MOSCOW, May 12 (RIA Novosti)
Analysts predict conflict among Russian elites/ Russia to complete Iran nuclear plant after successful bargaining with US/ Venezuela to buy $2 billion worth of Russian weaponry/ Meat issue to damage Russian-EU relations again/ Russia is unlikely to lease farmland to China/ China increases production of Russian weapons
Kommersant
Analysts predict conflict among Russian elites
Russia's parliament gave Vladimir Putin a free hand by approving his appointment as prime minister, which rules out conflicts between the legislative and executive branches of power for the next four years. However, there may be conflicts between the elites, which carries the risk of a political crisis, if the conflicting sides are the president and the prime minister.
The record-high vote of 392 for and 56 against Putin's appointment on May 8 confirmed that the State Duma, the lower house of parliament, supports almost wholeheartedly all of the Kremlin and government's legislative initiatives.
Iosif Diskin, a political analyst and co-chairman of the National Strategy Council, said Prime Minister Putin and President Medvedev's work in the next four years would not be hindered by conflicts between the branches of power. But this does not rule out conflicts between the elites, because Strategy 2020 provides for reforms that are bound to make some officials unhappy.
"Those who fear the reforms will worsen their position will try to set the president against the prime minister," Diskin said, adding that they are unlikely to achieve their goal, because "Putin and Medvedev have mutual agreements" concluded beforehand.
So the conflict between the elites will be limited to fighting between the government and the presidential administration. But the possibilities for this are limited by legislation, and therefore Russia may for the first time be ruled by law, the expert said.
Boris Makarenko, deputy director general of the Center for Political Technologies, said a conflict between elites carried the risk of a political crisis. He cited as an example the political crisis during the era of Mikhail Gorbachev, when the country was not saved by glasnost or perestroika.
He said the size of the current public space could be judged by the results of parliamentary voting, when the Communist Party was the only one to vote against Putin's appointment (56 votes).
According to Makarenko, the record-high "for" vote (392) and applause that 33 times stopped Putin's 45-minute address do not reflect public opinion, which can be described as "negative stability." People are not against the regime but will not protect it in a critical situation either.
The expert said people would not express their discontent as long as the authorities satisfy their paternalistic needs.
RBC Daily
Russia to complete Iran nuclear plant after successful bargaining with US
Iran's Ambassador to Russia Gholamreza Ansari said on May 7 he hoped Russia's new president, Dmitry Medvedev, would continue the golden age of Russian-Iranian relations which began during [Vladimir] Putin's tenure. However, on May 8, a presidential decree on measures to implement the UN Security Council's March 3 Resolution was published, signed by President Putin on May 5. It means that Russia has for the third time adhered to the economic sanctions policy against Iran. The only exception was made for equipment, materials and technology for light-water nuclear reactors supplied under the Bushehr contract.
Radzhab Safarov, director of the Moscow-based Center of Modern Iranian Studies, said the unfriendly move had caused a lot of raised eyebrows in Tehran which would certainly retaliate. "The cool down that might follow will affect all spheres," the analyst predicted adding that Russia's MegaFon was planning to become Iran's third largest mobile operator in June, just as the sanctions take effect.
Valentin Sobolev, deputy head of Russia's Security Council, tried to ease tensions during his visit to Tehran in late April. Safarov says he carried a package of compromise proposals, the key one being to stop uranium enrichment at least during negotiations with the UN Six. Iran declined, saying it had voluntarily suspended its nuclear program between 2002 and 2005, but that didn't boost the talks then. Iranians now view the talks as an instrument to impose the U.S. domination, and have more and more doubts about the sincerity of Moscow's "multipolar world" rhetoric.
Russia's observance of the sanctions against Iran is directly linked to the signing of a framework nuclear energy agreement with the U.S. Under that agreement, Moscow will accept for storage and processing at a special Russia-U.S. center in Siberia thousands of metric tons of spent nuclear fuel, which U.S. companies supply to third countries.
The project could fetch billion-dollar profits for Russia's state nuclear power corporation Rosatom, which will get the chance to make a foray into the U.S. market as well as enter its Gulf allies' markets, said Alexander Pikayev, member of the Scientists for Global Security Committee. The signing of the agreement had been delayed because of haggling with Moscow over Iran.
On May 6, Russia's Foreign Minister Sergei Lavrov told U.S. representatives at the Six's conference in London that Moscow was joining in, and the agreement was signed on the same day. The only thing Russia was able to insist on, was the chance to complete the Bushehr nuclear power plant and to export conventional weapons to Iran. "It was the 'carrot' that Sobolev brought to Tehran," Safarov concluded.
Kommersant
Venezuela to buy $2 billion worth of Russian weaponry
Venezuelan President Hugo Chavez, due to visit Moscow in late May, is expected to sign $2 billion worth of arms deals following his talks with President Dmitry Medvedev.
Former president Vladimir Putin focused on military-technical and fuel-and-energy cooperation in bilateral relations, with Russian arms exports soaring from $3.7 billion to $7.5 billion between 2000 and 2007.
Venezuela has received Russian weapons worth $4 billion in the last three years and now ranks among Moscow's main customers.
Caracas now wants to buy additional weaponry. The Venezuelan Air Force has successfully tested two Ilyushin Il-76MD-90 Candid strategic airlifters which will continue to serve with its 12th military-transport group.
Both countries will soon sign a $600 million contract for the sale of both Il-76MD-90s, and another eight Il-76MD-90 transports and two Il-78MK flying tankers, due to replace six obsolete Lockheed C-130H Hercules transports and two Boeing-707-320C tankers.
The contract will be implemented next year.
Caracas would like to purchase at least 10 Mil Mi-28NE Havoc (Night Hunter) attack helicopters that will beef up the 10 Mi-35M Hind helicopters currently serving with the Venezuelan Air Force. Deliveries under the $200 million contract are due to start in late 2009.
The Venezuelan Air Force wants to include the Mi-28s in its 15th special Operations Air Group. They will replace the obsolete Rockwell OV-10 Bronco turboprop-driven light attack and observation aircraft purchased in the early 1970s.
Venezuela will become the first country to receive Mi-28NE helicopters. In early 2008, Andrei Shibitov, CEO of the holding company Russian Helicopters, said Moscow was negotiating their sale "with more than three countries."
Earlier the media reported that the Mi-28NEs could be exported to two Latin American countries and Saudi Arabia.
In September 2007, the Mi-28N was adopted by the Russian Air Force, which will receive the first four helicopters this year.
In addition, Moscow and Caracas have finalized a $1.2 billion contract for the sale of four Project 636 Kilo-class submarines, bringing the value of bilateral military-technical contracts to $2 billion.
Vedomosti
Meat issue to damage Russian-EU relations again
The European Commission is accusing Russia of imposing ungrounded meat import bans. A difference in veterinary standards is to blame and according to Rosselkhoznadzor, Russia's food safety watchdog, Russia is not planning to ease them.
Over the past two weeks, Rosselkhoznadzor has temporarily banned pork and poultry supplies from about 30 plants in Belgium, Hungary, Germany, Denmark, Spain, Italy and France. The list includes some big suppliers, for instance several Danish Crown plants, a major Danish pork supplier (the company has 19 processing factories), and one of three enterprises of Germany's Toennies Fleisch (TF) in Hannover.
According to data from one of the associations operating in this sector, Danish Crown and TF account for about 20% of Europe's total pork supplies to Russia, or 6% of Russia's entire pork imports (with Russia's annual pork consumption at about 2 million metric tons and annual pork imports at about 650,000 metric tons, including nearly 200,000 metric tons from Europe).
In most cases, the ban is caused by the residual traces of antibiotics, mostly of the tetracycline group, in meat, said Alexei Alexeyenko, a Rosselkhoznadzor spokesman. Russian standards do not permit tetracycline antibiotics in meat, he said. If suppliers want to have the ban lifted, they must carry out an in-house investigation and find out why products which do not comply with Russian standards are being supplied to Russia," Alexeyenko said.
Meanwhile, meat prices are rising. "In the past week alone, pork prices rose by 5% to 10%. For instance, the retail price of pork shoulder rose from 120 rubles to 130 rubles per kilo, and of pork chuck from 160 rubles to 180 rubles per kilo," said Alexander Nikitin, director general of the Miratorg meat producer and supermarket chain. According to Damir Imamovich, vice president of the Produkty Pitaniya (Foodstuffs) company, poultry meat prices have risen by over 10% since early May and they are continuing to rise. "With the fast over, the time has come for outdoor shashlyk (BBQs) parties, and meat supplies have shrunk," Nikitin explained.
Nezavisimaya Gazeta
Russia is unlikely to lease farmland to China
Beijing wants to lease farmland in other countries, possibly Latin America and Africa, as well as forestland in Russia. Analysts predict that this idea will be received negatively in Russia.
Agvan Mikaelyan, director general of the FinExpertiza audit and consulting group, said Latin American countries, which are located far from China and lack funds for developing their farmland, would benefit from the idea.
"But this experiment may be very dangerous for Russia, because China is a neighbor and Russia's Siberia and Far East are scarcely populated territories," Mikaelyan said. "Therefore, leasing part of these territories to China could be fraught with many problems, especially in the long term. Look at Kosovo, which has allowed Albanians to settle on its territory in the past and became an Albanian province that broke away from Serbia. I don't think Russia needs money that much to allow the Chinese to settle its territory."
The expert said the possible leasing of forest areas would be highly unprofitable, and that Russia can process timber in sufficient amounts to ensure a stable inflow of funds.
"Russia doesn't need money that much at the moment while land is its main resource," Mikaelyan said. "Endangering this resource would be senseless."
Igor Nikolayev, chief strategic analyst at the FBK private auditing firm, said: "The sale and lease of land is part of a market economy, but we must also consider geopolitical interests."
It would also be advisable to ask people's opinion. "I can tell you without opinion polls that if they are asked about the lease of Russian land, the majority of people would vote against such [foreign] presence," he said.
Nikolayev said it was surprising that China, which is a food exporter, had openly announced a special program of buying foreign land. "It means that China is not catering to the needs of its population, but wants a share in a highly lucrative business in view of the rapidly growing food prices," he said.
Vedomosti
China increases production of Russian weapons
China has launched production of Russia's Su-27 Flanker fighter and also plans to assemble Russian-designed Mi-171 transport helicopters, an export version of the Mi-8/17 Hip helicopter, with Moscow's permission.
"The Chinese are planning to export Mi-171 helicopters to Pakistan and Africa, which may hurt Russian exports," a source in the Russian defense industry said. "In addition, the successful implementation of the project could leave Russian manufacturers short of component parts."
The Lantian Helicopter Company, based at military-equipment repair plant No. 5701 in Chengdu, in the Sichuan province, has already received orders worth 300 million yuan ($42.8 million). Total sales could reach 1.6 billion yuan ($228 million) in 2008.
China plans to build at least 20 helicopters in 2008 with assembly kits supplied by a Russian plant in Ulan-Ude, and later increase production capacity to 80 aircraft per year. Production will eventually be relocated to Chengdu.
Beijing has already tested the first Chinese-assembled helicopter. "We consider this project as the beginning of a trend to assemble Russian helicopters in China," the newspaper quoted a source in Oboronprom, which controls Russian Helicopters, a helicopter manufacturing group.
The source said Oboronprom would assess the possibility of license production in China depending on the helicopter project's success.
In 2007, the share of Russian contracts increased from 10-15% to 40%. According to Oboronprom, all contracts have been signed for 2009, and 70% for 2010.
Last year, Russia manufactured just 120 helicopters, instead of the required 150, due to the lack of gear boxes and engines whose production will not increase in the next few years, a helicopter plant worker told the paper.
China, which recently launched its first astronaut, will eventually copy the helicopters it needs without Russian assistance; instead of watching passively, Russia is better to get in first, said Konstantin Makiyenko, deputy director at the Moscow-based Center for Analysis of Strategies and Technologies.
In 1996, China started assembling Su-27SK fighters from Russian components and annulled the license contract in 2004. The Su-27 and the S-30 Flankers are the mainstay of Russian arms exports, accounting for 50% of Rosoboronexport earnings ($6.2 billion) last year.
Beijing long ago copied the MiG-19 Farmer and MiG-21 Fishbed fighters, the Tu-16 Badger intermediate-range bomber, as well as the An-2, An-12 Cub and An-24 Coke transport planes.
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