KIEV — Standard and Poor's cut its outlook on Ukraine's long-term credit rating to negative on Thursday, citing Kiev's lack of progress in talks with the International Monetary Fund and sole gas supplier Russia.
The move followed an announcement by Ukraine's deputy economy minister earlier on Thursday that the cash-strapped country wanted to delay repayment of $3 billion of debt it owes the IMF this year by a decade.
"Talks are being held now on restructuring the debt falling due this year, [which amounts to] $3 billion," First Deputy Economy Minister Vadim Kopylov told reporters Thursday. "We need to discuss delaying repayment of these funds by 10 years."
"Why not, if we have Greece [with a smaller population to Ukraine] and such huge loans [being restructured], while here we have 46 million people and a restructuring of $3 billion?" he said.
The IMF, which has never had a borrower default on its debt, said it had not received a request for restructuring.
S&P currently rates the former Soviet republic's long- and short-term debt B+/B.
"The negative outlook reflects our view of increased risks regarding Ukraine's significant fiscal and external refinancing needs," S&P said in a statement.
Kiev's efforts to restructure its debt, a break with policy, jolted the debt market. Ukrainian five-year credit default swaps were 18 basis points higher on the day at 768 basis points, according to Markit, though S&P's announcement failed to lift them higher still. Ukrainian debt spreads widened by 37 basis points on the day to 770 basis points over U.S. Treasuries on JPMorgan's EMBI+ Index.
"In our view, increased risk aversion toward Ukraine's funding needs has been fueled by the lack of clarity over the ultimate direction of government policy in relation to ongoing negotiations with the IMF and Russian gas company Gazprom," S&P said.
Ukraine's government has tried without success for more than a year to negotiate a lower price on Russian gas that Ukraine depends on heavily for its energy and heating needs.
Hoping to get a substantial discount from Russia, the cabinet has also refused to follow the IMF's advice and raise gas and heating prices for households, prompting the fund to suspend its $15 billion lending program in early 2011.
As a condition for reviewing the gas price for Ukraine, Russia insists on taking a stake in Ukraine's pipeline network, which transports the bulk of Russian gas bound for Europe.
But Ukraine sees the asset as a cornerstone of its economic sovereignty and says it can be managed only by a consortium that should also include large European energy firms.
"It seems unlikely to us that a deal to lower the price of gas imports will be made without Ukraine giving up control of key energy infrastructure assets," S&P said.
Analysts say the issue of raising domestic gas prices, an IMF condition, is unlikely to be resolved until the parliamentary elections in October, as the move is certain to hurt the government's already sagging popularity.
пятница, 16 марта 2012 г.
Putin Asks for May Holiday Extension
Prime Minister Vladimir Putin on Thursday announced a change in the May national holiday schedule that could shatter plans to hold a large opposition rally around the day of his inauguration as president.
He ordered an extended break for the Victory Day holiday, a development that gives malcontents a tempting option to spend that time out of town, catching some fresh air.
A large turnout would encourage anti-Putin sentiment and increase pressure for an earnest crackdown on corruption and greater democracy.
Instead of one day off on Wednesday, May 9, people will have four days that week to celebrate and tend to their dachas.
Time off will start May 6, which as a Sunday would have been off anyway.
But the following two days before Victory Day will provide unexpected downtime for businesses, including the day of Putin's inauguration as president on May 7.
As compensation, people will have to work two Saturdays, May 5 and May 12.
Putin told the Presidium, a subset of the Cabinet, that he moved around the week and weekend days based on requests from citizens.
At the Presidium session, Putin also heard some heart-warming economic numbers.
Russian airlines flew 12.6 percent more passengers last year, or 64 million people, Transportation Minister Igor Levitin said.
Deputy Economic Development Minister Valery Savelyev reported that 54 federal programs — which account for about 10 percent of federal spending and cover investment in areas ranging from satellite navigation to the Bolshoi Theater — had met their targets last year.
"It's gratifying to realize that the negative developments in the Russian economy that were linked to the [global] financial crisis are little by little a thing of the past," he said at a news conference after the session.
Private co-financing of the projects, which the federal programs seek to attract, rose 6 percent above the plan last year, he said. Business participation in the same programs in 2010 was down 20 percent.
As an example of successes, he said the Glonass satellite navigation system went into operation last year.
Other achievements of last year included construction of 350 kilometers of federal roads and 1,000 kilometers of regional and municipal roads, Savelyev said.
Access to running water in rural areas increased to more than 57 percent.
Russia destroyed 60 percent of its chemical weapons stockpile by the end of last year as part of its obligations under international agreements.
Putin himself spewed some feel-good numbers Thursday.
Average wages rose 9 percent last year, he said at a separate meeting of a commission that brings together officials, businesses and unions. That number is higher than what the Economic Development Ministry forecast for this year.
Putin also said the jobless rate dipped below the pre-crisis level, with 4.9 million people out of work at the start of this year.
He ordered an extended break for the Victory Day holiday, a development that gives malcontents a tempting option to spend that time out of town, catching some fresh air.
A large turnout would encourage anti-Putin sentiment and increase pressure for an earnest crackdown on corruption and greater democracy.
Instead of one day off on Wednesday, May 9, people will have four days that week to celebrate and tend to their dachas.
Time off will start May 6, which as a Sunday would have been off anyway.
But the following two days before Victory Day will provide unexpected downtime for businesses, including the day of Putin's inauguration as president on May 7.
As compensation, people will have to work two Saturdays, May 5 and May 12.
Putin told the Presidium, a subset of the Cabinet, that he moved around the week and weekend days based on requests from citizens.
At the Presidium session, Putin also heard some heart-warming economic numbers.
Russian airlines flew 12.6 percent more passengers last year, or 64 million people, Transportation Minister Igor Levitin said.
Deputy Economic Development Minister Valery Savelyev reported that 54 federal programs — which account for about 10 percent of federal spending and cover investment in areas ranging from satellite navigation to the Bolshoi Theater — had met their targets last year.
"It's gratifying to realize that the negative developments in the Russian economy that were linked to the [global] financial crisis are little by little a thing of the past," he said at a news conference after the session.
Private co-financing of the projects, which the federal programs seek to attract, rose 6 percent above the plan last year, he said. Business participation in the same programs in 2010 was down 20 percent.
As an example of successes, he said the Glonass satellite navigation system went into operation last year.
Other achievements of last year included construction of 350 kilometers of federal roads and 1,000 kilometers of regional and municipal roads, Savelyev said.
Access to running water in rural areas increased to more than 57 percent.
Russia destroyed 60 percent of its chemical weapons stockpile by the end of last year as part of its obligations under international agreements.
Putin himself spewed some feel-good numbers Thursday.
Average wages rose 9 percent last year, he said at a separate meeting of a commission that brings together officials, businesses and unions. That number is higher than what the Economic Development Ministry forecast for this year.
Putin also said the jobless rate dipped below the pre-crisis level, with 4.9 million people out of work at the start of this year.
Senator Sees No 'Slam Dunk' for Trade
WASHINGTON — A senior Republican U.S. senator on Thursday warned the White House that passing legislation to bolster trade relations with Russia won’t be a “slam dunk” because of concerns over that country’s record on human rights and foreign policy actions.
“It’s simply unreasonable to believe that PNTR [permanent normal trade relations] can be extended to Russia without a more thorough examination of the issues,” Senator Jon Kyl, the No. 2 Republican in the Senate, said at a hearing.
With Russia on the verge of joining the World Trade Organization, the United States is under pressure to repeal a largely symbolic Cold War-era provision known as the Jackson-Vanik amendment that is at odds with WTO rules.
The measure tied U.S. trade relations with the former Soviet Union to the rights of Jews and other religious minorities to emigrate freely. The Soviet Union collapsed two decades ago, and Russia has been judged to be in compliance with the Jackson-Vanik provision since the 1990s.
At a Finance Committee hearing to examine the issue, Kyl said he had very strong reservations.
“I think I understand the message that this hearing is intended to convey: American businesses want access to Russia’s market. We should repeal Jackson-Vanik, grant Russia permanent trade relations without delay and without conditions. It’s a slam dunk,” Kyl said, reiterating what he understood to be the process proposed by those who want to end trade restrictions on Russia. “But,” he added, “it isn’t a slam dunk.”
“While immigration is no longer an issue, Russia’s blatant disregard for human rights and the rule of law is every bit as relevant as it was decades ago,” Kyl said.
The Arizona Republican also raised concern with Russia’s support for Syrian President Bashar Assad’s bloody crackdown on anti-government protests.
“In recent months, Moscow has not only blocked UN Security Council action on Syria, but has continued to sell arms to Assad’s regime which is responsible for the slaughter of innocent citizens. This is not a government to be trusted to uphold its international commitments or give a fair shake to American businesses,” Kyl said.
In a letter published in The New York Times on Thursday, a former Soviet political prisoner, a former assistant to Nobel Prize winner Andrei Sakharov and a former director of the Andrei Sakharov Program on Human Rights at Harvard lambasted the Obama administration for delinking human rights from trade relations with Russia.
Vladimir Bukovsky, Alex Goldfarb and Tatyana Yankelevich wrote that “the revocation of the Jackson-Vanik amendment, which for almost 40 years has linked the Kremlin’s human rights performance to U.S. trade benefits, would add insult to the injury of President Obama’s congratulating Mr. Putin for his “victory” in last week’s “election.”
“American legislative pressure is as important today as at the time of Soviet repression, the letter said. “Appeasement of Mr. Putin would be a betrayal of this legacy [of Sakharov and Jackson].”
“It’s simply unreasonable to believe that PNTR [permanent normal trade relations] can be extended to Russia without a more thorough examination of the issues,” Senator Jon Kyl, the No. 2 Republican in the Senate, said at a hearing.
With Russia on the verge of joining the World Trade Organization, the United States is under pressure to repeal a largely symbolic Cold War-era provision known as the Jackson-Vanik amendment that is at odds with WTO rules.
The measure tied U.S. trade relations with the former Soviet Union to the rights of Jews and other religious minorities to emigrate freely. The Soviet Union collapsed two decades ago, and Russia has been judged to be in compliance with the Jackson-Vanik provision since the 1990s.
At a Finance Committee hearing to examine the issue, Kyl said he had very strong reservations.
“I think I understand the message that this hearing is intended to convey: American businesses want access to Russia’s market. We should repeal Jackson-Vanik, grant Russia permanent trade relations without delay and without conditions. It’s a slam dunk,” Kyl said, reiterating what he understood to be the process proposed by those who want to end trade restrictions on Russia. “But,” he added, “it isn’t a slam dunk.”
“While immigration is no longer an issue, Russia’s blatant disregard for human rights and the rule of law is every bit as relevant as it was decades ago,” Kyl said.
The Arizona Republican also raised concern with Russia’s support for Syrian President Bashar Assad’s bloody crackdown on anti-government protests.
“In recent months, Moscow has not only blocked UN Security Council action on Syria, but has continued to sell arms to Assad’s regime which is responsible for the slaughter of innocent citizens. This is not a government to be trusted to uphold its international commitments or give a fair shake to American businesses,” Kyl said.
In a letter published in The New York Times on Thursday, a former Soviet political prisoner, a former assistant to Nobel Prize winner Andrei Sakharov and a former director of the Andrei Sakharov Program on Human Rights at Harvard lambasted the Obama administration for delinking human rights from trade relations with Russia.
Vladimir Bukovsky, Alex Goldfarb and Tatyana Yankelevich wrote that “the revocation of the Jackson-Vanik amendment, which for almost 40 years has linked the Kremlin’s human rights performance to U.S. trade benefits, would add insult to the injury of President Obama’s congratulating Mr. Putin for his “victory” in last week’s “election.”
“American legislative pressure is as important today as at the time of Soviet repression, the letter said. “Appeasement of Mr. Putin would be a betrayal of this legacy [of Sakharov and Jackson].”
Medvedev Acts on Arrest of Activist
President Dmitry Medvedev on Thursday ordered prosecutors to examine the case of Suren Gazaryan, the environmentalist arrested in the Krasnodar region while trying to take photographs of a dacha allegedly built in a protected area.
Medvedev apparently gave the order after speaking to representatives of Russian environmental groups during a session of the presidential council on human rights dedicated to environmental affairs.
"The council spoke about Gazaryan more than once, and the president said he is ordering prosecutors to examine the case in the utmost detail," council chairman Mikhail Fedotov told reporters after the meeting in Novokuibyshevsk in the Samara region, Interfax reported.
Representatives of green groups including Greenpeace, World Wildlife Fund Russia, or WWF, and Baikal Environmental Wave had drafted a report detailing the problems, including the "de-environmentalization" of Russian legislation over the past 10 years, said Katya Khmylova of WWF Russia, who contributed to the document.
"This report isn't about the 10 most polluted spots in Moscow but about whether citizens are able to defend their environmental rights. This part of the report will be very critical," Greenpeace Russia's Sergei Tsyplenkov told Interfax ahead of the meeting.
Lobbyists went into the meeting promising to raise the case of Gazaryan, an activist from NGO North Caucasus Environmental Watch, who was jailed for 10 days Wednesday for disobeying police orders.
Gazaryan and his lawyer Viktor Dutlov were detained on Tuesday when they tried to take photographs of the fence of a luxurious property rumored to belong to regional governor Alexander Tkachyov.
Gazaryan is accused of destroying part of the fence during a protest in November last year, and faces five years in jail if found guilty. The photographs were reportedly to be used as evidence in his defense.
Medvedev apparently gave the order after speaking to representatives of Russian environmental groups during a session of the presidential council on human rights dedicated to environmental affairs.
"The council spoke about Gazaryan more than once, and the president said he is ordering prosecutors to examine the case in the utmost detail," council chairman Mikhail Fedotov told reporters after the meeting in Novokuibyshevsk in the Samara region, Interfax reported.
Representatives of green groups including Greenpeace, World Wildlife Fund Russia, or WWF, and Baikal Environmental Wave had drafted a report detailing the problems, including the "de-environmentalization" of Russian legislation over the past 10 years, said Katya Khmylova of WWF Russia, who contributed to the document.
"This report isn't about the 10 most polluted spots in Moscow but about whether citizens are able to defend their environmental rights. This part of the report will be very critical," Greenpeace Russia's Sergei Tsyplenkov told Interfax ahead of the meeting.
Lobbyists went into the meeting promising to raise the case of Gazaryan, an activist from NGO North Caucasus Environmental Watch, who was jailed for 10 days Wednesday for disobeying police orders.
Gazaryan and his lawyer Viktor Dutlov were detained on Tuesday when they tried to take photographs of the fence of a luxurious property rumored to belong to regional governor Alexander Tkachyov.
Gazaryan is accused of destroying part of the fence during a protest in November last year, and faces five years in jail if found guilty. The photographs were reportedly to be used as evidence in his defense.
S&P Sees Conflicted Approach to Banking
Credit-rating agency Standard and Poor's said Thursday that the government's approach to banks under its control was "conflicted" as state-owned Sberbank appeared likely to go ahead with a flagship $5.5 billion privatization in April.
The share price of the country's biggest lender has recently broken through the 100 ruble threshold set by bank president German Gref and Central Bank Deputy Chairman Alexei Ulyukayev as a precondition for the sale.
Standard and Poor's, or S&P, said there was a contradiction between the privatization plans for Russia's state-owned financial institutions and pressure for growth. Later this year, the government is likely to sell a stake in VTB, the country's second-largest bank. VTB has openly said it needs to raise capital.
Citing unnamed sources, business daily Vedomosti reported Thursday that Sberbank's privatization was scheduled for April. The Central Bank originally planned to offer a 7.6 percent stake in Sberbank to investors in the fall of 2011, but it was delayed after markets plunged.
The roadshow for the sale will begin on April 26, Reuters reported. Sberbank declined to comment on the time frame Thursday.
"There is a conflict between wanting to privatize and wanting things to grow and needing capital," Scott Bugie, managing director of financial ratings at S&P, told a news conference Thursday.
"The state is conflicted because it says it wants to privatize banks, but it is also pretty aggressive in pushing banks to expand," he said. "Sometimes it capitalizes and sometimes it doesn't."
Government-owned banks controlled 53.3 percent of the market in 2011, according to statistics from S&P. In 2007, the figure was 43.4 percent. The top three banks in the country — Sberbank, VTB and Gazprombank — controlled 41.6 percent of the market in 2011.
The dominance of state-owned banks and their expansion in recent years has squeezed privately owned institutions, including foreign banks. "There are more risks for the private-sector banks," Bugie said.
In a report released Wednesday, S&P outlined traditional reasons for their current assessment of Russia's banking sector, which has a lower rating than that of other emerging markets including India and China.
The economy's dependency on commodity prices, the poor credit standing of nonexport industries, regulatory failings and shallow domestic capital markets were weaknesses for the banking industry, the report said. Reduced economic balances, a current account surplus and funding expansion with retail deposits were among the strengths.
"The privatization of 7.6 percent of Sberbank will not have a significant effect on the bank's credit profile," Bugie said. The state will retain 50 percent plus one share of the lender after the sale.
Bugie said capitalization and any funds raised in privatization were more of an issue for Russia's second-biggest lender
"The capital is more in play for VTB than for Sberbank," Bugie said.
The share price of the country's biggest lender has recently broken through the 100 ruble threshold set by bank president German Gref and Central Bank Deputy Chairman Alexei Ulyukayev as a precondition for the sale.
Standard and Poor's, or S&P, said there was a contradiction between the privatization plans for Russia's state-owned financial institutions and pressure for growth. Later this year, the government is likely to sell a stake in VTB, the country's second-largest bank. VTB has openly said it needs to raise capital.
Citing unnamed sources, business daily Vedomosti reported Thursday that Sberbank's privatization was scheduled for April. The Central Bank originally planned to offer a 7.6 percent stake in Sberbank to investors in the fall of 2011, but it was delayed after markets plunged.
The roadshow for the sale will begin on April 26, Reuters reported. Sberbank declined to comment on the time frame Thursday.
"There is a conflict between wanting to privatize and wanting things to grow and needing capital," Scott Bugie, managing director of financial ratings at S&P, told a news conference Thursday.
"The state is conflicted because it says it wants to privatize banks, but it is also pretty aggressive in pushing banks to expand," he said. "Sometimes it capitalizes and sometimes it doesn't."
Government-owned banks controlled 53.3 percent of the market in 2011, according to statistics from S&P. In 2007, the figure was 43.4 percent. The top three banks in the country — Sberbank, VTB and Gazprombank — controlled 41.6 percent of the market in 2011.
The dominance of state-owned banks and their expansion in recent years has squeezed privately owned institutions, including foreign banks. "There are more risks for the private-sector banks," Bugie said.
In a report released Wednesday, S&P outlined traditional reasons for their current assessment of Russia's banking sector, which has a lower rating than that of other emerging markets including India and China.
The economy's dependency on commodity prices, the poor credit standing of nonexport industries, regulatory failings and shallow domestic capital markets were weaknesses for the banking industry, the report said. Reduced economic balances, a current account surplus and funding expansion with retail deposits were among the strengths.
"The privatization of 7.6 percent of Sberbank will not have a significant effect on the bank's credit profile," Bugie said. The state will retain 50 percent plus one share of the lender after the sale.
Bugie said capitalization and any funds raised in privatization were more of an issue for Russia's second-biggest lender
"The capital is more in play for VTB than for Sberbank," Bugie said.
Newsmaker: Vekselberg's Career Is Filled With Energy
As a young engineer in the late 1980s, Viktor Vekselberg showed initiative and was well-liked by co-workers at the Moscow-based company where he helped develop equipment for oil exploration.
But there was no sign that he would one day become a multibillionaire.
"He was full of energy and the life of the party," said one of Vekselberg's former co-workers at the company, Konnas. "He had a creative approach and always showed initiative.
"No one expected him to choose a different career path," said the former co-worker, who still works for Konnas and asked not to be identified because he was not authorized to speak with the media.
Those personal qualities, however, allowed Vekselberg, 54, to become the head of one of Konnas' departments and subsequently buy the whole company.
The eyes of the business community turned to Vekselberg this week after he resigned as chairman of United Company RusAl, accusing its management of drawing the world's largest aluminum producer into crisis and bringing a conflict between him and majority owner Oleg Deripaska into the open.
Vekselberg, who holds 15.8 percent of RusAl, had chaired the aluminum giant since it was established in 2007 from the merger of his SUAL, Deripaska's Russian Aluminum and Swiss-based Glencore International. SUAL — founded by Vekselberg and his university classmate Len Blavatnik, who bought aluminum assets across the country in the 1990s — was one of the world's biggest aluminum makers at the time of the merger.
Vekselberg, ranked 64th in Forbes magazine's list of the world's wealthiest businessmen with an estimated fortune of $12.4 billion, is said to have made his first million selling scrap copper from worn-out cables abroad.
A graduate of Moscow State Railway University, he founded Renova in 1990 and expanded it into a diversified holding with assets in oil and gas, metals and mining, energy, construction and telecommunications. Vekselberg is Renova's chairman.
In 2010, President Dmitry Medvedev appointed him to oversee the creation of the Skolkovo innovation center, the Russian answer to California's Silicon Valley.
Vekselberg is independent in his decision making but "absorbs the experience of others," said Alexander Galitsky, managing partner of a venture capital fund, Almaz Capital Partners, and a board member of the Skolkovo Foundation chaired by Vekselberg.
"He's very responsible, and if he starts doing something, he sees it through to the end," Galitsky said.
Unlike many tycoons, Vekselberg is very open in communicating with various people, he added. "There were many people at his last birthday party, but he managed to spend some time with everyone," he said. "His family is also very nice."
Vekselberg has an adult daughter and a son. His wife, Marina Dobrynina, chairs the Dobry Vek charity for people with mental disorders.
Like many oligarchs, Ukrainian-born Vekselberg has an expensive hobby: He is the world's largest private collector of Faberge eggs, which he has repatriated to Russia.
But there was no sign that he would one day become a multibillionaire.
"He was full of energy and the life of the party," said one of Vekselberg's former co-workers at the company, Konnas. "He had a creative approach and always showed initiative.
"No one expected him to choose a different career path," said the former co-worker, who still works for Konnas and asked not to be identified because he was not authorized to speak with the media.
Those personal qualities, however, allowed Vekselberg, 54, to become the head of one of Konnas' departments and subsequently buy the whole company.
The eyes of the business community turned to Vekselberg this week after he resigned as chairman of United Company RusAl, accusing its management of drawing the world's largest aluminum producer into crisis and bringing a conflict between him and majority owner Oleg Deripaska into the open.
Vekselberg, who holds 15.8 percent of RusAl, had chaired the aluminum giant since it was established in 2007 from the merger of his SUAL, Deripaska's Russian Aluminum and Swiss-based Glencore International. SUAL — founded by Vekselberg and his university classmate Len Blavatnik, who bought aluminum assets across the country in the 1990s — was one of the world's biggest aluminum makers at the time of the merger.
Vekselberg, ranked 64th in Forbes magazine's list of the world's wealthiest businessmen with an estimated fortune of $12.4 billion, is said to have made his first million selling scrap copper from worn-out cables abroad.
A graduate of Moscow State Railway University, he founded Renova in 1990 and expanded it into a diversified holding with assets in oil and gas, metals and mining, energy, construction and telecommunications. Vekselberg is Renova's chairman.
In 2010, President Dmitry Medvedev appointed him to oversee the creation of the Skolkovo innovation center, the Russian answer to California's Silicon Valley.
Vekselberg is independent in his decision making but "absorbs the experience of others," said Alexander Galitsky, managing partner of a venture capital fund, Almaz Capital Partners, and a board member of the Skolkovo Foundation chaired by Vekselberg.
"He's very responsible, and if he starts doing something, he sees it through to the end," Galitsky said.
Unlike many tycoons, Vekselberg is very open in communicating with various people, he added. "There were many people at his last birthday party, but he managed to spend some time with everyone," he said. "His family is also very nice."
Vekselberg has an adult daughter and a son. His wife, Marina Dobrynina, chairs the Dobry Vek charity for people with mental disorders.
Like many oligarchs, Ukrainian-born Vekselberg has an expensive hobby: He is the world's largest private collector of Faberge eggs, which he has repatriated to Russia.
среда, 14 марта 2012 г.
NATO Lessons From Libya Mission One Year On
NATO's intervention in Libya one year ago helped to avert a humanitarian catastrophe and created the conditions for Libya's citizens to end Moammar Gadhafi's dictatorship.
The military operation highlighted important improvements in European leadership since the Bosnian debacle in the 1990s, but the conditions underlying the Libya mission's success cannot be counted upon to exist again in the future. Indeed, NATO's accomplishments in the Libya operation risk obscuring persistent weaknesses in Europe's military capabilities.
Europe's unity of purpose in Libya contrasts sharply with its divisions and indecisiveness as Yugoslavia disintegrated in the early 1990s. The United States had to coax many Western European countries into helping to stop the slaughter of innocents in Bosnia. Although the trans-Atlantic alliance was more unified and responsive during the subsequent Kosovo crisis, the United States was still firmly in the driver's seat. In Libya, the roles were reversed: Western Europeans had to push the United States to take action.
The manner in which U.S. President Barack Obama brought the United States into the effort to protect Libyan civilians mollified European concerns about American hubris that had grown out of the Iraq war.
It also made possible a broad coalition of countries, as well as the first-ever call for intervention from the Arab League. Obama's decision that the United States should play a supporting role with other NATO partners — particularly France and Britain — taking the lead, reinforced the global perception of the mission's legitimacy.
Today, the growing debate about a Syrian intervention raises legitimate questions concerning whether Libya was a unique situation. Libya's proximity to Europe both lowered barriers to participation and stimulated Europe's sense of responsibility, while Gadhafi was a reviled figure with few friends.
Moreover, many European countries have direct interests in Libya and thus had a clear stake in the outcome. Libyans' opposition to Gadhafi was relatively well organized, was recognized by the international community and had explicitly called for outside intervention.
While the conditions in Libya were certainly optimal, the situation in Syria is better described as uniquely complicated for any intervention. For starters, Syria's location in the eastern Mediterranean is not as advantageous as is Libya's position in North Africa.
In addition, Syria's borders with Turkey, Iraq, Lebanon and Israel present unique challenges to regional security, given the potential not only for international conflict, but also for destabilizing cross-border flows of refugees. Syria also has allies — above all, Russia with its veto-wielding seat on the United Nations Security Council.
The significant obstacles to intervention and the genuine risk of making an already terrible situation worse makes direct military intervention in Syria a remote possibility at this time. That is tragic in many ways, but it does not mean that the positive post-Libya momentum toward the protection of civilians is entirely lost. Even though it ended in failure, the Arab League agreement with the regime of Syrian President Bashar Assad to allow observers into Syria to facilitate an end to the conflict was brokered, as Oman's foreign minister said, "to save the Arab world from Western intervention."
The Arab League's mission did not stop the killing, but it represented an escalation of pressure to end the slaughter — and it was based on leverage gained in Libya.
For NATO, that leverage depends upon its members' ability to marshal the will and resources to intervene if necessary. In Libya, Europe finally had the will to lead, but it largely lacked the means and thus relied heavily on the United States.
In addition to its air-strike deficiencies, Europe demonstrated serious shortfalls across all of the areas required to sustain any air campaign. As General Mark Welsh, commander of U.S. Air Forces in Europe, told top officers and industry executives at a gathering last summer, "We need more intelligence, surveillance and reconnaissance capability, and we need it now."
Unfortunately, the ongoing economic crisis is exerting downward pressure on defense budgets across NATO, exposing the need for greater cooperation among the alliance's European members.
The harm caused by budget cuts is likely to multiply if all European governments slash spending in the same areas. German Air Force Commander Lieutenant General Aarne Kreuzinger-Janik warns that this would create "even bigger gaps and shortfalls." European governments must now work to ensure that they invest their limited resources in the right areas.
The trans-Atlantic alliance has reached a fork in the road. Down the path less traveled lies greater coordination on both strategic objectives and development of military capacity — particularly within Europe, where governments must better allocate resources among themselves to overcome the key deficiencies revealed by the Libya mission. The more familiar road leads to wasteful overlap and lower investment in key technologies, leaving wider gaps than ever in Europe's defense capability.
If Europe is to build on its success in Libya, it needs to take the road less traveled. It will make all the difference.
John D. Podesta, chief of staff to President Bill Clinton from 1998 to 2001, is chairman of the Center for American Progress in Washington. Ken Gude is chief of staff and vice president of the Center for American Progress. © Project Syndicate
The military operation highlighted important improvements in European leadership since the Bosnian debacle in the 1990s, but the conditions underlying the Libya mission's success cannot be counted upon to exist again in the future. Indeed, NATO's accomplishments in the Libya operation risk obscuring persistent weaknesses in Europe's military capabilities.
Europe's unity of purpose in Libya contrasts sharply with its divisions and indecisiveness as Yugoslavia disintegrated in the early 1990s. The United States had to coax many Western European countries into helping to stop the slaughter of innocents in Bosnia. Although the trans-Atlantic alliance was more unified and responsive during the subsequent Kosovo crisis, the United States was still firmly in the driver's seat. In Libya, the roles were reversed: Western Europeans had to push the United States to take action.
The manner in which U.S. President Barack Obama brought the United States into the effort to protect Libyan civilians mollified European concerns about American hubris that had grown out of the Iraq war.
It also made possible a broad coalition of countries, as well as the first-ever call for intervention from the Arab League. Obama's decision that the United States should play a supporting role with other NATO partners — particularly France and Britain — taking the lead, reinforced the global perception of the mission's legitimacy.
Today, the growing debate about a Syrian intervention raises legitimate questions concerning whether Libya was a unique situation. Libya's proximity to Europe both lowered barriers to participation and stimulated Europe's sense of responsibility, while Gadhafi was a reviled figure with few friends.
Moreover, many European countries have direct interests in Libya and thus had a clear stake in the outcome. Libyans' opposition to Gadhafi was relatively well organized, was recognized by the international community and had explicitly called for outside intervention.
While the conditions in Libya were certainly optimal, the situation in Syria is better described as uniquely complicated for any intervention. For starters, Syria's location in the eastern Mediterranean is not as advantageous as is Libya's position in North Africa.
In addition, Syria's borders with Turkey, Iraq, Lebanon and Israel present unique challenges to regional security, given the potential not only for international conflict, but also for destabilizing cross-border flows of refugees. Syria also has allies — above all, Russia with its veto-wielding seat on the United Nations Security Council.
The significant obstacles to intervention and the genuine risk of making an already terrible situation worse makes direct military intervention in Syria a remote possibility at this time. That is tragic in many ways, but it does not mean that the positive post-Libya momentum toward the protection of civilians is entirely lost. Even though it ended in failure, the Arab League agreement with the regime of Syrian President Bashar Assad to allow observers into Syria to facilitate an end to the conflict was brokered, as Oman's foreign minister said, "to save the Arab world from Western intervention."
The Arab League's mission did not stop the killing, but it represented an escalation of pressure to end the slaughter — and it was based on leverage gained in Libya.
For NATO, that leverage depends upon its members' ability to marshal the will and resources to intervene if necessary. In Libya, Europe finally had the will to lead, but it largely lacked the means and thus relied heavily on the United States.
In addition to its air-strike deficiencies, Europe demonstrated serious shortfalls across all of the areas required to sustain any air campaign. As General Mark Welsh, commander of U.S. Air Forces in Europe, told top officers and industry executives at a gathering last summer, "We need more intelligence, surveillance and reconnaissance capability, and we need it now."
Unfortunately, the ongoing economic crisis is exerting downward pressure on defense budgets across NATO, exposing the need for greater cooperation among the alliance's European members.
The harm caused by budget cuts is likely to multiply if all European governments slash spending in the same areas. German Air Force Commander Lieutenant General Aarne Kreuzinger-Janik warns that this would create "even bigger gaps and shortfalls." European governments must now work to ensure that they invest their limited resources in the right areas.
The trans-Atlantic alliance has reached a fork in the road. Down the path less traveled lies greater coordination on both strategic objectives and development of military capacity — particularly within Europe, where governments must better allocate resources among themselves to overcome the key deficiencies revealed by the Libya mission. The more familiar road leads to wasteful overlap and lower investment in key technologies, leaving wider gaps than ever in Europe's defense capability.
If Europe is to build on its success in Libya, it needs to take the road less traveled. It will make all the difference.
John D. Podesta, chief of staff to President Bill Clinton from 1998 to 2001, is chairman of the Center for American Progress in Washington. Ken Gude is chief of staff and vice president of the Center for American Progress. © Project Syndicate
No More Teflon Putin
President-elect Vladimir Putin is returning to the Kremlin as a diminished figure. With nearly 64 percent of the vote in the March 4 election, he can still lay claim to significant residual support in Russian society. Yet his system of personalized power has entered a period of existential crisis as the previously quiescent middle class in Moscow and other major cities has signaled that its interests are no longer served by the current "managed democracy."
Putin has lost his Teflon coating amid unprecedented criticism of his rule from within Russia. His triumphant election victory is a sign of systemic weakness rather than strength. Putin was forced to come back because the system depends so heavily on him as an individual. The outgoing president, Dmitry Medvedev, clearly never inspired sufficient confidence among the regime's high-level stakeholders to become a real president and was perhaps never intended do so.
What is now likely to happen? Putin knows that he has to contain frustration among the middle class. Measures designed to let off steam are being enacted, including bills in parliament to lower the threshold for political parties to participate in elections and to return to a system of elected governors. Medvedev has even ordered a review of former Yukos CEO Mikhail Khodorkovsky's 2010 criminal conviction for embezzlement. These initiatives would clearly not have occurred without the efforts of tens of thousands of Russian citizens who took to the streets in December and February to assert their right to have their votes counted fairly.
In the economy, Putin is likely to announce new reformist policies to show that Russia's tired-looking leadership has not run out of ideas. The highly competent economist Alexei Kudrin could return to the government if, for example, Putin decides not to name Medvedev as prime minister. This would be welcomed by many businesspeople in Russia and the West.
These reformist policies and the likely co-opting of some of the liberal opposition may buy time, but they will not be enough to stem the sense of disillusionment and alienation among the most dynamic and active segments of society.
In theory, Putin now has an excellent opportunity to respond to pressure from this so-called creative class and finally resolve the issue of property rights. He could also allow a post-Soviet generation to develop political parties that will galvanize the creative energies of society and develop political institutions as a basis for genuine modernization. This would undoubtedly be an impressive legacy and establish him as one of Russia's greatest leaders.
Putin, a keen student of Russian history, has invoked the image of Alexander II who initiated successful reforms after Russia's defeat in the Crimean War in 1855. But Putin's reformist rhetoric needs to be backed up by action. Over the past eight years, his system has consistently demonstrated unwillingness to contemplate real political reform and, as a result, has pursued only token measures to develop the economy.
Russia's current rulers have a vested interest in maintaining a noncompetitive political and economic environment because they and their bureaucracy are the direct beneficiaries. To hold onto power and wealth, they require managed elections, a compliant judiciary and loyal law enforcement agencies. This system can only be dismantled and transformed if the elite understand that there is no other alternative. No less important, they would need assurances of a safe exit to make a calm, peaceful transformation possible. The ruling elite are already starting to realize that preserving the system has become much harder. This may be the beginning of a gradual transformation of the status quo.
While street protests are already fizzling out, this is by no means the end of pressure for change from below. Since December, new opposition forces have emerged. Competitive elections in the regions for mayors and governors are going to give these new political players an important opportunity to coalesce and achieve results.
Ultimately, it is the economy that will determine the speed of change. With high oil prices, low levels of public debt and 4 percent economic growth, Russia is unlikely to face short-term difficulties. Yet the longer-term problems are mounting up quickly and may be beyond the regime's ability to manage them. These problems include a shrinking labor force, low levels of capital investment and the urgent need to raise labor productivity and reduce exposure to the oil price. A prolonged euro-zone recession could easily push down the oil price and shake the system to its core.
For the foreseeable future, Russia is likely to steer between two paths — "stagnation plus" and "stagnation minus" — with neither resulting in a decisive breakdown or a qualitative breakthrough. Any way you look at it, this outcome is far from being a recipe for stability and will only erode Putin's model further.
Putin has lost his Teflon coating amid unprecedented criticism of his rule from within Russia. His triumphant election victory is a sign of systemic weakness rather than strength. Putin was forced to come back because the system depends so heavily on him as an individual. The outgoing president, Dmitry Medvedev, clearly never inspired sufficient confidence among the regime's high-level stakeholders to become a real president and was perhaps never intended do so.
What is now likely to happen? Putin knows that he has to contain frustration among the middle class. Measures designed to let off steam are being enacted, including bills in parliament to lower the threshold for political parties to participate in elections and to return to a system of elected governors. Medvedev has even ordered a review of former Yukos CEO Mikhail Khodorkovsky's 2010 criminal conviction for embezzlement. These initiatives would clearly not have occurred without the efforts of tens of thousands of Russian citizens who took to the streets in December and February to assert their right to have their votes counted fairly.
In the economy, Putin is likely to announce new reformist policies to show that Russia's tired-looking leadership has not run out of ideas. The highly competent economist Alexei Kudrin could return to the government if, for example, Putin decides not to name Medvedev as prime minister. This would be welcomed by many businesspeople in Russia and the West.
These reformist policies and the likely co-opting of some of the liberal opposition may buy time, but they will not be enough to stem the sense of disillusionment and alienation among the most dynamic and active segments of society.
In theory, Putin now has an excellent opportunity to respond to pressure from this so-called creative class and finally resolve the issue of property rights. He could also allow a post-Soviet generation to develop political parties that will galvanize the creative energies of society and develop political institutions as a basis for genuine modernization. This would undoubtedly be an impressive legacy and establish him as one of Russia's greatest leaders.
Putin, a keen student of Russian history, has invoked the image of Alexander II who initiated successful reforms after Russia's defeat in the Crimean War in 1855. But Putin's reformist rhetoric needs to be backed up by action. Over the past eight years, his system has consistently demonstrated unwillingness to contemplate real political reform and, as a result, has pursued only token measures to develop the economy.
Russia's current rulers have a vested interest in maintaining a noncompetitive political and economic environment because they and their bureaucracy are the direct beneficiaries. To hold onto power and wealth, they require managed elections, a compliant judiciary and loyal law enforcement agencies. This system can only be dismantled and transformed if the elite understand that there is no other alternative. No less important, they would need assurances of a safe exit to make a calm, peaceful transformation possible. The ruling elite are already starting to realize that preserving the system has become much harder. This may be the beginning of a gradual transformation of the status quo.
While street protests are already fizzling out, this is by no means the end of pressure for change from below. Since December, new opposition forces have emerged. Competitive elections in the regions for mayors and governors are going to give these new political players an important opportunity to coalesce and achieve results.
Ultimately, it is the economy that will determine the speed of change. With high oil prices, low levels of public debt and 4 percent economic growth, Russia is unlikely to face short-term difficulties. Yet the longer-term problems are mounting up quickly and may be beyond the regime's ability to manage them. These problems include a shrinking labor force, low levels of capital investment and the urgent need to raise labor productivity and reduce exposure to the oil price. A prolonged euro-zone recession could easily push down the oil price and shake the system to its core.
For the foreseeable future, Russia is likely to steer between two paths — "stagnation plus" and "stagnation minus" — with neither resulting in a decisive breakdown or a qualitative breakthrough. Any way you look at it, this outcome is far from being a recipe for stability and will only erode Putin's model further.
Indian LNG Market A Challenge To Gazprom
Gazprom is struggling to get a foothold in the Asian markets leading global economic growth.
The company's plan to supply liquefied natural gas to India from 2016, the year the United States is set to start gas exports, is faltering after buyers said they're looking for cheaper fuel from North America. Last year, decade-long talks to supply pipeline gas to China foundered over price disagreements.
"Gazprom has a major problem of having a fixed view on what the price of gas should be, irrespective of market conditions," Jonathan Stern, chairman and senior research fellow at the Oxford Institute for Energy Studies, said by e-mail. "If this continues, it will create increasing problems for Russian gas exports."
Keen to protect Russia's position in world gas markets, President-elect Vladimir Putin ordered export monopoly Gazprom to diversify into Asia and develop an LNG business.
Asia accounts for more than 60 percent of global demand for LNG, gas chilled to a liquid for transport by ship. The region imported 177.7 billion cubic meters of the fuel in 2010, valued at more than $86 billion, based on data from the U.S. Federal Energy Regulatory Commission. Buyers are turning to North America, where record production from shale deposits has driven down U.S. prices.
"The global gas market is integrating and that has implications for prices," Christof RЯhl, BP's chief economist, said at a conference in Moscow last month.
GAIL India, the country's largest gas supplier, became the first Asian buyer of U.S. natural gas in December when it signed a 20-year deal with Cheniere Energy Partners LP, which is planning the first U.S. export terminal.
Prices of LNG in India are at $13.65 per million British thermal units this year, according to FERC. Gazprom had agreed on preliminary long-term LNG supply deals last year with GAIL, Petronet LNG, Gujarat State Petroleum and Indian Oil for a total of as much as 10 million metric tons annually, with contracts to be signed within six months. In contrast to Cheniere, the Russian supplier ties long-term prices to oil, a policy some of its European customers are fighting. China has refused to pay Russia a price on a par with the European level.
"We have started price negotiations with Gazprom for the LNG we plan to buy from them," A.K. Balyan, chief executive of Petronet, India's biggest gas importer, said by telephone from New Delhi. "We will have to see how it compares with the United States and other markets."
India is "not going to be easier," said Valery Nesterov, an analyst at Troika Dialog. "You have to beware of the situation developing like with China, where we're in the back row with insignificant volumes."
The signing will happen this year, Gazprom deputy chief executive Alexander Medvedev said in an interview in New York on Feb. 16. The Indian deal "is in the final stage of preparation" with contract prices indexed to oil, he said.
Meanwhile, Sibur Holding, Eastern Europe’s biggest petrochemicals producer, bought an 80 percent stake in Gazprom’s abandoned Baltic LNG project in the Gulf of Finland.
Gazprom dropped the Baltic LNG project in 2008, as it switched focus to the Arctic Shtokman field. The sale to Sibur was reported Wednesday by Gazprom’s corporate magazine, which cited the project’s director general, Alexander Krasnenkov. Sibur is in talks with shipper Sovcomflot to buy the remaining 20 percent of Baltic LNG, Krasnenkov said.
The company's plan to supply liquefied natural gas to India from 2016, the year the United States is set to start gas exports, is faltering after buyers said they're looking for cheaper fuel from North America. Last year, decade-long talks to supply pipeline gas to China foundered over price disagreements.
"Gazprom has a major problem of having a fixed view on what the price of gas should be, irrespective of market conditions," Jonathan Stern, chairman and senior research fellow at the Oxford Institute for Energy Studies, said by e-mail. "If this continues, it will create increasing problems for Russian gas exports."
Keen to protect Russia's position in world gas markets, President-elect Vladimir Putin ordered export monopoly Gazprom to diversify into Asia and develop an LNG business.
Asia accounts for more than 60 percent of global demand for LNG, gas chilled to a liquid for transport by ship. The region imported 177.7 billion cubic meters of the fuel in 2010, valued at more than $86 billion, based on data from the U.S. Federal Energy Regulatory Commission. Buyers are turning to North America, where record production from shale deposits has driven down U.S. prices.
"The global gas market is integrating and that has implications for prices," Christof RЯhl, BP's chief economist, said at a conference in Moscow last month.
GAIL India, the country's largest gas supplier, became the first Asian buyer of U.S. natural gas in December when it signed a 20-year deal with Cheniere Energy Partners LP, which is planning the first U.S. export terminal.
Prices of LNG in India are at $13.65 per million British thermal units this year, according to FERC. Gazprom had agreed on preliminary long-term LNG supply deals last year with GAIL, Petronet LNG, Gujarat State Petroleum and Indian Oil for a total of as much as 10 million metric tons annually, with contracts to be signed within six months. In contrast to Cheniere, the Russian supplier ties long-term prices to oil, a policy some of its European customers are fighting. China has refused to pay Russia a price on a par with the European level.
"We have started price negotiations with Gazprom for the LNG we plan to buy from them," A.K. Balyan, chief executive of Petronet, India's biggest gas importer, said by telephone from New Delhi. "We will have to see how it compares with the United States and other markets."
India is "not going to be easier," said Valery Nesterov, an analyst at Troika Dialog. "You have to beware of the situation developing like with China, where we're in the back row with insignificant volumes."
The signing will happen this year, Gazprom deputy chief executive Alexander Medvedev said in an interview in New York on Feb. 16. The Indian deal "is in the final stage of preparation" with contract prices indexed to oil, he said.
Meanwhile, Sibur Holding, Eastern Europe’s biggest petrochemicals producer, bought an 80 percent stake in Gazprom’s abandoned Baltic LNG project in the Gulf of Finland.
Gazprom dropped the Baltic LNG project in 2008, as it switched focus to the Arctic Shtokman field. The sale to Sibur was reported Wednesday by Gazprom’s corporate magazine, which cited the project’s director general, Alexander Krasnenkov. Sibur is in talks with shipper Sovcomflot to buy the remaining 20 percent of Baltic LNG, Krasnenkov said.
LUKoil to Quadruple Dividends by 2021
LUKoil, Russia's second-largest oil producer, plans to boost its dividend by 25 percent in 2012 and at least fourfold through 2021.
"In the long-term perspective, we see an opportunity to increase dividends by at least 300 percent from the 2011 level," billionaire chief executive Vagit Alekperov said at a strategy presentation in London on Wednesday.
LUKoil expects production to grow at a compound annual rate of 3.5 percent a year to reach as much as 3.2 million barrels a day by 2021.
Even as Urals crude prices averaged more than $100 a barrel last year for the first time, output at the company fell 4.4 percent as it awaited tax changes. Delaying investments allowed LUKoil to amass a record $7.24 billion in free cash at the end of 2011.
LUKoil plans to spend $150 billion through 2021 to boost oil and gas output by 50 percent compared with 2011, the company said in the filing. That would equal 3.21 million barrels of oil equivalent a day.
Dividend payments are expected to increase 25 percent in 2012, LUKoil said in the regulatory filing.
"In the long-term perspective, we see an opportunity to increase dividends by at least 300 percent from the 2011 level," billionaire chief executive Vagit Alekperov said at a strategy presentation in London on Wednesday.
LUKoil expects production to grow at a compound annual rate of 3.5 percent a year to reach as much as 3.2 million barrels a day by 2021.
Even as Urals crude prices averaged more than $100 a barrel last year for the first time, output at the company fell 4.4 percent as it awaited tax changes. Delaying investments allowed LUKoil to amass a record $7.24 billion in free cash at the end of 2011.
LUKoil plans to spend $150 billion through 2021 to boost oil and gas output by 50 percent compared with 2011, the company said in the filing. That would equal 3.21 million barrels of oil equivalent a day.
Dividend payments are expected to increase 25 percent in 2012, LUKoil said in the regulatory filing.
Aeroflot Billing Sukhoi for Downtime
Aeroflot, the first buyer of the Sukhoi SuperJet, is receiving compensation from the liner’s manufacturer, Sukhoi Civil Aircraft, for losses incurred due to downtime resulting from technical problems with the aircraft.
“At a minimum, Aeroflot is not suffering direct losses from the planes’ downtime. They are being paid to the airline by the manufacturer,” a source close to the carrier said. This was confirmed by a source close to Sukhoi.
The sources did not specify the amount of compensation.
On Monday, Aeroflot officials reported to the Federal Air Transportation Agency on its operation of the six SSJ aircraft it added to its fleet. Over the past several months the planes have flown a third less than planned — just 2,381 hours.
The downtime was due to technical problems and late delivery of spare parts, said Konstantin Mokhna, deputy chief engineer at Aeroflot’s aircraft maintenance department.
The world’s leading aircraft makers, Boeing and Airbus, do not compensate airlines for losses suffered from downtime of planes, even when introducing new aircraft.
“Often carriers, at the stage of contract signing, opt for the aircraft operating support package, which costs hundreds of thousands of dollars per year,” one source said.
Compensation for downtime was far from the last concession Sukhoi gave to the national carrier.
The airline has ordered a total of 30 planes at a price of $19 million each — a discount of 38 percent of the catalog price of $31 million.
Sukhoi has also provided free engineering services, technical support, training for flight instructors and provided a trainer for their use, a source close to the aircraft maker said.
All of these concessions are worth tens of millions of dollars, a source familiar with the matter said.
n Sheremetyevo International Airport served 1.6 million travelers last month, a 22.7 percent year-on-year increase, Sheremetyevo said in a statement, Interfax reported.
Passenger flow on international flights increased 19.4 percent to 1 million people; on domestic flights growth was at 28.4 percent to 614,000.
The most popular destinations outside Russia during the past two months were Paris, Istanbul, Hurghada, Sharm el-Sheikh, Prague, Kiev, Bangkok, Beijing, Amsterdam and Rome. The favored destinations within Russia were St. Petersburg, Krasnodar, Yekaterinburg, Sochi, Rostov-on-Don, Vladivostok, Novosibirsk and Kaliningrad.
Sheremetyevo served 22.5 million passengers last year, a 16.7 percent increase from the year before.
There were 33,494 takeoffs and landings at Sheremetyevo during the first two months of this year, which was 12.2 percent more than in the same period of last year. The figure for February alone was 16,052, up 15.8 percent.
“At a minimum, Aeroflot is not suffering direct losses from the planes’ downtime. They are being paid to the airline by the manufacturer,” a source close to the carrier said. This was confirmed by a source close to Sukhoi.
The sources did not specify the amount of compensation.
On Monday, Aeroflot officials reported to the Federal Air Transportation Agency on its operation of the six SSJ aircraft it added to its fleet. Over the past several months the planes have flown a third less than planned — just 2,381 hours.
The downtime was due to technical problems and late delivery of spare parts, said Konstantin Mokhna, deputy chief engineer at Aeroflot’s aircraft maintenance department.
The world’s leading aircraft makers, Boeing and Airbus, do not compensate airlines for losses suffered from downtime of planes, even when introducing new aircraft.
“Often carriers, at the stage of contract signing, opt for the aircraft operating support package, which costs hundreds of thousands of dollars per year,” one source said.
Compensation for downtime was far from the last concession Sukhoi gave to the national carrier.
The airline has ordered a total of 30 planes at a price of $19 million each — a discount of 38 percent of the catalog price of $31 million.
Sukhoi has also provided free engineering services, technical support, training for flight instructors and provided a trainer for their use, a source close to the aircraft maker said.
All of these concessions are worth tens of millions of dollars, a source familiar with the matter said.
n Sheremetyevo International Airport served 1.6 million travelers last month, a 22.7 percent year-on-year increase, Sheremetyevo said in a statement, Interfax reported.
Passenger flow on international flights increased 19.4 percent to 1 million people; on domestic flights growth was at 28.4 percent to 614,000.
The most popular destinations outside Russia during the past two months were Paris, Istanbul, Hurghada, Sharm el-Sheikh, Prague, Kiev, Bangkok, Beijing, Amsterdam and Rome. The favored destinations within Russia were St. Petersburg, Krasnodar, Yekaterinburg, Sochi, Rostov-on-Don, Vladivostok, Novosibirsk and Kaliningrad.
Sheremetyevo served 22.5 million passengers last year, a 16.7 percent increase from the year before.
There were 33,494 takeoffs and landings at Sheremetyevo during the first two months of this year, which was 12.2 percent more than in the same period of last year. The figure for February alone was 16,052, up 15.8 percent.
VimpelCom Resumes Growth In Wake of $386M Loss in Q4
Mobile phone group VimpelCom forecast earnings and revenues would grow by a mid single-digit percentage from 2012-14, with its purchase of Wind Telecom last year providing a boost amid tough trading conditions at home.
The firm, which now has operations in Italy and North Africa in addition to Russia and the CIS as a result of the $6 billion deal, set the growth target for earnings before interest, tax, depreciation and amortization, or EBITDA, as well as revenue.
VimpelCom said Tuesday that it made a net loss of $386 million in the fourth quarter of 2011, hit by noncash items of $437 million relating to foreign exchange movements and one-off charges on operations in Vietnam and Cambodia as well as the Wind deal.
"We thought maybe there would be some one-offs relating to the Wind deal, but it is still a negative surprise. … Unfortunately there is also not much growth in operations, held back by the Russian operation," VTB analyst Viktor Klimovich said.
EBITDA fell 3 percent in the fourth quarter to $2.2 billion. However, revenues rose 5 percent excluding acquisitions to $5.9 billion and mobile subscriber numbers were up 13 percent to 205 million.
"The 2011 results provide a good platform for profitable growth and improved cash flows. … We expect to leverage the benefits of our increased size and capabilities," VimpelCom chief executive Jo Lunder said in a statement.
The firm's strategy includes cost savings and adding subscribers in its core Russian market, where the firm has been losing market share to rivals MTS and MegaFon.
VimpelCom, long the stage of a battle between top shareholders Telenor of Norway and Russia's Altimo, said it would pay a dividend of 0.80 cents per share for 2011. It is committed to a payout of at least that until 2014.
The firm, which now has operations in Italy and North Africa in addition to Russia and the CIS as a result of the $6 billion deal, set the growth target for earnings before interest, tax, depreciation and amortization, or EBITDA, as well as revenue.
VimpelCom said Tuesday that it made a net loss of $386 million in the fourth quarter of 2011, hit by noncash items of $437 million relating to foreign exchange movements and one-off charges on operations in Vietnam and Cambodia as well as the Wind deal.
"We thought maybe there would be some one-offs relating to the Wind deal, but it is still a negative surprise. … Unfortunately there is also not much growth in operations, held back by the Russian operation," VTB analyst Viktor Klimovich said.
EBITDA fell 3 percent in the fourth quarter to $2.2 billion. However, revenues rose 5 percent excluding acquisitions to $5.9 billion and mobile subscriber numbers were up 13 percent to 205 million.
"The 2011 results provide a good platform for profitable growth and improved cash flows. … We expect to leverage the benefits of our increased size and capabilities," VimpelCom chief executive Jo Lunder said in a statement.
The firm's strategy includes cost savings and adding subscribers in its core Russian market, where the firm has been losing market share to rivals MTS and MegaFon.
VimpelCom, long the stage of a battle between top shareholders Telenor of Norway and Russia's Altimo, said it would pay a dividend of 0.80 cents per share for 2011. It is committed to a payout of at least that until 2014.
Yandex Uses Its Own Services for New App Wired
Yandex on Tuesday presented their new service, Yandex.Navigator, which is available on iOS and Android OS.
The competing Google Navigation application is only supported by Android OS.
"We launch features once we feel they are ready for users," Google Russia spokeswoman Alla Zabrovskaya said when asked about Google Navigation on iOS.
The new Yandex application will make 500 Russian and Ukrainian city maps available; 274 of them are proprietary maps made by Yandex. The new application uses the Yandex.Karty, or Yandex.Maps, services, and current road conditions are taken from the Yandex.Probki or Yandex.Trafficjams service.
"We have 3 million users and 3 billion messages from them every month. Our information updates every two minutes," head of the Yandex mobile department Tigran Khudaverdyan said Tuesday.
The same is true of Google Navigation — the system combines multiple sources of data to update traffic conditions every few minutes.
Yandex.Navigator and Yandex.Karty are separate services. Many car owners previously used Yandex.Karty as a car navigator.
"In the future we plan to make them [Yandex.Karty and Yandex.Navigator] one service," Khudaverdyan said, but "we do not want to make a big, clumsy monster. We want to keep our application simple," he added.
The new Yandex service features a vocal guide that can be set as male or female. It offers two routes for the user to choose from. It shows maps in ordinary and 3-D graphics as well as in day and night modes. It will also show nearby restaurants, shops, filling stations and other services.
"We have more than 2.5 million organizations in our database. And, of course, companies can be highlighted on our maps for a charge," Khudaverdyan said.
The new application from Yandex is available for free. It is intended for use only by car owners. Yandex.Navigator cannot map out walking or bicycle routes. It cannot be used without Internet access as information on it is updated continually.
In the future, Yandex will make it possible to just download maps and only then update information, Khudaverdyan said.
The Google application can be used not only by car owners, but also by users of public transportation and walkers in its beta version. It works without a web connection.
"Google Maps Navigation downloads map data for your upcoming route, so navigation will often continue to work even during periods of lost connectivity. However, rerouting and further searches will have to wait until you're connected again," Zabrovskaya said.
Google Navigation is available now in 100 Russian cities and 31 countries around the world. Yandex.Navigator shows only Russia and Ukraine.
"We have no plans now to made it available for countries abroad," Yandex's Khudaverdyan said.
And it works only in Russian.
"We will make a version in Ukrainian later," Khudaverdyan said.
The country's most popular Internet search engine, Yandex, saw its weekly search-market share drop to 59.1 percent in the week through March 11, the lowest since at least August 2010, while Google's portion increased, according to data compiled by Liveinternet.ru, an Internet service provider and researcher, Bloomberg reported.
Yandex's share was 59.3 percent the previous week and averaged 59.3 percent over the past four weeks. Google's share of Russian searches rose to 26 percent from 25.7 percent, compared with a four-week average of 25.6 percent. The share of Mail.ru Group, the largest Russian-language Internet company, was unchanged at 9.4 percent from the previous week and from a four-week average of 9.4 percent.
The competing Google Navigation application is only supported by Android OS.
"We launch features once we feel they are ready for users," Google Russia spokeswoman Alla Zabrovskaya said when asked about Google Navigation on iOS.
The new Yandex application will make 500 Russian and Ukrainian city maps available; 274 of them are proprietary maps made by Yandex. The new application uses the Yandex.Karty, or Yandex.Maps, services, and current road conditions are taken from the Yandex.Probki or Yandex.Trafficjams service.
"We have 3 million users and 3 billion messages from them every month. Our information updates every two minutes," head of the Yandex mobile department Tigran Khudaverdyan said Tuesday.
The same is true of Google Navigation — the system combines multiple sources of data to update traffic conditions every few minutes.
Yandex.Navigator and Yandex.Karty are separate services. Many car owners previously used Yandex.Karty as a car navigator.
"In the future we plan to make them [Yandex.Karty and Yandex.Navigator] one service," Khudaverdyan said, but "we do not want to make a big, clumsy monster. We want to keep our application simple," he added.
The new Yandex service features a vocal guide that can be set as male or female. It offers two routes for the user to choose from. It shows maps in ordinary and 3-D graphics as well as in day and night modes. It will also show nearby restaurants, shops, filling stations and other services.
"We have more than 2.5 million organizations in our database. And, of course, companies can be highlighted on our maps for a charge," Khudaverdyan said.
The new application from Yandex is available for free. It is intended for use only by car owners. Yandex.Navigator cannot map out walking or bicycle routes. It cannot be used without Internet access as information on it is updated continually.
In the future, Yandex will make it possible to just download maps and only then update information, Khudaverdyan said.
The Google application can be used not only by car owners, but also by users of public transportation and walkers in its beta version. It works without a web connection.
"Google Maps Navigation downloads map data for your upcoming route, so navigation will often continue to work even during periods of lost connectivity. However, rerouting and further searches will have to wait until you're connected again," Zabrovskaya said.
Google Navigation is available now in 100 Russian cities and 31 countries around the world. Yandex.Navigator shows only Russia and Ukraine.
"We have no plans now to made it available for countries abroad," Yandex's Khudaverdyan said.
And it works only in Russian.
"We will make a version in Ukrainian later," Khudaverdyan said.
The country's most popular Internet search engine, Yandex, saw its weekly search-market share drop to 59.1 percent in the week through March 11, the lowest since at least August 2010, while Google's portion increased, according to data compiled by Liveinternet.ru, an Internet service provider and researcher, Bloomberg reported.
Yandex's share was 59.3 percent the previous week and averaged 59.3 percent over the past four weeks. Google's share of Russian searches rose to 26 percent from 25.7 percent, compared with a four-week average of 25.6 percent. The share of Mail.ru Group, the largest Russian-language Internet company, was unchanged at 9.4 percent from the previous week and from a four-week average of 9.4 percent.
Nine Homemade Bombs Found in Nalchik 'Lab of Death'
Security services in the North Caucasus found nine homemade bombs at a laboratory in Nalchik on Tuesday, thereby preventing a potential series of terrorist attacks, RIA-Novosti reported.
The bombs were found Tuesday night in an underground laboratory, called a "laboratory of death" by the National Antiterrorist Committee, beneath a garage in the capital of Kabardino-Balkaria. The garage was apparently owned by local gang member Tembulat Kazdokhov, the committee said in a statement.
"The self-made explosives contained more than 100 kilograms of explosive force. According to bomb experts, an explosion of that force could destroy an entire city block," the statement said. "The timely destruction of the 'laboratory of death' and disposal of nine homemade bombs has prevented a series of terrorist attacks in Nalchik and avoided a large number of deaths."
The bombs were taken to a secure area and destroyed.
The bombs were found Tuesday night in an underground laboratory, called a "laboratory of death" by the National Antiterrorist Committee, beneath a garage in the capital of Kabardino-Balkaria. The garage was apparently owned by local gang member Tembulat Kazdokhov, the committee said in a statement.
"The self-made explosives contained more than 100 kilograms of explosive force. According to bomb experts, an explosion of that force could destroy an entire city block," the statement said. "The timely destruction of the 'laboratory of death' and disposal of nine homemade bombs has prevented a series of terrorist attacks in Nalchik and avoided a large number of deaths."
The bombs were taken to a secure area and destroyed.
Officials Discuss Pay With President
SKOLKOVO, Moscow Region — Outgoing President Dmitry Medvedev on Wednesday floated the idea of holding open competitions to recruit several deputy ministers in the future Cabinet that he will likely lead.
"I would like to try this," he said at a meeting outside Moscow, adding that the measure could apply to about 10 such jobs. "It would be interesting."
He also embraced a proposal to make the posts of directors of federal agencies available through similar competitions. There are about 50 federal agencies, which are normally one level below the ministries in the government hierarchy.
"After all, if they can't manage for some reason, we will replace them," he said about the potential newcomers at both the ministry and agency levels.
Medvedev made the statements during a discussion about the need for skilled public servants in the federal and regional governments and ways to open those jobs to people who are outside the entrenched cohort of current bureaucrats. Medvedev debated the issue with his supporters — including business leaders and economists — that make up the group called the "open government." Some other attendees at the Skolkovo School of Management were members of regional governments.
"Wherever you look, there's a shortage of personnel," Medvedev said. "And I mean public service, too."
The corps of federal and regional officials numbers 1.65 million people, he added.
Inevitably for a talk about hiring the best talent, the question of competitive remuneration came up. A few officials, provoked by Medvedev, were strikingly revelatory about their incomes.
Mikhail Pryadilnikov, chief of the City Hall department that coordinates economic development policies, said he made 100,000 rubles ($3,400) a month. His rank deserves a salary of at least 50 percent more, he told Medvedev.
Mikhail Maximov, first deputy prime minister of the Sverdlovsk region around Yekaterinburg and a father of four, stated his monthly salary was also 100,000 rubles.
"To be honest, it's too little," he said.
Medvedev said his administration staff earned an average salary of 100,000 rubles, which is "not little." But he added that it would be fair to apply a system that would make officials' salaries comparable to what the market offers for their skills.
"We need to introduce this system faster than we have been doing," he said.
Economic Development Minister Elvira Nabiullina said Wednesday that she did not know whether she would be in the next Cabinet, Interfax reported.
"It's not for me to say," Nabiullina told reporters, when asked whether she would be in the next government.
"This depends on many factors," she said, adding that the issue of reforming the ministry would "be decided by the new prime minister."
Nabiullina also said she thought the recent presidential election has brought stability but that an attractive investment climate is also needed to reduce capital outflow.
"I would like to try this," he said at a meeting outside Moscow, adding that the measure could apply to about 10 such jobs. "It would be interesting."
He also embraced a proposal to make the posts of directors of federal agencies available through similar competitions. There are about 50 federal agencies, which are normally one level below the ministries in the government hierarchy.
"After all, if they can't manage for some reason, we will replace them," he said about the potential newcomers at both the ministry and agency levels.
Medvedev made the statements during a discussion about the need for skilled public servants in the federal and regional governments and ways to open those jobs to people who are outside the entrenched cohort of current bureaucrats. Medvedev debated the issue with his supporters — including business leaders and economists — that make up the group called the "open government." Some other attendees at the Skolkovo School of Management were members of regional governments.
"Wherever you look, there's a shortage of personnel," Medvedev said. "And I mean public service, too."
The corps of federal and regional officials numbers 1.65 million people, he added.
Inevitably for a talk about hiring the best talent, the question of competitive remuneration came up. A few officials, provoked by Medvedev, were strikingly revelatory about their incomes.
Mikhail Pryadilnikov, chief of the City Hall department that coordinates economic development policies, said he made 100,000 rubles ($3,400) a month. His rank deserves a salary of at least 50 percent more, he told Medvedev.
Mikhail Maximov, first deputy prime minister of the Sverdlovsk region around Yekaterinburg and a father of four, stated his monthly salary was also 100,000 rubles.
"To be honest, it's too little," he said.
Medvedev said his administration staff earned an average salary of 100,000 rubles, which is "not little." But he added that it would be fair to apply a system that would make officials' salaries comparable to what the market offers for their skills.
"We need to introduce this system faster than we have been doing," he said.
Economic Development Minister Elvira Nabiullina said Wednesday that she did not know whether she would be in the next Cabinet, Interfax reported.
"It's not for me to say," Nabiullina told reporters, when asked whether she would be in the next government.
"This depends on many factors," she said, adding that the issue of reforming the ministry would "be decided by the new prime minister."
Nabiullina also said she thought the recent presidential election has brought stability but that an attractive investment climate is also needed to reduce capital outflow.
Theaters May Be Forced to Show Russian Films
The government is discussing a possible move to institute a quota for screen time given to Russian films in movie theaters, Kommersant reported Wednesday.
The policy being discussed in correspondence between the Economic Development Ministry and the Culture Ministry would mandate that a minimum of as much as 24 percent of screen time be given to the films, which are often less popular than foreign productions.
In a letter to the Culture Ministry, Deputy Economic Development Minister Stanislav Voskresensky advocated for supporting Russian films and said they remain popular for longer because they are of higher quality.
Voskresensky cited similar quotas in Western countries, including France, where he said 43 percent of screen time is required to be devoted to foreign films.
Producers have said the support would have little effect, and that these films would be shown "in closets."
Voskresensky also suggested import quotas restricting foreign films, noting China's policy limiting such films to 30 per year.
An unnamed source in the film industry told Kommersant that quotas have been discussed for quite some time, with Russian producers forming the main block of support.
The source said that while Prime Minister Vladimir Putin had effectively blocked import quotas, the idea of a screen-time minimum has general support and now falls under the authority of Deputy Prime Minister Vladislav Surkov, who is a member of the cinematography council in charge of such projects.
Theater attendance in Russia and the CIS rose last year by 16 percent, with revenues reaching a total of $1.2 billion. Income from Russian films accounted for only 16 percent of that figure.
The policy being discussed in correspondence between the Economic Development Ministry and the Culture Ministry would mandate that a minimum of as much as 24 percent of screen time be given to the films, which are often less popular than foreign productions.
In a letter to the Culture Ministry, Deputy Economic Development Minister Stanislav Voskresensky advocated for supporting Russian films and said they remain popular for longer because they are of higher quality.
Voskresensky cited similar quotas in Western countries, including France, where he said 43 percent of screen time is required to be devoted to foreign films.
Producers have said the support would have little effect, and that these films would be shown "in closets."
Voskresensky also suggested import quotas restricting foreign films, noting China's policy limiting such films to 30 per year.
An unnamed source in the film industry told Kommersant that quotas have been discussed for quite some time, with Russian producers forming the main block of support.
The source said that while Prime Minister Vladimir Putin had effectively blocked import quotas, the idea of a screen-time minimum has general support and now falls under the authority of Deputy Prime Minister Vladislav Surkov, who is a member of the cinematography council in charge of such projects.
Theater attendance in Russia and the CIS rose last year by 16 percent, with revenues reaching a total of $1.2 billion. Income from Russian films accounted for only 16 percent of that figure.
Kobzon Ready to Take One Last Crack at U.S.
A crooner adored by millions around the former Soviet Union, seasoned politician Iosif Kobzon was once called "Russia's Frank Sinatra."
But the analogy wasn't born simply out of admiration. It is also a reference to Sinatra's legendary mob ties, a connection Kobzon shares — albeit with the Russian mafia — and which has been used as grounds to deny him a U.S. visa for more than a decade.
But the charismatic singer — who still occasionally sings with his trademark baritone — says he will try one last time to get a visa for a possible farewell concert tour for America's Russian population in May.
"It is the main intrigue of the day whether they will let me in or not," Kobzon told The Moscow Times on Wednesday, a day before his scheduled appointment at the U.S. Embassy. "It will be the last time, and I won't ask again."
The tour's promoter, the Russian-American Consulting Corp., which is headed by Andrei Shuranov, a former Russian diplomat to the United Nations, says it is optimistic, as the U.S. Department of Homeland Security has given a green light for the singer's arrival.
A crooner adored by millions around the former Soviet Union, seasoned politician Iosif Kobzon was once called "Russia's Frank Sinatra."
But the analogy wasn't born simply out of admiration. It is also a reference to Sinatra's legendary mob ties, a connection Kobzon shares — albeit with the Russian mafia — and which has been used as grounds to deny him a U.S. visa for more than a decade.
But the charismatic singer — who still occasionally sings with his trademark baritone — says he will try one last time to get a visa for a possible farewell concert tour for America's Russian population in May.
"It is the main intrigue of the day whether they will let me in or not," Kobzon told The Moscow Times on Wednesday, a day before his scheduled appointment at the U.S. Embassy. "It will be the last time, and I won't ask again."
The tour's promoter, the Russian-American Consulting Corp., which is headed by Andrei Shuranov, a former Russian diplomat to the United Nations, says it is optimistic, as the U.S. Department of Homeland Security has given a green light for the singer's arrival.
In trying to facilitate Kobzon's visa, the company even organized a petition signed by 4,000 Russian-Americans addressed to Secretary of State Hillary Rodham Clinton.
But Doron Bard, the U.S. consular section chief in Moscow, told the organizers that Kobzon's request will still be carefully reviewed.
Kobzon's visa saga started in June 1995 when his multiple-entry visa was revoked by the U.S. Embassy on suspicion that he was connected to Russian mafia dons operating in the United States.
A letter signed by the then-head of the U.S. consular section, Andre Goodfriend, said a visa could be denied to anyone who might enter the country to participate in "unlawful activity" and cited the U.S. Immigration and Nationality Act.
The letter also cited another provision stating that it is prohibited to issue a U.S. visa to anyone believed to traffic in "illicit" material or aid someone else in doing so.
The denial came soon after U.S. media reports labeled Kobzon a "tsar of the Russian Mafia" because of his friendship with the late mobster Vyachaslav Ivankov, also known as Yaponchik, who died after being gunned down in 2009.
Kobzon — recently elected for the fifth time to the State Duma — has never denied that he and Ivankov were friends but insisted that he was never involved in illegal activity.
"I have many gay friends. But does that mean that I am gay? I know many artists who know the same group of people," Kobzon said.
Kobzon said he frequently travels to Europe, including England, and he has grown used to the scrutiny at airport security checkpoints.
"I have gotten used to the fact that they study my passport and then run to their superiors. That's why I prefer to stand at the end of the line," he said.
The singer said he believes the mob accusations against him were part of a conspiracy by Boris Yeltsin's top bodyguard, Alexander Korzhakov, who went after the singer for supporting arch-rival Yury Luzhkov, who was then Moscow's mayor.
Ironically, Korzhakov later published a tell-all book about Yeltsin and became a United Russia party official, serving in the State Duma alongside Kobzon.
Korzhakov was not available for comment.
Yeltsin's daughter Tatyana Dyachenko wrote on her LiveJournal blog in 2010 that Korzhakov told her father that both Luzhkov and Kobzon had ties to criminal groups.
"Kobzon became an involuntary victim of Korzhakov's attack," said Dyachenko, while insisting that the allegations against the singer were "fake."
Kobzon has tried to clear his name in international courts but without success.
He also said Russian officials, starting with former Prime Minister Yevgeny Primakov, and foreign ministers Sergei Ivanov and Sergei Lavrov have all tried to lobby their U.S. counterparts without luck.
"Sergei Ivanov has even played some of my songs to Colin Powell, who said such a singer couldn't be a mafia guy," Kobzon said, referring to the former U.S. secretary of state.
"Since then, seven of my grandchildren were born, so the Kobzon family is getting larger," he said, noting that all of his relatives have been barred from the United States as well.
In 2000, Kobzon did receive a short-term visa as a member of a Duma delegation visiting Harvard University. But he said his American hosts followed his every move, so he decided to return to Moscow after a couple of days.
"I don't like being dressed down. Here I am not afraid of anyone — the government, criminals or the president," he said.
Kobzon, who recently announced that he is battling with cancer, said he is anxious to get to the United States one more time.
"I don't have much time left," he said at a recent news conference.
In September 2010, Kobzon was the only senior United Russia official to defend his friend Luzhkov when he was fired by President Dmitry Medvedev for a "lack of trust."
With United Russia's survival in question, Kobzon is eager to leap to the party's defense, saying it is the only existing political force that "has the resources" to carry out reforms in the country.
"Maybe it has lost popularity, but there is no other party which can be competitive with United Russia. It is the only party that has material resources, control over media and television. Maybe this is wrong. But what is right?" he said.
But while Kobzon might be positive about his visa chances, he has no illusions about his daily work as a party lawmaker.
"I am ready to say everything, but I know that if my proposal does not agree with the party line, it will not be voted for." he said. "That's why I try not to waste my time on the plenary sessions. It is useless. It is like being an artist who applauds himself."
But the analogy wasn't born simply out of admiration. It is also a reference to Sinatra's legendary mob ties, a connection Kobzon shares — albeit with the Russian mafia — and which has been used as grounds to deny him a U.S. visa for more than a decade.
But the charismatic singer — who still occasionally sings with his trademark baritone — says he will try one last time to get a visa for a possible farewell concert tour for America's Russian population in May.
"It is the main intrigue of the day whether they will let me in or not," Kobzon told The Moscow Times on Wednesday, a day before his scheduled appointment at the U.S. Embassy. "It will be the last time, and I won't ask again."
The tour's promoter, the Russian-American Consulting Corp., which is headed by Andrei Shuranov, a former Russian diplomat to the United Nations, says it is optimistic, as the U.S. Department of Homeland Security has given a green light for the singer's arrival.
A crooner adored by millions around the former Soviet Union, seasoned politician Iosif Kobzon was once called "Russia's Frank Sinatra."
But the analogy wasn't born simply out of admiration. It is also a reference to Sinatra's legendary mob ties, a connection Kobzon shares — albeit with the Russian mafia — and which has been used as grounds to deny him a U.S. visa for more than a decade.
But the charismatic singer — who still occasionally sings with his trademark baritone — says he will try one last time to get a visa for a possible farewell concert tour for America's Russian population in May.
"It is the main intrigue of the day whether they will let me in or not," Kobzon told The Moscow Times on Wednesday, a day before his scheduled appointment at the U.S. Embassy. "It will be the last time, and I won't ask again."
The tour's promoter, the Russian-American Consulting Corp., which is headed by Andrei Shuranov, a former Russian diplomat to the United Nations, says it is optimistic, as the U.S. Department of Homeland Security has given a green light for the singer's arrival.
In trying to facilitate Kobzon's visa, the company even organized a petition signed by 4,000 Russian-Americans addressed to Secretary of State Hillary Rodham Clinton.
But Doron Bard, the U.S. consular section chief in Moscow, told the organizers that Kobzon's request will still be carefully reviewed.
Kobzon's visa saga started in June 1995 when his multiple-entry visa was revoked by the U.S. Embassy on suspicion that he was connected to Russian mafia dons operating in the United States.
A letter signed by the then-head of the U.S. consular section, Andre Goodfriend, said a visa could be denied to anyone who might enter the country to participate in "unlawful activity" and cited the U.S. Immigration and Nationality Act.
The letter also cited another provision stating that it is prohibited to issue a U.S. visa to anyone believed to traffic in "illicit" material or aid someone else in doing so.
The denial came soon after U.S. media reports labeled Kobzon a "tsar of the Russian Mafia" because of his friendship with the late mobster Vyachaslav Ivankov, also known as Yaponchik, who died after being gunned down in 2009.
Kobzon — recently elected for the fifth time to the State Duma — has never denied that he and Ivankov were friends but insisted that he was never involved in illegal activity.
"I have many gay friends. But does that mean that I am gay? I know many artists who know the same group of people," Kobzon said.
Kobzon said he frequently travels to Europe, including England, and he has grown used to the scrutiny at airport security checkpoints.
"I have gotten used to the fact that they study my passport and then run to their superiors. That's why I prefer to stand at the end of the line," he said.
The singer said he believes the mob accusations against him were part of a conspiracy by Boris Yeltsin's top bodyguard, Alexander Korzhakov, who went after the singer for supporting arch-rival Yury Luzhkov, who was then Moscow's mayor.
Ironically, Korzhakov later published a tell-all book about Yeltsin and became a United Russia party official, serving in the State Duma alongside Kobzon.
Korzhakov was not available for comment.
Yeltsin's daughter Tatyana Dyachenko wrote on her LiveJournal blog in 2010 that Korzhakov told her father that both Luzhkov and Kobzon had ties to criminal groups.
"Kobzon became an involuntary victim of Korzhakov's attack," said Dyachenko, while insisting that the allegations against the singer were "fake."
Kobzon has tried to clear his name in international courts but without success.
He also said Russian officials, starting with former Prime Minister Yevgeny Primakov, and foreign ministers Sergei Ivanov and Sergei Lavrov have all tried to lobby their U.S. counterparts without luck.
"Sergei Ivanov has even played some of my songs to Colin Powell, who said such a singer couldn't be a mafia guy," Kobzon said, referring to the former U.S. secretary of state.
"Since then, seven of my grandchildren were born, so the Kobzon family is getting larger," he said, noting that all of his relatives have been barred from the United States as well.
In 2000, Kobzon did receive a short-term visa as a member of a Duma delegation visiting Harvard University. But he said his American hosts followed his every move, so he decided to return to Moscow after a couple of days.
"I don't like being dressed down. Here I am not afraid of anyone — the government, criminals or the president," he said.
Kobzon, who recently announced that he is battling with cancer, said he is anxious to get to the United States one more time.
"I don't have much time left," he said at a recent news conference.
In September 2010, Kobzon was the only senior United Russia official to defend his friend Luzhkov when he was fired by President Dmitry Medvedev for a "lack of trust."
With United Russia's survival in question, Kobzon is eager to leap to the party's defense, saying it is the only existing political force that "has the resources" to carry out reforms in the country.
"Maybe it has lost popularity, but there is no other party which can be competitive with United Russia. It is the only party that has material resources, control over media and television. Maybe this is wrong. But what is right?" he said.
But while Kobzon might be positive about his visa chances, he has no illusions about his daily work as a party lawmaker.
"I am ready to say everything, but I know that if my proposal does not agree with the party line, it will not be voted for." he said. "That's why I try not to waste my time on the plenary sessions. It is useless. It is like being an artist who applauds himself."
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