Sunday 31 January 2010
Yanukovych denies Tymoshenko's premiership if he elected president
The leader of the Party of Regions and presidential candidate Viktor Yanukovych has denied a chance of Yulia Tymoshenko premiership if Yanukovych were elected president. "First, this won’t happen," he said on the Ukraina television channel on Friday.Yanukovych said that today it's honestly to say it is possible to speak about a candidate for the premier post only after the election and formation of a new parliamentary majority.Yanukovych said that coalition proposes a candidate for the premier post, and not the president.Yanukovych added that it would be more honest in Tymoshenko's case not to promise the post of prime minister to Sergiy Tigipko if she were elected president, but to guarantee the support of her faction in the parliament.Answering the question on the candidate of the future premier, he said that he does not have abruption with other politicians, including Tigipko and Arseniy Yatseniuk.
Students from Haiti to receive Russian state funding
Prime Minister Vladimir Putin during his talk with students of Chuvashia State University on Monday said that all current Haitian students in Russia will receive state funding from the federal budget for their tuition fees.
He mentioned that according to his sources, there are 75 students from Haiti in Russian universities at the moment, some of whom are already receiving free tuition.
Earlier reports said that some Haitian students of RUDN (People's Friendship University of Russia) in Moscow received money for their tuition fees from their parents, but could not get in touch with them after the earthquake. According to RIA Novosti, there are 51 students from Haiti studying at RUDN. At least three of them lost their parents in the earthquake. The students previously applied to the University with requests to receive aid with their tuition fees. There are students from Haiti in the universities of Moscow, Voronezh, Rostov-on-Don, Ryazan, Cheboksary and Novosibirsk.
According to the latest sources, the death toll from the earthquake in Haiti on January 12 is now between 150,000 and 200,000 people.
He mentioned that according to his sources, there are 75 students from Haiti in Russian universities at the moment, some of whom are already receiving free tuition.
Earlier reports said that some Haitian students of RUDN (People's Friendship University of Russia) in Moscow received money for their tuition fees from their parents, but could not get in touch with them after the earthquake. According to RIA Novosti, there are 51 students from Haiti studying at RUDN. At least three of them lost their parents in the earthquake. The students previously applied to the University with requests to receive aid with their tuition fees. There are students from Haiti in the universities of Moscow, Voronezh, Rostov-on-Don, Ryazan, Cheboksary and Novosibirsk.
According to the latest sources, the death toll from the earthquake in Haiti on January 12 is now between 150,000 and 200,000 people.
One Russian Bronze worth Two American Golds
Russian athletes who bring home gold medals from the Vancouver 2010 Winter Olympic Games will earn seven times more than their American and Canadian counterparts.
Russians winning a gold metal can expect a cash reward of $140,510 (100,000 Euros). A silver is worth $84,306 (60,000 Euros) and a bronze $56,200 (40,000 Euros).
Figures published by the Canadian Olympic Committee say that their gold prize winners will receive $18,788 (20,000 Canadian dollars), silver medalists - $14,084 (15,000 Canadian dollars), and bronze medals winners $9,389 (10,000 Canadian dollars).
U.S. athletes will receive about as much for their medals from the government - $25,000 for gold, $15,000 for silver, and $10,000 for bronze.
The majority of the countries that send their teams to the Olympics offer monetary incentives - what varies is the amount.
During the Beijing 2008 Summer Olympic Games, Chinese officials promised $1,000, 000 to those who took gold on home turf. Perhaps unsurprisingly, China led the way with 42 gold medals. Olympics champions could also count on additional bonuses from their provinces, as well as life-time employment in state-run sport industry.
Britons were promised an Alfa Romeo for any medal that they received in Beijing, as well as a monetary sum ranging from $5,000 - $8,000.
Thai gold winners were promised to receive just over 30,000 dollars (1,000,000 baht), as well as a house.
However, countries such as Norway, Sweden and New Zealand do not pay Olympians, and all rewards for their team come from private sponsors.
Russian sport officials predict that the nations' Olympic team may return from Vancouver with as many as 50 medals.
Russians winning a gold metal can expect a cash reward of $140,510 (100,000 Euros). A silver is worth $84,306 (60,000 Euros) and a bronze $56,200 (40,000 Euros).
Figures published by the Canadian Olympic Committee say that their gold prize winners will receive $18,788 (20,000 Canadian dollars), silver medalists - $14,084 (15,000 Canadian dollars), and bronze medals winners $9,389 (10,000 Canadian dollars).
U.S. athletes will receive about as much for their medals from the government - $25,000 for gold, $15,000 for silver, and $10,000 for bronze.
The majority of the countries that send their teams to the Olympics offer monetary incentives - what varies is the amount.
During the Beijing 2008 Summer Olympic Games, Chinese officials promised $1,000, 000 to those who took gold on home turf. Perhaps unsurprisingly, China led the way with 42 gold medals. Olympics champions could also count on additional bonuses from their provinces, as well as life-time employment in state-run sport industry.
Britons were promised an Alfa Romeo for any medal that they received in Beijing, as well as a monetary sum ranging from $5,000 - $8,000.
Thai gold winners were promised to receive just over 30,000 dollars (1,000,000 baht), as well as a house.
However, countries such as Norway, Sweden and New Zealand do not pay Olympians, and all rewards for their team come from private sponsors.
Russian sport officials predict that the nations' Olympic team may return from Vancouver with as many as 50 medals.
Kremlin Security Scare
A 35-year-old man was detained after he tried to force his way into the Kremlin, saying he wanted to marry President Dmitry Medvedev's daughter. Medvedev has a teenage son but no daughters. Prime Minister Vladimir Putin, Medvedev's predecessor, has two daughters.
The man, whom police identified only as Bakhtiyar from Dagestan, was sent for psychiatric tests.
The man, whom police identified only as Bakhtiyar from Dagestan, was sent for psychiatric tests.
Russian Schwarzenegger Died of Steroids
Vladimir Turchinsky, a well-known Russian showman and bodybuilder, was buried in Moscow on December 19. The media continue discussing the death of 47-year old Turchinsky who passed away on December 16. Heart attack is still thought to be the main reason of his death. The Moscow branch of the Investigative department (SKP) has opened an inquest into the circumstances of the death.
According to one of the theories, the heart attack might have been caused by consumption of steroids for growing muscles. If medics prove the fact of anabolic consumption, it would most likely be stated as the cause of death, Novye Izvestia reports.
Nikolai Abramovsky, a cardiologist, told the newspaper that when anabolic steroids grow muscles, the heart does not catch up and cannot provide all muscles with blood. This can result in a heart attack. According to Yuri Vasilkov, a former doctor of the soccer team Russia, many sportsmen who consume anabolic steroids start experiencing various health problems at the age of 50.
Three weeks ago, Turchinsky visited a naval hospital complaining about chest pain. He was tested, but no abnormalities were revealed. The doctors say that plasmapheresis that Turchinsky underwent the day before his death could not cause the heart attack. Cardiologists are convinced that the procedure is harmless. Plasmapheresis helps to rid the body of toxins. The toxins could be caused by anabolic steroids.
Three years ago, in an interview, Turchinsky confessed that a sportsman who relied on his health alone coul only perform well enough to meet the sport standard. “All the rest is due to one or the other kind of stimulation, “the showman stated.
Professor Gennady Konovalov, head of the center of extracorporeal treatment Medsi where, according to some sources, Turchinsky could undergo plasmapheresis, refused to confirm that Turchinsky was treated in the clinic. However, Konovalov explained that if the procedure was to cause complications, he would have died an hour after the procedure and not the next morning.
As we wrote earlier, Turchinsky died in his countryside house in the village of Pashukovo in the Noginsk district of the Moscow region at 5.00 am December 16. The investigators said Turchinsky was unwell when he woke up. He fainted and collapsed onto the floor. His wife called an ambulance, but by the time paramedics arrived the bodybuilder was dead.
Turchinsky is known as a sportsman and a TV host. He also starred in several movies and had his own business. He participated in the World's Strongest Man competition. One of his Guinness records involves dragging a 20-ton double-decker bus for 100 meters with his left hand.
Turchinsky aka Dynamite became famous after the Gladiators TV show. Since 2003, he was a President of the Professional League of the Strength Extreme.
Turchinsky hosted a number of TV shows and a radio show at Silver Rain radio station.
According to one of the theories, the heart attack might have been caused by consumption of steroids for growing muscles. If medics prove the fact of anabolic consumption, it would most likely be stated as the cause of death, Novye Izvestia reports.
Nikolai Abramovsky, a cardiologist, told the newspaper that when anabolic steroids grow muscles, the heart does not catch up and cannot provide all muscles with blood. This can result in a heart attack. According to Yuri Vasilkov, a former doctor of the soccer team Russia, many sportsmen who consume anabolic steroids start experiencing various health problems at the age of 50.
Three weeks ago, Turchinsky visited a naval hospital complaining about chest pain. He was tested, but no abnormalities were revealed. The doctors say that plasmapheresis that Turchinsky underwent the day before his death could not cause the heart attack. Cardiologists are convinced that the procedure is harmless. Plasmapheresis helps to rid the body of toxins. The toxins could be caused by anabolic steroids.
Three years ago, in an interview, Turchinsky confessed that a sportsman who relied on his health alone coul only perform well enough to meet the sport standard. “All the rest is due to one or the other kind of stimulation, “the showman stated.
Professor Gennady Konovalov, head of the center of extracorporeal treatment Medsi where, according to some sources, Turchinsky could undergo plasmapheresis, refused to confirm that Turchinsky was treated in the clinic. However, Konovalov explained that if the procedure was to cause complications, he would have died an hour after the procedure and not the next morning.
As we wrote earlier, Turchinsky died in his countryside house in the village of Pashukovo in the Noginsk district of the Moscow region at 5.00 am December 16. The investigators said Turchinsky was unwell when he woke up. He fainted and collapsed onto the floor. His wife called an ambulance, but by the time paramedics arrived the bodybuilder was dead.
Turchinsky is known as a sportsman and a TV host. He also starred in several movies and had his own business. He participated in the World's Strongest Man competition. One of his Guinness records involves dragging a 20-ton double-decker bus for 100 meters with his left hand.
Turchinsky aka Dynamite became famous after the Gladiators TV show. Since 2003, he was a President of the Professional League of the Strength Extreme.
Turchinsky hosted a number of TV shows and a radio show at Silver Rain radio station.
Medvedev and Putin on politics and porn
Medvedev and Prime Minister Vladimir Putin wrestled with the thorny issue of political reform at Friday's State Council session, attended by top officials and parliamentary leaders, with the president urging lawmakers and top officials to work towards political modernisation and the prime minister warning against "Ukrainianisation".
"Our political system works. It's far from being ideal but it works," said Medvedev. However, "real political competition is virtually non-existent" and there is lack of "real... political discussion."
Putin backed the president, but counselled caution, saying a political system "shouldn't quiver like thin jelly every time it's touched," referring to Ukraine as a bad example of political infighting.
Putin also threw cold water on calls for a bigger Internet role in politics, saying that 50 per cent of the Internet was "pornographic material."
"Our political system works. It's far from being ideal but it works," said Medvedev. However, "real political competition is virtually non-existent" and there is lack of "real... political discussion."
Putin backed the president, but counselled caution, saying a political system "shouldn't quiver like thin jelly every time it's touched," referring to Ukraine as a bad example of political infighting.
Putin also threw cold water on calls for a bigger Internet role in politics, saying that 50 per cent of the Internet was "pornographic material."
Police chief fired over journalist’s death
Tomsk's regional police chief was sacked on orders from President Dmitry Medvedev and a police officer was arrested after a local journalist was beaten to death in a detox center. Amid a nationwide crackdown on police brutality, Interior Minister Rashid Nurgaliyev has suggested that alcohol detox centers may now be run by health officials rather than the police.
Konstatin Popov, 47, died Wednesday after spending two weeks in a coma. He was allegedly beaten and sexually abused in a Tomsk drunk tank, where he was taken on January 4 after neighbors complained he was making too much noise
Konstatin Popov, 47, died Wednesday after spending two weeks in a coma. He was allegedly beaten and sexually abused in a Tomsk drunk tank, where he was taken on January 4 after neighbors complained he was making too much noise
Moscow’s super ski slopes
The slalom in Moscow might only conjure up images of weaving in and out of the overcrowded metro, but as the snow settles the capital offers plenty in the form of downhill skiing.
And while the facilities may not live up to people's alpine experiences, thanks in part to the conspicuous absence of mountains, some of them are rather conveniently located within an Eddie the Eagle-sized jump from the metro.
Nagornaya
A short hop from Nagornaya metro station is the Kant sports complex with 13 slopes and a host of other sporting facilities, shops and cafes. The winter season started in December when temperatures plunged but only a few of the slopes, including the nursery hill, have been open lately. As long as you've got your own equipment there are no charges other than using the ski-lifts, which starts at 23 roubles a ride, though it is more expensive at peak times. The centre's ski-lift prices go downhill if the tickets are bought in bulk, though renting a board or skis could send chills through your wallet, setting customers back at least 450 roubles an hour or 1,125 roubles for the day - and this is one of the cheaper options.
Uzkoye
Despite its location in Bittsevsky Park, the closest metro station is Konkovo. It is a bit of a hike, but the scenic views when entering the forest more than make up for it.The complex has a ski service centre as well as rental of skis or snowboards from 500 roubles an hour, while lessons start at 600 roubles an hour. There are four slopes, including one for beginners and though entrance is free there is a small charge for each ride on the ski lifts.
Snej.com
This is the only slope in Moscow that charges an entry fee and with good reason - to keep the snow fresh all year round. The centre out in Krasnogorsk, which can be reached by bus from Planernaya metro station, is completely enclosed and has artificial snow 365 days a year.Entry is 700 roubles for adults at weekends but there are discounts for families and on weekdays. Over a six month period 20 trips can be bought for 14,000 roubles or 23,800 with equipment rental included.
Volen and Stepanovo
There are also various options more off-piste in the Moscow region that tend to be favoured by winter enthusiasts with a bit more experience. Two of these are Volen and Stepanovo less than 5 kilometres apart on Dmitrovskoye Shosse.
Car is the best way to get there, particularly if you don't want to lug your stuff on public transport, but bus No. 401 from Altufyevo and a train from Savyolovsky Station to Yakhroma both take slightly over an hour. From the station it is best to get a taxi to the complex.
At a height of 90 metres, the bigger slopes are at Stepanovo where the longest stretches for almost a kilometre. Volen, meanwhile, has a further 15 routes, including one for beginners, plus moguls, tubing and boardercross.
The two resorts operate a ski pass system where users put money on a card, which is used for the lift fares, which start at 20 roubles. A seasonal pass will set skiers back 17,000 roubles but for that they would get a mountainous 40,000 roubles' worth in trips back to the top of the hill.
A full set of equipment, either skiing or snowboarding, can be rented from 800 roubles an hour. There is also a hotel, as well as cafes, restaurants and bars for après ski.
Shukolovo
Another on Dmitrovskoye Shosse that can be reached by elektrichka from Savyolovsky Station to the stop Turist or by bus from Altufyevo is Shukolovo. With eight slopes and a snowboarding park it is popular with boarders and skiers alike.Different passes can be bought and these affect the price of rides on the ski lift. The most expensive seasonal pass will set riders back 17,000 roubles. Equipment rental starts at 600 roubles for 60 minutes for the full package with a further 400 roubles for each additional hour.
Like Volen, Shukolovo functions as a resort with a hotel and cottages for rent, though all of them are easily accessible for a day trip. After a day on the snow guests can visit various cafes, restaurants or a sports bar with bowling.
And while the facilities may not live up to people's alpine experiences, thanks in part to the conspicuous absence of mountains, some of them are rather conveniently located within an Eddie the Eagle-sized jump from the metro.
Nagornaya
A short hop from Nagornaya metro station is the Kant sports complex with 13 slopes and a host of other sporting facilities, shops and cafes. The winter season started in December when temperatures plunged but only a few of the slopes, including the nursery hill, have been open lately. As long as you've got your own equipment there are no charges other than using the ski-lifts, which starts at 23 roubles a ride, though it is more expensive at peak times. The centre's ski-lift prices go downhill if the tickets are bought in bulk, though renting a board or skis could send chills through your wallet, setting customers back at least 450 roubles an hour or 1,125 roubles for the day - and this is one of the cheaper options.
Uzkoye
Despite its location in Bittsevsky Park, the closest metro station is Konkovo. It is a bit of a hike, but the scenic views when entering the forest more than make up for it.The complex has a ski service centre as well as rental of skis or snowboards from 500 roubles an hour, while lessons start at 600 roubles an hour. There are four slopes, including one for beginners and though entrance is free there is a small charge for each ride on the ski lifts.
Snej.com
This is the only slope in Moscow that charges an entry fee and with good reason - to keep the snow fresh all year round. The centre out in Krasnogorsk, which can be reached by bus from Planernaya metro station, is completely enclosed and has artificial snow 365 days a year.Entry is 700 roubles for adults at weekends but there are discounts for families and on weekdays. Over a six month period 20 trips can be bought for 14,000 roubles or 23,800 with equipment rental included.
Volen and Stepanovo
There are also various options more off-piste in the Moscow region that tend to be favoured by winter enthusiasts with a bit more experience. Two of these are Volen and Stepanovo less than 5 kilometres apart on Dmitrovskoye Shosse.
Car is the best way to get there, particularly if you don't want to lug your stuff on public transport, but bus No. 401 from Altufyevo and a train from Savyolovsky Station to Yakhroma both take slightly over an hour. From the station it is best to get a taxi to the complex.
At a height of 90 metres, the bigger slopes are at Stepanovo where the longest stretches for almost a kilometre. Volen, meanwhile, has a further 15 routes, including one for beginners, plus moguls, tubing and boardercross.
The two resorts operate a ski pass system where users put money on a card, which is used for the lift fares, which start at 20 roubles. A seasonal pass will set skiers back 17,000 roubles but for that they would get a mountainous 40,000 roubles' worth in trips back to the top of the hill.
A full set of equipment, either skiing or snowboarding, can be rented from 800 roubles an hour. There is also a hotel, as well as cafes, restaurants and bars for après ski.
Shukolovo
Another on Dmitrovskoye Shosse that can be reached by elektrichka from Savyolovsky Station to the stop Turist or by bus from Altufyevo is Shukolovo. With eight slopes and a snowboarding park it is popular with boarders and skiers alike.Different passes can be bought and these affect the price of rides on the ski lift. The most expensive seasonal pass will set riders back 17,000 roubles. Equipment rental starts at 600 roubles for 60 minutes for the full package with a further 400 roubles for each additional hour.
Like Volen, Shukolovo functions as a resort with a hotel and cottages for rent, though all of them are easily accessible for a day trip. After a day on the snow guests can visit various cafes, restaurants or a sports bar with bowling.
Russia’s weather out of whack
January has seen temperatures in European Russia plunge 5 degrees Celsius below a 30-year average, but this is simply more evidence of man-made climate change, Russia's climatologists say.
"Nature is looking for a new balance," said Viktor Danelyan, director of the Institute of Water Problems at the Russian Academy of Sciencies, of the record warm temperatures in December, followed by January's freeze.
"What that equilibrium will be - no one can tell. Once the various regional factors stabilise, the climate will be warmer in general. And the weather volatility we are seeing today will settle down. We can only hope that the new equilibrium is not too warm, because that will negatively affect life on earth."
The debate over global warming has become increasingly bitter in recent months, with environmental activists blaming top polluting nations for failing to agree deeper emissions cuts at the Copenhagen climate summit in December.
eanwhile, in the so-called "Climategate" scandal, hacked scientists' e-mails were seized on by sceptics as evidence that data was being cherry-picked to support environmentalists' arguments.
Climatologists in Russia, where President Dmitry Medvedev has proposed to allow a small increase on current greenhouse gas emissions by 2020, agree that the weather here is becoming warmer, as least in part to man-made factors.
"The abnormally cold weather we are seeing does not contradict things," said Vladimir Katsov, a climatologist at the Voyeikov Geophysical Observatory in St. Petersburg. "So-called weather neuroses increase during periods of climate change."
But the problem is in oversimplifying a complex and ill-understood process, scientists say.
"There are a lot of periodic changes - short-term, long term, mid-term. They all overlap, and all this creates climate volatility." said Danelyan.
"The anthropogenic factor is adding to this natural volatility, leading to warming. If global warming was supposed to be happening naturally, now it's happening even faster."
When overlapping with natural factors, scientists say global warming results in erratic weather. For instance, climatologists believe that the recent cold spell in Europe is caused by Arctic oscillation, with lower atmospheric pressure contributing to cold Arctic air moving further south. "Arctic oscillation is a perfect example of a natural process of weather fluctuation, not connected to external or man-made factors," said Kattsov. But there's a catch - these natural fluctuations can act to offset or exacerbate anthropogenic global warming."
This year marks the start of an expected natural cold phase that will last for a few years, Danelyan said. "But there are other factors connected to regional peculiarities that were not foreseen. Because of the shrinking Arctic ice cap, Siberian winters are becoming harsher. This is in addition to the Arctic oscillation, and it's intensifying the cold snap."
But that doesn't mean that Siberian winters will get colder in the long run. A combination of natural periodic climate change and gas emissions will mean that the average global temperature - now 14 degrees Celsius - will increase by 0.75 degrees per decade. By cutting emissions, Kattsov says, we can reduce the temperature increase by 2 degrees.
"It's widely believed that an increase in average temperatures over the next few decades would be good for Russia," said Kattsov. "But a number of factors make Russia vulnerable. The thawing of permafrost is one of those. On the one hand, a shorter heating season is economically beneficial, but we shouldn't forget the southern regions, where hotter weather and heat waves will mean more energy spent on air conditioning."
Igor Podgorny, a Greenpeace official, said any benefit to agriculture from shorter winters would be offset by erratic weather. "Scientists have talked about erratic cold spells as a result of global warming," he said. "Late cold spells will freeze crops."
But Gennady Yeliseyev, who heads Russia's Meteorology Centre, remains reluctant to draw any conclusions from January's cold snap.
"The weather is not the same thing as climate," said Yeliseyev. "Volatile weather is part of a natural process ... If we get a lot of air from the south, from Africa, then we will have abnormally warm temperatures, which we saw a few years ago when the first snow came in late January.
If we get air from the north or east we'll have cold weather. These are all normal atmospheric processes."
Declining to comment on global warming, Yeliseyev was fatalistic about scientists' ability to understand the weather. "Long-term forecasts are only about 60 per cent to 70 per cent accurate," he said.
"Nature is looking for a new balance," said Viktor Danelyan, director of the Institute of Water Problems at the Russian Academy of Sciencies, of the record warm temperatures in December, followed by January's freeze.
"What that equilibrium will be - no one can tell. Once the various regional factors stabilise, the climate will be warmer in general. And the weather volatility we are seeing today will settle down. We can only hope that the new equilibrium is not too warm, because that will negatively affect life on earth."
The debate over global warming has become increasingly bitter in recent months, with environmental activists blaming top polluting nations for failing to agree deeper emissions cuts at the Copenhagen climate summit in December.
eanwhile, in the so-called "Climategate" scandal, hacked scientists' e-mails were seized on by sceptics as evidence that data was being cherry-picked to support environmentalists' arguments.
Climatologists in Russia, where President Dmitry Medvedev has proposed to allow a small increase on current greenhouse gas emissions by 2020, agree that the weather here is becoming warmer, as least in part to man-made factors.
"The abnormally cold weather we are seeing does not contradict things," said Vladimir Katsov, a climatologist at the Voyeikov Geophysical Observatory in St. Petersburg. "So-called weather neuroses increase during periods of climate change."
But the problem is in oversimplifying a complex and ill-understood process, scientists say.
"There are a lot of periodic changes - short-term, long term, mid-term. They all overlap, and all this creates climate volatility." said Danelyan.
"The anthropogenic factor is adding to this natural volatility, leading to warming. If global warming was supposed to be happening naturally, now it's happening even faster."
When overlapping with natural factors, scientists say global warming results in erratic weather. For instance, climatologists believe that the recent cold spell in Europe is caused by Arctic oscillation, with lower atmospheric pressure contributing to cold Arctic air moving further south. "Arctic oscillation is a perfect example of a natural process of weather fluctuation, not connected to external or man-made factors," said Kattsov. But there's a catch - these natural fluctuations can act to offset or exacerbate anthropogenic global warming."
This year marks the start of an expected natural cold phase that will last for a few years, Danelyan said. "But there are other factors connected to regional peculiarities that were not foreseen. Because of the shrinking Arctic ice cap, Siberian winters are becoming harsher. This is in addition to the Arctic oscillation, and it's intensifying the cold snap."
But that doesn't mean that Siberian winters will get colder in the long run. A combination of natural periodic climate change and gas emissions will mean that the average global temperature - now 14 degrees Celsius - will increase by 0.75 degrees per decade. By cutting emissions, Kattsov says, we can reduce the temperature increase by 2 degrees.
"It's widely believed that an increase in average temperatures over the next few decades would be good for Russia," said Kattsov. "But a number of factors make Russia vulnerable. The thawing of permafrost is one of those. On the one hand, a shorter heating season is economically beneficial, but we shouldn't forget the southern regions, where hotter weather and heat waves will mean more energy spent on air conditioning."
Igor Podgorny, a Greenpeace official, said any benefit to agriculture from shorter winters would be offset by erratic weather. "Scientists have talked about erratic cold spells as a result of global warming," he said. "Late cold spells will freeze crops."
But Gennady Yeliseyev, who heads Russia's Meteorology Centre, remains reluctant to draw any conclusions from January's cold snap.
"The weather is not the same thing as climate," said Yeliseyev. "Volatile weather is part of a natural process ... If we get a lot of air from the south, from Africa, then we will have abnormally warm temperatures, which we saw a few years ago when the first snow came in late January.
If we get air from the north or east we'll have cold weather. These are all normal atmospheric processes."
Declining to comment on global warming, Yeliseyev was fatalistic about scientists' ability to understand the weather. "Long-term forecasts are only about 60 per cent to 70 per cent accurate," he said.
Chinese bubble threatens Russian resurgence
Russia's fragile recovery could be threatened by the bursting of dangerous bubbles in the global economy, economists warn.
Central among these concerns is that Chinese growth, fuelled mainly by government spending, could collapse, the World Bank said in a report released last week.
"[The Chinese] are taking tentative steps to control their budget by forcing banks to curtail lending, and they had previously talked about putting caps on industrial capacity to slow it down because you have all the characteristics of a bubble developing," said Chris Weafer, chief strategist at Uralsib.
China could be the most vulnerable economy, despite being the success story of the crisis and propping up the world with cheap exports, demand for natural resources and GDP growth of 8.7 per cent last year.
Russia - thanks to its reserves and stabilisation fund - is likely to be immune from many symptoms of a double-dip crisis, but if demand does fall, Russia could be hit hard by collapsing commodity prices.
China's boom has had a positive knock-on effect in commodities-dominated Russia, which was boosted by rises in the oil price and commodities market last year.
Oil prices shot up from lows of $30 to around $80 in 2009, propping up the Russian economy and line the government's coffers but signs that the recession isn't over could send the price of oil spiralling.
"The oil forecasts are based on the view that the global economy is going to get back to the growth rates we saw midway through last decade and we simply don't think that is the case," said Neil Shearing, an economist at London-based Capital Economics.
Following the scare in Dubai and concerns about Greece's sovereign debt, emerging markets have looked most at risk, but developed economies are also facing the same demon.
The US budget deficit hit $1.4 trillion, or 11.2 per cent of GDP, in 2009 and governments are going to have to start lowering the debt burden as they emerge from the crisis, according to some economists.
Influential US economist Nouriel Roubini, who accurately predicted in advance the financial crisis of 2008, has warned that prolonged fiscal deficits could put a "chokehold on growth".
"Right now we have prevented too much slowing down [with fiscal spending] but in future this will keep recovery rates low and they could be low, even if the government has no debt," said Vladimir Bragin, chief economist at Trust Bank.
Like Greece, which is facing demands to cut budget spending, other countries in the EU are going to be forced into a no-win situation of either raising taxes or cutting spending."There is no chance of avoiding this process because if stimulus is withdrawn now, it will slow down the economy even further," said Bragin.
Europe has shown how dependent some sectors are on government stimulus after the German government withdrew its "cash-for-clunkers" scheme, causing sales across Europe to drop off rapidly."We saw this huge surge in exports, 50 per cent of which was in the vehicles sector, and that was almost exclusively owed to clash for clunkers," said Shearing.
Russia does not have the same problem as many other countries, having not borrowed externally to finance its deficit of 5.9 per cent of GDP, and could potentially spend its stabilisation fund on stimulus packages."There is little pressure to reign in fiscal policy but [Finance Minister Alexei] Kudrin seems hell-bent on it and that will be to the detriment of growth," said Shearing.
Kudrin's tough stance on the budget deficit, along with his claim that the RTS was overvalued following its 129 per cent gain last year, demonstrates his concern that the stock market is bubbling over before real economic growth returns.
Investors, however, still see Moscow's bourses as cheap compared to other markets, with 2010 price-to-earnings ratios still below 10.
"I don't agree with some of the concerns that the stock market has risen so fast it is causing a bubble, because people are looking at ... what happened in 2009 and not 2008," said Weafer.
Meanwhile, Russia's real economy remains in the doldrums. Key indicators such as GDP and property prices are not yet recovering, although the decline has been halted.
Risks remain to Russia if a second dip occurs worldwide, as earnings will slide and investors will look for safety in the dollar, taking their money away from Russia's risky assets.
"While the overall market and the economy are not showing characteristics of a bubble, the companies that have shown that pace of price appreciation on the back of the Chinese bubble are more at risk than the rest of the market," said Weafer.
Central among these concerns is that Chinese growth, fuelled mainly by government spending, could collapse, the World Bank said in a report released last week.
"[The Chinese] are taking tentative steps to control their budget by forcing banks to curtail lending, and they had previously talked about putting caps on industrial capacity to slow it down because you have all the characteristics of a bubble developing," said Chris Weafer, chief strategist at Uralsib.
China could be the most vulnerable economy, despite being the success story of the crisis and propping up the world with cheap exports, demand for natural resources and GDP growth of 8.7 per cent last year.
Russia - thanks to its reserves and stabilisation fund - is likely to be immune from many symptoms of a double-dip crisis, but if demand does fall, Russia could be hit hard by collapsing commodity prices.
China's boom has had a positive knock-on effect in commodities-dominated Russia, which was boosted by rises in the oil price and commodities market last year.
Oil prices shot up from lows of $30 to around $80 in 2009, propping up the Russian economy and line the government's coffers but signs that the recession isn't over could send the price of oil spiralling.
"The oil forecasts are based on the view that the global economy is going to get back to the growth rates we saw midway through last decade and we simply don't think that is the case," said Neil Shearing, an economist at London-based Capital Economics.
Following the scare in Dubai and concerns about Greece's sovereign debt, emerging markets have looked most at risk, but developed economies are also facing the same demon.
The US budget deficit hit $1.4 trillion, or 11.2 per cent of GDP, in 2009 and governments are going to have to start lowering the debt burden as they emerge from the crisis, according to some economists.
Influential US economist Nouriel Roubini, who accurately predicted in advance the financial crisis of 2008, has warned that prolonged fiscal deficits could put a "chokehold on growth".
"Right now we have prevented too much slowing down [with fiscal spending] but in future this will keep recovery rates low and they could be low, even if the government has no debt," said Vladimir Bragin, chief economist at Trust Bank.
Like Greece, which is facing demands to cut budget spending, other countries in the EU are going to be forced into a no-win situation of either raising taxes or cutting spending."There is no chance of avoiding this process because if stimulus is withdrawn now, it will slow down the economy even further," said Bragin.
Europe has shown how dependent some sectors are on government stimulus after the German government withdrew its "cash-for-clunkers" scheme, causing sales across Europe to drop off rapidly."We saw this huge surge in exports, 50 per cent of which was in the vehicles sector, and that was almost exclusively owed to clash for clunkers," said Shearing.
Russia does not have the same problem as many other countries, having not borrowed externally to finance its deficit of 5.9 per cent of GDP, and could potentially spend its stabilisation fund on stimulus packages."There is little pressure to reign in fiscal policy but [Finance Minister Alexei] Kudrin seems hell-bent on it and that will be to the detriment of growth," said Shearing.
Kudrin's tough stance on the budget deficit, along with his claim that the RTS was overvalued following its 129 per cent gain last year, demonstrates his concern that the stock market is bubbling over before real economic growth returns.
Investors, however, still see Moscow's bourses as cheap compared to other markets, with 2010 price-to-earnings ratios still below 10.
"I don't agree with some of the concerns that the stock market has risen so fast it is causing a bubble, because people are looking at ... what happened in 2009 and not 2008," said Weafer.
Meanwhile, Russia's real economy remains in the doldrums. Key indicators such as GDP and property prices are not yet recovering, although the decline has been halted.
Risks remain to Russia if a second dip occurs worldwide, as earnings will slide and investors will look for safety in the dollar, taking their money away from Russia's risky assets.
"While the overall market and the economy are not showing characteristics of a bubble, the companies that have shown that pace of price appreciation on the back of the Chinese bubble are more at risk than the rest of the market," said Weafer.
New Russian jet fighter to threaten Raptor?
Russia's prototype fighter aircraft of the 5th generation made its maiden flight on Friday, January 29th at Sukhoi's main facility in Komsomolsk-on-Amur in the Khabarovsk Region on the Pacific coast. The flight lasted for 45 minutes and was successful.
Sukhoi PAK FA T-50, Russia's first 5th generation stealth fighter jet has been in development since the 1990s. It was conceived as a counterpart to the American F-22 Raptor, the first 5th generation fighter aircraft and F-35 Lightning II. 5th generation fighters carry internal weapons, boast ultrasonic cruise speed, are nearly invisible to radars, have the ability to use shortened take off strips and are equipped with AI (artificial intelligence). The jet's computer should be able to analyze the environment and give the pilot the information as prompts.
The T-50's maiden flight was planned in 2008, but was later postponed to 2009. In December 2009 Russian Deputy Prime Minister Sergei Ivanov announced that the maiden flight would take place in January 2010. The 5th generation engine for the new jet was tested by the flying laboratory SU 27M on January 21st in Zhukovsky near Moscow. The press release on NPO Saturn, the engine manufacturer's, website says that the flight lasted for 45 minutes and was successful. There was no criticism of the engine's operation.
Only three jets have currently been built. The tests will take approximately 5 years. Russian Defense Ministry plans to buy the new jets from 2015. They should replace 4th generation fighter jets SU-27 and MiG-29 in the Air Forces.
T-50 is said to have bigger engine resources, more effective arms and equipment for goal detection, higher maneuverability, longer ultrasonic flight and it will be almost invisible to radio and infrared waves.
Experts say that T-50 can compete with the F-22 and F-35 jets on the international market. Konstantin Makienko from Centre for Analysis of Strategies and Technologies (CAST) said in an interview with the Russian newspaper Moskovskiy Komsomolets that some countries, particularly those in South-East Asia, will prefer them to the F-22 for military-political reasons, i.e. because they are not produced by the USA. Mr Makienko said that the only countries that are currently capable of developing 5th generation fighter jets are USA, Russia and China.
Ilya Kramnik, RIA Novosti's military commentator, thinks that the jet itself is not enough to bring Russia's military capabilities to a new level. A complex of measures and innovations is required, including weapons, communications equipment and management systems of Air Forces.
Sukhoi PAK FA T-50, Russia's first 5th generation stealth fighter jet has been in development since the 1990s. It was conceived as a counterpart to the American F-22 Raptor, the first 5th generation fighter aircraft and F-35 Lightning II. 5th generation fighters carry internal weapons, boast ultrasonic cruise speed, are nearly invisible to radars, have the ability to use shortened take off strips and are equipped with AI (artificial intelligence). The jet's computer should be able to analyze the environment and give the pilot the information as prompts.
The T-50's maiden flight was planned in 2008, but was later postponed to 2009. In December 2009 Russian Deputy Prime Minister Sergei Ivanov announced that the maiden flight would take place in January 2010. The 5th generation engine for the new jet was tested by the flying laboratory SU 27M on January 21st in Zhukovsky near Moscow. The press release on NPO Saturn, the engine manufacturer's, website says that the flight lasted for 45 minutes and was successful. There was no criticism of the engine's operation.
Only three jets have currently been built. The tests will take approximately 5 years. Russian Defense Ministry plans to buy the new jets from 2015. They should replace 4th generation fighter jets SU-27 and MiG-29 in the Air Forces.
T-50 is said to have bigger engine resources, more effective arms and equipment for goal detection, higher maneuverability, longer ultrasonic flight and it will be almost invisible to radio and infrared waves.
Experts say that T-50 can compete with the F-22 and F-35 jets on the international market. Konstantin Makienko from Centre for Analysis of Strategies and Technologies (CAST) said in an interview with the Russian newspaper Moskovskiy Komsomolets that some countries, particularly those in South-East Asia, will prefer them to the F-22 for military-political reasons, i.e. because they are not produced by the USA. Mr Makienko said that the only countries that are currently capable of developing 5th generation fighter jets are USA, Russia and China.
Ilya Kramnik, RIA Novosti's military commentator, thinks that the jet itself is not enough to bring Russia's military capabilities to a new level. A complex of measures and innovations is required, including weapons, communications equipment and management systems of Air Forces.
Friday 29 January 2010
Ukraine: Bubka Has High Hopes For Ukrainian Olympians
KIEV, Ukraine -- Ukraine's Olympic Committee chief Sergei Bubka said Wednesday he is hoping for some medals success at the Winter Games in Vancouver.
Pole vault legend Bubka added that though Ukraine's athletes were traditionally looking much stronger at the summer Games they still have chances to win Olympic medals in winter sports."In Lillehammer we won gold and bronze medals, at Nagano we could earn only one silver, while at Salt Lake City we failed to grab any," Bubka said."Four years ago in Turin we managed to clinch two bronze medals and I hope we increase our medal count at Vancouver. Looking at the situation impartially I believe we have chances to win at least one medal in biathlon."Earlier this month Ukrainian biathlete Sergei Sednev won a men's World Cup race at Anterselva, Italy to register his maiden career triumph.However Bubka refused to name any of his team's specific favourites saying that a medal in any Olympic discipline would be welcome."We decided to send 41 athletes to compete in eight events in Vancouver. And we hope that one of them can shine at the Olympics."The head of Ukraine's delegation at the 2010 Games, Nina Umanets, said skier Valentina Shevchenko was also among medal favourties, adding that Ukraine had also medal hopes in luge and freestyle.
Pole vault legend Bubka added that though Ukraine's athletes were traditionally looking much stronger at the summer Games they still have chances to win Olympic medals in winter sports."In Lillehammer we won gold and bronze medals, at Nagano we could earn only one silver, while at Salt Lake City we failed to grab any," Bubka said."Four years ago in Turin we managed to clinch two bronze medals and I hope we increase our medal count at Vancouver. Looking at the situation impartially I believe we have chances to win at least one medal in biathlon."Earlier this month Ukrainian biathlete Sergei Sednev won a men's World Cup race at Anterselva, Italy to register his maiden career triumph.However Bubka refused to name any of his team's specific favourites saying that a medal in any Olympic discipline would be welcome."We decided to send 41 athletes to compete in eight events in Vancouver. And we hope that one of them can shine at the Olympics."The head of Ukraine's delegation at the 2010 Games, Nina Umanets, said skier Valentina Shevchenko was also among medal favourties, adding that Ukraine had also medal hopes in luge and freestyle.
Ukraine Plans To Sell Up To $1 Billion In Bonds Next Quarter
KIEV, Ukraine -- Ukraine will seek to borrow $500 million to $1 billion by selling Eurobonds as early as next quarter, Economy Minister Bohdan Danylyshyn said, as Europe’s hardest hit economy looks for ways to restructure its debt.
“We have been analyzing the whole debt system,” Danylyshyn said in an interview in Kiev yesterday. “We are in talks with potential participants of the restructuring from the European Union, the U.S. and Japan.” While the country is considering different currencies for the sale, Danylyshyn said he thinks the bonds should be denominated in euros.The former Soviet state needs to get through a presidential runoff vote on Feb. 7 before turning to markets for financing, Danylyshyn said. Prime Minister and presidential candidate Yulia Timoshenko and her opponent Viktor Yanukovych have both said they’re ready to dispute the outcome of the ballot if they suspect vote rigging.That would prolong the period of political uncertainty that’s left Ukraine’s $16.4 billion International Monetary Fund loan frozen since November.“The major risk to the economy is the political risk,” Danylyshyn said. Ukraine plans to choose banks to manage the placement in the second half of March, he said.Ukraine last sold international bonds in June 2007, when it offered investors $500 million in notes at 6.385 percent. The country has $5 billion of foreign-currency bonds outstanding, including 35.1 billion yen ($388 million) of 3.2 percent securities due in December 2010, Bloomberg data show.The cost to insure against nonpayment by Ukraine using credit-default swaps is the world’s third highest, behind Venezuela and Argentina. Ukraine’s five-year default swaps have dropped to 910 basis points from a record 5,384 basis points in March. This compares to 483 basis points for Latvia and 179 basis points for Russia, Bloomberg data show.MarketsThe extra yield investors demand to own Ukraine debt instead of U.S. Treasuries fell 10 basis points to 7.47 percentage points as of 10:20 a.m. in Kiev, down from a peak of 35.93 percentage points in March, according to JPMorgan Chase & Co.’s EMBI+ Index.Acting Finance Minister Ihor Umanskyi said yesterday Ukraine is in talks to borrow abroad as early as April, and wants to sell debt that will mature in two to three years and pay a “one-digit” interest rate.The IMF last month agreed to allow Ukraine access to $2 billion more than originally agreed from its foreign reserves to help the country pay for Russian gas. The concession was made to keep the government liquid through the election without releasing loan funds.Reserve FloorEven so, the central bank has signaled it may limit access to reserves, which stood at $26.5 billion at the end of December, as policy makers try to avoid fueling inflation. Consumer prices grew an annual 12.3 percent last month, from 13.6 percent in November, the State Statistics Committee said on Jan. 6.Danylyshyn said the central bank should agree to print as much as $2.7 billion this year and next to help revive growth and resurrect the economy from 2009’s contraction, which he last month estimated at between 12 percent and 12.5 percent. Output shrank 15.9 percent in the third quarter after declining 17.8 percent in the second and a record 20.3 percent in the first three months of 2009.“This money should be spent for production, not for consumption and that would allow us to keep inflation under control,” he said. “Inflation is not a problem and there are good chances it will stay below 10 percent this year.”The winner of the presidential runoff vote will probably keep the current Cabinet in place until the next parliamentary elections, due in 2012, Danylyshyn said.Cabinet Outlook“There are no reasons for any talks about the new Cabinet in the near future,” he said. “The Cabinet is backed by the majority in the parliament.”Gross domestic product will expand between 3 percent and 3.7 percent in 2010, as prices for Ukraine’s key exports such as metals, grains and chemicals recover, Danylyshyn said. If the central bank agrees to print more money to finance industrial projects, the economy will probably grow between 5 percent and 6 percent this year and next and 7 percent in 2012, he said.“We have passed the peak of the crisis,” Danylyshyn said.
“We have been analyzing the whole debt system,” Danylyshyn said in an interview in Kiev yesterday. “We are in talks with potential participants of the restructuring from the European Union, the U.S. and Japan.” While the country is considering different currencies for the sale, Danylyshyn said he thinks the bonds should be denominated in euros.The former Soviet state needs to get through a presidential runoff vote on Feb. 7 before turning to markets for financing, Danylyshyn said. Prime Minister and presidential candidate Yulia Timoshenko and her opponent Viktor Yanukovych have both said they’re ready to dispute the outcome of the ballot if they suspect vote rigging.That would prolong the period of political uncertainty that’s left Ukraine’s $16.4 billion International Monetary Fund loan frozen since November.“The major risk to the economy is the political risk,” Danylyshyn said. Ukraine plans to choose banks to manage the placement in the second half of March, he said.Ukraine last sold international bonds in June 2007, when it offered investors $500 million in notes at 6.385 percent. The country has $5 billion of foreign-currency bonds outstanding, including 35.1 billion yen ($388 million) of 3.2 percent securities due in December 2010, Bloomberg data show.The cost to insure against nonpayment by Ukraine using credit-default swaps is the world’s third highest, behind Venezuela and Argentina. Ukraine’s five-year default swaps have dropped to 910 basis points from a record 5,384 basis points in March. This compares to 483 basis points for Latvia and 179 basis points for Russia, Bloomberg data show.MarketsThe extra yield investors demand to own Ukraine debt instead of U.S. Treasuries fell 10 basis points to 7.47 percentage points as of 10:20 a.m. in Kiev, down from a peak of 35.93 percentage points in March, according to JPMorgan Chase & Co.’s EMBI+ Index.Acting Finance Minister Ihor Umanskyi said yesterday Ukraine is in talks to borrow abroad as early as April, and wants to sell debt that will mature in two to three years and pay a “one-digit” interest rate.The IMF last month agreed to allow Ukraine access to $2 billion more than originally agreed from its foreign reserves to help the country pay for Russian gas. The concession was made to keep the government liquid through the election without releasing loan funds.Reserve FloorEven so, the central bank has signaled it may limit access to reserves, which stood at $26.5 billion at the end of December, as policy makers try to avoid fueling inflation. Consumer prices grew an annual 12.3 percent last month, from 13.6 percent in November, the State Statistics Committee said on Jan. 6.Danylyshyn said the central bank should agree to print as much as $2.7 billion this year and next to help revive growth and resurrect the economy from 2009’s contraction, which he last month estimated at between 12 percent and 12.5 percent. Output shrank 15.9 percent in the third quarter after declining 17.8 percent in the second and a record 20.3 percent in the first three months of 2009.“This money should be spent for production, not for consumption and that would allow us to keep inflation under control,” he said. “Inflation is not a problem and there are good chances it will stay below 10 percent this year.”The winner of the presidential runoff vote will probably keep the current Cabinet in place until the next parliamentary elections, due in 2012, Danylyshyn said.Cabinet Outlook“There are no reasons for any talks about the new Cabinet in the near future,” he said. “The Cabinet is backed by the majority in the parliament.”Gross domestic product will expand between 3 percent and 3.7 percent in 2010, as prices for Ukraine’s key exports such as metals, grains and chemicals recover, Danylyshyn said. If the central bank agrees to print more money to finance industrial projects, the economy will probably grow between 5 percent and 6 percent this year and next and 7 percent in 2012, he said.“We have passed the peak of the crisis,” Danylyshyn said.
US Advisers Add Polish To Kiev Candidates
KIEV, Ukraine -- The cast of characters would be familiar to followers of US election campaigns, but this presidential fight is seven time zones east of Washington and inside the former Soviet Union.
Western political and media advisers, led by big US companies, have been making inroads in Ukraine since the 2004 “Orange Revolution”, which ousted Viktor Yanukovich, the Moscow-backed president-elect.Five years later, Paul Manafort – a Republican strategist whose firm, Davis, Manafort and Freedman, advised several US presidents – has turned round Mr Yanukovich’s fortunes.Mr Manafort’s team provided strategic advice to Rinat Akhmetov, the country’s richest man, before Mr Akhmetov introduced them to Mr Yanukovich in 2005.They have now helped propel the humiliated loser of the fraud-marred 2004 election into pole position in the country’s first presidential vote since the Orange Revolution.AKPD Media and Message, founded by David Axelrod, President Barack Obama’s senior adviser, has been helping Yulia Tymoshenko, Ukraine’s prime minister, who came second in the first round of voting earlier this month. She is also being advised by John Anzalone, who worked on the Obama campaign.Mr Yanukovich and Ms Tymoshenko will contest the second round on February 7.Boris Kolesnikov, a lawmaker and confidant of Mr Yanukovich, says the Manafort team has made “a major impact” on the strategy and style of the rough-spoken former truck driver closely associated with Ukraine’s oligarchs.The PBN Company, another US group, failed to restore the popularity of Viktor Yushchenko, the outgoing president. Although Mr Yushchenko also received advice from Mark Penn, campaign strategist to Hillary Clinton, US secretary of state, his support plunged to about 5 per cent after his triumph in the 2004 Orange Revolution.With his chances of re-election slim to begin with, Mr Yushchenko finished fifth in the first round of the presidential election.The rules of engagement in Kiev are much less transparent than they are in Washington, with campaigns widely funded by shadowy slush funds. Election laws, which should control funding and ethics, are enforced weakly.But the market is attractive. Annual advisory contracts are worth between $2m and $4m (€2.8m, £2.5m), according to one US adviser working in Kiev. That is less than a crucial state campaign in the US would bring in, but enough to keep advisers busy during an election-less season back home. “It’s a rich country,” said the adviser.Myron Wasylyk, a vice-president of PBN and an American with Ukrainian roots, says it is an important market for all the big political firms. “It’s one of the largest countries in Europe and most of the largest parties are backed by big business, which is capable of financing professional campaigns.“There are also French and British advisers here, but the Americans get more attention.”Advisers say politicians are looking for solid strategic advice on domestic politics and on gaining legitimacy in the west.Another indicator of Kiev’s westward shift since the disputed 2004 presidential election is the lower profile of Moscow political advisers in this campaign.Mychailo Wynnyckyj, a sociology professor in Kiev, said: “The Russian advisers know how to organise a Putin-style campaign, where the administrative resources can be mobilised. In Ukraine, such tactics are not as effective any more.”
Western political and media advisers, led by big US companies, have been making inroads in Ukraine since the 2004 “Orange Revolution”, which ousted Viktor Yanukovich, the Moscow-backed president-elect.Five years later, Paul Manafort – a Republican strategist whose firm, Davis, Manafort and Freedman, advised several US presidents – has turned round Mr Yanukovich’s fortunes.Mr Manafort’s team provided strategic advice to Rinat Akhmetov, the country’s richest man, before Mr Akhmetov introduced them to Mr Yanukovich in 2005.They have now helped propel the humiliated loser of the fraud-marred 2004 election into pole position in the country’s first presidential vote since the Orange Revolution.AKPD Media and Message, founded by David Axelrod, President Barack Obama’s senior adviser, has been helping Yulia Tymoshenko, Ukraine’s prime minister, who came second in the first round of voting earlier this month. She is also being advised by John Anzalone, who worked on the Obama campaign.Mr Yanukovich and Ms Tymoshenko will contest the second round on February 7.Boris Kolesnikov, a lawmaker and confidant of Mr Yanukovich, says the Manafort team has made “a major impact” on the strategy and style of the rough-spoken former truck driver closely associated with Ukraine’s oligarchs.The PBN Company, another US group, failed to restore the popularity of Viktor Yushchenko, the outgoing president. Although Mr Yushchenko also received advice from Mark Penn, campaign strategist to Hillary Clinton, US secretary of state, his support plunged to about 5 per cent after his triumph in the 2004 Orange Revolution.With his chances of re-election slim to begin with, Mr Yushchenko finished fifth in the first round of the presidential election.The rules of engagement in Kiev are much less transparent than they are in Washington, with campaigns widely funded by shadowy slush funds. Election laws, which should control funding and ethics, are enforced weakly.But the market is attractive. Annual advisory contracts are worth between $2m and $4m (€2.8m, £2.5m), according to one US adviser working in Kiev. That is less than a crucial state campaign in the US would bring in, but enough to keep advisers busy during an election-less season back home. “It’s a rich country,” said the adviser.Myron Wasylyk, a vice-president of PBN and an American with Ukrainian roots, says it is an important market for all the big political firms. “It’s one of the largest countries in Europe and most of the largest parties are backed by big business, which is capable of financing professional campaigns.“There are also French and British advisers here, but the Americans get more attention.”Advisers say politicians are looking for solid strategic advice on domestic politics and on gaining legitimacy in the west.Another indicator of Kiev’s westward shift since the disputed 2004 presidential election is the lower profile of Moscow political advisers in this campaign.Mychailo Wynnyckyj, a sociology professor in Kiev, said: “The Russian advisers know how to organise a Putin-style campaign, where the administrative resources can be mobilised. In Ukraine, such tactics are not as effective any more.”
Ukraine Interior Minister Sacked
KIEV, Ukraine -- Ukraine's parliament has sacked the country's interior minister, in what could be a powerful blow to Yulia Tymoshenko, the prime minister, who is also a candidate in the upcoming presidential election.
The move was initiated by the Regions Party of Viktor Yanukovich, who faces Tymoshenko in February 7th runoff vote.The opposition party accused Lutsenko of not adhering to court decisions and most recently failing to act when the printing press producing ballot papers for the February election was attacked.The motion, at a special session of the 450-seat parliament, was narrowly passed by 231 votes on Wednesday.Tymoshenko responded in defence by saying Lutsenko would continue to head the ministry as its first deputy minister, according to Ukrainian news agencies."Today at a government meeting, Lutsenko will be named the first deputy, the acting head and he will head the interior ministry," she was quoted by local agencies.Officials of the Regions Party have said Tymoshenko, as prime minister, has the resources to influence voters and they can now say the loss of Lutsenko in his key role of interior minister has weakened her chances of doing this.Wolodymyr Fesenko, the director of Penta, a Ukrainian think tank, said the decision in parliament would not only be a blow to Tymoshenko's presidential campaign but also may safeguard an election result from future challenges."This means the Regions party has succeeded in weakening its rival in a significant part of the election process."The opposition in parliament has tried to sack Lutsenko several times, most recently last year after German police said they had detained him at a Frankfurt airport for drunk and disorderly behaviour.
The move was initiated by the Regions Party of Viktor Yanukovich, who faces Tymoshenko in February 7th runoff vote.The opposition party accused Lutsenko of not adhering to court decisions and most recently failing to act when the printing press producing ballot papers for the February election was attacked.The motion, at a special session of the 450-seat parliament, was narrowly passed by 231 votes on Wednesday.Tymoshenko responded in defence by saying Lutsenko would continue to head the ministry as its first deputy minister, according to Ukrainian news agencies."Today at a government meeting, Lutsenko will be named the first deputy, the acting head and he will head the interior ministry," she was quoted by local agencies.Officials of the Regions Party have said Tymoshenko, as prime minister, has the resources to influence voters and they can now say the loss of Lutsenko in his key role of interior minister has weakened her chances of doing this.Wolodymyr Fesenko, the director of Penta, a Ukrainian think tank, said the decision in parliament would not only be a blow to Tymoshenko's presidential campaign but also may safeguard an election result from future challenges."This means the Regions party has succeeded in weakening its rival in a significant part of the election process."The opposition in parliament has tried to sack Lutsenko several times, most recently last year after German police said they had detained him at a Frankfurt airport for drunk and disorderly behaviour.
Ukraine’s Presidential Rivals Tussle Over Minister
KIEV, Ukraine -- Supporters of Viktor Yanukovich, the front-runner in Ukraine’s hotly contested presidential election, on Thursday voted in parliament to oust the country’s top law enforcement officer, in an escalating struggle to control state institutions that could influence the outcome of the poll.
Should the February 7 runoff between Mr Yanukovich and his rival, Yulia Tymoshenko, the prime minister, fail to produce a clear winner, control of the courts, law enforcement and the central election office could be decisive.“Without a doubt, the escalating political struggle underway suggests that both sides expect the election to be very close, and so they are seeking leverage to influence a final outcome,” said Oleksandr Chernenko, head of the Committee of Voters of Ukraine, the main election watchdog.On Thursday, Yuriy Lutsenko, an ally of Ms Tymoshenko was ousted as interior minister by MPs in Mr Yanukovich’s opposition Regions Party supported by allies including the Communists and some lawmakers from Our Ukraine, the party of president Viktor Yushchenko.Minutes later, Ms Tymoshenko exploited a technicality to keep Mr Lutsenko in de facto control, appointing him the ministry’s first deputy head. She said the attempted dismissal of Mr Lutsenko, was meant to prevent law enforcement agencies from cracking down on vote-rigging probably planned by Mr Yanukovich.Mr Yanukovich lost the disputed 2004 presidential election that led to the Orange Revolution after his campaign was accused of widespread electoral fraud. Ms Tymoshenko, who co-led the revolution with Mr Yushchenko, now accuses her opponents of trying to steal an election again.But Mr Yanukovich’s backers claim that it is she who is plotting fraud and insist their leader has no reason to cheat, after having secured a 10 per cent lead over her in a first round election held on January 17.Both sides have clashed this week for control over a court that is to rule on election fraud complaints if the result is disputed, as well as a printing house that is producing election ballots.Law enforcement troops on Monday stormed into the printing house after a group of lawmakers backing Mr Yanukovich forcefully seized it. Allies of both candidates have accused each other of conspiring to print extra election ballots, allegedly for ballot stuffing.On Wednesday, lawmakers backing Mr Yanukovich criticised a judge from Kiev High Administrative Court of Appeals, which would consider a disputed election result. On Thursday, Mr Yanukovich’s camp filed a draft law in parliament to replace the judge.More than 3,000 foreign election monitors present for the first round vote, in which 16 other candidates were eliminated, called it generally democratic. Foreign observers will again be out in force in the run-off.Mr Chernenko said “it’s looking almost certain that results of the run-off will be challenged, and will be clouded amidst a sea of voter fraud allegations.”While such a scenario resembles the Orange Revolution, voter fatigue amongst most of Ukraine’s 46 million citizens is widespread and huge protests are not expected. Any dispute is more likely to be followed by court claims and counter claims leading, possibly, to a recount or a political compromise, Chernenko said.
Should the February 7 runoff between Mr Yanukovich and his rival, Yulia Tymoshenko, the prime minister, fail to produce a clear winner, control of the courts, law enforcement and the central election office could be decisive.“Without a doubt, the escalating political struggle underway suggests that both sides expect the election to be very close, and so they are seeking leverage to influence a final outcome,” said Oleksandr Chernenko, head of the Committee of Voters of Ukraine, the main election watchdog.On Thursday, Yuriy Lutsenko, an ally of Ms Tymoshenko was ousted as interior minister by MPs in Mr Yanukovich’s opposition Regions Party supported by allies including the Communists and some lawmakers from Our Ukraine, the party of president Viktor Yushchenko.Minutes later, Ms Tymoshenko exploited a technicality to keep Mr Lutsenko in de facto control, appointing him the ministry’s first deputy head. She said the attempted dismissal of Mr Lutsenko, was meant to prevent law enforcement agencies from cracking down on vote-rigging probably planned by Mr Yanukovich.Mr Yanukovich lost the disputed 2004 presidential election that led to the Orange Revolution after his campaign was accused of widespread electoral fraud. Ms Tymoshenko, who co-led the revolution with Mr Yushchenko, now accuses her opponents of trying to steal an election again.But Mr Yanukovich’s backers claim that it is she who is plotting fraud and insist their leader has no reason to cheat, after having secured a 10 per cent lead over her in a first round election held on January 17.Both sides have clashed this week for control over a court that is to rule on election fraud complaints if the result is disputed, as well as a printing house that is producing election ballots.Law enforcement troops on Monday stormed into the printing house after a group of lawmakers backing Mr Yanukovich forcefully seized it. Allies of both candidates have accused each other of conspiring to print extra election ballots, allegedly for ballot stuffing.On Wednesday, lawmakers backing Mr Yanukovich criticised a judge from Kiev High Administrative Court of Appeals, which would consider a disputed election result. On Thursday, Mr Yanukovich’s camp filed a draft law in parliament to replace the judge.More than 3,000 foreign election monitors present for the first round vote, in which 16 other candidates were eliminated, called it generally democratic. Foreign observers will again be out in force in the run-off.Mr Chernenko said “it’s looking almost certain that results of the run-off will be challenged, and will be clouded amidst a sea of voter fraud allegations.”While such a scenario resembles the Orange Revolution, voter fatigue amongst most of Ukraine’s 46 million citizens is widespread and huge protests are not expected. Any dispute is more likely to be followed by court claims and counter claims leading, possibly, to a recount or a political compromise, Chernenko said.
Tymoshenko To Win West Ukraine, Lose Presidential Vote - Survey
KIEV, Ukraine -- Ukrainian Prime Minister Yulia Tymoshenko will beat opposition leader Viktor Yanukovych in western Ukraine but will not do well enough in the east to win the presidential election, a survey said.
Strong backing for Tymoshenko in traditionally nationalist western areas of the country will not outweigh support for Yanukovych in predominantly Russian-speaking eastern and southern parts of the country, Research&Branding Group reported on Thursday.Yanukovych won the first round of Ukraine's presidential elections on January 17, and faces runner-up Tymoshenko in the second round on February 7.According to the survey, Tymoshenko is ahead in western Ukraine with the support of 60.6% of voters, but in the central Ukraine she has 42% and only 11.9% in the southeast.Yanukovych is polling at 14.2% in the west, 29.3% in central Ukraine and 69.2% in the southeast, giving him 44.9% nationwide, against 31.6% for Tymoshenko.The poll was carried out on January 19-25 among 3,108 respondents in 24 populated areas of Ukraine.Tymoshenko last week accused Yanukovych of attempting to secure victory in the second round by bribing losing candidates from the first round with the promise of seats in the parliament.Yanukovych hit back on Thursday during a visit to Simferopol by accusing the prime minister of trying to sabotage voting in areas where he is expected to do best."I am 100% confident that Tymoshenko is trying to disrupt the elections on the south-east of Ukraine," Yanukovych said in comments broadcast on Crimean TV, adding that he would impede these plans.Yanukovych won 35% of the vote in the first round, 10 percentage points more than Tymoshenko.
Strong backing for Tymoshenko in traditionally nationalist western areas of the country will not outweigh support for Yanukovych in predominantly Russian-speaking eastern and southern parts of the country, Research&Branding Group reported on Thursday.Yanukovych won the first round of Ukraine's presidential elections on January 17, and faces runner-up Tymoshenko in the second round on February 7.According to the survey, Tymoshenko is ahead in western Ukraine with the support of 60.6% of voters, but in the central Ukraine she has 42% and only 11.9% in the southeast.Yanukovych is polling at 14.2% in the west, 29.3% in central Ukraine and 69.2% in the southeast, giving him 44.9% nationwide, against 31.6% for Tymoshenko.The poll was carried out on January 19-25 among 3,108 respondents in 24 populated areas of Ukraine.Tymoshenko last week accused Yanukovych of attempting to secure victory in the second round by bribing losing candidates from the first round with the promise of seats in the parliament.Yanukovych hit back on Thursday during a visit to Simferopol by accusing the prime minister of trying to sabotage voting in areas where he is expected to do best."I am 100% confident that Tymoshenko is trying to disrupt the elections on the south-east of Ukraine," Yanukovych said in comments broadcast on Crimean TV, adding that he would impede these plans.Yanukovych won 35% of the vote in the first round, 10 percentage points more than Tymoshenko.
Taras Chornovil, Son Of Late Nationalist Hero, Changes Sides Again And Offers Inside Look At How Party Of Regions Is Run
KIEV, Ukraine -- If former Prime Minister Victor Yanukovych wins the presidency in the Feb. 7 runoff election, the political infighting and shady natural gas deals of President Victor Yushchenko’s years will continue, according to Taras Chornovil, a Ukrainian lawmaker who recently came full circle in political allegiance.
In a Kyiv Post interview, Chornovil provided rare insight into the bitter feuds waged between rival business and political clans inside the Yanukovych-led Party of Regions. Chornovil also explained his political flip-flopping, which has seen him go from being a member of Yushchenko’s political camp to Yanukovych supporter during the 2004 Orange Revolution.Now, however, Chornovil has left Yanukovych’s Party of Regions and is backing presidential contender and Prime Minister Yulia Tymoshenko, the Orange Revolution heroine."If Yanukovych wins, the country will fall apart," Chornovil said.His shifting alliances are another element of the national chaos that has seen Orange allies Yushchenko and Tymoshenko come to power in 2005 and then fall out bitterly.Tymoshenko was replaced as premier by Yanukovych in 2006, only to reclaim the job again in 2007. Yushchenko is so estranged from Tymoshenko that – while the president criticizes both candidates – he continues to undermine Tymoshenko’s presidential bid.Chornovil, who has over the years consistently been critical of Yushchenko, is no ordinary political figure in this fray. He is the son of Vyacheslav Chornovil, the legendary Rukh Party leader killed in a suspicious automobile accident on March 25, 1999. The late Chornovil led a popular nationalist movement in the 1980s and 1990s.Now his son, Taras, is saying that “a vote for Yanukovych will be tantamount to re-electing Yushchenko.” He says he knows how badly the party is run from the inside, prompting his support for Tymoshenko. But his former allies there, however, dismiss him as a political prostitute.Here is his story:Over the years, Chornovil has rubbed shoulders with the Party of Regions’ billionaire backers, including Rinat Akhmetov, and other faction leaders. One alleged Regions backer, Dmytro Firtash, was co-owner of RosUkrEnergo, the Swiss-registered “shady” intermediary that Tymoshenko removed last year as monopoly supplier of natural gas.Tymoshenko claims the interests of Firtash are represented by Serhiy Lyovochkin, former chief of staff to ex-president Leonid Kuchma and now Yanukovych’s top aide, along with former Energy Minister Yuriy Boyko.Chornovil said he’s not suddenly enamored with Tymoshenko. But he has come to believe that Yanukovych cannot control the ambitious politicians and business interests within the Party of Regions. “He [Yanukovych] is a good No. 2 guy, who needs someone to tell him what to do,” Chornovil said. “It’s just not clear yet who that person will be.”In addition, Yanukovych, 59, is growing old and weary of Ukraine’s three-ring political circus, according to Chornovil. “He is ready to turn over power,” and insiders like Lyovochkin are willing to take it, he said.Yanukovych confidant Hanna Herman called Chornovil a political prostitute. “He left us a long time ago and has little idea of what is happening in the party these days,” Herman said. “He left because he decided that he could make more money from our opponents.”Political analyst Volodymyr Fesenko said that although Chornovil may have an axe to grind against the Regions Party, he knows the party from the inside and was once close to Yanukovych. “Taras [Chornovil] has some resentment. He didn’t like his position in the party, which eventually led to his leaving, but he was once a trusted member of the team,” he said.Besides Akhmetov, Lyovochkin and others have a strong grip over Yanukovych’s ears and action. Also in the mix of this multi-party wrestling match for influence, according to Chornovil, are long-time Regions heavyweights like the Kluyev brothers, Serhiy and Andriy, as well as former tax chief Minister Mykola Azarov. Their dog fights, Chornovil claims, could doom Ukraine to another five years of chaotic executive stalemates as seen under Yushchenko.Herman insists Lyovochkin, as well as the others, are all just faction members with no more influence over Yanukovych than other Regions lawmakers: “You shouldn’t overestimate his [Lyovochkin’s] influence,” she said. She also denied any internal conflicts in the party: “In 2004, everyone said the Party of Regions will split into warring factions. But now, five years later, we are still together, still strong and ready to take the presidency.”Fesenko said that there are internal conflicts brewing in both the Yanukovych and Tymoshenko camps. But he said that Tymoshenko is better adept at containing them. In contrast, Yanukovych relies heavily on his influential backers, according to Fesenko.“If Yanukovych wins, Regions will not fall apart, but it will be like a fight between scorpions in a jar,” Fesenko said. Tymoshenko has more control over her team and faction, the analyst said: “She controls more people, has more influence over individual issues.”“Yanukovych is more of a symbol. He likes to delegate, and in this respect he looks more like Yushchenko,” Fesenko said. He said there are several competing groups within the Regions Party. “Herman and Lyovochkin rub people the wrong way,” Fesenko said. “They are too close to Yanukovych and the decision-making process.”Competing for influence with the Lyovochkin wing are politicians like Borys Kolesnikov, who is considered loyal to Regions moneybag Akhmetov. “Akhmetov still has around a third of the faction loyal to him, plus there are other independent but also significant lawmakers like the Kluyev brothers or Azarov,” Fesenko said.The financial side of the Lyovochkin group is believed to be Firtash and Boyko, the former energy minister. Chornovil said divisions within Regions really took root with the arrival of Firtash in 2006, when Yanukovych returned as premier under Yushchenko.“Before, Yanukovych kept Firtash and Boyko at arm’s length, but just before the vote for the new government after Yanukovych had been nominated as premier, we learned that Boyko’s name was on the list,” Chornovil said. “We didn’t know until the last minute.”Chornovil suspects that Yushchenko had proposed Firtash to Yanukovych. Under Yushchenko, Firtash’s RosUkrEnergo was made the monopolist importer of Russian gas – putting it in the center of a multi-billion-dollar trade. “Firtash and RosUkrEnergo will come back unless [Russian state-controlled gas company] Gazprom takes a principle position against it,” Chornovil said.Yanukovych has promised to review gas agreements made between the Kremlin and the Tymoshenko government, which did away with intermediary importers. Fesenko said the return of intermediary companies is likely, and that Firtash and Co. are likely candidates to fill the position.A Tymoshenko presidency will also entail cronyism, Chornovil said, the difference between her and Yanukovych being that, “Yulia will offer patronage to any oligarch who falls in line, but Yanukovych will pass out perks to his existing team. So, there is slightly more versatility under a Tymoshenko presidency,” he said.But the real danger of a Yanukovych victory, according to Chornovil, is that the Kremlin will be able to continue playing one side off against another. Even if Tymoshenko loses, she will still be a force to reckon with, and Moscow will give her the assistance she needs to keep Yanukovych’s team off balance, he said. “They have such levers at their disposal,” according to Chornovil.
In a Kyiv Post interview, Chornovil provided rare insight into the bitter feuds waged between rival business and political clans inside the Yanukovych-led Party of Regions. Chornovil also explained his political flip-flopping, which has seen him go from being a member of Yushchenko’s political camp to Yanukovych supporter during the 2004 Orange Revolution.Now, however, Chornovil has left Yanukovych’s Party of Regions and is backing presidential contender and Prime Minister Yulia Tymoshenko, the Orange Revolution heroine."If Yanukovych wins, the country will fall apart," Chornovil said.His shifting alliances are another element of the national chaos that has seen Orange allies Yushchenko and Tymoshenko come to power in 2005 and then fall out bitterly.Tymoshenko was replaced as premier by Yanukovych in 2006, only to reclaim the job again in 2007. Yushchenko is so estranged from Tymoshenko that – while the president criticizes both candidates – he continues to undermine Tymoshenko’s presidential bid.Chornovil, who has over the years consistently been critical of Yushchenko, is no ordinary political figure in this fray. He is the son of Vyacheslav Chornovil, the legendary Rukh Party leader killed in a suspicious automobile accident on March 25, 1999. The late Chornovil led a popular nationalist movement in the 1980s and 1990s.Now his son, Taras, is saying that “a vote for Yanukovych will be tantamount to re-electing Yushchenko.” He says he knows how badly the party is run from the inside, prompting his support for Tymoshenko. But his former allies there, however, dismiss him as a political prostitute.Here is his story:Over the years, Chornovil has rubbed shoulders with the Party of Regions’ billionaire backers, including Rinat Akhmetov, and other faction leaders. One alleged Regions backer, Dmytro Firtash, was co-owner of RosUkrEnergo, the Swiss-registered “shady” intermediary that Tymoshenko removed last year as monopoly supplier of natural gas.Tymoshenko claims the interests of Firtash are represented by Serhiy Lyovochkin, former chief of staff to ex-president Leonid Kuchma and now Yanukovych’s top aide, along with former Energy Minister Yuriy Boyko.Chornovil said he’s not suddenly enamored with Tymoshenko. But he has come to believe that Yanukovych cannot control the ambitious politicians and business interests within the Party of Regions. “He [Yanukovych] is a good No. 2 guy, who needs someone to tell him what to do,” Chornovil said. “It’s just not clear yet who that person will be.”In addition, Yanukovych, 59, is growing old and weary of Ukraine’s three-ring political circus, according to Chornovil. “He is ready to turn over power,” and insiders like Lyovochkin are willing to take it, he said.Yanukovych confidant Hanna Herman called Chornovil a political prostitute. “He left us a long time ago and has little idea of what is happening in the party these days,” Herman said. “He left because he decided that he could make more money from our opponents.”Political analyst Volodymyr Fesenko said that although Chornovil may have an axe to grind against the Regions Party, he knows the party from the inside and was once close to Yanukovych. “Taras [Chornovil] has some resentment. He didn’t like his position in the party, which eventually led to his leaving, but he was once a trusted member of the team,” he said.Besides Akhmetov, Lyovochkin and others have a strong grip over Yanukovych’s ears and action. Also in the mix of this multi-party wrestling match for influence, according to Chornovil, are long-time Regions heavyweights like the Kluyev brothers, Serhiy and Andriy, as well as former tax chief Minister Mykola Azarov. Their dog fights, Chornovil claims, could doom Ukraine to another five years of chaotic executive stalemates as seen under Yushchenko.Herman insists Lyovochkin, as well as the others, are all just faction members with no more influence over Yanukovych than other Regions lawmakers: “You shouldn’t overestimate his [Lyovochkin’s] influence,” she said. She also denied any internal conflicts in the party: “In 2004, everyone said the Party of Regions will split into warring factions. But now, five years later, we are still together, still strong and ready to take the presidency.”Fesenko said that there are internal conflicts brewing in both the Yanukovych and Tymoshenko camps. But he said that Tymoshenko is better adept at containing them. In contrast, Yanukovych relies heavily on his influential backers, according to Fesenko.“If Yanukovych wins, Regions will not fall apart, but it will be like a fight between scorpions in a jar,” Fesenko said. Tymoshenko has more control over her team and faction, the analyst said: “She controls more people, has more influence over individual issues.”“Yanukovych is more of a symbol. He likes to delegate, and in this respect he looks more like Yushchenko,” Fesenko said. He said there are several competing groups within the Regions Party. “Herman and Lyovochkin rub people the wrong way,” Fesenko said. “They are too close to Yanukovych and the decision-making process.”Competing for influence with the Lyovochkin wing are politicians like Borys Kolesnikov, who is considered loyal to Regions moneybag Akhmetov. “Akhmetov still has around a third of the faction loyal to him, plus there are other independent but also significant lawmakers like the Kluyev brothers or Azarov,” Fesenko said.The financial side of the Lyovochkin group is believed to be Firtash and Boyko, the former energy minister. Chornovil said divisions within Regions really took root with the arrival of Firtash in 2006, when Yanukovych returned as premier under Yushchenko.“Before, Yanukovych kept Firtash and Boyko at arm’s length, but just before the vote for the new government after Yanukovych had been nominated as premier, we learned that Boyko’s name was on the list,” Chornovil said. “We didn’t know until the last minute.”Chornovil suspects that Yushchenko had proposed Firtash to Yanukovych. Under Yushchenko, Firtash’s RosUkrEnergo was made the monopolist importer of Russian gas – putting it in the center of a multi-billion-dollar trade. “Firtash and RosUkrEnergo will come back unless [Russian state-controlled gas company] Gazprom takes a principle position against it,” Chornovil said.Yanukovych has promised to review gas agreements made between the Kremlin and the Tymoshenko government, which did away with intermediary importers. Fesenko said the return of intermediary companies is likely, and that Firtash and Co. are likely candidates to fill the position.A Tymoshenko presidency will also entail cronyism, Chornovil said, the difference between her and Yanukovych being that, “Yulia will offer patronage to any oligarch who falls in line, but Yanukovych will pass out perks to his existing team. So, there is slightly more versatility under a Tymoshenko presidency,” he said.But the real danger of a Yanukovych victory, according to Chornovil, is that the Kremlin will be able to continue playing one side off against another. Even if Tymoshenko loses, she will still be a force to reckon with, and Moscow will give her the assistance she needs to keep Yanukovych’s team off balance, he said. “They have such levers at their disposal,” according to Chornovil.
Monday 25 January 2010
Yushchenko's Defeat Is His Alone
Last week's presidential election in Ukraine failed to produce a clear winner, but it clearly produced an obvious loser: the incumbent President Viktor Yushchenko, the charismatic figure who, only five years ago, symbolised for many the democratic aspirations of the Orange Revolution.
The election also produced an ironic reversal of fortunes for opposition leader Viktor Yanukovich, who symbolised the old Soviet practice of transfer of power and was forced out by the Orange Revolution.Yanukovich received 35.42%, the current Prime Minister Yulia Tymoshenko won 25%, while Yushchenko received less than 6% of the votes. A second round of voting is scheduled for February 7.Some commentators wondered whether the Orange Revolution had been all for naught. This wrongly equates the Orange Revolution's democratic values with the political performance of one of its leaders. The popular rejection of Yushchenko does not mean the failure of or the rejection of the democratic foundations that the Orange Revolution put in place.Alive and kickingThe very result of the election in which the president is being rejected in favour of the opposition leader attests to the democratic nature of the process — a major accomplishment of the Orange Revolution. The US government recognised this achievement and congratulated the Ukranian people for it."We congratulate the Ukrainian people on the conduct of their January 17 presidential elections. This is another significant demonstration of the development of democracy in Ukraine," US State Department spokesman Philip Crowley said.The real failure here is not one of value but of personality; the astounding rejection by the Ukrainian people of Yushchenko is a rejection of his personal approach to democratic governance, but an affirmation of the values of democracy.First among these values is the primacy of people on whose behalf the politicians govern. If democracy is about government by the people for the people, Yushchenko failed to uphold that important value. He was isolated from the people and preoccupied with the intrigues of politics and dissipated by the demanding complexities of power.Democracy is also about the art of compromise and consensus building. Here again Yushchenko failed the democratic test. He seemed to spend more time fending off rivals and uncovering real or imagined parliamentary conspiracies, than on the business of governance. He thus made sure he had no time to build parliamentary and popular support.It is true that the fact control over the executive is divided between the president and the legislature created fertile ground for infighting and political paralysis, but Yushchenko showed no leadership in asserting the supremacy of the legislature. Instead he was busy revisiting history and making Russia look bad.The stubbornness with which he constructed and pursued his political agenda illustrates how far removed from the people Yushchenko was. High among his list of priorities was to achieve Ukrainian membership of NATO.He continued to pursue that objective even when it was made clear to him that Moscow strongly opposed Ukrainian membership of NATO. Moreover, opinion surveys showed that two-thirds of the Ukranian population opposed joining NATO.UnwiseIgnoring Moscow's security concerns in this regard only ensured the Kremlin's hostility without securing tangible assurances or support from the West. Like his friend Georgian President Mikheil Saakashvili, who imprudently challenged Russia militarily two years ago and was humiliatingly defeated, Yushchenko unwisely defined Ukrainian independence through a series of anti-Russian measures.These included, in addition to the quest for NATO membership, the downgrading of the status of the Russian language in a country where one in three people is a native speaker of Russian. Moreover, Yushchenko made the highly provocative decision to evict the Russian navy from its Black Sea base in the port of Sevastopol.Moscow responded forcefully. It terminated its energy subsidies and demanded that Ukraine pay market prices for Russian oil and gas; it even shut down its pipelines and compelled Ukraine to accept the new terms, leading many Ukrainians to hold Yushchenko responsible for the higher energy prices.Perhaps lack of experience and a naïve understanding of international relations led Georgia's Saakashvili and Ukraine's Yushchenko to believe that they could challenge their powerful neighbour to ingratiate themselves with the West and suffer no consequences.Arguably many of Yushchenko's democratic failings might have been forgiven by the Ukrainian people had he delivered on his promise of economic prosperity; many hold him responsible for mismanagement of the economy and for the grave financial crisis that paralysed economic activities and caused the country's currency to lose 50 per cent of its value. Only emergency aid from the IMF is keeping a more severe crisis at bay.Thus the Ukrainian elections raise an interesting question: Is it possible for democracy to take hold in a country even in the absence of past democratic traditions, and despite its leaders' lack of democratic experience? The answer seems to be yes, largely because commitment to democratic values and institutions transcends the limitations of history and personality.
The election also produced an ironic reversal of fortunes for opposition leader Viktor Yanukovich, who symbolised the old Soviet practice of transfer of power and was forced out by the Orange Revolution.Yanukovich received 35.42%, the current Prime Minister Yulia Tymoshenko won 25%, while Yushchenko received less than 6% of the votes. A second round of voting is scheduled for February 7.Some commentators wondered whether the Orange Revolution had been all for naught. This wrongly equates the Orange Revolution's democratic values with the political performance of one of its leaders. The popular rejection of Yushchenko does not mean the failure of or the rejection of the democratic foundations that the Orange Revolution put in place.Alive and kickingThe very result of the election in which the president is being rejected in favour of the opposition leader attests to the democratic nature of the process — a major accomplishment of the Orange Revolution. The US government recognised this achievement and congratulated the Ukranian people for it."We congratulate the Ukrainian people on the conduct of their January 17 presidential elections. This is another significant demonstration of the development of democracy in Ukraine," US State Department spokesman Philip Crowley said.The real failure here is not one of value but of personality; the astounding rejection by the Ukrainian people of Yushchenko is a rejection of his personal approach to democratic governance, but an affirmation of the values of democracy.First among these values is the primacy of people on whose behalf the politicians govern. If democracy is about government by the people for the people, Yushchenko failed to uphold that important value. He was isolated from the people and preoccupied with the intrigues of politics and dissipated by the demanding complexities of power.Democracy is also about the art of compromise and consensus building. Here again Yushchenko failed the democratic test. He seemed to spend more time fending off rivals and uncovering real or imagined parliamentary conspiracies, than on the business of governance. He thus made sure he had no time to build parliamentary and popular support.It is true that the fact control over the executive is divided between the president and the legislature created fertile ground for infighting and political paralysis, but Yushchenko showed no leadership in asserting the supremacy of the legislature. Instead he was busy revisiting history and making Russia look bad.The stubbornness with which he constructed and pursued his political agenda illustrates how far removed from the people Yushchenko was. High among his list of priorities was to achieve Ukrainian membership of NATO.He continued to pursue that objective even when it was made clear to him that Moscow strongly opposed Ukrainian membership of NATO. Moreover, opinion surveys showed that two-thirds of the Ukranian population opposed joining NATO.UnwiseIgnoring Moscow's security concerns in this regard only ensured the Kremlin's hostility without securing tangible assurances or support from the West. Like his friend Georgian President Mikheil Saakashvili, who imprudently challenged Russia militarily two years ago and was humiliatingly defeated, Yushchenko unwisely defined Ukrainian independence through a series of anti-Russian measures.These included, in addition to the quest for NATO membership, the downgrading of the status of the Russian language in a country where one in three people is a native speaker of Russian. Moreover, Yushchenko made the highly provocative decision to evict the Russian navy from its Black Sea base in the port of Sevastopol.Moscow responded forcefully. It terminated its energy subsidies and demanded that Ukraine pay market prices for Russian oil and gas; it even shut down its pipelines and compelled Ukraine to accept the new terms, leading many Ukrainians to hold Yushchenko responsible for the higher energy prices.Perhaps lack of experience and a naïve understanding of international relations led Georgia's Saakashvili and Ukraine's Yushchenko to believe that they could challenge their powerful neighbour to ingratiate themselves with the West and suffer no consequences.Arguably many of Yushchenko's democratic failings might have been forgiven by the Ukrainian people had he delivered on his promise of economic prosperity; many hold him responsible for mismanagement of the economy and for the grave financial crisis that paralysed economic activities and caused the country's currency to lose 50 per cent of its value. Only emergency aid from the IMF is keeping a more severe crisis at bay.Thus the Ukrainian elections raise an interesting question: Is it possible for democracy to take hold in a country even in the absence of past democratic traditions, and despite its leaders' lack of democratic experience? The answer seems to be yes, largely because commitment to democratic values and institutions transcends the limitations of history and personality.
Moscow Gains As Kiev Awakes From Orange Dream
KIEV, Ukraine -- The 2004 Revolution was the worst defeat of Russian strongman Vladimir Putin’s decade in power after he congratulated the victorious pro-Kremlin candidate before an uprising and court order annulled the rigged vote.
Now, in a stunning turnaround, Victor Yanukovich, the same Moscow-leaning candidate accused of rigging the elections in 2004, won the first round of presidential elections last Sunday and will be favorite in the run-off.Yanukovich’s second round opponent, Prime Minister Yulia Tymoshenko, may be an Orange veteran but she has struck a pragmatic tone on Kremlin ties and above all built up a strong relationship with the ever-important Putin.Meanwhile, the political career of the Orange Revolution’s defeated hero, President Victor Yushchenko, who dreamed of turning Ukraine away from Russia towards EU and NATO membership, appears to have sustained a terminal blow.“There are not too many differences between Yanukovich and Tymoshenko” on foreign policy, commented Nico Lange, director of the Ukraine program at the Konrad Adenauer Foundation in Kiev.“Russia can live with both of them very well”.While both Tymoshenko and Yanukovich have set joining the EU as a policy goal, neither shares Yushchenko’s enthusiasm for bringing Ukraine into NATO, a move some analysts warned risked causing a military conflict with Russia.Ksenia Lyapina, an MP close to Yushchenko, grimly acknowledged: “Moscow has won. They can be congratulated”.By contrast, Sergei Markov, a Russian MP from the pro-Putin United Russia party, could not disguise his glee. “Russia has won. The Orange Revolution and the politics of de-Russification of Ukraine have been discredited”.As well as his aim of permanently extracting Ukraine from Russia’s orbit, also in tatters is Yushchenko’s program of pushing the country to EU membership with an ambitious program of domestic reform.Many of the thousands from all over the country who in 2004 poured into Kiev’s Independence Square -- universally known as the Maidan -- to support the Yushchenko cause have been left feeling painfully betrayed.Despite their promises, the Orange leaders failed to end corruption, reform Ukraine’s creaking justice system or crack down on the oligarchs. Instead, they became embroiled in damaging internal struggles.“I don’t like the way the Orange leaders squabbled and Yushchenko betrayed the Maidan”, said Maria Petriv, 45, an accountant from the western city of Lviv.“What happened to his 10 steps for the people? What happened to putting the bandits in jail”?Yet for all the election day despondency, the Orange Revolution led to changes in Ukraine that are almost unique in the former Soviet Union.The country now boasts a vibrant media of websites, news magazines and political talk shows unafraid of touching on the most delicate of issues, in contrast to the turgid scene that existed before.In its latest report on global freedoms, Freedom House rated Ukraine as the only free country in the former Soviet Union, excluding the Baltic states. Russia remained stuck in the section for nations deemed not free.In rare praise for any election in an ex-Soviet state, Western observers led by the Organization for Security and Cooperation in Europe hailed the first round a “high quality” poll that largely met democratic standards.Ukraine also has a major opportunity in hosting the 2012 European football championships jointly with Poland, a unique chance for the country to showcase its identity and cities to the world.“There are achievements that are irreversible”, said Lange of the Adenauer Foundation. “But it’s an evolutionary process, not revolutionary. The problem with the Orange Revolution was that the expectations inside and outside Ukraine were far too high”, he said.
Now, in a stunning turnaround, Victor Yanukovich, the same Moscow-leaning candidate accused of rigging the elections in 2004, won the first round of presidential elections last Sunday and will be favorite in the run-off.Yanukovich’s second round opponent, Prime Minister Yulia Tymoshenko, may be an Orange veteran but she has struck a pragmatic tone on Kremlin ties and above all built up a strong relationship with the ever-important Putin.Meanwhile, the political career of the Orange Revolution’s defeated hero, President Victor Yushchenko, who dreamed of turning Ukraine away from Russia towards EU and NATO membership, appears to have sustained a terminal blow.“There are not too many differences between Yanukovich and Tymoshenko” on foreign policy, commented Nico Lange, director of the Ukraine program at the Konrad Adenauer Foundation in Kiev.“Russia can live with both of them very well”.While both Tymoshenko and Yanukovich have set joining the EU as a policy goal, neither shares Yushchenko’s enthusiasm for bringing Ukraine into NATO, a move some analysts warned risked causing a military conflict with Russia.Ksenia Lyapina, an MP close to Yushchenko, grimly acknowledged: “Moscow has won. They can be congratulated”.By contrast, Sergei Markov, a Russian MP from the pro-Putin United Russia party, could not disguise his glee. “Russia has won. The Orange Revolution and the politics of de-Russification of Ukraine have been discredited”.As well as his aim of permanently extracting Ukraine from Russia’s orbit, also in tatters is Yushchenko’s program of pushing the country to EU membership with an ambitious program of domestic reform.Many of the thousands from all over the country who in 2004 poured into Kiev’s Independence Square -- universally known as the Maidan -- to support the Yushchenko cause have been left feeling painfully betrayed.Despite their promises, the Orange leaders failed to end corruption, reform Ukraine’s creaking justice system or crack down on the oligarchs. Instead, they became embroiled in damaging internal struggles.“I don’t like the way the Orange leaders squabbled and Yushchenko betrayed the Maidan”, said Maria Petriv, 45, an accountant from the western city of Lviv.“What happened to his 10 steps for the people? What happened to putting the bandits in jail”?Yet for all the election day despondency, the Orange Revolution led to changes in Ukraine that are almost unique in the former Soviet Union.The country now boasts a vibrant media of websites, news magazines and political talk shows unafraid of touching on the most delicate of issues, in contrast to the turgid scene that existed before.In its latest report on global freedoms, Freedom House rated Ukraine as the only free country in the former Soviet Union, excluding the Baltic states. Russia remained stuck in the section for nations deemed not free.In rare praise for any election in an ex-Soviet state, Western observers led by the Organization for Security and Cooperation in Europe hailed the first round a “high quality” poll that largely met democratic standards.Ukraine also has a major opportunity in hosting the 2012 European football championships jointly with Poland, a unique chance for the country to showcase its identity and cities to the world.“There are achievements that are irreversible”, said Lange of the Adenauer Foundation. “But it’s an evolutionary process, not revolutionary. The problem with the Orange Revolution was that the expectations inside and outside Ukraine were far too high”, he said.
Japanese Itochu corporation wants to construct subway in Kyiv
The Itochu Corporation (Japan) wants to construct the subway in Kyiv. Ukrainian News learned this from the press service of Valerii Myronov, the deputy head of the Kyiv city state administration.Representatives of the Kyiv city state administration met with a delegation of the Japanese corporation in the building of the city state administration."It has been decided that the municipal company Kyivskyi Metropoliten [running the Kyiv subway] to provide in the near future basic data on the construction of the fourth line [Podilska-Vyhurivska] to the Japanese side," reads the statement.During the meeting, the delegation of the Itochu Corporation said they wanted to supply subway cars to the municipal company Kyivskyi Metropoliten on the terms of financial leasing.As Ukrainian News earlier reported, the Ukrainian Ministry of Transport and Communications, the Sumitomo Corporation and the Itochu Corporation (both are located in Japan) in March 2009 arranged cooperation in developing Ukrainian transport infrastructure.In particular, the Transport and Communications Ministry signed a memo with Itochu on the latter's participation in constructing railway connection between Kyiv and Boryspil (Kyiv region). The terms of cooperation will be determined by a tender.The sides have agreed to create a joint ad hoc expert group of carrying out the project.Itochu leads a corporate group of 1,090 fully integrated subsidiaries and affiliates worldwide.Itochu is comprised of seven large companies working in various sectors of the industry.
Kyiv prosecutor's office demands capital's authorities clean up after bad weather
The prosecutor's office in Kyiv has sent a submission to Kyiv City State Administration with a demand that it tackle the consequences of recent bad weather, the press service of Kyiv prosecutor's office. "The prosecutor's office of Kyiv sent a submission to Kyiv City State Administration on the administration's inactivity in tackling the consequences of recent bad weather, in particular, the non-fulfillment of works of the capital's municipal services on time, which led to difficulties in movement next to houses, injuries, increased road traffic accidents, traffic jams, and damage of electricity transmission lines," says the report.The report drew attention to the ineffective work of the operational city headquarters on preparing the city for the winter period, to the uncoordinated activity of capital's municipal enterprises and "raised an issue of bringing those who are to blame [for the situation] to account."
Fuel ministry proposes TVEL and Westinghouse participate in tender to construct nuclear fuel plant
The tender commission at the Fuel and Energy Ministry of Ukraine to select a technology supplier and partner for the construction of a nuclear fuel plant has directed proposals to participate in a tender to Russia's TVEL and U.S. Westinghouse, Fuel Minister Yuriy Prodan told journalists during his working trip to Zhytomyr region on January 25. "The commission has developed tender proposals and sent them to the companies dealing with the technology of fuel element production for our reactors," he said.Earlier, Ukrainian President Viktor Yuschenko by his order put into effect a decision of the National Security and Defence Council, due to which the fuel ministry was obliged to conduct a tender to select technology and partners for the construction of a nuclear fuel plant in Ukraine. The National Security and Defence Council in its decision partially the defined criteria for selecting a potential partner for the plant's construction.Prodan in November 2009 said that a tender to select the technology supplier for the nuclear fuel plant construction is to be conducted by April 1, 2010.As reported, Ukraine announced plans to launch a plant to produce nuclear fuel for nuclear power plants in 2015. Currently Energoatom is discussing two proposals on the building of the plant: one from Russia's TVEL and the other from Westinghouse (the United States).
Yanukovych: Ukraine turned into world's dump for various types of waste over last five years
Ukraine has turned into a world dump for various types of waste, including meat products, leader of the Regions Party and presidential candidate Victor Yanukovych has said. "Various raw materials were sent to Ukraine, very often [they are] of poor quality. To speak plainly, Ukraine has been made the world's dump, for example, for meat products," he said on the Kherson regional TV and radio company on Friday.Yanukovych, in particular, noted that in 2009 Ukraine imported 700,000 tonnes of meat from Brazil, Australia, Argentina, and the United States, which very often was of poor quality, according to experts' assessments.According to Yanukovych, livestock production is being deliberately eliminated in Ukraine."As our farmers say, soon the cow will become an exotic animal that we will see only in the zoo [in Ukraine]," Yanukovych said.At the same time, he vowed that if he were elected president, a program on the adaptation of farming to the conditions of the World Trade Organization would be launched.
Yanukovych expects radical measures from Tymoshenko aimed at disrupting election
Regions Party leader Victor Yanukovych has said he does not rule out that the public will soon witness radical measures taken by presidential candidate Yulia Tymoshenko in order to disrupt the presidential run-off vote. "They [Tymoshenko's team] are planning a lot of things. I think that we'll soon see their actions, they will be radical and they will be aimed at disrupting the election or rigging the vote," he said on Poltava television and radio company on Monday.Yanukovych said that any attempt to use falsifications with the printing of ballots would fail, "because it's impossible to [print] the number of ballots Tymoshenko would need even if all of the country's printing and publishing companies printed ballots.""They will fail to do this, because we'll oversee the voting process, and there are currently many international observers," he said.
Television debate between Yanukovych and Tymoshenko scheduled for February 1
The televised debate between Viktor Yanukovych and Yulia Tymoshenko, who will compete in the second round of Ukraine's presidential election, is scheduled for February 1, the press service of the Central Election Commission (CEC) has reported. If one of the candidates refuses to participate in the debate, the entire air time will be offered for the other candidate, the press service said.It was decided at a commission meeting on Monday that on January 28, the commission would make the draw for the order of giving air time and print space to presidential candidates for election campaigning on television, radio, and in the media, using budget funds.The law on the presidential election foresees that each of the candidates will have a chance to hold election campaigning on the First National TV Channel two times during 45 minutes and on national radio two times during 30 minutes, using budget funds.
Sunday 24 January 2010
Yushchenko: Ukraine's next president will disband rada
Outgoing Ukrainian President Victor Yushchenko believes that whoever gets elected president in the country's Feb. 7 runoff will dissolve the current parliament. Yushchenko announced this on Inter TV channel on Friday evening. "I am convinced that whoever gets elected president will dissolve the parliament," Yushchenko said, adding that he himself won't do this. He also said that he would not revoke his decision to suspend the decree on dissolving the parliament in 2009."The decree has been suspended and will remain so," the president said. Yushchenko also believes thatcooperation between Ukraine's parliament and the Constitutional Court might produce an official interpretation thatwould give a legal basis for settling the parliamentary crisis in Ukraine after the presidential election.
Cold kills 236 people in Ukraine, says Health Ministry
The number of those killed by cold weather in Ukraine since December 18, 2009 has increased to 236 people, including 52 people who froze to death at home, the Ukrainian Health Ministry's press service has reported.This is according to data as of noon on Thursday, January 21, the press service said.The largest number of people (97) died in Donetsk region. There were 29 deaths in Zaporizhia region, 17 in Kyiv region, 16 in Volyn region, 13 in Sumy region, and 10 in Khmelnytsky region. A total of 3,245 people with frostbite have asked for medical assistance, and 2,118 were hospitalized
Military Denies Plans to Boost Baltic Fleet Over Patriot Deployment
The Defense Ministry denied on Thursday that it planned to strengthen its Baltic Fleet in response to U.S. plans to deploy Patriot missiles in Poland, following a report by state-owned RIA-Novosti.
The United States is dispatching the missiles to Poland after dropping an earlier plan to deploy interceptor missiles in the NATO nation as part of an anti-missile system in Europe.
RIA-Novosti quoted an unidentified senior Navy official as saying that given plans to install Patriot missile batteries in Poland over the next five to seven years, "there may be significant changes in the approach to defining the tasks and the military capabilities of the Baltic Fleet."
The surface ship, submarine and airborne elements of the Baltic Fleet would all be strengthened, he told RIA-Novosti.
But a senior Russian Defense Ministry official told Reuters that there were no such plans to expand the Baltic Fleet because of the Patriot deployment.
"Alleged plans to expand the strength of vessels, submarines and aviation of the Baltic Fleet in connection with the planned deployment of U.S. Patriot missiles near Russian borders do not correspond with reality," he said.
Warsaw said this week that it would station the Patriot missile battery in the northern city of Morag, near Russia's Baltic exclave of Kaliningrad.
A high-ranking source in Poland's Foreign Ministry said Warsaw was not overly concerned by the initial reports.
"Let's stay calm. Such strengthening, even if it becomes true, is no direct threat to Poland," the source said.
"The Russians have known about the Patriots for at least two years. So there is no reason to react to unofficial comments."
Based in Kaliningrad and in Kronstadt near St. Petersburg, the Baltic Fleet includes surface ships, diesel-powered submarines, a military aviation wing, search and rescue vessels and land-based vessels. Its flagship is the destroyer Nastoichivy, which entered service in 1993.
Poland and the United States signed a deal in November that paves the way for the deployment of a U.S. Patriot missile battery on the U.S. ally's territory.
Poland, perturbed by what it says is Russia's more assertive foreign policy, has long complained that it hosts no NATO troops or major NATO military installations despite sending troops to help in U.S.-led missions in Iraq and Afghanistan.
Moscow has expressed concern about what it calls U.S. military encroachment and threatened to respond to any change in the military balance on its western borders with NATO nations.
President Dmitry Medvedev had previously warned that Moscow would station Iskander missiles in Kaliningrad if Washington went ahead with its original anti-missile plan. U.S. President Barack Obama's decision to revise it pleased the Kremlin.
State Holding Could Raise $4Bln in Asset Sell-Off
Russian Technologies is preparing to sell off noncore assets beginning this year, chief executive Sergei Chemezov told Vedomosti, and the state corporation will likely start with property held by AvtoVaz.
"We have an interest in having a clear ownership structure for the state corporation's holdings, allowing them to operate effectively in their core businesses and minimize costs not related to production, which will improve the companies' financial results. Revenue from the sale of noncore assets will go toward financing and developing innovative programs and new, high-tech production," Chemezov said. "In essence, this is our modernization budget."
The state has handed over 443 businesses to Russian Technologies. The holding has calculated that it has more than 40,000 real estate assets, including some 1,500 that are not involved in firms' core business. A source close to Russian Technologies' supervisory board said there was no precise estimate for the noncore assets' value, but that it was between $2 billion and $4 billion.
Assets are considered noncore if they are not involved in or set aside for a company's main business, said Igor Zavyalov, a Russian Technologies deputy chief. "We're also going to reclassify and sell ineffectively used assets, as well as shares, stakes and interests in other companies that belong to the companies but aren't related to their core business," he said.
Lists of noncore assets are being drawn up based on initial lists and analyses of companies' effectiveness, Zavyalov said.
Russian Technologies has created a department for working with noncore assets, headed by VTB's former managing director for construction, Oksana Lut.
"We'll definitely invite independent appraisers and make sure all of the work related to handling the noncore assets is entirely transparent," she said.
Decisions on what to do with the assets — including reclassification, renting or selling them, rebuilding or starting new construction — will be made after the analysis is complete. Decisions will be approved with the companies and holdings that are part of Russian Technologies, Lut said.
As an example, she offered the abundance of unused real estate held by Moskovsky Zavod Sapfir, which is part of the Optical Systems and Technologies holding.
Polina Grishina, AvtoVAZ vice president for corporate management, said the automaker also had many noncore assets, including about 90 real estate properties and roughly 30 stakes in companies. The offers will be made available on Group.avtovaz.ru ahead of auctions and tenders.
The sale will most likely begin in February, said an employee at one of AvtoVAZ's shareholders. The carmaker is planning to earn about 700 million rubles ($23.5 million) from real estate sales in 2010.
The government expected that there would be quite a few noncore assets, a government source said. "It was impossible to hand over the core assets without the noncore assets. There were a lot of federal state unitary enterprises with neglected financial reporting," the source said.
"The state corporation has been working on doing a serious inventory of assets for a year and a half, and it still isn't done," said Anton Danilov-Danilyan, a member of Russian Technologies' strategy committee. "I'm officially announcing that the state corporation did not know exactly what it was being given."
At the strategy committee's last meeting, chaired by Economic Development Minister Elvira Nabiullina, questions were raised about how to use the funds raised from noncore assets, Danilov-Danilyan said. "We reached the conclusion that first we need to clarify the strategy, and only then make use of these resources."
It was initially assumed that the noncore assets would resemble aid for Russian Technologies and that revenue from them should go toward development, said the source close to the corporation's supervisory board.
But Prime Minister Vladimir Putin's press secretary,Dmitry Peskov, said since Russian Technologies is a state corporation, it would be incorrect to compare its revenue from the sale of noncore assets to a gift from the state to a private company.
If a company owes money to the federal budget, it is legally required to use revenue from the sale of noncore assets to first pay wage arrears, taxes and debts to counterparties, and only then to use them for investment, said Yevgeny Semchenko, a court-appointed receiver.
The procedure for selling such a large volume of noncore assets is fairly complicated, he said. It can take years, and Russian Technologies has many federal state unitary enterprises whose real estate is not registered and belongs to them only for management, Semchenko said. Often the state corporation does not have a controlling stake in the companies, which means that it needs other shareholders to make a decision on selling noncore assets, he added.
There is no sense in holding on to noncore assets, so Russian Technologies' decision is a good one, said Yury Koval, a partner at BDO in Russia. "Today the market is no worse than yesterday, and tomorrow it won't be any better than today." The critical phase of the economic crisis has already passed for the real estate market, so it is already possible to make a profit — if not a huge one, said Oleg Repchenko, director of the IRN.ru analytical center. "It's another matter for a state corporation that got all of its assets for free, and for them any income is profit."
"We have an interest in having a clear ownership structure for the state corporation's holdings, allowing them to operate effectively in their core businesses and minimize costs not related to production, which will improve the companies' financial results. Revenue from the sale of noncore assets will go toward financing and developing innovative programs and new, high-tech production," Chemezov said. "In essence, this is our modernization budget."
The state has handed over 443 businesses to Russian Technologies. The holding has calculated that it has more than 40,000 real estate assets, including some 1,500 that are not involved in firms' core business. A source close to Russian Technologies' supervisory board said there was no precise estimate for the noncore assets' value, but that it was between $2 billion and $4 billion.
Assets are considered noncore if they are not involved in or set aside for a company's main business, said Igor Zavyalov, a Russian Technologies deputy chief. "We're also going to reclassify and sell ineffectively used assets, as well as shares, stakes and interests in other companies that belong to the companies but aren't related to their core business," he said.
Lists of noncore assets are being drawn up based on initial lists and analyses of companies' effectiveness, Zavyalov said.
Russian Technologies has created a department for working with noncore assets, headed by VTB's former managing director for construction, Oksana Lut.
"We'll definitely invite independent appraisers and make sure all of the work related to handling the noncore assets is entirely transparent," she said.
Decisions on what to do with the assets — including reclassification, renting or selling them, rebuilding or starting new construction — will be made after the analysis is complete. Decisions will be approved with the companies and holdings that are part of Russian Technologies, Lut said.
As an example, she offered the abundance of unused real estate held by Moskovsky Zavod Sapfir, which is part of the Optical Systems and Technologies holding.
Polina Grishina, AvtoVAZ vice president for corporate management, said the automaker also had many noncore assets, including about 90 real estate properties and roughly 30 stakes in companies. The offers will be made available on Group.avtovaz.ru ahead of auctions and tenders.
The sale will most likely begin in February, said an employee at one of AvtoVAZ's shareholders. The carmaker is planning to earn about 700 million rubles ($23.5 million) from real estate sales in 2010.
The government expected that there would be quite a few noncore assets, a government source said. "It was impossible to hand over the core assets without the noncore assets. There were a lot of federal state unitary enterprises with neglected financial reporting," the source said.
"The state corporation has been working on doing a serious inventory of assets for a year and a half, and it still isn't done," said Anton Danilov-Danilyan, a member of Russian Technologies' strategy committee. "I'm officially announcing that the state corporation did not know exactly what it was being given."
At the strategy committee's last meeting, chaired by Economic Development Minister Elvira Nabiullina, questions were raised about how to use the funds raised from noncore assets, Danilov-Danilyan said. "We reached the conclusion that first we need to clarify the strategy, and only then make use of these resources."
It was initially assumed that the noncore assets would resemble aid for Russian Technologies and that revenue from them should go toward development, said the source close to the corporation's supervisory board.
But Prime Minister Vladimir Putin's press secretary,Dmitry Peskov, said since Russian Technologies is a state corporation, it would be incorrect to compare its revenue from the sale of noncore assets to a gift from the state to a private company.
If a company owes money to the federal budget, it is legally required to use revenue from the sale of noncore assets to first pay wage arrears, taxes and debts to counterparties, and only then to use them for investment, said Yevgeny Semchenko, a court-appointed receiver.
The procedure for selling such a large volume of noncore assets is fairly complicated, he said. It can take years, and Russian Technologies has many federal state unitary enterprises whose real estate is not registered and belongs to them only for management, Semchenko said. Often the state corporation does not have a controlling stake in the companies, which means that it needs other shareholders to make a decision on selling noncore assets, he added.
There is no sense in holding on to noncore assets, so Russian Technologies' decision is a good one, said Yury Koval, a partner at BDO in Russia. "Today the market is no worse than yesterday, and tomorrow it won't be any better than today." The critical phase of the economic crisis has already passed for the real estate market, so it is already possible to make a profit — if not a huge one, said Oleg Repchenko, director of the IRN.ru analytical center. "It's another matter for a state corporation that got all of its assets for free, and for them any income is profit."
Lavrov Gives Strongest Signal Yet of New START Treaty
In Moscow's strongest public statement yet on the issue, Foreign Minister Sergei Lavrov said on Friday that an agreement will be reached soon on a landmark nuclear arms reduction treaty with the United States.
"The remaining questions, I hope, will be resolved rather promptly when the negotiations resume, and they will resume at the very beginning of February, I think," Lavrov told reporters.
His confident words indicate that an agreement is imminent between the two Cold War foes on a successor to the 1991 Strategic Arms Reduction Treaty (START 1).
President Dmitry Medvedev and his U.S. counterpart Barack Obama laid out plans last year for the new treaty between the world's two largest nuclear powers.
It is a key element of efforts to mend relations between Washington and Moscow, which plunged to post-Cold War lows after Russia's brief war with pro-Western Georgia in 2008.
Negotiators were unable to reach agreement by Dec. 5, when START I expired, and official negotiations in Geneva have not resumed after a break over the holiday period. A top U.S. official had indicated earlier this month that they would resume on Jan. 25.
But high-level consultations on the treaty resumed last week, and two top U.S. officials, national security adviser James Jones and chairman of the Joint Chiefs of Staff, Adm. Mike Mullen, traveled to Moscow this week for talks.
Lavrov said Jones and his Russian counterpart were expected to give the negotiators instructions that would help reach compromises. He did not say what remains in dispute or precisely when a final agreement might be reached.
Both sides have said they want the treaty signed in time to set an example for a global conference in May that they hope will bolster efforts to combat nuclear weapons proliferation.
The U.S. ambassador to Russia, John Beyrle, suggested on Wednesday that agreement could be reached in "the very near future."
Such an agreement must be ratified by lawmakers in both countries to take effect.
In July, Obama and Medvedev agreed that the new treaty should cut the number of nuclear warheads on each side to between 1,500 and 1,675 and the number of delivery vehicles to between 500 and 1,100.
Officials have said recently that issues still being negotiated included monitoring and verification measures
"The remaining questions, I hope, will be resolved rather promptly when the negotiations resume, and they will resume at the very beginning of February, I think," Lavrov told reporters.
His confident words indicate that an agreement is imminent between the two Cold War foes on a successor to the 1991 Strategic Arms Reduction Treaty (START 1).
President Dmitry Medvedev and his U.S. counterpart Barack Obama laid out plans last year for the new treaty between the world's two largest nuclear powers.
It is a key element of efforts to mend relations between Washington and Moscow, which plunged to post-Cold War lows after Russia's brief war with pro-Western Georgia in 2008.
Negotiators were unable to reach agreement by Dec. 5, when START I expired, and official negotiations in Geneva have not resumed after a break over the holiday period. A top U.S. official had indicated earlier this month that they would resume on Jan. 25.
But high-level consultations on the treaty resumed last week, and two top U.S. officials, national security adviser James Jones and chairman of the Joint Chiefs of Staff, Adm. Mike Mullen, traveled to Moscow this week for talks.
Lavrov said Jones and his Russian counterpart were expected to give the negotiators instructions that would help reach compromises. He did not say what remains in dispute or precisely when a final agreement might be reached.
Both sides have said they want the treaty signed in time to set an example for a global conference in May that they hope will bolster efforts to combat nuclear weapons proliferation.
The U.S. ambassador to Russia, John Beyrle, suggested on Wednesday that agreement could be reached in "the very near future."
Such an agreement must be ratified by lawmakers in both countries to take effect.
In July, Obama and Medvedev agreed that the new treaty should cut the number of nuclear warheads on each side to between 1,500 and 1,675 and the number of delivery vehicles to between 500 and 1,100.
Officials have said recently that issues still being negotiated included monitoring and verification measures
Abramovich Stocks Up on Art for Luxury Yacht
Russian billionaire Roman Abramovich bought 35 contemporary artworks for his luxury yacht, Eclipse, an art dealer revealed.
The purchases came through Terence Disdale, who designs the interiors of Abramovich’s yachts, according to Joseph Clarke, director of Millennium, which has its gallery in southwest England.
Abramovich, owner of the Chelsea soccer club, doesn’t talk about his art purchases. His collecting, with his partner Dasha Zhukova, has boosted prices at some sales — and renewed buying could help market confidence, dealers said.
“Among the major collectors, he’s on the quieter side,” London-based art and design dealer Kenny Schachter said. “Any time a collector with that magnitude of resources enters the market, it’s good news for everyone.”
The Millennium transactions are so far worth 200,000 pounds ($326,000), bought over six months, Clarke said. Terence Disdale Design Ltd. does not comment on specific artworks bought for projects, said Fiona Diamond, the company’s public-relations spokeswoman. When contacted by Bloomberg News, John Mann, head of public relations at Millhouse LLC, who responds to press enquiries on behalf of Abramovich, declined to comment.
Abramovich, whose wealth was valued at 7 billion pounds by the Sunday Times’ Rich List 2009, owns three other superyachts. The 116-meter “Pelorus,” the previous pride of his fleet, is listed among commissions on Disdale Design’s web site.
Abramovich was the buyer of Francis Bacon’s 1976 “Triptych” for $86.3 million and Lucian Freud’s 1995 “Benefits Supervisor Sleeping” for $33.6 million at auctions in New York in May 2008, dealers said. The prices set records for a postwar work of art and a work by a living artist, respectively.
Abramovich’s 13,000-metric ton yacht Eclipse is about 560 feet long and is the world’s biggest private yacht. It was built by Blohm + Voss of Hamburg, launched on June 12, 2009, and is due to be delivered this year. The yacht is protected by armor plating and a missile-defense system. Snooping snappers will be deterred by an anti-paparazzi laser shield that fires bolts of light at cameras to obliterate photographs.
The Bermuda-registered vessel, with a full-time crew of 70, boasts two helicopter pads, 11 guest cabins, a disco hall and at least one minisubmarine, the Live Yachting web site said. The total cost of Eclipse, which has taken four years to build, isn’t known, Live Yachting said. The final bill may approach $1.2 billion, Charlie Sorrel said on Wired.com in September 2009.
Sculptures by Millennium’s Simon Allen — who produces gilded wall reliefs resembling oversized jewelry, priced at 5,000 pounds to 18,000 pounds — and minimalist abstract paintings by Trevor Bell, which cost as much as 25,000 pounds, will displayed on the yacht, Clarke said.
Abramovich’s purchases illustrate how luxury interior-design projects have thrown a lifeline to galleries representing decorative artists who aren’t regarded as “cutting edge.”
“There’s a lot of activity at the moment for stylish, affordable pieces that appeal to interior designers,” said Anthony McNerney, the London-based head of the contemporary art department at Phillips de Pury & Co. “Often they aren’t the sort of things you’d see in our auctions.”
London designer Oliver Laws has selected further pieces from Millennium (valued at 200,000 pounds by Clarke) for the refurbishment of the Connaught hotel in Mayfair, said Paula Fitzherbert, head of public relations at the Maybourne Hotel Group.
“These works aren’t trendy,” said Clarke, whose gallery in St. Ives, Cornwall, shows a stable of Cornish-based painters and sculptors. “They’re made by the artists themselves, not assistants. No one’s trying to pull the wool over anyone’s eyes. They’re coming from a place with a long artistic tradition.”
Ben Nicholson, Barbara Hepworth, Bernard Leach and Patrick Heron were among artists who settled in St. Ives last century. The Tate Gallery now has a branch in the port.
The purchases came through Terence Disdale, who designs the interiors of Abramovich’s yachts, according to Joseph Clarke, director of Millennium, which has its gallery in southwest England.
Abramovich, owner of the Chelsea soccer club, doesn’t talk about his art purchases. His collecting, with his partner Dasha Zhukova, has boosted prices at some sales — and renewed buying could help market confidence, dealers said.
“Among the major collectors, he’s on the quieter side,” London-based art and design dealer Kenny Schachter said. “Any time a collector with that magnitude of resources enters the market, it’s good news for everyone.”
The Millennium transactions are so far worth 200,000 pounds ($326,000), bought over six months, Clarke said. Terence Disdale Design Ltd. does not comment on specific artworks bought for projects, said Fiona Diamond, the company’s public-relations spokeswoman. When contacted by Bloomberg News, John Mann, head of public relations at Millhouse LLC, who responds to press enquiries on behalf of Abramovich, declined to comment.
Abramovich, whose wealth was valued at 7 billion pounds by the Sunday Times’ Rich List 2009, owns three other superyachts. The 116-meter “Pelorus,” the previous pride of his fleet, is listed among commissions on Disdale Design’s web site.
Abramovich was the buyer of Francis Bacon’s 1976 “Triptych” for $86.3 million and Lucian Freud’s 1995 “Benefits Supervisor Sleeping” for $33.6 million at auctions in New York in May 2008, dealers said. The prices set records for a postwar work of art and a work by a living artist, respectively.
Abramovich’s 13,000-metric ton yacht Eclipse is about 560 feet long and is the world’s biggest private yacht. It was built by Blohm + Voss of Hamburg, launched on June 12, 2009, and is due to be delivered this year. The yacht is protected by armor plating and a missile-defense system. Snooping snappers will be deterred by an anti-paparazzi laser shield that fires bolts of light at cameras to obliterate photographs.
The Bermuda-registered vessel, with a full-time crew of 70, boasts two helicopter pads, 11 guest cabins, a disco hall and at least one minisubmarine, the Live Yachting web site said. The total cost of Eclipse, which has taken four years to build, isn’t known, Live Yachting said. The final bill may approach $1.2 billion, Charlie Sorrel said on Wired.com in September 2009.
Sculptures by Millennium’s Simon Allen — who produces gilded wall reliefs resembling oversized jewelry, priced at 5,000 pounds to 18,000 pounds — and minimalist abstract paintings by Trevor Bell, which cost as much as 25,000 pounds, will displayed on the yacht, Clarke said.
Abramovich’s purchases illustrate how luxury interior-design projects have thrown a lifeline to galleries representing decorative artists who aren’t regarded as “cutting edge.”
“There’s a lot of activity at the moment for stylish, affordable pieces that appeal to interior designers,” said Anthony McNerney, the London-based head of the contemporary art department at Phillips de Pury & Co. “Often they aren’t the sort of things you’d see in our auctions.”
London designer Oliver Laws has selected further pieces from Millennium (valued at 200,000 pounds by Clarke) for the refurbishment of the Connaught hotel in Mayfair, said Paula Fitzherbert, head of public relations at the Maybourne Hotel Group.
“These works aren’t trendy,” said Clarke, whose gallery in St. Ives, Cornwall, shows a stable of Cornish-based painters and sculptors. “They’re made by the artists themselves, not assistants. No one’s trying to pull the wool over anyone’s eyes. They’re coming from a place with a long artistic tradition.”
Ben Nicholson, Barbara Hepworth, Bernard Leach and Patrick Heron were among artists who settled in St. Ives last century. The Tate Gallery now has a branch in the port.
Constitutional Court Moves Toward Precedent-Based System of Law
The Constitutional Court has decided that the Supreme Arbitration Court has the right to set legal guidelines, not just follow the law — a move that lawyers say is the first step toward a precedent-based system of law.
The Constitutional Court has found that the Supreme Arbitration Court's right to review a decision that has already come into force poses no contradictions to the fundamental law. This conclusion follows from the court decision (a copy of which was obtained by Vedomosti) announced Friday on claims filed by companies Karbolit, Respirator, Mikroprovod and Bereg.
The firms had petitioned the court to declare unconstitutional a number of articles in the Arbitration Procedural Code, which the Supreme Arbitration Court relies on to review decisions that have already gone into force but which face new circumstances. This mechanism received practical support in February 2008, when the presidium of the Supreme Arbitration Court held that decisions made by the presidium in other cases could count as such a circumstance.
At the time, this was perceived as revolutionary: Even lower courts didn't always take into account positions in the decisions of the presidium, said Dmitry Stepanov, a partner at Egorov, Puginsky, Afanasiyev & Partners.
The plaintiffs to the Constitutional Court were among the first victims of the new development. Each of the companies had won lawsuits against Mosenergosbyt for charging too much for electricity. The electricity trader took advantage of the presidium's decision in a similar case and won reversals on all suits for a total of 42.8 million rubles ($1.4 million).
The Constitutional Court's recognition of such a right for the Supreme Arbitration Court is a significant step, Stepanov said. For practicing lawyers, the existence of a de facto precedent system has been recognized for some time, but academic lawyers and the Constitutional Court have urged judges that it is necessary to ignore the rulings of higher courts if they diverge from the law, he said.
Now it recognizes that, despite all the stipulations, the Supreme Arbitration Court can review decisions that have already gone into force if they diverge with established practice, said Galina Akchurina, head of practice at FBK-Prava.
In practice, an even stricter system of dependence on higher courts has developed, said Tamara Morshchakova, a retired Constitutional Court judge. But the fact that judges are afraid of being dismissed if their decisions are overturned doesn't make it a system of precedent law. On the contrary, in the Constitutional Court's finding it specifically held that courts must nevertheless follow the requirements of the law, she said. If the presidium of the Supreme Arbitration Court diverges from the law, then it is necessary to make decision on the grounds of the latter.
Though the Constitutional Court didn't forbid the Supreme Arbitration Court from reviewing decisions already in force, it did try to make it as difficult as possible, said Denis Shchekin, a partner at Pepeliayev, Goltsblat & Partners. The decisions of the presidium will have retroactive authority only when it is explicitly indicated.
There must be a stipulation that the legal positions in the decision can be used for reviewing decisions already in force, Stepanov said. The Supreme Arbitration Court has never made such stipulations before, so earlier decisions, according the logic of the Constitutional Court, cannot be used to review a case. But that doesn't mean that the court won't find a way to get around this requirement by issuing other interpretations, he said.
The chairman of the Supreme Arbitration Court declined to comment, saying the Constitutional Court's ruling had not yet reached the court.
The Constitutional Court's ruling also limited the number of cases that could be reviewed. Among such cases are all disputes with the state (administrative, tax-related, etc.), and reviews of civil cases are possible only for defending the interests of the general public or the obviously weaker side, the Constitutional Court held.
It is also not permitted to attach retroactive power to the interpretation of legal norms that would weaken the position of someone involved in a dispute with the state.
An observation about the prohibition against weakening the position of a company in a dispute with the company is also apropos, said Eduard Godzdanker, head of the legal department of TNK-BP Management. Samotlorneftegaz, a subsidiary of TNK-BP, filed a similar complaint in the Constitutional Court. The company is involved in a dispute with the tax service over whether or not the value-added tax for services can be refunded by registering certificates of origin: At first the courts supported the company, but later the Supreme Arbitration Court allowed the case to be reconsidered, agreeing to the legal position of one of the decisions of the presidium. It turned out that the company's position was worsened by these reviews, he said.
There was a similar case concerning the declaration of company expenditures in a later period, Akchurina said. Before 2008, practice was in favor of the company, but that changed, and courts began review cases that had already concluded in favor of the tax service.
Firms now have a chance to use the decision of the Constitutional Court as a newly developed circumstance; the court has repeatedly said that this can be done, Morshchakova said.
The firms in question hope for a review of their case as well. The Constitutional Court indicated in the decision that it was possible for the plaintiffs' cases to be reviewed. But it is still too early to draw conclusions before receiving the full text of the decision, said Tatyana Kamenskaya, managing partner at Kamenskaya and Partners, which represents the interests of Respirator and Mikroprovod in the Constitutional Court.
The Constitutional Court has found that the Supreme Arbitration Court's right to review a decision that has already come into force poses no contradictions to the fundamental law. This conclusion follows from the court decision (a copy of which was obtained by Vedomosti) announced Friday on claims filed by companies Karbolit, Respirator, Mikroprovod and Bereg.
The firms had petitioned the court to declare unconstitutional a number of articles in the Arbitration Procedural Code, which the Supreme Arbitration Court relies on to review decisions that have already gone into force but which face new circumstances. This mechanism received practical support in February 2008, when the presidium of the Supreme Arbitration Court held that decisions made by the presidium in other cases could count as such a circumstance.
At the time, this was perceived as revolutionary: Even lower courts didn't always take into account positions in the decisions of the presidium, said Dmitry Stepanov, a partner at Egorov, Puginsky, Afanasiyev & Partners.
The plaintiffs to the Constitutional Court were among the first victims of the new development. Each of the companies had won lawsuits against Mosenergosbyt for charging too much for electricity. The electricity trader took advantage of the presidium's decision in a similar case and won reversals on all suits for a total of 42.8 million rubles ($1.4 million).
The Constitutional Court's recognition of such a right for the Supreme Arbitration Court is a significant step, Stepanov said. For practicing lawyers, the existence of a de facto precedent system has been recognized for some time, but academic lawyers and the Constitutional Court have urged judges that it is necessary to ignore the rulings of higher courts if they diverge from the law, he said.
Now it recognizes that, despite all the stipulations, the Supreme Arbitration Court can review decisions that have already gone into force if they diverge with established practice, said Galina Akchurina, head of practice at FBK-Prava.
In practice, an even stricter system of dependence on higher courts has developed, said Tamara Morshchakova, a retired Constitutional Court judge. But the fact that judges are afraid of being dismissed if their decisions are overturned doesn't make it a system of precedent law. On the contrary, in the Constitutional Court's finding it specifically held that courts must nevertheless follow the requirements of the law, she said. If the presidium of the Supreme Arbitration Court diverges from the law, then it is necessary to make decision on the grounds of the latter.
Though the Constitutional Court didn't forbid the Supreme Arbitration Court from reviewing decisions already in force, it did try to make it as difficult as possible, said Denis Shchekin, a partner at Pepeliayev, Goltsblat & Partners. The decisions of the presidium will have retroactive authority only when it is explicitly indicated.
There must be a stipulation that the legal positions in the decision can be used for reviewing decisions already in force, Stepanov said. The Supreme Arbitration Court has never made such stipulations before, so earlier decisions, according the logic of the Constitutional Court, cannot be used to review a case. But that doesn't mean that the court won't find a way to get around this requirement by issuing other interpretations, he said.
The chairman of the Supreme Arbitration Court declined to comment, saying the Constitutional Court's ruling had not yet reached the court.
The Constitutional Court's ruling also limited the number of cases that could be reviewed. Among such cases are all disputes with the state (administrative, tax-related, etc.), and reviews of civil cases are possible only for defending the interests of the general public or the obviously weaker side, the Constitutional Court held.
It is also not permitted to attach retroactive power to the interpretation of legal norms that would weaken the position of someone involved in a dispute with the state.
An observation about the prohibition against weakening the position of a company in a dispute with the company is also apropos, said Eduard Godzdanker, head of the legal department of TNK-BP Management. Samotlorneftegaz, a subsidiary of TNK-BP, filed a similar complaint in the Constitutional Court. The company is involved in a dispute with the tax service over whether or not the value-added tax for services can be refunded by registering certificates of origin: At first the courts supported the company, but later the Supreme Arbitration Court allowed the case to be reconsidered, agreeing to the legal position of one of the decisions of the presidium. It turned out that the company's position was worsened by these reviews, he said.
There was a similar case concerning the declaration of company expenditures in a later period, Akchurina said. Before 2008, practice was in favor of the company, but that changed, and courts began review cases that had already concluded in favor of the tax service.
Firms now have a chance to use the decision of the Constitutional Court as a newly developed circumstance; the court has repeatedly said that this can be done, Morshchakova said.
The firms in question hope for a review of their case as well. The Constitutional Court indicated in the decision that it was possible for the plaintiffs' cases to be reviewed. But it is still too early to draw conclusions before receiving the full text of the decision, said Tatyana Kamenskaya, managing partner at Kamenskaya and Partners, which represents the interests of Respirator and Mikroprovod in the Constitutional Court.
Exxon Caught in Deja Vu Dispute
The government rejected a proposal by Exxon Mobil, the world's largest company by market value, to invest $3.5 billion this year in the Sakhalin offshore fields, putting the oil producer's plans at risk again, Sakhalin Governor Alexander Khoroshavin said Thursday.
Higher expenses in production sharing agreements — such as Sakhalin-1, which is operated by an Exxon-led consortium — would delay the government in receiving its share of revenues until the companies that develop fields recoup their investment.
"We believe it is an inflated amount," Khoroshavin told reporters after a Cabinet session Thursday that discussed unrelated issues. "The consortium can't substantiate it for us, this $3.5 billion."
Exxon said it had to suspend work on a Sakhalin field for several weeks at the start of last year as it argued with the government about the 2009 investment budget for the project that it co-owns with Rosneft, Japan's Sodeco and India's ONGK Videsh. The consortium has been producing oil at a field off Sakhalin for a few years and is investing in another field.
An ExxonMobil spokesman said the company was working to respond to the government's concerns and hoped to return to discussions on the matter in the spring.
Khoroshavin said Exxon would submit a revised spending plan to the government in March.
Khoroshavin's spokesman Alexei Bayandin said Sakhalin-1 was not going to suspend work as negotiations go on this year. The consortium can continue to operate because it has an approved original budget of about $1 billion, he said.
The spending dispute has been recurring as Gazprom seeks to buy all future gas from Sakhalin-1 to prevent it from flowing to China, which would create competition for Gazprom's own plans to sell gas on that market. Exxon has said the project would sell gas to the highest bidder.
Gazprom also needs the Sakhalin-1 gas to fill a pipeline that it is constructing from the island to Vladivostok to supply clean fuel in time for the Asia-Pacific Economic Cooperation forum in the port city in 2012.
"Much will depend on Sakhalin-1, that is, whether Gazprom can buy their gas for the pipeline," Khoroshavin said, referring to the prospect of fully loading the pipeline by 2012.
Khoroshavin flew from Sakhalin to participate in the Cabinet session because it discussed additional measures to help the victims of a 2007 earthquake in the region.
The Cabinet also approved a new federal program, scheduled to run through 2020 and worth 110.4 billion rubles ($3.7 billion) in federal funds, to develop a new generation of nuclear power technology, Rosatom chief Sergei Kiriyenko said after the meeting.
Under the program, researchers will choose from three types of reactors, cooled by sodium, lead or lead-bismuth, Kiriyenko said.
Kiriyenko sounded celebratory that the government agreed to fund the program despite the economic woes, but he said the investment amount was just one-fifth to one-seventh of what competing countries, such as Germany and France, invested in nuclear power technology. Russia has a chance to stay competitive because Communist governments spent as much as $10 billion on such research, he said.
"We have a lead because huge money was invested in the Soviet time," he said.
The Cabinet also discussed canceling payments for the use of state geological data for natural resources exploration. Such payments have earned 500 million rubles ($16.8 million) for the state budget over the past three years.
Prime Minister Vladimir Putin said he supported the measure, which could encourage private companies to develop small deposits.
Higher expenses in production sharing agreements — such as Sakhalin-1, which is operated by an Exxon-led consortium — would delay the government in receiving its share of revenues until the companies that develop fields recoup their investment.
"We believe it is an inflated amount," Khoroshavin told reporters after a Cabinet session Thursday that discussed unrelated issues. "The consortium can't substantiate it for us, this $3.5 billion."
Exxon said it had to suspend work on a Sakhalin field for several weeks at the start of last year as it argued with the government about the 2009 investment budget for the project that it co-owns with Rosneft, Japan's Sodeco and India's ONGK Videsh. The consortium has been producing oil at a field off Sakhalin for a few years and is investing in another field.
An ExxonMobil spokesman said the company was working to respond to the government's concerns and hoped to return to discussions on the matter in the spring.
Khoroshavin said Exxon would submit a revised spending plan to the government in March.
Khoroshavin's spokesman Alexei Bayandin said Sakhalin-1 was not going to suspend work as negotiations go on this year. The consortium can continue to operate because it has an approved original budget of about $1 billion, he said.
The spending dispute has been recurring as Gazprom seeks to buy all future gas from Sakhalin-1 to prevent it from flowing to China, which would create competition for Gazprom's own plans to sell gas on that market. Exxon has said the project would sell gas to the highest bidder.
Gazprom also needs the Sakhalin-1 gas to fill a pipeline that it is constructing from the island to Vladivostok to supply clean fuel in time for the Asia-Pacific Economic Cooperation forum in the port city in 2012.
"Much will depend on Sakhalin-1, that is, whether Gazprom can buy their gas for the pipeline," Khoroshavin said, referring to the prospect of fully loading the pipeline by 2012.
Khoroshavin flew from Sakhalin to participate in the Cabinet session because it discussed additional measures to help the victims of a 2007 earthquake in the region.
The Cabinet also approved a new federal program, scheduled to run through 2020 and worth 110.4 billion rubles ($3.7 billion) in federal funds, to develop a new generation of nuclear power technology, Rosatom chief Sergei Kiriyenko said after the meeting.
Under the program, researchers will choose from three types of reactors, cooled by sodium, lead or lead-bismuth, Kiriyenko said.
Kiriyenko sounded celebratory that the government agreed to fund the program despite the economic woes, but he said the investment amount was just one-fifth to one-seventh of what competing countries, such as Germany and France, invested in nuclear power technology. Russia has a chance to stay competitive because Communist governments spent as much as $10 billion on such research, he said.
"We have a lead because huge money was invested in the Soviet time," he said.
The Cabinet also discussed canceling payments for the use of state geological data for natural resources exploration. Such payments have earned 500 million rubles ($16.8 million) for the state budget over the past three years.
Prime Minister Vladimir Putin said he supported the measure, which could encourage private companies to develop small deposits.
Bulldozers Raze Mansions After Night Raid
Bulldozers on Thursday began razing a neighborhood of mansions perched on a riverbank in Moscow's western outskirts that City Hall says was constructed illegally. Earlier, riot police stormed the Rechnik neighborhood at about 4 a.m. and detained 15 residents who had braved freezing temperatures of minus 20 degrees Celsius to guard their homes. Opposition activists criticized the nighttime raid as a blatant violation of human rights, but city authorities trumpeted the action as proof that it was clamping down on corruption. The detainees were released later in the day, but at least three were hospitalized with injuries that they received during nighttime scuffles with police, RIA-Novosti reported. By Thursday evening, an excavator had destroyed three houses, while special forces commandos dressed in black helmets and bulletproof vests kept at bay protesters, onlookers and journalists. At least one female resident said she would resist eviction by any means, Interfax reported. Yury Alpatov, prefect for the city's Western Administrative District, said he had court orders to destroy 20 homes. The police force denied reports that its OMON riot police had taken part in the raid. "No OMON forces were in Rechnik, but there were special forces from the court marshals to enforce a court decision," police spokeswoman Zhanna Ozhimina said, Interfax reported. But in an indication that the police were involved, First Deputy Interior Minister Mikhail Sukhodolsky ordered an internal investigation into the police action. Court marshals report to the Justice Ministry. The escalation comes after years of bitter conflict between the city and residents of the Rechnik and Ogorodnik communities who over the past decade built sizable homes in a scenic park along the Moscow River. City authorities say construction in the environmentally protected area is illegal. The homeowners, who reportedly include lawmakers, governors, war veterans and celebrities, received public support from a motley bunch of opposition groups, ranging from the liberal Yabloko party to the ultranationalist Slavic Union. Analysts said the conflict was exceptional in that it has provoked clashes between those who claim that the state violates the law and authorities bent on fighting legal nihilism. Yabloko leader Sergei Mitrokhin condemned the crackdown. "Residents were evicted in the dark night and coldest of winter. They have not been shown documents to prove that the destruction is legal. The authorities are violating the law," he told The Moscow Times, speaking by telephone from one of the houses due to be razed. Mitrokhin said the legal situation was not as clear as authorities claimed. "There are various court decisions — some support City Hall, others the residents," he said. Lev Ponomaryov, a veteran campaigner and head of the For Human Rights movement, called the action a grave human rights violation. "Such decisions must be carried out in daytime and not at night. Action under the cover of night is more typical for bandits," he said, Interfax reported. The owner of one the houses destroyed Thursday tried in vain to fend off destruction by refusing to leave her home, shouting from the balcony that the razing was illegal, even as the excavator was starting to tear down the building, Channel One reported. The woman, Angelina Abramova, said she had not received any documents that would justify the razing, Moskovsky Komsomolets reported on its web site Thursday. But local officials said residents had been given six days' notice, RIA-Novosti reported. Anton Belyakov, a State Duma deputy for A Just Russia, spoke with Abramova at the scene and offered his support, the Grani.ru web site reported. Liberal Democrat Party leader Vladimir Zhirinovsky also traveled to the neighborhood, where he called on the government and the Interior Ministry to intervene. Communist lawmakers also criticized the destruction. The General Prosecutor's Office said it had not received any complaints about the destruction Thursday. City authorities defended the crackdown, pointing to numerous court decisions since Mayor Yury Luzhkov announced in May 2007 that the homes would be destroyed. Oleg Mitvol, who was a top federal environmental inspector in 2007, said at the time that by law, "only apple and pear trees can grow there." Alpatov, the local prefect, said the destruction was fully sanctioned by courts. "The law is the same for everyone and must be obeyed," he said, Interfax reported. He added that he thought the media were overreacting because many of the buildings were expensive. "We take this as routine action. We do not agree with those who give unnecessary political weight to this," he said. United Russia, the governing party that commands a two-thirds majority in the State Duma, backed City Hall. "I used to support these people, but it is not right to say that they are victims. It was certainly clear that these houses were illegal and those living there thought that total corruption and lawlessness would solve their problems," Alexander Khinstein, a prominent journalist and State Duma deputy, said in a statement published on the party's web site. Sergei Goncharov, a United Russia deputy in the City Duma, said the razing showed that corruption was being rooted out. "Some believe that you can get everything for money — but that is really our country's curse," he said. Alexei Mukhin, an analyst with the Center for Political Information, said the situation was paradoxical. "The government provokes social protests by insisting on legality, and now those who regularly doubt its legality rush to use the protests to their own ends," he said.
Fallen Oil Magnate's Fortunes on the Rise
Billionaire Mikhail Gutseriyev has returned to the world of Russian business after patiently waiting out a two-year Russian investigation from the safety of London.
His next anticipated step is actually returning to Russian soil, where his vast business and political experience make him a top candidate to steer efforts to stabilize his native Ingushetia and promote economic recovery there.
"Gutseriyev is a very powerful manager and economist who could tremendously help us here," said Kaloi Akhilgov, a spokesman for Ingush President Yunus -Bek Yevkurov.
"He and his expertise and knowledge would be highly desired by the republic's presidential administration," Akhilgov told The Moscow Times.
Gutseriyev, who fled Russia in mid-2007 after the Prosecutor General's Office piled up charges of tax evasion, fraud and license violations against him, regained control of his Russneft oil company earlier this month, reportedly on Jan. 4, from billionaire Oleg Deripaska. A clause in the sales agreement reached in July 2007 stipulated that it would be cancelled if Deripaska failed to secure government clearance in two years, said Deripaska's company En+.
Approval never came from the Federal Anti-Monopoly Service, whose director, Igor Artemyev, said Russneft's ownership was so complex that his agency was unable to deliver a judgment in two years.
Artemyev confirmed Thursday that Gutseriyev remained the owner of Russneft, Interfax reported.
Gutseriyev, who received $3 billion for the company from Deripaska in 2007, paid either nothing or $600,000 to take it back, Vedomosti reported last week, citing various unidentified sources. The lack of repayment stemmed from a large debt that the company ran up during those two years, the sources said.
Russneft is the only large Russian company that does not trace its origins to the dubious loans-for-shares auctions of the mid-1990s. Gutseriyev crafted it in 2002 out of numerous smaller production and retail assets that he had bought on the market.
What prompted the criminal case against Gutseriyev remains unclear. In July 2007, Gutseriyev wrote in an open letter that he had decided to step down as Russneft's president and sell the company to save it and its 25,000 jobs after being tormented by Russian law enforcement agencies. Gutseriyev accused investigators of targeting him personally but would not say why.
Commentators speculated at the time that Russneft was being punished for snatching away minor pieces of the Yukos oil giant — which was carved up after the politically tinged arrest of its founder Mikhail Khordorkovsky — from the state oil behemoth Rosneft, which gobbled up most Yukos assets. Another version floated by political pundits was that Gutseriyev had been targeted because of his support for the Ingush opposition, which was at odds with then-Ingush President Murat Zyazikov.
Gutseriyev was a big name in Ingushetia under Zyazikov's predecessor, Ruslan Aushev. In 1994, the Russian government appointed Gutseriyev as head of the administration of a free economic zone that was established and lasted in Ingushetia throughout most of the 1990s. Twice Gutseriyev was elected to represent Ingushetia in the State Duma, where he served as a deputy speaker from 1995 to 1999.
President Dmitry Medvedev's decision to replace the unpopular Zyazikov in the fall of 2008 with Yevkurov is widely seen as his first major independent personnel decision.
Yevkurov, who enjoys broad popular support, has opened a dialogue with the opposition and started a campaign against local corruption. But he has failed to curb violence and economic crime in Ingushetia, which remains Russia's least developed and poorest region. He barely survived an assassination attempt last year.
Medvedev pledged 32 billion rubles ($1.07 billion) in financial aid to Ingushetia from 2010 to 2016 in his state-of-the-nation address Nov. 12. A day before the announcement, the Prosecutor General's Office removed Gutseriyev from Interpol's international wanted list. Two weeks earlier, the Interior Ministry's Investigative Committee, which led the probe into Russneft, had called off its warrant to arrest Gutseriyev in absentia.
These moves immediately stirred speculation that Gutseriyev was being given the green light to return and help Yevkurov facilitate economic recovery in Ingushetia.
A criminal case in which Gutseriyev and other Russneft managers are charged with evading 20 billion rubles ($750 million) in taxes remains open.
Akhilgov said the Ingush presidential administration has not held any negotiations with Gutseriyev, adding that the Gutseriyev affair was being decided in the Kremlin and Prime Minister Vladimir Putin's Cabinet.
Vedomosti, citing an unidentified Kremlin source, reported in October that Yevkurov had asked Medvedev to allow Gutseriyev to return and that Medvedev had embraced the idea but Putin had opposed it.
Spokesmen for Medvedev and Putin said they were unaware of any negotiations over Gutseriyev.
Gutseriyev could not be contacted this week.
"Medvedev has placed his bets on Yevkurov, and he doesn't want him to fail in Ingushetia," said Alexei Makarkin, an analyst at the Center for Political Technologies. "If Gutseriyev can help Yevkurov, this could be his guarantee to criminal immunity."
Unlike several other Russian businessmen — including Boris Berezovsky and, more recently,Yevgeny Chichvarkin, who turned into outspoken critics of Putin after fleeing to Britain to avoid Russian prosecution — Gutseriyev has kept mum, although he reportedly applied for political asylum in October 2007.
Gutseriyev has not become a major irritant for Russia's leadership, Makarkin said.
In the meantime, the pro-Putin siloviki faction in the government that has sought Gutseriyev's arrest has weakened politically, opening the door for his return home, said Nikolai Silayev, a Caucasus specialist at the Moscow State Institute of Foreign Relations.
A strong reason for Gutseriyev to return to Russia is Russneft, which the businessman has fondly described as his brainchild but would be difficult to manage from abroad, especially in its current financial situation, Silayev said.
Gutseriyev reclaimed Russneft in much worse shape than when he left. Russneft has remained the country's eighth-largest oil company but saw annual output drop by 14 percent to 12.7 million tons last year in comparison with 2006, the last full year when Gutseriyev was at the helm.
Russneft's debt burden surged to nearly $7 billion during the time when the company had no formal owner and was managed by a mixture of Deripaska and Gutseriyev appointees.
In a statement announcing Gutseriyev's departure from the company in 2007, Russneft said it had 30 production units and 311 gas stations and operated in 22 regions of Russia and in Belarus.
Russneft said in a statement last week that it now runs 21 production units and 96 gas stations across 13 regions of Russia and in Belarus.
Russneft could expand if it teamed up with a partner like billionaire Vladimir Yevtushenkov, who last month announced that his company Sistema was interested in buying as much as 49 percent of the oil firm. Sistema in March agreed to pay $2.5 billion for control in another oil producer, Bashneft, a company that has capacity to refine more crude than it produces.
Russneft would complement that asset because it pumps more oil than it can refine, said Sergei Karykhalin, an analyst at asset management company Kapital.
Much of Russneft's debt is long-term or appears easy to refinance because the credit market is unfreezing as the country's economic situation improves, he said.
"The company hasn't been managed very well in recent years," he said. "It probably was forced to live through worse conditions than its peers, but a change for the better is possible."
State-owned Sberbank may take a token 1 percent or 2 percent stake in Russneft to act as a moderator between Gutseriyev and Sistema, Vedomosti reported Tuesday. Sberbank is the company's largest creditor and has all its stock as a collateral.
Russneft spokesman Eduard Sarkisov said he was unaware of the possible arrangement. Sberbank declined comment.
Russneft elected a new board of directors last week, but Gutseriyev was not among them. The board includes a representative of Swiss commodities trader Glencore, Yana Tikhonova; Sberbank executive Ashot Khachaturyants; and three Russneft executives, including company president Oleg Gordeyev, a Gutseriyev ally.
His next anticipated step is actually returning to Russian soil, where his vast business and political experience make him a top candidate to steer efforts to stabilize his native Ingushetia and promote economic recovery there.
"Gutseriyev is a very powerful manager and economist who could tremendously help us here," said Kaloi Akhilgov, a spokesman for Ingush President Yunus -Bek Yevkurov.
"He and his expertise and knowledge would be highly desired by the republic's presidential administration," Akhilgov told The Moscow Times.
Gutseriyev, who fled Russia in mid-2007 after the Prosecutor General's Office piled up charges of tax evasion, fraud and license violations against him, regained control of his Russneft oil company earlier this month, reportedly on Jan. 4, from billionaire Oleg Deripaska. A clause in the sales agreement reached in July 2007 stipulated that it would be cancelled if Deripaska failed to secure government clearance in two years, said Deripaska's company En+.
Approval never came from the Federal Anti-Monopoly Service, whose director, Igor Artemyev, said Russneft's ownership was so complex that his agency was unable to deliver a judgment in two years.
Artemyev confirmed Thursday that Gutseriyev remained the owner of Russneft, Interfax reported.
Gutseriyev, who received $3 billion for the company from Deripaska in 2007, paid either nothing or $600,000 to take it back, Vedomosti reported last week, citing various unidentified sources. The lack of repayment stemmed from a large debt that the company ran up during those two years, the sources said.
Russneft is the only large Russian company that does not trace its origins to the dubious loans-for-shares auctions of the mid-1990s. Gutseriyev crafted it in 2002 out of numerous smaller production and retail assets that he had bought on the market.
What prompted the criminal case against Gutseriyev remains unclear. In July 2007, Gutseriyev wrote in an open letter that he had decided to step down as Russneft's president and sell the company to save it and its 25,000 jobs after being tormented by Russian law enforcement agencies. Gutseriyev accused investigators of targeting him personally but would not say why.
Commentators speculated at the time that Russneft was being punished for snatching away minor pieces of the Yukos oil giant — which was carved up after the politically tinged arrest of its founder Mikhail Khordorkovsky — from the state oil behemoth Rosneft, which gobbled up most Yukos assets. Another version floated by political pundits was that Gutseriyev had been targeted because of his support for the Ingush opposition, which was at odds with then-Ingush President Murat Zyazikov.
Gutseriyev was a big name in Ingushetia under Zyazikov's predecessor, Ruslan Aushev. In 1994, the Russian government appointed Gutseriyev as head of the administration of a free economic zone that was established and lasted in Ingushetia throughout most of the 1990s. Twice Gutseriyev was elected to represent Ingushetia in the State Duma, where he served as a deputy speaker from 1995 to 1999.
President Dmitry Medvedev's decision to replace the unpopular Zyazikov in the fall of 2008 with Yevkurov is widely seen as his first major independent personnel decision.
Yevkurov, who enjoys broad popular support, has opened a dialogue with the opposition and started a campaign against local corruption. But he has failed to curb violence and economic crime in Ingushetia, which remains Russia's least developed and poorest region. He barely survived an assassination attempt last year.
Medvedev pledged 32 billion rubles ($1.07 billion) in financial aid to Ingushetia from 2010 to 2016 in his state-of-the-nation address Nov. 12. A day before the announcement, the Prosecutor General's Office removed Gutseriyev from Interpol's international wanted list. Two weeks earlier, the Interior Ministry's Investigative Committee, which led the probe into Russneft, had called off its warrant to arrest Gutseriyev in absentia.
These moves immediately stirred speculation that Gutseriyev was being given the green light to return and help Yevkurov facilitate economic recovery in Ingushetia.
A criminal case in which Gutseriyev and other Russneft managers are charged with evading 20 billion rubles ($750 million) in taxes remains open.
Akhilgov said the Ingush presidential administration has not held any negotiations with Gutseriyev, adding that the Gutseriyev affair was being decided in the Kremlin and Prime Minister Vladimir Putin's Cabinet.
Vedomosti, citing an unidentified Kremlin source, reported in October that Yevkurov had asked Medvedev to allow Gutseriyev to return and that Medvedev had embraced the idea but Putin had opposed it.
Spokesmen for Medvedev and Putin said they were unaware of any negotiations over Gutseriyev.
Gutseriyev could not be contacted this week.
"Medvedev has placed his bets on Yevkurov, and he doesn't want him to fail in Ingushetia," said Alexei Makarkin, an analyst at the Center for Political Technologies. "If Gutseriyev can help Yevkurov, this could be his guarantee to criminal immunity."
Unlike several other Russian businessmen — including Boris Berezovsky and, more recently,Yevgeny Chichvarkin, who turned into outspoken critics of Putin after fleeing to Britain to avoid Russian prosecution — Gutseriyev has kept mum, although he reportedly applied for political asylum in October 2007.
Gutseriyev has not become a major irritant for Russia's leadership, Makarkin said.
In the meantime, the pro-Putin siloviki faction in the government that has sought Gutseriyev's arrest has weakened politically, opening the door for his return home, said Nikolai Silayev, a Caucasus specialist at the Moscow State Institute of Foreign Relations.
A strong reason for Gutseriyev to return to Russia is Russneft, which the businessman has fondly described as his brainchild but would be difficult to manage from abroad, especially in its current financial situation, Silayev said.
Gutseriyev reclaimed Russneft in much worse shape than when he left. Russneft has remained the country's eighth-largest oil company but saw annual output drop by 14 percent to 12.7 million tons last year in comparison with 2006, the last full year when Gutseriyev was at the helm.
Russneft's debt burden surged to nearly $7 billion during the time when the company had no formal owner and was managed by a mixture of Deripaska and Gutseriyev appointees.
In a statement announcing Gutseriyev's departure from the company in 2007, Russneft said it had 30 production units and 311 gas stations and operated in 22 regions of Russia and in Belarus.
Russneft said in a statement last week that it now runs 21 production units and 96 gas stations across 13 regions of Russia and in Belarus.
Russneft could expand if it teamed up with a partner like billionaire Vladimir Yevtushenkov, who last month announced that his company Sistema was interested in buying as much as 49 percent of the oil firm. Sistema in March agreed to pay $2.5 billion for control in another oil producer, Bashneft, a company that has capacity to refine more crude than it produces.
Russneft would complement that asset because it pumps more oil than it can refine, said Sergei Karykhalin, an analyst at asset management company Kapital.
Much of Russneft's debt is long-term or appears easy to refinance because the credit market is unfreezing as the country's economic situation improves, he said.
"The company hasn't been managed very well in recent years," he said. "It probably was forced to live through worse conditions than its peers, but a change for the better is possible."
State-owned Sberbank may take a token 1 percent or 2 percent stake in Russneft to act as a moderator between Gutseriyev and Sistema, Vedomosti reported Tuesday. Sberbank is the company's largest creditor and has all its stock as a collateral.
Russneft spokesman Eduard Sarkisov said he was unaware of the possible arrangement. Sberbank declined comment.
Russneft elected a new board of directors last week, but Gutseriyev was not among them. The board includes a representative of Swiss commodities trader Glencore, Yana Tikhonova; Sberbank executive Ashot Khachaturyants; and three Russneft executives, including company president Oleg Gordeyev, a Gutseriyev ally.
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