MOSCOW, February 12 (RIA Novosti) Russia to cooperate with U.S. in disarmament drive / Army cuts put off till 2016 / Russia's Tvel signs $700 mn nuclear fuel contracts with India / Nationwide car sales plunge by 45% this January
Gazeta.ru
Russia to cooperate with U.S. in disarmament drive
The Kremlin's response to U.S. President Barack Obama's proposal to reduce nuclear forces was favorable. However, analysts do not think it will mean a new START treaty signed by the end of the year.
"What we have heard these last few days from representatives of the new administration regarding the evolution of Russian-American relations generates a positive reaction from the Kremlin," presidential spokesperson Natalya Timakova said Tuesday. "[President] Dmitry Medvedev is ready to work very closely with our American partners on every issue of the day in bilateral relations, including disarmament issues."
Reports of Washington's plans for a significant reduction of both Russia and the U.S.'s nuclear potentials by up to 80% came in the middle of last week. Western media sources emphasized a key point in Obama's initiative, a plan to reconsider George Bush's decision to site U.S. missile defense bases in Central Europe, a move vigorously opposed by Moscow.
Foreign Minister Sergei Lavrov said Washington has been carefully avoiding any commitment to begin discussing a new START-2 treaty for two years. The current agreement expires on December 5, 2009.
Alexander Konovalov, president of the Strategic Studies Institute, a Moscow think tank, said it would be difficult to develop and finalize a new document in such a short time. "However, Russia and the United States could still agree on extending some of the START-1 procedures. There is also another agreement, on the reduction of strategic offensive potentials (SORT), valid until 2012, but that treaty does not include procedures. It was alright while START was still in effect, but without START, SORT will become ineffective," he explained adding it was a good sign that the parties had agreed to cooperate.
According to Konovalov, Russia is likely to use the START talks to push the missile defense in Europe issue. "U.S. Vice President Joe Biden said that program would be continued, but only provided the technology is proven to work and cost-effective," he concluded.
RBC Daily
Army cuts put off till 2016
Defense Minister Anatoly Serdyukov yesterday reported on army reform to the State Duma and told deputies no officers would be made redundant against their will. Only volunteers, pensioners and the sick will quit, he said.
The army will naturally downscale to the declared one-million level in 2016. The cuts were previously expected to be made by 2012. Experts believe this is because the ministry is unable to provide all those who may have left with statutory housing. The second reason is the fear that the military men and women dismissed in a time of crisis might join protest groups or turn criminal.
Army generals have often said that a new-look army must be cut to one million men by 2012, and the main reduction must concern the officers, slimming their numbers from 355,000 to 150,000.
Now they decided to wait for the army to trim its ranks itself, at the expense of pensioners and the ill. Few, if any, will decide to abandon ranks during the current crisis.
According to experts, the authorities are simply afraid to swell the "army" of unhoused officers. "The Defense Ministry can build only 45,000 to 47,000 apartments a year, while officers in need of housing already exceed 112,000," said Anatoly Tsyganok, the head of the Military Forecast Center. "Today, thousands of servicemen win their cases in courts against the Defense Ministry, which has let them down by failing to pay them their full due on dismissal, or to provide them with housing," said Leonid Ivashov, president of the Academy of Geopolitical Sciences.
The authorities also fear that sacked servicemen could add to the growing ranks of protesters. "An officer discharged at the age of 35 to 40 is unlikely to find a civil job, because learning a skill at this age is difficult," Tsyganok said. "He has a family to support, and as one trained only to fight has practically nowhere to go but to turn criminal or join protesters."
Nezavisimaya Gazeta
Russia's Tvel signs $700 mn nuclear fuel contracts with India
Russian nuclear fuel producers have triumphed. Tvel, a subsidiary of the state corporation Atomenergoprom, has signed long-term contracts with India's Department of Atomic Energy for the delivery of fuel pellets to India's nuclear power plants. The total value of the contracts exceeds $700 million.
Experts predict a surge in competition on the Indian market.
"The Russian company was the first to sign a nuclear deal with India since the Nuclear Suppliers Group (NSG) lifted restrictions on the supply of uranium, reactors, and nuclear technologies to India on September 6, 2008," Tvel press office said.
The NSG, a multinational body concerned with reducing nuclear proliferation, imposed the embargo on international nuclear cooperation with India after India's first nuclear test in 1974 and for its refusal to join the Non-Proliferation Treaty (NPT).
Before selecting Russian fuel suppliers, India had conducted low-enriched uranium supply talks with companies in Canada, Kazakhstan and Africa. However, the market saw no real scramble for the lucrative contracts.
"India has had a real and effective nuclear power generation partnership with only one partner, Russia," said Ivan Andriyevsky, a managing partner at the 2K Audit Business Consulting. In particular, Russia is currently participating in the construction of India's Kudankulam nuclear power plant and plans to build power stations in other parts of the country.
On the one hand, a $700 million contract is a great success in the competition for the Indian market. India, which suffers from a huge energy deficit, plans to build 28 reactors with a total capacity of 40 GW until 2020, which is certainly the good part of the story.
The bad part is that, with the NSG embargo lifted, Russia will have quite a few rivals who also wish to develop and strengthen their nuclear cooperation with India.
"Primarily, Washington is nursing grand plans of cooperation with New Delhi," Andriyevsky said. "It is obvious that Russian nuclear companies will now have to put up a good fight for more Indian contracts."
Vedomosti
Nationwide car sales plunge by 45% this January
Russian car sales plunged by over 40% in January, causing problems for automakers and car dealers. Analysts say the situation will only get worse.
In January 2009, 116,500 new Russian and foreign cars were sold all over Russia, a Russian car dealer told the paper, citing European Business Association (EBA) data.
Genser, one of Russia's oldest foreign car dealers, estimated January sales at 116,000 vehicles. Sales fell by 33% and 44.5% on January 2008 and December 2008, respectively. An EBA spokesperson declined to comment on the issue.
"This is a disaster," Oleg Datskiv, director of Internet portal Auto-Dealer.Ru, told the paper. Roman Khapayev, board member at ROLF, a leading international automotive company in Russia, said the market had not seen such a slump since 1999.
All carmakers were in the red, with Honda and Hyundai reducing sales by 2% and 48%, respectively. These are the best and worst performances among the top ten carmakers.
Ernst & Young said the market would be restructured throughout 2009, and that the share of Russian cars would increase from 25.5% to 35% (670,000-730,000 vehicles), and that demand for cheap vehicles would soar.
Ivan Bonchev, an auto analyst at Ernst & Young, said market demand would not be restored in at least the next 12 months. In its auto-market survey, Ernst & Young predicted that new-car sales would plunge by 25-30% down to 1.92-2 million vehicles in 2009. Datskiv said car sales would plunge by at least 50% to reach 1.3-1.5 million vehicles.
Everything will depend on global oil prices. Customers would choose Russian cars or Russian-assembled foreign vehicles if a barrel of oil cost less than $50-70. Russian carmakers will hardly be able to resist the temptation to follow foreign companies in raising prices, Genser CEO Igor Ponomaryov told the paper.
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