MOSCOW, January 13 (RIA Novosti)
Moscow unperturbed by Western swipes/ MiG-29s rejected by Algeria will join Russia's Air Force/ Caspian shelf disappoints LUKoil again/ Unemployment exceeds 5-6 times official statistics
Moscow unperturbed by Western swipes
EU representatives said the increase by Russia of its import duties on cars has damaged its WTO membership plans. Analysts see the criticism as a repercussion of the ongoing gas scandal, but do not expect it to alter Russia's stance.
Japan, the country hit hardest by the new customs rules, earlier adopted a similar position, asking Russian officials not to introduce prohibitive taxes at a time of the worst economic crisis in the past 100 years.
Officials in Japan are convinced that Prime Minister Vladimir Putin's decision is in controvention of President Dmitry Medvedev's earlier pledges not to put up additional international trade barriers made at the G20 meeting in Washington in November.
The Russian Foreign Ministry seems cool and collected. The European Commission's criticism is unlikely to result in any sanctions on Russia, said Foreign Ministry spokesman Igor Lyakin-Frolov.
"The rise only applies to imported cars, while the same brands assembled domestically have not been affected," he added.
Analysts are also convinced that the European Commission's statement won't entail any serious consequences for Russia. "It is an act of political correctness. Such was the case with China which kept prices of certain goods high while joining the World Trade Organization," said Henry Penikas, an analyst at Russia's Higher School of Economics.
He linked the EU's swipe with the ongoing gas scandal and Russia's strict stance on the issue. "Practice shows that everything is interconnected in the economy, which means European officials' criticism could have stemmed from the pulling of gas levers," he suggested.
However, the Russian government seems unperturbed by whatever foreign diplomats and officials might say. Putin even said last August that Russia was not that interested in joining the WTO anyway, because membership won't bring any significant benefits to the country's economy.
MiG-29s rejected by Algeria will join Russia's Air Force
A few days ago the Defense Ministry signed a 20 billion ruble contract with the Russian Aircraft Building Corporation MiG to supply Russia's Air Force with 28 MiG-29 SMT Fulcrum fighters which had been returned by Algeria, a source at the ministry told Vedomosti.
The information was confirmed by the manager of one of the units involved in aircraft production. He added that a decision would soon be made to buy six MiG-29 UBT combat training planes, manufactured as part of the contract Algeria cancelled early in the year. The corporation declined to comment.
The $1.28 billion contract to supply 34 MiG-29s to Algeria was concluded in 2006, but early in 2008 the Algerian side annulled it, pleading technical problems and the use of old assembly units on the aircraft. Fifteen of the planes delivered were sent back to Russia. Their tests, however, showed them to be in full working order and sound, and Air Force Commander Anatoly Zelin gave the go-ahead to purchase them.
The cancellation of the contract with Algeria not only dealt a blow to the image of Russian weapons exporters, but also created a funding hole for both the MiG corporation (its debts topped 40 billion rubles last year) and the corporation's suppliers, said the manager of one of them. MiG's debt to the Chernyshov plant, the engine maker, is three billion rubles, while missile manufacturers are owed $80 million for weapons they supplied, the manager said.
Last year, MiG was among one of the front-running strategic companies promised funding through the government's anti-crisis package, and Air Force contract is one of the promised measures. Paradoxically, for the first time over the past 15 years, Russia's Air Force will get modern fighters which outperform all fighter planes currently in service, said Konstantin Makiyenko, an analyst at the Center for Analysis of Strategies and Technologies.
Caspian shelf disappoints LUKoil again
A second exploration well at the prospective block D-222 (Yalama), located in the Azerbaijani section of the Caspian Sea, has turned out to be a disappointment for Russia's LUKoil Overseas Ltd. A source with close ties at LUKoil said the well did not provide any confirmation on the commercial reserves of hydrocarbons there.
The drilling of the 2,650-meter well at the offshore block located at the sea depth of some 700 meters ended in late December.
This is LUKoil's second failure in the project, where it holds a 65% stake. Other shareholders are the Azerbaijani state oil company Socar (20%) and GdF Suez, to which LUKoil sold a 15% stake in November 2008.
GdF Suez refused to comment, and Socar was not available. A representative of LUKoil Overseas told the newspaper that no conclusions could be made at present because the collected geological data was being analyzed.
Natalia Milchakova, head of fundamental analysis at the Otkritie financial corporation, said LUKoil should stop the expensive project and sell its stake to a foreign investor, possibly GdF Suez, for $140-$150 million.
Russian oil companies have had repeated failures on the Caspian shelf.
The well drilled by LUKoil and Kazakhstan's KazMunaiGaz at Tyub-Karagan in the Kazakh sector did not yield any oil.
The Karabakh project in the Azerbaijani sector, whose largest beneficiary was LUKoil, was closed in 1999 for lack of reserves.
In 2006, Russia's largest state-owned oil producer Rosneft and KazMunaiGaz did not strike oil at the Kurmangazy offshore project.
Unemployment exceeds 5-6 times official statistics
Influential pollster Public Opinion Foundation (FOM) said only 1% of jobless Russians were registered with labor exchanges, while another 6% refused to register. Analysts said 8%-10% unemployment could lead to social unrest.
On December 25-31, FOM polled 3,000 respondents aged over 18 in 203 populated towns and cities in 63 Russian regions.
The opinion-poll results match the official statistics. The Health and Social Development Ministry's December 2008 labor-market survey said 1.4% of people out of work were registered with employment services nationwide.
But the authorities are unable to calculate the number of jobless workers not registered with labor exchanges and those taking unpaid leave. "Our poll revealed that over 6% of Russians now lack jobs and are not registered at labor exchanges," leading FOM analyst Pyotr Bavin told the paper. Moreover, 0.5% of Russians are now being forced to take unpaid leave.
It appears that 6 million Russians are currently unemployed because the Federal State Statistics Service (Rosstat) estimates the working-age population at 76 million. "It would be somewhat incorrect to convert percentages into absolute unemployment statistics," Bavin told the paper.
Yevgeny Gontmakher, board member at the Institute of Contemporary Development, said U.S. analysts believed that 8%-10% unemployment could lead to social unrest.
"However, 20% unemployment did not prevent the governing Spanish Socialist Workers' Party (PSOE) from winning a general election for the national legislature in March 2008," Gontmakher told the paper.
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