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Today's Headlines for:
Thursday, February 05, 2009

Belarus’ policy towards Russia is sincere, CSTO, EurAsEC, Air defense pact, European Commission satisfied, Opposition, Polish corruption and Sport

  • From the Top...
  • #383

    Alexander Lukashenko: Belarus’ policy towards Russia is sincere

    From: BelTA and the Office of the President
    Belarus is absolutely sincere in its policy towards Russia, said Alexander Lukashenko, Chairman of the Supreme State Council of the Union State, at his one-on-one meeting with President of Russia Dmitry Medvedev in Moscow on February 3.

    Alexander Lukashenko remarked that the problems faced by Belarus and Russia due to the global financial and economic crisis are similar.

    He underscored that virtually all acute issues regarding the bilateral relations were on the agenda of the session of the Supreme State Council. According to the Belarusian leader, it was a good signal and if the sides continued advancing like that, “we would be able to grow larger in all relations”.

    “We are resolute in our intention to take major decisions in the area of economy, military and technical and financial areas, in matters relating to giving the Russian ruble the regional currency status,” remarked the President of Belarus.

    Alexander Lukashenko informed his Russian counterpart about the international situation regarding Belarus.

    “We have nothing to hide. We are absolutely sincere in our policy towards Russia,” the President of Belarus made it clear.

    The presidents expressed readiness for fruitful and productive work during the negotiations and the session of the Supreme State Council.

    Belarus, Russia should maintain high-level integration, Alexander Lukashenko says

    Belarus and Russia should maintain a high-level integration, President of Belarus, Chairman of the Supreme State Council (SSC) of the Union State Alexander Lukashenko said at a SSC session in Moscow on February 3, BelTA informs.

    Since the last SSC session more than a year ago, dramatic changes have taken place in the world politics and economy, the Belarusian leader said. “The shortcomings of monopolism in the present-day world order architecture became increasingly obvious. The global financial crisis has been gathering pace, not without the help of some countries and their irresponsible decisions,” the President continued. The Head of State added that this process could not but affect the social and economic systems of Belarus and Russia.

    According to Alexander Lukashenko, during a meeting on December 22, 2008 the Belarusian and Russian sides took these factors into account and agreed to detail the issues most important for the two countries at the session of the Supreme State Council.

    “These agreements were based on the necessity to unite the efforts to preserve everything we have achieved in all areas and to give an additional impetus to the Belarusian-Russian partnership. We proceeded from the fact that we needed to ensure the dynamics of trade and economic cooperation,” Alexander Lukashenko said.

    In 2008, Belarus-Russia trade reached a record $35 billion. Belarus ranks sixth among Russia’s trade and economic partners. This translates into more than 55% of foreign trade of the Russian Federation with the EurAsEC member states.

    “It is increasingly important today to keep this high level of integration, mutually beneficial industrial, sci-tech and regional cooperation,” the President of Belarus said.

    According to him, the two sides are planning to complete the work on ensuring equal conditions for economic entities of Belarus and Russia as soon as possible.

    President of Russia Dmitry Medvedev informed that in Moscow today the sides will exchange the instruments of ratification to the agreement on equal rights of citizens of the two countries for the freedom of movement, choice of the place of stay and residence.

    Alexander Lukashenko added that another stage in the formation of the full-fledged Union State would be over.

  • Other Belarusian News...

    CSTO Collective Security Council okays Rapid Response Forces creation

    From: BelTA
    The Collective Security Council of the Collective Security Treaty Organisation decided upon setting up the CSTO Rapid Response Forces, President of Armenia Serzh Sargsyan said during the session of the CSTO Collective Security Council in Moscow on February 4, BelTA informs.

    Taking note of the importance of the adopted decision, he stressed that the Collective Rapid Response Forces would enhance the CSTO defensive capability.

    The participants of the summit approved the CSTO budget for 2009 and reappointed Nikolai Bordyuzha as CSTO Secretary General.

    The next session of the Collective Security Council will take place in Moscow in June 2009.

    On February 4, Moscow will also host a session of the EurAsEC Interstate Council.

    EurAsEC Anticrisis Fund necessary

    From: BelTA
    Presidents of EurAsEC member-states believe that it is necessary to set up an anticrisis fund of the Eurasian Economic Community, President of Belarus Alexander Lukashenko told a session of the EurAsEC Interstate Council in Moscow on February 4. At present Belarus is the presiding country in EurAsEC.

    According to the President of Belarus, the fund will not be commercial but will be used purely for support purposes. It is expected to be as large as around $10 billion. According to provisional data Russia’s contribution will make around $7.5 billion, Kazakhstan’s — about $1 billion. Contributions of other EurAsEC states will be determined later.

    At a press conference held after the EurAsEC summit Alexander Lukashenko underscored, the Anticrisis Fund is the response to present-day challenges. “The Anticrisis Fund may be considered an element of anticrisis measures, as these days our countries face shortage of money more and more and virtually all EurAsEC countries do. We don’t know how deep the world crisis is, how long it will last and don’t know its consequences, this is why a lot has to be done tactically without building a strategy,” added the President of Belarus.

    He underscored that Belarus and Russia had prepared an anticrisis plan of their own within the framework of the Union State. Alexander Lukashenko believes the plan is solid.

    “That’s the plan adopted by the Union State. In EurAsEC we adopt only one element, but it is a very important element, and we set up a fund of $10 billion. It can be considered safety cushion for the states in case the situation goes critical in one country or a group of countries,” underscored Alexander Lukashenko.

    According to the President of Belarus, all participants of the summit univocally approved the idea that the Anticrisis Fund money is for emergency purposes.

    EurAsEC to set up international high-tech centre

    Heads of state of the EurAsEC participating countries decided to set up a EurAsEC high-tech centre which would employ the expertise of many countries, including Belarus, President of Belarus Alexander Lukashenko told a session of the EurAsEC Interstate Council in Moscow on February 4, BelTA has learnt.

    “We have suggested establishing this centre in Belarus,” the Belarusian leader told reporters later. “No rejections followed; Dmitry Medvedev said that he did not mind it, though he is ready to set up this centre in Russia. But the location of this centre and its functioning will be discussed later,” Alexander Lukashenko underlined.

    He pointed out that the establishment of a high-tech centre within the framework of the EurAsEC has been prompted by the global financial crisis. “High technologies will shape the future. It is obvious that only the strongest will survive this crisis. After all, this crisis will make everyone do what they should do, and only those who rely on their brains will withstand the crisis,” the Belarusian President believes.

    Alexander Lukashenko said that the EurAsEC participating states are already working in this area. The session agreed to unite the expertise of the EurAsEC member states and create a single high-tech centre.

    Alexander Lukashenko praises results of SSC, EurAsEC and CSTO sessions in Moscow

    The Belarusian delegation is satisfied with the results of the two-day work in Moscow, President of Belarus Alexander Lukashenko told a press conference following the CSTO and EurAsEC summits, BelTA reports.

    I am very sorry that yesterday Russia mass media ignored the important event that took place in Moscow on February 3 which was a session of the Supreme State Council. We have never had such a successful session of the Supreme State ?ouncil. We have adopted a decision which we had been moving toward for ten years, the President said.

    He also noted that Belarus and Russia are ready to share the experience they have gained during the years of integration with the EurAsEC and the CIS. “The Belarusian delegation and I, as the President of Belarus, are satisfied with the first day of our work in Moscow when we had the session of the Supreme State Council and with today’s work,” Alexander Lukashenko said.

    The President of Belarus thanked Dmitry Medvedev for the creation of all necessary conditions for the summits and for the responsibility which “Russia shows today to addressing common problems of the organisations on the post-Soviet Union area”.

    Sergei Martynov: Russian proposal for new European security does not imply creating new organisations

    From: BelTA
    Russia's initiative to develop new European security architecture does not imply creating any new organisation or structure, Foreign Minister of Belarus Sergei Martynov told reporters in Moscow on February 3.

    “There is no speaking about new organisation of European security. This initiative is about the formation of new European security architecture. Architecture is neither a structure nor an organisation. The issues have been discussed between Russia, CSTO states and OSCE members many times. I would like to stress that this is not about the abolishment of any of the existing organisations: neither OSCE nor NATO or CSTO. The main point is to elaborate new additional elements and principles which European security might be based on,” the Foreign Minister said.

    According to him, “it has become obvious that old principles fail to function”, hence a necessity has arisen to elaborate new principles. “This is quite a difficult work and it is unlikely that these principles will be adopted immediately. It is important to start the process of discussing, searching for solutions and elaborating new principles, which later might translated into some structure, organisation and probably some agreement or a treaty which will help adjust and polish the existing security structure in Europe,” Sergei Martynov said.

    The previous CSTO summit decided that all the CSTO bodies will promote Russia’s initiative to develop new European security architecture, the minister added.

  • Economics...

    Belarus ranks 2nd in terms of industrial growth in CIS

    From: BelTA
    In 2008, the industrial production growth in Belarus was among the highest in the CIS, BelTA learnt from the CIS Interstate Statistical Committee.

    In 2008, Belarus’ manufacturing production was 10.8% up from 2007. Kyrgyzstan which posted a 14.9% production growth was first. Azerbaijan (6%) ranked third.

    In Russia and Kazakhstan the industrial production grew 2.1%, in Armenia 2%, in Moldova 0.7%. In Ukraine and Tajikistan the industrial production output dropped 3.1% and 4% respectively.

    As for Uzbekistan, the Statistical Committee offers only the data for January-September 2008 when the production grew 12.4% against the same period in 2007. The committee holds no information about Georgia and Turkmenistan.

    In 2008, the CIS industrial production growth averaged 2%.

    Almost RUB 1.3mn of Union State funds used inappropriately in 2007

    A range of violations were revealed in the course of the audit of the expenditures of the Union State budget in 2007. A statement to this effect was made during a joint session of the State Control Committee of Belarus and Audit Chamber of Russia in Moscow on February 4. The session was presided by chiefs of the financial watchdogs of the two countries Zenon Lomat and Sergei Stepashin, BelTA reports.

    The total sum of the Union State budgetary funds used inappropriately amounted to RUB 1.28 million.

    The analysis of the utilization of the expenditures of the Union State budget in 2007 showed that the volume of the revenues was sufficient to allow the main managers and recipients of the funds to use them in accordance with budget assignments. Due to the lack of clear procedure of budget execution, the expenditures were not used to the full. The money that was not used in 2007 were the allocations assigned for paying off some part of loan interests (RUB 480.4 million), for registration, assessment and management of the Union State assets (RUB 15 million). Reserve funds at the amount of RUB 3 million were not utilized either. Apart from that, the funds stipulated in the section “Other expenses” (RUB 374.7 million) remained unused, too. As of January 1, 2008, the unused funds of the Union State budget amounted to RUB 1.3 billion, or 31% of the revenues.

    In 2007, RUB 3.1 billion or 97.3% of the revised budget expenditures was spent to finance Union State programmes and subprogrammes. The funds that remained on the accounts of recipients made up RUB 159.9 million in Russia and RUB 75.4 million in Belarus.

    All in all, in 2007 RUB 4.1 billion of the Union State budget revenues was used, 98% of the revised budget expenditures. The budget revenues came from the fees of the participating states.

  • From the International Press...

    Russia, Belarus sign air defense pact

    From: UPI and Kyiv Post
    Russia and Belarus signed a military agreement Tuesday, pledging to jointly protect the skies over the two nations.

    President Dmitry Medvedev and President Alexander Lukashenko of Belarus signed the pact at a meeting in Moscow of the Russia-Belarus Union State Council, RIA Novosti reported.

    The Russian government called the pact "a serious step in the development of military and military-technical ties between Russia and Belarus." The government has been building its ties with Belarus at least partly in response to U.S. plans to locate parts of a missile defense system in Poland and the Czech Republic.

    The joint air-defense system is to include five air force units, 10 anti-aircraft units, five technical and support units and one electronic warfare unit, Col. Gen. Alexander Zelin, head of the Russian air force, has said.

    "In 2009, the Armed Forces of Belarus plan to begin operating six new samples of weapons and military hardware, including advanced missile and air defense missile systems. Besides, troops are expected to receive five systems of simulation equipment. We also plan to produce seven new experimental samples of such commodities," a spokesman for the country's Defense Ministry said.

    Russia is Belarus' main partner in military-technological cooperation, the spokesman said, adding he does not rule out that Belarus can purchase weapons from other countries, including Ukraine and Israel (for instance, drones), if they have better tactical and technological features than Russian-made arms.

    European Commission satisfied with Belarus’ steps in media freedom issues

    From: Kiev Post
    Progress has been made in ensuring media freedoms in Belarus, Janis Aizsalnieks, deputy head of the European Commission delegation to the republic, told a roundtable in Minsk on Wednesday.

    "Having seen progress in five areas in Belarus, including the media, the European commission decided to reappraise Belarus' steps on April 13," Aizsalnieks said.

    An assessment of measures taken in Belarus plays a considerable role in the European Commission's decision to suspend restrictions imposed on the republic, he said.

    Among other steps, the European Commission welcomes "specific moves taken in the press sector and the circulation of the Nasha Niva and Narodnaya Volya newspapers," the delegation deputy chief said. "These newspapers are on sale and available via subscription," he added.

    Commenting on the functioning of Internet newspapers following the adoption of a new media law, Aizsalnieks said he hopes that "the application of national laws will not restrict their activities."

    It is also important to promote dialogue on the media industry in the republic between Belarusian and EU experts, he said.

    Kazakhstan to assemble Belarus’ tractors and trailers

    From: Trend
    An assembling plant for tractors Belarus is expected to be set up in SemAZ (Semipalatinsk, Kazakhstan), BelTA learnt from the press service of the Industry Ministry.

    This Kazakh company is also supposed to assemble trailers of Minsk Automobile Works. The issues related to the creation of joint ventures and assembling plants on the territory of Kazakhstan were discussed during the visit of the delegation of the Industry Ministry of Belarus to that country.

    Deputy Industry Minister Gennady Svidersky held negotiations with the representatives of the Kazakh ministries and commercial organisations. The sides expressed mutual interest in developing industrial cooperation. Besides, the parties signed contracts on the delivery of tractors, farm machines and attached implements for the 2009 harvesting campaign to Kazakhstan.

    In order to create necessary conditions to boost production cooperation between the companies of the Industry Ministry and economic agents of Kazakhstan, the sides have been studying a possibility to apply the agreement on common conditions and mechanism of boosting production cooperation between companies and sectors of the CIS member-states. The agreement was inked in Ashkhabad on December 23, 1993.

    Kazakhstan is ranked among Belarus’ top three trade and economic partners in the CIS, following Russia and Ukraine. Over the 11 months of 2008, the trade between Belarus and Kazakhstan almost reached $500 million.

    Belarus intends to create the Trade and Logistic Center with Azerbaijan

    From: ABC.AZ
    Belarusian Government refused from its plans concerning creation of the own Culture & Business Centre in Baku.

    The Ambassador of Belarus to Azerbaijan Nikolai Pazkevich said that the idea of a trade house is becoming old as the new fields appear.

    “Now we are planning on creating a Baku and Minsk based trade and logistic center. It will be responsible for trade, transit and trade flow dispatching,” Pazkevich said.

    In March 2007 Belarusian Prime Minister Sergey Sidorsky stated that Belarus was ready for active investments in Azerbaijan, in particular in its Culture & Business Centre in Baku.

    “The Belarus party is ready to invest around $30-50 million in the centre construction,” he said.

    The plans have not been realized.

  • From the Opposition...

    The use of tortures against opposition is the reality for Lukashenka’s Belarus

    From: Viasna
    Belarusian human rights activists report about facts of torturing of the opposition by representatives of the Belarusian law machinery.

    4 February is the universal Torture Elimination Day. It was introduced in 1985, after the adoption of the appropriate resolution by the United Nations Organization.

    ‘The problem of tortures is still a daily one for Belarus’, told to the Charter97 press-center a well-known human rights activist Valiantsin Stefanovich. ‘In our country this problem remains ‘latent’ and is concealed. The people are afraid to complain that some prohibited methods or means are used against them. In addition, there’s still no such article as ‘tortures’ in the Criminal Code of Belarus.

    Instead, we have ‘abuse of the duty powers’. The system works in such a way that very often the abuse of powers remains unpunished. Let’s remind the case from Vitsebsk, where policemen beat a medic. They simply detained him out in the street and beat him. Recently these policemen have been sentenced to four years of imprisonment. However, according to the reports of Vitsebsk human rights activists, they were left at office till the complaint against their lawless action reached the court.’

    Bear in mind that on 22 December 2006 a surgeon of Vitsebsk Emergency Hospital Andrei Drobyshau was brutally beaten by the police officers Makhankou and Shushko. Only on 16 December 2008 the College Board on criminal cases of Vitsebsk oblast court sentenced the offenders to four years of imprisonment.

    Three people per one berth

    ‘Most often the information about tortures and the incarceration conditions in the Belarusian prisons is given publicity by oppositional activists who become victims of repressions,’ says Valiantsin Stefanovich.

    The human rights activist is of the opinion that convicts and suspects are still often kept in inhumane conditions.

    ‘The conditions in which prisoners are kept in the Belarusian prisons and investigative isolators often don’t meet the minimal standards of incarceration. There are three people per one berth in the overcrowded pre-trial prison and the prison in Akrestsin Street. That’s why the people have to sleep in turn. Several years ago we received information about a beating in Mazyr prison. Numerous suspects on criminal cases had to sleep on the floor, in cold barracks,’ said Valiantsin Stefanovich.

    Suspects are kept in cage

    The recent detention of youth activists can also be qualified as torture. ‘The incident in Homel’, points Mr. Stefanovich, ‘can be considered as mockery. Maybe, the police conducted examination of the detainees. This procedure is permitted by the law. However, the fact that the young people were strip-searched in presence of strangers is quite suspicious. Naturally, it can be considered as mockery.’

    Bear in mind that on 3 February in Homel the police detained the activists of the Young Front and of the organizing committee of the Belarusian Christian Democracy Party Vasil Takarenka, Andrei Tsianiuta and Kastus Zhukouski. The detainees were guarded to Tsentralny district police department of Homel and strip-searched there.

    ‘Last year we received complaints about the incarceration conditions in the prison in Akrestsin Street. The Administrative Code gives detainees the right to have individual places for sleep and bedclothes,’ says the human rights activist. ‘However, in practice these conditions are not implemented in the prison in Akrestsin Street. The fact remains – people are left in cells without individual berths. They are not lead out of the cells for walks and are kept in closed space.’

    Forced to eat T-shirt

    The opposition often becomes a target at which the authorities test their punitive methods.

    ‘In 2006, there was the crackdown of the tent camp,’ continues Valiantsin Stefanovich. ‘Secret services detained youngsters. I recollect the case of Kanstantsin Usianok, who was forced to eat his T-shirt in the car of the riot squad. He was beaten there. Then his hair was cut. We applied to the prosecutor’s office. Instead of investigation the prosecutor’s office forwarded the case to Padabed, the commandant of Minsk riot squad police, the head of the organ against which we had applied to the prosecutor’s office.’

    Pitifully enough, tortures are not uncommon in Belarus. As stated by Mr. Stefanovich, elements of punitive system can be observed even in the everyday life of the Belarusian society.

    Arrested oppositionists made take off all their clothes in militia department

    From: Charter '97
    Activists of the “Young Front” and the organizing committee on creation of the Belarusian Christian Democracy Party (BCD) were mocked in a militia department.

    Vasil Takarenka, Kastus Zhukouski, and Andrei Tsyanyuta, who took part in a picket near the KGB directorate in Homel on February 3, were guarded to the Tsentralny district militia department of Homel. The young men were strip-searched by militia officers.

    After the search, “Young Front” and BCD activists were guarded to the court and were punished with huge fines.

    “I have never seen in Europe that a person could be strip searched, participant of the picket Vasil Takarenka told Radio Svaboda. “I was made to get off, sorry, my trunks in front of some people in mufti. How do you like it?”

    “It has nothing to do with me,” said Kanstantsin Zhukouski, detained activist of the organizing committee on creation of the Belarusian Christian Democracy Party. “The authorities descended to a level when they can arrest the people, taking video of a picket, a meeting, or a holiday. I was detained and we got a common fine of 100 basic units – 3.5 million rubles. It is horrible, they drew up two reports. They authorities have chosen another type of repressions. They have begun to levy huge fines for nothing. “

    The drawn reports were considered by judge of the Tsentralny district court of Homel Maryna Domnenka. Andrei Tsyanyuta was fined 2,800,000 rubles for resistance to militia and unauthorized rally. Vasil Takarenka got a fine of 1,750,000 rubles.

  • Around the region...

    Russia, U.S. pledge closer cooperation under Obama

    From: MSNBC
    U.S. Secretary of State Hillary Clinton and her Russian counterpart Sergei Lavrov agreed on Tuesday to work more closely on key strategic issues, Russia's Foreign Ministry said.

    The two foreign ministers spoke by telephone at the request of Washington, the ministry said in a statement.

    "In the course of the discussion, the accent was given to the mutual interest of building a positive agenda for our relations after the arrival of the new U.S. administration."

    "Especially noted was the importance of strengthening bilateral cooperation, including questions of strategic dialogue and economic cooperation, as well as current international problems such as the resolution of (the situation in) Afghanistan," the statement said.

    Moscow's ties with Washington sank to a post-Soviet low in August over the war in Georgia, but some diplomats hope relations could thaw under the new administration of U.S. President Barack Obama.

    Russia's powerful Prime Minister Vladimir Putin has cautiously noted positive signals from the new administration and a Russian news agency reported last month that Russia had halted plans to deploy tactical missiles near the Polish border.

    Though unconfirmed, the report has raised hopes the Kremlin could be indicating it wished to boost cooperation after rows over a U.S. missile defense system in Europe, the expansion of NATO and the war in Iraq.

    Obama and Russian President Dmitry Medvedev are set to meet for the first time on the sidelines of a Group of 20 summit in London in April.

    Both countries want to boost nuclear cooperation and discuss how to replace a key Cold War strategic arms control pact.

    Russian and U.S. diplomats say they are confident Moscow could find a deal with the new U.S. administration on replacing the START-1 pact, which expires at the end of this year.

    The START treaty, signed by Moscow and Washington in 1991, committed both to cutting their numbers of missiles and strategic bombers to 1,600 each. Both sides met limits set by the treaty by December 2001.

    Crisis draws dwindling band of Russia bulls

    From: Reuters
    A dwindling but hardened band of Russia enthusiasts has descended on Moscow for an investor conference, some drawn by the possibility of bargain asset prices, others hopeful that the financial crisis would accelerate overdue reforms.

    Russia has been in the investor doghouse since a toxic combination of war in Georgia, government interference in major companies and a collapsing rouble made its stock market one of the world's worst performing last year.

    Moscow's RTS stock index plummeted 75 percent from its highs in 2008 and has fallen further this year.

    Underlining the grim mood at the Russia Forum 2009, hosted by local brokerage Troika Dialog, news arrived on the opening morning on Wednesday that Fitch had downgraded Russia's credit ratings. And the top government speaker, First Deputy Prime Minister Igor Shuvalov, signalled big cuts in government spending to preserve Moscow's dwindling reserves of cash.

    Adding to investor perceptions of heightened political risk, Russia's Central Asian ally Kyrgyzstan announced on the eve of the investor forum that it would close a key U.S. military base, a move diplomats saw as inspired by the Kremlin.

    But despite the gloom, some investors were still bullish.

    "You have some assets here with a 25 percent dividend yield," said Jochen Wermuth, chief investment officer of Frankfurt-based Wermuth Asset Management.

    "And how bad can it get if you have a company with $18 billion of net cash on its balance sheet ?"

    Wermuth was referring to Surgutneftegaz (SNGS.MM), Russia's fourth largest oil company. Analysts say concerns over its opaque ownership structure and its corporate governance are the reasons why the market values the entire company at no more than the value of the cash on its balance sheet.

    Several speakers at the conference said the collapse in the price of crude oil, Russia's main export, would increase the pressure on Moscow to clean up its act.

    "When oil was at $147 a barrel people would overlook institutional issues," said Joel Kurtzman, chairman of advisory firm Kurtzman Group. "But with oil in the low $40s and going to the 30s, they are not willing to overlook some of these issues."

    Shuvalov, addressing investor concerns, said the crisis was good for Russia because it would force the country to go through a period of real restructuring.

    "The glamour period is over," a participant who took notes in the closed session quoted Shuvalov as saying. "Now businessmen are turning to what they should be doing - running their companies efficiently".

    Recalling past financial storms that buffered Moscow, Ian Bremmer, president of political risk consultancy Eurasia Group, noted that "Russia was more investor-friendly when it had a more challenging economic environment".

    He said that the country's highly centralised system of power meant that Prime Minister Vladimir Putin was "the world's most powerful individual" -- a possible advantage in a crisis which required tough, rapid responses from the government.

    Wermuth endorsed that view. "The great time of arrogance (in Russian) is behind us," he said. "I remember birthday parties where you wouldn't speak to people unless they were worth $1 billion."

    Now, he said, investors should give the Russian government a break. "Maybe they are actually doing the right thing," he added.

    Herbert Henzler, a senior adviser to the chairman of Credit Suisse (CSGN.VX), pointed to Russia's success in attracting direct investment from a raft of big German companies including Siemens (SIEGn.DE), Daimler (DAIGn.DE), Adidas (ADSG.DE), E.ON (EONGn.DE) and BASF (BASF.DE). "I would just watch what is happening on the micro level," he added.

    But with valuations for Russian companies near historic lows -- the market is trading on a forward price-earnings ratio of around 2.5, well below other major emerging markets -- and nagging worries about politics and corporate governance, many investors seem to have given up on Russia already.

    Alexei Novikov, head of Standard and Poors in Russia, said foreign direct investment was very low as a proportion of GDP. "Why ? The answer is country risk," he said. "This creates a lot of mistrust and a lot of fear."

    Troika's Russian Forum 2009 - in past years a more international event -- was attended mainly by Russians, with a hardened minority of foreign Russia-boosters.

    Even Troika's own Russia Company Handbook listed "investor revulsion" among the concerns hanging over the Moscow market - though it said it believed this would only be a temporary issue.

    "I don't see any bad things specific to Russia here amid the global financial crisis," said one New York-based fund manager, who spoke on condition of anonymity because he was not authorised to speak to the press.

    "The government is doing all the right things and the quality of their macroeconomic management is quite impressive.

    "But the reality remains that a lot of investors in New York just don't want to get on a plane and come here right now. They argue: 'If all assets globally are cheap right now, why bother with Russia ?'"

    Ukraine Abroad: Court decides Black Sea border with Romania

    From: Kiev Post
    A decade-old dispute over a rocky island and surrounding territory was finally settled in Hague on Feb.3. Romania got four-fifth of the disputed territory in the Black Sea.

    Court decides Black Sea border with Romania

    The International Court of Justice drew a new maritime border between Romania and Ukraine on Feb. 3 to settle a dispute over parts of the Black Sea believed to hold significant oil and gas reserves, Reuters reported, citing a decision at The Hague.

    The unanimous decision by the court's 15 judges, which both parties agreed in advance would be binding, ends a long-running dispute that began more than a decade ago and was submitted to the court in 2004.

    Romania had claimed a border extending into the northern part of the Black Sea, excluding an area surrounding Ukraine’s Serpent Island or Snake Island, as the rock formation located 40 kilometers offshore is known. Ukraine had claimed a border closer to the western coast of the Black Sea, saying that Serpent Island gave it territorial rights over the waters.

    The ruling gives Romania about four-fifths of the area it claimed, said Bogdan Aurescu, Romania's agent on the case.

    As part of its judgment, the court also determined that Serpent Island could be considered an island, rather than just a rocky outcrop.

  • From the Polish Scandal Files...

    Another two detained in Polish football corruption probe

    From: Canadien Press
    Polish police have detained two people in connection with an ongoing football corruption investigation.

    Police in the western city of Poznan on Monday detained Lech Poznan striker Piotr Reiss and a former member of the club's governing board, Przemyslaw E., on suspicion of match rigging.

    The 36-year-old Reiss has also played for Hertha Berlin and has four appearances with the Polish national team.

    The two are being transported from Poznan to Wroclaw for questioning.

    Wroclaw prosecutors launched an investigation in 2005 into corruption in Polish football.

    So far they have charged more than 150 people - including members of the Polish Football Federation, coaches, referees, players and club officials - with fixing matches in the top domestic leagues.

    Polish soldiers go on trial for Afghan killings

    From: The Peninsula
    Seven Polish soldiers went on trial at a military court yesterday charged with the killing of a group of civilians during a tour of duty in Afghanistan two years ago, prosecutors said.

    Six of the soldiers, who were serving as members of NATO’s international security assistance force (ISAF), are facing possible life sentences if found guilty by the military tribunal sitting in the capital Warsaw.

    After the group pleaded not guilty, prosecutors told the court that six civilians, including women and children, were killed and three were seriously injured after the Polish troops opened mortar and machine gun fire in the village of Nangar Khel in the country’s mountainous south-east.

    “One person is accused of opening fire on a civilian area, while the remaining six are charged with opening fire on a civilian area, murder of civilians and causing grievous bodily harm to civilians,” military prosecutor Colonel Jakub Mytych said.

    The soldiers maintain that they opened fire in response to an attack by a Taliban militia and claim the deaths resulted from faulty mortar equipment.

    But military prosecutors say the deaths occurred several hours after the Poles had responded to an attack on a separate ISAF patrol. Mytych said all but one of the accused are facing maximum life sentences in prison in found guilty as charged. A court spokesman said that the group were the first Polish soldiers to be tried with breaking an international convention on protecting civilians.

    “This is the first trial in the history of the Polish army for an alleged violation of the 1907 Hague Fourth Convention on the Laws and Customs of War on Land and the Fourth 1949 Geneva Convention on the Protection of Civilian Persons in Time of War,” court spokesman Rafal Korkus said. Poland currently has 1,600 troops in Afghanistan. Meanwhile, a Polish court yesterday overturned the indecent exposure conviction of two women, including a model who has appeared in men’s magazines, who had sunbathed topless, a rarity in this deeply Catholic country.

    The court in the nothwestern city of Szczecin threw out a ruling by a lower level tribunal which in November had issued a legal reprimand to the women, aged 26 and 28, ordering them to pay costs.The Szczecin court said the November ruling was wrongheaded because the women’s toplessness had caused “neither scandal nor indignation”.

    Student detained for teacher harassment

    From: The News
    Another student accused of harassing his teacher has been detained in Ryki, in central Poland.

    The boy has admitted to having harassed his teacher, explaining that he wanted to seem 'cool' in front of his friends, two of whom had been already detained.

    Videos recorded in the class show the 19-year old boy not only dancing and insulting the teacher, but also hitting him. He also screamed "behave yourself or you will go to the hospital." The rest of the teenagers in the class seemed to support their friends’ actions.

    The boy expressed his strong regrets about what he had done, saying that he was ready to suffer the consequences, as well as apologize to the teacher in public.

    The teacher, with 20 years experience in the classroom, filed charges against the students only after the first of the recordings was put on the internet in January. He stated that he had not filed charges earlier because ‘ he was hoping that his students would start behaving themselves.’

    Jaroslaw O. and Kamil N., 19 year-olds detained on Monday with the same charges, pleaded guilty. They faced a sentence of six and three months in prison, respectively, with three years additional parole. As well, the boys face a 500 zloty (120 euro) and 300 zloty (70 euro) penalty, respectively. They will also have to make public apologies.
  • Note: That's about right...

  • Sport...

    Belarusian Victoria Azarenka is No. 15 in WTA Tour Rankings

    From: BelTA
    Victoria Azarenka of Belarus dropped one place and is now No. 15 in the rankings issued by WTA after Australian Open. In Melbourne the Belarusian had to retire during her fourth round match against Serena Williams due to an illness. Serena Williams, the winner of the 2009 Australian Open (the fourth title in her career) returned to No 1. Another Belarusians in the first 200 are Olga Govortsova (49th), Anastasia Ekimova (103rd), Ekaterina Degolevich (142nd) and Tatiana Poutchek (152nd).

    The top Belarusian in the men’s rankings is Vladimir Ignatik (475th). Max Mirnyi is 514th in the singles and 29th in the doubles.

    Belarus drawn against Austria, Denmark and Slovenia in Fed Cup Europe/Africa Zone Group 1

    A draw of the Federation Cup Europe/Africa Zone Group 1 took place in Tallinn on January 3, 2009, BelTA learnt from the Belarusian Tennis Association.

    Belarus was drawn in Group C against Austria, Denmark and Slovenia. Natalia Zvereva, a famous tennis player in the past, was appointed captain of the Belarusian national team. The team includes Victoria Azarenka (No. 15 of the WTA Tour Rankings), Olga Govortsova (No. 49), Ekaterina Degolevich (No. 142) and Tatiana Poutchek (No. 154).

    The leaders of Belarus’ competitors are Caroline Woznyacki from Denmark (No. 13), Katarina Srebotnik of Slovenia (No. 22) and Austria’s Tamira Paszek (No. 80).

    Fifteen teams are divided into four pools. The four pool winners will play off with the two winning nations advancing to the World Group II Play-offs in April 2009. The tournament will finish February 7.

  • Cultural scene...

    No plans to cut down Slavonic Bazaar funding, Pavel Borodin says

    From: BelTA
    The Union State budget funding of the international arts festival Slavonic Bazaar in Vitebsk will not be reduced, Secretary of State of the Union State Pavel Borodin told a press conference in Moscow on February 5.

    “Funding reduction is out of the question,” said Pavel Borodin. Contrariwise, the Union State budget will increase appropriations for the prestigious festival. While last year the Union State budget allocated RUB23 million for the festival, this year the sum will make RUB25 million.

    Deputy Secretary of State of the Union State Sergei Shukhno added, the larger part of the Slavonic Bazaar funding comes from the Belarusian budget. In his words, they are now working on a new concept of the festival. The festival will still, however, include the Union State Day, which has been held as part of the Vitebsk forum for years.

    Dmitry Zhuk: BelTA photo exhibition tells about people who shaped Belarus’ history

    BelTA photo exhibition “90 years together with people” tells about people who shaped Belarus’ history, BelTA News Agency Director General Dmitry Zhuk said at a solemn opening ceremony of the photo exhibition and the presentation of the photo album in Mogilev on February 3, BelTA has learnt.

    “BelTA is the first news agency to create a photo album that so fully and brightly illustrates the Belarusian history. The album is composed of about 400 large-size photos. Our aim was not to show just a static picture but many real people with their emotions in order to enable those who hold the album to feel the atmosphere of those times,” the Director General said.

    According to him, when the book was ready, it became clear that its collections were worth exhibiting across the country. The exposition presents 300 photos which portray the momentous events of the history of Belarus and people who have been and are shaping the strong and prosperous Belarus. “We tried to present as many photos as possible which have not been published before,” Dmitry Zhuk added.

    In order to let more people see the exhibition, a decision was taken to hold it in cinemas and houses of culture. Similar presentations were a great success in Minsk and Gomel, after that the exhibition will continue touring Belarus’ oblast cities.

    Deputy Chairman of the Mogilev Oblast Executive Committee Valery Malashko expressed his hope that the cooperation with BelTA will be expanded and will bring about new interesting joint projects. The exhibition will finally return to Mogilev to be presented at all the towns of the Mogilev oblast.

    The exhibition in Mogilev runs through February 15, 2009.

  • Endnote...

    Putin Undermines Gazprom as Ukraine Pact Freezes Out Yushchenko

    From: Bloomburg
    As Russia and Ukraine reached a mid- January accord in their long-running natural-gas dispute, Russian Prime Minister Vladimir Putin had at least one thing to cheer him up.

    He had frozen his pro-Western nemesis, Ukrainian President Viktor Yushchenko, out of the negotiations, reaching an agreement instead with Ukrainian Prime Minister Yulia Timoshenko, who had shuttled back and forth to Moscow during the crisis.

    At home, this left Yushchenko looking ineffectual: One opinion poll put his approval rating at 3.4 percent even before the settlement. Yushchenko is a Russia basher; Timoshenko isn’t. Her poll numbers are rising, and she has voiced a desire to run for Yushchenko’s job in the next elections, which could take place at year’s end.

    During Putin’s eight year presidency, which ended in May 2008, he made it his goal to strengthen Russia’s position as the dominant European gas supplier while becoming a global energy power with sway over energy supplies and policies far and wide.

    To that end, the Ukraine gambit is part of Putin’s ongoing strategy to divide Europe and thwart the U.S., which is concerned that Russia intends to exploit its energy dominance to influence European politics.

    Rough Test Ahead

    Marginalizing Yushchenko was one tactical Putin victory; that the West could do little more than issue statements and grumble at Russian temerity was another. The European Union’s helplessness was reminiscent of its inaction during Russia’s invasion of Georgia in August. Putin’s gamesmanship is in for a rougher test as oil prices drop and the Russian and global economies slump. He also must deal with a blow to the credibility of OAO Gazprom, Russia’s gas monopoly, which he employed as his proxy in the Ukraine fight.

    Still, Putin plows onward. He has used the Ukraine crisis as an opportunity to flog two new pipelines, known as Nord Stream and South Stream, as a way to break what he has characterized as Ukraine’s monopoly on European gas deliveries. The new pipelines would also increase Russia’s export capacity to Europe by 50 percent from current volumes; Russia now supplies about 25 percent of Europe’s gas.

    “You’ve got to give Putin credit, he’s outplayed the West,” says Chuck Wald, former deputy commander of U.S. armed forces in Europe. “It’s not as easy now without $100 oil, but he’s driving the issues.”

    Huge Losses

    Two developments could yet derail or at least stall Russia’s energy ambitions. One is the 70 percent drop in oil prices, which peaked at $147 a barrel in July 2008 before falling to a low of under $34 a barrel on Dec. 19. The other is that Europe, jarred by the Russian gas cutoff, is now seriously thinking it needs to diversify its energy supplies.

    “We must not allow ourselves to be placed in this position in the future,” said European Commission President Jose Barroso as gas started flowing again through Ukraine’s Soviet-era pipelines on Jan. 20.

    Putin’s actions also caused Gazprom to bleed. By the company’s own estimates, the Ukrainian dispute cost it more than $2 billion in lost revenue.

    “Was this agreement worth such efforts, such costs?” Putin said in a Jan. 25 interview with Bloomberg Television. “I think yes, because at some point you need to move to normal civilized market relations.”

    ‘Political Tool’

    Those losses were piling up at a time when Gazprom was saddled with 1.1 trillion ($31.4 billion) in debt; that and sharply declining revenue could weaken the company’s ability to raise outside capital as global credit markets dry up.

    “De facto, Gazprom is being used as a political tool,” says James Beadle, chief investment strategist at Pilgrim Asset Management, an investment fund in Moscow. “It’s not functioning as a corporate enterprise, putting business and reputation first.”

    Other casualties could include the Nord Stream project, estimated to cost 7.4 billion euros ($9.6 billion) and scheduled to go online in 2011, and South Stream, projected to cost about $20 billion and slated for completion in 2013. “The question is, where is Gazprom going to get all the financing?” says Keith Smith, an energy analyst at the Center for Strategic and International Studies in Washington.

    He contends that the projects are primarily political, as it’s prohibitively expensive to find and develop the Arctic fields that hold the gas with which Russia plans to fill the pipelines. Gazprom’s position as a natural-gas provider isn’t going to shield it from falling oil prices -- European gas prices are pegged to the oil market, lagging crude prices by six to nine months.

    Optimistic Projection

    Not everyone is that pessimistic. Nord Stream, a 1,200- kilometer (750 mile) route under the Baltic Sea, would cut out transit countries by linking Russia directly to Germany. “They’re going under the assumption that expanded sales will pay for Nord Stream,” says Ronald Smith, chief strategist at Moscow based Alfa Bank. “It will justify itself, even at $40 oil.”

    South Stream, on the other hand, a 900-kilometer pipeline under the Black Sea that would link Russia to Bulgaria, is less realistic, he says -- and not just because of its price tag.

    Should Europe get serious about importing more liquefied natural-gas and relying more on nuclear energy, demand for piped gas could stagnate, he says. Russia may find it difficult to keep on track many of the long-planned projects necessary to replace declining production, much less undertake ambitious new ones. Domestic crude output fell for the first time in a decade last year, declining to 488 million tons from 491 million in 2007.

    Many of the fields brought online by the last wave of Soviet investment three decades ago are drying up, forcing producers to explore in ever more remote regions in Russia’s Arctic and eastern Siberia.

    Cold Comfort

    One example is Gazprom’s Shtokman field -- an Arctic offshore project with enough reserves to meet world gas demand for more than a year. The field is financially feasible at a per barrel oil price of $50-$60, according to project chief Yury Komarov. Delays to the development, projected to provide 11 percent of Gazprom’s gas output by 2020, could also affect exports to Europe, since part of Shtokman’s gas is expected to fill the proposed Nord Stream pipeline.

    Merrill Lynch & Co., which had originally forecast 2009 average prices at $90 a barrel, cut that to $50 a barrel in November. Finam Investment Co. of Moscow estimates that 2009 oil prices will average $52 a barrel, while its “pessimistic” scenario projects $37 a barrel oil. Extraction taxes and export duties on oil and gas provide almost half of Russia’s revenue. Russia’s Finance Ministry, in one scenario projecting Russia’s Urals export blend to average $32 a barrel this year, is forecasting a 2009 deficit of 4 trillion rubles, or about $111 billion -- Russia’s first shortfall in a decade.

    Staying the Course

    Gazprom insists that despite a looming recession, dropping oil prices and the global credit squeeze, its energy plans are going forward. “All of our projects in production, distribution and transportation will be realized regardless of any difficulties,” Alexander Medvedev, Gazprom’s deputy chief executive officer, said at a January press conference.

    Western energy companies, desperate to get in on Russia’s still considerable untapped oil and gas reserves, may bail Russia out as they have in the past. “Russia is the biggest prize left on the planet for international energy majors,” says Chris Weafer, chief strategist at UralSib Financial Corp. in Moscow. “If they have to secure their position by shouldering a disproportionate share of the financing, history shows they will do it.”

    For example, France’s Total SA and Norway’s StatoilHydro ASA are already partners in Shtokman, while Royal Dutch Shell Plc and ConocoPhillips may be roped into developing the isolated Arctic Yamal peninsula. Gazprom plans to build Nord Stream in partnership with German energy companies E.ON AG and BASF AG; South Stream is proposed as a joint venture with Italy’s Eni SpA.

    Putin’s Irritation

    On the surface, the latest Ukrainian dispute, which erupted on Jan. 1, was about Gazprom’s attempt to discontinue selling gas to Ukraine at a discount and start charging market prices. The political subtext was Putin’s irritation that Yushchenko is seeking membership in the European Union and the North Atlantic Treaty Organization.

    The U.S., at least vicariously, got dragged into the Ukrainian fray. At the height of the dispute, Gazprom’s Medvedev suggested that Washington was behind Ukrainian obstinacy. “It looks like they are dancing to music which is being orchestrated not in Kiev but outside the country,” he said, referring to a U.S. Ukraine strategic partnership charter signed in Washington on Dec. 19.

    The agreement, similar to one Washington reached later with Georgia, contained a clause saying the U.S. would help Ukraine refurbish its gas pipeline network.

    U.S. Skepticism

    The American response to Russian criticism was a mid-January statement from the U.S. Embassy in Moscow that said, “We hope Russia will do its part to end this dispute, resume and maintain gas supplies and avoid similar crises in the future.”

    That the U.S. is wary of a Russian stranglehold on European gas supplies is no secret. In May 2006, four months after Russia cut off gas to Ukraine the first time, then U.S. Vice President Dick Cheney, on a visit to Lithuania, scolded Russia by declaring “no legitimate interest is served when oil and gas become tools of intimidation or blackmail.” Cheney toured former Soviet republics voicing U.S. support for a proposed “southern energy corridor” that would bring Caspian Sea energy to Europe, bypassing Russia.

    The key to the corridor is a European project that was backed by the administration of former U.S. President George W. Bush. Nabucco, named by its Vienna-based consortium for the opera by Giuseppe Verdi, is a $10 billion, 3,000-kilometer pipeline stretching from eastern Turkey to Austria that’s designed to bring gas from Central Asia, Egypt or the Middle East.

    Russia Strikes Back

    “What happened in recent years in Ukraine is the result, to a significant extent, of the activities of the previous U.S. administration and the European Union, which supported it,” says Putin.

    Annoyed with perceived U.S. meddling in Russia’s backyard, Putin journeyed to Central Asia in May 2007. He coaxed Kazakhstan and Turkmenistan -- two logical suppliers to Nabucco -- to increase gas exports to Russia instead of throwing in their lot with the Europeans. A month later, Gazprom announced its South Stream plans, and Putin courted leaders in Hungary and Bulgaria, both partners in Nabucco, to join South Stream instead.

    “South Stream is a Trojan horse to stop Nabucco,” says Keith Smith, the Washington based energy analyst.

    ‘One Goal’

    The Russians bristle at accusations that the pipelines are political tools. “Our relations with our partners have only one goal: to develop business from oil and gas extraction to refining and power generation,” Gazprom’s Medvedev says.

    U.S. policy may change little with the Obama administration. In June 2008, Joe Biden, just before he became Barack Obama’s running mate, spoke at Senate hearings on Russia’s energy intentions.

    “No wonder the president and prime minister of Russia spend more time running Gazprom than they do running the country,” Biden said. “They have shown that they are willing to use their dominance of both ends of most existing pipelines to extract not just economic deals but, increasingly, political influence.” Gazprom has been the engine in driving Putin’s energy goals and creating Russia’s new wealth.

    In 2007, Medvedev first laid out Gazprom’s vision to become the world’s largest company, with an eventual market value of $1 trillion. And as oil prices climbed to unprecedented heights in June, CEO Alexei Miller predicted that a barrel of crude would soon hit $250.

    Radical Adjustments

    The energy landscape has changed radically since then. Gazprom, amid crashing revenues, has to come up with $10.6 billion in debt payments by the end of June. Its share price by mid January had tumbled more than 60 percent since July, knocking the company from its perch as the world’s third largest, with a market cap of $366 billion on May 16, to 51st on Feb. 3, according to data compiled by Bloomberg.

    All of this is happening when other segments of the Russian economy are faring no better than the country’s energy industry. The Micex Stock Exchange has also cratered, declining almost 60 percent since its peak in May, when oil was riding above $130 a barrel.

    The ruble -- once touted by Putin as a reserve currency of the future -- has gone wobbly. It sank to record lows against the dollar, falling to 36 rubles per dollar and losing more than a third in value from August. That has forced the government to burn through more than $200 billion of reserves since August in an effort to buttress the currency.

    Beleaguered Oligarchs

    Russia’s claim to be the world’s hottest billionaire factory has also taken a battering. According to Bloomberg data, a clutch of oligarchs, including Roman Abramovich, who is an owner of steelmaker Evraz Group SA, and Oleg Deripaska, who runs Basic Element, an investment concern with holdings in energy, financial services and manufacturing, watched their asset values shrivel by $230 billion in the five months from May to October 2008.

    Some wonder if Putin has overplayed his hand. “Putin’s energy doctrine is in danger,” says Mikhail Korchemkin, director of East European Gas Analysis, a consulting firm in Malvern, Pennsylvania. “It doesn’t work in bad times.”

    Putin, a former KGB agent, is acutely aware of the correlation between cheap oil and economic decline. Sub-$19-a- barrel oil undermined Mikhail Gorbachev’s efforts to remake socialism and Boris Yeltsin’s early economic reforms.

    A Gas OPEC?

    Putin is counting on increased political clout and diversification to spare the new Russia. The country already belongs to a once ineffectual organization called the Gas Exporting Countries Forum, which includes the likes of Iran and Venezuela. Putin has said he wants to energize the group to coordinate investment and output -- similar, critics worry, to the Organization of Petroleum Exporting Countries.

    And he is already looking far beyond sales to European gas markets. Later this year, Russia will deliver its first shipments of liquefied natural-gas -- exportable anywhere by tankers -- to Japan and Korea.