What the Russian papers say


MOSCOW, July 27 (RIA Novosti)
Businesses undeterred by Ukraine's political instability / Georgian opposition brands Kodori events provocation / Former NATO chief Robertson to join TNK-BP / Russian prosecutors to press for extraditions in London

(RIA Novosti does not accept responsibility for the articles in the press)


Businesses undeterred by Ukraine's political instability

An active and determined prime minister like Yulia Tymoshenko is a negative factor for the Ukrainian economy, whereas political instability, a non-existent cabinet, and new elections are not. Economic indices and market surveys suggest that the Ukrainian government should pay less attention to the economy, which appears indifferent to the parliamentary crisis.
The State Committee for Statistics (Ukrstat) said an 8% decline in retail and wholesale trade largely accounted for the unprecedentedly low 2.6% GDP growth last year. These statistics surprised experts, who had observed a real consumer boom in Ukraine.
Irina Piontkovskaya, an analyst with Russian investment company Troika Dialog, said this could be linked to fiscal accounting problems resulting from the abolition of privileges in free economic zones.
But ING Bank experts said Ukrainian statistics are not paying enough attention to the trade-and-service sector. Yulia Tseplyayeva, senior economist for the CIS with ING Bank, said this shortcoming is typical of all transitional economies, because this sector provides additional tax-evasion opportunities. "This problem was exacerbated in Ukraine last year," she told the paper.
ING Bank said Ukraine's GDP grew by 5-6% in 2005; and Ukrstat estimated economic growth rates at 5% and 9.3% in the first six months of 2006 and in June. Since Ukrstat is using the same methods as in 2005, the actual GDP figure for the first half of 2006 is evidently substantially higher. Economic growth in 2005 was largely due to trade; industry is now seeing strong growth, with the machine-engineering sector posting a 12.2% rise in first six months of the year.
Ukrainian industrialists have become more optimistic. The Kiev-based Institute for Economic Research said their May 2006 confidence index was up 11 points on January. The number of optimistic businessmen (22.1%) has exceeded the number of pessimists for the first time in many months (19%). A poll by PRT agency showed that 74% of businessmen are confident that favorable business opportunities will emerge in late 2006 or early next year.
These positive changes in the economy and the public mentality are taking place at a time of heightened political instability. Only 6% of Ukrainian corporate managers said they are worried about elections. Twenty-three percent said the government's economic policy threatens their businesses; and 20% said the same about the 2004 government reshuffle, and the changed rules of the game. Fifty-nine percent of businessmen said a more open society positively influences business operations.
Yulia Tseplyayeva said she was surprised at the markets' indifferent reaction to the political situation. "Although the previous situation was different, the Ukrainian economy is now developing independently," Tseplyayeva told the paper. She said local legislation remains the same this year, because politicians are too busy to change anything. "Such indifference has a positive effect on the economy," she said.

Novye Izvestia

Georgian opposition brands Kodori events provocation

Until yesterday, hopes remained that the situation in the Kodori Gorge would not escalate. Representatives of non-government opposition parties and the Church had been speaking out for several days against the use of force on armed rebels in the only area of Georgia's breakaway republic of Abkhazia still under Tbilisi's control. However, the Georgian interior and defense ministries launched an operation against rebels led by Emzar Kvitsiani, a former presidential envoy to the Kodori Gorge, Wednesday.
Yesterday, Georgy Arveladze, head of the Georgian presidential administration, said unequivocally: "We do not negotiate with terrorists and bandits." Earlier, Emzar Kvitsiani commanded the Hunter border guard battalion established in 1998 to protect the Kodori Gorge from the armed forces of Georgia's breakaway Abkhazia province. In spring 2005, Georgian Defense Minister Irakly Okruashvili decided that military units could ensure security in the gorge, and ruled to disband paramilitary group Monadire ("the hunter"), calling its members useless spongers. Many militiamen have not yet laid down arms, and still bear a grudge against the minister.
Last Friday, Kvitsiani said he would not take orders from Tbilisi and that Okruashvili was planning to conduct a special operation in the Kodori Gorge on July 27. However, the operation began earlier. Education and Science Minister Alexander Lomaya was the first to report the developments on TV, and accused Emzar Kvitsiani of betrayal and plotting an armed revolt "in direct conspiracy with Russia and [Abkhaz] separatists." Witnesses say they heard the first gunshots in the gorge at about 3 a.m. Wednesday. Defense Minister Irakly Okruashvili and Interior Minister Ivane Merabishvili commanded security-related services.
"The majority of Georgian experts treat the Kodori Gorge developments as a provocation. Some of them think the provocation was planned to divert Georgia from its pressure on Tskhinvali. Officials hold a similar opinion, while others suspect the government itself of having plotted the revolt to put pressure on the opposition in Tbilisi," Alexander Rusetsky, head of the Caucasus Institute of Regional Security, told the newspaper.
The government has already sent the opposition its first "black mark" - Irakly Batiashvili, a former head of the State Security Council and leader of the "Forward, Georgia!" opposition movement, has already been exposed as being in contact with the rebellious Kvitsiani. The Georgian Interior Ministry circulated an audio tape recording of Kvitsiani's telephone conversation with Batiashvili. In it, the leader of the rebels said his relative, deputy defense minister of Abkhazia Garri Kupaba, was offering him support. "Kvitsiani rejected the offer, but this part of the conversation was deleted," said Batiashvili. In any case, government officials have warned that any political support for Kvitsiani, even verbal, will be considered treason.


Former NATO chief Robertson to join TNK-BP

Former NATO secretary-general Lord George Robertson will join Mikhail Fridman and Viktor Vekselberg on the TNK-BP board of directors. The company has decided he is sufficiently familiar with Russia and could prove a useful asset in areas including solving strategic problems.
TNK-BP, a British-Russian joint oil venture, has appointed Lord Robertson, 60, a former British defense secretary, deputy chairman of the board of directors and chairman of the company's audit committee, replacing Richard Olver, the company said. "Olver stepped down of his own will," said TNK-BP spokesperson Marina Dracheva. "The role tired him out - the position on the board of directors was not a formality; quite intensive work was required, including discussions of major projects." The board is a legislative body, it deals with strategic issues, and there is no clear division of duties between its directors, she said.
Robertson has an impressive track record. In 1997-1999 he was British defense secretary, and from 1999 to 2003, NATO secretary-general. He is also a former chairman of the Scottish Labor Party. He now combines several roles, being a non-executive director of Weir Group, an engineering company, and of logistics firm Western Ferries, and also an adviser to Cohen Group consultancy and to private joint-stock group Englefield Capital. "His lack of oil experience is not a key issue for us," said Dracheva. "The main point is that Lord Robertson is a public figure with an international reputation and a tremendous background as a manager."
Robertson has a good level of familiarization with Russia, and is the most suitable replacement to Olver, BP spokesman Toby Odone said. Robertson is co-chairman of the Russo-British roundtable, and a founder and former chairman of the NATO-Russia Council.
TNK-BP was unable to list the duties the new board member would assume, and the paper could not reach Lord Robertson for information.
It is not uncommon for foreigners of high standing and a political past to hold office in Russian companies.
Former German Chancellor Gerhard Schroeder heads the shareholders' committee of the North European Gas Pipeline Company. Lord Norman Lamont, who worked in the Margaret Thatcher Cabinet in various posts, and in 1990-1993 held the position of the British Chancellor of the Exchequer, is chairman of the advisory board of Uniastrum Bank.
Mechel, before being listed on the New York Stock Exchange, brought to its board Sir Andrew Wood, former British ambassador to Russia and now adviser to the British Prime Minister. Rosneft, Russia's state-owned oil giant, as it carried out its IPO, tried to attract former United States Secretary of Commerce Don Evans to join its board, but he declined.
Robertson has no specific functions to fulfill in TNK-BP, said Olga Suvorova, a partner in the head-hunting firm Suvorova and Partners. By inviting such an individual, the company wants to show that it is doing well and that its reputation is fair and above-board, the spokeswoman said. She said Robertson's managerial and general background may help TNK-BP in deciding strategic issues, because he has good connections. The company did not reveal information as to how much Robertson will be paid.

Rossiiskaya Gazeta

Russian prosecutors to press for extraditions in London

Russian prosecutors have arrived in London. Their visit was announced by new Prosecutor General Yuri Chaika immediately he assumed office.
A group of representatives from the Prosecutor General's Office, the Justice Ministry and the Foreign Ministry has now begun its work in the British capital.
The official goal of the visit is to "promote Russian-British cooperation in criminal proceedings" and to exchange experience of extradition, a spokesman for the Russian Embassy in London told Rossiiskaya Gazeta.
There is little doubt, however, that one of the key issues raised by the Russians in London will be clarification of what mistakes were made in extradition requests, and what now has to be done to have wanted individuals extradited.
Yesterday, on the first day of the visit, the Russian Prosecutor General's Office announced that new proceedings had been launched against Akhmed Zakayev, who received political asylum in Britain and is living in London. The office's PR department said that the charges included provoking national and religious hatred against a group of people using mass media, and threatening violence. These charges coincide very well with the British law on terrorism, and the Russian authorities hope they will now be able to prosecute Zakayev, even in London.
This is quite possible. In the last two months, Zakayev has become talkative and has given some interviews, in which he mentioned "driving the Russians out of Chechnya," "disposing of Russians," and "inhuman methods of Russian aggressors." From a legal point of view, he accused Russians of hostile actions and dangerous intentions towards Chechen citizens and threatened the Russian-speaking population with violence.
Moreover, in one of the interviews he described the recently killed Chechen terrorist leader Shamil Basayev as a hero and an outstanding commander. The Prosecutor General's Office gave the following comment: "The statement on Basayev falls under Article 1 of the U.K. law On Terrorism adopted in 2006, which envisages criminal prosecution for encouraging terrorism. Notably, Clause 3 Part A is concerned with statements that declare support for terrorist attacks or their preparations."
According to the newspaper, Boris Berezovsky may have made a hurried retreat from England for Latin America because of the prosecutors' visit. After all, he has always been known as a cautious individual.

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