MOSCOW, August 21 (RIA Novosti)
Russia ready to begin recognition process for Abkhazia, South Ossetia/ Ending Russia-NATO cooperation will prove a mistake/ U.S. may slap sanctions on Russia/ Canada may sap Gazprom's strategic plans/ Russia does not plan to supply Syria with offensive weapons/ Gazprom setting up Russia's largest energy holding
Nezavisimaya Gazeta, Vedomosti
Russia ready to begin recognition process for Abkhazia, South Ossetia
Sergei Mironov, the speaker of the Russian parliament's upper house, said Russia was ready to heed the appeals of Abkhazia and South Ossetia to recognize them as independent countries. In fact, the two houses of parliament said they have even agreed on a potential date to do so, August 25.
South Ossetian leader Eduard Kokoity was received by President Dmitry Medvedev at Bocharov Ruchei on Tuesday, while Abkhazia's Sergei Bagapsh visited the Russian president's residence on Wednesday.
Both meetings focused on the future of the two self-proclaimed republics, while their leaders presented Medvedev with letters on their intentions. Bagapsh said formal appeals would be launched soon.
On Wednesday Abkhazia's parliament approved an independence appeal to the Russian government. On Thursday a large gathering will meet on a square in the center of the capital Sukhumi to finally approve the appeal.
Medvedev had earlier assured the two leaders that Russia would support and act as guarantor of any decision taken by the peoples of South Ossetia and Abkhazia.
Zulfia Nigmatullina, who heads a legal department at Russia's Federation Council, said there are no international laws regulating the procedure for recognizing independence. In Russia, a presidential decree will suffice.
"Parliament can hail this decision or criticize it, but its statements have no legal force," she said.
However, considering Russia's determination to protect its citizens' interests and its decisive action to check aggression, it is an opportunity for parliament to pronounce its political stance, said Dmitry Mezentsev, deputy Federation Council speaker.
Alexander Rahr, program director for Russia and the CIS at the German Council on Foreign Relations, said he had no doubt that Russia would eventually recognize the two republics.
"It is now clear to everyone that the former Soviet Union cannot be rearranged solely to suit the West, which is in no position to do this. If the West tries to interfere, it may face a confrontation with Russia, which it would rather avoid," Rahr said.
However, the two rebel republics' recognition by the international community might be a problem. "It is important that Russia think twice about who will support Abkhazia's independence and the de facto annexation of South Ossetia, rather than dream of a victory over Georgia. No Western nation will recognize Abkhazia, which will end up having a similar status to Northern Cyprus. It will also shatter the fragile balance established in the post-Cold War world," he said.
Vedomosti
Kommersant
Ending Russia-NATO cooperation will prove a mistake
The war in South Ossetia has soured Russia's relations with the West, at least with NATO. The result has been the cancellation of several previously scheduled joint events.
Analysts believe that there are adequate steps Russia can take in response. But other voices coming from Moscow warn against drastic moves.
The initiative came from NATO - the first to be cancelled was the FRUKUS exercise, which was to have been held in the Pacific and involved the United States, Britain, France and Russia. Then the U.S. dropped Russia from a joint anti-terrorist operation, Active Endeavor, scheduled for August-September. Russia responded in kind: it refused to take part in the Open Spirit annual exercise.
Russia-NATO cooperation will be curtailed as much as possible, Kommersant quoted Vladimir Yevseyev of the Russian Academy of Sciences' Institute of World Economy and International Relations as saying. The only activity that is likely to be continued will be joint work on Afghanistan. NATO members are allowed to transport cargoes through Russia and use its airspace.
According to the analyst, Russia will in turn step up its global bomber patrols. "For the moment, patrols are flown as part of exercises. Aircraft are not always in the air," he said. "Perhaps if confrontation intensifies, patrols will become regular as in Soviet times, and their scope will be expanded."
Yevseyev believes that damaged relations with the U.S. will threaten Russia's military contacts with close American allies - Japan, Australia and South Korea. In return, the Russian authorities might curb the activities of NATO's information office in Moscow.
Russia has been offered a tempting opportunity to act innocently offended and bang the door, Vedomosti writes, but ending cooperation with NATO will be a mistake.
Recent events have shown that the alliance is not of one mind. Unlike the U.S., Britain and newly admitted countries, West European nations are unwilling to embroil themselves in a serious conflict with Moscow and speed up Georgia's NATO entry. By pursing a responsible policy in South Ossetia, Russia will not afford pretexts for isolation campaigners, the paper said.
Novye Izvestia
U.S. may slap sanctions on Russia
Because of Russia's intervention in Georgia, the United States will now stop short of abolishing the discriminative Jackson-Vanik amendment, a remnant of the Cold War which has been virtually ineffective for the past 20 years.
However, given the latest escalation of tensions, analysts do not rule out a thawing of the U.S. foreign-economic sanctions against Russia.
Yevgeny Nadorshin, an expert at the International Institute of Economics and Finance, said the strained relations between the two countries have already had some unpleasant consequences without the Jackson-Vanik amendment reinstated.
Investment activity dropped significantly, and mutual trade is hampered by more problems.
"It is quite conceivable that the U.S. Congress will lift the moratorium on the Jackson-Vanik amendment if bilateral relations deteriorate further," said Mikhail Delyagin, director of the Institute for Globalization Studies, a Moscow think tank. "At least they are discussing sanctions against Russia. Hypothetically, it may be fraught with an arrest of Russia's state assets in the U.S."
Nevertheless, he said, even a reinstitution of the amendment will not be a deadly blow to Russia's economy. True, it will hit large companies in specific sectors. But on the whole, Russia's trade and economic dealings with the U.S. are not so big to lead to really disastrous results.
"Russia has powerful pressure tools to influence the U.S.," Delyagin went on. "We have vast amounts of government funds invested in U.S. dollars, supporting the U.S. economy. If they go ahead with the sanctions, we divest our dollars. We could also divest government assets and other high-liquidity assets from American securities. The money can be moved to Asia or Europe. Such actions will damage the U.S. economy more than the Jackson-Vanik amendment may ever harm Russia's," he said.
Gazeta
Canada may sap Gazprom's strategic plans
Natural gas agreements between Russia and Canada may be jeopardized because of the conflict in Georgia. According to Canadian Prime Minister Stephen Harper, Ottawa plans to overhaul all aspects of cooperation between the two states, including the liquefied natural gas projects, which were discussed at the 2006 G8 summit in Russia. Analysts believe Ottawa's decision may frustrate Gazprom's plans to conquer North America.
Gazprom's only project in Canada so far is LNG supplies to the Rabaska regasification terminal. Gazprom's affiliate, Gazprom Marketing & Trading USA, recently signed a preliminary agreement for full exploitation by the terminal's production facilities. In future Gazprom would like to acquire a major stake in Rabaska. According to both parties, they have already concluded preliminary agreements regarding the matter.
Breaking these agreements will dash Gazprom's hopes of penetrating the North American market, said Ivan Andriyevsky, managing partner with Independent Consulting Group 2K Audit - Business Consulting. Vitaly Kryukov, analyst with the Kapital investment group, shares his colleague's viewpoint. "Gazprom planned to supply large volumes of LNG to the North American market, which is why statements of this kind bode ill for the holding - they can complicate the company's entry into the new market," the expert said.
Analysts argue that the aggressive marketing tactics the Russian monopoly uses to penetrate the U.S. market, which is one of the world's most rapidly developing markets, are justified. However, the lack of regasification facilities in the U.S. has so far prevented Gazprom from boosting its LNG export volumes. Under such circumstances a terminal in Canada could be a sort of entrance ticket to the American market. More importantly, Canadian terminals are thought to be the ideal solution when it comes to optimizing the route and the terms of LNG supplies.
"If other states take similar steps, this will have a negative impact on the development of Gazprom as a global energy company," Kryukov said. Nevertheless, he doesn't consider it probable.
Analysts unanimously acknowledge that Stephen Harper's statement wasn't determined by economic motives. Rather, it was based on purely political grounds.
"Canada is the U.S.'s major trade, economic and political partner. Given Washington's recent criticism of Moscow's current policy, Ottawa simply couldn't keep silent. But it doesn't necessarily mean that they will break off their energy relations," Andriyevsky said.
Vedomosti
Russia does not plan to supply Syria with offensive weapons
The presidents of Russia and Syria, Dmitry Medvedev and Bashir Asad, will today discuss military-technical cooperation. Supplies of offensive weapons are off the agenda, even though Israel has rendered military aid to Georgia.
On Wednesday, a Kremlin source said the sides would discuss the Middle East situation and pointed out that trade between the two countries has already grown to $1 billion.
A manager of a military-industrial company told Vedomosti that discussions would cover Russian arms supplies to Syria, including MiG-29 fighter planes, and fulfillment of existing contracts. No new contracts are expected to be signed.
Until now, Russia has been reserved in its arms supplies to Syria, says Ruslan Pukhov, director of the Center for the Analysis of Strategies and Technologies. On the request of the Israeli government, Moscow declined in the past to supply Damascus with Iskander theater missiles, and in place of S-300 long-range systems, it sent Pantsyr and Buk-M2 shorter-range systems.
Israel also expressed concern that Kornet anti-tank systems sold to Syria had found their way into the hands of the Hezbollah organization in Lebanon, and were used against Israeli tanks during the 2006 war in Lebanon. In the fall of the same year the Russian government imposed additional export controls over light arms.
But now, following the conflict in South Ossetia, a reverse situation has emerged. On Tuesday, Deputy Chief of the General Staff Anatoly Nogovitsyn said that Israel supplied Georgia with unmanned aerial vehicles of eight types, 100 charges for blasting passageways through mine fields, and 500 sets of camouflage netting, and Israeli advisers trained Georgia's special forces.
Plans were in place to supply tanks, personnel armored carriers, small arms, and air-borne reconnaissance devices. A source in the Defense Ministry said that Georgia was also planning to purchase several dozen Merkava tanks, but the Israeli government called the deal off not to offend Moscow.
Russia is not planning to supply sensitive types of armament to Syria, an official from the Presidential Executive Office said.
This means, Pukhov says, that Iskander and other offensive weapons will never be sold to Syria, but one could expect supplies of such non-sensitive systems as front-line fighters.
Kommersant
Gazprom setting up Russia's largest energy holding
The board of directors of Russian gas giant Gazprom has approved the consolidation of shares of its energy companies on the books of the Gazoenergeticheskaya (Gas & Energy) Company, Gazprom's 100% subsidiary.
Similar decisions will be taken for all of Gazprom's energy assets. The gas monopoly is establishing the country's largest energy holding, which will control nearly 30% of the total electricity market.
"We will transfer even insignificant stakes in territorial generating companies (TGKs) from GazenergopromInvest and other affiliated companies to one company," a Gazprom manager said. "This will allow us to include the energy companies' financial data in Gazprom's consolidated reports. Besides, we will be able to avoid some minor errors occurring when technological decisions, which are not coordinated with the monopoly's central office, are taken. When such things happen, we have to urgently clarify all issues."
Another reason for the consolidation of the company's energy assets is that Gazprom "will not have to nominate representatives of all subsidiaries to TGK and OGK (wholesale generating companies) boards of directors every spring, but compile a consolidated list for all instead."
Denis Fyodorov, head of Gazprom's Directorate for the Power Sector Development and Marketing, says the assets will be managed in line with the monopoly's traditional scheme. Gazprom will not set up a special managing company.
Galina Tarasova, deputy director general at the Corporate Management Technologies company, thinks that Gazprom is not likely to aim to increase the capitalization of its energy assets.
According to Alexander Seleznyov, a Sobinbank analyst, it will not increase, if Gazprom does not take a decision to convert all companies to a single share. By restructuring assets, the monopoly can minimize administrative and management costs.
Tarasova thinks that the present management can be replaced by a central management office.
Dmitry Skvortsov of the Bank of Moscow notes that the new Gazprom holding will account for more than 30% of Russia's electricity market. However, when transferring shares to GEC's books, Gazprom will have, under the current legislation, to make an offer to the minority shareholders of those energy companies in which the monopoly holds over 30% of shares, Skvortsov says.
RIA Novosti is not responsible for the content of outside sources.
