World powers vie for leadership in Afghanistan / Russia barred from modernization of Ukraine's gas pipelines / Norilsk Nickel's deals with shareholders attract state attention / Russian Internet domains grow despite crisis
World powers vie for leadership in Afghanistan
The long agonies of the George W. Bush administration was the price the U.S. paid for its quick and easy military victory in Iraq, writes a Russian analyst.
Dmitry Trenin, chairman of the Expert Council of the Carnegie Moscow Center, says Barack Obama is trying to avoid repeating his predecessor's mistakes. The White House hopes that the buildup of troops in Afghanistan will stabilize the political situation there, as happened in Iraq in 2007-2008.
However, Iraq could be a simpler case than Afghanistan, the analyst says.
Obama admitted during his election campaign that the Afghan problem cannot be solved without Pakistan.
A nuclear power with a population of nearly 150 million people, Pakistan is a much more serious problem than Afghanistan. Pakistan's stability has been taxed by Al-Qaida operating in its border provinces as well by religious extremists, the struggle among its elite groups and clans, and confrontation between its civilian politicians and generals.
Given this situation, the world's powers have so far tended to work alone, Trenin says.
The United States is assuming a growing share of responsibility for the NATO operation in Afghanistan, which proceeded parallel to the U.S. operation.
China is watching these developments, fearing that a new confrontation with Muslim countries could aggravate separatist problems in its Uygur province.
Russia, which has given its Western allies an opportunity to deliver troops and cargo to Afghanistan via its territory, is at the same time trying to squeeze U.S. bases out of Central Asia.
India is considering Afghanistan from the viewpoint of its problems with Pakistan.
However, the Afghan problem was recently discussed at international meetings in Moscow and The Hague. These discussions seemingly complement each other, but they are also evidence of growing rivalry over the leading role in the Afghan settlement, the analyst says.
This situation calls for extreme caution. Practice shows that only the Afghans themselves can solve their problems. The price of the new "big game" for the Hindu Kush mountain range is becoming too high for the players, Trenin concludes.
Russia barred from modernization of Ukraine's gas pipelines
Ukraine and the European Union have decided that Russia will not participate in the modernization of Ukraine's gas transportation infrastructure. This means that European companies will eventually assume control over part of it, a role that Russia had coveted.
One of the key issues discussed at the international gas conference in Brussels was the allocation of a loan to Ukraine by the EBRD, the World Bank, and the European Investment Bank. Ukraine negotiated a $2 billion loan, although Russia's Gazprom has estimated the modernization program at $16 billion.
Dmitry Aleksandrov, an analyst at investment company Financial Bridge, said: "$2 billion will definitely not be enough. The Ukrainian gas transportation infrastructure comprises some 10,000 km (6,215 miles) of pipelines, many of which must be replaced. This will cost tens of billions of dollars."
But this is not Russia's concern. "Modernization can be used as a cover for changing the structure of ownership of the gas transportation network," Aleksandrov said. "Ukraine has most likely agreed to turn over part of the network to a European company."
Russia's gas monopoly has long been trying to assume control over part of the Ukrainian gas pipeline system. This would have allowed it to lower transit risks and to exclude problems such as those it experienced early this year, when EU countries were left without Russian natural gas for nearly three weeks.
However, Ukraine and Europe do not want Gazprom to increase its influence, Aleksandrov said.
There is one more problem facing the Russian energy giant.
Dmitry Abzalov, senior analyst at the Center for Current Politics think tank, said: "The declaration [adopted in Brussels] has a clause on the potential expansion of the Ukrainian gas transportation system. If this happens, it will be a heavy blow to the Nord Stream and South Stream projects."
Brussels, which does not want to depend on the above two pipelines, is negotiating with Belarus, the second and last window through which Russian natural gas is supplied to Europe. If Belarus gives the EU access to its gas transportation infrastructure, Russia will be left empty-handed, Abzalov said.
Norilsk Nickel's deals with shareholders attract state attention
Deputy Prime Minister Igor Sechin, in charge of Russian industry, has become interested in the financial situation of Norilsk Nickel and its deals conducted in favor of shareholders. The Audit Chamber, Vneshekonombank (VEB) and VTB have also shown an interest.
In the second half of 2008, the company spent 86 billion rubles to buy back shares and assets from its holders.
The deputy prime minister also wants to know why Norilsk handed control over its pension fund and geological exploration licenses to the Onexim group. Most of the deals were bitterly fought over between UC RusAl and Interros as the conflict between shareholders erupted. UC RusAl even tried to stop Norilsk from buying back the shares through court action.
Now many have remembered these deals. Norilsk seems to have fallen into the dragnet, jokes Marat Gabitov, Unicredit Securities analyst. The Audit Chamber, for one, decided to check the spending of money by the OGK-3 (consolidated generating company), because the power company needs cash to fulfill its investment obligations, two of chamber staff told the paper. Early in March, it was the Federal Service for Financial Markets that asked the Norilsk Nickel registrator for details of its share-buying deals, said sources close to the company.
VEB and VTB are also interested in Norilsk shares (they hold as collateral 25% and 16.7% of its shares, respectively). "We owe these assets and must know what is happening to them," said a source close to VEB. The banks are against spinning off or selling the company's energy assets and selling the 4% Treasury shares only recently bought at the price of $400 million. These were the decisions made in February by the Norilsk board of directors.
The state is directly concerned with this company, even though it is a private one, said an informed official close to the government, explaining the moves. Norilsk belongs to strategic companies and provides jobs for several towns. Besides, some of its shares are pledged with the state, and their value may fall. Finally, there is information that these deals have been made in the interests of a narrow group close to the company's management, and that money and assets are being stripped unlawfully. This needs to be looked into, the official said.
Russian Internet domains grow despite crisis
The number of Russian Internet hostnames has grown by 1 million in less than 18 months to 2 million, and is expected to increase to 3 million in 2010, Ru-Center, the domain names registration center, forecasts. Analysts support this optimistic scenario.
According to Ru-Center, Russian domains have been growing at the second highest pace in the world in 2008, with Chinese domains (.cn) leading the race.
The Center believes that the growth pace of Russian domains will slow down. First, the majority of those willing to register their domains in Russia's capital and other large cities have done so, while the spread of the Internet, especially broadband Internet, in small and medium-sized cities has slowed down because of the economic crisis.
Another reason for the slowdown will be the official introduction of the domain zone .rf written in Cyrillic characters, in late June 2009.
Andrei Vorobyov, PR director at Ru-Center, said this is why the number of Russian domains would grow to 3 million no sooner than in 2010.
Analysts are optimistic about the future of the .ru zone.
Alexei Belyayev, president of the Internet and Business association, said: "In the near future, growth will be supported by small and medium-sized businesses."
Leonid Delitsyn, an expert at the Finam investment company, said: "The spread of the Internet is not large in Russia, with the electronic business only catching up with Western Europe and the United States. Therefore, the global crisis will not affect the growth of registrations as seriously as the other, more developed, sectors."
According to iKS Consulting, a company specializing in the telecom market in Russia and the CIS, the spread of broadband Internet in Russia is only 17% and will grow to 21% in 2009.
Analysts say the introduction of the Cyrillic zone is unlikely to hamper the development of the Russian part of the Internet.
"The registration price has decreased in the past few years, and so many people will register their domains in the .ru zone and in the .rf [Cyrillic] zone," Belyayev said.
"I would say the new zone will complement the .ru zone rather than compete with it," Delitsyn said.
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