MOSCOW, December 18 (RIA Novosti) President Putin suspends decision on re-election - expert/ Medvedev's sterile image too much for Russia/ Russia and Iran unlikely to become strategic partners - analyst/ Gazprom charges less from Belarus to keep its European clients/Arcelor Mittal back in Russia/ Elite housing fetches 40% p.a.
Vedomosti
President Putin suspends decision on re-election - expert
Vladimir Putin said at the United Russia party congress that he agreed to serve as Russia's next prime minister after his term as president ends. Experts say this means that the country's decision-making center will move to the Cabinet after the next presidential election.
Business executives are not unnerved by this possible transformation in Russia's government. As a prime minister supported by an overwhelming parliamentary majority, Putin will remain the key figure in Russian politics, and will continue running the "state machine," said Viktor Remsha, the owner and director general of the Finam brokerage, adding that a stable medium-term outlook is always good for business.
"Putin is so influential that he will have enough authority even without a redistribution of power," agreed Alexander Goncharuk, president of Russian consumer services company AFK Sistema. He said the arrangement for the country's government would enable Sistema to grow "even faster."
Another executive who heads the Russian subsidiary of a major foreign investment bank said that Putin had probably publicly agreed to become premier simply to let people know he wouldn't go too far. It is too early to be sure which office he will eventually take, the source added.
Businesses will simply have to change their top contact and deal with the Cabinet instead of the Kremlin, said Yevgeny Gontmakher, head of the Social Policy Center at the Institute of Economics of the Russian Academy of Sciences. He believes Putin the premier will deal with all economic issues, while [Dmitry] Medvedev will concentrate on foreign politics.
According to political analyst Dmitry Badovsky, Putin will still informally control the military and security services as well as Russia's foreign policy, although these issues are directly handled by the president. According to the constitution, the prime minister nominates Cabinet ministers.
Vitaly Ivanov, deputy head of the Center for Current Politics in Russia, is convinced that all the personnel decisions in the government and administration will be made after Putin's approval. Serving as prime minister will give him time to think whether or not he will seek re-election later, Badovsky concluded.
Nezavisimaya Gazeta
Medvedev's sterile image too much for Russia
Thanks to the support of President Vladimir Putin, First Deputy Prime Minister Dmitry Medvedev has grown from a minor politician into the most popular political personality in the past few months.
Experts have compiled a psychological portrait of the man who may be Russia's next president.
Andrei Zheldak, managing director of market survey company Qualitative Quest, said Medvedev's main trait is clear even without a personal interview - he is a completely upright person.
Zheldak said that Medvedev is not a leader but a brilliant administrator, and so indispensable for any system.
"The majority of lawyers belong to this group," the psychologist said. "They work well in a stable situation and accustomed environment, but tend to panic in a crisis. Their main problems are lack of spontaneity, imagination and creativity. Constant strict self-control and lack of spontaneity can result in nervous breakdowns. As for borderline states, such people sometimes suffer from obsessive ideas."
The majority of experts polled point to Medvedev's lack of charisma saying that this is unacceptable for a president of such a major country like Russia.
Yelena Koneva, head of the Comcon market and media research company, said Medvedev is the most unimpressive politician in Russia.
"His image is sterile and smooth, with nothing to catch the eye. His face makes one think about Soviet-era Komsomol posters," she said. "You will learn nothing even if you carefully read everything he says on different issues. He speaks correctly but without imagination, although you intuitively think that he is a sincere person and his language is not a mask, but what he is."
Medvedev is a yuppie, Koneva said. "Such leaders are not suited to Russia, but you can imagine him as the leader of Switzerland or Denmark," she said. "Medvedev may look intelligent, refined, moderate and predictable, but he is not quite what Russians need. What Russians want is strength."
Kommersant, Vremya Novostei
Russia and Iran unlikely to become strategic partners - analyst
After long delays Russia's Atomstroyexport has started supplying nuclear fuel to the Bushehr nuclear power plant in Iran. Analysts believe Russia has won a political victory in its confrontation with the United States, but do not think Russian-Iranian cooperation will ever become a strategic partnership.
The initial launching date was September 2007 and accordingly the Russian side was supposed to have delivered the fuel in March. But the earlier agreed timeline was upset by Iran's later payments for the construction which led to equipment delays from third countries.
Atomstroyexport said the uranium enrichment levels would not be higher than 3.62%. Currently, Iran is independently enriching experimental quantities of uranium to a level of 3.7%. Besides, all fuel to be supplied will be under IAEA control and supervision throughout the entire period of its stay on Iranian territory.
"Economically, Russia is not benefiting much at the current stage," said Troika Dialog analyst Mikhail Stiskin. "The decision should be regarded as a political one."
He recalled that the United States was against starting nuclear fuel deliveries to Iran.
"In this way, Russia has emphasized its leading role in the world nuclear market and confirmed that despite political pressure it intends to fulfill its contract obligations to Iran," Stiskin said.
Dmitry Terekhov, an analyst with AntantaPioglobal investment group, added that if equipment deliveries from third countries are not agreed, the station might not be launched to schedule.
In the opinion of Sergei Oznobishchev, director of the Institute of Strategic Assessments, Russian-Iranian cooperation is unlikely to become a strategic partnership, because "many countries cooperated with Russia only until they could establish ties with a wealthier and stronger partner - the U.S. It is not being ruled out that such a change could happen with Iran, too."
For Americans "Russian-Iranian close ties are unpleasant, but they surely did not expect anything else from Moscow, and deliveries of nuclear fuel to Iran are not likely to sour Russian-American relations uneasy as they are," he said.
Gazeta.ru
Gazprom charges less from Belarus to keep its European clients
Gazprom will sell gas to Belarus at $119 per 1,000 cubic meters. The Russian gas monopoly claims the price is profitable, but experts say it is a political compromise based on the sides' desire not to aggravate problems before Christmas.
They thought earlier that Gazprom would raise the price for Belarus to $160-$165 following an increase in the price of Central Asian gas.
Gazprom spokesman Sergei Kupriyanov said that $119 per 1,000 cubic meters is a suitable price, which is strange if we compare it with Gazprom prices for other countries.
Dmitry Abzalov, an expert with the Moscow-based Center for Current Politics, said: "Russia has stopped a brewing conflict and preserved Belarus as a strategic ally for at least six months. At the same time, Minsk has ensured itself a privileged gas price and a $1.5 billion stabilization loan, something it has been working towards since last summer."
The expert said Gazprom needed to have Belarus as its ally also because playing on two fronts would greatly weaken the gas holding in view of the current political events in Ukraine and Gazprom's unstable position there.
Valery Nesterov, an expert with the Troika Dialog investment company, said Gazprom would raise the price to above $150 by the end of next year.
He said: "Both sides know that the current price is below the market trend, and so the gas price [for Belarus] will grow by the end of 2008."
Yekaterina Kravchenko, an expert with Broker Credit Service, said price growth would depend on the political situation in Russia and Belarus and on Gazprom's advance in the European markets.
"Gazprom would rather lose some profit in Belarus than its European clients," she said. "Europe is closely monitoring the gas monopoly's relations with neighboring countries. A sharp rise in gas prices for Belarus, which depends on Russian gas supplies, would close Gazprom's door to Europe, which is concerned over its alleged dependence on Russia."
Vedomosti, Kommersant
Arcelor Mittal back in Russia
Arcelor Mittal, the world's largest metals holding company, which sold off all of its Russian assets a month ago, is back on the Russian market with a plan to build a plant in the Tver Region northwest of Moscow. Representatives of the company and the local government signed a relevant agreement Monday.
The new plant will annually produce up to 1 million metric tons of reinforcing bars and other metal products for the construction industry and ferroconcrete production. A $100 million rolling mill is to be built there by 2010 to produce 600,000 tons of reinforcing bars and other rolled products a year.
This project stands a good chance of being successfully implemented, after a whole series of unsuccessful ones Arcelor has initiated in Russia: Lakshmi Mittal's company was not admitted to take part in the bidding for shares in the Yakutugol and Elgaugol coal mines in Yakutia. Then Arcelor was said to be eyeing Russia's biggest steel maker, Magnitogorsk Iron & Steel Works (MMK), but MMK's key owner Viktor Rashnikov denied the rumors.
It won't be easy for Arcelor Mittlal to buy an operating facility in Russia or a stake in it for political reasons, according to Sergei Donskoi from the Troika Dialog brokerage. It might get interested in a large metallurgical or mining project, but there are numerous Russian bidders lining up to take part in such projects, so Arcelor has to build a plant from scratch, he said.
Analysts have shown no surprise that Arcelor Mittal chose the metal products market for its second chance in Russia.
"It is one of the more dynamic markets, because it is closer to the end consumer," said Kirill Chuiko from Uralsib.
Igor Nuzhdin from Bank Zenit added that "Tver is a region with high demand for metals, especially for construction materials."
Business & Financial Markets
Elite housing fetches 40% p.a.
Moscow has overtaken London in price rises on the elite real estate market, said Knight Frank analysts. They estimate that Moscow's luxury housing market in 2007 increased by 40.9% outstripping two other leaders - the U.K. and Bulgarian capitals. London residences brought their owners 32% p.a. profit and Sofia, 30.6%.
"The high growth in prices in Moscow and Bulgaria are typical of developing markets, while in London they are down to its status as a recognized world financial and cultural center," said Yekaterina Tein, a Knight Frank partner and director of residential real estate.
She said the Moscow elite market was maximizing prices. In the first quarter of 2007, elite property on the primary market was not exceeding $36,400 per sq m, but by the end of the year sellers were offering one sq m for $45,000 and above.
The average price in January was $12,060 per one sq m, and $22,460 in November.
Knight Frank forecasts that the growth rates in 2008 will range between 18% and 25%.
Players on the capital's elite property market, surveyed by B&FM, considered Knight Frank's figures to be overpriced.
Ella Bratilova, a leading elite property analyst with Paul's Yard, pointed to a steady 30% growing trend on new premium projects.
"Elite real estate in 2007 did not rise by more than 15% to 20% in price," said Alexander Dyachenko, director for development at Welhome.
In 2008, moderate growth for elite housing will continue, but will not surpass 10% to 15%, said analysts.
"Price dynamics will largely depend on the outcome of the presidential ballot," said Anzhela Kuzmina, director of sales at IntermarkSavills.
"If a hard-nosed candidate comes to power, many buyers will hold back, and the market will not balloon."
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