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An in-depth look at the Russian press, October 18


MOSCOW, October 18 (RIA Novosti)

Nezavisimaya Gazeta

Turkish-Eu Talks Open Prospects for Russia

Vladislav Inozemtsev, director of the Post-Industrial Society Research Center

Negotiations that recently opened between the European Union and Turkey on the country's EU membership directly affect Russia.

Turkey's example shows European doubts over integration did not prevent the establishment of a free trade zone, or the start of negotiations on EU membership. The country's size, traditions, and religion have ultimately proved not to be insurmountable barriers. Russia is not following the European path because of the prejudices of its political class, not because of its unique geographical situation.

The start of negotiations on Turkey's EU entry offers Russia a wider geopolitical choice: if Turkey has a chance of being admitted, Russia is not barred either. On the other hand, the opening of negotiations with Turkey may mean Europeans will turn a deaf ear to other integration proposals.

This does not mean that Russia should "apply for membership." A more successful effort to become Europeanized could be to for Russia's neighbors Ukraine and Belarus to integrate into Europe. Their membership would benefit Russia rather than work against it.

By supporting Ukraine's efforts to integrate, and by reviewing their attitude to the existing Belarussian regime, Russian politicians could make Russia a candidate for EU membership.


Natural Resources Ministry Sets Criteria for Foreign Companies

The Natural Resources Ministry has finally determined which deposits are to be considered strategic, and therefore have restricted foreign participation in their development. A new subsoil law allows overseas companies to be no more than minority participants in such projects.

Rare minerals such as uranium, diamonds, and yttrium group metals will be the first category to be off-limits. The second group will cover unique deposits, with more than 150 million tons of oil, over 1 trillion cubic meters of gas, or more than 10 million tons of copper. The third group will comprise deposits on defense-related sites.

The list was proposed by Russian Natural Resources Minister Yury Trutnev includes the Udokan deposit in the Far East (with about 20 million tons of copper), and the Sakhalin-3 project (with probable reserves totaling 620 million tons of oil, 767 billion cubic meters of natural gas, and 53 million tons of gas condensate). Foreign companies will not be permitted to independently develop fields such as the Chayandinskoye deposit in Yakutia containing 1.9 trillion cubic meters of gas, or the Roman Trebs and Anatoly Titov fields in the Timan-Pechora oil and gas region and the Barents Sea shelf.

Such criteria will not extend to deposits Russian companies cannot develop independently, for which separate laws will be made.

If a foreign company already has a license to work a deposit, it may continue to do so: no one has the right to demand that it follow the new rules on a project which has already begun. It would be difficult, for example, to revoke TNK-BP's license for an oil and gas condensate field in the Irkutsk region, although it is among the largest in Eastern Siberia, with 201.8 million metric tons of oil.

However, Natalia Komarova, head of the State Duma's committee on natural resources and nature management, says that "far from all bugs have been worked out of the bill", and the list of criteria may still be adjusted.


Russia Creating Illusion of Arms Market Liberalization

Russia is extending the list of defense companies allowed to trade abroad, but this measure is nothing more than an illusion of liberalization of the arms market: most defense companies are state-owned.

"It is believed in the West that Russia has problems with spare-parts deliveries and post-sale servicing," Konstantin Makiyenko, deputy director of the Center for Analysis of Strategies and Technologies, said. "Some say that this problem can be solved through liberalizing defense enterprises' foreign economic operation." However, the majority of the companies granted the license to foreign trade are state-owned.

The Federal Service for Military and Technical Cooperation should control the operation of these defense companies, but it does not have effective levers of influence. Companies are warned that their licenses may be revoked in case of inefficiency, but there are no clear-cut criteria for assessing efficiency.

"The state is openly strengthening its monopoly in the deliveries of end products," Makiyenko said. "The Russian aircraft manufacturing corporation MiG has in effect refused to trade abroad, leaving this right to Rosoboronexport, the state company that is the main exporter of weapons, military technologies and spares. The state's policy in spares deliveries can be described as conservative liberalization."

If the state is not ready to give up its monopoly in the arms trade, who can blame it? Nobody would turn down $6 billion in annual revenues.


Sibneft to Pay St. Petersburg

Now that Gazprom is taking over Sibneft, the new Sibneft chief executive officer will move to re-register the company from the Omsk region to St. Petersburg next year, a Gazprom source said. The Russian Ministry of Finance is preparing to compensate the region for its losses.

Omsk officials estimate that the regional budget will lose around $490 million next year.

"I raised the issue of compensating us for our losses, i.e. 13.6 billion rubles ($477 million), next year during the draft federal budget's discussion in the second reading," State Duma deputy Oleg Smolin (Omsk region), said October 17. The Omsk regional budget is to receive about $982 million in revenue. "First Deputy Minister of Finance Tatyana Golikova admitted that the region had to preserve its tax-applicable base. The Russian government has extra funds for compensating the region. We have agreed to discuss this issue together with the regional finance ministry's officials pending the outcome of the federal budget's third version on November 19," he noted.

Oleg Shishov, chairman of the Omsk regional legislature's committee for financial issues, said that this issue had been settled at top level.

Sibneft's relocation to St. Petersburg (where President Vladimir Putin and Gazprom CEO Alexei Miller were born) will enable City Governor Valentina Matviyenko to repay all city debts within a few years. These debts will total $568 million by late 2005, and over $700 million by late 2006.

Matviyenko, who was elected as governor in October 2003, repeatedly discussed tax re-registration issues with major companies including MegaFon, Transneft, LUKoil, TNK, Russian Railways, Sberbank and Rosoboronexport. However, none of these have yet moved to St. Petersburg.


Russians Do Not Know Who to Call Nation's Conscience - Poll

Over 70% of Russians were unable to name any prominent culture, science, or politics personalities who could be characterized as "the nation's conscience." Nearly 9% named President Vladimir Putin; 4% chose Alexander Solzhenitsyn; 3% Patriarch Alexy II and Emergencies Minister Shoigu; 2% Academician Andrei Sakharov. Is it feasible to find people who are the moral and spiritual leaders of the nation?

Leonid ROSHAL, a physician: There are thousands of worthy and respected people in Russia. The media are to blame for the fact that no one knows them.

Valery OSTROVSKY, a political scientist from St. Petersburg: the absence of a moral authority is not a sign of disease, but the indication that a nation is recovering. The "nation's conscience" syndrome arises in conditions of bitter confrontation, for example, between totalitarianism and anti-totalitarianism. A democratic society, where everyone answers for himself or herself and makes his or her own choice, needs no intermediary between God and human beings by way of a moral authority. Only collectivist groups such as skinheads require a ring-leader, but they are a minority.

Yury MAMIN, film director from St. Petersburg: Our society suffers from a serious disease. Media-hyped Western culture has implanted adoration of the golden calf and made us abandon spiritual values. Faces which become familiar because of television cannot become authorities in reality. More often than not they are just slick characters. There should be a state-supported program to popularize spiritual values and promote our worthy contemporaries.

Vladimir RYZHKOV, State Duma deputy: The fact that there are no such people now does not mean they will never appear. The authorities are gradually steering back to the Soviet mentality and resistance against this will create a need for spiritual leaders. I hope they will emerge either from the opposition like Sakharov or the spiritual sphere like Solzhenitsyn. At present, society is hibernating. We see no moral leaders among administrators - representatives of authorities are insincere, their actions belie their words. The voice of the opposition, on the other hand, is suppressed by the authorities.

Anetta BASS, director of the Samara regional art museum: There are many people like that. The general public does not know them because they do not pursue notoriety, but are quietly doing their job. Most people lack information about potential spiritual leaders.

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