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What the Russian papers say


MOSCOW, April 28 (RIA Novosti) Russia may have to fight for Abkhazia and South Ossetia/ Parliament leaves risky bills for new president to sign/ Prodi may be offered top job in South Stream/ World economic crisis to help revive Russian agriculture - analyst/ Turkmen gas to flow to India via Afghanistan and Pakistan/ GM offers expensive budget-car model to GAZ

RBC Daily, Nezavisimaya Gazeta

Russia may have to fight for Abkhazia and South Ossetia

Valery Kenyaikin, Russia's ambassador at large, said Georgia supported by the West could start a war for Abkhazia and South Ossetia. He said Russia was ready to respond even if Georgia asks NATO assistance.
"In the event of a military conflict, we will have to reply, also using military force," he said on Friday. "If they choose to rely on NATO, hoping that its troops will fight there, we have enough strength to respond."
It is Moscow's toughest statement since the beginning of the conflict.
Matthew Bryza, U.S. Deputy Assistant Secretary of State for European and Eurasian Affairs, said Kenyaikin's statement was not substantiated, adding that the United States was not aware of any concentration of Georgian troops on the border with Abkhazia. He inferred that Russia did not know what was going on there.
"On the contrary, we know very well," said a source in the Russian Defense Ministry, which confirmed Kenyaikin's information.
However, the ministry links the ambassador's statement to the news that Georgia and Ukraine will be granted status as NATO candidates in December. Then Russia will either have to leave the two breakaway Georgian republics, or prepare for direct confrontation with the bloc, which Moscow is trying to prevent.
Alla Yazkova, head of the Center for Mediterranean and Black Sea Studies at the Institute of Europe, Russian Academy of Sciences, said Georgia and Russia do not need a war, but provocations in the conflict zone might provide a pretext for an intervention by the United States and NATO, which are worried over the Baku-Ceyhan and Baku-Erzurum pipelines.
"When tensions ease, the West might insist that a UN police mission is deployed in Abkhazia and South Ossetia because Russian peacekeepers have no police functions there," Yazkova said. "Moscow may not accept the idea, but it should be discussed anyway."
Yuli Kvitsinsky, former Russian foreign minister and now deputy chairman of the international affairs committee of the State Duma, the lower house of parliament, said: "If Moscow recognized Abkhazia's independence using the example of Kosovo, it would have been a different kind of game now. It was clear that half-measures would provide grounds for denouncing Russia as an aggressor and engender opposition in the international community."
On Friday, Abkhazian President Sergei Bagapsh said his republic was ready to sign a military pact with Russia.
We will soon know if the United States will allow Georgia to start a war, and if Russia will act on its warning. So far, the situation could cut short the summer tourist season in Abkhazia and complicate the construction of facilities for the 2014 Sochi Olympics.

Nezavisimaya Gazeta

Parliament leaves risky bills for new president to sign

This April, one gets the impression that the parliamentary majority has been delaying the debate on risky state projects on purpose. The bills passed this month will have to be signed by President-elect Dmitry Medvedev, not Vladimir Putin, who might have undermined his popularity as the country's next prime minister. It is Medvedev who will now have to think twice before signing anything that largely runs contrary to his pre-election statements.
"Freedom is better than non-freedom," a formula that has already become Medvedev's slogan, will obviously be disavowed if he has to sign the new mass media law in late May. An amendment to the law initiated by United Russia's Robert Shlegel will authorize the government to pressure the media even more.
This law has not been significantly amended in the eight years of Putin's presidency. Some sources say there existed a silent Kremlin ban on changing it - this showcase policy provided Moscow with a ready response to Western criticism. In practice, however, the democratic law did not prevent the government from controlling the media in the slightest.
The amendments lobbied by United Russia will make it possible to close specific media outlets without a court ruling. Also, if there is a lawsuit against a media company, the plaintiff will be able to request the court suspend its publications during the court case. So the liberal Mr. Medvedev will have to sign it soon, too.
Another unpopular project left for the new president to deal with is the law on public control of penitentiary institutions. Paradoxically, the new law will effectively cancel any public control exercised today, virtually allowing the Justice Ministry's directorate for enforcement of penalties as well as other law-enforcement authorities to deceive inspectors by showing them to select prisons and hiding the undesirable truths about the majority of such institutions. That is certainly contrary to Medvedev's statements on civil society control over the government.
Finally, Medvedev will have to deal with a bill allowing the state corporation to keep government-allocated funds in commercial banks selected by the government and not necessarily in the Central Bank. Medvedev's signature here would be worth 240 billion rubles and would hardly fit with his earlier statements about fighting corruption, a fair competition between the public and private economic sectors and other liberal values.


Prodi may be offered top job in South Stream

Gazprom CEO Alexei Miller will today meet in Rome with Romano Prodi, who steps down as Italy's prime minister in early May, to discuss the South Stream project.
South Stream, a joint project between gas monopoly Gazprom and Italian oil and gas giant Eni, is expected to pump 1.06 trillion cubic feet of Central Asian gas to Europe annually from 2012, at an estimated cost of $14 billion.
It is rumored that Prodi will be offered the post as head of the Swiss-based South Stream AG, just as former German Chancellor Gerhard Schroeder heads the operator of the Nord Stream project.
Two sources in the Russian government have said Miller has a special mission in Rome; he will offer Prodi the post of head of South Stream.
In September last year, Gazprom Deputy CEO Alexander Medvedev said the South Stream would be organized along the same lines used for Nord Stream, led by Schroeder. Gazprom owns a 51% stake in it and Germany's E.ON and BASF each hold 24.5%.
This will allow the Russian monopoly to "surround Europe with gas pipelines in the south and the north, for gas delivery to different EU countries," Medvedev said.
The Italian prime ministers are to decide which of the pipelines - South Stream, the Nabucco pipeline to pump gas from the Caspian to Europe bypassing Russia, or the Trans-Adriatic Pipeline from Turkey to Greece, to be laid to Italy by 2011 - will be the first to reach Italy and granted gas sales contracts.
Mikhail Korchemkin, the founder and executive director of East European Gas Analysis, a Pennsylvania-based consulting firm, said that according to Vladimir Putin's plan Italy and Germany should become gas hubs, one in southern Europe and the other in northern Europe.
"Putin is repeating to the dot the moves made regarding Nord Stream," Korchemkin said. "First he announces plans to lay a gas pipeline to a certain country, and then he promises it special conditions and lures the prime minister who is going to step down to the project."
He foresees problems with environmental permits for the pipeline in the offshore economic zone of the Black Sea countries. According to Korchemkin, Viktor Chernomyrdin, former head of Gazprom and now Russia's ambassador to Ukraine, would make the best head of South Stream.


World economic crisis to help revive Russian agriculture - analyst

Skyrocketing food prices have caused unrest in the developing world and panic in industrial nations. The media is discussing impending food shortages, the suffering of the poorest nations and the urgent need to provide humanitarian aid.
However, it is hard to find any victims of the crisis, professor Konstantin Sonin of the Russian School of Economics told the paper.
Sonin said rising food prices were influenced by three factors. First, Chinese demand for meat and grain continues to grow. Second, the industrial world is promoting alternative energy sources, primarily the production of biofuels. And, third, Australia continues to suffer from long-term drought.
He said China's more affluent 1.3-billion-plus population is now eating more meat. The United States and industrial European nations are not facing any food problems either. Food prices would plunge if Washington cut back on agricultural subsidies, including payments for the non-use of fertile crop areas.
Sonin said the extremely powerful U.S. agrarian lobby attached priority to coordinated actions and long-term food-supply restrictions in order to prevent low food prices facilitated by competition between farmers.
However, political factors have a limited duration because most Americans are not grain producers, Sonin told the paper. He said rising prices would help overcome the resistance of lobby groups and expand food production.
European trade barriers shielding regional farmers highlight substantial production reserves, Sonin said.
He said rising global prices could only affect food-importing nations. However, the majority of the poorest countries are not food importers despite low agricultural-sector labor productivity.
According to him, producers are faring better than consumers. Disproportions in living standards show that national governments sometimes do not effectively redistribute profits derived from rising food prices.
Ineffective state management and problematic political systems are the main problem, Sonin told the paper. He said this could lead to political instability and even civil war in some cases, but that rising prices could not destabilize food-exporting countries.
Sonin said Russia and some other countries relied heavily on food imports, but that rising prices made the agriculture sector more profitable and could cause its revival.


Turkmen gas to flow to India via Afghanistan and Pakistan

Pakistan, Turkmenistan, Afghanistan and India have agreed to begin in 2010, and to complete by 2015, the construction of a trans-Afghan gas pipeline to deliver Turkmen gas to South Asia. According to tentative estimates, the gas pipeline with a capacity of over 30 billion cu m will cost $7.6 billion to build. Experts doubt the success of the project because of the political risks involved and the lack of raw materials.
The partners hope that the pipeline's annual capacity will be 31-32 billion cu m at inlet in Turkmenistan and 17-18 billion cu m at outlet in India. However, reserves of the Dovletabad field, which should serve as a resource base for the gas pipeline, have not been confirmed yet. Turkmenistan has promised to submit independent international analysts' assessments of its gas reserves by a regular meeting of the four countries' ministers to be held in Delhi this autumn. The Asian Development Bank is named as one of the main investors in the project.
Providing the pipeline with gas is still open for question as all gas produced by Turkmenistan has already been contracted by Russia's monopoly Gazprom and Iran. Until 2028, Russia is planning to annually buy 80-90 billion cu m of gas from Turkmenistan. At the same time, Turkmenistan has signed framework agreements on supplies of 30 billion cu m of gas to China and of the same amount to India from 2009. Thus the country has assumed obligations to export 154-164 billion cu m a year starting from 2009. Meanwhile, the country' total gas output was about 80 billion cu m last year.
Yevgeny Vinokurov, head of the economic analysis department at the Eurasian Development Bank, thinks that the success of the project is still questionable because of the two main risks: the first one is the prospect that Turkmenistan gas reserves are not sufficient for the pipeline because the Dovletabad field has not been assessed yet by independent experts, and the second, political, risk is connected with the fact that 830 km (516 miles) of the gas pipeline will run via Afghanistan. Tensions in Pakistani-Indian relations are an additional negative factor.


GM offers expensive budget-car model to GAZ

U.S. automotive giant General Motors has offered a costly budget model exceeding the $10,000 ceiling to Russian automaker GAZ Group.
Business oligarch Oleg Deripaska, owner and CEO of holding company Basic Element, said it had started negotiating a joint low-budget car project with GM last year.
GM offered the Chevrolet Lacetti as the basic platform costing $10,000 per car and said initial production would total 50,000 vehicles per year.
However, GAZ were not keen on the GM business plan, a source close to the company told the paper. He said the Chevrolet Lacetti featured expensive Korean components and would not fit into the low-budget market segment.
The source said GM was now modifying its business plan, and that the talks would continue.
GAZ will make a final decision this summer, a corporate spokesman said. GM declined to comment on the issue.
Yevgeny Bogdanov, head of the mechanical engineering and transport branch for Russia and the CIS at A. T. Kearney, said GAZ and GM were facing problems because most Russians could not afford to buy cars worth over $10,000-$11,000.
He said cheaper cars should feature an obsolete platform or be developed from scratch, but that the latter option would cost at least $1 billion.

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