MOSCOW, April 7 (RIA Novosti) Russia to take adequate measures in case of NATO expansion/ Russia should be friendlier to neighbors - expert/ West will improve relations with Uzbekistan and Turkmenistan/ Russia to lose Asian pipeline race/ Poland reluctant financer of Nord Stream project/ Sberbank eager to expand abroad
Kommersant
Russia to take adequate measures in case of NATO expansion
Russian President Vladimir Putin's speech at the closed meeting of the NATO-Russia Council during the bloc's summit in Bucharest has created a sensation.
According to the business daily Kommersant, Putin said Moscow viewed NATO's expansion to Russia's borders as a threat and promised to make an adequate response.
The Russian president spoke about Georgia calmly, but lost his temper on the issue of Ukraine, said a source on the delegation of a NATO member state. Putin told his American colleague that Ukraine was not a proper state but an Eastern European territory, a substantial part of which had been presented to it by Russia.
The source said Putin had openly hinted that if Ukraine were admitted to NATO, it would cease to exist as a state. In other words, he threatened to start the procedure for the secession of the Crimea and Ukraine's eastern regions.
Pro-Kremlin political analysts and experts have immediately taken up the hint. They said on Russian television on Saturday that Ukraine's admission to NATO could provoke that country's disintegration and this is why it will never join the bloc.
Some experts claim that Ukraine's admission to NATO's Membership Action Plan was postponed because the bloc wanted Russia's assistance in the delivery of NATO cargo to Afghanistan.
Andrei Serenko, an expert at the Russian Center for Contemporary Afghanistan Studies, said: "The defeat of the Taliban and the conclusion of the operation in Afghanistan are crucial for U.S. President George W. Bush. These issues must be decided before the fall elections."
"With the routing of the Taliban, Russia will lose the main bargaining chip in its relations with NATO. The bloc will therefore have no reason to refuse to admit Ukraine to the MAP at a meeting of its foreign ministers in December."
Vedomosti
Russia should be friendlier to neighbors - expert
The Bucharest summit indicated that Europe is gradually abandoning NATO's agenda. It is increasingly identifying itself as a different block, not led by the United States or NATO. It is symbolic that this awareness should come right before the resumption of the EU-Russia talks on the adapted CFE treaty, said Vladislav Inozemtsev, the head of the Center for Postindustrial Studies, a Moscow-based think tank.
The outcome of NATO's Bucharest summit elicited sighs of relief from Russian patriots and, what's more, proved that European politicians can think for themselves. By standing up to U.S, pressure, the "old European" leaders have made a much more important political statement than some would think.
Intra-NATO relations are growing into U.S.-EU dialogue, which, incidentally, is not always cloudless, Inozemtsev maintains. The Americans have actively lobbied for two strategic projects, Turkey's accession to the EU and Kosovo's independence, for the past two years. After consenting to the latter, Europe must have decided it has had enough of U.S. pressure. Why the U.S. is so keen to have Ukraine and Georgia admitted to NATO is clear; but on the other hand, NATO accession has become too closely associated with an "entrance ticket" to the EU for Europe's liking. It is only natural that the European nations want to retain the exclusive right to decide who should become a member of their union.
European flags were hoisted above the central squares in Tbilisi and Kiev during the days of the "pink" and "orange" revolutions in Georgia and Ukraine. Even today, they decorate the facades of many government buildings there. For the people of Georgia and Ukraine, Europe is a symbol of their choice made in favor of prosperity, a law-governed society and freedom of travel, the expert said.
NATO is something more abstract as far as they are concerned. The alliance is unlikely to send its armies to Tskhinvali and Sukhumi in any case, while Ukraine is not threatened by Russia. And who says that their way to the EU should go through NATO? If it was Washington who mooted it, the latest news from Bucharest might have cast doubts on the idea.
NATO and the EU aren't the same thing, Inozemtsev reminded. NATO membership is not a compulsory attribute of being a European nation. Even in 1973, during the first EU expansion, Ireland joined without being a NATO member. In 1995, Sweden, Finland and Austria followed suit, and in 2004, Malta, Cyprus. Portugal and Greece had to wait 30 years after they joined NATO before they were allowed to join the EU, while Turkey's admission, which has been a NATO member for over 50 years, is still pending.
Russia does not have a problem with Ukraine's joining the EU. On the contrary, as an EU member, Ukraine could become Russia's tool to influence Europe. But for that, Russia needs to pursue a friendlier policy toward its neighbors, the expert concluded. Inspired as it is by the outcome of the Bucharest summit, it should now try and rally its potential for compromise.
Nezavisimaya Gazeta
West will improve relations with Uzbekistan and Turkmenistan
The recent NATO summit in Bucharest demonstrated the active leaning by Central Asian states towards the West. Uzbekistan and Turkmenistan are working to break out of international isolation, and the West seems ready to cooperate with their regimes, which it previously sharply criticized.
Nur Omarov, an expert on Central Asia and a professor at the Kyrgyz-Russian Slavic University (Bishkek, Kyrgyzstan), said: "The heads of Central Asian states attended the NATO summit above all to ease their countries out of international isolation. Uzbekistan was driven into isolation after the events in Andijan, and Turkmenistan because of ex-president Saparmurat Niyazov's policies in the last few years. They want to diversify their economies."
The invitation to Islam Karimov to the Bucharest summit shows that the West has reviewed its policy regarding Uzbekistan and is even ready for close cooperation.
The Uzbek leader, whom the West sharply criticized for using military force to suppress opposition protests in Andijan in May 2005, has proposed his country be used for delivering non-military cargo via the Termez-Hairaton checkpoint on the only railroad into Afghanistan.
Karimov also proposed changing the format of the 6+2 talks on peace and stability in Afghanistan, held between Iran, China, Pakistan, Tajikistan, Turkmenistan and Uzbekistan and the United States and Russia, to involve NATO.
Turkmen leader Gurbanguly Berdymukhammedov has proposed opening NATO training camps and deploying NATO stores and logistics bases in Turkmenistan. He also advocated the construction of a new gas pipeline from his country to India via Afghanistan and Pakistan.
Sergei Luzyanin, president of the Oriental Studies Foundation and a professor at the Moscow State Institute for International Relations (MGIMO), said the energy factor dominated military issues in Washington and Brussels' relations with Turkmenistan.
Sergei Malashenko, an expert at the Carnegie Moscow Center, said: "The Central Asian states want to develop closer relations with the West. Russia was ready for this turn, as indirectly proved by the fact that President Vladimir Putin has not joked about this in his speech in Bucharest. Moscow knows that this [rapprochement] is inevitable."
Gazeta
Russia to lose Asian pipeline race
India is expected to join the trans-Afghan gas pipeline project soon. A source in the Indian Ministry of Petroleum and Natural Gas said that an official event would take place on April 21-22 in Islamabad, where oil and gas ministers of the consortium members are due to meet.
For Russia this means not only a defeat in the fight for the right to organize its own gas supplies to India, but also the failure of its long-cherished plan of the Russia-India-China strategic triangle.
The Russian side has been lobbying for the idea of a North-South transport corridor for years, in particular, the construction of an Iran-Pakistan-India (IPI) pipeline, 2,700 km long, with an annual capacity of 30-35 billion cubic meters, to link Asia with Europe. This project was a direct rival to the U.S. initiative to create the East-West corridor, via Baku, Tbilisi and Ceyhan. The U.S.-Russian confrontation in the region has resulted in over 10 years of rivalry for the two rival pipelines.
An unstable situation in Afghanistan has long played into the hands of Russia, which managed to step up negotiations on the IPI project. However, a conflict between Iran and India in early 2006 (the new Iranian leadership proposed that India should revise its gas prices under the 2004 contracts) froze negotiations on the project.
The prospect of more than a 53% rise in gas prices and Russian-Iranian nuclear power plant engineering projects have forced India to choose the pro-American TAPI project (Turkmenistan-Afghanistan-Pakistan-India pipeline, 1,600 km long, with an annual capacity of 33 billion cubic meters).
However, some experts think that Russia's failure to win the south-Asian pipeline race cannot be considered the final one. Political instability in Afghanistan could freeze the TAPI pipeline construction for a long time if it does not disrupt it totally. Besides, it is not yet clear whether Turkmenistan will be able to meet all its contractual obligations.
India's energy requirements are great, therefore it could benefit from participation in both projects, said Bharat Karnad, an expert at the Indian Center for Policy Research.
The implementation of these two projects will turn Central Asia into a powerful energy hub redistributing supplies both to the West and to East. The gas pipeline system in the region will be closed and absolutely autonomous. If Russia fails to ensure its participation in this new system now, in the future Russian gas supplies to the capacious Asian market may be restricted to small batches of liquefied natural gas (LNG) supplies from Sakhalin.
RBK Daily
Poland reluctant financer of Nord Stream project
Although Poland is opposed to the Nord Stream gas pipeline, due to link Russia and Germany via the Baltic Sea, it will have to finance it once the December 13, 2007 Treaty of Lisbon comes into force at the end of 2008 in time for the 2009 European elections.
This will happen if project operator Nord Stream AG requests a loan at the Luxembourg-based European Investment Bank, whose assets comprise contributions from all European Union countries, including Poland.
The Treaty of Lisbon, also known as the Reform Treaty, alters the way the EU works through a series of amendments to the Maastricht Treaty on European Union and the Rome Treaty on Establishing the European Community.
The Treaty stipulates more double-majority voting to new areas of policy in the European Council and the Council of Ministers from 2014 onward.
Previously, the parties to Nord Stream could not hope to obtain European Investment Bank (EIB) loans because Poland had the right to veto them. However, only 18 votes and 68% of capital stock will be enough to approve a loan after the Treaty of Lisbon enters force. Moreover, objections by Poland, Lithuania, Latvia and Estonia, owning a 2.4% stake in the EIB, will not be taken into account.
Nord Stream AG spokesperson Irina Vasilyeva said 70% of the 7.4 billion euro project would be funded by external sources. She mentioned project funding and allocations from international export-crediting agencies, but said there were so far no plans to take out an EIB loan.
Alexander Nazarov, an analyst with the Metropol Investment and Finance Company, said most of the aforesaid 18 shareholders were likely to approve the EIB loan, but that other banks could also lend money. Energy giant Gazprom was Russia's most reliable corporate borrower with a good credit history, and Nord Stream AG would have no problems getting the loans if they were guaranteed by Gazprom.
Mikhail Zak, head of research with Moscow-based Veles Capital, said Gazprom that had recently floated its Eurobonds would have no problem receiving the EIB loan, and that many companies were eager to loan money to Gazprom or its subsidiaries.
Just like any other sovereign state, Poland is trying to prove its importance; but Warsaw is unlikely to be in a position to defend itself because half of Europe and Russia are keen to build the Nord Stream pipeline, Zak told the paper.
Business & Financial Markets
Sberbank eager to expand abroad
Sberbank plans to become one of the global top 10 banks in terms of capitalization within five years, Denis Bugrov, senior vice president of Russia's largest state-controlled savings bank, said on Friday. He said this calls for increasing the bank's international share to 20% of total profits.
Analysts say the bank's plans for international profitability are unattainable.
Sberbank's capitalization grew from $68.4 billion in late 2006 to $93.25 billion in late 2007, more than 36% year-on-year. It reached a historical high, $99 billion, on the Russian trading system RTS on December 11, 2007, but plummeted to $72.1 billion on April 4, 2008, down 28% since the beginning of the year.
Bugrov said the bank was ranked 17th for capitalization in the world. Although it is the largest lending organization in Eastern Europe, its international revenues amount to less than 1% of the bank's total.
Sberbank is eyeing the markets of the CIS, China, Southeast Asia and Eastern Europe. Bugrov said strong local banks could be used for developing its Eastern European business, increasing international investment to billions of dollars.
Sberbank is moving ahead of BNP Paribas, the Bank of China, the Bank of America, the UniCredit Group, Santander and several other large banking groups. HSBC, with capitalization of as much as $200 billion, is leading this group.
Analysts refuse to make forecasts now, because market capitalization is a highly unstable factor.
Maxim Osadchy, chief analyst at the Russian-based AntantaPioglobal investment group, said the more a bank depends on the state as its main beneficiary, the less predictable is its capitalization. He said Sberbank could make the global top 10 only if its rivals' capitalization plummets.
"Over the past year, the capitalization of many major foreign lending institutions went down to 25%-33%," he said.
It is very difficult to take over banking assets in Eastern Europe, experts say.
Leonid Slipchenko, an analyst at the Uralsib investment corporation, said: "The largest banking assets on that market belong to foreign banks or major local players, such as OTP Bank in Hungary. Sberbank will have to hold acquisition talks with major local banks and Western shareholders, and such talks are unlikely to end well for Sberbank."
Slipchenko said Sberbank should opt for organic growth, which comes from a company's existing businesses as opposed to growth that comes from buying new businesses, on international markets. This means that it will be unable to earn 20% of its profits abroad in five years.
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