MOSCOW, April 20 (RIA Novosti) The Russian government will ignore economic forum in London/Russians prefer president with security background/Social discontent can lead to political instability - experts /Volvo to assemble trucks in Russia /VSMPO Avisma not to hold IPO abroad - experts
Kommersant
The Russian government will ignore economic forum in London
The Russian Economic Forum, which opens in London Sunday, will be ignored by the Russian state.
All government officials and representatives of state-owned companies have been excluded from its agenda. The Kremlin has instructed that the event be ignored and the focus placed on the St. Petersburg economic forum, to be held this June.
If officials and businessmen want to communicate, Russia can offer plenty of domestic sites, the president said.
In February, it seemed that this year's forum in London would have the best representation of government officials in its history. But the final version of its agenda does not have most of the names included earlier.
Three sources close to the Kremlin administration said the reason for this mass boycott was "an order from above."
One of the sources said that President Vladimir Putin's aide Viktor Ivanov had told officials three weeks ago "not to turn London into another Courchevel" and refrain from visiting the forum.
Another source said the final decision to boycott the event was made Wednesday or Thursday because of the Kremlin's conflict with the British Foreign Ministry related to political immigrant Boris Berezovsky.
The Kremlin's anti-British sentiments were allegedly aroused by the reaction of the European Union and the United States to the March of Dissent rally held in Moscow last Sunday.
"It has been said that only those who have an IPO planned soon can go to London," a source close to the authorities said.
"All others who want to speak can do it at the Russian Economic Forum in St. Petersburg in June," he said.
Yet another source said that the Kremlin administration had said the trip to London was very undesirable just the day before yesterday.
A couple of days ago, the head of a large state-owned company the source works for was preparing his report for the London forum and did not think to reject the invitation, he said.
The event's organizers, however, do not believe that this will affect the forum's popularity - this year they expect the highest ever number of guests representing private businesses.
Private businessmen said that the Kremlin was acting the way it was in the hope of raising the status of the St. Petersburg forum, which is organized by the Economic Development Ministry and the World Economic Forum in Davos.
Gazeta.Ru
Russians prefer president with security background
The two First Deputy Prime Ministers, Sergei Ivanov and Dmitry Medvedev, are the likeliest candidates to succeed President Vladimir Putin in 2008.
However, Ivanov, who resigned as defense minister two months ago, would win the second round of presidential elections because Russians now prefer a president with a security background.
According to the latest survey by the influential pollster Yury Levada Analytical Center (Levada Center), Ivanov is now more popular than the "liberal" Medvedev, who is in charge of the four high-priority national projects, i.e. healthcare, education, affordable housing and agriculture.
Medvedev's popularity is falling by 1-2% each month, Levada Center sociologists said.
When respondents were offered a list of several politicians, both Ivanov and Medvedev had virtually the same ratings, within the margin of error.
However, if both first deputy prime ministers run in the second round, Ivanov will have a better chance of prevailing.
If the elections were held this Sunday, Ivanov would receive 55% of all votes.
That is because Russians trust Ivanov more than Medvedev.
Traditionally the overwhelming majority of Russians approve of President Putin's performance.
This April, 79% of those polled confirmed this, while another 19% said they did not trust him.
In March, 59% and 57%, respectively, said they trusted Ivanov and Medvedev. In April, the gap grew - 59% to 55%.
Ivanov's rising popularity is hardly surprising, because he is shown more often than Medvedev on national television, which is more popular than any other media in Russia.
The press is also paying more attention to former defense minister. His recent interview with The Financial Times has been quoted by numerous press outlets.
President Putin, who has not yet named his choice for successor, told a news conference in February that he will not do so before the election race begins.
Many analysts believe, however, that neither Ivanov nor Medvedev will be elected, and their nomination is a mere diversion.
Gazeta
Social discontent can lead to political instability - experts
The majority of Russians (54%) believe that the privatizations of the 1990s were "unfair and illegal," according to a recent poll.
Experts say that people who demand a redistribution of property tend, as a rule, to reject the legitimacy of a government and not vote during elections.
In general, about 50%-60% of Russians do not accept the results of privatization, and that figure has remained stable for several years.
In spite of the propaganda disseminated by the government media, which highlights the growing wealth of Russians, more than half of the respondents are dissatisfied with their social position, especially considering that the state has received billions of dollars in oil revenues.
"All this talk about privatization is no more than empty words. Russians have not yet thought about specific methods of property redistribution. They protest by ignoring elections. But there is a negative attitude growing in society," said Leonty Byzov, head of socio-political analysis at VTsIOM, a pollster.
"Social instability may turn into political instability at any moment," said Vladimir Ryzhkov, an independent member of parliament.
"Society is moving further away from the government, and this can lead to a revolutionary mood," said Byzov.
Although protests have not yet led to mass demonstrations, a war between rich and poor has already begun.
"People who move into new apartments in run-down neighborhoods complain that beer bottles are being thrown at their cars," said Yelena Matrosova, director of the BDO Yunikon center for macroeconomic research. "As long as the authorities do nothing, people will hate their successful neighbors."
Every fifth Russian (18%) wants to return to the socialist regime of the USSR, and every second (45%) believes that the country's future lies in a combination of market and social policies. Only 28% of respondents are satisfied with the current state of affairs.
Vedomosti
Volvo to assemble trucks in Russia
On Thursday, automotive giant Volvo Trucks said it plans to build a truck plant worth 100 million euros in Kaluga.
Starting in 2009, the new enterprise will assemble 10,000 unpainted Volvo trucks and 5,000 Renault vehicles. Experts said that is bad news for Russia's truck maker KAMAZ.
Volvo Trucks Russia spokesperson Natalia Alyoshina said the company, now in talks with the government, wants to obtain concessions on a par with other carmakers turning out at least 25,000 vehicles a year under the industrial assembly program.
In 2003, Volvo Trucks built a plant in Zelenograd with an annual capacity of 500 vehicles.
On Thursday, telecommunications AFK Sistema agreed to sell its 34% stake in the joint venture to Volvo Trucks, and the deal will be closed in late May.
After that, Volvo Trucks will completely take over the Zelenograd plant.
The company sold 500 and 2,500 new trucks in 2003 and 2006, respectively. Renault Trucks has boosted sales to 600 vehicles a year since 2004.
KAMAZ spokesman Vladimir Samoilov said Volvo Trucks is a serious rival, offering more expensive vehicles, especially saddle prime movers. However, KAMAZ trucks featuring imported components also cost more.
Igor Korovkin, executive director of the Association of Russian Automakers, agreed. Korovkin said Volvo and Renault mostly face tough competition from automotive giants Mercedes-Benz, Iveco and Man.
By assembling trucks in Russia, both companies could reduce prices by 15%, Mikhail Pak, an analyst with the Capital brokerage, told the paper. Korovkin said industrial car assembly is the only way to cut production costs.
If the government agrees to reduce minimum production volumes, then other rivals, including Chinese companies, would also enter the Russian market.
Kommersant
VSMPO Avisma not to hold IPO abroad - experts
Russian VSMPO Avisma, the world's largest titanium producer, has decided to calculate its dividends until 2012 based on its financial accounts under Russian accounting standards, thereby refusing to peg them to accounts under US GAAP.
The move will not affect the size of its dividends, it has promised.
Industry analysts believe that Avisma, acquired last year by the state-owned weapons exporter Rosoboronexport, has decided to postpone its foreign IPO for a while.
Alexander Pukhayev, an analyst with Deutsche UFG, said Avisma is creating a precedent because there has been no example of going from US GAAP to the Russian accounting standards on the Russian metal market yet.
"The auditor has not yet started calculating profit for 2006 under US GAAP, but we have to pay dividends," the company said.
However, it stressed that the change "will hardly tell, because payments are not set as a percentage, but as a specific sum."
The decision indirectly proves that Avisma's new owner, Rosoboronexport, has decided against holding its initial public offering abroad, investment analysts said.
The previous owners of the controlling stake, Vyacheslav Bresht and Vladislav Tetyukhin, actively promoted the IPO initiative. Rosoboronexport's CEO Sergei Chemezov said last autumn that he approved of the plans and that the IPO could take place in 2007.
Natalia Kocheshkova of the Finam brokerage said that his statement could be "an image-shaping move targeting Western counter-agents."
Boris Vagner of 2K Audit Business Consultations said the cancellation of the IPO plans was "predictable" after Rosoboronexport had decided to re-evaluate the company's capitalization.
"So far, problems with US GAAP can be attributed to the new structure of finance management," he said. "But if the situation is not resolved soon, it will give a reason to suppose that Rosoboronexport has decided not to hold the company's IPO at all."
Experts said the decision was easy to understand. The corporation's development program envisages investment in production at $1 billion until 2012, while Avisma's net profit under the Russian accounting standards in 2005 was about $300 million.
That means that it is able to finance its investment program on its own, said Alexei Pavlov, head of analysis with the VIKA brokerage.
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