What the Russian papers say

Subscribe
International
India

MOSCOW, April 30 (RIA Novosti) Council of Europe membership guarantees respect for law in Russia/ Market speculators whipping up swine flu fever/ Aircraft corporation cuts production plans by half/ Gazprom not economizing on top managers' wages

Kommersant

Council of Europe membership guarantees respect for law in Russia

The agenda of the April 27-30, 2009 session of the Parliamentary Assembly of the Council of Europe (PACE), which includes discussions on the humanitarian consequences of the war between Georgia and Russia, points to the organization's importance for relations between Russia and the West, a Russian analyst writes.

Timofei Bordachev, director of the Center for Comprehensive European and Global Studies at the Moscow-based Higher School of Economics, writes that unlike the EU, the Council of Europe is an interstate organization where national states play a key role in its decisions.

On the other hand, these states also form alliances to attain their foreign policy goals.

The temptation to use all available instruments is now growing, the analyst writes. This is quite logical, since European states do not have power resources comparable to those of Russia or the United States.

If we compare the agendas of the Council of Europe (CoE) and the EU, we will see that the CoE has actually become an instrument of the EU, just like the Organization for Security and Co-operation in Europe (OSCE) has become a tool for NATO.

In this situation, Russia's participation in these organizations is seemingly becoming politically ineffective, since Russia has positioned itself as an alternative of the West.

In the mid-1990s, Moscow did not think it would ever become a counterbalance to the majority of the CoE states. However, the situation has dramatically changed since then, Bordachev writes.

Does this mean that its differences with the West, which are more than mere "stylistic disagreements," are strong enough for Russia to consider withdrawing from the Council of Europe?

This is not so, the analyst writes. To Russia, CoE membership is a guarantee of respect for law, which cannot be changed to suit passing political considerations. For example, to reinstitute capital punishment, Russia needs not only to ensure approval by parliament and the president, but also has to withdraw from the CoE.

So, the guarantee of preservation of these norms is reason enough for retaining CoE membership.

Izvestia

Market speculators whipping up swine flu fever

The latest swine flu outbreak has triggered a global economic panic, with speculators "bearing" the stock market. At the same time shares of pharmaceutical companies have risen to new highs. The World Bank has added fuel to the fire, predicting that the global economy could plunge by almost 5% during the first 12 months of a possible swine flu pandemic.

The market panic is spreading faster than the disease that has so far claimed eight lives. Airline stocks, oil and food futures are dropping, with the tourist industry also facing problems. So, what happens next?

It appears that swine flu could wreck the flagging global economy. World Bank analysts say the global GDP would shrink by 4.8% or $3.1 trillion if the disease matches the scale of the 1918-1919 Spanish flu pandemic that affected 20% or more of the world population to a varying extent.

Although the world has not seen such a catastrophic slump since the Great Depression, a more "optimistic" forecast says that global GDP would dwindle by just 1% if the swine flu pandemic matches the levels of the 1968 Hong Kong flu.

Speculators can now earn a fortune by capitalizing on bad news. "This will go on until swine flu is overshadowed by some other more important news," Alexei Pavlov, deputy chief of Arbat Capital Investment Company, told the paper.

"Pharmaceutical companies are among those profiting from the swine flu panic. Apart from Mexico, everybody is now talking about the United States, Germany and Switzerland with well-developed pharmaceutical industries. The value of some companies is now 8-10% more in the light of recent events," said managing director of hedge fund Moscow Capital Stanislav Mashagin.

"Society is now expecting bad news in every sphere. In the past, many industrial nations used similar instruments for launching hostilities. Today, we can use a tiny match to light a huge bonfire," Agvan Mikaelyan, director general of the FinExpertiza audit and consulting group, said.

Kommersant

Aircraft corporation cuts production plans by half

Russia's United Aircraft Corporation (UAC) will build only 196 aircraft in 2009-2012 compared to its target of 405 planes approved in early 2007. It has not reviewed its production plans, however, for military and transport aircraft.

Analysts say that even the revised plan is too optimistic, as last year the UAC delivered only eight aircraft to its customers.

By 2012, the corporation plans to manufacture 118 regional planes (74 Sukhoi Superjet 100s and 44 An-148s), 58 medium-haul narrow-body aircraft such as Tu-204/Tu-214, nine wide-body Il-96 planes, and 11 Be-200 amphibians.

It is to deliver 22 aircraft to consumers in 2009.

The UAC said it slashed the SSJ production program by 156 aircraft, more than any other type. The first SSJ deliveries to the country's top airline, Aeroflot, have been postponed by a year, but are to be made before the end of 2009.

Yevgeny Shago, chief analyst at Ingosstrakh Investment, said the new production targets were more realistic because they were based not on forecasts, but on demand.

Oleg Panteleyev, chief of the analytical service at the Aviaport news agency, said: "Even so, it will be extremely difficult to increase annual aircraft manufacturing by five or six times."

If the UAC turns over 22 planes to customers in 2009, Panteleyev said, this means it would have to deliver 50-60 annually in 2010-2012. Moreover, the revised plan does not take into account possible delays in SSJ certification, which would force the corporation to double the production rate.

Vedomosti, Nezavisimaya Gazeta

Gazprom not economizing on top managers' wages

For the first time in years, energy giant Gazprom has saved nearly 8 billion rubles ($240 million) on staff expenditure in 2008. However, payments to its top managers have grown.

Gazprom's total spending on wages fell by 3% in 2008, to 240.607 billion rubles ($7.2 billion), and by nearly 39% in the fourth quarter alone, compared to October-December 2007.

One of the main reasons for the drop was the deconsolidation of Gazprombank, meaning the removal of its financial results from the gas monopoly's consolidated financial reports, in the second half of 2008. Another reason was a cut in pension payments.

However, part of that saving was counterbalanced by growth in average salaries and consolidation of the company's power subsidiaries.

The number of Gazprom's overall personnel grew to 456,000 in 2008 from 445,000 in 2007, said a company spokesman. This means that the average monthly wage was 43,970 rubles ($1,322), down 6% year on year.

The thing is that Gazprombank has higher average wages than Gazprom, while wages at the power companies that were consolidated last year are lower than at Gazprom, said a company manager.

Gazprombank spent an average of 110,000 rubles ($3,310) per employee a month (excluding social benefits) in the first nine months of 2008.

Salaries at Gazprom's central office were 88,500 rubles ($2,670), and at the Mosenergo utility 40,500 rubles ($1,220).

However, Gazprom has not cut the salaries of its top managers. On the contrary, it has increased payments to the management committee and the board of directors by 21% to 2.056 billion rubles ($61.8 million) in 2008, the company said in its financial report for 2008 calculated to International Financial Reporting Standards.

The concern spent the following on seven directors who are not state officials and 17 members of its Management Committee (taking into account the money due to them from Gazprom's subsidiaries):

In 2008, directors received 15 million rubles ($451,130) each, while the salary of CEO Alexei Miller, who is also deputy head of the Board of Director, was set at 17.5 million rubles ($526,320), in accordance with decisions taken at last year's annual meeting.

This adds up to as much as 110 million rubles ($3.3 million). The remainder was divided between the other top managers, who received 114.5 million rubles each last year.

Gazprom is in a position to allow itself to look after its top management because its prices are growing faster than inflation. This year alone, the government has allowed the concern to hike its gas prices for the population by 5% every three months.


RIA Novosti is not responsible for the content of outside sources.

Newsfeed
0
To participate in the discussion
log in or register
loader
Chats
Заголовок открываемого материала