Gazeta.ru, Kommersant, RBC Daily, Vedomosti
Ukraine to get cheap gas for allowing Russian fleet to stay in Sevastopol
A sensational deal has been signed between Dmitry Medvedev and Viktor Yanukovych. After 2017 the Russian fleet will remain in Sevastopol for another quarter of a century with the right to extend its presence every five years. In exchange, Ukraine will get a 30% rebate on gas until 2019, saving $40 billion, according to the Ukrainian president's estimate. The agreement with Russia is advantageous only for sponsors of the Yanukovych party, claims the Ukrainian opposition.
Currently, Ukraine buys gas at $304 per 1,000 cu m. With the rebate, the price will be just above $200. Plans for 2010 provide for the supply of 36.5 billion cu m of gas. Dmitry Alexandrov, an analyst with Univer Kapital brokerage, estimates that since the beginning of the year Ukraine has already received 7 to 8 billion cu m. "Now, with 28 billion remaining to pump, and with a $100 rebate on every 1,000 cu m, Ukraine will save $2.8 billion this year alone, which will be correspondingly missing from Gazprom's revenues," the expert calculated.
But the loser will be the Russian budget, not the monopoly. "The price reduction is guaranteed by the lowering of Gazprom's export customs duty to the budget and does not affect Gazprom's financials," the holding's chief executive officer Alexei Miller explained.
The gas rebate will be set off against payments for the presence of the Black Sea fleet in Ukraine's Crimea. Under the lease agreement, Moscow is to pay $98 million a year until 2017 for the Sevastopol base, Alexandrov says. "Economically, it makes little sense to swap $98 million for $2.8 billion," the expert says. "Politics has again prevailed."
"The base is not worth even $0.5 billion, while Russia is to give away much more," believes Ariel Cohen, a leading expert at the Heritage Foundation in Washington. "The fleet is obsolete and not very capable of combat. It is payment for a change in policy."
"Ukraine is unable to pay as much as Russia would like it to anyway. The fleet, although of limited importance, is necessary to ensure the security of the borders and, in the future, the South Stream," Alexander Sharavin, director of the Institute of Political and Military Analysis, argues.
The rebates on Ukrainian gas will not filter through to ordinary Ukrainians, who are supplied with domestically produced gas, says Oles Doniy, a Supreme Rada deputy from Our Ukraine party. "The price cut will benefit only industry, most of which is in the hands of the Yanukovych party's sponsors," the deputy says.
Yanukovych has taken a risk and will now have to struggle for ratification in parliament, believes Vadim Karasev, head of the Ukrainian Institute for Global Strategy. The new agreement is only an addition to the existing one, and its approval will require only a simple majority in parliament, which the president has, said a high-placed source in the Party of Regions.
Moscow has hedged itself from a possible non-ratification of the Black Sea fleet agreement by Kiev and its denunciation in the future. Russia insisted that the provision on the 30% rebate be included not in the gas documents, but in the fleet agreement. It follows then that if there is no fleet agreement there is no gas rebate.
Viktor Yanukovych may become Moscow's constructive partner
As Ukraine faces an extremely challenging economic situation, reduced gas prices have become a matter of survival. The revision of gas contracts seems inevitable given that Ukraine already pays more for gas than the European Union does, writes an influential Russian analyst.
Alexei Miller, a leading research fellow at the Russian Academy of Sciences' Institute for Scientific Information in Social Sciences, writes that Moscow and Kiev are wrangling over the compensation for losses incurred by Russian energy giant Gazprom.
The day before Ukrainian and Russian Presidents Viktor Yanukovych and Dmitry Medvedev met in Kharkiv, Ukrainian Prime Minister Mykola Azarov flew to Moscow to meet with his Russian counterpart, Vladimir Putin.
Russia will eventually get what it wants, while Yanukovych will wrest concessions from his political adversaries and their business associates, rather than from Moscow. Numerous compensations will be offered because Ukraine's main resource, gas pipelines, has become much cheaper, the analyst writes.
Moscow will get further with Ukraine if it stops pressuring it into political integration for which it is not prepared. The questions of Ukraine's accession to NATO and the creation of an anti-Russian Baltic-Black Sea geopolitical arc have now been removed from the agenda. Both sides have already agreed on the key issue of extending the stay of the Russian Black Sea Fleet in the Crimea.
Low-pressure tactics play an important part in humanitarian efforts. Presidents Leonid Kravchuk and Leonid Kuchma eventually opted for moderate Ukrainization in order to strengthen their positions in the western regions, the analyst writes.
Had Yanukovych won the 2004 presidential election, he would have acted likewise. But the situation has changed since then. Yanukovych's predecessor, Viktor Yushchenko, made so many blunders that Yanukovych only stands to gain by eliminating them, the analyst writes.
Yanukovych can afford to ignore the hysterical reaction of the nationalist opposition because the idea of building a mono-cultural nation-state in Ukraine has failed completely.
Yanukovych should not be guided by any partly fetishistic expectations of granting second state-language status to the Russian language. The recognition of the Russian language's official status at regional level, the elimination of anti-Russian discrimination in education, television and film distribution and the end of history-distorting anti-Russian sentiment match the interests of both Ukraine and its president.
Yanukovych, Azarov and their Party of Regions could acquire stable political dominance in Ukraine and become Moscow's constructive partners if they are able to control their appetites during the re-division of property. Previous years ought to have taught the Kremlin to appreciate such a partner in Kiev, the analyst writes in conclusion.
Russia scrutinizes potential successors of Kyrgyz President Bakiyev
Kurmanbek Bakiyev, the deposed president of the Central Asian republic of Kyrgyzstan, refuted his resignation on Wednesday in the Belarussian capital Minsk and asked world leaders to consider him the head of state.
The Kremlin has apparently not heeded his appeal and is scrutinizing his potential successors.
"We are waiting for the new team to take shape in Kyrgyzstan to implement major projects jointly with it," a source in the Kremlin told the daily. "Of course, it is not all the same to us who will sit on the Kyrgyz government; we are monitoring the developments, but it will be the people who will ultimately make the choice."
Analysts say that Russia's approach will influence the outcome of elections.
"The Russian factor will be one of the crucial elements," said Andrei Grozin, head of the Central Asian sector at the Moscow Institute of the CIS.
First of all, Russia is Kyrgyzstan's largest creditor. It has recently promised to issue $50 million to the interim government, $20 million as a grant and $30 million as a loan for the spring sowing campaign. These allocations will compensate for part of the Kyrgyz budget deficit, which stands at $285.3 million or 20% of the budget.
The new Kyrgyz leader will also have to address the issue of duties on petrochemical supplies from Russia (1 million metric tons annually). The duties could be lifted, saving Kyrgyzstan $193 million annually, if it joins the Customs Union of Russia, Belarus and Kazakhstan.
"The main presidential candidates will try to rally the support of different Russian political groups and will go to Moscow for talks," Grozin said.
The first Kyrgyz visitor was Deputy Prime Minister Almazbek Atambayev, responsible for the economy in the interim government, who has been to Moscow twice since April 7 and has talked with Prime Minister Vladimir Putin. He has convinced Moscow to issue the above funds.
Today a delegation led by Temir Sariyev, in charge of finance, is to discuss the conditions of Russia's financial assistance.
"Sariyev has positioned himself as a compromise leader acceptable for Moscow," said a source with close ties in the interim government.
However, analysts say that Russia is unlikely to publicly support any of the candidates.
"All potential candidates in Kyrgyzstan can be described as pro-Russian, to one degree or another," said Grozin. "Moscow is unlikely to take the side of any of them, but will most probably act according to the Ukrainian scenario. Kyrgyz politicians will adjust their actions to changes in the situation, trying to win the favors of all sides, notably Russia, the United States, China, the EU and Kyrgyzstan's neighbors."
Russian servicemen to have two days off per week
Russian generals have failed to implement military reforms and discredited the idea of a contract army. This is why Defense Minister Anatoly Serdyukov has proposed changing the manning principle in order to strengthen combat readiness in the Armed Forces.
He said the number of contract servicemen should be reduced from 150,000 ("too expensive") to 90,000-100,000, who "will be paid as much as officers."
This could be the minister's response to the generals and their allies who have sabotaged the military reform aimed at creating a professional army with 400,000 contract servicemen, or 40% of privates and sergeants. He wants to cut the number of professionals and increase the number of recruits again.
Serdyukov intends to optimize service time and to contract functions not directly related to combat training to civilian agencies.
"We have agreed that privates must not perform non-combat duties, which should be outsourced to civilian organizations," the minister said.
Intensive combat training should change the ratio of service and off-duty time, reserving military service to ordinary working schedule. The Defense Ministry plans to introduce five working days and two days off a week; servicemen at outlying garrisons unable to go anywhere on their days off could add them to their vacations.
Officers have expressed dissatisfaction with the minister's proposal on the condition of anonymity. Police sources fear that the change in the work schedule of conscripted servicemen will increase crime, while Defense Ministry officers say the standards of combat training will plummet.
The number of crimes committed against civilians in some problematic military units is large as it is, with the victims unable to pinpoint the perpetrators because they all look like the same "men in green" to them, said a police officer.
An officer from the Interior Ministry's central staff predicts growth in the number of robberies and other street crimes in the deployment areas of the units whose servicemen will be given weekends off.
An officer from a motorized brigade of the Defense Ministry said that one-year service is not sufficient for training privates to use modern equipment, and the proposed change will cut this time still more.
Russia and Israel plan to produce spy drones
Russia and Israel could cooperate in the production of Israeli unmanned spy planes in Russia, according to Russian Technologies state corporation head Sergei Chemezov. Analysts say a Russian company will be chosen for the project by the government later.
"The Russian Defense Ministry has purchased 15 unmanned aerial vehicles (UAVs) for testing," Chemezov said. "All of them were bought in Israel. After the tests, a decision will be made on production and procurement," he added.
Military officials are not satisfied with Russian UAV technology, though about 5 billion rubles ($172 million) have been spent on development.
It has not yet been decided which company will take part in the project. "It could be Vega, or Irkut Corporation, or some other Russian company that makes drones and is capable of assembling the Searcher and Hunter models," a source familiar with the talks told GZT.ru. "Israel Aerospace Industries (IAI) is ready to establish a joint venture with any Russian company if Russian buyers need it."
Ruslan Pukhov, head of the Center for Analysis of Strategies and Technologies, agrees. "In choosing a partner, IAI will completely rely on the Russian government. They will accept any company selected," he said.
According to Pukhov, IAI plans to produce planes in Russia. This means that Israeli drones will be produced and adapted to the country in which they will be used, like Ford in St. Petersburg and Su-35 in India.
The Russian Defense Ministry said it would buy planes made at the joint venture only if they meet the needs of the army. "We will not buy them just to buy them or to help someone sell a product. If it meets our needs, and the needs of our units, if the price and quality are competitive, we will buy it," a ministry official said.
Russian Technologies state corporation was established in 2007 as a managing company for over 400 Russian ventures, 80% of which produce military equipment. It includes the Russian arms export monopoly Rosoboronexport, which in turn owns controlling stock in AvtoVAZ, Kamaz and the majority of Avionika.
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MOSCOW, April 22 (RIA Novosti)
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