Izvestia
Illarionov: Kyoto Protocol Strategic Mistake For Russia
A month after his losing his position as G8 sherpa, Andrei Illarionov has spoken publicly about why he left. Vladimir Putin's economic adviser acknowledged in an interview with Izvestia that he disagreed with the incumbent authorities on the Kyoto protocol.
The job of an adviser, Mr. Illarionov believes, is to give advice that often clashes with what is passed off as the president's view. The presidential adviser is not a yes man.
He said that the main reason for his resignation was that he could not agree with Russia's ratification of the Kyoto protocol. After the decision in favor of doing so was made anyway, Mr. Illarionov found it impossible to fulfill his duties as sherpa, because if he had continued, he would have had to participate in establishing a Kyoto system in Russia and so do "tremendous damage to my own people."
In Russia, the danger of Kyoto and the struggle against "global warming" has been seriously underestimated, Mr. Illarionov believes. There is no evidence that the minor climatic changes that have been registered over the past century drastically exceed the limits of natural variations observable over millions of years.
In the official's view, the measures proposed by European governments mean cutting Russia's economic potential by roughly 70-80% compared with what it was in 1990. As regards atmospheric emission quotas, which Russia will be able to sell, the country will use them up by 2011, and then there will be nothing left to sell. Moreover, according to criteria offered for G8 approval, Russia will have to reduce hydrocarbon emissions by 90% after 2012. To achieve this, economic activity in the country and, consequently, household revenues will have to be cut by two thirds.
Russia's ratification of Kyoto is, according to Mr. Illarionov, a mistake and a strategic miscalculation.
At the same time, he claims he had fulfilled his duty as a G8 sherpa by June 2002, when President Putin became a full member of the club.
Kommersant
Iran Finds Right Moment To Flex Its Muscles
Hasan Rouhani, the secretary of Iran's Supreme National Security Council, stated yesterday that if the US and Israel launched strikes at Iranian nuclear facilities, Tehran would inevitably retaliate. For the first time in history, the Iranian authorities have threatened Washington with the use of nuclear weapons, writes Kommersant.
One can doubt the threats emanating from Tehran, but Saddam Hussein's threats did not turn out to be entirely groundless, if one remembers that the Americans have become bogged down in Iraq. Tehran has the means and options to resist: it can easily close the oil routes and destroy the market, which will affect the whole world.
There is another model: the Americans will leave the region as they left Vietnam. In this case, Iran's influence will immediately grow, at the very least because the Americans struck Tehran's main opponents in Afghanistan and Iraq: the Taliban and Saddam.
It seems that for the time being, the Americans do not want another military campaign because they will have to do a great deal of work in Iraq over the next few years. On the other hand, they want to halt the spread of Iran's influence and make Tehran abandon its military programs, whose existence virtually no one doubts. So far, the game is being played at the diplomatic level.
Europe is also involved. It may give Iran an ultimatum to end its military programs, threatening Tehran with sanctions. However, far from every country is prepared to observe them. It seems that Russia will play its own game until it has to take a clear-cut position. This is because if the odds are in Iran's favor, the dividends on which Russia may count are comparable with those it can gain by joining the US.
Both Russia and the Europeans have taken a wait-and-see position. The Americans do not seem to have made a decision yet because none of the options is good. Tehran has chosen the right moment to flex its muscles and remind everyone about how much the issue is worth.
Noviye Izvestia
CIS Countries Outpace Russia In GDP Growth
According to the information published yesterday by the CIS Inter-State Statistics Committee, Russia has fallen behind almost every other CIS country in terms of GDP growth rates, writes Noviye Izvestia.
The leader in GDP growth rates in 2004 was Ukraine with 12%, followed by Belarus (11%), Tajikistan (10.6%), Azerbaijan (10.2%) and Armenia (10.1%). Lower increases were registered in Kazakhstan (9.4%), Georgia (8.4%) and Moldova (7.3%). Russia's GDP growth rates, after they were reconsidered, came in at 7.1% - the same as Kyrgyzstan. The Statistics Committee has no information on GDP in Turkmenistan and Uzbekistan, which means Russia and Kyrgyzstan are last on the list.
Deputy Economic Development Minister Andrei Sharonov requested that a comparison not be drawn between Russia and economic development outsiders. He also noted that the mission to double GDP did not yet mean that life had become better.
Vasily Solodkov, the director of the Banking Institute at the Higher School of Economics, recalled that the CIS countries, with the exception of Turkmenistan and Azerbaijan, were not oil and gas export addicts. "This means that they had to conduct reforms somehow to overcome a crisis," he explained. The second reason is that "the level of monopolization is enormous [in Russia]" - three or four monopolies account for 80% of the country's GDP. The raw material monopolies do not need to develop, which admittedly puts the brakes on Russia's potential growth.
Experts admit that the country's growth potential is no less than in the former USSR republics, but it is considerably diminished by Russia's current economic policy.
Analysts warn that it is highly probable that the neighbors will increasingly outstrip Russia in terms of development rates.
Nezavisimaya Gazeta
Public Protests An Advantage For Party Development
The new law on political parties has raised the number of members required to form a federal party to 50,000 people. However, none of the parties has yet managed to register according to the new rules. Even famous party leader Irina Khakamada has slim chances of forming a federal party so far. The Justice Ministry is not concealing executives' are content with the situation, Nezavisimaya Gazeta reported.
However, new party activists remain undeterred. According to Oleg Shein, a State Duma deputy, the social protests that recently swept the country in the wake of benefit-replacement reform give him every reason to believe that his Party of Labor Solidarity will be popular.
Valentina Melnikova, chairwoman of the Soldiers' Mothers Union, is also convinced that authorities' social policy will turn out to be good for party development. "It is not that easy for us to gather 50,000 members," she said. "But considering the protests of pensioners, students and officers, there will hardly be any member shortage."
Our Choice, Irina Khakamada's party, includes 13,000 people so far. According to Natalia Borodina, the head of the Our Choice executive committee, "the most important thing in forming a party is not how to gather 50,000 people, but what to do once you've gathered them." Therefore, she added, the unification of all democrats into a single political force is high on the agenda.
The parties already represented in the State Duma are also concerned about consolidating their rows. United Russia certainly has no reasons to worry, as it has no rivals. The Communist Party (that reported about 182,049 members in January) included into its lists only those who can cite their whereabouts without fearing political persecution. According to the party's Central Committee, such a risk is in place, particularly, in the regions. The Liberal Democrats, or LDPR, have no intention of topping the set figure - the party will report about precisely as many members as required under the law. Dmitry Rogozin, the leader of the Homeland party, said in January that his party members' had hit the 50,000 mark.
Izvestia
Central Bank Pegs Ruble To Two Currencies
The Russian Central Bank announced a change in policy beginning in February to "bi-currency benchmarking," in a move that is widely perceived as a confirmation that both the euro and the dollar would be officially seen as the benchmarks for the ruble exchange rate. This may result in faster downgrading of the dollar versus the ruble, the Russian daily newspaper Izvestia reported.
In the new currency basket, the dollar accounts for 87 percent and the euro, for 13 percent. This ratio will probably change gradually, until the two currencies are equal in weight.
According to Anton Struchenevsky, an analyst with Troika Dialog, the analysis of the exchange rate suggests that the Central Bank has, in effect, been using bi-currency benchmarking at least since 2003.
Bi-currency benchmarking is aimed at limiting the growth of the real ruble rate to render the Russian economy more competitive in non-dollar areas of the world. This year, the Central Bank plans to limit the growth of the real effective ruble rate by percent. Although officially this rate is pegged to 34 various currencies, a quite adequate model includes only two of them - the dollar and the euro - because many countries peg their own currencies to these two currencies. In such a model, the dollar/euro ratio is approximately 40:60. Mr. Struchenevsky said the Russian market has been operating on this ratio basis for quite some time now.
UFG analysts say the ruble, when pegged to the euro and the dollar, may begin growing faster against the dollar than now, building on Russia's high trade surplus and resumed capital inflow.
Gazeta
Ukraine Will Not Pay Gazprom
Russia's oil and gas giant Gazprom is ready to write off nearly $280 million owed to it by the Unified Energy Systems (UES) power grid of Ukraine for Russian gas deliveries in 1996-1997. UES was then headed by Yulia Timoshenko, who is Ukrainian Prime Minister now. Experts perceive this as a forced measure because Gazprom has no chance of getting its money back, the newspaper Gazeta reported.
The UES of Ukraine became a major Russian gas importer under Ms. Timoshenko. Moreover, this company and Gazprom used to implement mutual payments and settlements during the transportation of Russian gas via Ukraine. Timoshenko had served as UES president for two years, when UES incurred its debt to Gazprom. Deputy Gazprom Board Chairman Alexander Ryazanov said February 7 that UES debts could be written off.
According to some sources, the Ukrainian company owes this sum for gas deliveries. The UES' debts to Gazprom could have surfaced during the investigation of a fraud involving the Russian Defense Ministry's funds. In 1996 Gazprom, the governments of Russia and Ukraine, as well as UES, had signed an agreement on offsetting mutual debts. Acting within that document's framework, Gazprom had borrowed $450 million, subsequently transferring that sum to the Russian Defense Ministry. The latter then deposited it on United Energy International accounts as payment for construction-materials deliveries. (United Energy International is a UES affiliate) However, the Russian military never received those construction materials. In 2001, a court ordered UES to repay the money, after examining a Defense Ministry lawsuit.
Former Gazprom chief executive officer Rem Vyakhirev, who liked the Ukrainian "gas princess", could have disregarded her company's $200-million debt. However, Vyakhirev's successor Alexei Miller had no such intention. The Russian concern has zero chances of getting its money back now that Timoshenko has become Prime Minister.
Gazprom, which is merely stating the facts, has few alternative options, analysts say.
