow time [10:47 GMT]. The Soyuz TMA-14 spacecraft is due to dock with the ISS on Saturday.

The new crew of Commander Gennady Padalka from Russia, NASA astronaut Michael Barratt and space tourist billionaire Charles Simonyi will join Japan's Koichi Wakata, U.S. astronaut Michael Fincke and Russian Flight Engineer Yury Lonchakov.

Wakata replaced U.S. astronaut Sandra Magnus, who left the ISS on Wednesday on board the Discovery space shuttle following a four-month tour of duty.

This will be Hungarian-born Simonyi's second trip into space at a cost of around $35 million, up from the $25 million he paid for his 2007 visit.

Padalka and Barratt will remain on the ISS for six months, and Simonyi will be on board for ten days before returning to Earth on April 7 with Fincke and Lonchakov.

By the end of May, the ISS will be constantly manned by six astronauts.

American-Russian crew ready to blast off to ISS

http://www.russiatoday.ru/Top_News/2009-03-26/American-Russian_crew_ready_to_blast_off_to_ISS.html

26 March, 2009, 09:50

Final preparations are underway at the Baikonur spaceport in Kazakhstan where the Soyuz launch vehicle is just hours away from the blast off to the International Space Station.

Cosmonauts of the new mission are now enjoying their final hours on Earth before going to space.

The crew consists of Russian flight captain Gennady Padalka, American flight engineer Mike Barrat, and space tourist from the US Charles Simonyi.

It is actually the first time in history that a space tourist goes to the orbit twice and this man is U.S. billionaire Charles Simonyi.

Overall, two trips to space have cost him some $60 million.

Simonyi could also be the last space tourist at the ISS because starting in 2010, the US space shuttle programme will cease operations, which will make the Russian Soyuz vehicles the only possible transport for the American astronauts to the ISS. This means that there will simply be no space for space adventurers on board.

At the final press conference, Charles Simonyi and Russian cosmonaut Gennady Padalka spoke about what kind of research work they are about to carry out while in space.

Astronaut Simonyi said that this flight I am going to do much more ham radio contacts with schools and answer school childrens' questions.

Captain Padalka says that the environmental is quite interesting our problem districts for example. The construction of the Olympic venues in Sochi will be monitored from space. Well be taking high resolution photos in order for specialists on Earth to analyse how carefully we treat the protected areas.".

This flight is enjoying a lot of public interest. Many NASA astronauts and also journalists have gathered in town since several days prior to launch.

Relatives of Charles Simonyi and the family of Mike Barrat will also be at the launch site: Simonyis young Swedish-born wife and five kids of Mike Barrat will watch the launch.

I am very proud. I mean its not every day you can say My dad is in space, how cool is that! It is an honour but no fun. It is different when he is in space instead of sort of being at the dinner table with us, Barrats daughter Meeta said.

The wife of American astronaut Michelle Barrat said that though in space, cosmonauts will be able to stay in touch with their loved ones.

He will actually be able to call us from the Station on a phone and then once a week we will have a video conference and we will have a chance to hear from him and he can hear from us. The consol is actually at our kitchen so he can actually join the family at the kitchen table which is a fun place for us together as a family, said Michelle.

Michelle also said that she will pray during the final countdown and so, probably, will most of the relatives and friends of those going into space. Though experts say there is really no need as they guarantee that it will be a 100% safe lift-off as the Russian-made Soyuz space vehicle is the safest in the world and boasts 1700 safe flights into orbit.

UPDATE 1-U.S. software mogul set to roar into space history

http://www.reuters.com/article/CMPTRS/idUSLQ53664920090326

Thu Mar 26, 2009 5:09am EDT

* Billionaire Simonyi to blast off for second space trip

* Space officials prepare for launch from Kazakh steppe

* Russia to double number of flights to ISS this year

(Adds colour and quotes)

By Shavkat Rakhmatullayev

BAIKONUR, Kazakhstan, March 26 (Reuters) - U.S. billionaire Charles Simonyi will roar off into space aboard a Russian rocket on Thursday to make history as the first tourist to make the odyssey twice.

Hungarian-born Simonyi, who made much of his fortune developing software at Microsoft, will blast off from the Baikonur cosmodrome in the Kazakh steppe at 1149 GMT to dock with the International Space Station (ISS) two days later.

At Baikonur, hidden in the barren steppes of central Kazakhstan, heavy rain lashed hard against the sleek Soyuz spaceship, its nose pointing high into the heavy skies, as engineers went through final checks ahead of the launch.

Simonyi, 60, will blast off into space in the crammed interior of the rocket alongside Russia's Gennady Padalka and U.S. astronaut Michael Barratt.

"Charles! Good luck!" shouted a crowd of his friends and family, including his 28-year-old Swedish wife Lisa Persdotter, as the trio emerged from their hotel and headed for the launch pad.

Simonyi, who paid a total of $60 million for his two space trips, looked confident as he blew a kiss at his wife, clad in a floor-length fur coat against the chilly weather.

Simonyi has said he would be hanging up his space suit for good after this last trek.

"I cannot fly for the third time because I have just married and I have to spend time with my family," Simonyi told a pre-flight news briefing from behind a hermetic glass partition.

He is set to return to earth on April 7 with Michael Fincke, U.S. commander of outgoing Expedition 18, and Russian flight engineer Yuri Lonchakov.

"He is in great spirit, he is very excited. He feels very privileged to be able to go to space again," Eric Anderson, president and CEO of Space Adventures which arranges space trips, told Reuters.

Russia has borne the brunt of sending crews and cargo to the multi-national ISS since the U.S. Space Shuttle Columbia disintegrated on re-entry in 2003, killing its crew of seven.

A source in Russia's space industry told Reuters two space tourists could be launched in 2011. He gave no further details.

Space Adventures admitted its business was affected by the global financial crisis. "The number of billionaires has been cut in half," Anderson said, adding however that demand for space trips appeared to be stable for now.

"It's a very long term thing," he said. "You don't just wake up in the morning one day and decide to go to space." (Additional reporting by Shamil Zhumatov in Baikonur; Writing by Dmitry Solovyov and Maria Golovnina)

Ready for lift-off on the Kazakh steppe

http://news.bbc.co.uk/2/hi/asia-pacific/7964196.stm

By Rayhan Demytrie BBC News, Baikonur cosmodrome

Despite the freezing wind of the Central Asian steppe, photographers have been trying to get the best shots of a Soyuz spacecraft being slowly transported by rail to the launch site.

This is the Baikonur Cosmodrome - the world's largest and oldest space launch facility.

Every launch here follows the same ritual. It starts with assembling the rocket at the Installation and Test Building three days before lift-off.

At 0700 sharp, two days prior to launch, the assembled rocket is transported by railway in a horizontal position to the launch site. The train moves at 5 km/h (3 mph) - an average human walking speed.

Originally, the founder of the Soviet space programme Sergei Korolyov used to personally lead the procession to the launch pad by walking ahead of the train.

At the launch pad, engineers slowly raise it to its vertical starting position.

"Most Soyuz spacecraft take off from Site Number 1, also known as the Gagarin start," says Igor Barmin, chief engineer of the launch pad.

"Among the nine launch complexes at Baikonur, the Gagarin Start has been used the most. So far more than 400 rockets have taken off from this position."

Space tourism

The next Soyuz launch is scheduled for 1149 GMT on Thursday 27 March.

Expedition 19 will include Russian commander Gennady Padalka, US flight engineer Michael Barratt and US businessman and space tourist Charles Simonyi. Its destination is the International Space Station (ISS).

This is software billionaire Charles Simonyi's second mission into space. He previously flew to the ISS in 2007, for which he paid $24m. This latest journey is costing him $35m.

But Simonyi could also be the last space tourist travelling to the ISS because there may not be enough room on board for future space adventurers.

In 2010 the US space shuttle programme is expected to retire for at least four years, which means that Nasa astronauts will depend on Russian Soyuz rockets to send their crews to the ISS.

Secret location

Baikonur Cosmodrome covers almost 7,000 sq km of Kazakh steppe, three times the size of Luxembourg. The entire centre includes nine launch complexes and is leased to Russia until 2050.

Established in the 1950s as a top-secret facility, Baikonur was originally built to develop and test the largest range of intercontinental ballistic missiles.

To keep the location as secret as possible, the name Baikonur was deliberately chosen by the Soviets to be misleading. The real Baikonur is a village in northern Kazakhstan, several hundred miles away from the actual cosmodrome.

The official name of the centre was State Test Range No 5 and is located in Tyuratum, southern Kazakhstan.

After the break-up of the Soviet Union the cosmodrome fell under the ownership of Kazakhstan.

But an agreement was reached in the 1990s for Russia to pay an annual fee for renting the complex, currently worth $115m.

The former military facility has been fully transformed into a civilian launch pad, but it is still one of the most difficult places to visit in Kazakhstan, requiring permission from the Russian Federal Space Agency.

March 25, 2009Putins PR StuntBy Sergei BalashovRussia Profile

Vladimir Putin Will Talk and the Parliament Will Listen, but for Real, or for Show?

http://www.russiaprofile.org/page.php?pageid=Politics&articleid=a1238004632

As the prime minister, Vladimir Putin will follow a routine he has grown accustomed to during his tenure as president. He will once again deliver a report to the Parliament. Putin is scheduled to address the State Duma in early April, in order to explain what the government has done and what it will do to combat the crisis. But the Duma deputies are not too hyped about Putins upcoming report, in which he will ask for more powers to control the government.

A legislative novelty obliging the government to annually report to the Parliament was part of a package of constitutional amendments proposed by President Dmitry Medvedev back in November, along with extensions of the presidential and the State Duma terms. Putins speech, which will be comparable to a State of the Union presidential address, was devised as a tool in the mechanism of parliamentary control over the government. Apart from reporting the results of the governments work in 2008, Putin will answer three questions posed by each of the Dumas four factions.

These questions range from state support for high technologies amid the economic crisis and containment of the rising energy tariffs to changing trade regulations and making real estate affordable. The Communists are planning to complain about Russias high profile banks (VTB, Gazprombank and Sberbank) spending over $40 billion they received in state loans, meant to support the non-financial sector, to buy own shares and foreign currency. They will ask Putin whether he plans to get that money back.

The REGNUM news agency reported that the head of the Liberal Democratic Party faction in State Duma Igor Lebedev has expressed hope that Putins address would not be a formality, and the ministers would be held responsible for their failures. But the chances of this happening are not exactly high.

The State Duma, dominated by Putins United Russia party, has long since turned into a rubber stamp for the government, hardly ever challenging the bills put forth by the Kremlin and being, in Duma Speaker Boris Gryzlovs own words, no place for discussions. Deputies from the three minor factions claim that they are barely (if at all) heard, and their counterparts from the ruling party agree. The Parliament has no control whatsoever over the government; [the United Russia faction] has only a symbolic influence over the government, others have none at all, said Gennady Gudkov, a State Duma deputy and a member of the Just Russia faction.

Parties with representation in the State Duma have to rely on other, less official mechanisms to exert influence on the government. If anything can be done at all, it can only be done through personal meetings and agreements with the prime minister, who sometimes meets [State Duma factions]. The head of our party regularly meets with Putin and Medvedev, so we do have a chance to express our concerns. Were not desperate about the situation because there is an opportunity for dialogue, but if were talking about it as a system, there is none, said Gudkov.

Last week, Gryzlov said that Putins speech was scheduled for April 2, forcing the deputies to change their plans. Yet later, the date was unexpectedly moved back four days. After delivering his report, Putin will unveil the governments anti-crisis measures. Yet there is another side to this story. If delivered as scheduled, Putins speech would run simultaneously with Medvedevs speech at the G20 summit in London, planned precisely for April 2. Medvedev is also scheduled to meet with United States President Barack Obama the day before. Both events are expected to dominate the news, and thus overshadow Putins perfo