MOSCOW, January 16 (RIA Novosti) Russia dissatisfied with Britain's "colonial thinking" / Turkmenistan pressing Iran for early shelf division / Russia to promote national brands / Gazprom set to take over Serbian oil and gas company / Russian government agencies, commercial companies plagued by corruption / Russia not to renew lease agreement for Ukrainian radars
Gazeta, Vremya Novostei
Russia dissatisfied with Britain's "colonial thinking"
The conflict over the British Council in Russia is gaining momentum. The foreign ministers of the two countries yesterday exchanged sharp statements.
Russian Foreign Minister Sergei Lavrov actually accused Britain of colonial thinking. "This is not the language one should use to speak with Russia," he said.
U.K. Foreign Secretary David Miliband compared Russia's actions with the dictatorial policies of Myanmar's military junta and Iranian ayatollahs, who had both prohibited the operation of the British Council in their countries.
Experts forecast a growth of tensions in Russian-British relations.
The reasons for closing foreign NGOs either become public knowledge very quickly, or only when this suits the host country, as in the case of the British Council.
First it acted as a cultural NGO, but when Russia issued a law on the operation of non-profit organizations, London asked Moscow in September 2006 to recognize the British Council as a governmental organization. But the Russian authorities did not grant London's appeal, which has led to the current tax complaints.
Alexei Malashenko, scholar-in-residence and a member of the Research Council of the Carnegie Moscow Center, said the conflict would grow in scale. "The regional branches will be eventually closed, although the situation can still improve because our leading presidential candidate has not yet spoken his mind," he said.
Unless the upper echelons express their opinion soon, the situation will take the path outlined by Lavrov, with tough administrative measures against the British Council, Malashenko said. According to him, "the under the covers struggle will come to a head in the next two or three days."
Leonid Slutsky, first deputy chairman of the international affairs committee of the State Duma, the lower house of Russia's parliament, said the conflict was aimed at undermining Russian-British relations.
"There are no reasons for it, and it must be settled diplomatically," he said. "Force-against-force fighting is unlikely to solve the problem."
Meanwhle, one more "illegal" British NGO has been found in Russia. It is the Chechen branch of the British Center for Peacemaking and Community Development.
Valery Kuznetsov, the prosecutor of Chechnya, said on Tuesday: "An inspection showed that the branch is working in Chechnya illegally."
According to him, its accreditation expired on May 28, 2007, the permit to continue operation was not granted, and the Center did not even file for it.
Kommersant
Turkmenistan pressing Iran for early shelf division
The conflict between Iran and Turkmenistan over gas supplies that were halted in the New Year is slowly escalating into a regional gas war. After Turkmenistan announced it would not resume deliveries to Iran because of Iranian debt, Tehran warned it would file a complaint with international courts of justice.
Russia's Foreign Ministry believes the conflict is being fueled by Turkmenistan's wish to speed up the division of the Caspian shelf. Experts think the conflict will ultimately play into Russia's hands.
Turkmenistan suspended supplying gas to Iran (about eight million cubic meters a day) from January 1. Iran exports comparable amounts to Turkey, which sends the fuel on to Greece.
But in the second half of December, Iran reduced energy deliveries to 4-5 million cubic meters a day and stopped them altogether on January 7.
Unofficially, one of the Iranian employees said the reason was that Ashgabat had suggested raising the purchasing price of gas from $75 to $140 per thousand cubic meters starting from January 1, 2008.
Vladimir Yasinsky, head of analysis at the Eurasian Development Bank, said the stoppage was caused above all by Turkmenistan's wish to have its gas prices raised to Russia's levels - an average of $140 - in 2008.
According to Valery Nesterov, a Troika Dialog analyst, if Turkmenistan were to push up the price for Iran, Russia would be another beneficiary: "With two long-term contracts, with Russia and Iran, breached, Ashgabat is unlikely to sell gas to China at much cheaper rates - $90. In other words, Gazprom would have another chance to persuade the Chinese to conclude a steadier agreement on deliveries than with Turkmenistan."
But a Foreign Ministry official, who asked not to be named, said that by stopping supplies to Iran, Turkmenistan is pressing for Tehran's consent to a division of the Caspian seabed.
Russia, Kazakhstan, Azerbaijan and Turkmenistan agreed to divide the Caspian seabed on the modified median line principle. But the remaining stumbling block is Iran. Tehran is opposed to this principle, suggesting the shelf should be divided into national sectors.
A source at the Foreign Ministry said Ashgabat had chosen the tactic of a gas blockade of Iran's northern parts that have no pipelines linking them with fields in the country's south, in order to obtain Tehran's early go-ahead to the Caspian division principle.
Vedomosti
Russia to promote national brands
Russia's Ministry for Economic Development and Trade has drafted and submitted to the government a concept to promote Russian-made products and the national brand, aimed at boosting exports, encouraging tourism, foreign investment and Russian companies' capitalization.
The concept involves establishing a whole network of non-profit organizations to function as an image-making infrastructure.
The "Russia" brand-name and logo will be promoted by long-term information campaigns, each implemented by a special non-profit organization. The country's development will be translated into foreign languages, online resources on Russia will be created, and foreign journalists will be invited to tour the country.
The government is not exactly offering a direct support for collective brands, but the draft concept envisages some assistance with participation in international exhibitions and forums, and advertising in the Russian media published for foreign audiences.
Russia's image, as seen by potential foreign tourists, investors and people on the street, is rather poor. But this approach will hardly be effective. Although many countries advertise themselves pointedly, they usually concentrate on specific spheres.
Egypt, Turkey and Thailand emphasize tourism. Great Britain does almost the same, advertising its schools. China spends most of its advertising budget on the promotion of its language and culture abroad, and on charity programs in countries where Chinese companies operate, mostly in Africa.
An attempt to tell everyone about everything in a short time will create a sketchy and abstract image rather than an attractive one. Moreover, an ambitious task such as creating a national brand would require a combined effort of all citizens, including airport customs officers and street police patrols, not just a couple of government agencies.
In Moscow, the various departments of the Economic Development and Trade Ministry are in fact working independently from each other on the creation of the national brand and establishing an image-making state corporation.
Nezavisimaya Gazeta
Gazprom set to take over Serbian oil and gas company
The European Commission is worried about energy giant Gazprom's regional expansion because it is ready to buy a controlling stake worth a billion euros in Naftna Industrija Srbije (NIS), or the Petroleum Industry of Serbia, the largest state-owned national oil and gas company.
Experts said the deal would be closed during President Vladimir Putin's visit to Serbia on January 18.
Other customers were deterred because of the minority stake's $550 million price, the need for additional investment and other prohibitive barriers.
Troika Dialog analyst, Valery Nesterov, said the Serbian company now offered more attractive terms for would-be investors.
Serbian authorities decided that a strategic investor would first buy a minority stake, and that majority stakes would subsequently be sold and top managers hired.
Nesterov said Gazprom had made the most attractive offer, and one that Belgrade could not refuse because otherwise it risked losing a promising gas project.
Gazprom will pay 400 million euros for a 51% stake in NIS and will invest the remaining 600 million euros into corporate development. The energy giant also promised to assist in the construction of the 400-km South Stream gas pipeline system worth $800 million, due to pass through Serbia.
Moreover, Gazprom offered strategic partnership in building a gas reservoir in Banatski Dvor, Serbia.
Timur Khairullin, an analyst with the Antanta Capital brokerage, said politicians and corporate officials had virtually coordinated the deal, and that Serbia's Minister of Economy and Regional Development Mladan Dinkic who had previously claimed that the NIS stake was worth 2 billion euros, would resign from a commission examining the bilateral contract.
Commenting on the European Commission's nervous reaction, Khairullin said any company had the right to sell their assets to anyone, and that its objections seemed far-fetched.
Nesterov said Gazprom had recently eliminated gas shortages in Greece and Turkey after Iran curtailed gas exports. The company did this by pumping more gas along the Blue Stream pipeline linking Russia and Turkey via the Black Sea.
"Instead of trying to create artificial competition for Gazprom, the European Commission should adopt a more constructive stand," Nesterov said.
Business & Financial Markets
Russian government agencies, commercial companies plagued by corruption
Corruption is flourishing in Russia, while investor rights are often abused and property rights unprotected, the U.S. Heritage Foundation and Wall Street Journal said in The 2008 Index of Economic Freedom, a report published on Tuesday and rating 162 countries on 10 specific freedoms such as trade freedom, business freedom, investment freedom, and property rights.
Russia was ranked 134th, but Russian experts said they did not agree with every assessment in the report.
The report said Russia's tax policy was not bad, but certain economic freedoms leave much to be desired. Russia has dropped 15 places since last year's ranking. Its weakest points are corruption, restricted investor rights and insufficient protection of private property. The authors of the report also pointed out excessive government regulation in the oil and gas sector.
Russian experts do agree with the assessment of the scale of corruption.
"Corruption is not just plaguing government institutions, but has infiltrated commercial companies as well, where middle managers often act in ways that harm their shareholders' interests," said Anton Danilov-Danilyan, head of the Expert Council of Delovaya Rossiya.
The problem is aggravated by a lack of an anti-corruption effort, said Yelena Panfilova, who heads the anti-corruption center at Transparency International Russia.
However, Russian experts are critical about several other points made by the report. For example, Danilov-Danilyan thinks that investment freedom in Russia is much higher than in other countries, business espionage in China and the United States is "monstrous" compared to Russia.
As for the high level of government interference in the more attractive economic sectors, as the report says, it is partly due to the fact that Western civil servants cannot even imagine other sources of income than their service, Panfilova added.
Kommersant
Russia not to renew lease agreement for Ukrainian radars
According to a Russian Defense Ministry source cited by the business daily Kommersant, the ministry has decided not to renew a lease on two radars located near Sevastopol and Mukachevo in Ukraine. Their tasks will be fulfilled by the new early warning radar recently built near Armavir in Russia.
However, Ukraine hopes that Russia will renew the lease and increase lease payments.
Over the past two years, the Russian Defense Ministry has been increasingly cautious about the data provided by the two Ukrainian radars.
A source in the ministry said: "In 2005, control over the Sevastopol and Mukachevo radars was transferred from the Ukrainian Defense Ministry to the country's National Space Agency. New staff were employed there who were only just learning to operate the radars."
At the same time, Kiev almost doubled the lease payment, from $840,000 to $1.3 million annually.
The Dnepr-class radars were put on combat duty in 1979. When the Soviet Union fell apart, the radars became the property of Ukraine. In 1992, Russia and Ukraine signed an intergovernmental agreement on the lease of the radars for 15 years.
The radars can detect missile and spacecraft launches at a distance of 4,000 km (2,486 miles), covering southern Europe, northern Africa and the Middle East. Their working life is 25 years.
Last year Ukraine's National Space Agency proposed modernizing the radars in order to prolong their service life and increased annual lease payments [for the two radars] to approximately $3 million. In July 2007, Russia notified Ukraine of its intention to withdraw from the intergovernmental agreement on the radars.
The Voronezh-DM radar has capabilities similar to its predecessors, the Dnepr and Daryal, but uses less energy and meets current environmental standards. It has extensive radar coverage of a territory spreading from China to northern Africa, including missile-capable countries, notably Iran, Pakistan and India.
Russia started pilot use of its radar near Armavir, whose construction began in May 2006, in December 2006. Its active range of 4,200 km (2,610 miles) can be increased to 6,000 km (3,729 miles).
However, Ukraine claims that Russia has problems with putting the Armavir radar on combat duty.
The Russian Defense Ministry plans to build five or six Voronezh-DM radars in Russia and eventually to stop using all radars located in Ukraine, Azerbaijan, Belarus and Kazakhstan.
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