Vedomosti
VimpelCom continues to expand
Alfa Group has made the first step toward expanding Russia's telecommunications assets by involving foreign companies. VimpelCom Ltd. is in talks to acquire Italy's mobile operator Wind and 51% of Egypt's Orascom. This move will make VimpelCom the world's fifth largest mobile operator, providing services to 200 million users.
A source close to leading figures in Altimo (Alfa Group's telecoms offshoot) confirmed that Vimpelcom Ltd. and Orascom Telecom Holding were in talks. Orascom is controlled by Egyptian businessman Naguib Sawiris. Altimo owns 44.65% of VimpelCom while Norway's Telenor owns 36.03% (the rest of the stocks are traded on the NYSE).
VimpelCom Ltd. CEO Alexander Izosimov declined to comment on the situation. Representatives of Orascom claim that the company is not holding talks with VimpelCom and declined to comment on the shareholders' actions. Any agreement that emerges could see VimpelCom buy the Italian operator Wind as well as some of Sawiris' other assets.
Five years ago, Alfa Group board chairman Mikhail Fridman defined the company's strategy as follows: "The past several years have shown that the future belongs to global companies like Vodafone and Orange, and it is better for us to be a minority shareholder and investor in a large multinational company than to hold shares in several national operators."
Soon afterwards, Alfa Group acquired 13.22% of Turkey's mobile operator Turkcell. In 2007-2008, VimpelCom, majority owned by Alfa Group, began building networks in Vietnam and Cambodia. But the group failed to unite with a large player. Several years ago, it held talks on trading its share in VimpelCom for Telenor shares but they ended in failure.
VTB Capital analyst Viktor Klimovich says that if VimpelCom seals the deal, Wind and Orascom operators will add 110 million users to VimpelCom's 90 million. This will make the company the world's fifth largest mobile operator, behind Spain's Telefonica (over 200 million users) and outrunning Mexico's America Movil (about 190 million).
AC&M-Consulting managing partner Mikhail Alekseyev believes that after reaching an agreement with Sawiris, VimpelCom will continue acquiring assets, in particular, in the South African holding MTN Group. A source close to the deal says VimpelCom can afford large deals and can take on and, importantly for the Wind deal, settle the debts of any acquired assets.
Izvestia
Kadyrov does not want to be called president
Chechen President Ramzan Kadyrov has sent a letter to the republic's parliament proposing to rename the post he is holding. Chechnya is part of the Russian Federation, and a state should have only one president, he believes.
The Chechen Republic's head proposed that the parliament change the name of the highest office in the republic. "I am ready to accept any name except for the current title of 'president,'" he said.
In his opinion, the top officials of the Russian constituent entities can be called leaders of republics, heads of administrations or governors, but not presidents. Kadyrov also pointed out that he was opposed to the idea of signing the agreement on delineation of authority between Chechnya and the federal government. "I am sure there is no need for such documents. We have the Constitution, which contains all the rules we need. The regions should not have special authority," the republic's head summed up.
Having given reporters and other regional leaders food for thought and discussion, Kadyrov took a vacation for the first time during his term in office. As for local parliament members, they will have to rack their brains to find a substitute for the presidential title.
Political analyst Yury Girenko believes the abundance of presidents in Russia is the result of the "sovereignties parade" of the early 1990s. "This name of a region's head creates a feeling of disparity between the constituent entities. In fact, Kadyrov's proposal is a rebranding initiative," he said. "On the face of it, it does not change the meaning but implies possible changes."
When the heads of regions were elected, it was possible to name heads of republics presidents. But now that the president appoints them it seems inappropriate. Of course, with this proposal Kadyrov emphasized his loyalty to Moscow, and this is important, especially after the events at the Don camp, Krasnodar Territory, when there were doubts about Chechnya being part of the Russian Federation, the analyst said.
The initiative to rename the post is a gesture showing that Chechnya is really part of Russia. As for the names themselves, this is a formal issue. The division of the constituent entities into territories, regions and republics causes confusion, as the federation becomes "asymmetrical." It would be better to use the same names, but it is much more difficult to do, the analyst concluded.
Nezavisimaya Gazeta
Medvedev criticizes regional administration system
President Dmitry Medvedev has clearly indicated at a recent meeting in Dagestan that he was dissatisfied with the current administration system in the regions. He urged the republic's government to "really start tackling corruption" rather than "doing deals over official posts" if they wanted to achieve any results at all.
The "deals over official posts" part is the key here, because it reflects the historical pattern of power distribution in Russia. The present-day regional governors are not professional managers or administrators. Their role is more to watch over things, to have influence as leaders and to deal with specific problems. They manage their regions by exercising individual will and by manipulating their human resources using two major stimuli, fear and greed. This kind of management requires substantial resources, control over financial flows being a major one.
Although the president is actively replacing governors, it is difficult to imagine a governor who would agree to manage strong regional groups for a modest salary. A governor who is not using substantial financial resources in the management process will soon be snapped up by political opponents with the help of mass media or public campaigns. This is why it is so important that regional governors support local economic lobbies.
Yet, Medvedev is showing an increasing discontent with this state of affairs. He seeks to replace the old system with a modern one driven by law and conscience. This means that, for example, if a governor tells everyone to pay taxes, they should just take the requirement for granted and pay without additional persuasion.
Yet, no one can tell how to make this scheme work.
In fact no ideal administration system exists anywhere in the world. For example, the system in the United States is based on legalized lobbying. There are large corporations which are given access to "the cake." In return, they are expected to "feed" the politicians by financing their election campaigns. However, it is still a question whether this scheme can work in the Russian environment or whether a similar one could be built here.
Novye Izvestia
Government to defend farmers in court
Speaking at a meeting in Taganrog on measures to stabilize domestic grain market on Thursday, Dmitry Medvedev admitted that the situation in the country is very difficult. About a quarter of all crops have been destroyed, and most farms are facing bankruptcy. Under the circumstances, the distribution of grain from the reserve fund takes on a particular significance. Overall, 10 million metric tons of grain will be allocated to farmers.
Authorities have prepared a list of 27 regions worst hit by wildfires and drought, said the president. They will be first to receive assistance. Medvedev did not exclude, however, the possibility of additional grain interventions in other regions of the country that have not been as strongly affected by the natural disaster but are still lacking forage.
The agricultural producers attending the meeting supported the decision to unseal the reserve fund. What is needed now is to determine the procedure for grain distribution. One way is to provide the grain to the farmers, mainly stock breeders, at an affordable price of 4,500 rubles per ton.
The other way would be to offer the farmers who have not been affected by the disaster to sell grain to those needing it at 5,500 to 6,000 rubles per ton. This would help keep the reserve fund mostly intact, but would require creating certain mechanisms that would provide incentives for such a scheme to work.
Agriculture Minister Yelena Skrynnik agreed with the need to unseal the reserve fund but said it had to be done only after the amount of the harvested crops is known. Essentially, she did not offer any new solutions.
President Medvedev, in his turn, informed the farmers of the government's decision to support those affected by the grain export ban. This decision will be certainly welcomed by them. In fact, in addition to economic assistance, the government may need to defend the farmers in international courts, as they could face lawsuits for failure to execute contracts due to the export ban.
"We must jointly defend them in courts by submitting appropriate legal evidence to the fact that their failure to execute contracts has to do with force majeure circumstances," stressed the president. He said a consolidated position on the issue had to be developed at all levels in Russia.
Rossiiskaya Gazeta
Russian jobs market climate
In the first six months of 2010, the number of jobless in Russia declined by half a million, Deputy Prime Minister Alexander Zhukov said during a working visit to Vladivostok on Thursday. In July, 23,000 more people were employed than were laid off.
This means the labor situation in Russia and the Far Eastern Federal District has improved, Zhukov said, though unemployment indicators for the district are still higher than the Russian average.
The deputy prime minister said the government had decided to continue financing some aspects of the anti-crisis program to stabilize the jobs market because they had proved to be effective. "True, financing will be more frugal: In 2009, the government allocated 38 billion rubles to this, in 2010 it was 43.4 billion rubles, while in 2011 we are planning to allocate 27 billion rubles," Zhukov said. "This includes three billion rubles for programs to retrain or improve the qualifications of women taking time off work to look after their children."
Other priorities he mentioned included funding programs to retrain women who work under arduous working conditions and programs for preemptive retraining and vocational training. In the Far East, the Khabarovsk Territory leads the field by spending 17.8% of its labor market stabilization program budget on this.
As before, the government intends to support the development of small and medium-sized businesses. The focus will be on providing jobs and training opportunities for graduates, as well as creating jobs for the disabled (the government will compensate the employer for costs incurred). Zhukov said that progress on this has been slow and advised the regions to pay more attention to this program.
Resettlement of compatriots is also going slow. In the Far Eastern District, only five territories and regions are taking part in the program. To date, 396 people have been resettled, including 157 in the Primorye Territory. At the same time, 26,000 Chinese have been recruited into Primorye over the past few months, said Mikhail Tyurkin, first deputy director of the Federal Migration Service. There are few vacancies for compatriots, he said. Resettlers are mainly offered jobs in healthcare provision, education and in unskilled occupations.
In the resulting situation, the Migration Service proposes modernizing the program, promoting compact resettlement in rural areas and taking road shows to countries with large migration potential to hype up the attractions of living in Russia. The Primorye Territory is to start running these road shows in CIS countries in the near future.
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MOSCOW, August 13 (RIA Novosti)
