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Vedomosti
Putin upsets political plans for 2008
Russian President Vladimir Putin has thwarted the hopes of United Russia that the ruling party would be given the power to appoint the prime minister, thus putting in question its future after the end of his presidency. Putin did not even hint at the name of his successor and advised the Cabinet, including First Deputy Prime Minister Dmitry Medvedev, not to think about politics.
Putin's response to a question about "a party government" created a political sensation at his sixth annual live news conference. He said anything was possible in perspective, but currently "we need strong presidential rule."
In fact, Putin himself advanced the idea of a party-based government in 2003. Former Yukos head Mikhail Khodorkovsky supported it in September of last year calling for the combining of "the indisputable prestige" of the president and "a democratic system where parliamentary parties form the government".
"The idea of Putin heading Untied Russia after the election can be buried now," said Dmitry Oreshkin, an analyst with the Mercator Group. "But this does not mean that the president will leave politics. He could become prime minister without party assistance."
"Putin has hinted that he cannot leave the responsibility for the country with United Russia," said Dmitry Rogozin, head of the Rodina (Homeland) party.
Yury Korgunyuk of the Indem Foundation said "Putin has said that United Russia cannot form the Cabinet. It is not a party, but an accessory to Putin's rule and will hardly survive his departure."
The president refused to answer a question about his successor and told the government "to think about results that influence the living standards of the people" and to "be as free from politics as possible".
By declining to speak about his successor and limiting the government's operation to executive functions, Putin has shown that he was against governing the state via an election campaign, said Gleb Pavlovsky, president of the Effective Policy Foundation.
Korgunyuk said Putin had not made his choice yet, but Boris Makarenko of the Center for Political Technologies said the president was waiting to see how Medvedev would perform.
Gazeta.ru
Business community does not trust Putin
Russian President Vladimir Putin promised to persuade the government to reduce taxes and stop the oil-and-gas sector's deprivatization in an effort to calm down the business community. The president is merely trying to distract businessmen, independent experts said.
"Taxes will be reduced," Putin said at a news conference in the Kremlin. But he did not specify which taxes or at what rate they would be reduced. Russian businessmen mostly insist that the government reduce value-added tax (VAT) rate and simplify VAT administration. "We have not yet completely decided on reducing VAT rate from 18% to 13%," Putin said.
The Russian leader made another lucrative promise to businessmen. "Oil-and-gas sector companies will not be nationalized. Moreover, we will respect the rights of all owners and investors," Putin said.
"One has every reason not to trust Putin. Suffice it to say that he promised not to bankrupt Yukos. Or we can recall his statements concerning the Rosneft - Gazprom merger. The Russian oil-and-gas sector is usually redivided regardless of presidential statements to calm down the public," said Vladimir Milov, president of the Institute of Strategic Development of Energy Industries. Milov predicts that the remnants of Yukos and Slavneft will soon be nationalized.
Zenit Bank Analyst Yevgeny Suvorov echoed those sentiments. "Although Putin promised not to bankrupt Yukos, this is already happening," he said.
Igor Nikolayev, director of the FBK strategic analysis department, does not sound optimistic either. "The business community is quite happy about the 18% VAT rate. Unfortunately, the Cabinet is saying nothing about specific tax reduction deadlines and volumes. Consequently, businessmen find it hard to chart mid-term and long-term strategies," Nikolayev said.
Yevgeny Nadorshin, an economist with the investment bank Trust, said VAT reduction would take place in the next one to two years. "The president's statement on this issue means that Russian authorities have already decided to lower the VAT rate," Nadorshin said.
Politichesky Zhurnal No. 3
Kremlin no longer relies on KGB governors - expert
The former KGB generals the Kremlin appointed to govern the Russian regions have not proven themselves outstanding political leaders or professional managers. Their experience with special services, where complete obedience to orders is required, hindered them in their civilian duties.
Rostislav Turovsky of the Political Technologies Center said that after President Vladimir Putin had come to power, Russia's Federal Security Service (FSB) tried to reinforce its positions in the regions. Its former servicemen had won elections due to support from central authorities - all of them were called the Kremlin's candidates. As a result, former KGB officers came to power in the Smolensk, Voronezh and Ulyanovsk regions and in Ingushetia.
The regimes established by the generals had several common features, Turovsky said. A former KGB governor struck an alliance with local elites who hoped that he would allow them to manage the region's economy on their own. Usually, they were right: real economic power was given to a group or some rivaling groups. But then the general would start inviting people from other regions, mostly from Moscow, and giving them property and leverages of power. A conflict between local elites and newcomers would break out and reshuffles in the regional administration ensued.
Experts believe that two years ago, the Kremlin decided not to appoint KGB alumni governors, Turovsky said.
However, FSB officers are not currently sitting on the bench, waiting for regional appointments. In the Tula Region, head of the local FSB department Vladimir Lebedev seriously prepared to run for governor, but never got the official go-ahead. In the Ryazan Region, Army General Georgy Shpak won the election, while former counterintelligence officer Igor Morozov failed to gain support from central authorities.
There is a feeling that it is not so much that former KGB officers did not live up to expectations, but that the very mechanism of bringing FSB representatives to power in the regions has failed, Turovsky said.
Kommersant
Aeroflot to phase out Soviet-made airliners by 2010
On January 31, the Aeroflot Russian Airlines board of directors examined a long-term program for the development of its fleet. There are plans to gradually phase out all Soviet-era airliners and to purchase 22 Boeing B-787 Dreamliners worth at least $2 billion.
The results of the July 2005 tender for the best long-range airliner are still unknown. But it appears that Boeing has defeated Airbus, its main rival, and that its plane is better than the A-350.
Aeroflot intends to scrap all of its Tupolev Tu-134 Crusty, Tu-154 Careless and Ilyushin Il-86 Camber planes. Aeroflot's projected charter company is to acquire six Il-86 long-range aircraft by late 2006. Subsidiaries Aeroflot-Don and Aeroflot-Nord will receive 11 Tu-134 planes before the year is out. In total, 25 Tu-154s will be phased out from late 2008 to 2010. Aeroflot now operates 18 A-320s, which will form the mainstay of its medium-range fleet.
Aeroflot will primarily operate Dreamliners, A-320s and Russian Regional Jets in the next several years. The company is to start receiving RRJ airliners in late 2008.
"This is a very reasonable plan," Boris Rybak, general director of Infomost, said. "However, projected RRJ purchases are fraught with certain risks because the Russian aircraft industry may fail to deliver the planes on time. Consequently, Aeroflot would lack short-range aircraft because the global market offers relatively few planes in this category."
"The board of directors has decided to modify this program and to re-examine it in March 2006," a board source said. "It looks like the document will be approved without any serious changes."
Gazeta
Mitsubishi and Mitsui may sell part of their stake in Sakhalin II
Mitsubishi Corp. and Mitsui Co., who own 45% of the Sakhalin II liquefied natural gas project, may sell part of their stake to the project's key shareholder - Royal Dutch/Shell Group of the United Kingdom and the Netherlands (55% of shares). This unexpected statement may have been the Japanese response to a new major player - Gazprom - joining Sakhalin II.
However, the Japanese do not have any real grievances against the gas monopoly, which is going to buy from Shell the blocking parcel of shares of operator Sakhalin Energy in exchange for a 50% stake in the development of the Neokomsky block of the Zapolyarnoye field.
So far, the Japanese have not said they would abandon the project, nor have they specified the size and cost of the stake they are selling. So the Mitsubishi statement, articulated yesterday by Chief Financial Director Ichiro Mizuno, is more of a warning.
Analysts are not in a hurry to offer any serious conclusions. They are simply saying that Sakhalin II, a medium-term shelf project involving many risks, is not a priority for the Japanese at the moment. It is much more important for them to gain access to East Siberian deposits via the East Siberian pipeline, whose construction is to start soon.
"Sakhalin II is a special project and is not running as smoothly as it seems," said Anatoly Khodorovsky, director for news and analysis of brokerage firm Region. "There are issues involving production sharing. It is a medium-term project that requires large infrastructure investments."
"That Sakhalin is close at hand is not a matter of much importance to the Japanese," said the analyst. "With comparable success, they are using methane carriers to deliver liquefied natural gas from Southeast Asia and the Middle East, employing more than half of their global fleet, especially since the country has 24 deliquefying terminals. Compare that with four in the U.S."
Novye Izvestia
Europe to find alternative to Russian raw materials, but not soon - experts
Western Europe is searching for an alternative to Russia's raw materials and most Russian experts say it can find one, but not in the near future.
Estimates show that by 2020 Europe will have to import no less than 800 billion cubic meters of natural gas, one-third more than it imports today. Raw materials from Russia now account for approximately a quarter of all of Western Europe's imports, but the share is expected to grow in the future.
"Europe will never find an alternative to Russian gas," Mikhail Delyagin, director of the Institute of Globalization Studies, said, adding that the search for alternatives would cost Europeans far more.
Energy specialists believe that an alternative to gas cannot be invented "at
one go," but many countries are capable of finding a replacement for gas in several sectors. Nikolai Yaremchuk, head of the oil and gas geology department at the Moscow Energy Institute, said that although "gas is unlikely to lose its dominant positions in the fuel balance of enterprises and in households," changes would be far-reaching owing to the use of energy-saving equipment and narrowing spheres of gas usage. The scientist also said that as liquefied natural gas became more profitable to use, transportation costs would go down, though resources would grow in price.
However, experts also indicate that Russia, while remaining a "great hydrocarbon power" and exploiting the dependence of trading partners on its deliveries, is itself becoming increasingly dependent on them. State Duma deputy Sergei Glazyev said Russia would not profit from gas "speculations." "Europe gets whatever it wants from us anyway, but our reliance on resources exports will come back to hit us with an inevitable crisis," he said.
"The model of a superpower based on energy pressure has no future," said Our Choice party leader Irina Khakamada.
