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An in-depth look at the Russian press, December 2

MOSCOW, December 2, RIA Novosti


Iran to receive Russian missile interceptors

Moscow will sell the Tor M-1 (SA-15 Gauntlet) surface-to-air missile, capable of intercepting cruise missiles and aircraft bombs, to Iran. This contract does not violate any of the Kremlin's international commitments.

"Several days ago, Russia and Iran signed a contract for the delivery of Tor M-1 SAM systems," a defense factory manager said. "This concerns missiles that were produced on a previous Greek contract," an air defense industry official added. In total, Athens bought 21 Tor M-1 systems and had the right to purchase another 29. However, it decided to scrap the deal in the late 1990s.

"The Greek contract was worth $526 million, whereas the Iranian contract may exceed $700 million," Dmitry Vasilyev, an expert with the Center for Analysis of Strategies and Technologies, said.

"In 2000, Moscow withdrew from a Russian-U.S. agreement that restricted arms deliveries to Iran," Mikhail Barabanov, the science editor of Arms Exports magazine, said. "Consequently, it was believed that Iran would become the third largest importer of Russian combat hardware after China and India. But Tehran spent no more than $300-$400 million on Russian weaponry because it was not sure whether Moscow could implement its military-technical policies without asking for Washington's advice."

"The sale of Tor M-1 missiles to Iran should be viewed as a purely commercial operation because they are tactical weapons," Vagif Guseinov, director of the Institute for Strategic Assessments and Analysis, said. "Iran must defend the Bushehr nuclear power plant, due to be completed by Russia by 2007, because Israel has repeatedly said that it was examining a possible preventive strike against the facility," Professor Sergei Druzhilovsky of the Moscow State Institute of International Relations (MGIMO), said.

"Iran is not covered by any international arms-trade sanctions," Konstantin Kosachev, chairman of the State Duma's international affairs committee, noted. In his opinion, the Russian-Iranian contract does not, therefore, violate any of Moscow's international commitments. "Instead of taking legal action, the West will react politically to this deal," Kosachev said.

Vremya Novostei

Ukraine, Georgia create alternative CIS

Ukraine is moving away from Russia toward Euro-Atlantic integration. It was announced at the Ukraine-EU summit held in Kiev December 1 that Ukraine would be granted market economy status, the first step towards EU membership. At the same time, Ukraine is gaining strength as a regional leader and rival of Russia.

On December 2-3, Kiev will host the forum of the Community of Democratic Choice (CDC), to be attended by the leaders of Georgia, Estonia, Slovenia, Macedonia, Latvia, Moldova, Lithuania, Romania, Poland and Bulgaria, as well as representatives of non-governmental organizations of the post-Soviet countries and the Untied States. Georgy Arveladze, chief of staff for the Georgian president, said before the event that the forum should create an alliance of states that refuse to be Russian satellites.

The forum is part of the initiative by Ukrainian President Viktor Yushchenko and Georgian President Mikhail Saakashvili, who announced in August their intention to create a commonwealth of democracies of the Baltic, Black Sea and Caspian regions.

Politicians and experts from the states that will attend the Kiev forum are using every opportunity to present claims to Moscow.

Georgy Khaindrava, the Georgian minister for conflict settlement, said that Russia's peacekeeping efforts in Georgia and Moldova have only frozen, not settled, the conflicts.

Georgian political scientist Paata Zakareishvili admitted that one of the CDC intentions was to neutralize the Russian factor. He said that Russia did not bring democratic ideals to the newly free post-Soviet states.

Ukrainian political scientist Andrei Yermolayev forecasted that major geopolitical players - the U.S. and the EU - would eventually "try to incorporate the CDC into their plan of a sanitary cordon" along the perimeter of Russia.

Logically, Moscow regards the CDC forum as unfriendly. Its participants "are united only by their anti-Russian stand and do not have a constructive program," Konstantin Kosachev, chairman of the State Duma committee on international affairs, said. "It is another stillborn baby, just like GUUAM [Georgia, Ukraine, Uzbekistan, Azerbaijan and Moldova]."


Private Aeroflot shareholders promise to block RRJ purchase

Aeroflot's management has decided to purchase 30 Russian Regional Jet (RRJ) aircraft. The contract includes the option for an additional 20 RRJs and will be signed by the national carrier and Sukhoi Civil Aircraft (a subsidiary of the Sukhoi state holding) before the end of the year. On the other hand, Aeroflot's top managers and shareholders consider the price to be too high and want it to be lowered by at least 25%. The RRJ planned operating costs have not yet been proven and deliveries will not begin until 2008-2009. Deputy Alexander Lebedev, an Aeroflot co-owner, has already pledged to block the deal.

Aeroflot announced the tender to buy 50 regional jets in July 2004. At present, the company needs 14 such aircraft, and in the next three to five years, it will need another 17. For the moment, Aeroflot owns 12 Tu-134s (Crusty, the old Soviet-made airliner of the same class). The results of the tender were to have been completed in spring of this year.

The listed price of the RRJ-95 is $27.2 million. "I have heard Aeroflot managers say more than once that if the plane costs more than $18 million, the company will never recoup its investment," Andrei Derkach, deputy chairman of the board of directors of Ilyushin Finance Co., said. "But that is putting the project's profitability in question." Other market players have serious doubts that the RRJ will ever be mass-produced. Indeed, its overall development costs are about $700 million (minus engines), although all investments so far have been $70 million.

Nor is there unanimity in Aeroflot concerning the RRJ purchase. "We agree the RRJ is a next generation program, but it needs reworking," Dmitry Senatorov, the company's head of the air fleet, said.

According to Lebedev, whose structures control 30% of Aeroflot stock, "a lot of questions exist concerning the price and characteristics of the RRJ." He is threatening to block the deal at the next extraordinary meeting of shareholders required for its approval. No date has yet been fixed for the meeting.


Russia must monopolize sturgeon and caviar trade - agriculture minister

On December 1, Russian Agriculture Minister Alexei Gordeyev addressed a government session saying the state should monopolize all sturgeon and caviar trade. According to the minister, all poached delicacies must be confiscated and destroyed, and the national caviar market must be closed almost completely. But other ministers, not to mention numerous experts, disagree with Gordeyev.

Russian fishermen, by law, are not allowed to catch more than 250 metric tons of sturgeon per year, the agriculture minister noted. "However, local markets sell at least 2,500-3,500 tons of the delicacy," Gordeyev said. Russia has lost its foreign sturgeon caviar markets. At present, Europe buys Azerbaijani and Iranian caviar, whereas Russia is overflowing with poached products.

Various officials have proposed similar initiatives since 2000. In 2003, the State Fisheries Committee even drafted a bill that would have enabled the state to monopolize trade in caviar. Unfortunately, that bill was subsequently killed. And many experts also oppose similar measures today.

"We are getting carried away with that magic word 'monopoly.' It is still unclear whether the state can manage this entire process," Valery Draganov, chairman of the State Duma's economic policy committee, said.

Moscow would follow Tehran's example if Gordeyev's ideas were supported. It is common knowledge that the Iranian public sector has monopolized oil production and Caspian sturgeon catches.

The Soviet Union used to catch 10,000 to 13,000 tons of sturgeon per year on the Volga River and in the Caspian Sea. Up to 1,200 tons of caviar were also produced. Legal sturgeon catches now total 165 tons. Russia produces only 10 tons of legal caviar each year. Local caviar output has not diminished in the last 15 years and still exceeds 1,000 tons, Astrakhan Governor Alexander Zhilkin said. The domestic market mostly offers poached caviar because Russia exports all its legal caviar.

Nezavisimaya Gazeta

Foreign intelligence services will not disclose secrets to help Beslan mothers

The mothers of North Ossetian school children who were killed during the Beslan hostage crisis (when terrorists seized a local school September 1-3, 2004) have asked the president of the United States to declassify satellite photos of the school taken as the tragedy was unfolding. However, experts claim that such information could result in a serious diplomatic scandal and would cause immense damage to the interests of foreign intelligence services.

Numerous foreign spy satellites, technical reconnaissance systems, and secret agents keep watch over Russia. Many countries may therefore possess information on Beslan. Nevertheless, foreign intelligence services are highly unlikely to divulge their secrets. Russian secret services would draw appropriate conclusions if their foreign counterparts declassified radio-electronic reconnaissance data or secret agent reports. Consequently, some countries would have to recall their operatives and adopt new cipher codes. If the appeal of the North Ossetian mothers were to succeed, the consequences would be political rather than practical.

Colonel General Valery Manilov, former deputy chief of staff and adviser to Federation Council Speaker Sergei Mironov, is convinced that Washington does not have any relevant information about the Beslan tragedy. "With all due respect to the Pentagon's highly effective space reconnaissance systems, the Americans have nothing to offer that our experts do not already know," Manilov said.

"If such photos did appear, we would know for sure that the U.S. satellite did not fly over Beslan by sheer coincidence," a space force official said. It would have taken the United States about 24 hours to adjust the satellite's orbit. The possible publication of classified information that was received on September 1, the first day of the hostage crisis, would imply that the CIA was aware of the impending terrorist attack.

No one needs such a scandal. If, however, it turns out that the U.S. satellite had been redirected over Beslan after the school had been seized, any controversy over the issue would be moot. But Russian experts would be able to draw conclusions based on indirect analysis of the performance of similar reconnaissance systems.

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