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RA’s Daily Russia News Blast – Oct. 17, 2007

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Russia’s President Vladimir Putin, Iran’s President Mahmoud Ahmadinejad, Kazakhstan’s President Nursultan Nazarbayev, Turkmenistan’s President Kurbanguly Berdymukhamedov and Azerbaijan’s President Ilham Aliyev (R-L) pose for photographers while attending the Caspian Sea Littoral States summit in Tehran October 16, 2007. (Raheb Homavandi/Reuters)

President Vladimir Putin’s annual call-in show, due to take place this week, has already attracted 700,000 questions, with emphasis on housing programs and benefits. Mayor Yury Luzhkov has demanded that rules governing foreign workers be toughened up. German Gref, the former economic development and trade minister, has been nominated as the next chief executive of Sberbank by the bank’s supervisory board. Russia must shed its dependence on commodity sales for the nation to become a global economic “leader, said Russian Deputy Economy Minister Andrei Belousov. PricewaterhouseCoopers said that Russia could expect robust mergers and acquisitions activity over the next year, as the recent global liquidity squeeze and associated higher costs of borrowing drive down the valuations of potential targets. “The rapid growth [the banks] had will have to slow down because the wholesale funding is not there for them. This will challenge, in the short term, their margins and profitability.” A top Ukrainian official has welcomed statements by Gazprom board chairman Dmitry Medvedev hinting that Gazprom may sell gas directly to the country next year, cutting out gas trader RosUkrEnergo. One outcome of President Putin’s visit to Iran is that the presidents of the Caspian Sea states (Russia, Iran, Kazakhstan, Turkmenistan, Azerbaijan) have agreed that, should one of them be in armed conflict with a third state, neither their territory nor their armed forces will be used against it, implying that Russia will defend Iran’s interests should it come into radical conflict with the United States. The joint statement between Russia and Iran affirmed “the promotion of a fairer and more democratic world order.” Putin had already announced that “We should not even think of making use of force in this region,” and both Putin and Mahmoud Ahmadinejad frequently talk about the need to resist “unipolarism” – a “code for American influence.” Most controversially, Putin also announced that the Caspian Sea states, including Iran, have the right to develop a peaceful nuclear program without limits, although Putin was not clear on when the Russian-built Bushehr nuclear power plant in Iran would be completed, signifying some temperance in his approach, and the project has already been “repeatedly put back”. Russia has proposed holding an economic conference of Caspian Sea states at the level of deputy prime ministers next year in Astrakhan. In Europe, Industry and Energy Minister Viktor Khristenko said that Russia opposed a European Union proposal to prohibit Gazprom from controlling EU natural gas transmission networks as long as the company remains a supplier, highlighting some tensions over the draft legislation. “Regulation of the electricity markets and gas markets does not necessarily have to follow precisely the same pattern.” Top energy officials from Russia and the EU at the Brussels meeting agreed to postpone the dispute over investment access in the gas and electricity sector and “showed a united front on gas prices and secure supplies.” Russia is still in talks with Venezuela to develop a new 220,000 barrels per day refinery in the country that would supply US markets. In its annual Worldwide Press Freedom Index, the media rights group Reporters Without Borders (RSF) has again given Russia a poor ranking. Could Alisher Usmanov become Uzbek president? Russian police are preparing for violence ahead of the Euro 2008 qualifying match between England and Russia, with police forces already reporting a number of attacks ahead of the game.