27/8/2014 13:05
RIA Novosti

Analysis & Opinion

What the Russian papers say

20:00 09/12/2008

MOSCOW, December 9 (RIA Novosti)
New U.S. administration to rebuild relations with Russia/ Former Marches of Dissent activist offered governor post/ Falling energy prices may freeze Shtokman project/ Nearly all car makers in Russia announce cuts

Nezavisimaya Gazeta, Kommersant

New U.S. administration to rebuild relations with Russia

President-Elect Barack Obama has said he wants to "cooperate with Russia in areas where we can," including in combating terrorism, nuclear non-proliferation and other areas. At the same time, he has accused the country of violating "the norms and practices of the international community" in Georgia.
Some analysts say these are not the only areas that the U.S. and Russia should discuss, and that the agenda does not take Russia's interests into account.
Andrei Fyodorov, director for political programs at the Russian Council on Foreign and Defense Policy, said Russian-U.S. relations in the past few years were hovering on the brink of a "cool war," above all because of Russia's refusal to play a supporting role in the world.
The two countries now have a chance to develop reasonable relations, the former deputy foreign minister of Russia said.
"The threat facing the U.S. and Russia is not military confrontation, but a global financial and industrial collapse, which may rewrite the global rules of the game and weaken both states," Fyodorov said. "They should think of ways of minimizing risks and also military spending, and to ease global tensions."
Alexei Bogaturov, deputy rector of the Moscow-based State Institute of International Relations (MGIMO), said Russia and the U.S. should try and forget about their tensions in the past few years and especially months, although this is impossible. Therefore, rebuilding bilateral relations, as Obama has proposed, will be extremely difficult, the international security expert said.
The proposed agenda smells of mothballs, as it includes issues the sides have been trying to address for the past eight years, Bogaturov said. Unless they review the agenda, their relations will continue to deteriorate as rapidly as over the last six months.
According to the analyst, they should revive the key issues formulated during Mikhail Gorbachev's perestroika, notably global security and relations with other countries, including those that have been trying to fan tensions between Russia and the U.S.
If Moscow and Washington solve these problems, they will have more time to discuss terrorism, nuclear non-proliferation and other issues, such as global warming, the biggest issue facing Obama.

Gazeta.ru, Kommersant, Gazeta

Former Marches of Dissent activist offered governor post

President Dmitry Medvedev nominated Nikita Belykh, former leader of the Union of Right Forces (SPS) party, for governor of the Kirov Region on December 8. His candidacy is now subject to the approval of the region's lawmakers.
The former opposition leader's team believes the nomination was meant to reward Belykh for his help in setting up the pro-Kremlin Right Cause project.
Some sources say the surprising move had been in the pipeline since mid-summer. A source in the politician's team has hinted that the nomination was planned in exchange for Belykh's resignation as SPS leader. "It was a foregone conclusion," the source said.
The nomination came a few days before the initial meeting of Solidarnost (Solidarity), a new political movement of which Belykh is a member.
"It was important to nominate Belykh before he made a high profile appearance as an activist of a major opposition project," the source said.
By making Belykh governor, the president will strip the organization of a potential leader, added Alexander Kynev, director for regional programs at the Foundation for Information Policy Development, a partner of USAID in Russia.
A source in the former SPS suggested Belykh's nomination was a trade off for dissolution of the right-wing party. "It was Belykh who cooled passions in the party's Chelyabinsk and Perm branches," the source said.
"The government can use both stick and carrot on the opposition amid the global crisis. Belykh's nomination is one of the carrots," Kynev said.
Dmitry Badovsky, deputy director of the Research Institute of Social Systems said the nomination was a sign of the government's "willingness to cooperate with liberals rather than driving them into radical opposition."
Some opposition activists also see Belykh's nomination as a positive development.
Vadim Prokhorov, the potential governor's lawyer, said there would now be at least one region in Russia where opposition movements would be able to hold meetings freely, without any danger that the designated premises would be closed for sanitation or repairs just before the event.

Gazeta, Vedomosti

Falling energy prices may freeze Shtokman project

The Nord Stream gas pipeline, the most ambitious project undertaken by Russian energy giant Gazprom, may be postponed because of the global financial crisis and falling energy prices.
Analysts say the continuing drop in oil prices may lead to the suspension in the development of Russia's largest offshore gas deposit.
Yury Komarov, head of project operator Shtokman Development AG, said on Monday the business model of the giant Shtokman field was based on oil prices of $50-$60 per barrel.
He said he hoped the economic situation would change in time for gas production at the Arctic field, and that "the tide of the financial crisis will turn by next year when [the company] will seek outside financing."
According to Komarov, "the partners' own funds are expected to account for about 30% of funding, with the remaining 70% coming from loans."
Russian analysts say Gazprom's expectations may not materialize next year, because falling energy prices may delay Shtokman's recoupment period by several years.
Svetlana Savchenko, director of investment projects at 2K Audit-Business Consultations, an independent consulting group, said: "If the value of the oil basket falls below $50 per barrel, Gazprom may have problems with raising funds for the Shtokman project."
Tatyana Menkova, an analyst at the Finam investment company, supports this view. "Falling [energy] prices will make the project unprofitable, thereby halting its implementation," she said.
Due to the high cost of gas production at the Shtokman field, which analysts assess at $30-$40 per 1,000 cubic meters, its development will be profitable only if energy prices stay at $55-$61 per barrel at the least. Analysts believe oil prices will not bounce back to that level any earlier than in 2010.
The partners in the Nord Stream pipeline project, which will pump gas from Siberia to Europe under the Baltic Sea, include Russian energy giant Gazprom, Germany's BASF and E.ON, and Dutch gas transportation firm Gasunie.

Vedomosti

Nearly all car makers in Russia announce cuts

Although the Russian car market is not falling as fast as in Europe, plants are closing down all the same: yesterday Ford extended the New Year holidays at its plant outside St. Petersburg.
"The general market situation and forecasts of fewer car sales for the industry as a whole" are behind the extra-long holidays at the Ford plant in Vsevolozhsk from December 24, 2008 to January 21, 2009. The workers will be paid two-thirds of their wages for their time off. The plant's trade union was unavailable yesterday for comment.
As decreed by the government, the New Year holidays will run from January 1-10, that is to say, Ford will add 14 days to the official holiday period. The plant turns out an average of 300 cars per day, which means that because of longer holidays its conveyor line will roll out 4,200 fewer Ford Focus cars. This year's output plan (75,000) will be cut by 2.4%, and next year's, by 1.9% (from the original 125,000).
Up to now virtually all automakers in Russia have announced cuts in production, said Yevgeny Bogdanov, director of A. T. Kearney's Moscow office. Avtoframos (which turns out the Renault Logan) will be idle for 14 days more (from December 12 to 31) and will have a shortfall of 4,600 units, cutting output by 5.75%.
Longer holidays will be enjoyed by AvtoVAZ (an additional six days of idleness will cut 21,000 cars) and GM-AvtoVAZ (start their break from December 15). The Volkswagen plant in Kaluga, which planned to produce 150,000 cars in 2010, will turn out 100,000 next year.
The plant stoppages speak for themselves: producers expect a fall in sales early in the year, said Mikhail Pak, an analyst with the Metropol investment company. He forecasts a drop of 15% to 20% on 2008.
A particularly heavy reduction is expected in the first quarter - down to 25%, said Yelena Sakhnova, an analyst from VTB Kapital. In annual terms, the market will fall 15%, she said.

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