What the Russian papers say


MOSCOW, August 15 (RIA Novosti) Russian authorities may use railway explosion to pressurize NGOs/ India no longer sees Russia as ideal ally - expert/ India no longer sees Russia as ideal ally - expert/ Strong man public speaking most appealing to voters/ Severstal buys non-ferrous Irish asset/ Olympic State Corporation to handle record budget

Gazeta, Kommersant

Russian authorities may use railway explosion to pressurize NGOs

Nikolai Patrushev, director of the FSB and head of the Russian Counterterrorism Committee, said yesterday the explosion on the Moscow-St. Petersburg railway near Veliky Novgorod in northwestern Russia Monday evening, and the deterioration of the situation in the North Caucasus showed that the threat of extremism and terrorism had not been eradicated in Russia.
Experts wonder if Patrushev's words will hail a new strengthening of Russia's vertical system of power.
Stanislav Belkovsky, president of the National Strategy Institute, said: "The authorities will use it [the tragedy] as a pretext for attacking disloyal NGOs. The Kremlin has compiled a list of 125 'uncomfortable' organizations, which receive funding from abroad, and nationalist associations. I don't think the government is guilty of planning the explosion, but it will certainly use it to put pressure on unsuitable organizations."
Dmitry Oreshkin, head of the Mercator analytical group, said: "The power vertical should be probably strengthened, but only if those who made mistakes and failed to use their powers [to prevent the tragedy], including at the top level, are fired. Otherwise, every new terrorist attack will give more power to those whose job is to prevent attacks. By and large, this is also having a negative effect on the president's prestige, because it is generally believed [in Russia] that the president is responsible for everything."
Emil Pain, a political analyst at the Institute of Social Studies of the Russian Academy of Sciences, said: "I don't think there will be major changes in the political situation ahead of the [parliamentary and presidential] elections, not even under the banner of combating terrorism."
Valery Ryazansky, deputy head of the United Russia group in parliament, said: "The power vertical is strong enough, and security-related services do not need additional powers."
Yuly Rybakov, a human rights champion from St. Petersburg, said: "Somebody needs a reason to tighten the screws before elections. The method is as old as the hills. Housing blocks were blown up in Moscow before Putin's first presidential campaign."
Viktor Maslov, a major general of the FSB and former governor of the Smolensk Region (1994-2002), said: "The explosion came too early before the elections to destabilize the situation, and was too small to be seen as a show of force. It was an act of terrorism that looks more like vandalism. Anyway, the authorities should not react too harshly, or else someone may think the tragedy could undermine the system."

Nezavisimaya Gazeta

India no longer sees Russia as ideal ally - expert

The news that India and the United States finally reached a nuclear cooperation agreement was not unexpected.
Russia became friends with democratic India back in Soviet times when the Communist regime was in power. Today, however, this friendship is visibly cooling down. The two nations are getting further away for a number of reasons. They do not show much interest in each other's economy, and their military cooperation has most likely reached its zenith.
India has already taken from Russia whatever was left of the defunct Soviet Union's technological heritage, and Russia has not developed anything distinctly innovative over its past fifteen years of independence. That is why Delhi's interest in Russia's defense programs is fading - India is highly developed and ambitious, what it wants is real state-of-the-art technologies.
In addition, Russia is probably heading for a scandal over the contract to upgrade an aircraft carrier commissioned by the Indian Navy. The shipyard is way behind schedule to deliver both the vessel and the aircraft for it.
True, India had been quite willing to be friends with Russia as opposed to China and a number of Islamic nations. Unfortunately, Russia created the non-existent "triangle" Moscow-Delhi-Beijing, and then began rapprochement with the very Islamic nations that India would never regard as friendly.
Beijing and Delhi are unlikely to become friends today. But if they decide otherwise, what would they need Russia for? What could Russia offer those two major powers?
India would maintain friendly relations with Russia based on real shared interests, but would never do it to indulge the psychological complexes of the Kremlin officials. It is Russia's irrational policy of allying itself with its natural opponents in order to annoy the U.S. that eventually prodded India to seek the latter's friendship.
All this may result in an absurd situation: Russia will end up China's ally despite its historic distrust of Beijing, and an opponent to India, its best potential ally.
(Alexander Khramchikhin heads the analytical department at the Institute of Political and Military Analysis)


Strong man public speaking most appealing to voters

The Levada Center has registered a surge in the popularity rating of First Deputy Prime Minister Sergei Ivanov as a presidential candidate. He is now 8% ahead of his closest rival, Dmitry Medvedev.
Until July both candidates were running neck and neck, and in May Medvedev even forged ahead. Experts explain these "swings" by psychological reasons: the population likes Ivanov's powerful speech making better.
If a presidential election were held next Sunday and the list of candidates omitted the incumbent head of state Vladimir Putin, Ivanov would gain 37% of the vote. His runner-up Medvedev would garner 29%. These are the findings of a July poll conducted by the Levada Center in 46 regions among 1,600 people.
This figure does not say much about the successor candidate's potential, said Valery Fedorov, general director of VTsIOM (All-Russian Center for the Study of Public Opinion).
Whenever Putin features on the candidates' list, the deputy prime ministers are left within 3%-4% of each other, and it is simply impossible to reliably compare their popularity levels. Over 50%-60% of respondents said they were ready to vote for a candidate if nominated by Putin, he added.
The overall growth of Ivanov's rating should not be seen in the context of an election campaign, said political expert Alexei Makarkin. The election of both candidates is hypothetical, and Putin is behind both.
But he is unlikely to make his choice from polling results. Simply Ivanov fits the image of a strongman better than the other, because society has now opted for this style of government.
Ivanov's popularity owes its growth to society embracing self-assertive processes now under way across Russia, the expert said. Subjects most popular among Russians currently are imperial speech making and Arctic explorers.


Severstal buys non-ferrous Irish asset

Severstal, Russia's second-largest steel producer, has bought a 22% stake in Ireland's Celtic Resources.
Severstal made the transaction to replenish its molybdenum reserves, while Celtic will have a chance to strengthen its foothold in Russia. However, analysts say that investors are unlikely to be happy with the steelmaker's diversification plans.
According to Severstal Resurs, which manages the mining assets of Severstal, the transaction is part of the company's strategy of "diversifying its mining business through alliances with globally respected partners."
In line with the strategy, Severstal Resurs signed an agreement with Anglo American plc, a leading global mining and natural resources company, in October 2006 for joint exploration of copper, nickel and zinc deposits in Russia. However, they have just set up a joint venture so far.
Investors are not happy with the news either, and the two companies' shares gained only a few percentage points yesterday. Investment analysts say Celtic's ores are downstream resources for Severstal, and the steelmaker is buying an insufficiently large stake.
Ivan Andriyevsky, a managing partner at 2K Audit-Business Consulting, said the acquisition of a 22% stake would give Severstal less than 1% in the Russian gold market.
Kirill Chuiko, an analyst with the Uralsib financial corporation, said: "It is not clear why Severstal decided to put the deal on its balance, rather than on the balance of Alexei Mordashov's companies." (Mordashov is the main beneficiary of Severstal.) "This will create a large degree of uncertainty for investors, because the company's strategy is becoming less definite."
Celtic's Russian business is not doing very well. The Irish company lost the battle for the Nezhdaninskoye gold ore deposit in Yakutia, Central Siberia, to Alrosa, Russia's largest diamond producer, and later to Polyus Gold, a leading Russian gold-mining company.
After that, Celtic bought Britain's Eureka Mining, which is developing deposits in the Chelyabinsk Region (South Urals). But Eureka later lost its development licenses for two of its three Russian deposits.
In late July, Celtic withdrew from a project to develop the Mikheyevskoye copper and gold deposit (the Chelyabinsk Region) by selling the Mikheyevskoye mining and dressing plant (GOK) to the Russian Copper Company, one of the largest copper producers in Russia, for $33 million.
Celtic Resources Holdings Plc has gold, molybdenum and copper deposits in Russia and Kazakhstan. It produced 1.9 metric tons of gold in 2006.
Severstal accounts for more than 16% of Russia's steel output. The company has production facilities in Russia, Italy, France, Great Britain, and Ukraine.

Business & Financial Markets, Vremya Novostei

Olympic State Corporation to handle record budget

A special state corporation will be entrusted with building all the facilities for the 2014 Sochi Winter Olympics. The government provided record funds which will be spent in the most centralized way possible. The State Olympic Corporation will control the bulk of spending for preparations for the Sochi Olympics, 314 billion rubles. Private developers will be acting as subcontractors.
The scheme chosen will channel all financial flows through Moscow. President Putin must have failed to find another trustworthy person like himself to ensure the funds are spent correctly. Whoever is appointed to head the new corporation, they will be closely supervised by the president.
"This decision is well justified, as it will help avoid the misuse of funds," said Mikhail Gorokhovsky, first vice president of BEST Realty, a Moscow real estate company. "Otherwise, some officials concerned would try to make a profit. The facilities' estimated cost would grow, and their quality would be poorer," he added.
In addition, this amount of work can only be handled by a large company, the expert said. On the other hand, private companies will not be totally excluded from the project either, but will work as subcontractors.
"All constructors and developers will find something to do in Sochi," agrees Alexander Chernov from API Development.
The state corporation was established because the government wanted all construction issues coordinated by a single center, believes Yakov Fyodorov, a representative of MCFR Consulting, a Moscow IT-consulting firm. "Of course there will be some allegations of misuse of the Olympic funds anyway. But with all the top officials supervising the process, the problem really has a solution," the expert said.
Still, however transparent the managing company might be, misuse of funds is more common at the subcontractor level, at the construction stage, said Maxim Temnikov, a board member at Mirax Group, a major Russian development company.

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