MOSCOW, July 31 (RIA Novosti) Russia will maintain relations with both sides in Palestinian conflict - expert / Russia still hopes to export certain arms to Middle East / Turkmenistan elbows Russia out as gas supplier to China - expert / Russia suspends loan to Belarus / Isuzu trucks to be assembled in Tatarstan
Gazeta.ru
Russia will maintain relations with both sides in Palestinian conflict - expert
Russia will not break off its contacts with Hamas, despite the position taken by Mahmoud Abbas, head of the Palestinian National Authority (PNA), now visiting Moscow.
The Hamas leadership has even said it is planning a visit to Russia by agreement with Moscow. In the opinion of experts, the Kremlin is not going to repudiate its contacts with the two parties to the conflict.
Hamas is planning a trip to Moscow as soon as the PNA chairman concludes his visit to Russia.
Abu Marzuk, member of the Hamas politburo, said Monday that last weekend, Khaled Mechal, leader of Hamas' political wing, discussed the matter with Russian Foreign Minister Sergei Lavrov by telephone.
During the conversation the Russian side reiterated its support for the idea of "Palestinian unity," the Palestinian leader said.
Hamas has decided only now to admit that such a conversation ever took place.
"The conversation did not define anything, but we will discuss this in the near future, following Mahmoud Abbas' trip to Russia," Marzuk said.
So far Abbas has been able to see only Lavrov, but judging by everything, Russia did not give Abbas its unqualified support.
At least, when the meeting was over, the Russian foreign minister did not rule out a visit by a Hamas delegation to Moscow. Lavrov said the only way out of the situation in Palestine was a "dialogue between all political forces" in Palestine and Israel.
The announcement of a possible Hamas visit to Moscow on the day negotiations opened with Abbas, is, in the opinion of Yevgeny Satanovsky, president of the Institute for Middle East Studies, evidence that Russia is not going to abandon its close relations with Abbas' opponents, but will be playing both fields simultaneously.
"Russia is no longer betting on one horse. Earlier we contrived to spoil relations with both sides in the conflict. Those times are gone never to return. One cannot pull others' chestnuts out of the fire all the time, especially when no one thanks you for it. Russia will negotiate with whomever it likes," the expert said.
"Hamas can be isolated by others - money comes from Europe, arms from Egypt. And no one is now accusing us of lobbying on behalf of Hamas, or supplying it with arms," he said.
Vedomosti
Russia still hopes to export certain arms to Middle East
The United States, in a drive to offset Iran's growing influence in the Middle East, is preparing to supply its allies in the region with a vast quantity of weapons worth more than $60 billion. These plans will help Russia to increase its own arms deliveries to the region, but not in comparable volumes.
During the next 10 years, the U.S. will supply Israel with weapons worth $30 billion and $13 billion-worth to Egypt. Washington is also planning to sell arms to Saudi Arabia to a total sum of $20 billion (including new air-to-air missiles and JDAM smart bombs).
The largest long-term Russian contracts fall way short of these deals - a contract concluded with Algeria last year to supply it with aircraft, submarines, tanks, air defense and other equipment is estimated at $7.5 billion, while a ten-year military and technology cooperation program with India approved in 2001, is worth $10 billion.
Russia has no similar programs with Mideast countries. Weapons exports to Saudi Arabia and Egypt have never been large because of the countries' dependence on American aid, according to Konstantin Makiyenko, of Russia's Center for Analysis of Strategies and Technologies, while with Israel Russia is only cooperating and competing on third-country markets, for example in India, the expert said.
Additional supplies of American arms may come in useful, because they will help to "hot up" the Middle East arms market, Makiyenko said. Russian plans to boost arms exports to Saudi Arabia now look problematic, but hopes for exporting tanks or air defense systems there still remain, the expert said.
Early this year, during Vladimir Putin's visit to Saudi Arabia, Sergei Chemezov, general director of state arms export monopoly Rosoboronexport, said negotiations were under way with the country to deliver T-90 tanks and armored vehicles to a sum of about $1 billion. Russia delivered to Egypt upgraded S-125 Pechora-2M and Tor M-1 air defense systems, according to a source in the defense industry. Larger shipments are problematic because of U.S. control over Egypt's military-technical policy.
On July 27, the Israeli Debka website reported that Russia was negotiating with Iran supplies of 250 Su-30 MK fighter jets.
A source in the Sukhoi company called the report a "provocation."
Mikhail Barabanov, editor of the Export Vooruzhenii (Arms Export) magazine, said such a decision would be the best solution for Iran's run-down air force, but that under the current political circumstances neither Russia nor China would supply their weapons to Iran in such quantities.
Nezavisimaya Gazeta
Turkmenistan elbows Russia out as gas supplier to China - expert
Technical talks between delegations of the governments of China and Turkmenistan to be completed today in Beijing may have far-reaching consequences not only for their bilateral relations but also for other Central Asian countries and Russia.
Two weeks ago, Turkmenistan's President Gurbanguly Berdymukhamedov and Chairman of the People's Republic of China Hu Jintao signed an agreement in Beijing on Chinese investments in the construction of a 7,000-kilometer (4,300-mile) gas pipeline from Turkmenistan to China.
The main subject of discussion at the present talks is the price of Turkmen gas to be supplied to China. Specialists say it should not exceed $90 per 1,000 cubic meters.
Alexei Maslov, professor at Russia's Peoples Friendship University, said it is extremely disadvantageous for Russia, which intended to supply gas to China at prices above $100 per 1,000 cubic meters.
In his opinion, "the situation with Turkmenistan repeats the one with Kazakhstan, which suddenly agreed to supply oil and gas to China at lower prices, thereby pushing Russia aside from contracts with Beijing." The expert believes that Russia has been ousted as a gas supplier to China.
Whereas the initial agreement on gas exploration and production in Turkmenistan, signed a year ago by the former Turkmen President Saparmurat Niyazov, proposed gas supplies only from the right bank of the Amu Darya River, the latest agreements signed by Gurbanguly Berdymukhamedov also suggest gas supplies from the river's west bank, i.e., from the area where the Gazprom pipe of the Caspian Gas Pipeline starts.
In other words, the Turkmens have allowed China to get into the Russian "gas space" in Turkmenistan.
Moreover, China hopes to "become Turkmenistan's exclusive partner." According to Maslov, Turkmenistan, like Kazakhstan, have already "separated from Russia," despite the political rhetoric of their leaders.
Kommersant
Russia suspends loan to Belarus
Russia has suspended the granting of a $1.5 billion loan to Belarus, coordinated with the Finance Ministry in June, because the country has refused to take a loan from Gazprombank, the financial arm of gas monopoly Gazprom, to repay its gas debts.
Belarus owes Gazprom $450 million for gas supplies in the first half of the year.
Moscow is not against granting the loan to Belarus. In early June, Finance Minister Alexei Kudrin said he had the government's preliminary approval to grant the loan and that the process had entered the technical stage.
Belarusian Prime Minister Sergei Sidorsky's failure to secure the loan was determined by political reasons.
On July 25, Belarusian President Alexander Lukashenko publicly questioned the agreement on gas prices reached in December 2006, and criticized the Nord Stream project, which stipulates laying a gas pipeline across under the Baltic Sea bypassing Belarus.
According to Lukashenko, Gazprom raised gas prices from $50 per 1,000 cubic meters in 2006 to $100 in 2007 in order "to earn $1.5 billion, and possibly $2 billion, at the expense of Belarus."
The Belarusian leader demonstrated his displeasure immediately after his negotiators failed to agree with Gazprom on restructuring the Belarusian debt at the corporate level last week. Lukashenko inferred that Gazprom's offer to grant a loan through its bank for the repayment of gas debts at 12% interest per year was too expensive.
A cheaper alternative is to take out a state loan from the Russian budget, but Belarus will have to pay for it. The Russian Finance Ministry said: "Russia never granted cheap loans, not even to Belarus; we are only starting a program of providing so-called economic development assistance loans."
Besides, Russia issues sovereign loans only "on market conditions, in particular to solvent states." Borrowers are recommended to look up the practices of the Organization for Economic Cooperation and Development (OECD).
Business & Financial Markets
Isuzu trucks to be assembled in Tatarstan
Russia's Severstal-Avto, and Japan's Isuzu Motors Ltd. and the Sojitz trading house signed an agreement yesterday to set up a joint venture to produce trucks and engines in Russia.
Experts said the deal could earn Severstal-Avto $130 million by 2012.
Severstal-Avto will provide its production facilities in the Alabuga special economic zone, in Tatarstan.
There are also plans to manufacture Fiat Ducato light commercial vehicles there. The company will turn out 25,000 trucks a year if the factory works in two shifts. However, its production volumes can be increased to 30,000. In the future, localization can account for up to 50% of production.
The UAZ car factory is planning to continue producing Isuzu vehicles, but it will shift its focus to the construction of truck bodies.
Under the agreement, Severstal-Avto is the main shareholder and owns 66% of shares, while Isuzu has 29% and Sojitz 5% of the company's assets.
The participation of the Sojitz trading house in the project is common practice in Japanese business, said Gennady Sukhanov, an analyst with Troika Dialog. Trading companies take part in nearly all Japanese joint ventures.
Vadim Shvetsov, CEO of Severstal-Avto, said all models of Isuzu trucks with a loading capacity of 2 to 16.9 tons will be manufactured in Russia.
At the initial stage, investment in the project will amount to only 350 million rubles. The available production facilities and part of the equipment, for example, a painting complex shared with the Fiat Ducato project, provided for such a modest financial outlay.
The first Isuzu trucks will appear in early 2008.
Considering the price of trucks, sales volume and expected production profitability, the joint venture will bring Severstal-Avto $1 billion in profits, or over $100-$130 million in net profits by 2012, said Kirill Tachennikov, an expert with the Otkrytiye brokerage.
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