What the Russian papers say


MOSCOW, February 9 (RIA Novosti) - Moscow, Washington ready for behind-the-scenes bargaining / Kyrgyzstan and U.S. continue maneuvers around Manas airbase / Gazprom shareholders grieve plummeting shares, appeased by large dividends / Russian arms exports reach record $8 billion in 2008

Moskovsky Komsomolets
Moscow, Washington ready for behind-the-scenes bargaining

The latest Munich security conference shows that Moscow and Washington are ready to discard mutual Bush-era grudges and to launch another round of unpredictable diplomatic bargaining behind the scenes.
On Sunday, U.S. Vice President Joe Biden met with Russia's Deputy Prime Minister Sergei Ivanov in Munich. Instead of laying their cards on the table, both men merely hinted at their content.
Moscow must smile and use the carrot-and-stick policy while dealing with Washington. Ivanov, who has the reputation of a war hawk in Russia and the West, prioritized the carrot aspect in his speech. He hinted that Russia was ready to cooperate with the West on nuclear arms cuts and in other areas.
However, Ivanov also brandished an invisible whip. Russian officials at every level say Kyrgyzstan has independently persuaded the United States to dismantle its air base at Bishkek's Manas international airport without any pressure from Moscow.
A seemingly friendly Russia is openly telling the West that it must either reach agreement with Moscow or face negative consequences.
An experienced Biden held out an olive branch during complicated negotiations with Ivanov. Although Biden openly confirmed the Obama administration's commitment to deploying elements of the National Missile Defense system in Eastern Europe, he said the project would be implemented "provided the technology is proven and it is cost-effective."
Biden ostensively denied Russia the right to decide what alliances its neighbors should join. It is unclear whether Washington merely reaffirms certain principles, or whether it is ready to discuss the free choice of former Soviet republics with Moscow.
It appears that U.S. and Russian officials have made their share of public statements and that time is ripe for another tug-of-war behind the scenes.

Kyrgyzstan and U.S. continue maneuvers around Manas airbase

Kyrgyzstan has repeated its intention to close down the U.S. airbase in Manas. But it is too soon to think the United States has lost it. The White House says talks about new lease terms are continuing. Bishkek, too, says it is ready to cooperate with Washington in Afghanistan, hinting at further bargaining.
The debate on the ending of the base agreement in parliamentary committees may open today. However, despite the determined statements made by the country's leadership, Bishkek is not ruling out parliamentary delays. Observers say the decision will directly depend on the financial aid promised by Moscow to Kyrgyzstan. As agreed, $450 million must be made available before April 30, but observers allow that President Bakiyev may try to press for earlier guarantees. To do so, he must have an effective tool with which to pressure Moscow, because should it terminate the agreement with the United States it will find itself fully dependent on Russia.
As The Washington Times says, Washington believes Bishkek's decision may have been prompted by a wish to raise the lease price on the base. A Pentagon source told the paper that the U.S. might have to look for some economic means of encouragement, such as grants, loans, cash or infrastructure. A great deal is at stake.
At the same time, the U.S. administration is negotiating alternative supply routes to Afghanistan with Tajikistan and Uzbekistan. Western diplomatic sources in Tashkent are reporting that the U.S. is close to concluding an agreement with Uzbekistan on a new supply rail line for its troops in Afghanistan via Uzbekistan. An agreement on overland transport of NATO's non-military cargoes across Tajikistan is expected to be signed during this week's visit by President Emomali Rakhmon to Brussels.

RBC Daily
Gazprom shareholders grieve plummeting shares, appeased by large dividends

Russia's Finance Ministry said the state should not claim 2008 dividends from companies it controls, but Gazprom plans to pay them anyway. However, analysts do not expect even large dividends to compensate the state monopoly's shareholders for their losses from the plummeting value of their shares.
Gazprom is most likely to pay the traditional 17.5% from the parent company's net profit under Russian Accounting Standards (RAS), said Vitaly Kryukov from the Capital investment group. He estimates the monopoly's 2008 net profit at 580 billion rubles, up 61% year on year, which means the holding will pay 4.29 rubles per share (2.66 rubles last year).
The company will pay a total of 101 billion rubles (up from 63 billion it paid shareholders as of the end of 2007). This means the government will earn 50.5 billion rubles. The monopoly's shares will show a record yield of 3.7% (0.9% the year before).
However, this is not only due to an increase in the company's net profit, but also to the falling price of its shares, which means that even large dividends, much larger than last year, won't compensate the shareholders for their losses from the plummeting share value, Kryukov said.
Gazprom has never been particularly generous when it comes to dividends, and has always paid less, in percent terms, than other oil and gas producers, always citing the huge investment projects it needed to finance, which should some day produce giant profits for investors, said Pavel Sorokin, an analyst at the UniCredit Aton, part of the international Unicredit Group.
But "some day" proves to be a very remote prospect. Sorokin estimates that the company's 2009 investment program is overinflated, and that it could have raised dividends instead.
Demand for natural gas is unlikely to surge, in and outside Russia. If anything, it will drop by about 5%, believes Sergei Pravosudov, director of the National Energy Institute think tank. Therefore, the company won't have any need to boost production, which means its investment program could be cut as well.

Russian arms exports reach record $8 billion in 2008

Due to expensive aircraft sale contracts, Russian arms exports reached a record $8 billion last year, a source in a federal military-cooperation agency told the paper.
A source at the Russian Technology Corporation, a state-owned industrial behemoth with assets in many sectors, from defense to automotive to civil aviation, also confirmed this report.
Rosoboronexport, the sole state intermediary agency for Russia's exports/imports of defense-related and dual-use products, technologies and services, sold $6.7 billion worth of weaponry, a source said.
Moscow also exported $1.3 billion worth of weapons and components under contracts signed before Rosoboronexport received a monopoly right to export ready-made systems.
This includes the sale of anti-tank guided missiles and man-portable air-defense systems (MANPADS) manufactured by the Tula Instrument Design Bureau, BrahMos supersonic anti-ship cruise missiles developed by a Russian-Indian joint venture involving the Reutov Engineering Science and Production Association, and other systems.
Russian arms exports have hit another all-time high, Konstantin Makiyenko, deputy director of the Center for Strategic and Technological Analysis, told the paper.
The Federal Military-Technical Cooperation Service estimated 2007 arms sale volumes at $7.4 billion, with Rosoboronexport accounting for $6.1 billion of the grand total. In 2006, Russia exported $6.5 billion worth of weaponry, with the Rosoboronexport share being $5.3 billion.
The large arms export volumes are first of all due to expensive contracts for the sale of Sukhoi Su-30 Flanker fighters.
About 40 Su-30s were sold abroad last year, including 8-10 Su-30MKAs to Algeria, six Su-30 MKMs to Malaysia, 16 Su-30MKIs and fighter-assembly kits to India, eight Su-30MK-2Vs to Venezuela and two Su-30-MK2s to Indonesia, an aircraft company manager told the paper.
These warplanes and their weapons account for 30% of total arms exports, a source in the aircraft industry told the paper.
In late January, Rosoboronexport and China signed a $500 million contract for the sale of 122 engines for Chengdu J-10 fighters, said a Russian aircraft company official.

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