MOSCOW, March 13 (RIA Novosti) Russian-Algerian arms deals/ Future of Russian-Iranian nuclear relations uncertain/ Big business to fund state structures/ Kremlin clashes with Nashi/ High sugar prices to hurt inflation
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Vedomosti
Russian arms trade freed from "Sino-Indian ghetto" - expert
Experts consider Vladimir Putin's Friday visit to Algeria, during which $4.7 billion in Algerian debt was written off in return for $7.5 billion in Russian arms contracts (more than $10 billion including options), an utter success. They say that selling arms is better than waiting for debt repayments, respected business daily Vedomosti reported.
In fact, Russian weapons to be supplied under contracts signed in recent months will be enough to fully rearm the Algerian fighting force. Russian negotiators and defense industry sources have discussed contracts involving about 34 MiG-29 SMT Fulcrum and 28 Su-30 MKI Flanker fighters, and 14 Yak-130 Mitten combat trainers worth a total of $3.5 billion (36 older MiG-29s will be returned to Russia to be resold to third countries). Other contracts include the sale of 300 T-90S MBTs ($1 billion), eight S-300 PMU-2 SAM battalions ($1 billion), 30 Tunguska gun/missile air defense systems (up to $500 million), and the Metis and Kornet antitank guided missiles, and upgrades of 250 T-72 MBTs (over $200 million) and repairs of Algerian naval ships.
"Even if Algeria could pay off its debt in one installment and in cash, the money would have gone to a stabilization fund or somewhere that would not have been used for the economy," said Konstantin Makiyenko, an expert with the Center for Analysis of Strategies and Technologies. "Now [that the deal is done], many companies will have tens of thousands of jobs for highly-skilled workers for the next four to five years."
Algeria, now Russia's third largest arms buyer, has in effect led Russian defense producers out of what the expert called the "Sino-Indian ghetto."
"If Russia had been too focused on getting back the Algerian debt, the contracts would never have been signed," a source in the Russian delegation said.
Gazeta
Russia's Iranian initiative fails
With only one step left in the creation of a Russian-Iranian joint venture to enrich uranium, Tehran threw off all disguises and refused to continue talks. Moreover, Iranian Foreign Ministry spokesman Hamid Reza Asefi threatened to reconsider the entire program of nuclear cooperation with Russia, hinting at a possible breach in the contract on the construction of the nuclear power plant in Bushehr. Experts, however, are worried about a more serious problem than the fate of Russian-Iranian contracts: how much time is left until Tehran goes nuclear?
Radzhab Safarov, director of the Center for Modern Iranian Studies, said the talks with Iran failed because of Russian Foreign Minister Sergei Lavrov's recent visit to Washington. "Russia and the United States have most likely made a secret deal: we wrap up cooperation with Iran and the United States makes some economic and political concessions to Moscow."
Yevgeny Satanovsky, president of the Institute of Middle East Studies, said the new announcement by the Iranian leaders was a diplomatic move to buy time. While the international community is deciding how to react, he said, Iran's nuclear industry is gaining momentum. At present, the ayatollahs' main goal is not to solve the problem, but to create the appearance that it has been solved. After all, according to some estimates, they only need six months to create a nuclear bomb. Under such circumstances, every week is very precious.
The Kremlin does not seem to realize that it has been deceived, as shown by the stance taken by Andrei Denisov, Russia's ambassador to the UN: "Two weeks is very little to prepare a new IAEA report."
Some experts say Moscow's position has been directly affected by an influential group that has commercial interests in Iran. But neither the Foreign Ministry nor the presidential administration have Middle East experts capable of proving that Russia's strategic national interests contradict the immediate interests of this business group.
Nezavisimaya Gazeta
Business financing of state structures a crime
It became known last week that the Russian president had issued a decree offering big companies the opportunity to help finance the operations of the National Antiterrorism Committee. What other state structures could Russian business fund, bypassing the budget?
Mikhail Leontyev, a journalist and political scientist: "There are many projects that need appropriations, but we should distinguish between structures and projects. In the case of projects, the state outlines long-term goals and supports them with partial financing. Business can invest in these projects in order to gain profit. But it may not finance committees or any other state structures because this would be a crime."
Yevgeny Yasin, research supervisor of the Higher School of Economics: "This amounts to extortion. There are many other objects that can exploit business, but this is unacceptable. Business, especially big business, is depressed now and would rather invest abroad than in Russia. Businessmen will provide funds just to be let alone; they know that the regime has plenty of ways to punish them for refusing its 'offer.'"
Gennady Gudkov, deputy chairman of the security committee of the State Duma (lower house of parliament): "We have enough funds to invest in the economy, receive substantial revenues and use them to finance everything we need, including arms modernization, antiterrorism, the reform of law enforcement, and many other projects. The level of monopolization in the Russian economy has soared above the normal, and possibly even the critical, ceiling. State operations, especially antiterrorism activities, should be financed from the state budget."
Kommersant
Kremlin adjusts pro-president youth movement
A carnival-parade organized by political youth movement Nashi (Us) against racism and xenophobia, which was originally scheduled for March 26, has been postponed until fall. Commenting on the decision to delay the event, a source close to the Russian presidential administration said the Kremlin had realized that "anti-fascism" has been overplayed and decided not to sponsor the carnival for now.
Robert Shlegel, spokesman for Nashi: "Everybody wants to find political reasons, but there are none, we are not that dependable. It has been very difficult to prepare this campaign. We are simply running out of time, and it is not a matter of underfunding - we are having transportation and security problems." He refused to comment on the size and sources of financing for the campaign, Russia: Capital of the World, referring only to "a few million."
A source close to the presidential administration said: "The postponement of the march can be considered a correction to the Nashi program. Though the movement was initially positioned as anti-fascist, the administration has realized that this theme cannot be pedaled, so the decision was made not to fund the campaign for the moment."
According to opposition activist Vladislav Surkov, deputy head of the presidential administration in charge of pro-Kremlin youth: "Such straightforward attacks on the opposition are irrelevant now, in particular accusations of fascism against the leaders of [Russian democratic opposition party] SPS, [democratic party] Yabloko and the National Bolshevik party Nikita Belykh, Grigory Yavlinsky and Eduard Limonov, respectively."
"I don't think this is an adjustment," Limonov said. "The Kremlin seems to have turned its back on them - the Nashi movement failed to meet its expectations and proved to be negative advertising."
Belykh said: "The Kremlin might have understood that Nashi may pose a threat. A crowd of 100,000 marching people is dangerous and may have a negative impact on the city."
Novye Izvestia
Soaring sugar prices will speed up inflation in Russia
One of the reasons for a surprise sugar shortage on the global market was the soaring demand for the commodity in Russia, according to international experts. An acceleration of inflation could become the worst consequence of this price growth.
Brazil, a major sugar producer that regularly increases its sugarcane harvests, is using the bulk of its output to produce the vehicle fuel ethanol. Russia, which is the biggest sugar consumer in the world, is increasing its imports, although world prices have doubled to a record-high for the past 24 years. The prime cost of raw sugar reached more than $750 per metric ton in February.
"In 2005, we saw vividly a close connection between the energy and sugar markets," said Marina Gracheva, an analyst with ISCO-I Sugar Monitoring, a leading information and analysis project on the sugar market. "A rapid growth of oil prices [reaching a record-high of $70 per barrel in September] has moved sugar from foodstuffs to the energy commodities sector."
Vladislav Kochetkov, an analyst with the investment firm Finam, said the growth of sugar prices in Russia was logical. "Russian sugar producers can satisfy only 30% of the demand of the confectionery sector," he said. "The situation deteriorated in winter when Ukraine, preparing for the spring elections, decided to limit sugar exports so as to bring down domestic prices."
Kochetkov said nearly all raw materials for the confectionery sector, notably coffee, grain and sugar, were becoming more expensive. "The government will most likely not stop the growth of sugar prices but rather revise its inflation outlook," he said. "It may exceed the planned 8.5%, and even the 2005 level [10.9%]."
According to the Federal Committee for Statistics, inflation in Russia in the first two months of 2006 reached 4.1%, nearly half of the permitted figure for the year.
