What the Russian papers say

Russian president urges modernization / Russia also needs to reset relations with EU / New player likely to enter international telecommunications market / Turkmenistan no longer sees Russia as reliable partner /

MOSCOW, November 13 (RIA Novosti)

Russian president urges modernization / Russia also needs to reset relations with EU / New player likely to enter international telecommunications market / Turkmenistan no longer sees Russia as reliable partner /

Gazeta.ru, Vedomosti

Russian president urges modernization

Russian President Dmitry Medvedev said on Thursday in his second annual address to parliament that Russia's survival fully depended on modernization. However, he proposed only local and rather mild methods of attaining this goal.

Medvedev's second address was the longest in this genre's history and the most peculiar in form. The president wrote an article, "Forward, Russia," and monitored people's responses to it before writing the annual state of the national address, cramming it with facts and practical proposals.

Political analyst Gleb Pavlovsky said it was also the president's address to the government, and in particular to Prime Minister Vladimir Putin.

Medvedev's address includes instructions for the government and lists of goods and services the country needs, such as Iskander missiles, mass broadband Internet access, and construction of "smart" school buildings.

It is logical that Medvedev has addressed his speech this year to the government, because in the current political system, which he is unlikely to try to change, the parliament is nothing more than a rubber-stamping agency.

However, it is audience that is Medvedev's biggest problem. He may have a team of supporters in the Kremlin prepared to forget their personal considerations in their striving to promote Russia's development. But we know nothing about this team.

So far, only the Communist Party has offered political support to Medvedev - for the first time in post-Soviet Russia's history, which means that the Communists have sensed Medvedev's solitude. This is an alarming sign because the Communists cannot have the same goals and aspirations as the president. They have most likely offered their help in the hope of getting immediate political benefits.

Analysts say that Medvedev most frequently used the words "examination" and "experts" in his address. Unfortunately, it is difficult to imagine the expert community as a political force ready to support the president.

Kommersant

Russia also needs to reset relations with EU

As was to be expected, the routine Geneva meeting on the South Caucasus has not produced a solution. Moreover, subsequent meetings are unlikely to yield a positive result either, a Russian politician says.

Mikhail Margelov, chairman of the International Affairs Committee of the Federation Council, the upper house of Russia's parliament, said the negotiators have amicable coffee breaks because their positions cannot be reconciled.

The Georgian and European delegates address any issue on the meetings' agenda as if it concerns indivisible Georgia, while their opponents think it concerns the independent South Ossetia and Abkhazia.

No matter what issue you put on their agenda, they will always address it from opposing sides, the politician said.

Georgian and European delegates speak about the need to send EU observers to Georgia, meaning South Ossetia and Abkhazia.

Russia will say that this is the competence of the two republics, whose independence it has recognized.

And Abkhazia and South Ossetia say that the Western observers are biased, which is a logical assumption given the media ballyhoo in Europe and America before, during and after the August 2008 South Ossetian war.

In Margelov's opinion, the European Union seems to have done everything it possibly could. French President Nicolas Sarkozy was the main peacemaker, and Swiss diplomat Heidi Tagliavini, head of the EU investigation into the causes of the 2008 war, has said that it was Georgian President Mikheil Saakashvili who provoked the war.

The EU only needs to recognize the independence of South Ossetia and Abkhazia, which it will not do, while the two republics will never give up their hard-won independence, and Russia will not withdraw its recognition of their independence.

This contradiction will not be removed even if Abkhazia and South Ossetia agree to let EU observers in.

The top Russian officials are now speaking about modernization, which brings to the fore the issue of Russia's relations with the EU, Margelov said. Russia needs to reset its relations with the EU as much as with the United States. Will the Geneva talks influence the probability of resetting relations?

Influential EU members have recently lost all and any sympathy for Saakashvili, and resetting Moscow-Brussels relations also implies a review of priorities. Therefore, "deeper understanding" in Geneva is unlikely to hinder the development of Russia-EU relations in such key spheres as energy and European security, Margelov concludes.

RBC Daily

New player likely to enter international telecommunications market

A new epoch-making deal is looming in the telecommunications business. Following the merger of VimpelCom and Kyivstar, announced a month earlier, Alfa Group proposed to Nordic telecommunications operator TeliaSonera that they set up a new telecom giant based on Russia's MegaFon and Turkish mobile firm Turkcell, Alexei Reznikovich, head of Russia's Altimo, which manages Alfa Group's telecom assets, said. And this despite the fact that back in September, Alfa's new global partners were its sworn enemies.

RBC Daily sources say that through this deal the government expects to fulfill its long cherished dream of a global company - a tidbit for international investors. After its failure to bail out Opel and, previously, to gain access to European airspace technologies by buying a 5% stake in EADS, the state started looking for an industry least damaged by the unstable economic situation. Communications appeared to be the best option. So the Kremlin invited Alfa Group head Mikhail Fridman to "discuss matters" with Vladimir Putin and Dmitry Medvedev.

"The Kremlin is seeking an early solution to conflicts with Telenor and TeliaSonera, which are having a negative effect on Russia's image in the West," a source close to Alfa Group said. "According to the prime minister, all these disputes have made investments in Russia less attractive, especially in a time of crisis, when the government is looking for foreign capital."

The source said that later, when the companies controlling VimpelCom and Kyivstar, as well as MegaFon and Turkcell, are merged, the state could obtain a large communications operator covering Russia, the CIS and Asia.

For the Kremlin this option must be the most attractive, because shareholders of all four companies are interested in expanding into developing markets, above all in Asia and Africa. "The government plans once again to try its hand at creating a big-time international player in communications, a key operator in Eurasia. Especially since it is a high-tech business," says a source familiar with the progress of the deals.

The only cloud that might darken Fridman's mood in connection with the two deals is that authorities could demand that the merged companies make all basic decisions in Russia.

Nezavisimaya Gazeta

Turkmenistan no longer sees Russia as reliable partner

Turkmenistan no longer views Russia's Gazprom as a reliable partner and is therefore considering other possibilities to export its oil and gas, but not to Europe.

The country plans to commission the second leg of a gas pipeline to Iran in December, which will increase exports to Iran from 8 billion to 14 billion cu m and later to 20 billion cu m. The Turkmenistan-Uzbekistan-Kazakhstan-China pipeline is also close to completion. Analysts say Moscow can relax, as the Turkmen gas is still unlikely to reach Europe.

Turkmenistan produces about 80 billion cubic meters of natural gas a year. Gazprom used to buy 50 billion cu m of that amount before the global economic meltdown. Turkmenistan stopped supplies to Russia after an explosion on its section of the Central Asia-Center pipeline in April 2009, and began working on diversifying its export routes to international markets.

"Turkmenistan is being forced to reroute the bulk of its exports to Iran, after Gazprom refused to buy its gas in April," said Mikhail Krutikhin, a partner in Moscow's RusEnergy Consulting.

The project poses no direct threat to Russia, believes Sergei Pravosudov, director of the National Energy Institute. The global recession has brought the demand for natural gas and its prices down anyway, and Turkmenistan's efforts to diversify its exports do not make a serious difference for Gazprom. "What is important is that Turkmenistan's gas doesn't flow to Europe," the analyst stressed.

Analysts also think it unlikely that the Turkmen gas will eventually fill the EU-backed Nabucco pipeline reaching it through Iranian pipelines. Iran's law stipulates government monopoly for oil and gas, which means Turkmenistan would have to sell the commodity at the border losing a great share of export profit, Krutikhin estimated. The country is unlikely to agree to that.

The United States will also be opposed to Iran's link to Nabucco, which means the Turkmen gas so far has no chance of bypassing Russia and the Caspian region and reaching Europe.

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