MOSCOW, May 22 (RIA Novosti)
Kazakhstan, Russia to merge their economies / Russian fleet may leave the Crimea in 2017 / Reunion of South and North Ossetia may cost Russia / Russian Railways to buy into Deutsche Bahn / Western countries oppose Russia's energy projects more actively / Ukraine to hold WTO accession talks with Russia /
Kommersant
Kazakhstan, Russia to merge their economies
On Thursday, Russian President Dmitry Medvedev will pay his first foreign state visit to Kazakhstan, a Central Asian republic, thereby showing that Moscow is still focused on the former U.S.S.R.
Kazakh President Nursultan Nazarbayev will be flattered and will propose an economic-integration plan to the Russian leader.
Both leaders will, as usual, focus on energy issues. Moscow, which last week announced plans to build the Baltic Pipeline System 2 oil-transport route, would like Astana to co-finance the project. However, Kazakh authorities are still considering the Russian offer.
Nazarbayev and Medvedev will probably discuss this issue today.
A source close to Nazarbayev said the Kazakh leader would raise the economic-integration issue.
Nazarbayev wants to reinstate the Common Economic Space concept that was first proposed by Russia, Kazakhstan, Ukraine and Belarus in 2003. This time, Astana insists on a bilateral cooperation plan minus Kiev and Minsk, which are allegedly hindering mutual integration.
Astana mayor Imangali Tasmagambetov, a supporter of Nazarbayev and one of his possible successors, said there were no plans to reinstate the Soviet Union, and that merged domestic markets were a key to cost-effective economic performance.
Medvedev and Nazarbayev could discuss integration prospects at the upcoming CIS summit in St. Petersburg, scheduled for early June.
On July 6, Nazarbayev will celebrate his 68th birthday; and the Kazakh capital will mark its tenth anniversary that same day.
Russian Prime Minister Vladimir Putin has already agreed to attend the celebrations; and President Medvedev will be invited today.
Nazarbayev, Medvedev and Putin will probably decide on the future of another post-Soviet alliance during their trilateral talks.
Gazeta, Gazeta.ru
Russian fleet may leave the Crimea in 2017
Ukrainian President Viktor Yushchenko has instructed the government to draft a bill to terminate agreements on the deployment of the Russian Black Sea Fleet in the Ukrainian territorial waters (Sevastopol) after 2017.
Ukraine's Foreign Minister Viktor Ogryzko said Kiev had encouraged Moscow to start preparing for the pullout.
"The work will last several years. But this does not mean that we are pushing [Russia] out of Ukraine," the minister said, adding that Moscow refuses to heed Ukraine's arguments. "We will do our best to make it hear us."
Ogryzko said he does not think Russia will withdraw from the 10-year Friendship and Cooperation Treaty, which came into force on April 1, 1999.
"I think the Russian authorities are aware of the treaty's importance for bilateral relations," he said.
Andrei Paruby, deputy of Our Ukraine - People's Self-Defense Bloc associated with President Yushchenko, said Ukraine's WTO membership was an advantage in its geopolitical competition against Russia.
"We can block Russia's accession to the World Trade Organization until the Russian-Ukrainian border is marked and an agreement on the withdrawal of Russia's Black Sea Fleet from Ukraine is signed," Paruby said. "This will give Ukraine an edge in relations with Russia and allow it to become a full-fledged player in international politics."
Russia has been unnerved by the Ukrainian officials' statements.
Sergei Karaganov, chairman of the presidium of the Council on Foreign and Defense Policy, said: "The point at issue is not the site or duration of the fleet's deployment, but that Yushchenko and a group of his comrades want to push Ukraine toward NATO."
The political analyst said the deployment of Russia's Black Sea Fleet is an issue to be decided by Russian military and political leaders.
Pavel Zolotarev, deputy director of the U.S. and Canada Institute, and former head of the Defense Ministry's information and analysis center, said: "The Ukrainian authorities have tried again to recarve the monetary pie, raising the issue of Sevastopol for a reason. But they forget that Sevastopol's economy will not survive without the Russian naval base."
Admiral Eduard Baltin, commander of the Black Sea Fleet in 1993-1996, said: "Russia is paying huge funds to Ukraine for the lease of the base, which could have been used to build a modern naval base on the Solyonye Lakes between Anapa and the Kerch Strait. There is a power transmission line and a gas pipeline in the vicinity, a smooth coast and no ice. I proposed the idea to Viktor Chernomyrdin when he was Russia's prime minister. But nobody seems to care that Russia is being robbed."
Izvestia
Reunion of South and North Ossetia may cost Russia
Taimuraz Mamsurov, head of Russia's North Ossetian republic, and Eduard Kokoity, president of the breakaway South Ossetia, have proposed reuniting the two republics. What will Moscow do about their appeal?
Georgia is too busy with parliamentary elections to comment, but Russia should consider all the pros and cons.
The two presidents have made their appeal at the right time, with Moscow and Georgia exchanging blows and the Ossetian issue one of the Kremlin's aces.
Besides, the Kosovo precedent gives Russia a free hand in the issue of breakaway republics. In the past, the borders of states that became independent after the collapse of socialist federations, such as the Soviet Union and Yugoslavia, were considered inviolable, but Kosovo has created a new precedent. If Albanians can secede from Serbia, why cannot Ossetians get their freedom from Georgia?
President Mikheil Saakashvili has rejected the Moldovan scenario, which provides for refusing to join NATO in return for Russian assistance in restoring Georgia's territorial integrity. He is eager to join the bloc, whereas Russia has apparently decided that if Georgia wants to become a NATO member, it will have to do it without Abkhazia and South Ossetia.
These were the pro arguments, but there are also reasons against the reunification of the two Ossetian states.
It will be extremely difficult technically to separate South Ossetia from Georgia, because the breakaway republic is a patchwork of Georgian and Ossetian villages and enclaves. It cannot be divided between Georgia and Russia without ethnic cleansing or starting a civil war against Georgians, and neither solution is acceptable.
Abkhazia, where territorial division could be effected relatively simply, could be a better argument for convincing Georgia not to join NATO.
Russia must also think about the price of the possible reunification of South and North Ossetia. It is one thing to support a republic that is actually independent of its parent country, and it is quite another matter to legally recognize its secession or include it into Russia.
This might provoke a serious conflict with the West. Is Russia ready to pay such a high price for incorporating a small area with a population between 40,000 and 70,000 that is a Russian protectorate de facto?
Nezavisimaya Gazeta
Russian Railways to buy into Deutsche Bahn
Saudi Arabia has cancelled an $800 million tender won by Russian Railways (RZD) to build a 520-km (323-mile) rail line in the country for political reasons. But top RZD managers are undaunted because the company now wants to buy into German state rail operator Deutsche Bahn (DB).
Analysts said they were optimistic about RZD plans, but that the government would make the final, politically motivated, decision.
The German government plans to sell a 24.9% DB stake is the biggest European IPO this fall. Before that, one of its subsidiaries, DB Mobility Logistics, will become an independent company handling cargo and passenger trains and providing other services.
This is a mandatory pre-condition for privatizing DB, whose capitalization reportedly exceeds $200 billion. However, the state will retain control over the German railway network.
RZD will have to spend several dozen billion euros on the deal. Vladimir Tikhomirov, chief economist at UralSib Financial Corporation, said RZD CEO Vladimir Yakunin would not have the final say in the DB privatization deal because the government usually made such politically motivated decisions.
Tikhomirov said RZD had no reason for being a minority shareholder, and that it wanted to buy a 100% DB stake in order to receive a seat in the corporate board of directors.
Vladislav Inozemtsev, head of research at the Center for Post-Industrial Studies, said RZD would not profit from the deal.
According to Inozemtsev, Aeroflot's plans for taking over Italian flag carrier Alitalia held more promise because this allowed the company to enter the European market, to use airline hubs and to operate transit flights.
He said DB abided by tough German legislation, and that RZD was in no position to overhaul the corporate management system.
The discussion of the deal implies that corporate executives consider foreign investment to be more profitable than domestic operations, Inozemtsev told the paper.
Novye Izvvestia
Western countries oppose Russia's energy projects more actively
The implementation of Gazprom's largest project in North America may be delayed for an indefinite period. The Canadian companies and the French company, which are the main partners in the Rabasca project to build an LNG depot in the Canadian port of Lewis, came to the conclusion (referring mostly to technical problems) that long-term gas supplies from the Shtokman gas condensate deposit are uncertain and cannot be properly guaranteed.
Observers talk about the political sabotage of the project. Delays in the launch of the 25-year contract, worth $20 billion, could be regarded as yet another round of Western opposition to Moscow's energy expansion.
Guy Trepagnier, a Canadian analyst, believes that the Western developers of the Shtokman deposit (French Total and Norwegian StatOilHydro, each with a 49% stake in the project) are not sure that they will retain their positions in the future.
In his opinion, Moscow is too unpredictable in its relations with Western investors, so no one knows for sure what will happen in Russia in the post- [presidential] election period, when the redivision of property on the energy market will begin. The Canadian expert cited the Kremlin's recent decision to cut Baltic terminals from Russian oil export and to reorient it to the Russian ports of Primorsk and Ust-Luga.
Another analyst, John Stellio from the Detsima research center, is of a different opinion. Belgium has just allowed Gazprom to supply gas for its industrial enterprises, which means that the Russian gas monopoly enjoys a great credit of trust. He said that tensions around Russian energy supplies are a trivial 'black' PR campaign organized by Russia's main global energy rivals - the United States and the EU.
Stellio said that the United States had to put up with the Nord Stream project; it missed its chances to interfere, and it has no alternative to this project. However, the South Stream project runs into the pro-American Nabucco and AMBO projects, with the latter specially designed for southern Europe and the Balkans.
Judging by all the signs, Russia's global rivals are anything but pleased with Russia's activities in the Mediterranean countries, in particular in northern Africa. Moscow offers lucrative transactions to Algeria, Morocco and Libya which take into account the poor development of the local infrastructure.
To give an adequate response, the other side, primarily France, intends to resort to manoeuvre and intensify its traditional political influence and historical ties with its former colonies. Some French commentators say mockingly that France better sponsor Algerian security forces before Gazprom does so.
Kommersant
Ukraine to hold WTO accession talks with Russia
Ukraine has filed a request with the Secretariat of the World Trade Organization (WTO) to hold bilateral talks with Russia, whose accession to the organization is all but complete.
Until Ukraine officially joined the WTO on May 16, Kiev and Moscow had thought Ukrainian negotiators would join the accession talks in a multilateral working group. President Viktor Yushchenko said in February that Ukraine "will not complicate Russia's WTO accession talks."
Alexei Portansky, head of the Information Office on Russia's WTO Accession, said they did not expect Ukraine to do this to Russia.
Ukraine's list of potential complaints is so long that the Russian delegation prefers to keep silent.
"It's too early to make comments now," Portansky said. "We are still waiting for an official request with clearly formulated complaints. Of course, Russian negotiators will insist that Ukraine should accept the terms coordinated with the main negotiating parties, i.e., the United States and the European Union."
A relevant example is Israel, which signed a bilateral accession protocol with Russia "without wasting time on unnecessary formalities."
Sergei Teryokhin of the Yulia Tymoshenko Bloc, head of the Ukrainian parliament's committee on the tax and customs policies, had earlier said Ukraine would demand that Moscow lift limitations on Ukrainian exports to Russia, cancel duty on oil exports, and amend Russian legislation on the protection of Russian producers.
Bilateral accession talks are unlikely to be limited to trade, because Russian-Ukrainian relations started to rapidly deteriorate after Kiev interpreted Luzhkov's speech in the Crimea as an infringement on Ukraine's territorial integrity.
Moscow Mayor Yuri Luzhkov said in the Crimea that the issue of ownership of Sevastopol is far from settled, which increased Russian-Ukrainian tensions and may also complicate Russia's WTO accession.
Yulia Tymoshenko's government has clearly hinted to Vladimir Putin's cabinet that Russia's accession to the WTO will proceed under Ukrainian control.
If Ukraine advances new requests to Russia within the framework of the "Crimean war" or copies the US and the EU's old positions, which the Kremlin has overturned, Russia may have to freeze the talks.
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