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RIA Novosti

What the Russian papers say

What the Russian papers say

What the Russian papers say
16:08 01/03/2010

MOSCOW, March 1 (RIA Novosti)

Does Russia need a pro-western Iran? / U.S. trying to make European missile defense process irreversible / Russia leaves European air market / Gazprom's problems in Belarus will not be resolved with 50% stake in Beltransgaz /

Vremya Novostei

Does Russia need a pro-western Iran?

Officials in Moscow have recently been showing an increasing pro-Western bias with regard to Iran's nuclear status, writes Radzhab Safarov, director general of the Russian Center for Iranian Studies. Russian leaders should stop and think what is more dangerous for them: a pro-western Iran or an Iran with hypothetical nuclear weapons?

Moscow, thanks to its existing good-neighborly relations, could now do everything possible for the Iranian nuclear program to become transparent to the world community. But to do so it needs to take Tehran's interests into account and its striving to develop the peaceful atom. It is enough to recall what Iran was like during Shah Pahlavi's reign when, with American aid, the country was rapidly building a nuclear industry. It is not unlikely that the West is now pursuing entirely different goals: first to bleed the Iranian economy white and then replace its ayatollah led regime with a pro-Western government patterned after the Pakistani or Iraqi model.

Will an Iran with the nuclear bomb really be more of a threat to Russia than such nuclear states as India, Pakistan, Israel or North Korea? With a pro-Western Iran, however, Russia will find it more difficult to cooperate with Tehran.

Judging from the response in Tehran, Moscow's pro-Western slant is not improving relations between the two countries. The Iranians are not happy with Russia delaying its supply of S-300 air defense systems. The leadership of the Islamic Republic may refuse to buy them in general due a possible breach of contract. Iran has already disbanded a special regiment of top military specialists formed two years ago to service these systems. The prevailing opinion among the Iranian military is that "the time limit" for delivering the S-300 has nearly expired, and the situation surrounding Iran brooks no delay. Iran is examining other defense options and hinting that they are on the threshold of a technological breakthrough in the manufacture of similar and no less effective systems of their own.

Moscow's failure to observe the signed contract means not only the loss of nearly a billion dollars in profits but may also damage Russia's image as an arms supplier for the Middle East.

Nezavisimaya Gazeta

U.S. trying to make European missile defense process irreversible

This April, the first battery of U.S. MIM-104 Patriot surface-to-air missile (SAM) systems is scheduled to be deployed at a Polish military base near the town of Morag, just 100 kilometers (60 miles) from the Kaliningrad Region, Russia's Baltic exclave.

Analysts say this move does not threaten Russian national security but could be a step in a "creeping process" of establishing a European missile defense system without Moscow's involvement.

A temporary U.S. military base which will acquire permanent status after 2012 is being established near Morag. Aside from Patriot SAMs, SM-3 IA missiles capable of destroying enemy ballistic missiles will subsequently be deployed there. The Polish media say the required equipment will be installed there on April 10-15.

Patriot SAMs are purely air-defense systems, said Alexei Arbatov, director of the Center for International Security at the Institute for World Economy and International Relations (IMEMO). Moreover, Russia and Belarus are building a modern air-defense system that will comprise S-300-P Angara (SA-10 Grumble) and S-400 Triumf (SA-X-21) SAMs, and we do not think that neighboring countries should fear this defensive system, he said.

Pavel Zolotaryov, deputy director of the Moscow-based Institute of USA-Canada Studies, agreed that Patriots and other missile interceptors being deployed in Eastern Europe do not threaten Russian security. At the same time, we are witnessing the "creeping process" of establishing a European missile defense system within the NATO defensive perimeter under U.S. supervision and without Russian involvement, he said.

Washington proposes that Moscow join the system on U.S. terms. Unlike a European missile defense system with full Russian involvement, a NATO missile defense system would only promote a more divided Europe, the analyst said.

According to Zolotaryov, Russia, the United States and Europe have 10 years to implement their declarations on missile defense cooperation. Otherwise Moscow could face far greater risks than those posed by the 10 Ground-Based Interceptors (GBIs) that U.S. President George W. Bush planned to deploy in Poland.

It appears that SM-3 missiles will be able to intercept ballistic missiles by 2020 and could eventually become part of the U.S. multi-echelon missile defense system. "Russia would therefore have no choice but to deliver strategic nuclear weapons to Iran in order to justify the deployment of this U.S. system in Europe," Zolotaryov joked grimly.

According to Major General Zolotaryov, certain interests, primarily those in the U.S., would try to make the process of creating a European missile defense system without Russian involvement irreversible pending extended negotiations between Moscow and Washington.


Russia leaves European air market

The Hungarian government has signed an agreement with Russia's Vnesheconombank to buy back a 95% share of debt-ridden airline Malev, effectively renationalizing the company. The Russian state bank took over the airline in 2007 from an owner of the bankrupt alliance AirUnion.

This decision drew a line in front of Russia's attempts to expand into the Western air transportation market. Moreover, the change in Malev shareholding could lose Russia the contract to supply 30 Sukhoi Superjet airliners signed last summer.

VEB and the Hungarian government entered into Malev talks immediately after the bank took control of the asset. VEB sources said the money losing airline with its vague recovery prospects was of no interest to the bank.

In handing Malev back to Hungary, Russia is slowing its attempts to expand into the European air market, which it began in 2007 when flag carrier Aeroflot entered into a competition for a 30.1% stake in Italy's Alitalia. The stake eventually went to Air France-KLM. In 2008, Aeroflot also fought for Serbian JAT and Czech CSA, but cancelled the first bid, while the second bid was declined.

Russia's Sibir Airlines (S7) tried to bid for a stake in Austrian Airlines, but its bid was declined as well.

Blue Wings, an airline controlled by Russian businessman Alexander Lebedev and until recently the only successful Russian investment in the European air market, filed for bankruptcy last week.

Oleg Panteleyev, head of analysis of the Aviaport information web portal, does not think Russian operators will attempt more forays into the Western air market. "The domestic market currently has brighter prospects than Europe. Also, the Russian carriers who survived the crisis are too busy restoring their own sustainability to expand," he said.

Alexei Sinitsky, editor-in-chief of Aviatransportnoye Obozrenie (Air Transport Review), said Malev was a major foreign customer for the new Russian regional jet, Sukhoi Superjet, signing a $1 billion preliminary agreement to buy 30 aircraft at Le Bourget in 2009. "The new owner will certainly revise the airline's strategy and long-term plans. It is hard to tell whether the Superjet contract will remain intact, unless it is made a condition of the deal," he said.


Gazprom's problems in Belarus will not be resolved with 50% stake in Beltransgaz

Russian energy giant Gazprom, which has become a parity owner of the Belarusian gas transportation system, expects the asset to ensure safe gas transit to Europe. But will it be able to influence Beltransgaz policy?

On February 24, 2010 Gazprom closed a deal to buy a 50% stake in Beltransgaz. When it signed the deal in 2007, the stake was assessed at $500 million, but the cost eventually rose to $2.5 billion. Gazprom took 12.5% in the Belarusian state company annually with installments of $625 million.

Beltransgaz owns and manages 7,400 km (4,600 miles) of gas pipelines, two gas storage facilities and the power generating assets vital to the system's operation. Some 40 billion cubic meters (1.41 trillion cubic feet) or 25% of Russian natural gas exports are shipped to Europe via Belarus annually. Russia pays approximately $300 million in transit fees.

The price of gas sold to Belarus, which needs some 20 billion cubic meters (706 billion cu f) annually, along with the transit fee have provoked several conflicts between Russia and Belarus. Now that the Russian gas export monopoly owns 50% of Beltrasngaz, it will have equal power with the Belarusian authorities to manage the gas transportation company and to share in its revenues.

Nevertheless, analysts are not entirely happy with Gazprom's new acquisition.

"Gazprom will not benefit much from the 50% stake [in Beltransgaz]," said Andrei Suzdaltsev, deputy dean of the world economy and policy department at the Moscow-based Higher School of Economics. "A relevant example is the Mozyr refinery, in which the Russian business owns a large stake. Also, the specifics of doing business in Belarus should be taken into account."

"The Belarusian political system can be described as socialism, with high taxes levied on energy companies, including Beltransgaz, which has large social commitments such as financing of kindergartens, deductions to farms, etc," Suzdaltsev said. "In addition, Belarusian authorities can easily block any initiative vital for Gazprom since issues put to a vote cannot be solved with a 50:50 split."

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