MOSCOW, September 27 (RIA Novosti)

Novye Izvestia


Appointment of regional governors does not contradict democratic principles, because soon all parties will be able to propose their candidates for these posts, Igor Shuvalov, the Russian President's aide, said yesterday. However, the only party to jubilate over the news was United Russia.

Mr. Shuvalov said the abolishment of direct gubernatorial elections was just a part of the political system's reformation. "We have to further develop the political system so that party leaders are able to take a governor's post," he announced. This way the reformers are trying to encourage parties' political activity, a task set in President Vladimir Putin's annual address to the Federal Assembly.

Yet the opposition perceives forthcoming changes as only political manipulations of the party of power, and a simulation of democratic processes. Alexei Kondaurov, Communist member of parliament, believes that one party will have a priority in any case. "Today we have only the appearance of democratic processes, and in certain cases it is even absent," he said.

"Formally, it will certainly seem more democratic. But essentially, the procedure of appointing [governors] will be the same," said Sergei Mitrokhin, deputy chairman of the Yabloko party. He is positive that now we will see an absolute preponderance of the ruling party's administrative resource in the regions and that United Russia will be the only supplier of gubernatorial hopefuls. But he does not rule out that other parties will get, at least, a theoretical chance to see their leaders as regional heads. "OK, give us, at least, the chances, because now, we do not even have them."

Boris Nadezhdin, secretary of the federal political council of SPS, the Union of Right Forces, has described the reform as "total nonsense and a political gimmick." In real politics, a regional party leader should run in public elections. In other cases it is all about political technologies, he maintains.

Nezavisimaya Gazeta


Gurus of the pro-Kremlin movement Nashi, or Us, have decided to rear their own work force for big politics. To this end they have set up a non-governmental institute called the Higher School of Management.

In mid-November, 150 members will converge on Moscow from all over the country to attend the first session of state management correspondence course. The selection was made at the top level - by the Kremlin administration.

Pro-Kremlin political scientists and lecturers from various universities in Moscow have devised the curriculum. "This was done to suit the ideological tenets of the movement, whose members have declared support for Putin," said Vladimir Nechayev, the rector. The titles of the courses and lectures to be offered, (for example, "Ideological Struggle in Present-Day Russia" and "Putin and the Oligarchs") suggest the training for "revolutionaries" is going to be fundamental and have a clearly defined political orientation.

"Understandably, they are being groomed for big politics," says political scientist Alexander Tsipko, referring to Nashi. "Russia is in the middle of a cold civil war, and everyone should realize that."

Another political scientist, Institute of Political Studies director Sergei Markov, has no doubt that political practice will follow theoretical studies. Apart from fighting for sovereignty, he advises the movement to fight the oligarchs as well, "because they are strangling Russia."

Tuition fees are to be paid by the movement itself, which is financed, according to its leader Vasily Yakemenko, by "nationally oriented business." The fee for the correspondence course is $1,500 a year.

The school has opened 22 centers throughout the country. The rector believes that the goal is to shape the new generation. It looks as if the shaping will be done according to a particular ideological model.



The deadline for Russia's entry into the World Trade Organization has been moved again. Finance Minister Alexei Kudrin has crushed all the Economic Development and Trade Ministry's hopes for making the final arrangements before 2005.

Even if Russia completes all admission negotiations before the end of 2005, it will still take at least six months to finalize the details of the entry, according to the minister. The WTO holds general conferences where new members are admitted once in two years, and if next December's meeting fails to decide on Russia's accession, it will not be able to join before 2007.

Experts also doubt if Russia will manage to complete the negotiating process this year. "Russia has yet not signed or even coordinated the terms of entry with the U.S. and several other countries, and there are still some disagreements with those members that have consented," says Igor Belyakov, an analyst with the Economic Expert Group.

"The statements made by Russian officials carry no real message," believes Yevgeny Yasin, the academic supervisor of the Higher School of Economics. "The entry date will depend on a political decision by the other members of the organization."

Sergei Prikhodko, head of the foreign trade sector at the Institute for the Economy in Transition, says that "quick access to the WTO requires acceptance of all the proposed terms." But this price would be "too high and damaging to Russian business in the first place".

To date Russia has completed negotiations with 33 nations, which account for 87% of its foreign trade. Belyakov said that the main remaining points are access by foreign companies to Russian financial markets, and protective mechanisms for the aviation and auto industries. Also, the U.S. has some grievances against Russia concerning intellectual property rights. "The government would rather continue the negotiations than make concessions, especially since all the prerequisites are there," believes the analyst.



Capitalization of Russian companies soared by 60% this year, totaling $410 billion. Unlike the United States, Russian stock market successes do not influence economic growth and the incomes of ordinary people.

The national stock market continues to grow because of sky-high global fuel-and-energy prices. Foreign investors believe that Russia will inevitably profit from this as a raw-materials producer, and that they should buy the shares of its mining companies.

Russian authorities cannot boast any impressive macroeconomic achievements today because the processing industry is growing more slowly. And the mining sector continues to show a recession. It therefore became obvious that the Russian government would eventually try to "capitalize" on the stock market's successes.

On September 26 Deputy Prime Minister Alexander Zhukov said at a traditional Kremlin conference involving the President and government ministers that the capitalization of industrial enterprises had increased by $100 billion in absolute terms since early 2005. According to Zhukov, overall profits soared by 50% and reached $55 billion.

U.S. style management focuses on corporate capitalization because the performance of U.S. managers is measured by rising share prices. Most U.S. citizens are stockholders, while the Russian situation is completely different. Consequently, rising popular incomes have nothing to do with the capitalization of Russian companies.

Local capitalization statistics are influenced by a number of factors. For instance, the Central Bank favors a controlled, rather than floating, dollar exchange rate for listing share prices in rubles. All Russian shares would cost more, if the Central Bank opts for a stronger ruble. Runaway inflation has made all goods, and not just shares, more expensive since early 2005.

The IMF predicts that Russian inflation will exceed 12% this year. Russian corporate shares may cost more by late 2005. However, the people of Russia do not seem to be very happy about the growing national capitalization.



The Kaskol aircraft company hopes that 100 M-101 Expedition aircraft, manufactured in Nizhni Novgorod, will appear in Africa within five years. They will enable Namibian farmers to survey their farmlands and travel in the country. Experts are sure that Africa is the plane manufacturer's best chance for M-101 sales, even better than Russia.

Kaskol owns 40% of the Sokol aircraft factory located in Nizhni Novgorod. It specializes in upgrading and manufacturing the MiG-31B fighter-interceptors, MiG-29UB and Yak-130 trainers, Akkord-201 flying boats and M-101 Expedition light passenger aircraft.

Russian Il-76 and An-12 transports have long formed the backbone of Africa's air transport system. Warplanes like the MiG-29 and Su-25 are also popular on the Dark Continent. Now the Expedition, a short-range business liner seating six to eight, is ready to emerge on the African market. However mass production has yet to begin in Russia.

According to vice-president Alexander Korshunov, Kaskol is going to assemble the M-101 in Namibia. A newborn company Namibian-Russian Aircraft Manufacturers (NRAM) has already been registered. Kaskol and Sokol will not be its shareholders but only partners, Korshunov said.

Experts say that chances for the M-101 to take flight in Africa are high. "Africa is roads-hungry and the M-101 is designed for severe conditions," says Yevgeni Bakhtin, general director of Russia's biggest business carrier Avkom. Western-made aircraft, such as the American Cessna Caravan and Piper Meridian, will not be competitors for the Nizhni Novgorod plane because of price and specific African service requirements.

Kaskol is holding talks with the Chinese state corporation AVIC-1. Bakhtin is sure that in the Chinese and European markets it will be very difficult to compete with American and European manufacturers.

Currently, Kaskol is hoping to sell 100 planes in Namibia and 150 to China within five years. The projected M-101 cost is $1.5 million each.

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