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What the Russian papers say


MOSCOW, July 19 (RIA Novosti) London puts on a circus show/Russia, Turkmenistan set to divide gas markets/Foreign investors to be denied access to 39 Russian sectors/Russia forced into arms race against its will/Putin pulls wool over journalists' eyes again

RBC Daily

London puts on a circus show

The Russian-British diplomatic scandal provided some thrilling details Wednesday. The Sun, a British tabloid, reported that a Russian killer had been caught in London's Hilton Hotel on Park Lane as he tried to assassinate Boris Berezovsky.
Later, the RAF reported that scrambled Tornado fighter jets had intercepted two Russian Tu-95 bombers as they approached Scotland.
The Foreign Office did not comment on the killer, and The Times said Wednesday he had been deported, which is strange considering London's efforts to get Andrei Lugovoi extradited.
Also Wednesday, Boris Berezovsky told a news conference in London that he had spent $400 million to change Russia's political system. He was sure, he said, Russia's FSB was behind the attempt on his life.
An RBC Daily source in the FSB described the statement as "stuff and nonsense." Colonel-General Alexander Zelin, commander of the Russian Air Force, used the same words to describe the alleged interception episode.
Russian strategic aviation would continue its "scheduled flights" over the North Atlantic, he said.
Yury Fedotov, the Russian ambassador to Britain, thinks Berezovsky is using his political opposition as a red herring to draw attention away from his financial dealings.
Some observers believe it is just another provocation to further aggravate relations between the European Union and Russia.
The United States may be interested in that happening, because a new conflict could stall negotiations on a EU-Russia Partnership Agreement, expedite the basing of a missile defense system in the Czech Republic and Poland, and isolate Moscow at the Kosovo negotiations.
The U.S., worried by progress in Russia's relations with Germany and France, is attacking Russia from the British vantage point, believes State Duma deputy Ivan Melnikov.
He said the Brown Cabinet was "raw" and had no line of its own. Hearings in the British House of Commons Wednesday support that view.
Jim Murphy, a young Secretary of State for the EU, could not explain to deputies why 10 Downing Street did not want to extradite Berezovsky or swap him for Lugovoi, why the government was putting company business in Russia at risk and refusing to take into account Moscow's stand on Kosovo at the UN Security Council.
London is showing signs that it is beginning to feel ashamed of the circus.
On Wednesday, the Foreign Office presented the Russian Embassy with a note listing the names of four diplomats to be expelled. It suggested they leave the United Kingdom within 10 days, which is a lot of time.
Michael Ellam, a spokesman for Gordon Brown's press service, disclosed that the government agreed to a trial of Lugovoi in a third country, saying that to further insist on his extradition would not be proper.


Russia, Turkmenistan set to divide gas markets

The Russian government no longer plans to build a pipeline from the Kovykta gas deposit in the Irkutsk Region to China. A government source said that construction of the North European and Caspian gas pipelines was now the main priority.
Several weeks ago, Alexander Ananenkov, deputy board chairman of energy giant Gazprom, called on the government to take action against U.S. oil producer Exxon Mobil, which had promised to sell 8 billion cubic meters of liquefied natural gas from the Sakhalin I project to China.
The Russian Industry and Energy Ministry promptly warned Exxon Mobil that it had no right to export gas without Gazprom. However, that does not mean Japan will not receive Sakhalin gas.
On Wednesday, President Gurbanguly Berdymukhammedov of Turkmenistan, a Central Asian republic, said during his official visit to Beijing that Ashgabat was ready to annually sell 30 billion cubic meters of gas to China.
The Turkmen leader also signed an agreement stipulating the construction of a gas pipeline into China and a production-sharing agreement with China National Petroleum Corporation (CNPC).
The gas pipeline is to be completed by late 2008.
The Russian government was not dismayed, because it will now start building new gas pipelines to Europe.
It appears that President Vladimir Putin has ceded the Chinese gas market to President Berdymukhammedov because Beijing would be only too happy to buy cheap Turkmen gas.
However, Turkmenistan and Kazakhstan, another Central Asian republic, agreed to build another gas pipeline to export their gas to Europe via the Gazprom network, and also froze talks with Turkey and Iran on building alternative export routes.
Consequently, a "gas OPEC" advocated by Moscow has now started dividing up gas markets.


Foreign investors to be denied access to 39 Russian sectors

The Russian government has forwarded to the lower house of parliament (State Duma) a bill banning foreign investors from 39 strategic sectors. Violators will have to deal with the security.
Experts said the Russian bill is more logical and clear than a similar American act. Britain and China also have similar laws.
The 39 sectors include natural monopolies, the defense sector, aerospace, and the nuclear sector.
A foreign company or a Russian firm it controls willing to buy more than a 50% stake in an enterprise from the list, or half of the seats on its board of directors or management committee, must get a permit from a regulatory body.
Foreign companies may only buy less than 25% of the shares in a strategic enterprise.
A government commission headed by the prime minister will grant or deny permits, acting in accordance with instructions barring foreign investors from companies that have development licenses for projects involving state secrets, export defense products, or that fulfill state defense contracts.
However, foreigners may be allowed to buy into such companies if they pledge to continue supplying weapons at agreed prices.
In the case of companies fulfilling projects that involve state secrets, only Russians with a clearance permit may sit on the said company's managing bodies after its acquisition by a foreign investor.
The Federal Security Service (FSB) will monitor compliance with the law, including by using investigation methods.
A source close to the FSB said it is a global trend, adding that the United States will also soon pass a bill allowing security-related services to monitor deals involving foreign investors.
Albert Yeganyan, a managing partner at the Vegas Lex law firm, said foreign investors would have clear-cut rules of the game, as the bidder cannot be denied if he wants to buy into a company that is not on the forbidden list.
He said Germany's Siemens waited a year for a permit to buy into Power Machines, France's Total was not allowed to buy a 20% stake in independent gas producer Novatek, and China's CNPC was denied the right to buy into Sintez, which is working in the fuel and energy sector.
Maxim Shub of Shell shares Yeganyan's opinion, and ExxonMobil's Ben Haynes spoke in the same spirit Tuesday.

Novye Izvestia

Russia forced into arms race against its will

Although the Cold war ended 20 years ago, the arms race is once again a key element of global politics because the highly profitable international arms trade lacks any accepted rules of the game.
In its 2006 report, the Stockholm Peace Research Institute (SIPRI) named Russia and the United States as the world's leading arms exporters, and said Moscow completely owed its successes to Soviet-era R&D projects.
Anatoly Tsyganok, head of the Moscow-based Center for Military Forecasts, said Russia controlled the African market, and that Algeria was the main regional customer. Moscow also had good positions in the Middle East, Asia and Latin America.
"Russia owes its successful business operations to Soviet-era ties. But the national defense industry has fallen into disrepair," Tsyganok told the paper.
He complained that Russia had a lot of money, but preferred to upgrade older weapons systems rather than develop new ones.
Rosoboronexport, the main state-owned national arms exporter, said Russia promptly reacted to the changing market situation and did its best to find new customers and expand its product range.
Officials said naval weapons now accounted for an increasingly greater share of arms sales. Moscow also exports more air-defense systems and has boosted small firearms sales by 150%.
Since the late 1980s, financial interests prevailed on the arms market. However, supply and demand is influenced by political factors, namely, regional instability, territorial and military conflicts and changing national foreign policies.
It appears that although leading arms exporters are forced to invest more into their respective defense industries, they have little control over global markets. Consequently, the world is now witnessing another arms race.
The global media is now focusing on a "new Cold War" between Washington and Moscow. No matter what politicians on both sides of the Atlantic may say, Russian-U.S. relations are gradually deteriorating.
That resembles a vicious circle, and the re-division of markets and a new arms race are changing the essence of international relations for the first time since 1992.

Vremya Novostei

Putin pulls wool over journalists' eyes again

Yesterday, President Vladimir Putin accepted the resignation of Igor Ivanov, secretary of the Russian Security Council.
The former foreign minister resigned not just because the Security Council is a mere cog in the Russian system of power. According to the newspaper's sources, he does not support the current policy of confrontation with the West.
Putin, who is also chairman of the Security Council, appointed Ivanov's deputy, Valentin Sobolev, as acting secretary.
As usual, the president has pulled the wool over the eyes of journalists and political analysts, who thought the appointment would clarify the status of the Security Council ahead of parliamentary and presidential elections this and next year.
If Putin appointed Sobolev secretary, journalists would have concluded - quite wrongly - that the Council would remain a decorative agency, as the efficiency of any body of power depends on the tasks set to it by the president.
The Security Council headed by Acting Secretary Sobolev could handle more important tasks than under any other possible appointee, such as Prosecutor General Yury Chaika, head of the drug enforcement agency Viktor Cherkesov, presidential envoy in the Southern Federal District Dmitry Kozak, or speaker of the lower house, Boris Gryzlov.
But Putin preferred to keep the situation in limbo. Few people in the Kremlin probably know if Sobolev will be made full secretary, or will give way to someone else.
Valentin Sobolev, 60, is a security officer with 35 years of experience. Putin's colleague in the KGB/FSB, he was appointed deputy secretary of the Security Council in 1999, when Putin was prime minister.
According to the newspaper's sources, Sobolev was directly involved in the drafting of an information security concept in the Security Council. It was approved in the fall of 2000, soon after Putin was elected to his first term in the Kremlin.
At the time, many people viewed the concept as a way to limit the freedom of the media, in particular the rise of politicized Internet publications.

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