Russia 101217 Basic Political Developments

Russian Press at a Glance, Friday, December 17, 2010

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Russian Press at a Glance, Friday, December 17, 2010
08:45 17/12/2010

© RIA Novosti. Rybchinskiy

A brief look at what is in the Russian papers today


Russia is never abandoned by the watchful eye of one of its two rulers, Prime Minister Vladimir Putin said Thursday during a record Q&A marathon in which he lashed out at the opposition and called former Yukos CEO Mikhail Khodorkovsky a criminal

(The Moscow Times, Vedomosti, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

Russian President Dmitry Medvedev has blamed investigators who released suspects in the death of a football fan in Moscow for recent race-hate riots

(Rossiiskaya Gazeta)

Belarussian President Alexander Lukashenko appears on course for another victory in presidential elections Sunday, despite recent criticism from the Kremlin and other groups
(The Moscow Times, Nezavisimaya Gazeta)

Kyrgyzstan forms a new parliamentary majority to consist of three political parties

(Nezavisimaya Gazeta)


Aeroflot will buy $4 billion worth of Boeing airliners to expand its long-haul fleet. The carrier confirmed that it has sealed a deal for 16 Boeing 777s to be delivered between 2012 and 2017

(The Moscow Times)

Russia's largest nickel producer Norilsk Nickel has made a $12 billion offer to the world's largest aluminum maker RusAl to buy its 25 percent stake in Norilsk Nickel



Metal rods, hammers, stun guns, brass knuckles, baseball bats, knives and air guns were confiscated from 1,700 people detained nationwide, confirming that the threat of ethnic clashes was real

(The Moscow Times)


Prime Minister Vladimir Putin said that repair costs at the country's biggest coal mine, Raspadskaya, which stopped operations after a fatal explosion in May, stood at 5 billion rubles ($162 million), or half the initial forecast


Moscow Mayor Sergei Sobyanin has vowed to make the Russian capital a world-level medical hub

(Nezavisimaya Gazeta)


Russian film director Andrei Konchalovsky speaks in an interview with Rossiiskaya Gazeta about his new film The Nutcracker, which is expected to hit the movie theaters after January 1, 2011

(Rossiiskaya Gazeta)


For the first time in the last 14 years Moscow CSKA basketball club failed to clear the Euroleague group stage and qualify for the playoffs

(Rossiiskaya Gazeta)

Montana ships instant ranch to Russian grasslands

Today at 08:18 | Associated Press

Cowboys, quarter-horses and 1,434 purebred beef cattle — just add grasslands and you've got a transplanted Montana ranch.

Those livestock basics — plus some training in animal care — is what Montana cattle producers have shipped to southwestern Russia, where the landscape is similar to the grassy high plains of eastern Montana. It's part of a Russian subsidized deal to make that country's cattle industry more self-sufficient.

"It's like an instant ranch," said Kate Loose, a representative of one of the Montana ranchers involved in the deal.

Most of the cattle departed by aircraft, with the last shipment due to touch down Thursday in Moscow before heading to Russia's Voronezh region.

The remainder — 545 cattle, five quarter-horses — plus a veterinarian from Choteau went by boat to Stevenson Sputnik Ranch, a partnership between rancher Darrell Stevenson and Russian investors. That livestock also was due to land Thursday.

Montana agriculture officials said the shipment represents the state's largest overseas export of live cattle to date.

Work on the export deal began two years ago, during a trade mission to Russia that included Montana Agriculture Director Ron de Yong, Stevenson and Jack Holden, of Holden Herefords.

Russia has only about a half-million beef cattle but wants to sharply increase that figure in the next decade. Its government also has made cattle import deals with European countries, Canada and Australia, but de Yong said the how-to-ranch services provided by Stevenson could give Montana producers a future advantage.

"The potential is so huge, it's hard to put numbers on it," de Yong said.

Sara Stevenson, Darrell Stevenson's wife, said the Russians have a different way of handling cattle than Montana ranchers: No fences, fewer cattle per cowboy — and much more direct government involvement.

"Part of the subsidy is that they employ as many Russians as possible," she said. "And since there's no fences, instead of one cowboy, they need two to three herdsman for every 200 to 300 cattle."

A rotation of Montana ranchers, working cowboys and veterinarians will teach Russian herdsmen how to care for the livestock in what Sara Stevenson called "cowboy training."

The landscape will look somewhat familiar to the Montana group, even when they're half the world away, said de Yong.

"It's just like coming to Montana 100 years ago when it was just all grass," he said of the Voronezh area.

FT Blog: Russia in Africa: hunting for uranium

December 16, 2010 11:31am

by Stefan Wagstyl

China, India and Brazil aren’t the only BRICs pursuing strategic natural resources: Russia too is on the hunt. Rosatom, the Russian state nuclear energy group, is expanding its worldwide uranium reserves with the $1.15bn acquisition of a project in Tanzania. And it is looking for other deposits, having already invested in Namibia and Canada.

ARMZ Uranium, Rosatom’s mining division, plans to acquire the Tanzanian assets by taking over its owner, Australia-based Mantra Resources in an agreed bid. Mantra said on Wednesday that it had recommended the offer to its shareholders. Mantra’s principal asset is the Mkuju River Project in Tanzania, which holds 101.4 million pounds of uranium.

“Mantra’s flagship asset, the Mkuju River Project, is a world class deposit,” ARMZ Director General Vadim Zhivov said. “We believe Mantra will complement our portfolio of assets and is consistent with our stated strategy of acquiring low cost, long life, geographically diverse assets.”

ARMZ has offered A$8.00 per share, or A$1.16 billion, for the firm, 15.5 percent above its 20-day average price on the Sydney exchange.

As the FT has reported, ARMZ, the world’s fourth largest uranium producer, has most of its mines in Russia and Kazakhstan, but it is rapidly expanding in the face of a growing demand for nuclear fuels. Last month it gained final approval for a $610m bid that allows it to increase to 51 per cent its stake in Canada’s Uranium One a company with operations in Kazakhstan, the US and Australia.

Rosatom first went into Africa in 2008 with a joint venture with SWA Uranium Mines in Namibia. There was a time when such aggressive expansion in the nuclear industry by a Russian state company would have raised hackles in Washington. But not now. The US relies heavily on imported uranium, including from Russia. And, when it comes to natural resources acquisitions, it is more concerned about China than Russia.

December 16, 2010
Renewed Rivalries

Comment by Sergey Markedonov
Special to Russia Profile

Renewal’s Victory in Transdnestr’s Parliamentary Elections Marks a Milestone in its Development as an Independent Republic

Election campaigns conducted in de-facto states have one key difference from those that take place on territories recognized by the international community. Apart from the competition between the candidates, their political programs and the financial resources of their backers, there is a distinctive competition between those who have failed to gain international recognition and those who have it. Perhaps this competition was demonstrated at the highest level during the parliamentary elections that took place on December 12, 2010, in the self-proclaimed Transdnestr Republic, which from a legal point of view is considered part of Moldova.

Transdnestr is fundamentally different from all other post-Soviet territories with a similar status not only because it does not have a clearly defined “titular ethnicity.” The population of Transdnestr is divided into three groups, which are roughly equal in size – Russians, Moldovans and Ukrainians. It is also the closest of the “separatist republics” to the EU. Neither Georgia nor Azerbaijan (to which Abkhazia, South Ossetia and Nagorny Karabakh officially belong) have a land border with the EU. There is also significantly less military rhetoric used in Transdnestr, and calls for a high democratic standard. It is no accident that on the eve of elections to the Transdnestr Parliament, the head of the Interior Ministry of the unrecognized republic Valery Yastrebchak met with representatives of a number of EU bodies. The EU does not recognize elections in Transdnestr, but is keeping a close eye on the internal dynamics in the republic, particularly since between 2005 and 2010 these dynamics became notably more exciting.

For many years the Moldovan political class has turned to both its electorate and external groups, such as the EU and the United States, with the following argument: “At a time when we are building a ‘European democracy,’ in Transdnestr there remains an authoritarian regime, ‘the last oasis of communism in Europe’.” The communism argument can be immediately dismissed because unlike Moldova, where the Communist Party was in power from 2001 to 2009 (and remains to this day a leading faction in parliament) in Transdnestr there are two communist parties competing with each other and lacking their own parliamentary faction. It is hard to argue with the claims of authoritarianism, although there are certain important nuances to be aware of. In Transdnestr, in contrast to Nagorny Karabakh, South Ossetia and Abkhazia, the leaders never change. Transdnestr has known only one head, Igor Smirnov, who has been in power for 20 years. Furthermore, rumor has it that he has no intention of leaving his post until at least the next presidential elections. But Transdnestr, like the rest of the world, has its own objective laws that no political dinosaur is in a position to annul.  

Over the years of the existence of the de-facto state, a young generation of businessmen has grown up to whom the old managerial ways (Smirnov comes from the Soviet-era managerial class) have become a burden. They have begun to convert their economic influence into politics. This spurred Renewal, initially a political movement that turned into a political party. Its first assault on political power came in December of 2005, when it enjoyed success in parliamentary elections, outstripping the pro-Smirnov association Respublika. Renewal’s candidate Evgeny Shevchuk (who calls himself a “technocrat” and a “supporter of a socially-oriented market”) took the speaker post, replacing another veteran of the Transdnestr political scene, Grigory Marakutsa. 

At that time many observers predicted that Shevchuk would run in the 2006 presidential elections. However, the strong pressure exacted by Ukraine and Moldova on Transdnestr (which is referred to in the republic as “a blockade”) consolidated the electorate around “patriotic ideas” and made the participation of the Renewal leader impossible. But during his time in Parliament, Shevchuk was able to build up political muscle to such an extent that in 2009 he was able to head the movement opposed to the constitutional amendments proposed by Smirnov (these would turn the unchallenged leader of Transdnestr into a Central Asian-type dictator.) In December last year Shevchuk even publicly demanded the president’s resignation, which would have been inconceivable just a few years ago. But because politics is “the art of the possible,” Shevchuk had to leave his post as parliamentary speaker, handing it over to his colleague from Renewal Anatoly Kaminski. But this did not prevent Shevchuk and his allies from stopping the constitutional reforms. This was Smirnov’s biggest defeat since 1990. 
In December of 2010 Renewal went into the elections as the likely winner, having won in the local elections that took place in March. Renewal’s main “weapon” is the financial-industrial corporation Sherif, which controls up to 70 percent of Transdnestr’s economic assets, in particular in such spheres as the production and sale of foodstuffs, telecommunications and bank services, sales of fuels and lubricants, construction and agriculture. At the opposite pole was the pro-Smirnov bloc RSPP, created by the alliance of the Republicans and the Patriotic Party of Transdnestr (in which Oleg Smirnov, the president’s son, played a leading role).  

Meanwhile, despite the presence of different interests and different party programs among the candidates, there were some points of consensus, the vector of geopolitical development among them. All the political players in Transdnestr are not prepared to consider reintegration with Moldova. And sympathy toward Russia is very high among all the candidates. Because unlike Abkhazia and South Ossetia, Transdnestr does not have a land border with Russia, and, moreover, neighbors Ukraine, the idea of cooperation with this neighboring country also enjoys support, especially since almost a third of Transdnestrian voters are ethnically Ukrainian. Therefore, the number one issue of the campaign was the voters’ personal attitude toward Igor Smirnov, and the model of the future that the different political powers envisage. Renewal received a constitutional majority in the elections on December 12. Unlike in Moldova, in Transdnestr elections are held not according to party lists, but on a majority vote system. We can expect somewhere in the order of 25 to 30 deputies (of 43) to be associated in one way or another with Renewal. 

Will this victory mark a full-blown renewal of internal politics in Transdnestr? For now it is still difficult to answer. The party and its allies’ strategy has yet to be defined, as has that of its rivals for 2011, a presidential election year.

Obvioisly 2011 will be the main date in Transdnestr’s five-year political cycle. Renewal has already demonstrated its strong defensive capabilities. They rebuffed Smirnov’s constitutional attack. However, the party and the businessmen that support it are yet prove themselves “on the offensive.” They are obviously discussing various problems and which steps to take first: whether to launch a cavalier attack on the president or negotiate with his team about choosing a successor who would receive consolidated support? In any case, December 12, 2010 has a chance of marking a new milestone in the history of Transdnestr and its unrecognized statehood. A real renewal would remove one of the criticisms that have been aimed at Tiraspol for years – usurping power and the absence of political competition and democratic procedures.   

Sergei Markedonov, Ph.D., is a political analyst and a visiting fellow at the Center for Strategic and International Studies (CSIS), Russia and Eurasia Program, Washington, DC
From Russia with a Christmas wish list

bne staff and everyone who lives in Russia or has to deal with it
December 17, 2010

Dear Santa,

Things are getting better in Russia and all the talk has been all about "modernisation" this year. But while we have been waiting all year for some gifts from the Kremlin, very little has appeared.

Really, the only exciting thing that happened was that Russian President Dmitry Medvedev said he wants to change the name of the militsiya to politsiya (yawn) – oh, and now we are allowed to have parties with the gays on Triumph Square, which is something I guess.

Still, without wanting to appear greedy, below is a short list of simple things we would like to get in 2011 that we think will make a big difference to living and working in Russia at almost no effort or cost. Do you think you could see your way to sorting them out with Tweedledum and Tweedledee in the Kremlin? I am sure they will listen to you, (as they seem to have a bit of problem listening to anyone else).


17 years in waiting? Enough already. Let Russia in.


Paint yellow grids over every junction in the city and then ban any driver that stops in the box for six months (use cameras at junctions to police this rather than the ravenous GAIshniki). At a stroke, you would double the flow of traffic.

Get rid of the law that demands cars that hit each other have to stand where they are until the police come (at least 30 minutes), which only causes huge jams behind them.

Increase the fine for having your car towed away from RUB100 to $100. And ban parking on the pavement (again, but this time make it stick).

Ban police from drinking beer while they driving their police cars. It looks bad.


Unilaterally drop the visa requirement for EU and US citizens entering Russia. Or at the very least allow them to get a visa at the border. If you want foreign investment, the first thing you need to do is let investors into the country. Don't wait for the EU to reciprocally drop visa requirements for Russians, as this will take a decade to organise.

Oh yes, while you're at it, put up those little poles with straps between them in the arrival hall at Domodedovo and Sheremetyevo so there is a proper queue to passport control.

Business education

Poor management skills is the biggest drag on Russia's productivity, according to several studies. So instead of wasting $3bn on setting up Skolkovo that won't really function properly for another 10 years (if the Dean Wilfried Vanhonacker's track record is anything to go by), set up a fund of say $100m and pay for 2,000 young Russian managers to take MBAs in France, UK and US every year.

There are about 50,000 significant companies in Russia and in five years you could create an army of well-trained managers. You can even make the scheme self-financing if you force the students to repay the money after their studies end.

Pension reform

Act now. Pensions and social spending already account for a quarter of the budget deficit and this is only going to get worse. What is so hard? You can take anyone one of the three Baltic state's systems (all successful, but all three taken slightly different models) and just adopt it wholesale.

Close all the shell companies that were set up in the last attempt and do nothing. Make pension investments into legitimate funds tax-free. The programme to make Moscow an International Financial Centre will fail unless pension reform is successfully implemented. Make Sberbank set up western-style mutual funds.

And while you are thinking about social issues, change the constitution to fix the amount of budget spending on education at something high like 4-8% of GDP, like the Taiwanese did.

Do a Georgia on red tape

Take a deep breath. Swallow your pride. And get Kakha Bendukidze to come back to Russia from Georgia to cut red tape. Bendukidze, who made his first fortune as a Russian industrialist, was given the power to slash the bureaucracy and chuck out stupid rules in Georgia's legislation and has made the tiny Caucasus republic the easiest place to do business in the CIS.

If Bendukidze is a bridge too far, then get someone else to this job – preferably someone Finnish, like Ilkka Salonen, former deputy chairman of Sberbank.

Proper CSD with T+3 DVP

Talk, talk, talk and no action on setting up a central securities depository. Everyone wants this and with T+3 settlement (trade plus three days), it would at a stroke greatly reduce the cost of trading and so the cost of capital. It is only a question of will and this reform will materially make everyone's life easier and cheaper.


Several top analysts we have asked all want the second case against Khodorkovsky dropped and for him to be released on New Year's Eve in an act of clemency.

And on the same note, resolve Prosperity Capital Management's row over TGK-2 in favour of minority shareholders, as you can't seriously let them get dicked over and still pretend that Russia is an "attractive investment destination."


Send a swarm of locusts to destroy Russia's entire dill crop – forever.

Lots of love

bne staff and Everyone who lives in Russia or has to deal with it


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