The cold union of Russia and Belarus
Moscow is set to expand its ties with Belarusian politicians, while the Russian media and public organizations offer their assessment of the current events in Belarus. That is what constitutes the Kremlin's response to President Alexander Lukashenko's anti-Russian offensive.
The Kremlin's relations with the Belarusian authorities have reached a dead-end and will never revert to how they used to be, Natalia Timakova, President Dmitry Medvedev's press secretary, said yesterday.
On Sunday, Medvedev responded to Lukashenko's statements by accusing the Belarusian president of fanning anti-Russian sentiments in order to bolster his election campaign, forgetting that Russia had agreed on discount oil and gas supplies worth nearly $4 billion annually to Belarus.
The Russian president also said that Lukashenko had behaved dishonorably over the issue of recognizing the independence of Abkhazia and South Ossetia.
Russian officials and politicians intend to continue their dealings with all political forces in Belarus, Timakova said. The Russian authorities refuse to comment on Lukashenko's attitude to the Belarusian opposition, but it is certainly a topic the Russian media and political and public movements are likely to raise.
Russia will also maintain its contact with Belarus through military and other unions (the CSTO, Eurasec and the CIS), but their integration will slow, the presidential press secretary said.
Open contacts with the Belarusian opposition would herald a new era in bilateral relations, as such meetings with Russian politicians and officials were previously held off the record, said Anatoly Lebedko, chairman of the Belarusian opposition United Civil Party.
He said that consultations between the Russian embassy and all Belarus' political forces would be another way of promoting dialog.
However, an employee of the Russian embassy in Minsk said such meetings could be regarded as interference in Belarus' internal affairs and that they currently have no such plans.
We have been in regular contact with several different Belarusian politicians, said Alexei Ostrovsky, a member of the Russian Liberal Democratic Party and the chairman of the State Duma committee on the CIS.
Konstantin Zatulin, a member of the pro-Kremlin United Russia party, said that dialog with the opposition remains the prerogative of Russian liberal opposition parties as they share a pro-Western ideology. United Russia has no partners with whom it could promote contacts in Belarus, he said.
President Medvedev blogged about the similar appeals he had made to Ukraine and the previous Ukrainian president, Viktor Yushchenko.
But a re-run of the Ukrainian scenario (Russia's relations with Ukraine improved considerably after Viktor Yanukovych won the elections) is unlikely in Belarus due to the specific nature of the political situation there, Zatulin said.
Gazprom losing Europe
The global recession has provoked a slowdown in economic activity in Europe, leading EU countries to cut energy consumption and to demand revisions of their contracts with Russia's Gazprom. Gazprom is playing it cool so far as the "take-or-pay" contracts are still in effect, which means the customer has to pay for the entire amount contracted in any case. The company also continues to conclude new contracts.
At the same time, the Russian monopoly's share of the European market has already shrunk from 28.4% to 26%.
Yet, despite the obvious problems, Gazprom is expanding its European business. It is in talks with Macedonia on the economic and technical conditions for additional gas supplies, including through a planned offshoot from the South Stream pipeline.
Gazprom is facing a growing pile of problems in Europe. The amount of contracted gas its customers failed to withdraw this year is close to the 2009 level, deputy CEO Alexander Medvedev said last week. In 2009, Gazprom's European customers withdrew some 5 billion cubic meters less gas than stipulated under their long-term contracts.
However, these changes have not yet affected Gazprom's earnings. "Although we sold only 140 billion cubic meters of gas to Europe, we still received additional revenue equivalent to the export of another 5 billion because our long-term export contracts invariably contain a take-or-pay clause. Therefore, we earned an amount equivalent to the export of 145 billion cubic meters of gas," Medvedev explained.
Nikolai Isain, a fuel and energy analyst at the Institute for Natural Monopoly Problems, believes Gazprom's share of the European market may be shrinking only temporarily. The Russian monopoly controlled 26% of the European gas market at the beginning of this year, down from 28.4% in 2009.
"Gazprom will soon gain a better foothold in the European market as the Nord Stream pipeline begins operation. Its capacity has already been contracted by consumers in Germany, Denmark, France and the UK. Therefore, Gazprom's exports will grow accordingly by 2012, the analyst said.
Food stamps become reality
The Russian city of Novorossiysk has become the first in the country to start giving food handouts to people on low incomes. Starting in October, low-income residents will be given food stamps for free bread and milk. Novorossiysk's Mayor Vladimir Sinyagovsky took this decision due to rising food prices, the city's government spokesmen said. The resolution states that food stamps for six loaves of bread and six liters of milk per month are granted to large low-income families and pensioners living alone who confirm their income is lower than or equal to the region's living wage.
The local government will allocate 1 million rubles to this program by the end of the year, or about 250,000 rubles per month, Irina Shapovalova, head of the city government's social protection department said. This 'in-kind' social benefit is expected to reach between 1,500 and 2,000 low-income residents. This is already the second trial of a food stamps program, Shapovalova added: "A similar number of people applied to social protection agencies when a similar program was implemented in early 2010. Under that program, food stamps for 15 loaves of bread per month were provided."
This program will reach 0.8% of Novorossiysk's population whereas according to the official statistics for the first quarter of 2010, on average, 14.7% of the Russian population are low income. If the scheme were to cater for all the city's low-income families, Novorossiysk would have to spend about 55 million rubles per year, judging by the foodstuffs covered by the program, which cost 125 rubles per month. The country as a whole would have to spend 32 billion rubles.
State Duma deputies have repeatedly proposed similar programs over the last few years. For example, a program proposed in 2008 provided for 12,000 rubles of aid to each low-income person per year and was estimated at about 120 billion rubles. Novorossiysk became Russia's first city to provide food stamps on a more or less regular basis. It is worth mentioning that this kind of program works out as much more expensive when implemented outside cities because of the infrastructure costs associated with delivering this help. For example, when implementing a similar program the United States had to set up a special debit-card system.
China joins struggle for Arctic
Commander of the Russian Navy Admiral Vladimir Vysotsky said that non-Arctic Council states had begun to enter the region.
He said that China, an outsider, was becoming "a serious partner" with a problematic stance.
Beijing is interested in the Arctic as a source of hydrocarbons and as an alternative route from Asia to Europe.
Admiral Vysotsky said Russia planned to continue defending its interests in the Arctic, which is now apparently being eyed by our southern neighbor, China. He said non-Arctic Council countries had started entering the Arctic, including China, which has signed agreements with Norway on developing the Arctic region. Consequently, Russia should adopt a reasonable stance, without ceding a fraction of its interests, Vysotsky said.
The Arctic Council, a high-level international organization, appeared in 1996 on Helsinki's initiative. It includes eight states: Denmark, Finland, Iceland, Canada, Norway, Russia, Sweden and the USA. The United Kingdom, France, Germany, The Netherlands, Poland and Spain have permanent observer status, while China, Italy and South Korea still have ad hoc observer status.
This spring, SIPRI, the Stockholm International Peace Research Institute, issued a report arguing that China would seek to increase its role in the Arctic in coming years, both politically and economically, and that the region could become a sphere of Beijing's geopolitical interests.
This is explained in part by the fact that the Chinese economy is heavily dependent on foreign trade, hence its desire to shorten maritime transport routes. China is adamant it must not miss out on the new opportunities that will arise if predictions about the northern route becoming navigable in summer prove correct,
China is allocating additional funding to polar research. SIPRI analysts say that Beijing is also interested in developing Arctic mineral deposits itself.
The northern Arctic shelf may contain 75% of the world's hydrocarbon deposits, analysts say. The Shtokman gas-condensate deposit in the Barents Sea contains an estimated four trillion cubic meters of natural gas. Exploration work has also been carried out on the Rusanovskoye, Leningrad and other gas fields.
Vysotsky said relations in the Arctic region remained fluid, and that no obvious allies and adversaries had emerged so far. He said that Moscow might face major problems with outsider states, which are not members of the Arctic Council.
Consequently, all state interests should be integrated under the guidance of a respected agency.
Russia completes consultations on WTO entry
Russia has successfully completed consultations with the United States on its planed accession to the World Trade Organization. The breakthrough has led Finance Minister Alexei Kudrin to say that Russia may join the world trade club as early as in 2011. However, analysts do not share his optimism.
Russia's WTO entry talks have been dragging on since 1993. None of the existing members ever had to go through such a long negotiation process. The estimated date of Russia's admission has been moved back a dozen times. However, each time the talks ended up in a deadlock due to the demands of one of the members. Analysts believe it was down to the United States, which supported Russia's bid only verbally.
In June 2009, when it became obvious that the talks could go on for ever while Russia's trade interests were being abused, Russia began building the Customs Union with Belarus and Kazakhstan. The new partners then announced they would make another attempt to join the WTO as a group of three. However, Russia soon realized that to do so, it would have to begin the talks from the ground up and backtracked on the announcement. President Dmitry Medvedev ordered the government to achieve some progress by the end of September.
Intensive consultations began in Geneva, where the WTO has its headquarters. Although announced as multilateral, those were de facto U.S.-Russian consultations. On Friday, the U.S. and Russian presidents both agreed in a telephone conversation that the talks were a success. Two events played a decisive role: Russia's Agriculture Ministry issued a guarantee that Russia would gradually cut state support for farming to the acceptable ceiling of $4.4 billion a year by 2017, and the State Duma passed amendments against intellectual piracy.
Finance Minister Alexei Kudrin believes the finalizing and coordinating procedures will take another two to four months. That will be followed by the accession process proper, which should not take longer than a year. However, analysts do not share his optimism. Alexei Portansky from the Trade Policy Institute at the Higher School of Economics warns against any rush in announcing the "final" date. The change of the farming support policy has only been proposed, and "we will not know until October whether our partners are satisfied," he said.
Meat imports are also a problem in Russia: the old agreement has expired, and Russian producers want the government to cut the import quota, a move the United States, Brazil and Argentina will not like.
State-controlled companies are another stumbling block, as the United States believes they pressure private businesses in Russia.
Georgia has been long blocking Russia's WTO entry, complaining of Russian trade sanctions, and is now insisting that part of its territory is occupied by Russia and trade there is paralyzed.
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MOSCOW, October 5 (RIA Novosti)