22:38 GMT +322 October 2016


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    Russian President Vladimir Putin has held a conference on pressing foreign policy issues in his country residence of Novo-Ogarevo. According to Kommersant, the centrepiece of the meeting was Moscow's relationship with Georgia, which is now led by Mikhail Saakashvili.

    The time for the conference was no coincidence. Last Thursday, the Georgian Central Election Committee declared Mikhail Saakashvili to be the winner of the January 4 presidential elections. Accordingly, Moscow now has to decide on its policy towards the politician who it least wanted to deal with: in Russia the new Georgian leader has an established reputation as a politician with nationalist and anti-Russian views.

    However, despite its dislike of Mr Saakashvili, the Kremlin has to put up with the fact that the new Georgian president was supported by over 96% of voters. Therefore, Kommersant continues, the Kremlin seems to have decided that dialogue with the new leader is better than further hostility, because this is the only way of making Mr Saakashvili understand Russia's special interests in Georgia. With this in mind, the conference in Novo-Ogarevo decided that Mikhail Saakashvili's inauguration, which is due on January 25 in Tbilisi, should be attended by Russian Foreign Minister Igor Ivanov as Moscow's representative. The Kremlin expects Tbilisi to appreciate duly this gesture, Kommersant writes.


    Russian Defence Minister Sergei Ivanov begins his visit to India today. The trip is expected to finally yield a contract to sell the Admiral Gorshkov aircraft carrier to Delhi, Izvestia reports. In all, the package of contracts, which includes the ship deal, will feature 20 separate contracts on the vessel's maintenance, its provision with a group of 20 Mig-29K ship-borne fighters and a system of up-to-date missile and navigation weapons. The package contract is worth $1.5 billion. Once implemented, it will open the way to the Indian market for the Russian military equipment, including the MiGs but for the "coastal" airfield.

    According to Izvestia, this problem will not be easy to solve. Delhi maintains that its contracts with Russia for the delivery of Su-30MKI fighters and T-90S tanks contradict current regulatory acts on the diversification of basic armament suppliers, for the main weapon of the air force, Sukhoi fighters, and the key combat tank are provided by the same supplier. India, however, wants to be less dependent on one country, especially in defence terms. Accordingly, Delhi is actively developing its military-technological co-operation with Israel, France, and is in negotiations with the United States. Moscow is losing its positions on its earlier traditional market, and therefore has to offer the most sophisticated and promising weapons to preserve its partner.

    Izvestia quotes Russian representatives of the military industrial sector that "the Indians are hard to deal with. They begrudge every kopek and want to make the most of it. But we have a trump card - the use of the same aircraft at sea and on land is more economical than the use of two separate vehicles from different producers."


    In the estimate of the Russian Agriculture Ministry, the Russian agro-industrial sector will lose $300-400 million a year due to the expansion of the European Union (EU). Gazeta blames this on the EU's policy seeking to protect the domestic market: from 2004 this policy will be pursued by the 10 new members who previously were part of Russia's market. The Agriculture Ministry, Gazeta reports, has worked out the relevant measures: Russia will soon limit the import of dairy products, above all cheese, with the EU being its leading producer.

    According to Agriculture Minister Alexei Gordeyev, duties for European dairy products are going to be raised. "Russia is buying excessive amounts of dairy products, especially cheese. The products we receive from Europe are subsidised by the EU's budget, which we see as aggressive protectionism," the minister said.

    His first deputy Sergei Dankvert has explained that high duties will be introduced in regard to cheap cheese from Europe, whereas duties for expensive cheese that is not produced in Russia and is therefore in high demand will be lower.

    Gazeta continues that Russia will equally suffer from high import duties for cheap cheese, along with European producers. Imported dairy products make up 26% of the total consumption in Russia. Hence, higher prices for a quarter of the products will inevitably increase prices for the remaining three quarters.


    Vedomosti has quoted Prime Minister Mikhail Kasyanov as saying that successful economic reforms could leave many Russians unemployed. According to the premier, the country will soon have to wrestle with the problem of unemployment caused by higher labour efficiency. Experts are perplexed by the premier's forecast. They believe that he has obviously exaggerated the problem. "We went through the peak of unemployment in the mid-1990s," Sergei Smirnov, director of the Institute of Social Policy of the Higher Economics School, said in rebuttal to the gloomy forecast.

    According to Vedomosti, Minister of Labour and Social Development Alexander Pochinok has in turn stated that Mikhail Kasyanov was misinterpreted. "In four years, workforce in Russia will be reduced by 500,000-700,000 people annually. What unemployment peak are you talking about?"


    According to NG, the consolidation of the rouble and the uninterrupted increase of currency inflow have caused euphoria among the Russian authorities. The Central Bank has announced a new record - in the first holiday week of 2004, Russia's gold and currency reserves increased by $1.8 billion to $79 billion, while the dollar has "slimmed" by 60 kopeks since January 1. There seems to be no minister who has missed the chance of boasting this "achievement." However, all officials concur that this process is the result of the situation on the world currency markets. The euro is growing, thereby encouraging the Russian rouble. And now Russia is allegedly a full-fledged participant in the world market, with the complete convertibility of the national currency round the corner. And an ordinary Russian will soon be able to pay with rubles in any cafe in London or Paris.

    The irony is obvious, NG reports. The complete convertibility of the rouble is based on a combination of the political will of the country's authorities and its recognition by the world community. There are no problems with the former, but the latter is a serious question. The world community sees the Russian rouble as nothing but a piece of paper, like the Belarussian rouble or the Armenian drum, for example.

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