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MOSCOW, October 11 (RIA Novosti) Iran can dispel suspicions over its nuclear program / Georgian president compromises "orange" idea / New state corporation to improve Russia's investment image / France ready to invest in Russian economy / Generating companies: investors unwilling to pay through the nose

Vremya Novostei

Iran can dispel suspicions over its nuclear program

Crucial talks on Iran's nuclear program, attended by the International Atomic Energy Agency (IAEA), are underway in Tehran. The international community wants to determine the rules of the game for countries wishing to access enriched uranium as part of nuclear power generation programs, a Russian political analyst told popular daily Vremya Novostei.
According to Vitaly Naumkin, head of the of the Moscow-based Center for Strategic and Political Studies, the majority of Russian politicians and analysts believe there is no reliable proof of Tehran's intention to create nuclear weapons. But there are suspicions, which Tehran can dispel.
Moscow is disappointed over Iran's policy, and especially its rhetoric, the analyst said. Advocates of Russian-Iranian partnership find it difficult to uphold their stance, since they sometimes cannot explain the Iranian partners' harsh and inflexible policies.
Naumkin said he was surprised at Tehran's inability to understand that differences between Russia and Iran's policies are natural, and not a result of Washington's "manipulations."
Such accusations are particularly unfair, as Russia is now consistently advocating its view of a fair world order based on respect for the legitimate interests of regional and global players, and on the primacy of international law and collective international institutions.
If Russia can understand that Iran has legitimate interests in the regional and global politics and economy, why can't Tehran concede that Russia also has its interests and international commitments?
Naumkin is concerned that Russia and Iran, which have so much in common, have not found a solution to the problem of Iran's nuclear program, taking into account the interests of other countries without damaging either partner's relations with them.
Not only Western countries, but also Iran's Arab neighbors have expressed concern over its nuclear ambitions. Iran is currently under strong psychological pressure, including threats of an armed intervention, which is a unique situation for trying to find a compromise jointly with Russia, the expert said.
Naumkin believes that this would allow Iran to uphold its right to use nuclear power for peaceful purposes, and also to dispel the international community's suspicions of secret Iranian plans.

Kommersant

Georgian president compromises "orange" idea

A large anti-Russian wave is sweeping Georgia, triggered by officials in Tbilisi. Authorities and the opposition are going out of their way to convincingly clear themselves of suspicion of being linked to the Kremlin, and to successfully smear their opponents with similar accusations.
In such a situation any criticism of authorities is at once viewed as playing into the hands of the "aggressive northern neighbor." Especially since some of Moscow's actions and remarks have only helped Tbilisi.
All this seems to be giving Mikheil Saakashvili a reason to feel victorious. But Georgia will have a heavy price to pay for his triumph.
Saakashvili came to power in the fall of 2003, riding on the wave of the Rose Revolution, as a young democrat who dethroned the old corruption-ridden bureaucrats. That was the image he had won both in the country and abroad.
But much has changed in the four intervening years. The presidential team has lost many of its key figures. Gone are the ones that could have been rivals of the head of state. Zurab Zhvania, called the "brain of the revolution", died under mysterious circumstances. Salome Zurabishvili, who had strong connections in the West, quit as foreign minister amidst scandal. The president has decided to drop his defense minister, Irakly Okruashvili, the most charismatic figure in the Georgian leadership.
Perhaps Saakashvili has consolidated his grip. But his rigid vertical of power has failed to advance Georgia's ultimate goal - the unification of the country. And even this is not the main thing. The creation of a stronger presidential administration has compromised the Rose Revolution badly. Now its ill-wishers will have a killing argument: this is what the people who make "velvet" revolutions are like.
In this way Saakashvili, possibly against his will, has rendered an invaluable service to those who greet all "orange" revolutions with open suspicion. However, Moscow has no cause to celebrate either. The price of what is happening in Georgia will be high for it, too: it will be a long time before a Russia-sympathizing politician comes to power there.

Vedomosti

New state corporation to improve Russia's investment image

The Russian Economic Development and Trade Ministry said a new state corporation could be set up to help improve the national investment climate and the country's international image.
So far, Russia's reputation in the eyes of potential investors is worse than its investment climate. However, investors operating on the Russian market receive above-average profits, and are aware of the country's high investment potential and relatively low risks.
In 2006, a poll of prospective investors conducted by the government's Consultative Council on Foreign Investment revealed that they believed the situation to be just the opposite.
The Economic Development and Trade Ministry said the new state corporation would straighten things out, and that $1 worth of marketing expenses could provide up to $4 in profits.
Ireland's Industrial Development Agency, established in 1994, helped swell foreign investment into the country from $1 billion to $25 billion.
The "information expansion" takes into account the specifics of 33 countries. For instance, hi-tech products should be marketed in Brazil, which does not know much about Russia's export potential. Famous Russian lawyers, scientists and cultural figures could hold lecture tours in Germany. Under the plan, materials about successful cooperation between Russian business and Danish metallurgical giant Dan Steel should be published regularly in that country.
The plan said Russia's image in the United Kingdom would not improve unless fundamental problems, in particular the introduction of International Financial Reporting Standards (IFRS) and improved corporate management, are solved.
Energy giant Gazprom and oil companies LUKoil and Tatneft will be asked to issue student grants and organize free Russian-language courses in Iran.
Anastasia Onegina, head of Reuters Russian service, said it would be better to provide normal access to the Kremlin and the government. Merrill Lynch economist Yulia Tseplyayeva complained that Russian officials refused to meet with 70% of foreign businessmen, and that government ministers could only be contacted through former ministers.
Martin Smith, the managing director of West Bridge Consulting, said foreign investors were receiving different signals from Russia, and that gas shutoffs to Europe impeded their cooperation with some ministers.
Stephen Lock, CIS regional director at mining equipment manufacturer Mmd, said Russia would have to spend $2 million on its PR campaign in the United States. And Smith said the entire program would cost $200-$300 million.

Gazeta.ru

France ready to invest in Russian economy

French investors are prepared to buy stakes in large Russian companies, specifically Gazprom, France's President Nicolas Sarkozy said after his Moscow talks with Russian President Vladimir Putin.
Sarkozy said France would not apply protectionist measures, and that French-owned equity should be mutually beneficial.
French companies have long been trying to enter the Russian market, in particular the oil and gas sector. Total has moved well beyond other French companies in this undertaking. In July this year, it signed an agreement with Russian energy giant Gazprom on the joint development of the Shtokman gas condensate deposit in the Barents Sea.
Total has not gained much from the deal, because Gazprom said it would not be allowed to market Russian gas. But the choice of the French partner was significant, given that many other global energy players, notably American ones, had bid for participation in the project.
Dmitry Abzalov, an expert with the Center for Current Politics, a Russian think tank, said: "Russia needs France's support as an ideological leader of the European Union and a major economy."
Experts attributed Gazprom's decision to team up with Total to political motives.
A month later Total, which operates the Kharyaginskoye oil project in the north of the Nenets Autonomous Area, brought down production there by 0.5 million metric tons annually.
It was a major concession, which experts explained as Russia's attempt to promote energy cooperation with France as a springboard for its foray into the European market.
When the European Commission made public its plan to regulate the European energy market, spearheaded primarily against Gazprom and oil pipeline monopoly Transneft, in September, France joined forces with Germany to express its protest.
Sarkozy has probably come to Moscow to claim compensation for his country's clearly pro-Russian energy stance.

Kommersant

Generating companies: investors unwilling to pay through the nose

Russia's electricity monopoly Unified Energy Systems has decided to postpone an IPO of its OGK-6 generating company. UES says the reason is the unfavorable global business climate. However, analysts believe the determining factor was the poor performance of OGK-2's placement, which ended less than two weeks ago.
In the course of its IPO, investors showed very little interest in the generating company's shares. OGK-2 had been able to attract only half of the targeted amount - $864 million instead of $1.7 billion. A considerable portion of the newly-issued shares were bought up by Gazprom, for $640 million.
"When OGK-2 was floated, the bid book was left undersubscribed, with the floating completed closer to the middle of the price range," said Bank of Moscow analyst Dmitry Skvortsov.
"OGK-6's IPO was in effect a carbon copy of OGK-2's placement," said Vladimir Sklyar, an analyst with Renaissance Capital brokerage.
Investors are not ready to purchase generating assets which they believe are overpriced.
"The OGK-2 situation has shown that companies priced at more than $500 per kilowatt appeal little to investors," said Irina Filatova, an analyst from Broker Credit Service brokerage.
Her view is echoed by Sklyar: "Investors are willing to buy such paper only on condition that the company estimate does not exceed $460 per kilowatt, because shares lack the potential to grow." He added that investors were prepared to pay more only for OGK-5 and OGK-4 stock backed by offers from strategic investors, Enel and E.On.
The postponement of OGK-6's IPO could be followed by its complete cancellation in favor of selling the whole stake to a strategic investor, experts said.
"Not to get burned again, OGK-6 might not only move its flotation date, but also change the scheme of attracting funds. In particular, the company could decide to place its securities under a closed subscription," Skvortsov said.
Sklyar does not rule out that OGK-6 might now try to persuade Gazprom to buy up the whole issue.


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