MOSCOW, October 15 (RIA Novosti) Intermediate-range missiles new Russian argument in ABM dispute / Europe will not improve energy security by pressuring Russia - expert / Russia, India set to develop fifth-generation fighter / Russian shipyard to build vessels for Algerian navy / AvtoVAZ finds Fiat more accommodating than Renault
Gazeta
Intermediate-range missiles new Russian argument in ABM dispute
Russian President Vladimir Putin said during last week's visit by U.S. State Secretary Condoleezza Rice and Defense Secretary Robert Gates that Russia "will find it very difficult to remain within the framework of the treaty on the liquidation of intermediate- and shorter-range missiles."
This makes sense. Since the U.S. is deploying its global anti-ballistic missile system against "rogue" countries that can hypothetically create only intermediate-range missiles of poor quality, it would be best to use methods of joint military diplomacy, rather than unilateral military methods, to preclude that hypothetical danger.
The Soviet Union and the United States signed the treaty on the liquidation of intermediate- and shorter-range missile in 1987, largely under pressure from Washington's European allies, who feared becoming a battleground in the two nuclear superpowers' war.
Leonid Ivashov, vice president of the Russian Academy of Geopolitical Problems, said the Kremlin's idea was impractical.
"The treaty has been fulfilled," he said. "All intermediate- and shorter-range missiles have been liquidated, along with their production facilities. We don't have the personnel, the scientists or the facilities [to produce such missiles]. Moreover, the denunciation of the treaty would benefit the Untied States, which has more powerful production facilities."
Ivashov said: "Russia's resumption of the production of intermediate-range missiles would play into the Americans' hands, who will remain invulnerable across the ocean. In addition, we will fuel Europe's concerns, just as our American friends want."
Nikolai Zlobin, director of the Russia and Eurasia Project at the Washington-based World Security Institute, shares some of Ivashov's views.
He said: "[Defense Minister] Sergei Ivanov first mentioned the possible denunciation of the treaty three years ago. The threat did not impress the Americans then, and I don't think it will impress them now. They know that Russia does not have the capability or the desire to start a full-scale arms race. The Americans could use it as a pretext to launch an anti-Russian campaign, accusing Russia of disregarding its international commitments. But they will most likely interpret Putin's words as part of the bargaining process."
Nezavisimaya Gazeta
Europe will not improve energy security by pressuring Russia - expert
The Vilnius energy summit has shown that Ukraine and Poland are craving to play the role of Europe's own Strait of Hormuz, a Mideast waterway that is of strategic importance to the United States, said Viktor Mironenko, head of the Ukraine Studies Center at the Institute of Europe of the Russian Academy of Sciences.
This is a strange goal. In the future nations will engage in armed conflicts for control over fuel transportation routes, and one of them is already smoldering in the Middle East. It is hard to imagine that countries like Ukraine, Poland or Lithuania with their histories could wish to become stages for global conflicts once again, the expert said.
What Ukraine, Poland, Lithuania and other participants in the Vilnius talks had in common was their support of the European Energy Charter and the Energy Charter Treaty. Russia has not ratified these two acts, because they do not meet its national interests. The Vilnius summit has shown that an EU tendency was to step up political pressure on Russia. But this policy will not improve Europe's energy security, but lead it into a deadlock. It won't be easy to find a way out, Mironenko believes.
The key players in this global game do not even seem confident in the plan's success, so they are happy to hand their role to Russia's neighbors. In this case, Ukraine might end up a hostage of bigger players' plans. Its EU entry is being ever more insistently conditioned by its complete solidarity with Western policies, including accession to NATO and the "energy union." The latter, as the Vilnius meeting has shown, is slowly but surely turning into a political alliance.
On the other hand, the summit participants have not offered Ukraine generous compensation for the possible inconvenience, in the event that its relations with Russia deteriorate even further. What they offered was to help Ukraine complete the construction of the Odessa-Brody-Plock gas pipeline. True, the EU or Poland could do it, if Azerbaijan and Kazakhstan showed genuine interest in the project. But if Russia responds by putting its Burgas-Alexandroupolis pipeline on stream and launching direct oil shipments of Kazakhstan's oil to China, Ukraine's project would hardly lay a solid foundation for the "common Baltic-Black Sea-Caspian energy transit space" which the Ukrainian president described so ardently in Vilnius.
Therefore, the expert said, the EU must start effectively doing something about its energy security in the east rather than putting together an anti-Russian alliance while Russia's back is turned. Whoever was the first to use energy sources as a means of political pressure - the buyer or the seller - it is now important to try and avoid it in future.
Kommersant
Russia, India set to develop fifth-generation fighter
Under an intergovernmental agreement due to be signed in Moscow in the next few days, Russia and India will jointly implement a $10 billion fifth-generation fighter program over several decades on a parity basis.
Sources in the Russian aviation industry said the agreement would be signed on October 17.
Mikhail Pogosyan, CEO of aircraft producer Sukhoi, said the entire program would be based on Russia's T-50/I-21 project. He said Russia would contribute most engineering solutions during the program's initial stage, and that India would largely provide financial support.
Pogosyan said the new warplane would have to meet Indian Air Force requirements, that Indian engineers would eventually upgrade it, and that this would account for 50% of the entire program.
Air Force Commander Alexander Zelin said the fifth-generation fighter's first version would take off by late 2009, and that its production versions would be purchased as of 2010. He said the second version, due to be bought by 2015, would match all air force requirements.
Although Russia and India have already implemented the BrahMos supersonic cruise missile project, the cash-strapped MTA medium transport aircraft project has stalled.
Moscow had trouble coordinating the relevant draft intergovernmental agreement because the Russian Finance Ministry refused to reinvest $1 billion worth of India's rupee debt into the MTA project.
This July, India criticized Russian bureaucracy, threatened to scrap the MTA project, and said it could implement a similar project with a European or Brazilian partner.
The paper's sources said the MTA agreement would at best be signed this November.
Business & Financial Markets
Russian shipyard to build vessels for Algerian navy
Severnaya Verf, a major St. Petersburg shipyard, has launched a project to repair and modernize two warships for the Algerian navy as part of the larger contract signed by Rosoboronexport, Russia's state-controlled arms exporter, estimated at $800-$900 million.
A source close to the shipyard's shareholders said the contract envisaged the construction of two frigates at Severnaya Verf, in addition to the repairs.
Analysts say the shipyard will be fulfilling mostly military contracts in the next few years because Russian shipyards still lag behind Asian companies in civilian shipbuilding.
The United Industrial Corporation (OPK), which manages assets in the most promising sectors of Russian economy - the beneficiary of Severnaya Verf - plans to merge it with other shipbuilding assets in Russia's northwest, Baltiysky Zavod and Iceberg.
Russia's Vneshtorgbank (VTB) announced in August it would co-invest in the restructuring of OPK's shipbuilding assets. One of the options discussed is to move the Baltiysky Zavod assets to Severnaya Verf and close down the former. However, OPK said it had not yet made a final decision on the facility's liquidation.
Andrei Fomichev, director general of Severnaya Verf and manager of OPK's shipbuilding program, said Baltiysky Zavod would continue operations until 2012. The company may be expecting to sign a gas carrier contract with Gazprom.
The merger scheme seems quite logical, because it would allow for the modernization and expansion of production assets to build vessels with deadweight of up to 300,000 metric tons. Such ships are not produced at any of Russia's shipyards at present, but they will soon be needed for exploring the continental shelf.
Bank of Moscow analyst Mikhail Lyamin said OPK would greatly benefit from moving the Baltic assets to Severnaya Verf, as the company would be able to concentrate on modernizing one large yard instead of partially reconstructing two smaller ones.
Vedomosti
AvtoVAZ finds Fiat more accommodating than Renault
AvtoVAZ will today sign a protocol of intent with Fiat, which will help the car maker to develop a class B vehicle and solve its engine headaches. However, negotiations with Renault have not been called off.
Rosoboronexport has been casting about for a strategic partner for AvtoVAZ for almost two years. To obtain modern technology for engine and car manufacture, AvtoVAZ is willing to sell to an investor 25% plus one share.
AvtoVAZ managers started with Renault and then switched to Magna, agreeing together to develop a new class C vehicle. In spring, Rosoboronexport director-general Sergei Chemezov named Fiat among its would-be partners. That came as a surprise to many, because Fiat already has a partner in Russia - Severstal-Avto.
The protocol will not detail any projects, said sources close to AvtoVAZ. It will merely confirm the intention of the car giants to consider cooperation options. Earlier, Chemezov said that AvtoVAZ wanted to set up a new engine operation (diesel and gasoline engines from 1.4 liter to 2.2 liters) with Fiat, and to jointly produce A and B cars under the Lada brand name in Togliatti.
Renault refused to manufacture its Logan model under the VAZ brand. It was due to the accommodation shown by the Italian manufacturer that Maxim Nagaitsev, AvtoVAZ vice-president for development, described Fiat last week as the most fitting partner for AvtoVAZ.
Fiat "entertains no aggressive plans, while other companies demand division and the manufacture of their models under their own brand names," he said.
The signing of the protocol has not put paid to negotiations with Renault or other would-be partners with AvtoVAZ, said a source at the plant. Another source close to AvtoVAZ considered Renault's shareholder chances high. Cooperation talks are also going on with General Motors, which AvtoVAZ has no objections to letting in on its charter capital, said two more sources close to the plant.
AvtoVAZ needs a strategic vehicle-manufacturing partner as soon as possible, said Mikhail Pak, an analyst with Capital: models developed with foreign companies will help AvtoVAZ to keep its part of the market (about 30%). AvtoVAZ president Boris Alyoshin said in September that it could be kept above 25%. Fiat was more suitable for that purpose, Pak said, because Renault's main weapon in Russia - its budget model Logan - was an AvtoVAZ rival.
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