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RA’s Daily Russia News Blast – Sept. 20, 2007

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Russia’s new Prime Minister Viktor Zubkov chairs his first government meeting in Moscow September 20, 2007. (Photo: REUTERS/RIA-Novosti/Kremlin)

In a signal that Russia intends to be taken seriously as a democratic entity, business leaders are predicting that tomorrow’s RSPP meeting with Vladimir Putin will be less politically oriented than those held by former President Boris Yeltsin; subjects such as cabinet reshuffling or structural changes are likely to be overlooked. It is thought that Anatoly Chubais, chief executive of Unified Energy Systems, could be appointed Energy Minister in the new Cabinet. The resignation of Defense Minister Anatoly Serdyukov, put forward due to his family ties with Prime Minister Viktor Zubkov, was not required by the law, sparking suspicions that the resignation was an effort to boost Zubkov’s image as a responsible leader. There remains the possibility that Putin will not accept the resignation. Zubkov meanwhile held a stormy first Cabinet meeting, during which he attacked several hapless ministries. He targeted the Transport Ministry in particular, which failed to meet a 2006 deadline set by Putin for the completion of a port development, growling, “Who dared to correct the President’s orders so easily?” A new party, People for Democracy and Justice, is being set up by opposition leader Mikhail Kasyanov, who separated earlier this year from Garry Kasparov’s coalition. The Duma is currently debating the suspension of the Treaty on Conventional Armed Forces in Europe, saying that the document is outdated, although a Russian defense official said that the country would not use the suspension as a chance to build up arms. US computer company Dell has opened a store in Moscow. Russia’s three biggest mobile phone operators have asked the Economy Ministry for help obtaining licenses in China. The Russian government, together with companies such as Gazprom, Russian Railways and Unified Energy System, plans to spend $1 trillion through 2020 on infrastructure. Strict new European Union regulations to ban non-EU firms from controlling European energy networks, aimed at monopolies such as Gazprom, have been announced by the EU Commission President, José Manuel Barroso. The new proposals are seen in Russia as “evidence of how skeptical of Moscow European leaders have become,” and “could compel the company to divest its sizeable stakes in energy companies from Latvia to Italy.” The Iraqi Foreign Minister says that Lukoil will have an advantage in the tender for West Qurna-2 oil field should it make a bid. Iraq will favour Russia in its oil and gas contracts as part of a deal in which Russia will write off 90% of Iraq’s $10bn debt. It does not appear that the US will reach an agreement with Russia over the Gabala missile defense radar. US Deputy Assistant Secretary of State David Kramer has forecasted that the upcoming Russian elections could negatively affect relations between the two countries. Russia abstained from a UN vote to renew its NATO troop mandate in Afghanistan due to “concerns over an expression of appreciation for the Japanese naval mission supporting U.S.-led forces in Afghanistan.” The Estonian government said it will not allow a German-Russian consortium to conduct a survey of its exclusive economic zone in the Baltic Sea for a planned underwater gas pipeline. The Russian Foreign Ministry agrees with the UN secretary general that Israel should reconsider its position on the Gaza Strip. Russia has acknowledged that its aircraft violated Finnish airspace last week, but said that it was unintentional. Two new missile defense systems will become operable for Russian armed forces in the next years, because “over 50% of the [current systems] are obsolete.” Analysts believe that the slowing rate of Russia’s industrial production was due to a drop in Gazprom exports, the global sub-prime mortgage crisis, and the warm weather. Russian investment bank KIT Finance expects to gain almost $100m from an IPO on the London Stock Exchange next year. The 6th International Investment Forum, held in Sochi, has attracted about 10,000 Russian and foreign businessmen and, it is thought, will result in business deals worth over $5bn. Ukraine has rejected a Russian proposal on how to determine the origin of the poison given to President Viktor Yushchenko three years ago, on the grounds that “the tests will only be valid if they are conducted on Ukrainian territory.” Former Russian banker Alexander Konanykhin has been granted political asylum by a US court, despite the US government’s belief that Konanykhin is wanted in Russia for criminal, rather than political reasons. Russian scientists will claim 1.2 million square kilometers of Arctic territory, although the energy-rich area is likely to come under a number of disputes from different countries.