MOSCOW, December 30 (RIA Novosti) President discusses dual power/ Moscow tired of WTO accession talks/ Gazprom to cut off Ukraine's gas on January 1/ Russia's auto market hopes to be Europe's largest
Gazeta.ru
President discusses dual power
President Dmitry Medvedev has brought up the issue of dual power in the country for a second time over the past few days, but in a different context.
He assured federal TV channels in a recent interview that he and Prime Minister Vladimir Putin had successfully built an effective cooperation model. However, when he spoke at the end of the year government meeting, he said that the current model needs to be preserved "despite differences."
Analysts decoded the latter statement as a hint of possible tensions within the government team, and warned that the president-premier duo is fraught with serious risks in a crisis.
Political analyst Dmitry Oreshkin sees three possible scenarios - a delineation of powers within the Putin-Medvedev duo, Medvedev's dominance over weakened Putin, or Putin regaining control.
It is possible that Medvedev will brace himself, waiting for Putin's popularity to wane with further economic decline, and eventually fire the prime minister to remain the sole leader of the country, he said. According to Oreshkin, Medvedev's criticism of the government's "less than perfect" policies could be evidence of such plans.
"His very tone has changed. Earlier, one could not even imagine the president judging the government's actions. Now he ventures some criticism, saying they 'could have done better than that'," the analyst added predicting acute political conflicts in the next few months.
Igor Bunin, director of the Center for Political Technologies, a Moscow-based think tank, disagrees with Oreshkin. He said a schism in the duo in power could lead to an all-out systemic collapse; therefore neither Medvedev nor Putin would risk it.
"They will continue to compromise and to agree on things," Bunin said adding he saw no serious differences in approach.
"Problems will arise when the crisis becomes deep enough to provoke social tensions, and solutions will be needed," the analyst suggested.
Nezavisimaya Gazeta
Moscow tired of WTO accession talks
In the past five years, Russian officials made regular announcements that we would join the World Trade Organization this year. But in 2008 Russia moved away from accession.
Late last week, Moscow announced that it should either be allowed to join the WTO in 2010, or it will not honor related agreements and will strengthen the protection of its market from imports.
That statement was a logical continuation of the Russian leadership's policy of toughening relations with the WTO and reviewing some of its related obligations. The Kremlin has again raised import duties on cars and trucks and cut poultry import quotas for 2009, although it had promised not to raise duties in previous bilateral agreements with individual WTO members.
Tired of waiting for an accession permit, Russia has decided to disregard its commitments, possibly also because its new, tougher foreign policy has complicated accession talks with some WTO members. The war with Georgia and Moscow's recognition of Abkhazian and South Ossetian independence have complicated attempts to agree with the government of Mikheil Saakashvili on Russia's accession to the WTO.
Now Moscow hopes it will be allowed to join the organization despite Georgia's disagreement.
Russian analysts put Russia's losses due to non-participation in the WTO at $2-$5 billion. On the other hand, its gains in the first few years after accession could be smaller than the budgetary and business losses due to the lifting of customs limitations, especially during the global financial crisis. When the crisis reached Russia, the government adopted new measures to protect the market from imports, which was a step away from the WTO.
Russia could abstain from joining the WTO in the current unfavorable international economic and political environment even if WTO members ask it to join them.
Moskovsky Komsomolets
Gazprom to cut off Ukraine's gas on January 1
The gas dispute between Russia and Ukraine just weeks before the New Year is now an ugly tradition, all the uglier since it has long grown into a political issue rather than a purely economic one.
A source in the Russian parliament who is also a leading gas expert said neither President [Viktor] Yushchenko nor Prime Minister [Yulia] Tymoshenko is truly interested in an early settlement, as both politicians are working for the 2009 presidential elections.
"They are holding each other back because the one who succeeds in resolving the gas issue will have a mighty advantage in the presidential campaign," the expert said.
In this case, if even Ukrainian politicians aren't interested in a settlement, why should Gazprom bother? The Russian monopoly has already paid for the Central Asian gas to be forwarded to Ukraine, and it doesn't matter that we are talking about a different gas now, because the amount remains the same.
Moreover, a source told MK that Naftogaz Ukraine made a $3 billion profit this year, and therefore had sufficient funds to pay Gazprom.
No one can tell how much Ukraine earned reselling Russian gas it imported at a discounted price, but the amount should be significant. Most of Naftogaz's complaints that local consumers' are late paying are ungrounded. Gazprom also sells part of its gas directly to Ukrainian consumers, and reports an 80% payment rate on that market.
Therefore, Gazprom is highly likely to cut off supplies to Ukraine on January 1 this time around. The country's government has given no sign that it wants to negotiate a settlement apart from Yushchenko's feeble proposal that Russia take back the gas Ukraine hasn't paid for.
Technologically, it is no more practicable than any of H.G. Wells' fictional inventions. Even if there were a pipeline option to reverse the gas flow, what about the gas meant for European consumers?
Vedomosti
Russia's auto market hopes to be Europe's largest
In annual results, Russia may still become the largest auto market in Europe: sales in Germany have been dropping, while in Russia, despite the crisis that began in the fall, they will show annual growth.
PriceWaterhouseCoopers (PwC) estimates Russia will sell 3.3 million cars this year (including imported used vehicles), putting the country in first place in European car sales. Germany, which has for many years been the largest auto market on the continent, according to the European Automobile Manufacturers Association (EAMA), sold 2.86 million cars in the first 11 months of the year. According to the analytical agency Avtostat, Russia sold 2.6 million cars from January to November, and 2.5 million, according to Ernst & Young.
The Russian market will be in second place, believes Ivan Bonchev, an analyst with Ernst & Young: in Germany, 3.1 million cars will be sold, while Russia will ring in the New Year with 2.7 million. The United Kingdom and Italy will sell 2.16 million each. The forecast by Troika Dialog and Avtostat for 2008 is 2.75 million cars.
Unlike the European and American markets, Russia offers more prospects at least to those that produce vehicles domestically, Bonchev says. The basic political decision on the auto industry was taken in November: Prime Minister Vladimir Putin signed a resolution raising import duties on new and used brands, which becomes effective on January 12, 2009. As a result, prices for new cars will rise, according to dealers, by 5% to 8%, while the number of imported used cars - rivals of the Lada and foreign budget models made in Russia - will drastically fall. Importers have already responded to the increased duties by raising their prices: Ford by 5%, Chevrolet 5% to 8%, Mercedes-Benz 3.4% to 6.1%, Volvo 10% to 15%, and Hyundai by 7%.
Russian producers have opportunities for growth even in a market downturn, believes Stanley Ruth from PwC, because a weaker ruble and growing import duties could make Russian brands and even Russian foreign makes more competitive, although most of their spending is in dollars and euros.
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