MOSCOW, December 29 (RIA Novosti)
Izvestia
Russia to preside over G8 next year
Russia will hold the G8 presidency for the first time in 2006. This event will largely influence next year's political developments. However, Russia's presidency over the political G8 is fraught with more problems than one can imagine.
Far from everyone agrees that Russia will represent the interests of the world's largest economies. Experts are likely to discuss drawbacks in the G8 work. They may also say that Beijing or New Delhi have more reasons to join the G8 than Moscow because of their impressive economic performance.
To some extent, Russian diplomacy will have to change its priorities and implement the various initiatives of other countries that had presided over the G8 in the past. For instance, the United Kingdom that held the EU presidency in 2005 suggested a program of aid to Africa. Moscow, too, would be expected to implement this program next year. Most Russians do not understand why huge financial and political resources must be spent for this purpose. The Kremlin will therefore have a hard time explaining the program's aspects to the people.
Immense political and organizational problems should also be mentioned. Moscow will have to prove during the G8 summit and numerous ministerial conferences that it did not receive the presidency by chance. First of all, this concerns economic matters. But technical nuances are no less important. The negative experience of Great Britain's presidency shows that G8 summits are vulnerable to antiglobalist and terrorist attacks.
Moreover, Russia must implement national projects while presiding over the G8. Both extremely ambitious tasks require a lot of time and effort. Still it is unclear whether the Kremlin, the government and the Russian state as a whole will be able to simultaneously accomplish both objectives.
The results of the St. Petersburg G8 summit in summer will make it possible to say whether Russia's presidency was successful or not. But national projects are another story because their implementation will be monitored round the clock. This will influence the popularity of federal authorities and President Vladimir Putin. Moreover, the country's political configuration is bound to change with the onset of the next political campaign in late 2006.
Vremya Novostei
All Russian Democrats will never unite - expert
The reason why Democrats are unifying is not that they have an inner urge to do so, but because the Russian state is swiftly returning to the Soviet model of administration, says Dmitry Oreshkin, head of Mercator think-tank.
Their union depends on many factors. On the one hand, it is the ambitions of every one of their leaders, on the other, the extent of penetration of Soviet-styled practices in the present-day Russian state.
In today's Russian political establishment, tens number those who call themselves Democrats. They are very different and all of them cannot patently join forces. The question is, will a certain political core take shape on the right-wing flank?
Nikita Belykh, Union of Right Forces (SPS) leader, took a great step when he announced that he was ready to sacrifice the party's brand for the sake of unity. An important thing is the way this merging, cooperation or coordination continues between the SPS and Yabloko - and the depth to which such union is possible. But in no case will they finally become totally united.
Another problem is that Russia still lacks public political parties grouped according to their interests. There are only parties bringing together people advocating one or another system of values, or ideologies.
Westernized, or European, systems of value are associated in Russia with the Right. But inside it there are also left-wing Liberals, or Yabloko, right-wing Liberals, or the SPS, and super-Liberals, or Novodvorskaya and Kasparov. What interests does Novodvorskaya share? It is nothing but ideology. But currently the business community, which views Kremlin developments in slight horror, is becoming increasingly aware that it is necessary to construct some sort of political opposition. This opposition is not so much against the Kremlin, but against its security-related elements. The attempt to build such an opposition inside United Russia has failed, and now businessmen are casting occasional interested glances at what is happening on the right flank.
Kommersant
Putin suggests crediting arms exports
Russian President Vladimir Putin has demanded that new measures be drafted to support the projects of defense companies that produce modern arms for export. One such measure is subsidizing bank credit interest for defense companies. Unless the rapid price increases of arms bought for the Russian armed forces is stopped now, they will have to pay more for Russian-produced arms than Southeast Asian nations do.
A source in the Russian government said: "2005 has become a year of sky-high price increases for defense items." Moreover, "prices are growing without good reason. For example, the third submarine of Project 955 costs several times more than the first one. Prices of Topol-M missiles have nearly doubled in the last three years."
This is why Prime Minister Mikhail Fradkov has instructed state Defense Ministry contractors to convert their pricing structures to market principles in 2006.
The source said that prices grow because the defense industry "needs the money to maintain the facilities that are being used at 30-40% of their capacity and would not be used more extensively in the future." Another reason is that providers raise prices without control.
It is not clear how the struggle against overrating the defense industry's profitability can be combined with subsidizing its export profitability. Theoretically, by making life easier for exporters and stabilizing their incomes, the state helps keep prices at the domestic level. But the situation looks ridiculous. While the president suggests making life easier for the Russian defense industry by helping its prices rival those of the United States and the European Union, acquisition prices for the Russian armed forces may soar above those for export.
Worse still, the situation will not improve. Though expenses of the federal budget has grown by 40% compared to the previous year, spending on defense has increased by only 26%. No wonder that the defense industry is doing its best to use as much of the budgetary allocations as possible.
Vedomosti
Kremlin reinforces state presence in key industries
The appetites of state companies have been whetted in 2005, with the state taking over Sibneft, AVTOVAZ and the St. Petersburg Promstroibank. Experts foresee new takeovers in 2006.
In 2005, the state remained the biggest player in the mergers and acquisitions (M&A) market. According to Mergers.ru, the M&A market was worth $36.7 billion in 2004 and will top $56 billion in 2005. State companies have spent $17.4 billion on takeovers (31% of the market in 2005 as against 25.8% in 2004).
The Kremlin is increasing state presence in key industries, said the owner of a major raw materials company. He said that big owners actually had been prohibited from selling their companies to foreigners. "Oligarchs can now sell their assets only to another oligarch or a state company," said Sergei Suverov, head of market analysis at Gazprombank.
"The main goal" of the Kremlin "is not to strengthen state presence but to consolidate assets as the only way of becoming an equal competitor in foreign markets," said a government official.
But businessmen do not believe it. A big businessman said the state would continue trying to gain control over individual assets and whole sectors through loyal allies. "Officials are bad administrators, while deals with loyal businessmen are the golden mean," the source said. "They encourage development, while the state controls the said company and can buy out its assets at an acceptable price whenever it wants."
Oleg Sysuyev, deputy board chairman of Alfa Bank, said strengthening the state is a time bomb for the economy. High oil prices allowed the state to forget about restructuring, which "is fraught with serious instability in the absence of a developed civil society and small and medium-sized businesses," the banker said.
Novye Izvestia
Russian middle class to face problems in 2006
Experts predict that the most active members of Russia's middle class are likely to stage all-out protests next year. So, here is what they have to say on this issue.
Boris Kagarlitsky, director of the Institute for Globalization Studies: "The reforms are spearheaded against two-thirds of the Russian middle class with $500 per capita incomes. However, these active middle-aged people will prove to be more dangerous than any other protesters because they are capable of collective action."
Igor Bunin, director of the Center for Political Technologies: "Russia is marked by monocentrist politics because its democratic institutions lack any checks and balances. In fact, the Russian president is the only source of state power. Liberalism stipulating the state's more active role in the oil sector has become the main economic paradigm. Part of oil sale proceeds is being used to create a welfare state and to implement several "showcase" reforms in such areas as health care, education, agriculture and housing mortgage."
Alexei Malashenko, member of the academic council, Moscow Carnegie Center: "The situation may deteriorate next year because of a more active power struggle. The Kremlin may prove unable to fulfill its social promises as a result of runaway inflation and an involved economic situation. Nationalist slogans will become more popular, as is proved by the activity of the Rodina party."
Alexei Mukhin, director of the Center for Political Information: "The Kremlin will turn the multi-party system into a unipartisan system. United Russia, the party of power, will try and imitate the Communist party. The opposition will do its best to unite and establish new organizations. But the Kremlin will take advantage of disagreements between opposition leaders and pit them against each other. Russia's metallurgical, automobile, diamond and defense industries will implement new vertical integration projects."
