MOSCOW, December 29 (RIA Novosti) Russia should make its energy policy clear to West - expert/Gas show becomes New Year tradition for Gazprom/Political outlook for 2007: Putin doesn't need trouble/Government anxious to curb purchases of public securities by non-residents/Sales of foreign cars exceed those of Russian makes
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Rossiiskaya Gazeta
Russia should make its energy policy clear to West - expert
Russia is currently trying to make it clear to the West that Belarus is likely to steal gas bound for Europe. According to Alexander Rahr, the director of the Russia and CIS programs of the German Foreign Policy Council, Moscow should not lose the PR battle and should demonstrate that Minsk is to blame.
Now we can see that Russia and Belarus are bargaining and trying to deceive each other. However, Moscow is in control of the resources, while the best Minsk can do is reach an agreement with Russia.
Russia's only weak point is that it is speaking from a position of power and using pressure against Belarus, its closest ally, Rahr said. Russian gas monopoly Gazprom could have refrained from raising the gas price fourfold all at once. Instead, it should have started to gradually increase it five years ago, the expert believes. As to the rest of things, Russia is acting correctly. Belarus is an independent country and it should pay a market price for gas. The Soviet era is long gone.
The West always fears Russia when it demonstrates its strength. Moscow waved its arms during the cold war. Today competition in the oil and gas sector is becoming fierce, and Russia is using force and pressure and showing off its energy power, which frightens Europe. So, the West prefers to protect the weak, but it is not clear how they will respond with Belarus, which is ruled by "Europe's only dictator," a man isolated from the West.
Russia will have to make its policy clear in order to avoid irritating the West, Rahr believes. If Russia pursues an open and non-aggressive policy, it will not come under criticism. But it will have to make an effort to prove that it is pursuing commercial, not political interests in its gas dispute with Belarus.
According to Rahr, problems may ensue if Moscow loses the PR war and the West believes that Russia wants to take over Belarus. Europe will start to establish oil and gas transportation systems with Libya and Algeria in a bid to stop buying Russian gas. Russia, therefore, should not neglect the opinion of the European public.
Gazeta.ru
Gas show becomes New Year tradition for Gazprom
Gazprom CEO Alexei Miller has officially announced that unless his company signs a gas contract with Belarus, the Russian gas monopoly will cut off supplies to the country at 10 a.m. on January 1. He said Gazprom has already officially warned its European partners of possible disruptions in gas supplies.
The energy giant staged a similar show late last year, when it cut off gas supplies to Ukraine. Now that Belarus has refused to accept Russia's proposals, Moscow has found a new argument: Gazprom will soon give the Russian government a proposal to introduce an export duty for Belarus.
Experts believe that Miller does not actually expect to receive extra profits from a potential introduction of export duties. "Now that Belarus has refused to accept what Gazprom calls an 'advantageous' proposal on the gas price, the gas monopoly is making it clear to the country that things might get worse," said Konstantin Cherepanov, an analyst at Rye, Man & Gor Securities, a brokerage firm.
There is a political subtext in Gazprom's demand. "Gas duties for Belarus were abolished in the run-up to the Russia-Belarus economic union," said analyst Andrei Gromadin at MDM Bank. "However, the merger did not take place, and it is therefore logical that Gazprom wants to reintroduce export duties."
According to Cherepanov, Belarus has no choice but to reach an agreement with Gazprom. "Belarus will not last long without gas, and it has no one to buy it from but the Russian gas monopoly," the expert said.
The government has so far refused to consider Gazprom's proposal on the reintroduction of duties. It "may consider" the gas giant's proposal, but it must also "make thorough preparations and necessary calculations," an anonymous government official said.
Considered alongside Miller's sharp statements, this attitude shows that Russia has clearly opted for the "good cop, bad cop" policy. Alexander Lukashenko has been given a chance to accept Russia's proposals and retain the image of a skillful negotiator.
$martMoney
Political outlook for 2007: Putin doesn't need trouble
It is not true that President Vladimir Putin has been given "black lists" of officials and businessmen who will be publicly lynched to ensure a smooth transition of power.
Elections in Russia, both parliamentary and presidential ones, tend to spell trouble: the first Chechen war in 1994; the resignation of the president's main bodyguard and deputy prime minister in summer 1996; the second Chechen war and explosions of residential blocks in 1999; the arrest of the country's richest man in 2003.
All of these events were part of the election calendar or were used during election campaigns. They can be divided into two groups: "a small victorious war" and "sacrifice." This creates the impression that all of that trouble was deliberately provoked or devised by the Kremlin's political managers to manipulate the public and strangle the opposition.
Suspecting the authorities of ignoble intentions is a rational view, especially in Russia, with its head-chopping czars and bloodthirsty secretaries general. Any political expert will tell you that adjusting the election campaign to an agenda imposed by opponents entails defeat and is therefore inadmissible. They will tell you that such an agenda should be shattered. Those who work in the presidential administration say that the decision to deploy troops in Chechnya was presented to former President Boris Yeltsin as a way to raise his ratings, which reformers had pushed down to the floor.
Russian bureaucrats are not crafty enough to be able to blow up apartment blocks and blame it on Chechen terrorists without being caught red-handed. Khodorkovsky fell victim not to the election manipulations of the Kremlin's "gray eminence," Vladislav Surkov, but to his own overambitious strategy, which had rallied all the Kremlin forces against the oil magnate.
Arresting a "turncoat" minister or a billionaire with a Jewish name in order to raise the rating of the president's successor or the pro-Kremlin party would be counterproductive, because such a move can only escalate the conflict, with unpredictable consequences.
Any random persecution campaign that might take place in 2007 would only be defensive and spearheaded against those who play contrary to Putin's strategy. However, purely offensive plans will still be forwarded to the president, but he will not approve them.
There are no reasons to expect the president to exile Anatoly Chubais, the "father of Russian privatization" and the current CEO of electricity monopoly RAO UES, or moguls Vladimir Potanin and Mikhail Fridman, who are lying low. And don't expect a small war, for Putin does not need trouble.
Nezavisimaya Gazeta
Government anxious to curb purchases of public securities by non-residents
At its last meeting of 2006, the Russian cabinet brought up the issue of Russian government securities being actively bought up by foreigners, which, it said, was undesirable. Finance Minister Alexei Kudrin reported that the yields on government securities trading on the stock market are rapidly decreasing, which makes them attractive only to non-residents.
According to the minister, in 2005-2006, their yields dropped from 8% to 6.7%, compared with an annualized inflation rate of roughly 9%. As a result, pubic securities have no appeal to Russian investors. The same cannot be said for Western players, for whom 6-7% ruble returns are a fairly good figure. That is why, Kudrin said, the government must make every effort to lower inflation, because otherwise the country could turn into a sort of vacuum cleaner for foreign speculative capital.
Experts differed on how justified the minister's fears are. Natalia Volchkova, a senior economist at the Center for Economic and Financial Research and Studies, sees no danger: "It is just fine that there are such speculators, because their actions largely contribute to the market's growth." The Russian stock market went up by 65% in 2006.
On the other hand, Olga Belenkaya, an analyst with Finam, a brokerage firm, said that by buying up Russian securities, non-residents are helping to strengthen the ruble, eroding the competitiveness of local producers. "That is the reason why an inflow of speculative money in general is undesirable for the Russian economy," she said. "Earlier, foreigners were restricted in their dealings, and Sberbank and the Pension Fund were the principal portfolio holders of government securities, in spite of the fact that demand on the part of Western investors was high."
Liberalization in this field came too soon, she said, and restrictions on foreigners were removed before the market was ready.
Vedomosti
Sales of foreign cars exceed those of Russian makes
This year, sales of foreign cars exceeded those of Russian vehicles for the first time in 75 years. The largest national carmaker, AvtoVAZ, which controls only 33.5% of the local market compared with 50% two years ago, faces bleak prospects because Nissan, General Motors and Volkswagen want to build plants in Russia.
Experts at Ernst & Young said 800,000 to 900,000 Russian cars, as well as one million foreign vehicles, had been sold in 2006. In all, 250,000 foreign cars were assembled in Russia this year.
The situation will not improve for the Russian automotive industry because a record-breaking number of contracts for the assembly of foreign motor vehicles in Russia was signed this year.
Volkswagen has launched construction of a large automotive plant, expected to produce 115,000 vehicles per year, in the Kaluga Region. GM, Nissan and Toyota plan to build facilities worth $1 billion in St. Petersburg. GM alone wants to assemble 50,000 cars per year.
Foreign automakers are rushing to enter the local market because the government's car-assembly resolution stipulating low import duties on components has now expired.
Yevgeny Bogdanov, head of the machine-engineering and transport department at the management consulting firm A. T. Kearney, said major automotive concerns have done their best not to miss the boat.
At least one million foreign cars will be assembled in Russia in 2010, Valery Tarakanov, an independent automotive market expert, told the paper.
Ivan Bonchev, a consultant for the automotive industry from Ernst & Young, said AvtoVAZ is the only Russian carmaker that is trying to develop its own models. However, AvtoVAZ and Canada's Magna have signed a contract on building another plant in Togliatti worth $1.7 billion. The new enterprise will turn out 450,000 cars per year. AvtoVAZ will find it harder to compete against foreign companies with each passing year. Ernst & Young said the company will control only 28-30% of the local market by 2010.
