MOSCOW, November 25 (RIA Novosti) Putin proposes new security principles for Europe/Russia, West ready to monitor parliamentary elections in Turkmenistan/Russians disappointed in government yet trust prime minister/Antimonopoly regulator fines TNK-BP, Gazprom Neft/Russia's budget based on unrealistic oil prices/Crisis will give boost to Russia's outdated infrastructure
Gazeta.ru, Vedomosti
Putin proposes new security principles for Europe
Russian Prime Minister Vladimir Putin has formulated the "Three No" principles of European security in a long foreign policy speech. Although resting on short-term political considerations, this seems like one of the most balanced, cautious and meaningful proposals so far.
Putin formulated the three principles at an international conference on international human rights law in St. Petersburg on Monday. Russia thinks these principles should become the foundation for a new European security treaty.
According to them, the signatory countries must pledge not to ensure their own security at the expense of other countries' security, not to take actions that would weaken the integrity of the common security space, and not to allow the development and expansion of military alliances to the detriment of other signatory countries.
Russia's European partners have been offered clear principles for discussion. Although expressed loosely, the first principle apparently concerns the U.S. anti-ballistic missile plans for Europe, the second principle covers the ABM and the Western military assistance to Georgia, and the third principle NATO's eastward expansion.
Timofei Bordachev, director of the Center for Comprehensive European and Global Studies at the Moscow-based Higher School of Economics, said: "Many European politicians support the Three No principles, which reflect Russia's concerns."
Alexei Makarkin, deputy head of the Center for Political Technologies, does not agree, however.
He said: "Putin has proposed a new concept for coordinating international security principles in a treaty between Russia and the West. But the West is unlikely to accept it. European countries do not think NATO is threatening Russia. The positions of Russia and the West are incompatible, yet neither side wants an open confrontation. Therefore, the European security treaty will be buried in red tape in working groups, commissions and all kinds of coordination efforts."
It is interesting that this time it was Putin who spoke about the treaty, President Dmitry Medvedev's favorite subject.
"Putin probably decided to show that he is a political prime minister who has as much say on foreign policy matters as the president in Russia's current dual-power regime," Makarkin said.
Kommersant
Russia, West ready to monitor parliamentary elections in Turkmenistan
A CIS election monitoring mission will start working in Turkmenistan today. The observers were dispatched to monitor parliamentary elections to be held on December 14.
The OSCE Office for Democratic Institutions and Human Rights (ODIHR) will also field a monitoring team to Turkmenistan for the first time following permission by a special decree of President Gurbanguly Berdymukhammedov.
The observers are expected to confirm the country's democratic commitments to the election process, as both Russia and the West are more interested in access to the Turkmen gas than in democratic freedoms there.
Official media sources in Turkmenistan report that the election campaign is "in full swing" there. However, their pre-election coverage provides neither names of potential parliament members nor even the political parties they represent.
The opposition forces, such as the Watan movement, operate outside the country and are not planning to participate in the upcoming elections.
The lack of a viable alternative is not much of a concern for the Turkmen government. They even plan to allow access to international observers, which suggests that officials in Ashgabat are not worried about criticism from the CIS experts, known for their bias against Central Asian election practices, or from the ODIHR team.
Berdymukhammedov has a good reason to be confident - such as the country's huge natural gas reserves, for example.
The West has been lobbying for Nabucco, a project to build a pipeline for shipping Caspian oil and gas to Europe bypassing Russia, ever since the five-day war in Georgia. Moscow at first tried to talk its European partners out of that plan, pointing out that Central Asia, especially Turkmenistan, does not have enough resources to fill the pipeline.
However, British oil and gas consultants Gaffney, Cline & Associates announced last month that reserves of Turkmenistan's South Yolotan and Osman fields are comparable with Russia's largest deposits.
Therefore, high-ranking emissaries from the EU and the U.S. doubled their efforts to make friends with Ashgabat. Europe even seems to have dropped its favorite subject of human rights in Central Asia where Turkmenistan is concerned.
President Berdymukhammedov visited Germany and Austria earlier this month. Before his visit, the Human Rights Watch group insisted that Chancellor Angela Merkel should use his visit to highlight human rights violations in his country.
However, the rights issue was not even brought up during his meeting with Merkel.
"Turkmenistan is a rich country as far as gas and oil are concerned, and cooperation is far from exhausted here," Merkel said in the wake of the talks in what can be viewed as confirmation that guaranteed stable gas supplies are more important for Europe these days than human rights.
Vremya Novostei
Russians disappointed in government yet trust prime minister
The current economic crisis has resulted in Russians becoming increasingly disappointed with their government led by Vladimir Putin, the country's most popular politician, a recent poll by the Levada Analytical Center revealed.
According to the survey, conducted among 1,599 respondents in 128 cities, towns and villages in Russia's 46 regions in mid-November, a third of Russians believe the government is badly handling the economic crisis, inflation and unemployment, compared with 27% in October.
The number of those who consider the government is handling the crisis satisfactorily has decreased from last month's 13% to 7%, the survey showed.
Meanwhile, 86% of respondents are in favor of Putin's activities, the poll results revealed.
"Putin's high popularity rating is mostly a hyped up phenomenon which fits the majority's social expectations," political analyst Dmitry Oreshkin said. "People need hope, and Putin - both as former president and current prime minister - is seen as symbol of hope, which is always embodied in a certain person."
According to Oreshkin, this is something of a discrepancy: the government is considered bad, while Putin is considered good.
"If the current situation gets worse, Putin will not avoid this wave of discontent," Oreshkin noted yet saying that so far the prime minister's positive image has prevented people from blaming him for the current state of events.
"People evaluate the government and Putin differently," echoed him Iosif Diskin, co-chairman of the National Strategy Council. "Today Putin and Medvedev embody the values which unify the country on a metaphysical level but have little in common with the current state of events."
According to Diskin, if people realize this crisis has a systematic character, they will point the finger of responsibility at Putin as the creator of this system. So far, Duskin said, the crisis is not affecting the system's "supporting structures."
According to Oreshkin, such "image safeguards" will work for Putin for the next couple of years, his rating ending up plummeting together with the country's economic indicators.
Vedomosti
Antimonopoly regulator fines TNK-BP, Gazprom Neft
In view of the current global economic crisis, Russia's Federal Antimonopoly Service has imposed the lowest possible fine on TNK-BP and Gazprom Neft for abusing their dominant positions on the fuel market. Both companies plan to appeal the decision.
The approved turnover fine is 1.112 billion rubles ($40.2 million) for the Russian-British oil venture and 1.357 billion rubles ($49.06 million) for Gazprom's oil-producing unit.
Anatoly Golomolzin, deputy head of the FAS, said the fine for TNK-BP was barely 1% of its 2007 gasoline and jet fuel sales revenues. Gazprom Neft will pay approximately the same percentage of its income from the sales of gasoline, jet fuel, diesel fuel and fuel oil.
Under the law, the fine can vary between 1% and 15% of a company's annual revenues from the sale of specified products, but cannot exceed 2% of the offending firm's total income.
We have taken into account the current situation, Golomolzin said. He did not say how much the FAS would have fined the two companies in other circumstances.
Denis Borisov, an analyst at the Solid investment financial company, said the size of the fine was not critical for the oil companies, but they do not want to have problems with the FAS amid the liquidity crisis and falling oil prices.
He said the fines could have exceeded $400 million for each company.
The regulator initiated proceedings against Russia's largest crude producers - Rosneft, LUKoil, TNK-BP, Surgutneftegaz and Gazprom Neft - last July. Surgutneftegaz was let off the hook because it is does not hold a dominant position on the market. The rest have been charged with price fixing and with discriminating against other players on the petrochemicals market.
The FAS said they violated the norms in April-July 2008, when fuel prices were growing especially fast.
The oil companies were not represented at the FAS meeting. Gazprom Neft said it did not know about the planned meeting and had not seen the FAS decision. We will appeal it anyway, they said.
TNK-BP said it would use all the methods available, including a court appeal, to contest the FAS decision, which allegedly did not take into account information about cuts in gasoline and jet fuel prices. As of late November, the prices (adjusted to consumer inflation) were the same as last year.
Rosneft and LUKoil are still waiting for a decision by the regulator. The FAS intends to make a decision within a month, Golomolzin said.
Nezavisimaya Gazeta
Russia's budget based on unrealistic oil prices
President Dmitry Medvedev signed the federal budget law for 2009, 2010 and 2011 Monday, with all estimates based on oil prices nearly twice as high as the current ones.
While yesterday a barrel of Russian Urals oil was trading below $50, Russia's federal budgets for 2009, 2010 and 2011 were based on $95, $90 and $88, respectively. The Reserve Fund is expected to compensate for the possible shortfall.
Analysts do not share the Finance Ministry's optimism.
Many global oil and gas producers and exporters were forced to adjust their price forecasts during the past month. Saudi Arabia calculated its 2009 budget assuming that oil would cost $45-$50 per barrel. Nigeria and Libya downgraded their 2009 forecasts from $62-$65 to $45. Bahrain set the 2009-2010 benchmark at $60, the same as Venezuela.
"All countries that have gotten on the oil 'wagon' have to downgrade their forecasts now," said Shirvani Abdullayev, senior Alfa-Bank analyst. "Oil prices are plummeting, and the trend is likely to persist."
"The government probably refused to revise the oil prices for the budget because it is the first time a federal budget has been adopted for three years," suggested Ivan Andriyevsky, a managing partner from 2K-Business Consultations. "It was a government priority, while revising target oil prices could have delayed or jeopardized it. As a result, the government ended up a hostage to the three-year document."
Finance Minister Alexei Kudrin said his ministry's forecast was $50 for 2009, $55 for 2010 and $60 for 2011. "These are much lower prices than those included in the budget," he admitted, but then assured the parliament's upper house that the budget would be implemented even with oil prices as low as that. "If oil prices drop below $70, the Reserve Fund will automatically kick in, without waiting for a special parliamentary decision, to compensate for the additional expenditure."
According to Central Bank information, the Reserve Fund as of November 17 was 3.588 trillion rubles. Another 1.677 trillion has been accumulated in the national welfare fund. However, analysts warn that the "safety cushion" could be eaten up quickly.
"The Reserve Fund could lose more than 500 billion rubles next year due to the decline in global oil prices," said Alexei Pavlov from Arbat-Capital.
Andriyevsky, too, predicts that the Reserve Fund will be used to support Russia's economy as a whole, not only compensate for the shortfall in oil revenues.
"It won't last long, not with the current rate of spending," the analyst said.
Vedomosti
Crisis will give boost to Russia's outdated infrastructure
Rail traffic has come to practically a standstill on the Trans-Siberian Railroad in Russia's Far East. There were 100 trains standing on rail sidings yesterday - 6,500 carloads of coal, oil and other export goods.
According to Yevgeny Andriyanov, the Vladivostok division superintendent, the entire line could grind to a halt. But soon congestion on all lines will ease - because of the crisis. The crisis period must be used to improve infrastructure for a future upturn.
In 2000-2007, freight turnover on railroads rose by 50% and on highways, by 30%. The length of railroads has remained unchanged over these years, while that of roads increased slightly, from 46,000 km to 49,000 km. Existing routes and hubs were modernized too slowly. As a result, the average commercial speed on Russian roads is just 400 km per day, according to road haulers. This figure is around half as much as the average in Europe.
Improving infrastructure does not require public initiatives, as has been done (and perhaps will be done) in the United States. So far, Russia is not going to cut its spending under a federal program to develop the transportation system from 2010 through to 2015. The program costs 4.3 trillion rubles (600 billion rubles per year) and provides for the construction of 8,000 km of highways and the repair of another 6,200 km.
Russian Railways also says that its investment programs for next year (434.2 billion rubles) will not be substantially cut. Prices for equipment and construction materials will probably drop. Unemployment will make it possible to hire more qualified personnel to construct roads and engineering facilities which will bring down the cost of road building.
It is important to spend these funds wisely and monitor their end use. The price of one kilometer of highway is set by the program at 305.6 million rubles, or over $11 million. Analysts say the figure is too high. In mountainous Croatia, one kilometer cost $5.5 million.
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