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What the Russian papers say


MOSCOW, August 9 (RIA Novosti) Russian arms dealers prefer reliable partners - expert/Iraqi government cannot guarantee implementation of oil contracts/Georgia claims it was attacked by Russian missile/Another gas conflict between Russia and Belarus could flare up this autumn/Gap between high and low incomes critical in Moscow


Russian arms dealers prefer reliable partners - expert

Russia could cancel its nuclear fuel deliveries to the Bushehr power plant in Iran unless Tehran declassifies its nuclear program.
Russia's Foreign Ministry says that no official statement has been made, while Rosatom (the Russian Nuclear Power Agency) is planning no fuel deliveries to Bushehr right now for technical and financial reasons.
Still experts believe Russia is seeking a pretext to avoid completing construction.
Associated Press yesterday reported that Russia had presented another ultimatum to Iran, quoting some European and U.S. diplomats, who spoke on condition of anonymity.
Iran was supposed to stop uranium enrichment on its territory and fully declassify its nuclear program, as well as to ensure that the International Atomic Energy Agency (IAEA) and the international community have unimpeded access to all its nuclear information - otherwise, Moscow would stop supplying fuel for the nuclear power plant it is currently building in Bushehr.
The facility was to be commissioned in the fall of 2007, but Moscow said in March that Tehran had failed to observe the financing schedule.
The Russian Foreign Ministry has no information of any such demands advanced to Iran, said Andrei Krivtsov, deputy head of the ministry's public relations department.
"Fuel deliveries were to begin six months before the facility came on stream according to the technological plan. However, Iran has broken the financing schedule, and new fuel delivery deadlines have to be determined," said Rosatom press spokesman Sergei Novikov.
"Russia's unofficial policy toward Iran is quite harsh, but it still doesn't want to join the United States," said Ivan Safranchuk, director of the Moscow office of the Washington-based World Security Institute.
"Russia expects no new contracts from Iran and is reluctant to complete the Bushehr project. Those alleged new demands may be a pretext to close it," a source familiar with Moscow's position on Bushehr reported.
"Iran is the most unreliable partner these days, and even Russian arms dealers prefer not to deal with it," agreed Ruslan Pukhov, director of the Moscow Center for Strategy and Technology Analysis.
Russia will hardly choose Iran if the choice is between Tehran and countries of the Gulf, for example the United Arab Emirates, he added.

Nezavisimaya Gazeta, Vremya Novostei

Iraqi government cannot guarantee implementation of oil contracts

The Kremlin intends to discuss the settlement of Iraq's $10 billion debt and the right to oil contracts signed during Saddam Hussein's rule during talks with Iraqi Oil Minister Hussein al-Shahristani.
The minister arrived in Moscow yesterday for a three-day visit. However, agreements with the tottering Iraqi government may prove invalid.
Deputy Finance Minister Sergei Storchak said the settlement of the $10 billion debt for Russian military deliveries to Iraq depended on the outcome of the talks with al-Shahristani. He said a relevant agreement had been drafted, expressing "cautious optimism" regarding its signing by the end of the year.
According to Storchak, much will depend on a decision to implement oil contracts signed during Hussein's rule, although a "debts-for-oil" offer is not on the agenda.
Russia's largest private oil company, LUKoil, signed a contract to develop the West Qurna-2 oil deposit with proved recoverable reserves of about 6 billion barrels of oil in 1997. Saddam Hussein attempted to cancel it in late 2002, shortly before he was toppled.
The new Iraqi government has begun drafting a new oil bill, which could deprive LUKoil of its rights to West Qurna-2. The Iraqi minister said as much at the Moscow airport yesterday.
A source with connections in the Russian oil sector said he was surprised the oil minister had made such a sharp statement immediately upon his arrival. He said: "Does the minister think a dialogue is possible if he has already said Russian companies must reconcile themselves to the loss of contracts?"
The Iraqi parliament has not yet passed the second wording of the Iraqi oil bill, and that may not happen soon, because the Sunnite, Shiite and Kurd factions in parliament are divided over it.
The agreements reached with the new Iraqi government appear to be as shaky as the contracts signed with Hussein's administration.
Apart from the continued violence, the political crisis in Iraq has grown more severe, making the future of contracts unpredictable. Nobody there can guarantee they will be implemented.
Five more ministers have joined the boycott against the government of Prime Minister Nouri al-Maliki, and the attempt to form a national unity government appears to be failing.


Georgia claims it was attacked by Russian missile

Experts from the Georgian Defense Ministry examined fragments of a missile that fell in the Gori District Monday evening and concluded it was a Russian-designed anti-radar guided missile not in use in Georgia's armed forces.
Moscow argues that the strike was a provocation designed to discredit Russia.
According to Georgian experts, it was a Rainbow X-58 anti-radar guided missile of Russian make, 4.8 meters long and 0.38 meters in diameter, weighing 640 kilograms (1,400 pounds), with a warhead containing 140 kilograms (308 pounds) of TNT.
Georgia claims that these conclusions irrefutably prove that the Russian Air Force violated Georgian airspace.
But South Ossetian leaders share Moscow's argument about a provocation.
Irina Gagloyeva, South Ossetia's minister for the press and information, said: "Georgia will benefit from the situation once again. It has long tried to convince global public opinion that Russia is a destabilizing factor in the region. Georgia wants Russia and its peacekeepers to pull out, giving [President Mikheil] Saakashvili a chance to start a war."
"Georgia does not have aircraft armed with such missiles," a spokesman for the Georgian Defense Ministry said.
However, specialists from the Raduga design bureau, located in Dubna, near Moscow, said the X-58 missile could be also mounted on a Su-25 Frogfoot, which Georgia has.
Vitaly Larionov, deputy director general of Raduga, said: "The X-58 missiles were deployed in many Soviet republics, and therefore the CIS and other countries may still have them, or their modifications."
He sees many seams in the fabric of the missile scandal. For example, engineers would never dig out an unexploded missile, as that is extremely dangerous. But Georgian bomb experts did so in front of television cameras.
"This could happen only if they knew the missile would not explode," Larionov said. "Somebody probably staged an imitation of a missile attack, and an unarmed missile was brought to the site, broken up into fragments and buried in the ground."

Another gas conflict between Russia and Belarus could flare up this autumn

Fearing cuts in Russian gas deliveries, Belarus has repaid its debt. Experts are convinced it is not the last energy conflict between the two countries; another one can be expected as early as this autumn. Then Belarus may put up some assets for sale, and Russia may use its traditional "gas weapon."
Analysts think the Russian-Belarusian energy dialogue, which looks rather like an exchange of passes, is far from completion.
"Russia and Belarus signed an agreement for 2007, but problems with payments started as early as the middle of the year," said Alexander Blokhin, an expert with the AK BARS Finance investment company.
According to experts, next year we can expect more conflicts with Belarus over Russian gas supplies.
"Theoretically, starting next year the gas price for Belarus should rise to the Ukrainian level ($230), but it is hard to say now what kind of agreement Gazprom and Beltransgaz may sign. Traditionally, talks become difficult late in the year, when the sides must sign a contract for the following year. However, other versions are also possible in this case," Blokhin said.
This year, a conflict may start earlier, as Belarus must put up for auction state-owned stakes in some of its fuel and energy enterprises (mostly oil refining and petrochemical ones).
Russian companies, primarily the energy giant Gazprom, have the best chance of acquiring the stakes.
However, the Russian side claims that the starting price of the share packets is too high. For that reason, Russia is trying to put pressure to bear on Belarus to make it reduce the starting price.
Experts say that Russia has broadly hinted that Belarus will get some preferences on gas deliveries if it reduces the price of its assets.


Gap between high and low incomes critical in Moscow

While economic growth persists in Russia, the gap between high and low incomes is growing alarmingly, most of all in Moscow. Social scientists report that more and more people have become frustrated, seeing themselves as outsiders these days.
According to the Moscow branch of Rosstat, Russia's Federal Statistics Service, the so called decile coefficient (the ratio between the incomes of the richest 10% and the poorest 10%) reached 41 in the first quarter of 2007, compared to mere a 25 in the early 20th century, when Russia experienced three revolutions in a row.
Denmark, Finland and Sweden boast a high-low income ratio of 3-4, as was the case in the former Soviet Union. Germany, Austria and France have a greater gap between the rich and the poor - 5-7, a level economists consider ideal.
"Once a country's decile coefficient hits 10, it creates the conditions for riots," explained Ruslan Grinberg, head of the Russian Academy of Sciences Economics Institute.
"Very acute social inequality has two major implications," said economist Natalia Tikhonova, department head at Moscow's Higher School of Economics.
"First, it destroys trust in society and reduces its social capital as a whole. Everyone starts to believe they can implement whatever suits them best, ignoring the rules of the game that should be the same for all.
"In the 1990s, the law was in fact ineffective, but people still had some common ideas of how one was supposed to behave. At present, more and more people have started to think they can do whatever they like, that their freedom is unlimited. That inflicts huge economic losses and affects the country's competitiveness," she said.
"The second implication," in her opinion, "has to do with people's health. Apparently, frustration and feelings of being an outsider generate some kind of ferment in humans that affects their health, destroying the body from inside. It is happening to the majority of Russians these days, because many of them consider themselves pushed to the margins," she added.

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