The Rise of the Russian Empire: Russo-Armenian Relations

[Armenian]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

RAF scrambles to intercept Russian bombers



Richard Beeston, Diplomatic Editor

RAF fighter jets were scrambled to intercept two Russian strategic bombers heading for British airspace yesterday, as the spirit of the Cold War returned to the North Atlantic once again. The incident, described as rare by the RAF, served as a telling metaphor for the stand-off between London and Moscow over the murder of Alexander Litvinenko.

While the Kremlin hesitated before responding to Britain’s expulsion of four diplomats, the Russian military engaged in some old-fashioned sabre-rattling. Two Tu95 “Bear” bombers were dispatched from their base on the Kola Peninsula in the Arctic Circle and headed towards British airspace.

Russian military aircraft based near the northern port city of Murmansk fly patrols off the Norwegian coast regularly, but the RAF said that it was highly unusual for them to stray as far south as Scotland. Two Tornado fighters, part of the RAF’s Quick Reaction Alert, took off from RAF Leeming, in Yorkshire, to confront the Russian aircraft, after they were shadowed by two F16s from the Royal Norwegian Air Force, The Times has learnt.

“The Russians turned back before they reached British airspace,” an RAF spokesman said. There was no evidence to suggest that the incident was connected with the diplomatic row over the extradition of Andrei Lugovoy, the main suspect in the murder of Litvinenko.

Source: http://www.timesonline.co.uk/tol/new...cle2093759.ece

[Armenian]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

Dealing With A Newly Assertive Russia



Oxford Analytica

Moscow's foreign policy is increasingly driven by the belief that major world powers are seeking to constrain the rise of its influence around the world. The West is concerned that a newly assertive Russia undermines many of its conflict resolution and energy security efforts, particularly in the Commonwealth of Independent States. These conflicting fears have led to a stalemate in many areas of Russia's relations with the U.S. and European Union. On three notable occasions since May, President Vladimir Putin harshly criticized the U.S. for "hegemonic behavior," "neo-imperialism" and provoking an arms race. These accusations stand in sharp contrast with Putin's overtures to the West in the first two years of his presidency. In fact, they are reminiscent of the assertive approach Russia pursued in relation to the U.S. under Prime Minister Yevgeny Primakov in the late 1990s. Russia's doctrine of multipolarity, as developed by Primakov, argues that other centers of power should check U.S. global influence.

Several factors explain the return to this line of thinking at the end of Putin's second term. Russia believes the U.S. is overstretched internationally and hobbled domestically by the invasion of Iraq, the standoff with Iran and the need to counter the rise of China. It also believes the dollar's prospects of remaining the world's main reserve currency are uncertain. The Kremlin assesses the overall level of anti-Americanism around the world as high and rising. On present evidence, Putin appears to believe that anti-U.S. sentiment is increasing even in Western Europe. The Kremlin's ruling elites assume they can harness this sentiment to advance Moscow's foreign policy goals, making Russia a leader among the states that feel threatened by U.S. behavior.

Moscow sees its international influence as stemming from its nuclear weapons, civil technologies and exports of hydrocarbons. Russia's "nuclear triad" of strategic bombers and land- and submarine-launched ballistic missiles remains the most combat-ready part of its armed forces. Russia also bases its international position on its vast hydrocarbons reserves and pursues a twin-track energy policy to serve its foreign policy goals. By tightening the government's grip on oil and gas assets within the country, Moscow has come to exert more pressure on its customers in Europe and Asia. It has become increasingly able to manipulate pipeline routes, membership of project consortia and the amount of oil and gas that is "earmarked" for each particular buyer.

Russia's nuclear status and its position as a major energy exporter create a number of policy challenges. Concerns have been expressed about a possible depreciation of Russia's nuclear deterrent, especially in light of U.S. plans to station missile shield infrastructure in Eastern Europe. Moscow will be tempted to invest in countermeasures if security tensions continue. The image of an "energy superpower" is also problematic. Putin has argued that the tag creates negative connotations, reminiscent of the Cold War. Tensions are rising within Russia over the uneven distribution of oil wealth. And any emerging opposition could exploit the theme of "oil injustice," which would complicate the Kremlin's ability to manage elections in 2007-08.

The notion escalates the "war of words" between Russia and the U.S., which rejects the political fungibility of oil and gas exports. The U.S. and E.U. insist that energy trade is a form of business and does not make Russia automatically eligible for the political privileges it demands. The Kremlin's continued reliance on the nuclear arsenal and energy exports as pillars of its international prestige will perpetuate tensions with Washington, whoever wins the presidency in 2008.

Source: http://www.forbes.com/business/2007/...718oxford.html

In related news:

Russia Opens Probe of Lawyer Who Fled



By BAGILA BUKHARBAYEVA, The Associated Press

MOSCOW -- A prominent lawyer who challenged the security services' wiretapping of his client and then fled Russia is the focus of a criminal investigation opened Tuesday, news agencies reported. Boris Kuznetsov was accused of disclosing state secrets by providing wiretapping evidence to the Constitutional Court, the report said, citing a statement from the Moscow prosecutor's office. Calls to the prosecutor were not answered Tuesday.

Kuznetsov left Russia after a city court ruled last week that a criminal investigation could go forward against him. He had asked the Constitutional Court to rule whether the Federal Security Service, the Soviet-era KGB's successor, violated the rights of his client, a former member of the upper house of parliament, by tapping his phone conversations without a court's authorization. The client, Levon Chakhmakhchyan, was arrested in February on suspicion of accepting a $300,000 bribe. Security service agents claim to have caught him in a sting operation.

"All my actions were right," Kuznetsov told Radio Liberty last week. "I didn't send it (the evidence) to (Israel's) Mossad (intelligence service) or the CIA, but the Constitutional Court. According to the law on state secrets, information about human rights violations and official abuse are not considered state secrets."

Kuznetsov, who has not revealed his whereabouts, did not answer his cell phone Tuesday. Many Russian lawyers have come under pressure from authorities by working on sensitive cases or for government critics as President Vladimir Putin's administrations has tightened control over the justice system. Kuznetsov also represented Manana Aslamazyan, head of the U.S.-funded Educated Media Foundation who fled in the spring as authorities pursued smuggling charges against her for a customs infraction and forced her media-training group to halt its activities.

Other clients included the family of investigative journalist Anna Politkovskaya, a fierce Kremlin critic who was murdered in October, and several dozen families related to some of the 118 sailors drowned when the submarine Kursk sank in August 2000. Kuznetsov has said the action against him could be revenge for his book two years ago that accused authorities of covering up the truth about the Kursk disaster and suggested they probably wanted to remove him from his cases.

Source: http://www.washingtonpost.com/wp-dyn...071701476.html

Bertelsmann exec murdered in Russia



Reuters, By Scott Roxborough

COLOGNE, Germany (Hollywood Reporter) - Marina Pisareva, production manager at Bertelsmann's Russian publishing house, Bertelsmann Media Moscow, was stabbed to death at her home outside of Moscow this weekend, Russian authorities said Monday. Police found the body of the 47-year-old Pisareva on Sunday at her suburban home in Odintsovo, southwest Moscow.

Pisareva is believed to have died of stab wounds from an antique Russian "kinshala" dagger that Russian media reports said had come from a collection the media executive owned. Preliminary police investigations suggest that nothing had been stolen from Pisareva's home. Yelena Rassokhina, a spokeswoman for the Moscow city prosecutor's office, told Moscow's Radio Mayak on Monday that police have begun a murder investigation. Russian police were refusing Monday to rule out any connection between Pisareva's death and her professional life. A Bertelsmann spokesman, however, told The Hollywood Reporter that Pisareva's work for the German group was "entirely nonpolitical."

"This is a terrible tragedy, but Bertelsmann Media Moscow is a publisher of books on art and culture, it is not political at all," the spokesman said. "And Ms. Pisareva was head of production, she was not responsible for the content of books published."

Bertelsmann Media Moscow, a division of the company's Direct Group, employs 17 people and has annual revenue of around $1.3 million, the spokesman said. But official denials did little to stop a wave of speculation in the German media about possible political motives for the murder. In numerous radio, television and online reports, the German media compared the killing to that of Anna Polikovskaya. Polikovskaya, an investigative journalist and longtime Kremlin critic, was shot dead in the elevator of her Moscow apartment building in October. She has since become a symbol for political oppression of press freedom in Russia.

Source: http://www.reuters.com/article/indus...34194220070716

[Armenian]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

Retired generals predict US-Russia war



By Adrian Blomfield in Moscow

Capitalising on the increasingly bellicose rhetoric in Moscow, a group of influential retired generals yesterday said the United States was preparing to invade Russia within a decade.

Interviewed by Komsomolskaya Pravda, Russia's biggest circulation newspaper, the four senior generals - who now direct influential military think tanks - said the United States had hatched a secret plan to seize the country's vast energy resources by force. "The US is both laying the ground and preparing its military potential for a war with Russia," said Gen Leonid Ivashov, a former joint chief of staff. "Anti-Russian sentiment is being fostered in the public opinion. The US is desperate to implement its century-old dream of world hegemony and the elimination of Russia as its principal obstacle to the full control of Eurasia."

The generals said the conflict would inevitably spark a third world war, but predicted it would be fought only with conventional weapons or "low impact" nuclear missiles. Dismissed by some critics as the Cold War nostalgia of a handful of Soviet dinosaurs, such opinions nevertheless reflect a growing mood of nationalism both within the Kremlin and among many ordinary Russians wistful for lost superpower status.

Engaged in a bitter dispute with Washington over its plans to erect a missile defence shield in central Europe, Vladimir Putin has increasingly used the kind of anti-American rhetoric many assumed had disappeared with the Cold War. Once more casting the United States as Russia's main threat, the Russian president, a former KGB spy, has accused Washington of "diktat" and "imperialism" - even going so far as to liken America to the Third Reich.

Source: http://www.telegraph.co.uk/news/main...17/wrus217.xml

[Armenian]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

Russian tycoon Berezovsky tells of plot to assassinate him



LONDON: The police said on Wednesday that they had arrested a man last month on suspicion of plotting to murder the Russian exile Boris Berezovsky, a prominent critic of the Russian president, Vladimir Putin. A police official, who spoke on condition of anonymity, said that the suspect had been arrested in London on June 21 and then handed over to the immigration service two days later, without being charged. The suspect, the official said, was a Russian national who was then sent back home. The news followed a day in which Berezovsky publicly spoke of the plot against him, saying that he had been compelled to leave Britain temporarily last month after the security services warned him that a Russian assassin had arrived and intended to kill him.

"A month ago, an officer from Scotland Yard said a person came with the task of killing me, and that I knew this person," Berezovsky said by telephone. "They said I should meet with nobody, and I should leave the country."

Berezovsky described the plot - outlined further to him by Russian friends "who are connected to the special services," he said - as involving a lone gunman who would lure him to a meeting and shoot him. Then the gunman would turn himself in to the British authorities, serve a long sentence in Britain for murder and return to Russia to collect "a large reward and Hero of Russia medal," Berezovsky said. Berezovsky, who parlayed once-close ties to Putin into a sprawling industrial empire and vast wealth, fell out with the Russian president and sought refuge in Britain. He was granted political asylum in 2003 and is wanted in Russia on charges of fraud, embezzlement and fomenting a coup.

In London, Berezovksky, 61, became close to another critic-in-exile of Putin, Alexander Litvinenko. Litvinenko, a former KGB agent, was poisoned with the radioactive isotope polonium-210 in London last November. He said that Putin had ordered his murder. Berezovsky, who in Russia once survived a car bomb that decapitated his driver but left him unharmed, added that after being warned that his life was in danger he left London for about a week and returned when the British authorities said it was safe. He declined to say where he traveled. Neither he nor the British authorities would provide specific details about the supposed murder plot, or say who the suspect was. The Russian ambassador to Britain, Yury Fedotov, told the BBC that Berezovsky's claim that someone wanted to assassinate him was "quite strange information." He added: "I have nothing that could confirm it."

Berezovsky said that he had received numerous threats against his life over the years. "All these threats bear the hallmark of Russian security service activity, and of course President Putin changed the law last year to empower agents to commit murder overseas," he said in a statement. In the interview, Berezovsky said he was grateful the British government had undertaken to protect him now, because "only a government can defend me."

The latest round of intrigue comes two days after Britain said it would expel four Russian diplomats and inflict other penalties on Russia in retaliation for Russia's refusal to extradite the key suspect in Litvinenko's death. The British authorities say they have enough evidence to prove that the suspect, a former KGB agent named Andrei Lugovoi, administered the poison to a pot of tea Litvinenko was drinking at a meeting in the Pine Bar of London's Millennium Hotel on Nov. 1. Litvinenko died three weeks later, claiming that Putin had ordered his assassination.

In another incident, a spokesman for the British Royal Air force said that it had scrambled jets on Tuesday to intercept Russian strategic bombers headed toward British air space. Russian officials said its planes were on a routine training flight over international waters. The spokesman, Wing Commander Andrew McGill, by telephone Wednesday it was "just speculation" that this Cold War style brinksmanship over the North Atlantic coincided with heightened tensions over the poisoned-spy scandal. The Russian Tu-95 bombers, called "Bears" by NATO, turned back before entering British airspace, he said. Russia's ambassador to London said his government was not behind any alleged plot. A spokesman for the British prime minister, Gordon Brown, said the government would not comment on speculation about security matters.

Berezovsky, who says he wants a "bloodless revolution" in Russia and the end of Putin's rule, said on Wednesday he had spent $300 to $400 million funding opposition groups in his former homeland since he went into exile in 2001. Britain has refused to extradite Berezovsky to Moscow, where he is being tried in absentia for theft. He said he had had many death threats in recent years and accused Russia's security service of being behind them. Asked why he thought the Russians would want to kill him, Berezovsky, a colorful character who speaks broken English, said it was because he was a key witness to Litvinenko's death and the main funder of Russian opposition to Putin.

Source: http://www.iht.com/articles/2007/07/18/news/poison.php

Godfather of the Kremlin: The Decline of Russia in the Age of Gangster Capitalism



Book Review

Mr. Paul Klebnikov makes a rather unusual declaration at the beginning of his book by stating that what is about to be read may be difficult to believe. As this work is non-fiction the comment would seem misplaced. However once the reading has begun it not only proves to have been appropriate, but is a fact you will keep reminding yourself of. The Author relates what is arguably the greatest theft in History, and if he had decided to change some detail, he could have had an outstanding novel. That the events he relates actually took place makes for a reading experience no novel can compete with. I have been following Mr. Klebnikov's stories in Forbes, since December of 1996 when he introduced Mr. Boris Berezovsky as Russia's Godfather. That first article in Forbes brought the wrath of Mr. Berezovsky to bear on Forbes and the Author, but he continued with his research and lived to write this book. Whatever his personal motivation was, and continues to be, is remarkable. This man worked for years on the home field of a variety of people who were capable of removing him from the living, with a glance, and without any fear of consequence to themselves.

The dysfunctional, amoral, nothing is out of bounds world, that was Boris Yeltsin's Russia, truly is difficult to get your mind around. Some minor details that will prepare you for the real story; when Gorbachev was still in power the government budget received 25% of its revenues from where, from the Government monopoly on Vodka! The ruble of Gorbachev was worth approximately one U.S. dollar. At the close of 1992 one dollar would cost 415 rubles, and when Yeltsin finally left office in an alcoholic haze, if you wanted a dollar you needed 28,000 rubles! The "Voucher Auctions" that took place in 1993 and 1994 would not have been condoned much less implemented by a student with a semester or two of Economic study. Gazprom, which owns one third of the planet's Natural Gas, was "auctioned" for $250 million dollars, the truer value, if valued as a Western Company, would have had its gas reserves alone valued at between $300 and $700 BILLION. These numbers do not take into account that the company was basically a monopoly supplier to the entire former Soviet Union, and much of Western Europe as well.

To put a more familiar face on these numbers, at the very lowest estimate, you could have bought Exxon and had $12 billion left over, at the high end you could have bought General Electric, the most valuable company as I write, and since you might be thirsty after the effort, you could pick up Coca Cola with the change left from the GE purchase. You will learn how Mr. Berezovsky privatized the cash flows of companies like Aeroflot, companies he did not own, and by using little money, if any at all, and if he needed any the seller, The Government would supply it. He was not the only man to take advantage of Yeltsin and his hand picked group of incompetents but he surely was the master at the game.

This book will leave you stunned. How much to buy the election for Yeltsin, read the book, how often Yeltsin was sober, the facts will alarm you, how Tanya his beloved daughter who knew nothing that qualified her for Government, became the power behind her Father, often doing the bidding of Mr. Berezovsky, who are you ready for this, was appointed to the Government by good old Yeltsin himself. The wholesale rape of Russia's assets is worse than any damage that Russia has ever been through. Those who dared to challenge the system of "Kleptocracy" were easy to identify, they were either already buried, were bleeding, or about to be assassinated. You played by the rules of thieves or you were removed, it was that simple.

I have read many metaphors in other places that compare the Mafiyas' in Russia today to the Robber Barons of this Country of a century or more ago. Anyone who puts forth this argument is painfully ignorant of History. It is true that the men who carried the sobriquet Robber Baron were not individuals whose paths you would have wished to cross, for as businessmen they were ruthless. That is where the comparison ends, for the bottom line is that they built this country, and while there were times violence took place it is only the inept that would compare it to the thousands murdered, and the millions who died as the result of Russia being taken apart and given away. Russia was eviscerated with the Government's consent and its participation, and the consequences to the citizenry at large had not been as premeditative in their design or as destructive since Stalin.

I liked this quote from a top Russian Official, "it is very difficult to determine whether it's incompetence or embezzlement".

Source: http://ftrreading.blogspot.com/2006/...f-kremlin.html

[skhara]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

The British verbal response to this just absolutely cracks me up:

http://news.bbc.co.uk/2/hi/uk_news/politics/6906481.stm

[Wind]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

The british all doing this not because of the assassination but because Moscow didn't allow the gay parade to happen

[Armenian]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

The british all doing this not because of the assassination but because Moscow didn't allow the gay parade to happen

Not only did not "allow" it to happen but they also assaulted the participants. One of whom was a British human rights advocate, the other a famous British singer. A German and an Italian European Parliament members were also assaulted. It is quite obvious that certain street elements in Russia are being directly and indirectly used for political purposes. This event, where the state authorities basically gave the Ultra-Orthodox and racists groups a free hand to do as they pleased, was a glaring example of this.

Here are some pictures of the days event:


The unknown assailant about to punch Peter Tatchell in Moscow during Gay Pride


British musician Richard Fairbrass, who supported gay activists in Moscow, was beaten by members of ultra-nationalist groups opposed to the gay parade.


A member of the European Parliament Volker Beck, left, at a demonstration of gay parade activists in Moscow.

[Armenian]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

NASA drops $19m on Russian toilets for American asstronauts



So apparently NASA has agreed to purchase toilet technology from the Russian company RSC Energia for the tidy sum of $19 million, to be delivered to the ISS in 2008 in preparation for a crew upsizing from three to six members. The previous system required that urine tanks be transfered to cargo ships and burned up in the Earth's atmosphere, but the new toilets operate like a waste treatment center on Earth, collecting and reconstituting urine as drinking water -- an unpleasant concept for a number of our readers, but a welcome relief for thirsty astronauts. The toilets are similar to normal models, though they employ leg restraints and thigh bars to hold the "user" in place, and high-powered fans to suck, um... waste into the commode. The system will be installed on the American side of the station, while the Russian-side will remain as is, resulting in extremely long lines to use the "good" bathroom.

Source: http://www.engadget.com/2007/07/06/n...n-asstronauts/

In related news:

Russia Touts Space



Russia's space agency chief said Wednesday the U.S. is running half of the world's satellite fleet, but highlighted Russia's role in managing the international orbital station and building new pads for launch vehicles. "Out of about 950 spacecraft, the U.S. owns over 450," Anatoly Perminov, head of the Russian Space Agency, said in an online briefing. He highlighted the growth of third-party space launches from Russian sites and the expansion of the global launch network for Russian space rockets as Moscow's most recent successes.

"[Russia] accounts for about 40 percent of annual space launch activity. Of 94 new satellites orbited across the globe this year, 16 were Russian," he said. "Russia also plays a key role at the International Space Station, providing [long-term] crews and cargo," Perminov said. He also vowed Russia would launch a Soyuz vehicle from the new pad at the Kourou space center in French Guiana in less than two years. "We will have facilities delivered to French Guiana as early as this fall, and the first Soyuz-ST launch is planned for spring 2009," he said. On Tuesday, a Russian Cosmos 3M carrier rocket launched from the Plesetsk space center in northern Russia has put a German SAR-Lupe satellite into orbit, a spokesman for the Space Forces said.

"The satellite was put into orbit at 00.06 a.m. Moscow time," Alexey Zolotukhin said. It is the second time Russia has launched a German military spacecraft from the Plesetsk space center. Russia's Space Forces successfully conducted the first SAR-Lupe launch in December last year. In 2003, Russia's state arms exporter Rosoboronexport and German COSMOS International Satellitenstart Gmbh (a subsidiary of OHB Systems AG) signed a contract to launch five SAR-Lupe satellites until 2009. The German satellite system is designed to provide high-resolution radar images to NATO military commanders in Europe. It offers a spatial resolution of less than 1 meter, and allows imaging at night and through clouds. The Cosmos-3M is a liquid-fueled two-stage rocket, first launched in 1967, with over 410 successful launches to date. The booster has been designed to lift a payload of up to 1500 kg.

Source: http://mnweekly.rian.ru/news/20070705/55260937.html

[Armenian]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

It is said that Sergei Ivanov is amongst Putin's most trusted men. He is undoubtedly a nationalist and a serious politician and is expected to continue Moscow's nationalistic policies after Putin's departure. I would like to also point out that Sergei Ivanov and the Armenian authorities have a very close relationship. Thus, the following polling results from Russia bode really well for Armenian-Russian relations. In my opinion, if Ivanov does win the Russian elections next year and Armenian Foreign Minister Serge Sarkisian does become the next president of the Armenian Republic we can expect Russo-Armenian relations to advance even further. Having said that, Russia-Armenian relations are expected to advance, long as Russia does not put into power a drunken clown like Yeltsin or a corporate w-h-o-r-e like Gorbachev. What's more, more NATO pushes the Russian Federation the closer Moscow will have to move to Armenia, its last 'natural' ally in the region.

Armenian

Ivanov is Presidential Frontrunner in Russia



(Angus Reid Global Monitor) - Sergei Ivanov, a former defence minister, is leading all other candidates in the early stages of Russia’s presidential election, according to a poll by Yury Levada Analytical Center. 37 per cent of respondents would vote for Ivanov in the 2008 ballot, up six points since June. Deputy prime minister Dmitry Medvedev is second with 29 per cent, followed by Communist Party (KPRF) leader Gennady Zyuganov with 14 per cent, Liberal Democratic Party (LDPR) leader Vladimir Zhirinovsky with 11 per cent, Yabloko (Liberal) leader Grigory Yavlinsky with five per cent, Sergei Glazyev of For a Dignified Life with four per cent, and former Motherland - National Patriotic Union (MDRT) leader Dmitri Rogozin with one per cent. Vladimir Putin was elected to a second term as president in March 2004 with 71.31 per cent of all cast ballots.

In April 2005, Putin ruled out seeking a new mandate, saying, "I will not change the constitution and in line with the constitution, you cannot run for president three times in a row." The next presidential election in Russia is tentatively scheduled for March 2008. Medvedev has served as deputy prime minister since November 2005, and Ivanov was appointed to the same position—and relieved of his duties as defence minister—in February. Both have been identified as the Kremlin’s main contenders in the election. In a prospective run-off scenario, Ivanov holds an 18-point advantage over Medvedev. On Jul. 8, Ivanov decried a United States plan to build an anti-missile shield in central Europe, saying this would amount to constructing a "new Berlin Wall" in the continent, and deemed the project "an obvious threat to Russia."

Source: http://www.angus-reid.com/polls/inde...m/itemID/16567

[Armenian]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

Brazil, Russia, India and China Overtake USA

The largest threats to the American economic power have overtaken the domination of the USA in the global energy industry.



Brazil, Russia, India and China – have taken over the domination of the USA in the global energy industry, shows the newest study by the investment bank, Goldman Sachs. The strengthening of the economic power of those four countries – new economic giants united under the name BRIC – is already obvious in the metal and mining sector, and it is slowly starting to be felt in the insurance and consumer industries, says Anthony Ling, the director of that investment bank.

“For all companies that operate globally, the world is changing at an ever faster rate, bringing larger challenges than ever before – that is true globalization”, he said. One of the most important changes is the growth of the BRIC economies, he added. According to a Goldman Sachs study, at the end of the first Gulf War in 1991, of the 20 largest companies in the energy sector by market capitalization, 55 percent were American, and 45 percent European. However, in 2007, 35 percent of the largest energy companies come from BRIC countries, 35 percent European, and around 30 percent American, it says in the study. “The USA is now trailing behind, with the smallest percentage of energy companies in the world”, says Ling.

“If we assume the global resources industry is a traditional leader as far as global trends are concerned, we will start to notice the same trend in the mining industry, where 20 percent of the top 20 companies are from BRIC countries”, he said. “We are convinced that the same form will happen in all other industries”.

This form is already present in the insurance sector, in which the BRIC countries hold 10 percent of the top 20 companies. In the world industry of refreshing drinks, in which the new economic powers are just starting to be represented with a 5 percent share. Ling is predicting that BRIC will soon start to penetrate the food and pharmaceutical sectors. If investors and corporations do not take into account the growing strength of BRIC in the global economy, they will start to fall behind in the growth of investments, and lose their competitive advantage of their companies, warned Ling, talking at a press conference before the summit in Geneva on July 5-6, about the United Nations Global Compact initiative.

An initiative that was stated in 2000 is in question. The aim of the initiative is connecting the business sectors with UN agencies, governments, and the civilian population, in supporting basic social values, which reflect the ten principles on which the initiative is based, which includes respecting human rights and fair work, responsible behaviour towards the environment, and anti-corruption measures. The Goldman Sachs study, which analyses the effect of those factors in a number of industry sectors, will be released on the 3rd of July.

Source: http://www.javno.com/en/economy/clanak.php?id=57122

In related news:

Industrial Brute Strength: Six-Month Growth of Production in Russia Comparable to Asian Tiger Economies



Rosstat has reported that industrial production in Russia grew by 10.9% in June, on top of a 7.7% increase in the first half of 2007, and the manufacturing sector grew by 15.6% and 12.2% in those two periods, respectively. Such blistering rates of growth, which are comparable to the so-called "Asian tiger" economies, have never before been recorded in Russia. To explain this increase in production, economists point to a rise in consumer and investor demand, especially at the beginning of an investment program being launched by UES. They also cautiously suggest that Russian industry is adapting successfully to the expensive ruble, largely thanks to the investment boom.

According to data published yesterday by the Russian governmental statistics agency, Rosstat, the Russian economy has set yet another record for growth. The growth rate of industrial production in June 2007 was 10.9%, the largest since August 2004. This is hardly an accident. For the first half of 2007, in comparison to the same period of 2006, the manufacturing index rose by an unusual 7.7%. Such six-month growth rates have not been seen in Russia for the entire period that Rosstat has been tracking the economy. Last year, production grew only half as fast: in comparison to data from 2005, production in 2006 increased by only 3.9%.

Monthly indicators have been surprising economists since the beginning of 2007, particularly since they are significantly higher than the official predications made by the Russian Trade and Economic Development Ministry (MERT). For 2007, the ministry predicted 4.3% growth, revised it to 4.7%, and then corrected it again to 5.2% after it became clear that investment in the Russian economy was growing faster than had been expected.

Other economists also did not guess at what the future would bring. Most of their predictions were either just slightly higher than those made by MERT, or they were on the level of predictions for 2006. Deutsche UFG analyst Yaroslav Lisovolik emphasizes that such production growth is much more typical of the countries of Southeast Asia, the "Asian tigers," which have some of the highest production growth rates in the world. In China, for example, GDP is growing at more than 11%, and production growth exceeds 18%.

The most striking aspect of the Russian boom is in the manufacturing industry: in June, it grew by a record 15.6%, and it grew by 12.2% over the first half of 2007. On one hand, consistent growth is being shown by the production of various construction materials and similar products destined for investment: cement, bricks, reinforced concrete. On the other hand, import substitution is continuing on a "wide front": the production of meat, printed goods, and especially household appliances is strongly outstripping average growth indicators.

The highest growth rates were posted by steam and hydraulic turbines: between January and June 2007, they produced 1.1 and 0.9 million kW of energy, respectively, 1.9 and 2.7 times more than in the same period of 2006. Experts interviewed by Kommersant directly linked this jump with the beginning of the realization of a large-scale investment program in electrical energy. Alexander Morozov of HSBC mentions that "until 2007, such massive investment in the retrofitting of electrical energy [equipment] had not been done." A representative of UES explained to Kommersant that in 2007 the company plans to invest 520.5 billion rubles, although since "contracts are constantly being signed," it is unknown how much of that has already been spent.

Investment by players in the energy sector became apparent in the data on production on in June, but high indicators of industrial manufacturing have been being observed since the beginning of this year. As Kommersant has already mentioned several times and as all of the economists consulted yesterday emphasized, two main factors are evident. The first is consumer demand, which is based on increasing incomes and access to credit among the population. The second is an increase in investment demand, which is fueled both by government investment and by an influx of foreign capital.

However, economists are not rushing to correct their predictions for industrial growth for the whole of 2007. By way of an explanation, Alexander Morozov points to the "volatility of monthly figures": in 2006, for example, industrial growth in May was very rapid, but in June it slowed almost to zero. He is certain, however, that growth really will accelerate to a "very high" 6-7%. Vladimir Salnikov from TsMAKP says that it is difficult to predict growth, but he suggests that we can "hope for 6.5-7%," explaining that "the transportation and power engineering sectors are protected from imports."

For his part, Yaroslav Lisovolik remembers the doubts that accompanied the strengthening of the ruble and the worries that it might hurt the competitive capacity of Russian industry. In 2007 alone, for example, such fears have been voiced several times by President Vladimir Putin. Now these fears should been diminished: it turns out that Russian industry is successfully adapting to the expensive ruble.

Source: http://www.kommersant.com/p783719/r_...turing_Russia/