Pyongyang engages in dangerous but calculated game / Belarusian officials say there have not been bans on milk exports to Russia / Court bailiffs to auction off Telenor's Vimpelcom stock / Government must help people with more than just money
Pyongyang engages in dangerous but calculated game
The current unheard-of worsening of the situation on the Korean Peninsula is not happening by chance. North Korea is pursuing a thought-out strategy decided on at the end of 2008. Pyongyang seems to have concluded that six years of talks have failed to allow it to implement its strategic priorities.
In 2005, when all parties agreed on a formula of "peace and aid for nuclear renunciation," the North Korea leaders hoped for U.S. recognition, firm security guarantees, peace with South Korea, and economic aid. Instead, in exchange for real steps to wind up nuclear programs, including the decommissioning of the nuclear reactor, North Korea was fed up with promises, and its authorities came to the conclusion that the West's true purpose was to change the regime.
North Korea is playing a dangerous but calculated game and is unlikely to let the situation get out of hand. It is prepared to exist as a "besieged fortress" as long as it can. It is also braced for sanctions - their seriousness will determine Pyongyang's response, up to and including suspension of UN membership.
After upping the ante and "taming" newcomers in Washington, Pyongyang will evidently "agree mercifully" to talks. But its bargaining position will be more aggressive than before. North Korea will not renounce its status as a nuclear power. The issue of abandoning nuclear weapons there is currently off the agenda. The most that can be expected is the curtailment of its nuclear and perhaps rocket programs provided Pyongyang gets fair compensation. It is not economic aid, although construction of a nuclear power plant is sure to be one of the terms. North Korea will demand real, verifiable and irreversible steps from the U.S. to guarantee North Korea's security.
Pyongyang's tension-building will sooner or later force Washington to seek a compromise. But a two-way agreement will be short-lived unless reinforced by international guarantees obtained in six-way negotiations, creating a new system of peace and security on the Korean Peninsula.
Belarusian officials say there have not been bans on milk exports to Russia
While the mass media dazzle with experts' comments on a ban on the export of Belarusian dairy products to Russia, official Minsk prefers to pretend that nothing has happened.
According to Valentina Kachan, the chief sanitary inspector of Belarus, companies that planned to export dairy products to Russia had been issued the necessary permits.
"The 500 types of dairy products mentioned [in the press] are hardly ever exported to Russia," she said.
Leonid Zaiko, head of Belarusian analytical center Strategiya, said nobody wants to be the bearer of bad news.
"Only degenerates and Mr. Kudrin speak badly about the Belarusian economy," he said, referring to Russian Finance Minister Alexei Kudrin, who was criticized by President Alexander Lukashenko for recently doubting the country's economic sustainability.
Zaiko said there was nevertheless a serious problem, since "all 118 regions in Belarus have dairy plants, which make direct payments to farms that represent 30% of the country's population."
"Forced cuts in production have dramatically affected their financial situation," he said.
The analyst noted that over 80% of Belarusian dairy exports go to Russia, earning the country $1 billion last year.
Zaiko said it was completely logical for Russians to strive to protect their market, especially since Belarus increased milk and dairy exports to Russia by 37% in January and February 2009 compared to 22% last year.
"This looks like expansionism," he said, adding that milk production was more profitable than oil refining, which explains why Russia does not want to allow Belarus to seize its dairy market.
"According to my calculations, one liter of milk can earn as much as $1 in Russia, while one liter of gasoline brings only 70 cents," Zaiko said.
Court bailiffs to auction off Telenor's Vimpelcom stock
Russia's Federal Bailiff Service (FSSP) said on Monday it had prepared documents to auction off a 26.6% stake in Russian mobile firm VimpelCom held by Norway's telecommunications giant Telenor.
The stake was seized under a court order in March as part of a long-running dispute between Telenor and Russia's Alfa Group, the two main shareholders in VimpelCom, over the operator's move into the Ukrainian market. Each party has filed several lawsuits in the past few years.
Following the latest lawsuit filed by Farimex, which is registered in the British Virgin Islands and holds 0.002% of VimpelCom's stock, Russia's Eighth Arbitration Appeals Court in late February ordered Telenor to pay $1.73 billion to VimpelCom.
On June 3, the Moscow Arbitration Court turned down a Telenor request on suspending case proceedings pending a court-of-appeals verdict.
Natalia Selivanova, head of the FSSP press service, declined to say whether the service had hired a broker to sell the VimpelCom stake.
On Wednesday, the Tyumen-based West Siberian Appeals Court is to examine a Telenor appeal regarding the $1.73 billion payment. Lawyers said case proceedings would be terminated if the appeals court verdict were overruled, and that the Norwegian company could contact the Supreme Arbitration Court if it lost the case.
"The Supreme Arbitration Court is the only option left for Telenor," Lidings Law Firm partner Andrei Zelenin said. "The main hope is the Supreme Arbitration Court in Moscow," Telenor Russia spokeswoman Anna Ivanova-Galitsina said.
Court bailiffs will be able to auction off the 26.6% stake pending a trial. It takes the Supreme Arbitration Court Presidium three to four months to examine any specific case after receiving the appeal, said Maxim Kulkov, a partner with the Russian international law firm, Goltsblat BLP.
Telenor could sue Russia if the FSSP auctions off the disputed VimpelCom stake. Under the 1998 Russian-Norwegian inter-governmental agreement on mutual investment protection, any foreign investor has the right to contact the Arbitration Institute of the Stockholm Chamber of Commerce (SCC), after sustaining losses.
Vladimir Khvalei, a partner with Baker & McKenzie, an international law firm, said it would be difficult to prove that Telenor did not get a fair trial in Russia.
Government must help people with more than just money
Most Russians are prepared to study. According to a poll conducted by SuperJob.ru, 35% of respondents were willing to learn a new profession or trade, and 29% would appreciate learning a related profession.
The Russian government has drafted an impressive employment program, with 23.3 billion rubles ($750 million) to be allocated for fighting and preventing unemployment. The regions are to contribute another 2 billion rubles to the program.
However, the government should give more than just money in this situation. When it approved the unemployment relief program, it stipulated the appropriation of 43.7 billion rubles ($1.4 billion), but cuts in financing are not necessarily bad. What matters is the efficiency of spending money.
A recent report by the Regional Development Ministry shows that the bulk of allocations (19.6 billion rubles, or nearly 80%) will be spent on public works that should embrace 1.1 million people. Indeed, assuming that spending on their organization will be minimal, each participant will receive approximately 17,900 rubles, or a little bit more than the country's average wage.
The government also plans to issue 2.65 billion rubles ($85 million, or 55,000 rubles per person) to 48,200 jobless to start their own businesses, and another 771 million rubles ($25 million, 50,000 rubles per person) to relocate 15,442 jobless to their new places of employment.
And lastly, under the government's advanced training programs, 2 billion rubles ($64.35 million) will be issued for training more than 200,000 people, or as much as 10,000 rubles per capita, which is enough to attend a basic accounting course.
This is all very good, but in today's situation it is necessary to talk not just about numbers. The government could allocate smaller sums if it guaranteed that people could start their businesses fearlessly.
If the conditions of work were changed for small companies and the economy in general, and the law-enforcement agencies were told to reduce their money-collecting activity, the people would immediately feel these positive changes and find their own way to take out loans or learn new professions - but only on the condition that their efforts will not be in vain.
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