MOSCOW, October 04 (RIA Novosti)
Nezavisimaya Gazeta
WILL U.S. TRADE FORMER NUCLEAR MINISTER FOR DISGRACED OLIGARCH?
Switzerland's decision to extradite Yevgeny Adamov to the United States may conceal the West's desire to take advantage of the criminal persecution of Russia's ex-nuclear minister to alleviate the fate of Mikhail Khodorkovsky, the convicted ex-head of Yukos. Russian experts consider the possibility of such a development of events.
Stanislav Belkovsky, director of the National Strategy Institute, says: "These two events are totally unrelated. The U.S. needs Adamov on the state level, and so does Russia. But Putin as head of a certain economic group has no need for Adamov. Putin has made no efforts to try and get Adamov released, because Adamov is not one of his business partners. How much the state needs Adamov is not Putin's concern. There is no link to Khodorkovsky here. The U.S. does not support Khodorkovsky on the administration level. Putin as the incumbent president suits it all right. So the U.S. will never take any radical steps in Khodorkovsky's interests."
Sergei Markov, director of the Institute for Political Studies, says: "Adamov's extradition is the reply not directly to the trial of Khodorkovsky, but to the Russian law enforcement system which is seen as politicized and illegitimate. Nor does the West respect Russia's judiciary. Besides, Adamov is useful to the U.S. as a person knowing nuclear secrets, and this is a good occasion to show to Russia that despite all else it is under the U.S. thumb."
Alexei Makarkin, deputy general director of the Center for Political Technologies, says: "The Swiss department of justice, which took the decision, just as Swiss authorities in general, bear no relation to Khodorkovsky and are no parties to any intrigue. I think Switzerland decided that since Adamov's arrest was made on U.S. initiative, so here too the priority is American."
Prof. Inga Mikhailovskaya, the Institute of the State and Law of the Russian Academy of Sciences, says: "If the U.S. wants to learn some of our secrets from Adamov, this is by far more important for its interests than releasing Khodorkovsky from jail. "
Novye Izvestia / Kommersant
KREMLIN TO REFORM POWER SYSTEM IN GERMAN STYLE
Yesterday the president submitted new amendments to the law "On the Parties" to the State Duma. If passed, parties which win the regional parliamentary elections will be entitled to nominate their candidates for the gubernatorial post. Some experts say it is a German-style reform of the Russian power system.
In the opinion of Maxim Dianov, director of the Regional Problems Institute, President Putin has been consistent in introducing the German electoral model in Russia since 2000: the German president also appoints chief executives for Lands from the list of candidates submitted by the winner party. Dianov says that Putin's next step may be to adopt a similar model at the federal level: nomination of the prime minister by the party which wins the Duma elections.
"This is an imitation of a democratic procedure, needed today to legitimate a new mode of shaping regional executive power," said Sergei Mitrokhin, deputy chairman of the Yabloko party. In his opinion, the president's initiative does not change anything, because governors will be appointed by the United Russia party, which is certain to win the elections in every region due to its administrative resource.
Supporters of the president believe that the amendments should be seen as an interim step towards a new model of post-2008 power. The Duma first vice-speaker, Oleg Morozov of the United Russia faction, said that the amendments "are designed to advance the president's idea of forming the government by the parliamentary majority." The ruling party's general council secretary, Vyacheslav Volodin, says the presidential bill may be the first step towards a new state party model. "Formation of party-based executive power entails a similar process for the appointment of the government and, eventually, the election of the president," he explained.
Vremya Novostei
EU WOULD NOT PAY FOR FLIGHTS OVER SIBERIA
The European Union has made another attempt at opening the Russian sky for foreign airlines.
On the eve of the Russia-EU summit due to open in London on Tuesday, European Commission President Jose Manuel Barroza demanded from Russian President Vladimir Putin to backdate to last January, a stage-by-stage canceling of payments for non-stop flights across the trans-Siberian route and drop limitations on flight frequencies operated by European air carriers over Russia. He also threatens to prevent Russia's entry into the World Trade Organization for not meeting EU demands.
Way back in the mid-1980s, the Soviet Union allowed European, Asian and U.S. airlines to make non-stop flights from Western Europe to North-East and South-East Asia over Siberia. In return, they were to reimburse Aeroflot for lost profits. Otherwise, Western carriers would have had to land in Moscow, disembark passengers who would have to continue their journeys on Soviet airliners. After the breakup of the USSR, Aeroflot-Russian Airlines has been getting the payments.
In different years these revenues were between $120 million and $240 million. According to unofficial information, no more than a quarter of the reimbursements go into Aeroflot's coffers. The major part of the money goes "for the sector's needs", such as developing the state air navigation system in Russia.
For Russia it means not merely hundreds of million dollars but the existence of a major national airline. Financially better off in recent years, Aeroflot has not yet reached profitable operations. Only payments made by Western airlines for their flights over Siberia make it profitable. The leader of Russian civil aviation, Aeroflot, may not survive this huge immediate loss.
Business
FINANCE MINISTRY AGREES TO LOWER TAX RATE ON AMNESTIED CAPITAL
The Finance Ministry has asked for a grace period to update its bill on a tax amnesty. Alexei Kudrin needs the time to examine the possible effects of a 9%, instead of a 13%, income tax on declared capital. Experts, however, do not think the government will see a massive legalization of stowed-away capital.
Igor Lavushchenko, an analyst with Prospekt brokerage, is sure the Ministry will not radically cut the tax rate on amnestied capital. "The rate is most likely to be above 9% but below 13%," he supposes, explaining that a reduced tax rate is not the decisive motive for paying it. Alexander Sotov, an expert at FBK brokerage, shares his view: "The size of the tax does not, as a rule, matter. What citizens fear is to disclose their source of income."
The tax rate is indeed not the crucial factor in deciding to declare one's income, agrees Yevsei Gurvich, the head of the Economic Expert Group. "Some people may take advantage of this mechanism, but I do not think there will be many," the expert believes. "There are far more effective ways of legalizing one's money - for example, through investments in Russian enterprises."
If the rate is fixed too low, it will be unfair to other citizens who have paid taxes regularly on all their incomes, reasons Pavel Vorozhtsov, an analyst with Russkiye Finansovye Traditsii (Russian Financial Traditions) brokerage. But if it is left at 13%, that will be a poor incentive for capital to return to Russian bank accounts. "I think the 9% is the golden mean," the analyst believes.
Everything will depend on the kind of mechanism chosen by the Ministry, warns Sotov: "It may opt for terms that will keep the tax amnesty only on paper."
Izvestia / Russian Newsweek
DEMAND FOR LUXURY ITEMS GROWING FAST IN RUSSIA
Organizers of Moscow's first Millionaire Fair say with enthusiasm that demand for luxury items is growing at an unprecedented 20-25% a year in Russia while the figure around the world is just 7-8%.
Millionaire Fair Moscow director Bettina von Schlippe says Russian millionaires no longer carry bags of cash, nor do they attack any expensive item. They are well educated, know the items' value and think before buying. However, they make decisions faster than European millionaires do in similar circumstances.
Last February, a shop for millionaires, Vladenie, was opened in Moscow. One can buy anything there: yachts, Arab stallions and even an island in the Pacific. Any item has a price tag of not less than $1 million.
According to De Lux Alliance, there are some 15,000 multimillionaires in Russia. 83% of them earn $1-5 million a year and 9% make $5-10 million. 5% of all nouveaux riche make $10-20 million a year and just 3% earn more than $20 million. 70% of millionaires are businessmen, 20% are prominent politicians and 10% are figures of culture and show biz.
The incomes of the richest Russians are growing at a wild pace - two times faster than the poorest manage to get themselves out of their financial precipice. Taking into account hidden incomes, the gap between rich and poor is almost 20-fold and will continue to grow: the wild influx of petrodollars speeds up the development of trade and services and stifles non-raw materials industries, Igor Polyakov, an expert with the Macroeconomic Analysis and Forecasting Center explains.
Rapid millionaires from businessmen to managers plan their present, not their future, and spend money on expensive toys, not on the acquisition of new businesses - the risk of losing everything is great.
Three years ago in Amsterdam the first Millionaire Fair was held. Today it is one of the most prestigious exhibitions of luxury. This year alone over 200 companies and brands took part in it, such as Bvlgari, Bentley, BMW, Cartier, Fairline, Jaguar, Remy Martin, Mercedes, Mont Blanc, Porsche, Riva, Rolex, Sony, Starline, Wolford and others.
