RA’s Daily Russia News Blast – Oct. 19, 2007

President Vladimir Putin used a live three-hour call-in session, in which he answered questions from the Russian people, to reiterate criticism of the Bush administration’s missile-defense plan and its stance on Iran and the Iraq war. “Direct dialogue with the leaders of states … is the shortest path to success, rather than a policy of threats, sanctions, and a resolution to use force,” he said. He also said that Russia was developing new nuclear complexes as part of a “grandiose but fully realistic” plan to boost the country’s defences against the United States, signalling “the return of the nuclear arms race.” Higher food prices were a key theme of the call-in. Putin announced that the government had started to sell grain from national reserves to ease domestic prices, and that cuts in import tariffs on milk and other dairy products had been made. He assured his audience that Russia would not see an economic meltdown after his Presidential term is over, and used the term “political erotica” to describe Madeleine Albright’s comment, made years ago, that it was unfair that Russia should have all of Siberia’s resources. Putin’s decision to head the federal list of United Russia in the State Duma elections “may one day be seen as the worst bungle in his biography as a statesman.” Prime Minister Viktor Zubkov has ordered that Cabinet meetings should no longer be televised. The Duma has amended the 2007 budget to increase pensions and investments, and Russian pensioners are to receive payments owed to them from the mid-90s. The central bank is “highly unlikely’” to curb inflation by allowing the ruble to strengthen, according to the Duma’s first Deputy Chairman. Market participants are playing down fears that a gasoline shortage in Moscow and the Moscow region could contribute to a sharp price rise in pump prices in the near future. High mineral extraction taxes and fears of political uncertainty are acting as a drag on Russia’s oil-and-gas-dominated stock market, which has underachieved this year. UK exploration company Timan Oil & Gas said its main exploration and production license for work in Siberia remains valid after a Russian court overturned a government ruling. State-controlled Unified Energy System says that OAO OGK-3, a power generator controlled by Norilsk Nickel, isn’t honoring a contract covering an investment program. Austrian company Strabag SE is planning to invest at least $1 billion a year in Russia to expand capacity in the market for construction of roads and buildings. America has “made progress” towards convincing Russia to co-operate on plans for a missile defence shield in Europe, according to senior US official Daniel Fried, and Washington remains “cautiously optimistic” that a solution can be found. Israeli Prime Minister Ehud Olmert has met with Putin to discuss reported Russian arms deals with Syria and Israel’s concerns about Iran’s nuclear ambitions. US Defence Secretary Robert Gates has said he believes that Putin is serious about trying to play a constructive role in resolving the crisis over Iran’s nuclear program. “President Putin takes Iran seriously as a security concern for Russia, and I think they are prepared to take some actions as befits that.” The Russian Finance Ministry plans to repay a $343 million loan to the US under a 1998 credit agreement for agricultural supplies ahead of schedule, saving $46.7 million in interest. Under a government resolution, Russia will use money from the Stabilization Fund to repay the debt. Russia’s Deputy Prime Minister Alexei Kudrin has reiterated that Russia will join the G8 finance conference this week “as an equal”. Putin sent a telegram of condolences to President of the Islamic Republic of Pakistan over a major terrorist attack staged this week, saying the attack confirms “the necessity of further consolidation of efforts of the international community against terrorism.” From The Guardian’s report on Putin’s call-in: One caller was so stunned to speak directly to the president she forgot her question. “Is it you?” she said. “Yes,” Mr Putin said. “Is it really you?” she asked. “Yes,” he repeated. “Thank you very much for everything, Vladimir Vladimirovich,” she gasped. She then hung up.