MOSCOW, December 4 (RIA Novosti)
Russia can still mediate between Iran and U.S. / Serving officers critical of government policy / Russia to have private bank holding soon / Russia ups contract for upgrading Indian aircraft carrier /
Kommersant
Russia can still mediate between Iran and U.S.
Despite international pressure, Iran may become a de facto nuclear power alongside Israel, India and Pakistan, a Russian analyst writes.
Yevgeny Satanovsky, president of the Moscow-based Institute of Middle East Studies, told the business newspaper it was too late to consider if tougher sanctions could stop Iran.
It is good that Russia, which does not need a nuclear bomb in Iran or a Middle Eastern war on its southern border, managed to maintain passable relations with Iran, Israel and the U.S. during the Iranian nuclear crisis. The analyst thinks it can still act as a mediator between them.
Iran, if it builds a nuclear bomb, will become as "protected from democracy" as North Korea, and its influence in the region will be comparable to that of India's.
The next U.S. president, Barack Obama, is aware of this inevitability and will therefore try to promote dialogue with Iran and Syria, including "constructive cooperation" over Iraq, Satanovsky writes.
Israel will have to pay for this change of heart, but the history of its relations with the U.S. should have prompted it this could happen.
The Arab countries, which quietly hoped that a U.S.-Israeli blow against Iran would leave the country weak for decades, will have to adapt to the appearance of a new regional superpower.
It would be naive to think that this change will benefit Russia, the analyst writes. The non-proliferation regime will collapse, and if the U.S. and Iran smooth over their animosity, the Caspian hydrocarbons will flow to the global market, bypassing Russian pipelines.
The West has been trying to achieve this goal since the dissolution of the Soviet Union, Satanovsky writes. This will destroy Russian-Iranian relations and improve Iran's ties with the EU and the U.S.
Russian-Iranian differences over the Caspian Sea status are compounded by Iran's memory of a lengthy historical period between the rule of Peter the Great in the early 18th century and that of Joseph Stalin in the 20th century, when the Russian army controlled the southern coast of the Caspian Sea.
Vedomosti
Serving officers critical of government policy
General Vladimir Isakov, deputy defense minister and chief of support services, has been removed from office. His departure is probably the first in a series of high-profile personnel decision inevitable at this stage of ongoing military reform.
The need to reform Russia's armed forces is obvious. The recent armed conflict with Georgia confirmed many analysts' opinions that the nearly two-fold increase of the defense budget in 2005-2008 did not result in the expected reequipping of the army or an improved professionalism. The operation has revealed the need to change the very system of purchasing weapons, as well as the financing and manning of the army.
However, the reform process is not going to plan. The optimization plans were developed privately, away from the military experts or professionals they would eventually affect. There is a plan to dismiss around 200,000 officers out of 345,000, as well as many ensigns and midshipmen, before 2012.
The secrecy surrounding the process generates rumors and resentment in the army. Officers are making wild guesses about who will be dismissed and who will remain in service but lose rank.
Opinion polls suggest that serving officers, including top ones, are generally critical of the government and its policy.
Vitaly Tsymbal, a military analyst with the Institute of the Economy in Transition, said he was not convinced that all outgoing officers will be provided with the housing they are entitled to. He also believes that officers will become unmotivated by the prospect of redundancy, which will impair combat training and discipline.
Other analysts warn that dismissals might be accompanied by financial scheming.
Also, there is a risk that hundreds of thousands of active and aggressive men will add to social tensions once unemployed.
Gazeta.ru
Russia to have private bank holding soon
MDM Bank and URSA Bank have announced plans to combine their equities into a bank holding company with assets of 523 billion rubles ($18.7 billion) and 72 billion rubles ($2.6 billion) in capital.
In 12-18 months, Russia will have a huge private bank holding smaller only than Sberbank or VTB.
Analysts say the merger will be a success.
"A detailed integration plan will be developed simultaneously with the formation of the common holding company. The full integration of the two banks is expected to be complete within 12-18 months," the banks said in a press release.
Analysts say the bank owners' hopes are justified, but add that the merger is a way to weather the current financial crisis.
Denis Barabanov, chief analyst at the financial markets division of the Grandis Capital investment company, said a crisis usually spurs consolidation, because only the strongest can survive in such conditions.
Alexei Buzdalin, chief analyst at the Economic Analysis Center, said: "More assistance is granted to state-owned or -controlled banks during crises, whereas private banks have it tough. They have to fight to keep clients from fleeing to state or foreign banks."
Such banks can only merge or diversify their business, he said. The merger of URSA Bank and MDM Bank will attain both goals, Buzdalin said.
The two banks have different business models, and their merger may therefore produce a synergic effect.
"MDM Bank is a large corporate bank, while URSA has a broad retail infrastructure," Buzdalin said. "Their merger may create a stable business structure with a stable client base contributing to the united bank's value in all spheres of its operations."
The merger will help the two banks not only to survive, but also to increase their market share.
"This is only the beginning," Barabanov said. "We are bound to see more mergers and acquisitions [in the sector], above all among small and medium banks."
URSA Bank, headquartered in Novosibirsk, was formed in 2006 through a merger between Sibacadembank and Uralvneshtorgbank. It is a leading regional bank with an extensive branch network spanning 120 cities in the Urals, Siberia, and the Far East.
MDM Bank is one of the most dynamically developing banks in Russia and among the top Russian banks in terms of assets and equity.
Nezavisimaya Gazeta
Russia ups contract for upgrading Indian aircraft carrier
New Delhi has agreed to pay an additional $2.2 billion to Moscow for the completion of a refit of its Vikramaditya (formerly Admiral Gorshkov) aircraft carrier. The starting sum of the contract was $700 million, but it was later increased to $1.5 billion.
Experts believe the tactic of obtaining large foreign contracts and their following re-pricing, while giving short-term benefits, is damaging to the reputation of Russian contractors and the country's image.
Iran is another country that has felt the effects of the Russian way of fulfilling contracts. Back in 1995, it negotiated with Russia the completion of the Bushehr nuclear plant. The project was estimated at $1 billion and did not provide for price hikes. But in September 2006 the sides signed an agreement under which Iran agreed to pay $25 million monthly for a year until the plant's commissioning in September 2007. Any delay in payment caused a delay in construction. The new "deadline" is the second half of next year.
But the techniques tried on Indians and Iranians misfire when Russia deals with Western or Chinese partners. The arm-twisting tactic "works when partners are in a corner," said Agvan Mikaelyan, general director of the FinExpertiza company.
The Admiral Gorshkov is the best option for New Delhi, considering that the Indian naval forces are 65% equipped with Russian-built frigates, destroyers and submarines, Indian media quoted government sources as saying.
"Russia's defense sector is gradually losing its traditional markets, and episodes like the one with The Admiral Gorshkov only contribute to the process," said Ivan Andrievsky, managing partner of the 2K Audit - Business Consulting company. "New Delhi is not giving up the purchase, because the ship already figures in India's military doctrine, and in addition, the contract is partly paid for. But given such an attitude, prospects for further cooperation are dim."
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