MOSCOW, September 10 (RIA Novosti) Putin's "third term" to become main campaign issue - expert/ China's ability to pay key to Eastern gas program/ Gazprom establishes its own environmental watchdog/ Quality of Russian economy getting worse/ President Putin unwilling to boost Sergei Ivanov's position
Vedomosti
Putin's "third term" to become main campaign issue - expert
Professor Konstantin Sonin from the Moscow-based New Economic School (CEFIR) said, although the upcoming elections to the State Duma, the lower house of parliament, and presidential elections were not completely democratic, they nonetheless aimed to settle important issues.
He said the main election campaign intrigue remained unclear, but that the re-election of President Vladimir Putin for a third term could become its main issue. Political parties must decide whether they will support Putin after his second term expires in March 2008 or not, Sonin told the paper.
Sonin said the pro-Kremlin United Russia party could support Putin for a third term prior to State Duma elections and probably receive over 50% of votes. He said this would make Putin politically legitimate and would help abolish a constitutional provision allowing each president to serve only two terms in office.
Although the incumbent president wants to step down next spring, the Constitution would inevitably be amended if most Russians vote for Putin's third term, Sonin told the paper.
Prior to elections of the fourth State Duma in December 2003, the Kremlin analyzed opinion polls and decided that Russian voters would support the arrest of disgraced oligarch Mikhail Khodorkovsky, deprivatization and the redistribution of natural resources, Sonin said.
He said the Putin administration could be blamed for many things, but that it heeded the public mood better than the elite and "progressive" Yeltsin administration.
The 2003 elections sealed the fate of embattled oil giant Yukos and determined subsequent national development. And the issue of Putin's third term could legitimize the Kremlin's efforts to curtail democracy and to facilitate state regulation of the economy.
Kommersant
China's ability to pay key to Eastern gas program
The Industry and Energy Ministry has approved an Eastern Gas Program worth 2.4 trillion rubles. The timeframe and export amounts will depend on Gazprom's commercial negotiations with buyers in China and Korea. If China does not agree to Russia's terms, the export part of the program will stop dead in its tracks.
Russia intends to export gas west or east at the same prices - for the Asia-Pacific region the price will be pegged to European rates. But the Chinese are not ready to purchase gas at European prices - negotiations with CNPC (China National Petroleum Corporation) have been ongoing for years. Recently China concluded a contract to buy large amounts of Turkmen gas at $90 per thousand cubic meters and hinted it would not pay more for Russian gas.
But the odds are China will have to accept Russia's terms. "I do not believe," said Konstantin Batunin, an analyst with Alfa Bank, "that Turkmenistan has sufficient available gas for China." He explained that considerable volumes of Turkmen gas had been contracted for by Russia, and Turkmenistan is exploring practically no new fields. What is more, there are also doubts that the country's gas reserves are that significant: despite Gazprom's repeated requests, no international audit was carried out.
The program will take 2.4 trillion rubles in investment to be implemented. Gas production and processing will absorb 1.3 trillion rubles, with another 1.1 trillion rubles going into the construction of pipelines and underground storage facilities. The program does not specify the funding sources - these could be both Russian or foreign investors. But the ministry has already sent to the Ministry of Natural Resources a list of several dozen gas fields, including the Chayandinskoye deposit and several on Sakhalin, proposing they be listed as strategic and restricted for foreign companies.
Gazeta
Gazprom establishes its own environmental watchdog
Russian energy giant Gazprom decided to establish its own environmental watchdog after organizing its own army and fleet. The monopoly is cutting a dash, say experts, adding that there will be some use in having an internal environmental watchdog.
International holdings such as Shell and BP have already received environmental complaints from the Russian state authorities. One can expect that Gaznadzor (Gazprom's fully owned subsidiary) will resolve conflicts with environmental experts without making them public.
Fulfilling the gas-saving program, of which the environmental inspectorate is a part, in 2007-2010 will allow Gazprom to save 9.2 billion cubic meters of natural gas, about 1.3 billion kWh of electricity, and 1.212 million Gcal of thermal energy, the monopoly's representatives say.
Establishing the watchdog is a PR campaign, say experts. "Any large, world-famous company has some sort of internal inspectorate. It is quite common for businesses. But it does not replace a state regulator," says Alexei Yablokov, a member of the council of the Environmental Policy Center.
Gazprom's environmental program is unworkable and is aimed at cutting a dash. But it will be useful, hopes Yablokov. Experts hope that the volume of petroleum gas being burnt into the atmosphere will be reduced.
According to official data, about 26% (about 15 billion cubic meters) of produced gas is burnt at oil refineries, but the real figure is approaching 65% (35 billion cubic meters,) say experts. Gazprom and Rosneft are the leaders in burning gas.
According to the Ministry of Natural Resources, about 3.7 billion cubic meters of Gazprom Neft's gas (65% of the total gas volume) were burnt at the company's oil fields in 2005, as well as 3.1 billion cubic meters of Rosneft's gas (37% of the total volume).
Nezavisimaya Gazeta
Quality of Russian economy getting worse
Economic growth in all countries of the Commonwealth of Independent States (CIS) is exceeding all recent forecasts of the International Monetary Fund (IMF). However, it is far from satisfying everyone. Many economists warn about the increasing primitivization of the [CIS countries'] economies and their growing technological backwardness.
The CIS countries' statistics committee reports that over the first six months of the year GDP grew by 35.1% in Azerbaijan, by 10.6% in Kazakhstan, and 7.8% in Russia.
IMF specialists report rapid growth of economic activity reflecting substantial development indicators in countries exporting energy resources and a certain rise in activity in countries importing them.
Meanwhile, Russian economists think that high GDP growth conceals fundamental problems facing Russia and other "raw material tigers" of the CIS countries.
"The aging of fixed assets in Russian industry is continuing, over half of them are more than 20 years old, which means they cannot produce any competitive products," said Dmitry Sorokin, deputy director of the Economics Institute of the Russian Academy of Sciences.
According to him, the growth of investment in the engineering sector is remaining at 2%-3%, which is not enough for bridging the technological gap with industrialized nations. In his opinion, an extremely alarming symptom is the dependence of raw material exporters from advanced countries that supply modern equipment for the raw material sectors.
"Kazakhstan could be the only exception from the common rule: it has adopted a 30-year industrial development program and can reduce its technology lag in the future," Sorokin said.
The extremely high GDP growth in Azerbaijan is explained by its small economy and a steep rise in oil production. Its oil sector accounts for over 78% of GDP and is the main cause of the country's economic growth. In 2005, Azerbaijan produced 22 million metric tons of oil, in 2006 30 million, and by 2009 it plans to increase its annual oil output to 60 million metric tons. Today, Azerbaijan's GDP is nearly 50 times less than Russia's and its oil output is 15-17 times less.
$martMoney
President Putin unwilling to boost Sergei Ivanov's position
A couple of months ago, Andrei Illarionov, president of the Institute of Economic Analysis, condescendingly described nanotechnologies as "banana technologies." It is difficult to imagine the emotions felt by the former presidential adviser on economics when Leonid Melamed, a close associate of Unified Energy Systems head Anatoly Chubais, was appointed general director of the Rosnanotech (a Russian corporation of nanotechnologies). Illarionov had slated Chubais even more severely than these games with molecules.
Melamed's appointment looks really unexpected. Mikhail Kovalchuk, director of the Kurchatov Institute, was tipped to be head of the new state corporation. He was recently made deputy for Sergei Ivanov, first deputy prime minister, on the government council on nanotechnologies, while his brother Yury, a co-owner of the Kremlin-friendly Rossiya Bank, is one of Putin's closest associates. Maybe the president decided against boosting Ivanov's position too much.
Rosnanotech will be one of the largest spenders of state money. Officials promised that 130 billion rubles, and perhaps even 200 billion rubles, would be contributed to Rosnanotech's authorized capital by the end of the year. An expert team of managers, however, is needed before these funds are used effectively, and nanotechnologies, which seem more mysterious than the UES reforms of five years ago, are put on a commercial footing.
The fact that a financier has been placed at the head of Rosnanotekh shows that the development of nanotechnologies is planned as a commercial undertaking. Ivanov has neither a team of managers nor a team of scientists. Yet as early as next year, following the abolition of UES, a large group of people with the experience of managing big projects will find itself without employment. The fact that Melamed became Rosnanotekh general director and Chubais joined its supervisory board shows that the team of old Chubaisites will soon reunite around a new project. And Ivanov will not forget who helped him with personnel and financial technologies at a critical moment.
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