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    MOSCOW, May 6 (RIA Novosti)
    Russia-NATO relations cool off once again / Swine flu as market gimmick / Russia to spare no expense for World Cup / Real incomes plunge by over 40% in Russia /



    Moskovsky Komsomolets

    Russia-NATO relations cool off once again

    Russian Foreign Minister Sergei Lavrov will not attend a meeting of the Russia-NATO Council at foreign-minister level, initially scheduled to be held May 19 in Brussels.
    A source at the Russian Foreign Ministry's information and press department said Lavrov's Brussels visit had not been officially announced and could not therefore be viewed as a demonstrative refusal.
    The overall situation is unfavorable, NATO exercises in Georgia and the expulsion of two Russian diplomats from Brussels do not facilitate expanded mutual relations, the source said.
    The Russia-NATO Council stopped its work in August 2008 after Russia fought Georgia over its former republic of South Ossetia. In early April 2009, the NATO summit decided to resume the Council's work.
    On April 30, NATO ordered the expulsion of two Russian diplomats from Brussels as retaliation for a spy scandal involving Herman Simm, former chief of the Estonian Defense Ministry's security department, who reportedly forwarded classified Estonian and NATO information to Moscow.
    "We were recently trying to restore our relations with the alliance from scratch. We were preparing for a ministerial meeting to later study the possibility of resuming military contacts. This process has now been hurled back by several months," Russia's ambassador to NATO Dmitry Rogozin said.
    "The demarche of our partners has reduced to nothing the efforts of numerous influential Western politicians, including U.S. President Barack Obama," Rogozin said.
    Political analyst Fyodor Lukyanov said the current freeze in Russia-NATO relations was unlikely to last more than two months, and that it would not affect bilateral talks on NATO transits to Afghanistan.


    Swine flu as market gimmick

    The new type of flu, referred to as "swine flu" for the lay public, is no more dangerous for human health than any other similar virus. Meanwhile, the panic created over swine flu is a perfect way of distracting the masses from the economic downturn, a business stimulant for drug manufacturers and veterinary officials, and a formal reason to pursue protectionist policies.
    What Russia's chief sanitary inspector Gennady Onishchenko refers to as "the danger of swine flu proliferation to Russia" is in fact a good formal pretext for the hysteria stepped up around a relatively ordinary condition. This flu is neither new nor "swine." It is another horror story that sells well in breaking news, just like bird flu or red mercury, and can yield profits at a time when regular businesses are seeing losses due to the tight economic situation.
    Every day adds entries to the Russian government's list of countries and U.S. states and Canadian provinces whose pork is banned from Russia. Every day Russian pharmaceutical companies sent out news releases full of commercial offers aimed at fighting the "terrible disease" that has so far killed 30 people and contaminated slightly over 1,000 around the globe.
    Panic in a globalized world has long become an effective financial and political tool. Shortly before the 2008 Summer Olympics in China, the so-called bird flu made all the headlines and TV news, with wide-eyed commentators predicting even the cancellation of the Games unless the epidemic subsided.
    Governments and the media are well trained to exploit the human psyche's liability to forget global issues over local problems. The economic crisis has already become part of a habitual environment in which people have now lived for some time and will have to continue living for God knows how long. But swine flu is a brand-new danger.
    A danger to be entirely forgotten in a while, once the world is shaken by some new economic or political changes and the number of swine flu victims begins to decrease.
    It will be a time to invent a new plague; the government and the media are responsible for entertaining the public, keeping them busy and supporting domestic producers who cash in on fear.


    Russia to spare no expense for World Cup

    Prime Minister Vladimir Putin has supported the Russian Football Union's bid to bring the 2018 World Cup to Russia. An estimate for preparations for the event has not been made, but analysts are convinced it would exceed that for the 2014 Sochi Olympics.
    FIFA accepted requests until mid-March. Russia has 10 rival bidders and quite enough time to work on the bid, as FIFA will determine the winner in December 2010.
    The front runners are Britain, Spain and Portugal, said Vyacheslav Koloskov, an honorary president of the Russian Football Union and member of the FIFA executive committee. They are ready to host the World Cup tomorrow if need be. To beat them, Russia will have to entrust the preparations to a team as strong as theirs, and provide government guarantees at a level as high as when bidding for the 2014 Winter Olympics.
    FIFA requires the World Cup hosts to provide about 12 40,000-seat stadiums for the 32 participating teams. The opening and final matches require at least an 80,000 seat facility.
    Russia will have to develop a lot of things from scratch, Koloskov said.
    "So far, only a political decision has been made, but no costs estimated," a government official admitted. However, he is convinced that the budget costs would be lower than those of the 2014 Sochi Olympics. The Olympic construction projects are estimated at 206 billion rubles ($6.3 billion), with 118 billion of that amount being provided by the federal government.
    Total spending on the World Cup preparations may reach $8 billion, Koloskov added. Building one stadium to meet FIFA's requirements costs around $300 million. Bulat Stolyarov, director of the Institute for Regional Politics think tank, said the estimate would be closer to $10-$15 billion.
    By 2012, Russia will have spent its reserve fund, currently being used as an economic air bag, warns Igor Nikolayev, chief strategic analyst at the FBK private auditing firm, adding it was reckless to embark on an ambitious project like hosting the World Cup before carefully estimating its costs.
    The current state budget cannot finance such a large project, a Finance Ministry official said firmly. However, the situation might change by the time construction begins in 2012, he noted.


    Real incomes plunge by over 40% in Russia

    In January-March 2009, real incomes plunged by over 40% nationwide due to a weaker ruble, fixed wages and the lack of bonuses.
    Analysts noted insignificant wage reductions after studying the national labor-market situation in ten major Russian cities and polling representatives of 271 Russian and foreign companies. Wages have dwindled by just 0.6% on late 2008.
    Natalia Danina, director of the Ankor employment agency's analytical center, said wage statistics were subject to insignificant fluctuations. She said real incomes had plunged due to a weaker ruble and failure to index wages.
    Mark Rozin, president of EKOPSI Consulting, said an overwhelming majority of companies had stopped paying bonuses, that bonuses had been reduced in many cases, and that fixed wages were not being raised.
    Rozin said real incomes, including ruble payments, had plunged by over 40%.
    Sergei Lvov, managing partner of AXES Management, said over 50% of companies had cut wages by 10%-15% in the first quarter of 2009 on August 2008.
    "Employers promised to reinstate everything in June 2009, while cutting wages, bonuses and benefits. Over 50% of companies are likely to keep their promises," Lvov said.
    Alyona Vladimirskaya, head of the Rabota@mail.ru project, said wage fluctuations mostly depended on the status of employers. In January-March 2009, the pharmaceutical industry raised wages by 10%-15%, while the real-estate sector, automakers and car dealers cut them by 50% and 30%-40%, respectively.
    "Although job applicants and employers had a different opinion of the crisis, the first have changed their wage expectations. For instance, top managers now request 150,000 ruble ($4,573) salaries, rather than 300,000 rubles ($9,146)," Vladimirskaya said.

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