MOSCOW, January 16 (RIA Novosti) Russian gas giant to improve its image abroad / Russia to maintain subsidies for Belarus / Lifting diamond export quotas will not change life for market players / Govt. simplifies registration of foreign workers but reduces their number / Chechen militants given jobs in security-related structures
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Kommersant
Russian gas giant to improve its image abroad
After a series of gas wars between Russia and CIS countries, which have undermined Western customers' confidence in Gazprom, the state-controlled gas giant has decided to improve its image abroad. Its export arm, Gazexport, is in talks with a consortium of PR agencies led by PBN Company on a three-year contract to hold public relations events in the European Union and the United States. Gazprom is ready to cough up $11 million for its reputation campaign this year. The move is part of Russian authorities' broader campaign to improve the country's image in the West.
A source familiar with the talks said Gazexport wants to focus on positioning the company as a commercial body. "The West associates Gazprom with Russian President Vladimir Putin and his political allies," he said. "But the company wants to be positioned differently."
Dmitry Sokur, CEO of the PR agency Sokur and Partners, said that $11 million is not a large sum to popularize a company on the Western market. "Probably, $11 million is a prepayment, but total spending will be much higher," said Svyatoslav Bychkov, managing partner with SPN Ogilvy PR.
The sum is about 8% of Gazprom's total PR budget for 2007. Last year it totaled about $140 million.
Gazprom's PR campaign in the West could be part of the Kremlin's broader campaign to improve Russia's image. The Kremlin administration is now discussing the list of potential contractors. According to the newspaper, they include legal firms Patton Boggs and Hogan & Hartson, and PR companies Weber Shandwick, Burson Marsteller, Barbour Griffith & Rogers, Ruder Finn and Hill & Knowlton. The final choice will be made within the next few months.
Gazeta.ru
Russia to maintain subsidies for Belarus
Vladimir Putin has essentially confirmed that Russia will sponsor Alexander Lukashenko's regime, at least until 2011.
At a meeting with the Cabinet, Putin said: "Russia will continue direct or hidden support for the Belarusian economy for a long time."
"$5.8 billion-worth of subsidies for energy will be Russia's support for the Belarusian economy in 2007," he said. Subsidies for natural gas supplies will amount to $3.3 billion, plus $2.5 billion for oil and petrochemicals.
According to Russia's Finance Ministry, the Belarusian budget will be some $14 billion in 2007. "Our support will account for 41% of that sum," Putin concluded.
"The economic advantage of support for Belarus is not evident," said Konstantin Cherepanov of Ray, Man & Gor Securities. "The issue is to do with politics, rather than economics," he said.
"There are three reasons why Russia almost subsidizes Belarus," said Dmitry Abzalov, an expert with the Center for Current Politics.
The first is military, as Belarus acts as a buffer zone between Russia and NATO, where Russian military bases are deployed, and the rent for Belarusian land is cheaper than elsewhere in the world. In addition, the Russian government hopes to maintain the common economic space with Belarus. "However, Beltransgaz remains a priority in our relations with Belarus, and Gazprom wants to control half of it," Abzalov said.
Russia will subsidize the Belarusian economy for as long as it will take to buy 50% in Beltransgaz. Under the gas contract, the Russian gas monopoly will buy 50% of the Belarusian gas transportation company for $2.5 billion within four years, until 2011, after which Russia will have fewer reasons to continue financing its neighbor. Lukashenko will have to find another way to secure oil and gas price concessions from the Russian government.
Gazeta
Lifting diamond export quotas will not change life for market players
Last week, Russian President Vladimir Putin signed a decree abolishing the system of quotas on the export of precious metals and stones, in particular platinum group elements and diamonds. However, analysts and market players are not inclined to overestimate its importance: the delayed signing did not inflict any serious damage on companies, while the abolition of quotas does not change the situation drastically, because the previous scheme of obtaining export licenses still remains in place.
Norilsk Nickel's five-year quota for platinum exports expired on December 31. In fact, it was the only Russian company that had cause to worry over the two-week break in exports. Russia's top diamond producer, Alrosa, has a five-year quota for precious stones exports that expires in 2008. Even Norilsk Nickel's damage was more psychological than economic.
The company anticipated a possible delay and tried to prevent losses by adjusting its export schedule, its spokeswoman Yelena Kovaleva told the paper.
Analysts and market players agree that the abolition of quotas will be felt only after it is followed by full liberalization of the precious metals and stones market. The situation in the sector is similar to that on the weapons market: all companies can export their products only through a state mediator. In the case of precious metals, the mediator is Almazyuvelirexport.
However, the presidential decree will bring some confidence to the global market. "There will be more certainty, because the quotas scheme irritated global markets, especially the platinum market," said Vyacheslav Zhabin, an analyst with Broker Credit Service.
This is hardly surprising: Norilsk Nickel accounts for about 65% of the world's palladium output.
"In January 2001 the global price of palladium was $1,125 per troy ounce against $449.5 in late 1999," he said. "There was talk at the time that the delay in setting quotas was part of bullish play on the part of the government and Norilsk Nickel. Now it will be more interesting to play with basic metals."
Nezavisimaya Gazeta
Govt. simplifies registration of foreign workers but reduces their number
Russian authorities have introduced new regulations for legalizing guest workers, and new restrictions on the work of foreign traders at the country's retail markets.
Foreign nationals now find it easier to register in Russia. However, the share of foreign vendors at local marketplaces is now restricted to 40%.
Although many of the 10 million foreigners now working in Russia are not legally registered, this year's quota for foreign workers is just 308,000.
This means that many employers will either have to lay off illegal workers in order not to pay fines of up to 800,000 rubles ($30,120) per person; or they will risk further trying to bribe officials.
Experts said these restrictions may harm the Russian economy.
Agvan Mikaelyan, deputy director general of the FinExpertiza auditing and consulting group, said foreign nationals account for 10% of all workers in Russia. Their share in the West Siberian Tyumen is 60%; moreover, 70% of shift workers in oil-and-gas regions are also foreigners.
Alexander Belov, leader of the Movement Against Illegal Immigration, said cheap foreign labor creates employment problems for Russian citizens. "It will not be easy to get rid of the system for exploiting cheap foreign labor based on illegal immigrants," said Belov.
According to Belov, contractors and subcontractors in the construction industry are using illegal workers, and fly-by-night companies pay all the fines.
Foreign businessmen, who are scared by tougher retail-market trade regulations, have recently been registering their companies in the name of fictitious Russian owners. However, people from other post-Soviet republics still dominate local retail markets.
It is impossible to change this system overnight because commodity and financial flows around markets and ties with officials have evolved over the last 15 years, Belov told the paper.
Vedomosti
Chechen militants given jobs in security-related structures
A total of 546 Chechens have responded to an amnesty, fewer than during a similar amnesty in 2000. The organizers are satisfied with the result, but local residents are not happy that the militants have been given jobs in security-related structures.
The amnesty, which ended January 15, was one of the highest-profile projects of the National Antiterrorist Committee set up in Russia in early 2006. The NAC has assessed its results as positive.
Chechen Prime Minister Ramzan Kadyrov said the amnesty's goals "have been attained" and promised to hunt down bandit leaders, such as Doku Umarov, who have not stopped their subversive activities. An officer from the Chechen Interior Ministry said up to 70% of militants would be offered jobs in local security-related structures, notably the interior ministry and the North and South battalions.
Federal and Chechen information on the number of bandits remaining in the republic differ. According to Kadyrov, there are only a few dozen of them, but a source connected to the Regional Operations Staff of the federal troops said the number was close to 1,000-1,500. A Russian security service source said some of the bandits had probably become legalized in Chechen security establishments in order to carry on their subversive operations.
Violence has declined in Chechnya, including thanks to the amnesty, said Alexei Malashenko of the Carnegie Moscow Center. But the fact that former bandits are being offered jobs in security-related structures does not suit ordinary Chechens who had not fought against the federal forces. They say former bandits enjoy better conditions than other Chechens, the expert said.
