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    Russian Press - Behind the Headlines, October 8

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    Putin Says Khodorkovsky Could Be Pardoned/ Foreign Investors Affirm Interest in Russia Despite Street Rallies/ Why Are Russians Paying More for Groceries?


    Putin Says Khodorkovsky Could Be Pardoned

    The Russian president answers questions about high-profile cases.

    The NTV channel showed a documentary about Vladimir Putin, who marked his 60th birthday on October 7. The Russian president talked with journalist Vadim Takmenyov and answered questions about recent high-profile cases.

    When asked about the young women from Pussy Riot, who have been sentenced to two years in a prison camp for dancing in the Cathedral of Christ the Savior in Moscow, Putin said he considers this to be a fair sentence.

    “We must not allow acts that undermine public morals and erode the country. What will this leave us with?” the president said.

    He also expressed his opinion about the case of Mikhail Khodorkovsky, the former head of Yukos, the leading Russian oil producer at one time.

    “If he (Khodorkovsky) decides to file for a pardon, it will be considered quite favorably,” Putin said. “We are not bloodthirsty about this.”

    Nezavisimaya Gazeta

    Foreign Investors Affirm Interest in Russia Despite Street Rallies

    Foreign investors were showing interest in Russian securities during the second Russian-European Economic Forum, Investments in modern Russia. IPO, shares and bonds, organized by Italy’s General Invest company jointly with MICEX-RTS.

    Representatives of Russia’s unified exchange MICEX-RTS, Vnesheconombank, Sberbank and Severstal, as well as chief executives of Italian companies who have had experience in investing in Russia, spoke during the two conference days, October 3-4, in Milan (Italy) and Lugano (Switzerland).

    Yekaterina Novokreshchonykh, Managing Director of Primary Market Development at MICEX–RTS, spoke about upcoming changes on the Russian financial markets, including the Central Securities Depository which will go on stream soon, the cancellation of the cash in advance policy for securities transactions, and the policies aimed at eliminating the shortage of long-term financing on the domestic market through the use of pension savings (some 2 trillion rubles, or $64.6 billion) and continued privatization of government assets. Although Russian issuers certainly raise more money due to the fact that 80 percent of their newly issued stock is bought up by foreign investors in IPOs, this also carries a certain risk for long-term stability because most of these transactions are speculative, she said.

    Answering a question from the audience, Ksenia Nefyodova, head of debt finance at VEB, said the bank did not plan to issue euro-denominated Eurobonds in the near future. However, this year the bank issued $3.7 billion worth of Eurobonds in dollars and Swiss francs for the first time, she added.

    Sberbank spokesperson Maria Shevtsova cited the bank’s recent acquisitions of Austrian VBI and Turkish Denizbank as examples of the biggest Russian lender’s global expansion. At the same time, the bank views the domestic market, in which 90 percent of its assets are concentrated, as its priority. This proportion is not going to change any time soon, she said.

    Vittorio Volpi, head of the General Invest Advisory Board, noted that Italian investors are no longer satisfied with simply investing in energy in Russia but they are interested in other sectors as well. At a time when the global economy is becoming ever more geared toward Asia, Russia is certainly a destination which should be given priority consideration, a major Euro-Asian power, where “we see protesters in the streets, just like in Italy,” he said.

    Moskovsky Komsomolets

    Why Are Russians Paying More for Groceries?

    Every time I visit a Russian grocery store, I ask myself the same question – when will Russia come out of its prolonged post-Soviet survival phase and finally become a civilized country for its own consumers?

    Progress in the service sector is too slow. The reasons for this are clear – previously selected sales methods have failed and Russian consumers are paying for the sins of others.

    First, the goods in the large shopping malls are more expensive than in mid-sized supermarkets. The costs of managing large facilities and numerous staff strongly influence consumer prices. Special sale offers are only customer bait.

    Second, only some “influential” commercial groups were allowed in the Russian market, which they carved up between them. And they actually agreed to not really compete against one another. This type of agreement is called a trust.

    But who ends up paying for the high standard of living of corrupt officials? Entrepreneurs? Of course not. They are not charities. Every time you open your wallet at the cash register, a portion of your honestly earned money goes to pay for the yachts of state functionaries.

    And the ruble further limits opportunities for domestic producers to enter the Russian market. Chain stores find it more profitable to buy wholesale goods and products abroad. They're cheaper, so they can profit even more.

    Prices are determined by consumers’ buying power and not on the actual market value of the product! All the more so since Russian consumers often think that the more expensive something is, the better it is.

    Not all Russians know that you can buy acceptable wine for three euros in many Italian stores. And I've seen the same bottles selling for five to six times as much in Moscow. Is the markup the customs duty? I doubt it. Rather, it is the irrepressible appetite for money by those in the distribution chain.

    Grocery products are another consumer issue. How can Russian supermarkets and shops sell food past its due date? Do the owners of these stores have no shame? Why, for example, are stores allowed to stock dirty vegetables? Because dirty potatoes and carrots weigh more? Where is the trust between retailers and customers, between consumers and official inspectors? And where can you lodge a complaint if something is not right?

    The basics used to cost a few kopecks, but now you need rubles, and a considerable number of them, to make purchases.

    Frankly, it’s a mystery to me how inflation is calculated. I notice that everything in Russia grows more expensive by the month, but the official macroeconomic data, by contrast, show success in the campaign against rising prices.

    I would really like to see retailers and government agencies in Russia behave more responsibly towards consumers and become capable of at least a small qualitative improvement in service in the Russian consumer market. But I understand that this is not easy when current issues are addressed with outdated and unsuitable methods.

    RIA Novosti is not responsible for the content of outside sources.

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