MOSCOW, September 19 (RIA Novosti)
Moscow ready for "moderate detente" with the West / Washington has no levers against Moscow / Abkhazia, South Ossetia will not become precedent for Trans-Dnestria, Karabakh / U.S. eager to cooperate with Russia in space / Russia's government to urgently slash oil export duties / Russian GDRs go up in London
Nezavisimaya Gazeta
Moscow ready for "moderate detente" with the West
The Kremlin does not want to further escalate the current confrontation with the West as a whole, and the United States in particular. Several well-informed sources in the Kremlin have said that Moscow will soon take a series of confidence-building measures to de-escalate tensions and improve relations with its key Western partners.
These priority measures are being drawn up by an informal working group led by Alexei Gromov, deputy head of the presidential executive office.
President Dmitry Medvedev's decision to try and ease tensions through diplomacy was probably prompted by the U.S. and EU's reserved reaction to the recognition of South Ossetia and Abkhazia.
Despite the hawkish rhetoric of many Western politicians and commentators, no actual sanctions have been slapped on Russia, indicating that quarrelling with Russia over Georgia was the last thing they wanted.
Another reason for the Kremlin's attitude is the financial crisis that hit Russia as part of the global economy. Russia is now unlikely to be able to handle the consequences in isolation.
According to the sources, the president has given several important guidelines to the group. First of all, the Kremlin won't go back on its recognition of South Ossetia and Abkhazia as independent states or abandon plans to deploy its military bases there. Neither will it agree to any major economic concessions, such as ratifying the Energy Charter Agreement which would open a free flow of Asian oil and gas across Russia.
On the other hand, the Kremlin could take the lead from Belarusian President Alexander Lukashenko and ease pressure on certain people the West refers to as "political prisoners." However, the sources are unanimous in doubting that any "thaw" would concern disgraced oil tycoon Mikhail Khodorkovsky.
Major transnational corporations could be offered more liberal terms for their participation in strategic projects in Russia. Another practicable option would be for the Kremlin to hand the West a personnel reshuffle, pushing to the background several officials who annoy the West the most - for example, Foreign Minister Sergei Lavrov recently turned into a living symbol of the growing confrontation between Russia and the West.
President Medvedev is probably trying to reach a solution which would include a strategic truce with the West without really conceding his geopolitical positions. If he succeeded, it would signify the beginning of a new era in Russia's foreign politics marked by a constructive partnership with the West, "a friendship of the equal and the strong" rather than of an omnipotent boss and a shy subordinate.
Vremya Novostei, RBC Daily
Washington has no levers against Moscow
Officials in Washington have been making increasingly harsh statements about Russia as presidential elections draw closer in the United States. Some analysts say the division between the two powers on fundamental issues is growing. Others say Washington has no more levers against Russia, as evidenced by the latest speech by Secretary of State Condoleezza Rice.
She said at the German Marshall Fund yesterday that Russia was becoming "increasingly authoritarian at home and aggressive abroad." This is her harshest statement about Russia since she became State Secretary.
Nikolai Zlobin, director of the Russia and Eurasia Project at the Washington-based World Security Institute, said: "The latest statements by members of the U.S. administration should not be seen as only the result of Russian-American disagreements in the Caucasus."
"It became clear already a year ago that political relations between Moscow and Washington would deteriorate as presidential elections draw closer in the U.S.," Zlobin told Vremya Novostei. "There are too many issues on which the U.S. and Russia differ fundamentally."
According to the analyst, the two countries will continue cooperation on some aspects of international politics, but this cooperation will not be stable.
"The Americans think they can interact with the Russians only where this suits their national interests. In other spheres, they will not cooperate with Russia, but will fight it," Zlobin said.
According to the RBC Daily, Condoleezza Rice could have been expected to crown her criticism of Russia with a list of measures the US would take against it. Instead, she only inferred that Russians have punished themselves.
"Russia's international standing is worse than at any time since 1991," she said. "And the cost of this self-inflicted isolation has been steep. Russia's civil nuclear cooperation with the United States is not going anywhere now. Russia's leaders are imposing pain on their nation's economy. Russia's bid to join the World Trade Organization is now in jeopardy."
Anatoly Utkin, director of the Center for International Studies at the U.S.A.-Canada Institute of the Russian Academy of Sciences, said: "Condoleezza Rice can only criticize Russia, but she cannot do anything to harm it."
He said the site of her anti-Russian manifesto was chosen deliberately. "The U.S. is trying to pull Europe back to the era of the Marshall Plan," Utkin said. "Like at the height of the Cold War, Washington has again appealed to Europe to join forces in order to fight 'the Russian threat'."
Vedomosti
Gazeta
Abkhazia, South Ossetia will not become precedent for Transdnestr, Karabakh
On Thursday, Russian Foreign Minister Sergei Lavrov said the West's negative reaction to the deployment of Russian forces in South Ossetia and Abkhazia would not force Moscow to change its stance, and that the deployment had been requested by both breakaway provinces.
He said the recognition of Abkhazian and South Ossetian independence would not become a precedent for settling conflicts in the Transdnestr and Nagorny Karabakh regions that seceded from Moldova and Azerbaijan, respectively, in the early 1990s.
On Wednesday, Russia signed friendship and cooperation treaties with South Ossetia and Abkhazia, promising them military and economic support.
Under the treaties, the three parties will allow each other the use of their respective military bases for the purpose of maintaining security in the South Caucasus.
Although cooperation treaties signed with Tajikistan and Kyrgyzstan contain similar provisions, the new documents stipulate joint efforts to repel aggression, rather than emergency consultations in case of security risks.
Ruslan Pukhov, a member of the Russian Defense Ministry's public council, said the treaties were called on to jointly repel any repeat of Georgia's aggression.
The Russian military has started forming several brigades with heavy artillery systems, tanks and air-defense weapons, a Defense Ministry officer told the paper. He said the new units would be able to resist superior enemy forces much longer than lightly armed peacekeepers before the war.
There will be no permanent air force units so far because warplanes can support ground forces from their Russian bases, the officer said.
On Thursday, Lavrov told the Federation Council, the upper house of parliament, that he planned to actively facilitate the peaceful settlement of CIS conflicts on the basis of international law.
"This also concerns Transdnestr and Nagorny Karabakh in full measure. The South Ossetian crisis creates no precedent for them," Lavrov said.
Mikhail Margelov, chairman of the Federation Council's foreign affairs committee, said Russia would advocate Transdnestr's reunification with Moldova and a settlement to the Karabakh conflict.
"We can see that the peace process is making headway there. Moreover, the local population is not being massacred. And there was no act of aggression, similar to the one committed by Georgia," Margelov told the paper.
He said Moscow's stand on Kosovo remained unchanged.
"They are always accusing us of being illogical. On the one hand, we do not recognize Kosovo, while recognizing Abkhazia and South Ossetia. But the West which is also behaving illogically should recognize Tskhinvali, Sukhumi, the Turkish Republic of Northern Cyprus, Transdnestr and even Western Sahara," Margelov told the paper.
Kommersant
U.S. eager to cooperate with Russia in space
The United States cannot do without Russia's Soyuz spacecraft to make flights to the International Space Station, the Senate was told during hearings on Wednesday. This puts paid to the idea, suggested by presidential candidate John McCain and a number of Republican senators, to end Russian-American space cooperation in the aftermath of the recent five-day Caucasus war. The last word, however, rests with the U.S. Congress, which is to consider the issue on Tuesday.
Under the Nuclear Non-Proliferation Act (Gilman Act of 2000), the U.S. will not make so-called emergency payments (which include payment for space activities) to countries that support Iran's or North Korea's nuclear programs. But in the case of Russia, the sanctions have been put on hold until December 31, 2011.
The U.S. has only one option to using Soyuz craft - extending the service life of its own shuttles. NASA is currently left with three ships - the Atlantis, Endeavor and Discovery. All of them have practically served their lifespan, and may become unsafe with time. The last flights have been set for 2010. The new American spacecraft, Orion, designed to replace them, is still under development. Its test flight was scheduled for 2012, but, as Democratic Senator Bill Nelson said during the hearings, the Orion will not be ready until 2015.
But even the continued operation of the shuttle ships will not decide the issue. The Soyuz is not only the basic transport vehicle in the program, it is also a lifeboat on which the ISS crew can abandon ship in an emergency. No shuttle can serve that purpose.
Andrei Ionin, a corresponding member of the Tsiolkovsky Russian Academy of Astronautics, said an American refusal to cooperate with Russia would do no great harm to Russia's space program: "Advocates of a split with Russia have mixed up their eras. It was early in the 1990s that such sums compared with all of Russia's space budget. But now they make up less than 10% of it. After all, space tourism can fetch about the same money."
Five space tourists have already visited the station, each paying between $20 million and $25 million. Under the latest contract, concluded for the next three years, the American side will pay Russia $719 million for transporting 15 astronauts and 6 metric tons of payload to the station.
Vedomosti
Russia's government to urgently slash oil export duties
This week, the government will cut oil export duties to $372 per metric ton starting October 1, 2008. Earlier, it was planned that export duties for the October-November period would be cut from $495.9 to $485.8 per metric ton.
Experts say oil companies will thus save over $5 billion, while the federal budget will lose up to 140 billion rubles.
Alexander Sakovich, deputy head of the Finance Ministry's customs payments department, explained that the new oil duty would amount to $372.2 per metric ton, export duty on light petrochemicals $263.1 (down from $339.7), and on dark petrochemicals $141.7 (down from $183) per metric ton.
According to Sakovich, the rates have been calculated on the basis of the average price of Urals crude at $97 per barrel.
Ilya Trunin, director of the Finance Ministry's tax department, says that no compensation measures for the reserve fund and the national welfare fund have been discussed.
Mikhail Perfilov, Argus Media's director for development in Russia, says that now, after all tax deductions, a metric ton of export West-Siberian oil costs 2,500-3,000 rubles, while production costs, including taxes, exceed this figure by more than 100%. With the new export duty, a metric ton of oil will give 6,056 rubles to the company.
In the opinion of Gennady Krasovsky, a LUKoil spokesman, the economy of export supplies will then "enter an acceptable corridor."
The new duty will apply for two months. Denis Borisov of Solid investment company has calculated that over this period the companies will be able to export about 37 million metric tons of oil, 7 million metric tons of light petrochemicals, and 8.5 million metric tons of dark petrochemicals. This means they will be able to save about $5.2 billion on export duties.
According to unofficial statistics cited by a Finance Ministry employee, with the same export volumes as in October and November 2007 and the dollar exchange rate at 25.5 rubles per dollar, budget losses from cuts in oil export duties will reach up to 140 billion rubles.
Aleksandra Suslina of the Economic Expert Group assesses budget losses at 120-125 billion rubles. If the companies increase their profits by as much as the saved amount, a portion of this money (29 billion rubles) will return to the budget in the form of profit tax.
The oil companies' gains will come to zero with a fall in world oil prices by $19-20 per barrel, Perfilov says. However, they can expect even more new benefits from the government.
On September 18, Russia's Finance Minister Alexei Kudrin promised that the government would again reduce the [tax] burden on the oil sector in order to stimulate oil production.
Prime Minister Vladimir Putin said that the new measures would take effect in 2010. They may bring closer, or level, export duties on light and dark petrochemicals; offer benefits for oil production at the deposits with higher production costs, or mineral extraction tax holidays during oil production in the Sea of Okhotsk and the Black Sea, the Finance Ministry official says.
Gazeta
Russian GDRs go up in London
With trading still suspended on domestic stock markets, Russian stocks have shown booming growth abroad. However, analysts warn against getting too excited.
In the two days since trading was suspended in Russia, Polyus Gold surged 50%, Rosneft 22.5%, Gazprom 14%, LUKoil 11.5%, Mechel 8.5% and Rostelecom 15%.
On the one hand, foreign investors' demand for Russian companies' global depositary receipts conditions an upward trend on the entire domestic market.
On the other hand, Russian stocks also showed some growth on LSE during the hour break on Tuesday, but continued their previous downslide when trading resumed.
Alexei Moiseyev, head of fixed-income research at Renaissance Capital, a Moscow investment bank, attributes the Russian stocks' rise on foreign markets to Russian companies' high financial performance coupled with low price.
Alexander Tolkachev, managing director at the Russian office of Monitor Group, an international consultancy, believes that the surge of Russian receipts on Western markets will be short-lived if it reaches Russia at all.
"The downslide will continue on the Russian stock market, because the financial system is still plagued by the liquidity crisis. A global high-profile event would be needed to reverse the trend globally, something that would rivet investors' attention on geopolitical risks instead of financial ones.
"Global markets have not yet reached the bottom, and it seems unlikely that huge funds will flow into Russia with, as opinioned by Western investors, its "unpredictable" policy. The government's efforts are now focused on pumping liquidity into the 50 largest banks," he said.
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