MOSCOW, January 30 (RIA Novosti) Russia to deploy military aircraft in Abkhazia / Nabucco to be carried through despite major flaws / First Russian Dreamliner client scraps deal / Unemployment grows exponentially in Russia /
Russia to deploy military aircraft in Abkhazia
Russia's plans to establish a naval and two army bases in Abkhazia have been augmented to include an air force base. According to the newspaper, it will be deployed at the Bombora airfield near Gudauta.
Russia may deploy up to 20 aircraft in Abkhazia, including Su-27 Flanker fighters, Su-25 Frogfoot ground attack planes, and military transport planes.
Abkhazian Foreign Minister Sergei Shamba said the strengthening of Russia's military presence was among the republic's plans.
"We are negotiating in many spheres," he said. "Under the Friendship and Partnership Treaty, Russia is to guarantee Abkhazia's security, and so the deployment of the Russian troops in the region is logical and necessary. We are for expanding cooperation."
"Russia actually wants to restore the Soviet-era military presence at Bombora," said a Georgian military analyst. In Soviet times, "the airfield had all types of aircraft, as it can service ground attack planes, fighters and transport planes. The landing strip starts right on the seashore, so that planes can begin their flights at a low altitude, which prevents their initial detection by radar."
Konstantin Zatulin, first deputy chairman of the CIS affairs committee and director of the Institute of the CIS, said: "The key factors should be the Abkhazians' attitude to the issue, and its expediency for Russia."
"Abkhazians welcome the deployment of Russian forces," he said. "And Russia's plans to strengthen its military capability is a response to the developments in Georgia. Unwilling to make conclusions from the August war, the U.S. and NATO are restoring the Georgian army's first strike potential and continue to supply offensive arms to that country."
Nabucco to be carried through despite major flaws
The obvious conclusion that the Europe-backed Nabucco pipeline project is seriously flawed has been redrawn from the new wave of alternative gas routes discussions. However, this does not mean it should be given up as a bad job right now. It looks like they'll still have to build it eventually, even if perhaps not soon, said Mikhail Krutikhin, a partner at RusEnergy, an oil and gas consultancy.
Nabucco lacks resources to fill it with gas, a cornerstone of a gas pipeline project. Azerbaijan cannot provide much, Turkmenistan is too far away, and Iran has too little gas to meet its own needs. The Iraq and Egypt options cannot be considered right now for political reasons.
However, the Europeans are too worked up about their energy security, so they cannot overlook two major factors, Krutikhin said.
First, a diversification of supply routes will not remove the problem entirely. Gazprom's Nord Stream across the Baltic Sea and South Stream under the Black Sea will partly replace the discredited route via Ukraine, but keep Europe dependent on Russia. This scenario does seem a good enough security guarantee to Europe, because it leaves Russia's Gazprom to play all the four essential roles in the chain as the producer, supplier, transporter and distributor of the commodity.
Nabucco will certainly help diversify gas sources rather than routes. It will assign Kazakhstan and Turkmenistan small but important roles, as well Iran and Azerbaijan. Europe is also working on boosting North African supplies and building more LNG terminals.
The second factor keeping the Nabucco project afloat is the expectation that Russian gas supplies will dwindle. Russia's independent gas companies produced a little over 90 billion cubic meters last year, and are now winding up investment in production due to the global financial crunch.
According to Gazprom's estimates, annual gas production will drop by 60 billion in 2010, and by 470 billion by 2030. New major production projects are to be launched after 2011. The Yamal peninsula fields will produce moderate amounts first, and Shtokman will mainly roll out liquefied gas. Other assets won't be developed before 2015-2018.
Therefore, the Nabucco project won't be shut down, not even with the weak prospects of Russia's gas export potential and with Europe's obsession with diversifying fuel import sources. It won't happen even if Gazprom succeeds in pushing through its sea projects bypassing Ukraine and Belarus, Krutikhin concluded.
First Russian Dreamliner client scraps deal
Financial problems have forced S7 Airlines to terminate a contract for the delivery of 15 long-haul Boeing 787 Dreamliner passenger jets. The airline is trying to get back the $34 million option it paid on them. Experts say Boeing's announced production date shift could help S7 to get away without financial sanctions.
Initially, Boeing declined to name the carrier that had cancelled the order, but S7 later confirmed that it had done so. At the same time, the company said it was still interested in flying Boeing 787s and was considering ways of leasing the liners and at an earlier date.
The airline ordered the aircraft in May 2007. It signed a contract for the supply of 15 Dreamliners, including an option on 10 more. The company was to have taken delivery of the first seven in 2014. But it later emerged that the delivery was being postponed by two years. The contract's list price was $2.4 billion.
The refusal is explained by the fact that the airline is going through difficult times: in the first nine months of 2008, S7 ran up 11.5 billion rubles in debt to banks and suppliers. Next week, S7 is facing an offer on a 2.3 billion ruble bond loan. The company has turned to the Transportation Ministry for help, but was turned down. Market players believe the reason was Transportation Minister Igor Levitin's refusal to comply. He had offered to merge S7 with Aeroflot.
The advance paid upon concluding the contract may be refunded to the Russian carrier. According to sources close to the talks with Boeing, it amounted to 1% of the projected list price when the contract was signed (usually it is above the current price). The source gave the sum tentatively at $34 million.
"The carrier has a chance to get back the funds it so needs," believes Oleg Panteleyev, head of the Aviaport branch-oriented agency. "Boeing announced it was pushing back delivery times. Accordingly, the client will not lose its deposit if it cancels the contract now."
S7 will surely get off without financial sanctions, said another market source.
Unemployment grows exponentially in Russia
Seven million Russians will be unemployed in 2009, according to the Healthcare and Social Development Ministry. The number of officially (registered) unemployed will be 2.2 million, but analysts say the overall figure may soar to 12 million if the crisis grows. Those who will retain their jobs will experience wage arrears.
Deputy Minister Maxim Topilin said 1.548 million Russians, or 2% of the employable population, were registered with labor services. According to the federal statistics service, Rosstat, another 5.8 million (7.7%) are looking for a job without having registered.
The ministry recently forecast 5.5 million jobless in Russia in 2009.
Alexander Khoroshilov, deputy rector of the Moscow-based Academy of Labor and Social Relations, said: "We expect the number of unemployed to reach 4-6 million in the first quarter, and think it may soar to 12 million by the end of the year."
Igor Polyakov, a leading expert at the Center for Macroeconomic Analysis and Short-Term Forecasting, said: "If the enterprises see that the crisis is deteriorating, and if the demand [for their products] drops, we will see another wave of dismissals in the fall."
Analysts say the growth of unemployment is fanning social tensions.
"Discontent may become especially outspoken in the industrial regions, where layoffs have been considerable," Polyakov said.
The police will have more to do, as crime will grow. "The unemployed are not sitting at home; some people without an income commit crimes," Polyakov said.
Shrinking incomes are further complicating the situation. Those who still have a job may have their wages cut or delayed.
"If the enterprises lack working capital, wage arrears may reach 30-35 billion rubles ($1 billion) by the end of April, affecting 2-2.5 million workers" in the worst-case scenario, Polyakov said.
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