MOSCOW, August 8 (RIA Novosti)
New war begins in the Caucasus / Russia struggles to revive Soviet-time strategic alliances / Supreme Court puts prosecutors and investigators above the law / Russia's uranium exports to U.S. start yielding profit / South Stream may be rerouted through Romania / Olympic preparations cost Russia $1.2 million per athlete
RBC Daily, Gazeta, Moskovsky Komsomolets
New war begins in the Caucasus
Georgia has done it. It has started the war against South Ossetia it has been preparing for years. Unfortunately North Ossetians, the blood brothers of South Ossetians, will most likely become involved in the war, which may spread throughout the North Caucasus.
The undisguised intention of Georgia and the United States is to push Russia out of Abkhazia and South Ossetia through military means, if political methods fail.
Oleg Teziyev, former prime minister of South Ossetia, said an all-out war was raging in the breakaway republic. "This is not a minor confrontation. An all-out war has been going on in South Ossetia for the past week," he told the popular daily Gazeta.
The distinguishing feature of this war is the opposing positions of Russia and the Untied States. Their mutually exclusive interests in the South Caucasus became apparent in the early 1990s, but they still pretended not to be involved.
Today, the United States and its allies are openly supporting Georgia and have broadly hinted that they might "warm up" the North Caucasus, as Matthew Bryza, U.S. Deputy Assistant Secretary for European and Eurasian Affairs, put it.
This is quite possible, given the Caucasus volunteers' intention to fight for South Ossetia and the growing exodus of refugees, which can aggravate Ossetian-Ingush tensions in the Prigorodny district of North Ossetia.
Russia has traditionally expressed its concern and called on the two sides to make up. But Georgia and other countries do not consider its stance neutral, especially after the Russian Foreign Ministry and the command of the North Caucasus military district had promised to protect Russian citizens in the breakaway republics, and after Russian jets flew over Tskhinvali.
A source in the Russian Defense Ministry told RBC Daily that the troops of the North Caucasus military district had been confined to barracks and are waiting for new orders.
"Only the political leadership can order troop redeployment or the use of arms," he said. "As soon as the troops receive such an order, they will advance to the conflict zone to protect Russian citizens."
MP Konstantin Zatulin, director of the Institute of the CIS, told Moskovsky Komsomolets: "A resumption of hostilities would only encourage Russia to recognize the republics. Though this may provoke an outbreak of emotions, Russia must recognize them, so that Georgia would stop hoping that South Ossetia will surrender in this or future confrontations."
The analyst said the forceful reintegration of South Ossetia into Georgia, which would cost many lives, would not bring peace but encourage a guerrilla war in the region.
Gazeta.ru
Russia struggles to revive Soviet-time strategic alliances
The only conceivable reason why Russia is bothering to strengthen ties with Cuba is to spite Washington. While friendship with Venezuela and Iran provides certain economic benefits, albeit small ones as some Russian politicians suggest, Cuba offers not even that.
We need to restore our positions in Cuba and other countries, Prime Minister Vladimir Putin said recently. Restoring positions certainly implies more than selling Lada cars and spare parts for tanks and aircraft to Cubans. It was a hint to a possible restoration of the old strategic alliance of the Cold War time, when Cuba was a Russian outpost in close proximity to America's shores.
The media immediately suggested Russia could deploy an aircraft-carrier fleet base in Cuba. But it will be up to military experts to decide about the potential benefits or disadvantages of having aircraft-carrier divisions in the Russian navy. However, it is worth bearing in mind that even with those divisions, the Russian Navy will still be much weaker than those of the NATO members.
Basing strategic bombers in Cuba won't be effective either. Such aircrafts launch nuclear missiles from a range of thousands of miles, and deploying them 90 miles from Florida will only limit their combat qualities.
Cuba is going through a hard period, and the island's economy is in a dismal state as a result of the past communist experiments. Raul Castro could certainly do with a few Russian bombers and aircraft-carriers to intimidate his northern neighbors, the growing opposition and the huge Cuban Diaspora in the U.S., like in 1962.
But what does Cuba mean to Russia, apart from predictable nostalgia of the romantic symbols of the Cuban revolution? Are we trying to show the U.S. that we are prepared for another Cold War? We aren't. The Soviet Union, incidentally, lost the Cold War with twice as large a population and a better developed economy (at least as far as the defense sector was concerned).
Today, Russia is little more than a mineral resource supplier to developed nations, with a generally incapable army and almost without allies. Moscow has even failed to build a proper union with Belarus.
China's attempts to use Russia to suit its own interests have been fairly successful, judging by the two countries' joint veto with regard to Robert Mugabe, the Zimbabwean dictator. China in fact has important economic interests in Zimbabwe and in Africa as a whole, so its policy is clear. But Russia's interests lie elsewhere. Still, it supported Beijing. Why? Apparently to annoy London and Washington. A return to Cuba is yet another facet of the same policy of spite.
Vedomosti
Supreme Court puts prosecutors and investigators above the law
Prosecutors and investigators are now officially allowed to break traffic rules and risk only token punishment. The Supreme Court of Russia has banned patrol police from registering traffic violations made by prosecuting and investigating staff.
The highest court has as good as decriminalized such a practice not only for prosecutors but also for other holders of all sorts of "cards."
More and more people want to boost their legal status. In May 2008, all prosecutor's offices, including the Investigative Committee, had a combined staff of 58,000 people. By January 2009, under a presidential decree, their numbers will grow by another 2,000.
The police force has 820,000 staff. The number of those employed in the FSB and the Federal Guard Service is a state secret; but in 2006, the personnel of the Federal Guard Service central office was increased by a presidential decree from 600 to 665. Russia has 27,300 arbitration and federal judges. Lastly, the number of bureaucrats at all levels has risen from 1.2 million to 1.7 million in 2001-2007. Many of them have been put off limits to the law and are increasing the ranks of offenders sure that their cases will be considered "by special procedure", without public airing.
One reservation, however, is in order: the immunity and special court hearings for deputies and some categories of civil servants, including judges and prosecutors (as stipulated by the Code of Administrative Violations and the Law on Prosecutors), are needed to make them independent and impartial. The ban on opening a criminal case against them, to examine or search such people without observing special rules has been introduced to prevent law enforcers from threatening judges or staff of regulating bodies on the bidding of interested parties.
But a statement drawn up to record a traffic violation is unlikely to pressure an honest judge or an unbribable prosecutor.
The Supreme Court's ruling confirms that "some animals are more equal than others," and stresses that the Russian brand of immunity means that members of the law enforcement community, while remaining under their superiors' thumb, are guaranteed against outside control.
Kommersant
Russia's uranium exports to U.S. start yielding profit
Russia has finally negotiated a market-price payment for its uranium deliveries to the United States. This means that the U.S.-Russian HEU-LEU agreement regulating Russia's overseas deliveries of uranium has stopped being merely a political program, but has started to yield profit.
The HEU-LEU intergovernmental agreement signed in 1994 is a 20-year program via which the United States purchases highly enriched weapons-grade uranium (HEU) that has been down-blended to low enriched uranium (LEU) for use in 44% of the 103 U.S. commercial reactors.
According to the United States Enrichment Corporation (USEC), from 1994 through 2006 Russia was paid $4.6 billion for the uranium delivered under the HEU-LEU agreement. The full value of the contract is $7.6 billion.
Under the agreement, Russia annually supplies 5.5 million SWU (separative work units, representing the amount of uranium processed and the degree to which it is enriched).
The current market value of 1 SWU is $156, which means Russia should earn $858 million on uranium exports this year.
The USEC said in its report for the first half of 2008 that its growing costs imply an 11% growth of SWU market value.
A source in the nuclear industry suggested that the U.S. must have heeded Russia's requests on raising the uranium price, because "they had solid economic grounds." "HEU-LEU was signed using a pricing formula which is disadvantageous for Russia," he said adding that the agreement has recently acquired a more economic nature and that a new one has been signed to regulate uranium sales at market prices.
The new civilian nuclear agreement was signed between Russia and the U,S. in May. It says that Russia can sell uranium to the U.S. at a free price from 2011 on. By 2014, the amount of uranium purchased at the market value should cover 20% of the country's demand. However, the document has yet to be approved by Congress, which insists that Russia make a series of concessions in exchange - for example fully supporting U.S. sanctions against Iran.
Dmitry Terekhov, an analyst with the Metropol brokerage, said the U.S. had agreed to pay more because the old price could have forced Russia to cancel the contract. "They have saved just enough on Russian uranium during the past 14 years the HEU-LEU was in effect. Further scrimping could have made Tenex, the state owned Russian company which trades uranium fuel and services, to halt deliveries. Or Russia could have changed the amount of the fuel delivered without even breaking the contract. The U.S. wouldn't have been happy about it," the analyst said.
RBC Daily
South Stream may be rerouted through Romania
Italy's energy giant Eni, tired with Serbia's delay in ratifying the agreement with Russia on the acquisition of oil refinery Naftna Industrija Srbije (NIS) and construction of the South Stream gas pipeline across its territory, has proposed building it in Romania.
Analysts say Serbia may lose as much as 130 million euros in additional profits from gas transit tariffs if this happens.
Gazprom has declined to comment on a possible change in the pipeline's route, but a source in the Russian gas monopoly said it was technically possible.
Eni has also made no comment.
Initially, Romania, Hungary and Slovenia were regarded as possible transit routes for the South Stream pipeline linking Russia to the European Union across the Black Sea. Later, it was decided to reroute the pipeline through Serbia.
Last January, Russia and Serbia signed a package agreement on the construction of the pipeline across Serbia, the completion of the underground gas storage facility Banatski Dvor and the sale of NIS to Gazprom Neft, the oil arm of Gazprom.
The previous Serbian government ratified the document in May and sent it for approval to parliament, which had no time to consider it. In July, the new Serbian government once more approved it and forwarded it to parliament, which is due to discuss it on September 2.
However, the process could grind to a halt, because Serbia has said it was unhappy with the proposed price for NIS. Gazprom Neft is to pay 500 million euros for a 51% stake in the company and to invest as much in its modernization.
Deputy Prime Minister Mladjan Dinkic has said the construction of the South Stream pipeline across Serbia could come under question unless Russia agrees to pay more for NIS.
Dmitry Lyutyagin, an oil and gas analyst at the Moscow-based investment company Veles Capital, said Gazprom as the key player in the project will insist that the pipeline be built across Serbia because Gazprom Neft needs to buy the Serbian refinery to implement its strategy.
Vitaly Kryukov, an analyst with the Capital Investment Group, said the construction of the pipeline across Romania would not seriously increase its cost, assessed at over $20 billion. In view of Serbia's foot-dragging policy, it is logical that Eni would be prepared to reroute it, he said, adding that its obstinacy could cost Serbia 130 million euros in additional transit profits.
Vedomosti
Olympic preparations cost Russia $1.2 million per athlete
Russia has allocated over $500 million from the budget to prepare for the Beijing Olympics, which open today. Private business donated another $50 million, increasing overall spending to $1.2 million per athlete.
The money was provided from the federal budget, sponsors of the National Olympic Committee, and the assistance fund for Olympic athletes chaired by President Dmitry Medvedev. It was set up in 2005 by 10 Russian billionaires, including Roman Abramovich, Oleg Deripaska, Vagit Alekperov and Vladimir Potanin.
The budget has allocated 12 billion rubles (over $510 million), which is roughly as much as other leading sporting countries have spent on their Olympic preparations.
China has spent over $500 million over the last three years, Germany $196.5 million in 2008, and Britain $530 million over the last three years. The United States had kept its spending under wraps.
Of that sum, 4 billion rubles was spent on wages, 2 billion on scholarships for athletes and coaches, and the remaining sum was invested in maintenance and modernization of training facilities, sport schools and equipment etc.
Businessmen provided over 1 billion rubles, and the assistance fund for Olympic athletes earmarked 650 million rubles. The fund's founders also allocated 290 million rubles ($12.3 million) for bonuses to the athletes. Alexander Katushev, managing director of the fund, said the sum could be increased to 340 million rubles depending on the athletes' performance at the Games.
The fund allocated $4 million for the athletes' bonuses at the 2006 Turin Winter Games. Gold winners at the Beijing Olympics will receive 100,000 euros, silver medalists 60,000 euros, and bronze medalists 40,000 euros from the state, or double those paid to athletes after the Turin Games.
The founders transfer to the fund donations, whose size iskept confidential, but they grow every year, said Anton Mishnov, head of LUKoil's sponsor department.
Vladimir Potanin, head of the Interros holding company, said the fund founders provide equal contributions.
Oleg Deripaska, who controls the holding company Basic Element, said: "We transfer as much as the fund tells us."
Alexander Gafin, a director at Alfa Bank, said its CEO, Pyotr Aven, possibly contributed between $1 million and $1.5 million annually.
In all, the fund provides $100 million and also manages extra-budgetary allocations.
Allocations from Russia's National Olympic Committee have dwindled from tens of millions of dollars before the Athens Olympics to $6 million for the Beijing Games, a source in the NOC said.
RIA Novosti is not responsible for the content of outside sources.
