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Tuesday, February 27, 2007

Lukashenka: President of Russia in 2008? Opinion Special, Russia, Venezuela, Iran, Poland; Priests, Politicians, Oil, Gays and Money, Money, Money…

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    Investments in Belarus economy discussed during meeting of Alexander Lukashenko with SB Telecom CEO

    From: BelTA
    Alexander Lukashenko praises SB Telecom’s investment contribution to Belarus economy
    Belarus president Alexander Lukashenko thinks highly of the investment contribution of Arab company SB Telecom to the national economy. At today’s meeting with Ead Samawi, chairman of the board of SB Telecom, the Belarusian head of state said SB Telecom’s investments in Belarus amount to hundreds of millions of dollars.

    According to the president, at present several investment projects SB Telecom may take part in are being discussed. These projects are related to the Belarusian hotel business, cement production and telecommunications. “I am interested in how these projects are advancing and what hinders their implementation”, said Alexander Lukashenko. He underscored, the Belarusian side “would like to attract certain funds into the cement industry”. It would make the total figure rather large, added the president.

    Alexander Lukashenko expressed gratitude to Ead Samawi for the charity aid the company has been rendering to the Belarusian healthcare. According to the president, the volume of investments made by the Arab company comprises millions of dollars.

    The head of state noted, “If all foreign investors and our businessmen invested that much in the Belarusian social sphere, we would surpass the social security level of any European country”.

    The Belarusian head of state said he thinks highly of the investment cooperation with this company. In his words, SB Telecom’s investments in Belarus amount to hundreds of millions of dollars.

    Alexander Lukashenko expressed gratitude to Ead Samawi for the charity aid the company has been rendering to the Belarusian healthcare. The head of state added, “If all foreign investors and our businessmen invested that much in the social sphere of Belarus, we would surpass the social security level of any European country”.

    The head of state said, Belarus is interested in SB Telecom’s investments in hotel business, cement production, telecommunications and other industries. At present several investment projects are being discussed. A respective protocol on cooperation and the creation of joint ventures with three cement plants of Belarus has been signed.

    In turn, Ead Samawi noted, the company intends to hold several meetings with officials of Belarusian ministries and agencies in order “to evaluate these projects and get down to implementing them”. He added, the owner of SB Telecom is ready to arrive in Minsk at any time to hold the negotiations.

    Ead Samawi informed, the company is ready to take part in building a high-grade hotel in the Belarusian capital. In his words, the hotel will be run by Kempinski Hotels. The hotel will be built by one of the world’s largest companies, which, in particular, built the Emirates Palace in the United Arab Emirates.

    The chairman of the board of SB Telecom stressed he was proud to be an investor in Belarus.

    Addressing his guest, the president said he would like Ead Samawi to assist the Belarusian side with defining promising avenues of cooperation with the United Arab Emirates. The Belarusian head of state plans to visit the country in the near future. “You have good contacts there and your knowledge is very useful for us”, said Alexander Lukashenko.

    Lukashenko’s Followers Join the Presidential Race

    From: Kommersant
    A movement willing to put forward Belarus’ President Alexander Lukashenko to run for Russia’s presidency in 2008 has emerged in Russia. The key purpose of the initiative is to offer the choice to the Russians and Lukashenko, reported referring to Alexey Kanurin, leader of the Lukashenko 2008 Organizing Committee.

    Lukashenko is unaware of forthcoming nomination, Kanurin said. “We don’t need it. Our purpose is to create the situation of having a choice, including for Alexander Grigorievich. One thing is a policymaker’s decision whether or not to go to elections, but the all-people decision is a different matter,” Kanurin explained. Policymakers, and Lukashenko is a successful policymaker, don’t miss such chances.”

    Kanurin said the movement is backed up both morally and financially but didn’t disclose the sources, emphasizing, however, that “the Moscow City Hall, Gazprom or RAO UES won’t be our sponsors for sure.” “But we certainly have the national support, including material and technical and financial ones," Kanurin said, pointing out they are ready “to double propaganda and information flow.”

    Under Russia’s laws, only the RF citizen of at least 35 years of age, who has permanently lived in Russia for at least ten years, could become the country’s president. Russia will elect its president March 2, 2008.

    Russian Threat Convinces Poland and the Czech Republic

    From: Kommersant
    Washington has again confirmed its desire to establish bases in Eastern Europe as part of its missile defense system. In response, the Russian military has threatened to aim rockets at US facilities in Poland and the Czech Republic. American officials insist that the missile defense system is necessary for defense against Iran and North Korea, but Washington's plans are attracting criticism not only from Moscow but from Berlin and London as well. In Poland and the Czech Republic, however, threatening rumblings from Moscow have only increased support for the expansion of the system.
    The USA is Coming

    American officials are still attempting to calm the scandal that has erupted recently around US plans to establish links in the country's missile defense system in Poland and the Czech Republic. In Moscow last week, the US president's national security advisor, Stephen Hadley, met with Russian politicians, including deputy prime ministers Dmitry Medvedev and Igor Ivanov, National Security Council secretary Igor Ivanov, and Foreign Minister Sergei Lavrov. "Despite our differences of opinion, we can speak openly and work constructively," Mr. Hadley assured journalists with a smile, while Igor Ivanov replied, "that does not mean that there is no cloud over our relations."

    At the same time in New York, US Missile Defense Agency director Lieutenant General Henry Obering and assistant secretary of state for European affairs Daniel Fried held a press conference to explain the idea behind the missile defense system to the foreign media. The diplomat and the general both stressed that the defense system that is to be deployed at the Russian border is not aimed at Russia, but they acknowledged that Washington is concerned by the nervous reaction from Moscow. General Obering and Mr. Fried especially complained about Russian Strategic Missile Forces commander Nikolai Solovtsov, who has announced that Russian missiles could potentially be directed at targets among US missile defense system facilities in Poland or the Czech Republic. "We were surprised by those remarks and frankly, found them both incomprehensible and negative," said Mr. Fried. General Obering, a former fighter pilot, repeated his assurance that the expansion of the American missile defense system is not aimed at Russia. "The radar that we were putting there…is designed against the Middle Eastern threat, not against the Russian threat. With the radar that we have there that we have proposed, it is a very narrow beam radar…so even if we wanted to try to track Russian missiles with that radar, we could only track a very, very small percentage of those missiles. And even if we could, passing that information off and having an interceptor try to intercept the Russian missile, we can't do it. The interceptors that we would place in Europe are not fast enough to catch the Russian ICBMs [intercontinental ballistic missiles]."

    General Obering explained that the current phase of expansion of the US system has already begun and will last until 2013. According to him, the system already includes facilities located in North America, Western Europe, and the Far East, which gives America the ability to cover a significant portion of Russian territory (from the border with Belarus and the Kola Peninsula to Yamal and Novaya Zemlya in the north, all of eastern Siberia, and the far east). If Poland and the Czech Republic agree to the expansion of the system on their territory, by 2013 the American system's capabilities will have increased significantly.

    General Obering and Mr. Fried said several times that the plans will go forward only if Poland and the Czech Republic agree. Given the certainty with which the head of the Missile Defense Agency talked about financing for the plan (to the tune of $3.5 billion over six years), little doubt remains that Eastern Europe will give its consent.

    President Bush is personally taking great care to ensure that no problems arise. On Saturday, the office of Polish president Lech Kaczynski confirmed that George Bush intends to visit Poland in June. According to the Polish newspaper Dzennik, which quoted sources in the president's inner circle, Mr. Bush will personally explain to the Poles the necessity of establishing American missile defense facilities in the country. The Czech media, relying on unofficial information from their Foreign Ministry, reported on Saturday that Prague is also a likely stop for the US president on his summer tour of Europe. Both the Polish and the Czech media are following the story closely.

    In the opinion of experts in both countries, no amount of pressure from Russia will change the situation. The only possibility is that Moscow and Washington could come to some kind of military or political compromise. A majority of politicians in Poland and the Czech Republic support America's plans, and the warnings issuing from Moscow are seen as yet another attempt by Russia to return wayward nations in the region to the fold and are only strengthening the countries' independent resolve. Czech President Vaclav Klaus, who is known to be more skeptical about missile defense systems than Prime Minister Mirek Topolanek, has proposed to discuss the issue during his upcoming official visits to the US and Russia. Ten days from now, he will meet in Washington with vice-president Dick Cheney, and in April he has been invited by President Putin to visit Moscow. According to the Czech ambassador to Russia, Czech former defense minister Miroslav Kostelka, Vladimir Putin and Vaclav Klaus "are sufficiently pragmatic politicians to come to an understanding and to avoid allowing the matter at hand to become the key to the further evolution of relations between the two countries."

    According to a report in the Prague newspaper Dnes, President Klaus will not leave Dick Cheney empty-handed: in exchange for Prague's loyalty, the US is prepared to offer several economic incentives. Warsaw's demands on Washington are more concrete: in return for Poland's consent to host bases on its territory, it wants Patriot missiles in defense against possible threats from its large neighbor to the east. On Friday, the Polish Foreign Ministry officially presented the US ambassador in Warsaw with documents agreeing to begin talks about establishing the bases.

    Meanwhile, the expansion of the US missile defense system in Eastern Europe is causing some concern in Western Europe. According to the British journal The Economist, British Prime Minister Tony Blair recently suggested to George Bush that the American bases and radar facilities be established not in the countries of Central Europe but in Britain, where a similar facility already exists. Mr. Blair's press secretary confirmed the offer.

    German Foreign Minister Frank-Walter Steinmeier was less generous in his remarks. In an interview with the newspaper Handelsblatt, he said that before it expands its system to include bases in Eastern Europe, the US should hold talks with Moscow, "because these facilities are located very close to Russia." The German minister also cast doubt on the American view that the missile defense system in Eastern Europe is essential protection against Iran. "If we look at the map and think about the distance that Iranian rockets are capable of flying and the level of weaponry in the country, all of [America's arguments] appear fairly dubious." He was supported by German Defense Minister Franz Josef Jung, who said that establishing bases in Eastern Europe could "disrupt the stability of Europe and lead to a split" and recommended that the issue at least be discussed between Russia and NATO.

    However, it is not likely that the objections from London and Berlin will put a hitch in America's plans to expand its missile defense system. Washington has kept its comments to a minimum on the British and German statements, and it has also not reacted to speculation from the European press that bases could be established in Kiev and Bucharest if Warsaw and Prague are uncooperative. American national security advisor Stephen Hadley, for example, said in Moscow that he knew nothing about any such plans.

    In 2007, Belarus to attract up to EUR 1bln investments from Raiffeisen Zentralbank Austria

    From: NLIPRB
    In 2007, the government of Belarus intends to attract up to EUR 1 billion worth of investments from Raiffeisen Zentralbank Austria (RZB).

    “Raiffeisen and Belarus have developed good relations”, prime minister of Belarus Sergei Sidorskiy has said today in a meeting with Mr. Patrick Butler, a member of the RZB Managing Board. In 2005, Belarus attracted first syndicated credit of Raiffeisen what gave an opportunity for other banks to work effectively in this sphere.

    Mr. Patrick Butler said he was quite satisfied with the operation of the bank in Belarus. A reminder, four and a half years ago Raiffeisen bank bought shares of OAO Priorbank. “These four and a half years show that the investments in Belarus were quite successful,” he noted.

    Apart from that, the parties discussed an opportunity of further cooperation under other projects. In particular, Raiffeisen Bank will use its potential, institutions and instruments to attract direct investments from abroad.

    Belarus to set up state oil company by July 1

    From: Ria Novosti
    Belarus's first deputy premier said the country will consolidate its oil assets into a state-run oil company by July 1 as part of a long-term energy saving strategy in view of growing energy prices.

    "An oil company must be formed by July 1 this year," Vladimir Semashko told the presidium of the council of ministers.

    Belarus, whose budget heavily depended on the untaxed re-export of refined Russian crude to Europe, now has to pay an export duty of $53 per metric ton. Another heavy blow to the Belarusian budget came when Russia, its sole gas supplier, doubled the gas price to $100 per 1,000 cubic meters early this year.

    The new oil company is expected to unite the Mozyrsky and Naftan oil refineries, the Belarusian oil trading house, and the Belarusneft production association, which will form joint fixed capital and register the new firm in western Europe.

    The move is part of a draft energy-saving strategy for the nation until 2020, which the government considered Tuesday.

    "Work on this document was prompted both by the new economic relations with Russia and global trends," the economics minister, Nikolai Zaichenko, said, adding that Belarus was two or even three times behind international standards in terms of GDP energy intensity.

    The draft energy-saving strategy provides for reducing GDP energy intensity by at least 31% by 2010 compared with 2005, and 50% by 2015.

    In 2012, a quarter of Belarus's electric and thermo-power production must be based on domestically produced fuel - peat and brown coal, the document said.

    The government also plans to apply energy-saving technologies, including transform boilers into mini-thermopower plants and to re-equip refineries of the agro-industrial sector.

    "By 2020, no energy supplier to Belarus must hold more than 60% of the total [national] energy imports," Zaichenko said, adding that this would help Minsk end the Russian monopoly on the Belarusian energy market.

    Ukraine is ready to work jointly with Belarus to elaborate common approaches in transit policy

    From: NLIPRB
    Urkaine is ready to work jointly with Belarus on elaborating common approaches in transit policy, charge d’affaires ad interim of Ukraine to Belarus Oksana Kitsun told BelTA.

    According to her, Belarus and Ukraine are transit countries. Almost 100% dependence on Russian energy resources makes the two countries search for common approaches to ensuring their energy security.

    The diplomat stressed, the Ukrainian side is ready to consider promising projects in bilateral and multi-sided format. Thus, in terms of oil transit the use can be made of trilateral format of cooperation between Belarus, Ukraine and Lithuania or Azerbaijan, Belarus, Ukraine. In terms of transit of electrical power there has been set up a four-sided working group between Ukraine, Belarus, Lithuania, Latvia.

    Interaction in energy sphere is a new promising area of cooperation between Belarus and Ukraine which would help the two countries step up mutual trade turnover, Oksana Kitsun says.

    She noted that the two countries intended to boost electric power transmission from Ukraine by employing already operating and constructing new power transmission lines between Belarus and Ukraine in order to promote mutually beneficial sale and transit of electric power to third countries. The parties plan to construct a line from the Rovno nuclear power plant to Mikashevichi. “We would like to boost sales of electrical power to Belarus and its transit to Baltic states, first of all, to Lithuania which is going to need it after the closure of the Ignalina nuclear power plant,” the diplomat believes.

    Speaking about oil supplies, Oksana Kitsun said that the parties considered an opportunity to use Odessa-Brody oil pipe line in reverse to pump Caspian oil.

    As for gas, the Ukrainian party is ready to lease underground gas repositories to Belarus. The parties were also planning to reconstruct Ivatsevichi-Dolina gas pipeline.

    In a related story, the state and prospects of military and technical collaboration between Belarus and Russia will be put under the spotlight of the fifth session of the seminar organized by the Parliamentary Assembly of the Belarus-Russia Union State. The session is scheduled to be held from February 27 to March 1 in Pskov.

    The seminar will focus on modern evaluation of the geostrategic situation in Eurasia, military and political situation in Western strategic lines, conception of formation of a Union State military organization and peculiarities of the armed forces development in Belarus and Russia. Parliamentarians will work out the ways to unify military legislation of the Union State. Promising areas of the development of the defence industry and military personnel training will be debated too.

    Deputies of the Parliamentary Assembly, Union State leadership, representatives of ministries and departments of Belarus and Russia will take part in the seminar.

    Flaring the Gas That Could Fix Supplies Gap

    From: Moscow Times
    Two huge flares that burn around the clock mark Rosneft's sprawling Priobskoye oil field outside Nefteyugansk. Spewing 2 billion cubic meters of precious gas into the crisp Siberian air every year, they stand testament to the absurdity of the country's looming gas crisis.

    Without access to Gazprom's infrastructure, namely processing plants and pipelines, Rosneft and other potential producers are being shut out of the gas game even as the country veers toward a shortage that could keep it from fulfilling contracts at home and abroad.

    Gazprom buys 1.5 billion cubic meters of gas per year from Yuganskneftegaz, the former Yukos unit that Rosneft scooped up at a forced state auction in December 2004. Yet Yugansk burns well over that amount, poisoning the environment and losing out on substantial revenue because there is currently nowhere for the gas to go.

    "In Siberia and beyond, almost all gas goes through Gazprom infrastructure," Rosneft vice president Sergei Kudryashov said on the sidelines of a news conference in Moscow last week. "There is no point seeking out the domestic market, which is dominated by Gazprom.

    "Who chooses the price? The buyers do -- that is, Gazprom. They have to get us interested, and all that interests us is price."

    Gazprom pays just 280 rubles, or just under $11, per 1,000 cubic meters of gas from Yugansk, the production unit's general director, Vladimir Bulba, said on a recent Rosneft-sponsored tour of the Priobskoye field. In marked contrast, Belarus recently agreed to pay Gazprom $100 per 1,000 cubic meters, while customers in Europe pay an average of $230.

    With demand for gas surging at home and abroad and the yields from many of Gazprom's most lucrative fields in west Siberia falling, the gas giant may well soon face a crisis of supply as it stalls on its exploration of new fields.

    In a bid to make the domestic market more attractive to Gazprom and the independent gas producers allowed to function under the near-monopoly, the Cabinet in December approved a gradual rise in domestic gas prices, which will reach market levels by 2011. Yet Gazprom is locked into long-term supply contracts with many of its largest buyers, and last year renewed the terms of its deals with German, French, Italian and Austrian customers, which oblige it to maintain supplies for up to 25 years.

    If Gazprom fails to develop the fields that it has been sitting on for decades, such as Yamal and Shtokman, while continuing to squeeze out independent gas producers, the government will eventually have to choose between turning down the taps to either Europe or customers at home, analysts said.

    "There is plenty of gas in the ground in Russia and identifiable projects that haven't been developed because of politics," said Chris Weafer, chief strategist at Alfa Bank. "Oil companies could produce significantly more gas if only they could pump through Gazprom's pipelines. At some point in the not-too-distant future, the state is going to have to step in, but this will be complicated by the fact that the respective heads of Rosneft and Gazprom sit at opposite ends of the Cabinet table."

    Those complications appear to be deepening as the country moves closer to next year's election that will decide President Vladimir Putin's successor.

    The recent promotions of Sergei Ivanov to first deputy prime minister and Sergei Naryshkin to deputy prime minister appear to have strengthened the hand of the siloviki, the Kremlin faction that represents the country's security services. Naryshkin has, since 2004, been a member of the Rosneft board, which is chaired by Igor Sechin, Putin's powerful deputy chief of staff who is widely viewed as the informal leader of the siloviki faction. Sechin is also the man whom former Yukos chief Mikhail Khodorkovsky accused of orchestrating the legal onslaught against him.

    Gazprom's interests, meanwhile, are represented by the man expected to be Ivanov's rival for Putin's blessing in the upcoming election, First Deputy Prime Minister Dmitry Medvedev, who heads Gazprom's board of directors.

    The war over Yugansk marked a low point in relations between the two state energy giants. Gazprom pulled out of the auction for Yugansk, formerly Yukos' main oil production unit, after an injunction from a U.S. court. The unit went instead for just $9.34 billion to an unknown shell firm, Baikal Finance Group, which was acquired by Rosneft a few days later. A planned merger between Rosneft and Gazprom fell apart in the wake of the struggle.

    That sale transferred about 11 percent of the country's oil output into state hands. The state's share rose even further in September 2005, when Gazprom bought Sibneft from Roman Abramovich for $13.1 billion.

    Despite widespread criticism of creeping state control over the country's energy sector, officials at Yugansk hailed the change in ownership here.

    "It's much more stable now," said Yelena Shulgina, who heads a treatment center at the Priobskoye field and has been with Yugansk since 1981. "It's better to work for a state company."

    Since acquiring Yugansk at the expense of Yukos, Rosneft has gone from a mid-tier company to the country's favored oil champion, with nearly 15 billion barrels in proven oil reserves, putting it just behind privately held LUKoil.

    Rosneft hopes to raise output to 2 million barrels per day by 2010 and to 2.8 million bpd by 2015, up from the current 1.75 million bpd.

    Walking reporters through a tightly managed tour of the Priobskoye site, Bulba passed buildings that, more than two years later, remain painted in the yellow and green colors of Yukos.

    "I wouldn't say that it's right everywhere," Bulba said, when asked what he thought of state control over the energy sector. "As long as the companies pay taxes and develop the fields -- if that doesn't happen, then the state should step in."

    Yukos was dismantled amid state claims that it had failed to pay over $33 billion in back taxes. Khodorkovsky was jailed for eight years on charges of fraud and tax evasion, and faces a further 15 years in prison if found guilty of new charges of embezzlement and money laundering. He has called the campaign against him politically motivated, coming as it did during the run-up to the 2003 State Duma elections and amid speculation that he was getting ready to sell a stake in Yukos to a U.S. oil major.

    "Stability" was the word of the day in meetings with officials from Rosneft, Yugansk and the Nefteyugansk city administration.

    Sergei Karaganov, Rosneft's vice president for social affairs, said: "People are quite confident in their future now. There are no longer problems with hiring, without even regard to salaries -- people are looking for stability."

    Rosneft's vice president Kudryashov agreed: "This is a step forward."

    Karaganov said wages at Yugansk, the highest in Rosneft's empire, had increased by 35 percent since 2004, averaging 48,700 rubles ($1,850) per month.

    The yellow and green buildings stand as the only reminder of the days when Yugansk was in Khodorkovsky's realm.

    In a presentation of the company's history and future plans, Bulba left out the entire period of Yukos ownership, skipping straight from the formation of a joint stock company in 1993 to Rosneft's acquisition of the unit in 2004.

    Khodorkovsky and his lawyers have likened Rosneft's purchase of Yugansk to expropriation.

    Rosneft is expected to snatch up a large part of the remaining Yukos assets that are due for auction this year. The cycle of sales will begin March 27, when the 9.44 percent stake that bankrupt Yukos still owns in Rosneft goes up for auction. The state is widely expected eventually to dilute further its 75 percent stake in Rosneft to a controlling 51 percent. The company raised $10.6 billion last July in the country's biggest initial public offering to date.

    Rosneft officials have said they hope to get their hands on five refineries up for sale, and the company is expected to go head-to-head with Gazprom in the auctions for Yukos' two remaining large oil production units, Tomskneft and Samaraneftegaz.

    "The original model of Gazprom in gas and Rosneft in oil has certainly broken down," Alfa Bank's Weafer said.

    Recent partnership deals between the two companies prompted speculation that the Kremlin hoped to set aside differences ahead of the presidential vote. In December, the two firms signed a strategic-partnership agreement to make joint bids for licenses and join forces in the production and delivery of oil, gas and electricity. Last month, Putin approved a decision to split all new offshore oil and gas fields equally between the two companies.

    Part of the deal saw Gazprom pledging to buy associated gas from Yugansk, but the amount is less than half of the gas that the unit is required to produce under its license, Bulba said.

    If it does not produce the gas, the production unit could be fined by the Natural Resources Ministry and theoretically find itself in the same position as TNK-BP, which faces an investigation into breaching the terms of its contract. At its Kovykta field in east Siberia, TNK-BP subsidiary Rusia Petroleum is producing just 1.5 bcm of gas per year, instead of the 9 bcm stipulated in its contract. Gazprom is refusing TNK-BP access to export pipelines, limiting it to filling weak local demand.

    "We are not producing more precisely because we don't want to flare the gas," said TNK-BP spokeswoman Marina Dracheva. "We don't want to meet the terms of the license just to flare it."

    Environmental groups and international organizations say gas flaring causes untold damage, emitting vast amounts of carbon dioxide into the atmosphere and adding to the greenhouse gases that are slowly eating away at the ozone layer.

    Both the International Energy Agency and the World Bank, which estimates that Russia accounts for about 11 percent of more than 100 bcm of gas flared worldwide into the atmosphere every year, have called on the country to cut down on the practice.

    For now, Bulba said Yugansk was planning on converting the gas into electricity, with plans to commission two compression stations by 2008 and a gas-fired power plant by 2009 with a capacity of 300 megawatts.

    "By 2010, we expect this problem will be fully addressed," Bulba said.

    Yet Jonathan Stern, director of gas research at the Oxford Institute for Energy Studies, said that method of dealing with associate gas, a natural byproduct of oil production, was an improvement on flaring but still "a terrible waste."

    Book examines communist-era Polish secret police penetration of church

    From: IHT
    Rev. Tadeusz Isakowicz-Zaleski
    A new book by a Polish priest examines the communist-era secret police's alleged infiltration of the Roman Catholic Church, offering the first such account by a church insider.

    The Rev. Tadeusz Isakowicz-Zaleski alleges some 30 priests — including four bishops — once tied to the church in Krakow, where Pope John Paul II once served as archbishop, were registered as informants with the secret police in the decades before communism fell in 1989.

    Released to media on Monday, the book, "Priests In The Face Of The Security Services" coincides with a surge of interest in the issue stoked by the shock resignation in January of Warsaw's archbishop over his communist-era past.

    Isakowicz-Zaleski, who was twice beaten by the secret police, has become one of the leaders of a drive to expose clergy who cooperated with the secret services, saying the church must confess and repent to heal wounds.

    In the introduction to the book, which goes on sale Wednesday, Isakowicz-Zaleski says he started researching the problem of compromised priests knowing that it "sooner or later will become a public problem."

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    "The church's avoiding of the problem could lead to irreversible harm," he writes. "Above all, it will cast a shadow on those clergy (and they were the vast majority) who never cooperated with the secret police."

    He scoured the former secret police archives, stored at the Institute of National Remembrance, to find what he said is evidence of the secret police's links to four bishops: Rzeszow Bishop Kazimierz Gorny, former Poznan Archbishop Juliusz Paetz, Tarnow Bishop Wiktor Skworc and Olsztyn Archbishop Wojciech Ziemba.

    Officials at the Krakow diocese and the other dioceses whose bishops were named could not be reached for comment Monday.

    According to Isakowicz-Zaleski, the secret police registered Archbishop Paetz as an informant under the code name "Fero" in March 1978 when Paetz worked at the Vatican.

    The communist authorities broke off contact with Paetz after he returned to Poland in 1983 to become the bishop of Lomza, he adds. In 2003, Paetz resigned as Archbishop of Poznan after being accused of making sexual advances on young clerics.

    On Monday evening, Paetz denied the allegations.

    "I did not undertake any form of cooperation with the communist secret police," Paetz read in a statement on TVN24 television.

    According to the book, Bishop Skworc agreed to cooperate with the secret police in 1979 after being caught with a large stash of food in the trunk of his car. The police threatened to blow up his alleged "speculating" into an anti-church propaganda campaign.

    Skworc bowed to the blackmail, was given the code name "Dabrowski" and agreed to pass on information about the attitudes of church officials toward the regime, Isakowicz-Zaleski says. He allegedly cooperated until 1989.

    Archbishop Ziemba never agreed to cooperate, Isakowicz-Zaleski says — and yet the secret police registered Ziemba as agent "Wojtek" March 1979 after he applied for a passport to travel abroad.

    After two years of sharp refusals by Ziemba to cooperate, the secret services closed his file "admitting defeat," Isakowicz-Zaleski says.

    Stories of compromised priests largely lay dormant until after John Paul's death in 2005, with some saying people were reluctant to raise the issue of collaboration in the Polish church for fear of embarrassing him.

    But widening disclosures that priests did indeed cooperate have threatened to shake the widely held belief that the church acted as a courageous opponent of communism.

    The heaviest blow came last month, when Warsaw Archbishop Stanislaw Wielgus abruptly resigned after admitting having cooperated with the secret services.

    Church officials and historians say that, while the church was a pillar of resistance, about 10 percent to 15 percent of Poland's priests were pressured into informing or otherwise cooperating with the secret police.

    Gay Groups Unite in Belarus

    From: UK Gay News
    Representatives of most gay and lesbian groups have agreed to work together where possible in joint projects. Unpublicised, the meeting was said to have been a “great success”.

    The agreement was reached at a meeting this month in Minsk at the suggestion of Amnesty International Belarus LGBT Network.

    Other groups attending the meeting were Belarusian Initiative of Young Gays, Lambda Belarus, Volunteers without Borders, HIV/Aids groups,and administrators of Belarusian LGBT websites, The Polish gay activist Lukasz Palucki also attended.

    After presentations on their activities by the individual groups, discussions were held on the problems faced by Belarusian LGBT movement.

    Mr. Palucki, of Equality Foundation and invited to attend by Amnesty International Belarus, told participants about achievements and problems of Polish LGBT movement.

    “Being at least 10 years older than ours, the Polish movement has faced problems well familiar to us – from excessive ambition of leaders to rigid competition for financial resources,” said a spokesperson from the TEMA LGBT Information Centre.

    “A recent example is a dispute around a project of monument [in Warsaw] to commemorate gay victims of Nazi concentration camps. Nevertheless, Poles can brag of a high degree of unity when it comes to such serious matters. Last year’s Warsaw Equality parade was a stunning success and involved 15 000 people.

    “Yes, there is a lot to learn from our nearest neighbours,” the spokesperson said.

    Other aspects discussed included the opportunities of joint projects, an information exchange (magazines, bulletins, web-sites, blogs, networks, Yahoo! groups, a web-community, etc.), creation of positive image Belarusian LGBT movement inside the country and at the international level, cooperation with governmental structures, and promotion of LGBT culture..

    “Despite obvious differences, both the registered organisations and informal groups developed a lot of variants of possible cooperation,” the TEMA spokesperson said.

    “These range from advisory support to mutually advantageous use of resources. . Participants noted that it is possible to do many things without ‘official’ registration.

    The representative of the Belarusian Initiative of Young Gays spoke about the “successful experience of work” with strictly homophobic organizations like Belarusian Popular Front and Belarusian Nationwide Union of Youth.

    He said that he managed to publish a number of articles on LGBT problems in pro-government media.

    Great attention was given to information exchange. “We decided not be isolated in our own narrow-design purposes, and to cooperate constructively, searching for innovative approaches to wider audiences,” said TEMA.

    Perhaps the major achievements of a meeting was the agreement on maintenance of a positive image of Belarusian LGBT movement inside the country and abroad – and on collective responsibility for actions in this connection.

    “In particular, we talked about unacceptability of use of ‘black’ PR ventures against each other,” the spokesperson said.

    “In the short term, we intend to develop strategic approaches with a view of cooperation with state structures, business and civil society sector

    “Without exaggeration, the meeting can be called a historic step in development of LGBT movement in Belarus. We hope, that the first step will be followed by the second. At least, it is already known, that the next meeting of leaders of Belarusian LGBT movement is planned for April,” the spokesperson said.

    Council of Ministers' regulations governing foreign adoptions come into force

    From: Naveny
    The Council of Ministers' regulations governing foreign adoptions of Belarusian orphan children came into force on February 24.

    Under the regulations, recommended for foreign adoptions may be children who have been on the official list of orphans for no less than one year if no adoptive parents have been found for them in Belarus, Tatsyana Kavalyova, deputy minister of education, told BelaPAN. According to her, the list, which currently includes some 12,000 children, will now be formed on the basis of proposals from regional guardianship and wardship offices, not by the National Adoption Center as before.

    "Foreign citizens' applications for adoption will now be considered by regional guardianship and wardship offices and then will be submitted to the National Adoption Center," the deputy minister said.

    She stressed that adoptions will only be allowed for citizens of the foreign countries with which Belarus has an appropriate agreement. At present Belarus has such an agreement with Italy only. "All countries have been informed and received a draft agreement but so far have not expressed a definite readiness to sign it," Ms. Kavalyova said.

    She noted that the new regulations clearly specify grounds for foreign adoptions. "A systematic effort should be made to find a Belarusian adoptive family for the child," she said. "It is necessary to find out if the child has any relatives. All of them should be questioned as to whether they can have the child under their care. It is also necessary to find out whether the child has a brother or a sister, as it is very important not to part them."

    Ms. Kavalyova stressed that the regulations fully meet the Marriage and Family Code, the Rights of the Child Law and the standards of international law, and is aimed at protecting the rights and interests of orphan children.

    Chavez Decree Takes 60% Share in Foreign Oil Ventures

    Hugo Chavez
    Venezuelan President Hugo Chavez signed a decree tonight allowing the government to seize at least a 60 percent stake in the nation's last four heavy-crude-oil private joint ventures by May 1.

    The ventures, located in Venezuela's oil-rich, eastern Orinoco Belt, will be run by ``transition committees'' until May, when Venezuelan teams will take over, Chavez said on his nightly radio address to the nation. He didn't specify what kind of agreement, if any, had been reached with the six overseas companies that invested in the projects. He said only that he wanted them to stay on as minority partners.

    The privatization of oil is over,'' Chavez said. ``This is the last space that was left for us to recuperate. Petroleum now belongs to all Venezuelans.''

    Since his re-election on Dec. 3, Chavez has nationalized Venezuela's largest telephone and electricity companies, buying back assets he calls ``strategic'' to the state.

    His government last year raised royalties on private foreign oil companies and forced some into joint ventures, paring their participation even while expanding the role of foreign state-owned oil companies in developing the Orinoco's oil reserves.

    Foreign State Companies

    Argentine oil company Enarsa on Feb. 21 began exploratory drilling with Venezuela's state oil company Petroleos de Venezuela in the region's Ayachucho Block 6.

    State oil companies from Iran, Cuba, China, Belarus, Vietnam, India, Brazil, Russia and Malaysia have also signed on to help develop the Orinoco fields.

    Venezuela, a founding member of the Organization of Oil Producing Countries, was the group's third-largest exporter of crude in January.

    The four joint ventures affected by tonight's decree are partly owned by BP Plc, Chevron Corp., ConocoPhillips, Exxon Mobil Corp., Statoil ASA and Total SA. The projects upgrade the Orinoco's tar-like crude into about 600,000 barrels of synthetic oil a day.

    Spokespeople for Chevron, Conoco, Exxon and Statoil in Venezuela didn't return calls tonight for comment. Julieta Tucker, a BP representative in Caracas, said she had not been informed of the decree and had no knowledge of its content.

    Chavez on Feb.1 announced that 4,000 of the ventures' employees would be added to Petroleos de Venezuela's payroll this year.

    Leader: Russia's grasp on Ukraine rising

    From: Star Telegram
    Ukraine's main opposition leader, on the eve of a trip to the U.S., warned Saturday that the former Soviet republic is at risk of sliding back under the influence of Russia.

    Yulia Tymoshenko said she will reassure U.S. leaders on her visit starting Sunday that the Orange Revolution team which set Ukraine on its pro-Western path has reunited and will provide tough opposition to Prime Minister Viktor Yanukovych's Russian-leaning government.

    "Our union today is not due to circumstances, it is not a spontaneous decision," Tymoshenko told The Associated Press after signing an agreement Saturday to rejoin forces with President Viktor Yushchenko's party.

    "It is a decision dictated by those Ukrainians who want to see Ukraine European."

    Tymoshenko was one of the driving forces behind the 2004 Orange Revolution, which helped bring the pro-Western Yushchenko to power. The Kremlin had backed Yanukovych, and his defeat was a major blow to Moscow's efforts to keep Ukraine under its sway.

    But Yushchenko's hesitant governing style proved to be a disappointment for many Ukrainians who expected quick change and a strong embrace from Europe. He also split with Tymoshenko, a widely popular politician in Ukraine. Last year, Yanukovych's party triumphed in parliamentary elections and he returned to power as prime minister, governing jointly with Yushchenko.

    Yushchenko has since become sidelined, and Tymoshenko said that under Yanukovych, Russia's influence was growing.

    "I don't want to be silent about this," she said, noting that Moscow's pressure was particularly strong in the energy sector.

    "Really, there is energy pressure on Ukraine which ... is used today for political control of the country," she said. "All this forces us to confront a new challenge: to protect the independence of our country."

    Russia temporarily cut off natural gas supplies to Ukraine last year, a shut-off was widely seen as punishment for Ukraine's pro-Western policies. This year, both sides agreed to a price widely seen as a gift to Yanukovych's government - nearly half the price Russia is demanding from Georgia, another West-leaning ex-Soviet republic.

    Russia has increasingly used its huge energy supplies to wield influence in other former Soviet republics and Eastern Europe. Last month, Russia stopped pumping oil to Belarus in a trade dispute. The stoppage affected Poland, Germany, Ukraine, Slovakia, the Czech Republic and Hungary - all of which are dependent on Russian oil.

    Russia is also trying to exert pressure on Poland and the Czech Republic to turn down requests by the Washington to host parts of a U.S. missile defense system. Both countries have expressed interest in the system, which Moscow says could disturb the balance of power in the region and fuel a new arms race.

    Tymoshenko's visit to the U.S. comes after Russian President Vladimir Putin gave a speech in Germany earlier this month blasting U.S. foreign policy - his harshest criticism of the Bush administration since he came to power in 2000.

    Tymoshenko is scheduled to meet with Vice President Dick Cheney and Secretary of State Condoleezza Rice in Washington.

  • Opinion...

    Lukashenko can easily win the presidential elections in Russia - Expert

    From: Lukashenka 2008
    The Action for Belarusian leader Alexander Lukashenko, to whom in Russia began collecting signatures for his nomination of a candidate for election as President of the Russian Federation is a not for the campaign, and future conflicts.

    As told RIA leading Russian political scientist, Director of the Institute of Political Studies Sergei Markov, the act offers, at the outset, the head of Belarus, but that does not mean that Alexander Lukashenko turns to the presidential campaign in Russia, because he was not even a citizen of the Russian Federation.

    At the same time, the expert believes that the chances of winning the head of Belarus is high enough.

    If Alexander Lukashenko hypothetically will participate in the election of the President of the Russian Federation in the absence of Putin, he is a good chance to win,"s aid in an interview with RIA correspondent Sergei Markov

    According to the expert, in favor of the Belarusian leader will play its huge brand, the support of the pensioners, which is the voting population.

    Also in favor of Alexander Lukashenko said the ability to talk with people in their own language, the active western position in the absence of Belarus oligarchs who hates people, the preservation of the republic of social infrastructure, employment, industrial capacity.

    These characteristics could help Lukashenko win in the elections President of the Russian Federation, if they did not participate Vladimir Putin.

    However, the possibility that the Belarusian leader will take part in the elections is close to zero, because he is not a citizen of Russia.

    If it would be a simple process, he could easily obtain citizenship of Russia but, given that it is not easy Belarusian, he had a chance to obtain citizenship of the Russian Federation minimal>, said in an interview with RIA correspondent Sergei Markov.

    According to the expert, the attack on the collection of signatures in Russia in favor of Lukashenko is preparing for presidential elections and the preparation for future conflicts.

    One of the most important tools of Alexander Lukashenko in his confrontation with the Kremlin is its support for a large number of citizens Russia.

    The second influence his party, the Communist-already firmly at the side of the Belarusian leader, and the huge number of citizens of the Russian Federation believes that the conflict between the Kremlin and Lukashenko, which began in January, is not so much that more Russia received money she relied for oil and gas, and how many so that the Russian oligarchs trying to deal with the potential victim-Belarusian economy>, "says Sergei Markov.

    Sovereign Lukashenko

    From: Ria novosti
    It transpires that Lukashenko's 12.5 year-long rule has not crippled public mentality. It is rather the other way round. Say, on the eve of his presidency in 1993, the respondents gave typically post-Soviet answers to the question "How to make a fortune?" - 72.4% mentioned personal contacts and 56.3% lack of honesty. In 2007, these figures dropped to 43% and 15% respectively, while hard work received 68%, reflecting advanced liberal self-reliance.
    While Alexander Lukashenko was rending the air with his loud interviews to Reuters and other media, and the revolutionary change in attitude reached its peak, a group of independent Belarusian sociologists published the results of a regular survey. The late January poll was timed to coincide with the 15th anniversary of the Soviet Union's disintegration. The emotions stirred up by Lukashenko's comments made its results even more striking.

    What do people in Belarus think about the president's achievements? Only 20.7% of respondents, or the smallest group, are ready to thank him for consolidating the union state. Some 61.3% are grateful to Lukashenko for building an independent state, and this response is only slightly lagging behind the winning answer - 64% have thanked him for "establishing order in the country," about which we have heard a lot.

    Clearly, several stormy weeks at the turn of the new year played a role - for the first time more respondents were ready to vote against unification with Russia - 39.3% versus 35.1%. But even before, the majority of no-holds-barred integration supporters was as stable as it was unconvincing - from 43% to 46% throughout 2006, that is, without the obvious bet on 50%. Difference in responses to the theoretical choice between integration with Russia, the European Union (EU), or non-alignment is statistically negligible with Russia's minor lead over independence. The Belarusians are 100% confident that life at home is much better than in Russia. But if in 2004 Belarus's lead was minimal - 34% versus 30%, in June 2006 the gap almost quadrupled. The recent poll produced a new record - 51% versus 11.8%. It would be hard to attribute it to the government's propaganda alone.

    To sum up, in the last few years, Belarus has been building an independent state to the accompaniment of the lofty integration rhetoric. This is why the oil-and-gas squabble did not come as a shock or bitter disappointment to the Belarusians. Nobody had expected anything special from Russia for a long time. It transpired that Lukashenko's compatriots perceive his passion for sovereignty as an indisputable merit. Despite all skepticism about the EU, the idea of joining it has scored 50% more points than the proposal "to unite with Russia for the resolution of all energy problems."

    Now that the tradition to celebrate annual anniversaries of our integration every April will quietly die out, we can cast a sober look at how a regular, undemocratic state is emerging on the ruins of our integration utopia. Lukashenko's anti-Russian escapades are very impressive, but there is no evidence at all that Belarus is on the threshold of global strategic change, not to mention a revolution in the president's mentality. No matter what Lukashenko might tell the media, he does not feel the slightest need for cardinal changes. Independence is developing by itself, and a clever ruler should aim to adapt himself to it, rather than direct this process. This is what Lukashenko has done - put independence at his service to the surprise of many. Under the regime's pressure, the people of Belarus have learnt to ignore their president's whims a long time ago. And it is this mastered skill rather than an inborn love of totalitarianism that makes him indispensable.

    It transpires that Lukashenko's 12.5 year-long rule has not crippled public mentality. It is rather the other way round. Say, on the eve of his presidency in 1993, the respondents gave typically post-Soviet answers to the question "How to make a fortune?" - 72.4% mentioned personal contacts and 56.3% lack of honesty. In 2007, these figures dropped to 43% and 15% respectively, while hard work received 68%, reflecting advanced liberal self-reliance. The hopes which the populace link with their president continue revolving around 48%. However, foreign investment supporters have moved from 25% at the start of Lukashenko's era to 40% today.

    There are no big changes in the attitude to the market economy. It was supported by almost two thirds of the population already in 1997. Judging by all, the change has affected the understanding of the market - 10 years ago one third favored planned economy, whereas now they amount to a mere 13%. Fewer people believe that the state should regulate prices - 19% as compared with half of this figure 10 years ago.

    In a nutshell, this is a fundamental difference between a true dictatorship and a fake one, which reeks of farce. Lukashenko will himself decide how long he wants to rule. A modern tyrant can maintain political stability without forcing the nation to whisper. In Belarus, the tyrant has concluded a surprising tacit contract with his elites - he gives them former nomenklatura blessings and does not to pay too much attention to what they say about him behind closed doors, while they continue to loyally strengthen the tyrannical spirit and to wait with the same patience. As a result, instead of a real dictatorship with its death camps, this farce is cultivating not so much "the grapes of wrath," as a normal environment with relatively civilized rules of the game.

    This model allows Lukashenko to continue harassing the opposition, bargain with Moscow over the price of the ABM or land under the pipe, and even to promise some exotic benefits to the West with undue repentance. But in reality, Lukashenko is most likely to rule in the tried-and-tested style of sovereign tyranny as long as he wants, and without any sharp turns, or accomplishments announced to Reuters. Paradoxically, but contrary to his own self, he will devote every day of his presidency to preparing Belarus for the long-awaited moment of his departure in such a way that when it comes, Orange neighbors will feel envious.

    Lithuania exploring 'exit strategy' for Belarus leader

    From: EU Observer
    EU state Lithuania and EU neighbour Georgia are working on an exit strategy for Europe's "last dictator" - Belarus president Aleksander Lukashenko - amid concern that Russian gas and oil hikes against Belarus are part of a wider process threatening the country's independence.

    "I recently visited Georgia and I had a lot of discussions with our Georgian colleagues - some of them think we need to propose an exit strategy for Lukashenko," Lithuanian prime minister Gediminis Kirkilas told EUobserver in Vilnius on Friday (23 February).

    The prime minister declined to speculate whether such an "exit strategy" could one day see Lukashenko retire to a friendly country such as Venezuela, or whether it would mean a full rapprochement with the EU starting with, say, Belarus' release of senior political prisoner Aleksander Kozulin.

    "For the preparation of this strategy we have to have some informal consultation with envoys, such as a former president who can speak Russian [and go to Minsk]," Mr Kirkilas added. "Lukashenko has to take some steps [such as releasing Mr Kozulin]...but we have to work with him, to speak with him."

    The prime minister explained that Belarus' conflict with Russia is "much more deep than it seems" in the context of a proposed Russia-Belarus state union that is being resisted by Minsk. "Belarus sovereignty is the main issue. Lukashenko will step down sooner or later, but to have an independent Belarus is very important [for the EU]."

    Old allies Russia and Belarus fell out in January when Russia imposed gas and oil hikes set to cost Minsk $1.8 billion a year and that could push it to the edge of economic crisis, with European kremlinologists scratching their heads as to why Moscow made the move.

    Russian ambassador to the EU Vladimir Chizhov recently said it is simply designed to fit in with market prices, adding that the old talks on state union are at a "relative standstill" but that all options are still on the table, including the absorption of Belarus by Russia.

    Of all the EU states, Lithuania has kept the closest contacts with Minsk since EU-Belarus relations began to deteriorate in the mid-1990s, with Lukashenko and 34 of his officials currently on an EU visa ban list and with EU trade sanctions worth $530 million a year to kick in by July.

    The Belarus game is being played out amid EU concern for Mr Lukashenko's mental health. The 53-year old autocratic ruler is a gifted orator and a match-fit ice hockey player. But he is wildly unpredictable in policy terms, prone to emotional outbursts and increasingly self-contradictory statements.

    The prospect of Mr Lukashenko one day leading a reformed government and shaking the hands of a European Commission president in Brussels is laughable to most EU diplomats working on the Belarus dossier, while some hardline Belarus activists want him to face justice over disappeared persons.

    Other candidates wanted
    "We are looking for other people in the Belarus administration that we can talk to," Lithuanian foreign ministry eastern Europe director, Arunas Vinciunas, said last week. The US has also recently hinted it would prefer to work with an alternative leader from the existing government.

    EU diplomacy is focussing on approaches to potential reformers at the "low and medium" levels of the Belarus government for now. Lukashenko's former EU ambassador and current foreign minister, Sergei Martynov, was once considered a reformer but lost that reputation after returning to Minsk.

    Meanwhile, Mr Lukashenko seems to be grooming his eldest son, Viktor, for succession, having recently appointed him as a senior member of the country's security council and given him two assistants to underline his importance.

    The president has also carried out an extensive process of derussification of the Belarusian KGB and military to reduce the risk of a Russian-led palace coup, but many Kremlin-loyal Belarus KGB and military officers remain in the system adding to Mr Lukashenko's unease.

    Historically, Belarus has only been independent twice in its entire history - briefly in 1918-1919 and since 1991, with Lukashenko taking the reins in 1994. Ethnic Belarusians make up 81 percent of the 10 million-strong population, with Russians (11%), Poles (4%) and Ukrainians (2%) also forming large groups.

    Belarusians recall that surrealist painter Marc Chagall, Hollywood actor Kirk Douglas (a.k.a. Issur Danielovitch) and proto-existentialist writer Fyodor Dostoyevsky have Belarusian origins. "We are not just a territory underneath a gas pipeline," Belarusian activist Natalia Koliada once told EUobserver.

    Stanislav Ponomarenko Ponders Belarus' $1.5B Loan

    From: Fin Market
    The Belarusian government has apply for a US$1.5bn loan from Russia Last week, The Russian Economy Minister German Gref commented on the application of the Belarusian government for a loan of US$1.5bn. The Belarusian side wants to get this money to finance the financial gap which appeared in 2007 with the reduction of Russia''s energy subsidy (an increase in gas prices and the introduction of oil export duty). There are several important consequences which should be considered in the framework of this loan: Belarus is very likely to get this loan, although conditions are likely to become a subject of additional negotiations. It is much better solution for Russia: the previous indirect and non-transparent mechanism of subsidising the Belarusian economy and budget will be gradually replaced by a direct and clear financial scheme.

    Russia''s political influence is likely to increase. * Belarus wants to receive a sovereign loan rather than to borrow on the market, which is understandable. The mid-term market rate could be 11-12%, but Russia is very likely to lend cheaper. In addition, it will be much easier to restructure the loan if necessary. *

    Previously, Belarus has planned to borrow RBL10bn (US$380m) on the Russian market - and we believe that the new loan is unlikely to change this plan. At the same time, Belarus may prefer to postpone the borrowing from 1Q07 to 2Q07. * Although the loan will triple the government''s foreign debt (from US$0.85bn to US$2.4bn), its volume will remain very low at 5.5% of GDP - far from alarming. _ Investment implications: We expect Belarus will get the loan of US$1.5bn from Russia, and that it will be very likely to be approved for political reasons. This will not significantly affect the country''s debt profile. We also believe that Belarus will borrow on the Russian local bond market in 2007.

    Russia begins a new round of multilateral negotiations on WTO entry. As the Russian side has acknowledged, negotiations will be neither easy nor simply technical. Although the main issues have been agreed, the sides now need to return to the complicated issue of intellectual property rights and their protection in Russia.

    Although Russia may state that progress is being in made right direction, the demonstrated pace of change may not be satisfactory for the USA and EU. In addition, the political aspect is important for entry, and the recent speech of President Putin in Munich is unlikely to enthuse the USA much in its support for Russia''s entry. Although Russian-Georgian negotiations have been scheduled, they may not be continued this time. The position of Georgia, which blocked the process of Russia''s entry in response to the serial aggravation of its political and economic relations with Russia, has become the most crucial obstacle for accession. Although the Russian delegation has managed to compromise on the most complicated problems, Georgia still wants Russia to close its customs offices in Abkhazia and South Ossetia in exchange for entry.

    Nevertheless, we believe that the last barrier will be finally eliminated already in 1Q07. The gradual stabilisation and warming between Russia and Georgia is becoming clearer, and Russia has not ruled out that economic sanctions against Georgia will be fully removed soon, including the transport blockade and the resumption of Georgian wine and mineral water imports to Russia. We also remain positive on Russia''s entry in 2007. _ Investment implications: We expect the progress on WTO negotiations, which should open avenues for the long awaited entry to the organisation and make it possible this year. We expect political and economic gains from accession, in particular in the mid and long terms, and further acceleration in foreign investment inflow.

  • From the blogs...

    Blowing Away the Gazprom Cloud

    From: LaRussophobe
    The most common defense of Russia’s/Gazprom’s increasing the price of gas to Ukraine, Belarus, Azerbaijan and others is to deny that the motive is political, and to claim instead that these consumers are now being charged the same market price as the Western Europeans. There is a kernel of truth to this, but it obscures the crucial question: just what kind of market is this?

    Some markets are competitive. Some markets are not. The market for Russian and most Central Asian gas falls squarely under “not.” Gazprom has a state enforced monopoly on the transit of gas across Russian territory. Moreover, the Russian government is aggressively playing the “Great Game” in Central Asia and the Caucasus to stymie development of any alternative transport routes. For instance, Russia used its overwhelming leverage against Armenia to get that impoverished nation to limit the size of a gas pipeline from Iran, thereby ensuring that the pipe could not be used to transport Iranian gas into Europe.

    Russia’s central geographic position, and its heretofore successful efforts to impede development of alternative transportation routes gives the transit monopoly Gazprom great market power. It is effectively a monopsonist upstream, and can exploit this monopsony power to depress the purchase price of gas from Turkmenistan and other “independent” suppliers. Moreover, because the supply of gas into Europe from non-Russian sources is constrained (and will continue to be so unless and until Europe invests in substantial LNG capacity), Russia faces a downward sloping demand for its gas in Europe, which gives it some monopoly power. Indeed, Eastern and Central Europe have even fewer alternatives to Russian gas, and are even more vulnerable to the exercise of market power.

    This combination of monopoly and monopsony power is reflected in the chasm between the purchase price of gas from Turkmenistan and Kazakhstan–about $45-$65 per mcm for years, lately raised to $100 per mcm–and the price in Europe–upwards of $230 per mcm. Based on a price of $230 to Germany, and a price in Turkmenistan of $65, this translates to a price difference between consumer and producer of about 3.5 cents per mcm per kilometer. This represents a markup over the Turkmenistan price of about 63 percent per 1000 kilometers. (Even at the now higher Turkmenistan price of $100, the shadow price of transportation is about 2.8 cents per mcm per kilometer, and the markup is 42 percent per 1000 kilometers.)

    To put things in perspective, the basis (i.e., the price difference) between the price of gas in Chicago, and the price of gas at the AECO hub in Alberta, a distant Canadian gas supply location, averaged a little over 1 cent per mcm per kilometer from November 2003-January 2007. The markup is about 5.5 percent per 1000 kilometers. Examining the AECO-Iroquois route (Iroquois is a gas hub in New York state), the average basis worked out to about 1.5 cents per mcm per kilometer in 2003-2007, and the markup was about 7.5 percent of the AECO price per 1000 clicks. Iroquois is often quite congested, especially during the winter, so it tends to exhibit a wide basis compared to other locations in North America. Nonetheless, the Europe-Turkmenistan basis dwarfs the Iroquois-AECO basis, and dwarfs the Chicago City Gate-AECO basis even more.

    Now, some of the disparity arises because of Gazprom’s inefficiency. (If the exercise of market power doesn’t bother them, global warming worriers should fret about the massive amounts of methane–a greenhouse gas much more potent than CO2–that leaks from Gazprom’s pipes.) But a healthy chunk reflects a market power rent that exists in the no-entry Russian market but does not exist in the much more competitive North American gas transportation market.

    The Europeans have importuned Russia to open its gas transportation system. Sorry, not going to happen. This arrangement is too lucrative for the Russian government and the various hogs that feed at the Gazprom trough. This market is not competitive, and is unlikely to become so any time soon.

    So let’s call a spade a spade. Let’s not pretend that the price of gas in Europe is a competitive market price. It’s not. It’s a monopoly market price, supported by a state-enforced entry barrier. It deserves no deference from supporters of free markets. The subsidized prices that once prevailed in Ukraine and Belarus don’t deserve deference either; nor does the highly subsidized domestic Russian price.

    But two wrongs don’t add up to a right. This has long been a dysfunctional market supported by the dysfunctional exercise of government power. The old dysfunction was to subsidize the consumption of energy by inefficient manufacturing enterprises. The new dysfunction is to extract monopoly and monopsony rents. Prices were too low before. They are too high now (for consumers–still too low for producers).
    Read the complete text...

    Rendition Cases test Trans Atlantic relations

    Italian and German prosecutions have highlighted the controversial US policy of rendition - the extra-legal transfer and/or detention of suspected terrorists - and the question of European cooperation with it.

    Criminal investigations are also underway in Portugal and Switzerland, and the European Parliament last week adopted a report urging EU member nations to investigate the cases of as many as 21 terror suspects who were "transferred through a European country or were residents [of] a European state at the time of their kidnapping" by US authorities.

    The report, the result of a year-long inquiry by a parliamentary committee, named Britain, Italy, Germany, Poland and Romania as either colluding with the US in renditions or not cooperating with the probe. It found "no definitive evidence […] to contradict any of the allegations" of a secret US jail in Romania, and said Polish denials of a similar facility on their territory were "contradictory."

    At least 1,245 flights operated by the CIA used European airspace or airports between the end of 2001 and the beginning of 2006, the report said, adding that it was unknown how many held terror suspects.

    Working relations to carry on
    Several observers said it would be unlikely - given the ongoing criminal proceedings - that US rendition flights were currently transiting Europe, but human rights advocates told ISN Security Watch they believed that the program was continuing in other parts of the world.

    One former senior US intelligence official familiar with the issue told ISN Security Watch that the criminal cases would not damage working-level relations with European intelligence agencies.

    "We have a 50-year relationship" with European agencies, said the former official, who asked for anonymity because he is not permitted to speak to the news media without a lengthy pre-clearance procedure.

    "We've protected each others' countries, saved each others' lives. That doesn't mean you can ignore it," the official continued. "We have to sort it out […] there is a lot of goodwill on both sides […] it is in everyone's interests to continue working together."

    The heart of the matter
    At the heart of the controversy is the charge that the US rendition program - a "covert action" that former CIA director George Tenet boasted repeatedly of in public, even before 11 September 2001 – effectively outsources torture.

    Rendition is a broad term, poorly defined, referring to extra-legal transfer and/or detention by US agencies. "Extraordinary rendition" is a term invented by the media, according to several US intelligence officials.

    The pre-9/11rendition program, Tenet told Congress in February 2000, had brought more than two dozen suspected terrorists to countries where they were wanted for prosecution or questioning since July 1998.

    According to former intelligence officials, the program was massively expanded after 9/11, and included for the first time secret detention centers in which suspects were held in US custody. But several former and serving intelligence officials have told ISN Security Watch that the majority of renditions continued to be to third countries.

    In May 2005, Egyptian Prime Minister Ahmed Nazif told NBC that "60 or 70" suspected terrorists had been sent by the US to Egypt since September 2001. In well documented cases, captured terror suspects have also been sent by the US to Morocco, Syria and Jordan.

    Torture is endemic in jails in all four countries, according to multiple human rights groups, and almost all of those who have emerged from the shadowy underworld of secret arrests and night-time flights the rendition policy has created have made credible allegations that they were tortured.

    Only the beginning?
    British Member of Parliament Andrew Tyrie, the opposition Conservative Party's shadow attorney general and chairman of the All Party Parliamentary Group on Extraordinary Rendition, called the European criminal cases "inevitable" and "just the beginning."

    "I expect to see many more," he said in a statement. "The United States cannot go around kidnapping people and transferring them to countries where they may be tortured, and not expect there to be consequences."

    In Germany, Munich prosecutor Christian Schmidt-Sommerfeld last month indicted 13 people he said were CIA agents for kidnapping a German citizen in Macedonia in December 2003 and taking him to a US jail at Bagram air base just north of Kabul, Afghanistan.

    The man, Khaled al-Masri, was detained by Macedonian border authorities when his name turned up on a US terrorist watch-list, and alleged in a lawsuit last year that he was turned over to US officials, who beat and drugged him, and subjected to coercive interrogation in a jail at Bagram called the Salt Pit. Five months later, after US officials determined his detention was a mistake; he was deposited on a hillside in Albania.

    The case overshadowed last year's visit to Germany by US Secretary of State Condoleezza Rice, and provoked a public dispute between officials about whether - and for what - she had apologized to German Chancellor Angela Merkel.

    "The American administration has admitted that this man had been erroneously taken," Merkel said through a translator when asked by reporters about the case.

    Rice herself declined to comment on the case, but said she had told Merkel "that when and if mistakes are made, we work very hard and as quickly as possible to rectify them."

    But al-Masri remains on a US government watch-list of known or suspected terrorists and had to get a special waiver from the Department of Homeland Security to obtain a visa to the US last year. US officials told ISN Security Watch at the time that there had been an inter-agency dispute about his continued listing, with the State Department seeking to have him removed.

    In Italy, 31 people, 26 Americans and five Italians from the country's Military Intelligence and Security Service, known by its Italian initials SISME, will stand trial in June for the kidnapping of an extremist Islamic cleric.

    Hassan Mustafa Osama Nasr, also known as Abu Omar, an Egyptian who had been granted refugee status in Italy, was seized in a Milan street in December 2003, and taken to the US Air Force base at Aviano, the prosecution says in court filings. From Aviano he was flown to Cairo, and handed over to Egyptian officials, who he said tortured him so badly with beatings and electric shocks that he suffered kidney damage and became incontinent.

    The 26 Americans include the head of security at the base, a US Air Force colonel, and 25 others - some known only by the aliases on their US passports - including the CIA's Rome station chief and its Milan office head.

    None of the Americans are likely to voluntarily attend the trial, and Italian officials indicated this week that they would not seek extradition, but Italian law allows for defendants to be tried in absentia.

    The five Italian defendants include the former head of SISMI, General Nicolo Pollari, and his then-deputy, Marco Mancini. Two other Italians, a police officer who helped provide cover for the gang doing the snatch, and a former reporter who conducted a SISMI-financed disinformation campaign to over-up the operation afterwards, have already pleaded guilty as accessories.

    Determining collusion
    One of the issues at trial will be whether and at what level Italian authorities approved the plot, centering on the question of whether controversial media magnate Silvio Berlusconi, who was then the Italian prime minister, authorized the operation.

    Pollari has indicated through his attorney, a lawyer who is also a high-level consultant to the Italian Justice Ministry, that he cannot defend himself without revealing state secrets - a hint that he may have been acting under secret orders.

    Despite the embarrassment that the case is likely to cause on both sides of the Atlantic, the former senior US intelligence official insisted it would not interfere with the close alliance between the two countries.

    "There have been worse incidents than this," the former official said, referring to "very ugly, messy, sticky things [...] counter-espionage stuff [...] things done in countries that weren't coordinated [with local agencies]."

    "They never got out [into the public domain …] but they were every bit as disconcerting [as the Nasr case]."

    Last year, he recalled, US troops mistakenly shot and killed an Italian intelligence agent in Iraq, as he was exfiltrating a freed kidnap victim. "Even that didn't stop [the two services] talking to each other."

    Chinese Premier Commits to Socialism; says that promoting fairness and social justice is a major

    From: New Zeal
    While developing productive forces and immensely increasing material wealth, China needs to gradually secure fairness and social justice, Chinese Premier Wen Jiabao said in an article released on Monday.

    He called them "two interrelated and mutually beneficial tasks" that will run through various stages of socialism for a long period.

    In the article, which is about historical tasks in the primary stage of socialism and China's foreign policy, Wen said without sustained rapid growth of productive forces, it's impossible to finally secure fairness and social justice that lies within the essence of socialism.

    Without gradually promoting fairness and social justice in step with development of productive forces, it's impossible to bring the initiative and creativity of the whole society into full play and thus impossible to secure sustained rapid development of productive forces.

    The essence of socialism is to "emancipate and develop productive forces, eliminate exploitation and polarization and eventually realize common prosperity", Wen quoted the late Chinese leader Deng Xiaoping as saying.

    Wen said that "China is and will remain to be in the primary stage of socialism for a long time". The primary stage is an "underdeveloped" stage characterized by underdeveloped productive forces and a socialist system that is still not perfect and mature enough.

    He said China's socialist market economic system is till not perfect enough. The democratic and legal system is still not perfect enough and there still exist social injustice and corruption. The socialist system is still not mature enough.

    He said today, China is still far from walking out of the primary stage of socialism and remains a developing country.

    Wen said that China must encourage reform and innovation in it drive to become more open and modernized.

    Wen said that China shall develop the democracy in its own way. The socialist system is not contradictive to democracy, and a highly developed democracy and a complete legal system are inherent requirements of the socialist system and an important benchmark of a mature socialist system.

    The country has the full capacity to establish a nation of democracy governed by laws within the framework of socialist system, Wen said

  • Sport...

    Oleg Kechko to compete at the Arnolds

    From: USA Lifting
    Of course, Arnold always makes an appearance. He has never missed and Arnold Expo and visits every sport venue at some point during the weekend. That tradition hasn’t been interrupted by details like becoming governor of California
    The most exuberant celebration of weightlifting and sport in North America is coming around again. Those who have been to the Arnold Weightlifting Championships and Arnold Expo go home evangelical in their enthusiasm. Those seeing the event for the first time may be overwhelmed, but are never disappointed.

    Belarus Olympian and former Soviet team member Oleg Kechko will be competing in the he Arnold Weightlifting Championships is the only meet in North America where a twelve year old schoolage athlete or sixty year old master can lift in the same meet with national and international stars.

    Past competitions have produced some heated battles, with head to head fights that will be long remembered. In 2004 Oleg Kechko outlasted Armen Garzarian and Shane Hammon for the top check of $3,000.00.

    The 2005 Arnold saw a showdown at 85kg between beefed up returning champ Oleg Kechko, who had decided to move up a weight class, and National Champion Chad Vaughn, also up a weight class from his usual 77kg. They went lift for lift in the snatch, with Vaughn taking a PR 152.5 snatch and a 2.5kg lead into the clean & jerks and the crowd jamming with Kechko to AC/DC’s Hells Bells. The two traded good clean & jerks until Vaughn hit another PR with 192.5. Kechko loaded the 195 he needed for a win on bodyweight. With Hells Bells again rocking him to the platform and through the lift, Oleg stuck the jerk for a big win, Chad later hugging him in congratulation.

    Unfortunately for Oleg, Dimitri Klokov, fresh off his first Russian national championship, flew in for the meet and went six for six, hitting a 180 snatch and 220 clean & jerk at 105kg bodyweight, good for first place and $3,200.00.

  • Sport briefs...

  • Sergei Dolidovich of Belarus who was suspended at the Nordic world championships over a too high haemoglobin level is eligible to compete again after passing another blood test, the governing body FIS said on Monday. The FIS imposed a so-called start prohibition for health reasons on the athletes for five days. An excessive haemoglobine level, the amount of red blood cells, is no doping offence. But it can hint at a possible use of blood doping substances.