RA’s Daily Russia News Blast – Sept 25, 2014

5463-40-Putin-REUTERS_Alexander-Zemlianichenko_PoolTODAY: Ukraine ceasefire under threat; Obama hits out at Kremlin in UN speech; Crimean Tartars under pressure. Yevtushenkov appeal subject to delay; Bashneft will not sell UPC stake to Sistema; gloomy economic forecasts; FSB surveillance methods under scrutiny in Strasbourg; another plaudit for the President.

Reports have emerged of mortar fire striking an apartment block in the rebel-held city of Donetsk in eastern Ukraine, indicating that the ceasefire may be compromised.  The Investigative Committee has pledged it will undertake an enquiry into reports of a mass grave discovered near the city.  In a speech to the UN general assembly, U.S. President Barack Obama used tough rhetoric against the Kremlin’s ‘vision of the world‘, in which ‘civilised people are not allowed to recover the remains of their loved ones because of the truth that might be revealed‘.  At the same assembly Ukrainian Prime Minister Arseniy Yatsenyuk urged Western countries to uphold sanctions against Russia until all Ukrainian territory has been restored to Kiev’s control.  Ukraine’s President hopes that the state can apply for EU membership in six years.  It has been reported that the Mejlis, the principle representational organisation of Crimea’s minority Tatars, has been ousted from its office.  Crimean Affairs Minister Oleg Savelyev has warned that problems of power and water shortages loom large in the newly absorbed state.  The Kremlin is apparently mulling a $200 million project to bolster the number of Russian speakers in other former Soviet states.  Read More »

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RA’s Daily Russia News Blast – Sept 24, 2014

5462-05-industry-tank-russiaTODAY: Rights advocates harassed in attempts to attend NYC conference; Russia to limit foreign ownership of media; military production thriving. Ceasefire in Ukraine holding; Russia concerned about U.S. airstrikes in Syria without Assad approval; Japan extends sanctions; Rotenburg’s Italian properties seized.

Five rights advocates have reportedly been prevented from leaving Russia to attend a UN-organized World Conference on Indigenous Peoples in New York by the authorities through a variety of ruses – including having pages torn from their passports in Sheremetyevo Airport.  Yukos founder Mikhail Khodorkovsky has said he does not plan to establish a new political party but hopes his Open Russia organisation will stimulate fundamental change.  A plan is afoot among lawmakers to curb Western ownership of Russian media to 20% as opposed to the current level of 50%, a move which would affect leading titles such as Vedomosti.  Russia is planning to increase its Black Sea fleet with more than 80 new warships by 2020; small wonder that production of military equipment is apparently largely responsible for the increase in the country’s industrial production rate.

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RA’s Daily Russia News Blast – Sept 23, 2014

File photo of a PetroChina logo at its gas station in BeijingTODAY: Russia committed to China oil exports despite sanctions; Gazprom remains unconcerned by strictures; why Europe cannot extract itself from Russian gas projects. South Africa Rosatom deal; Russia’s nuclear armed forces set for overhaul; Ukrainian peace plan gaining traction? Mechel in trouble; Putin hits kids TV thanks to tiger.

The Kremlin has asserted that despite sanctions limiting Russian access to Western technology, it will fulfil its plans of increasing oil exports to China.  Asian companies have apparently signalled an interested in replacing the U.S. companies which are now debarred from Arctic exploration with Russia.  French major Total, which owns 20% of the mammoth Yamal gas project, is looking for alternative sources of funding as a result of sanctions, whilst Russian major Novatek, which owns 60%, apparently has no problem financing its share.  Whilst acknowledging the complexities of the political situation, Total’s CFO Patrick de La Chevardiere noted that Europe’s reliance on Russian gas is such that it must continue to participate in energy projects with Russia.  Reuters reports that last week Austria unexpectedly received 20-25% less gas from Russia than contractually agreed.  Gazprom is confident that it can substitute all imported equipment that is subject to Western sanctions.  The company board’s Deputy Chairman, Alexander Medvedev, believes that in 15 years Asia-Pacific regional states’ aggregate annual gas import will almost double.  Having withdrawn from its other Russian projects, Exxon Mobile energy company is reportedly still active in the Far-Eastern Liquefied natural gas plant construction project.

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RA’s Daily Russia News Blast – Sept 22, 2014

Peace_March_Web_Dumont658TODAY: Moscow witnesses mass protest against Russian aggression in Ukraine; turnout figures vary; Mikhail Khodorkovsky indicates surprise comeback to politics; Yevtushenkov released. Security Council’s Internet muzzle; families of MH17 victims in Germany to sue Ukraine; sanctions taking their toll on oil and banking.

In Moscow, opposition leaders Boris Nemtsov and Yevgenia Chirikova were among the thousands of protestors who gathered on Sunday to march against what they perceive as Russia’s collusion in fuelling the Ukraine conflict.  Estimates for turnout figures vary wildly, from the police estimate of 5,000 people to independent monitoring group SONAR’s count of 26,000.  Similar events were held across the country, with more than 1,000 people gathering in St. Petersburg for an unsanctioned rally.  Anti-gay activists from an Orthodox church-affiliated group have attacked participants in a gay rights festival in the same city.  Yukos founder Mikhail Khodorkovsky has indicated that he may return to politics with the reopening of his foundation, Open Russia, which aims to coordinate the political and civic opposition.  Billionaire Vladimir Yevtushenkov, whose arrest last week drew comparisons with Khodorkovsky, has reportedly been freed from house arrest.  Bloomberg considers how the cases differ.  Russia’s Security Council plans to introduce stricter controls over access to the global Internet ‘during times of crisis’.  The authorities refute the accusation this is to deny Russians opportunities to surf global media, but to deal with instances when the West tries to block Russia’s access.  Read More »

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RA’s Daily Russia News Blast – Sept 19, 2014

TODAY: Kremlin presents new budget, admits sanctions have hit hard, Putin says they violate WTO principles; Kremlin minister says Yevtushenkov arrest will hurt economy; BBC news team beaten up for investigating soldier deaths; U.S. makes new aid pledge for Ukraine; ExxonMobil halts Arctic drilling project.

The Kremlin’s new ‘fragile’ budget for 2015-2017 showed a heavy reliance on high oil prices and reserves; Prime Minister Dmitry Medvedev said the biggest challenge for the budget was the ‘uncertainty’ regarding ‘how fast [investor] trust will return’, and acknowledged that the budget had been drawn up under ‘such difficult conditions, when the slowing of our economy coincided with the sanctions imposed against some sectors of our economy’.  President Vladimir Putin says the sanctions against Russia are in violation of World Trade Organisation principles, and that Russia’s only retaliation would be to develop its domestic market – a natural ‘competitive advantage’.  The timing of Vladimir Yevtushenkov’s arrest could not be worse, says the Financial Times.  Alexei Ulyukayev, the economic development minister, was the first Kremlin official to agree, saying that the arrest ‘complicates investors’ decision-making’ and puts the current negative investment growth forecast for the year under threat.  This article speculates that Rosneft may be the one ‘maneuvering to takeover Bashneft’, the subsidiary oil company of Yevtushenkov’s Sistema.  A draft bill that would limit foreign ownership of Russian media assets to 20% will also damage the business climate, but is apparently supported in its early stages by the Kremlin.

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RA’s Daily Russia News Blast – Sept 18, 2014

TODAY: Yevtushenkov arrest seen as backdrop for economic theft, Sistema and Bashneft shares drop; budget to be released today; private equity investments down 90%; Gazprom says it cannot meet European demand; Russia and Egypt agree on preliminaries of arms deal; Russia and Zimbabwe agree on major investment deal; foreign media ownership to be cut.

Business leaders, analysts and oppositionists around the world reacted warily to the news that Sistema head Vladimir Yevtushenkov had been placed under house arrest, with many drawing comparisons with the Yukos takeover, and generally viewing the move as an authoritarian grasp for economic control in troubled times.  It is the sign of ‘an intensifying battle for a “shrinking pie” of resources’, says one; a former deputy finance minister called it an economic raid designed to gain control over Sistema. ‘This is not even a racket, this is simple, undisguised theft,’ he said.  A Moscow-based analyst agrees: ‘The economy is doing poorly, sanctions have been imposed, and all there’s left to do is to seize tidbits that are left in the country.’  Others say the arrest is emblematic of the state’s attitude towards private property.  The persecution of Yevtushenkov may be the last straw for business owners, says Bloomberg.  Bashneft, which is owned by Sistema, says the arrest has not affected company operations, though its share price fell by 22%; and Sistema’s share price fell by 32%.  The Moscow Times has a brief profile of Yevtushenkov.  Private equity investments in Russia have seen dramatic losses this year of around 90%: ‘The question is who will be left standing in 2016.’ Russia will present its 2015-2017 budget later today.

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RA’s Daily Russia News Blast – Sept 17, 2014

TODAY: Kremlin says it will intervene against inflation, Central Bank concerned that drop in oil prices will affect growth, Kudrin warns of imminent recession; sanctions thwart art fair, delay new pipelines in Siberia; Mail.ru acquires Vkontakte; Yevtushenkov under house arrest; Russia to establish military unit in Crimea, who is next?

Deputy finance minister Alexei Moiseyev says Russians needn’t panic about the ruble’s new low against the dollar, promising that the authorities would step in to curb any further increases in inflation if necessary.  The Central Bank is concerned about the drop in oil prices, however, saying that a failure to recover will ‘significantly’ slow economic growth (which is already at its lowest level in four years at 0.4%).  Former finance minister Alexei Kudrin said Russia is at risk of recession next year, calling for government investment and a decrease in social spending.  Art Moscow, the long-running contemporary art fair, has been canceled this year due to international tensions caused by sanctions, according to its founder.  Zimbabwean President Robert Mugabe backed Russia yesterday by describing Western sanctions as ‘illegal’.  Transneft says sanctions are expected to delay the launch of new oil pipelines in Siberia, but Energy Minister Alexander Novak says no substantial changes will be made to oil extraction or production plans.  A state loan of $1.55 billion to Belarus has been approved.

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RA’s Daily Russia News Blast – Sept 16, 2014

TODAY: Ruble reaches new low, Western sanctions hit oil producers; Russia to create a crisis fund to help targeted companies; Dozhd producer attacked; United Russia wins most seats in election; Lebedev bank searched; watchdog to log bloggers’ info’; Vkontakte hacked.

The ruble hit a new record low against the dollar yesterday, of 38 rubles per dollar: partly due to a corresponding two-year low in oil prices, as well as a new round of Western sanctions against Russia.  Thanks to Washington’s banning Western companies from working with Russia’s oil giants, Gazprom Neft may require alternative equipment providers in order to meet production targets at its Prirazlomnoye oil field in the Arctic.  Western service firms Halliburton and Schlumberger are also likely to lose a combined $4 billion in revenue fro the restrictions.  Prime Minister Dmitry Medvedev says the sanctions are a test of Russia’s strength, and urged officials ‘not to succumb to the temptation of easy solutions’.  Finance Minister Anton Siluanov says Russia will create a multi-billion-dollar fund next year to support companies hit by sanctions; part of the money will come from the 100 billion rubles left over from this year’s budget.  Crimea is seeking $2.1 billion from Moscow for new investment projects.  Ksenia Batanova, the chief producer at independent and occasionally oppositionist television channel Dozhd (Rain), has been attacked and robbed near her apartment building.

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RA’s Daily Russia News Blast – Sept 15, 2014

5455-02-Grishin-Moscow-Elections1436TODAY: Regional elections see low turnout and reports of falsifications; extended U.S. sanctions target energy sector and raise doubts about Arctic projects; crisis fund to help sanction-affected companies on the cards; plans for railway to bypass Ukraine; Orthodox Church takes to the air waves. 

United Russia candidates have reportedly shown a strong performance in the regional elections which were held yesterday.  Whilst the Central Election Commission claimed it had received no complaints throughout the day, the leader of St. Petersburg’s branch of the A Just Russia party, Oksana Dmitriyeva, has announced that her party would not recognise the results in the city on the basis that the elections were not free.  Yabloko leader Sergei Mitrokhin has indicated that his party might follow suit in the case of the Moscow City Duma.  Golos has received 656 complaints of electoral violations in the polls which also had a low turnout; the Moscow Times estimates 15-20% attendance.  At 45%-60% (depending on which source you use) turnout was considerably higher in Crimea, whose first ever vote in a parliamentary election since the reunification with Russia in mid-March saw United Russia apparently glean 70% of votes.  Reports of pressure to vote for the party of power have emerged in the case of newly absorbed region.

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THE TPPA: TRADING AWAY NEW ZEALAND’S INDEPENDENCE

nz-democracy-tpp-kim-dotcomAs this paper goes to press, New Zealand is a handful of days away from perhaps the most significant election in the country’s history. One key issue for consideration is the status of the Trans-Pacific Partnership Agreement (TPPA), a comprehensive free trade agreement involving a dozen countries including New Zealand, still in the negotiation phase. The TPPA would give the world’s most aggressive economy – the United States (U.S.) – access to New Zealand’s markets and to the mechanism of investor/state arbitration against New Zealand, while stripping the New Zealand Parliament of its authority over much of the country’s trade and business.

This paper addresses five systemic aspects of the TPPA: (1) the asymmetry of the trade relationship between New Zealand and the U.S.; (2) the secrecy and lack of transparency that permits unequal bargaining positions between producers and consumers throughout the free trade area; (3) the capture of the entire trading relationship by U.S. special interest groups which instrumentalise the office of the United States Trade Representative (USTR) to sanction and coerce countries into adopting U.S. corporate interests; (4) the tendency by the U.S. to legislate extra-territorially for other sovereign countries; and (5) the disparity between the trade negotiation process and New Zealand’s ability to maintain its rule-of-law standard.

Click here to download the PDF version of the paper.

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