Weekly News #7

This week’s news highlights (or lowlights, depending on your point of view) include Putin’s popularity falling to an all time low, lots of good news for the economy, the US and Germany both crawling with Russian spies, and a joint nomination for the Nobel Peace Prize…

Domestic

• President Putin’s popularity rating has fallen to an all-time low following last month’s pensioners protests – only 24% of respondents said they trusted him.  However, despite this, 42% said they would vote for him if an election were held today.
• Igor Ivanov, head of Russia’s Security Council says that a lack of "public trust in all power structures and state institutions" is threatening national security.  For my money this is an astonishing statement from a very senior government member, and I’m puzzled as to why not much has been made of it in the press.
• Ex-Yukos boss Mikhail Khodorkovsky has given his first interview from prison since his arrest in October 2003.  He thinks that, now he is a prisoner, his views are taken far more seriously than they would be if he were still an oligarch pontificating between trips to the sauna and tennis sessions. 
• A suspect alleged to have been involved in the Beslan school raid last September has been arrested in Ingushetia. 
• Russia has launched a late bid for the Euro 2012, UEFA’s flagship football tournament.  If they succeed with both this bid and their 2012 Olympic bid, Moscow is going to be a very cool place to live in seven years time.

Economics/Business

• Russia’s GDP grew 7.1% in real terms during 2004.
• Standard & Poors has given Russia an investment grade rating.  The increase in Russia’s foreign reserves is thought by S&P analysts to be more important than the uncertainty that Putin’s pursuit of Yukos and Mikhail Khodorkovsky.
• Russia paid off the final $3.3 billion of its IMF loan on 31st January.  Russia’s foreign exchange reserves are now higher than its total debt.
• The chances of the US reaching a deal with Russia on WTO entry in 2005 are good, claims America’s top trade negotiator.
• Rosneft, which bought Yukos subsidiary Yuganskneftegaz in last month’s auction, has denied borrowing $6 billion from Chinese banks to finance the deal.  The denial comes after a statement from Alexei Kudrin, Minister of Finance that Chinese banks lent $6 billion to a Russian bank which, in turn, lent the money to Rosneft. 
• McDonalds is to open 105 new restaurants across Russia over the next three years, almost doubling it’s presence.

Foreign Affairs

• Mahmoud Abbas, Palestine’s newly elected President visited Moscow this week.  He came away with strong pledges of support from President Putin, who reaffirmed Russia’s commitment to supporting the creation of a Palestinian state.
• Putin has confirmed that Russia is still considering selling missiles to Syria, although he claims that any sale will not include material that could be used by terrorists.
• The recent election in Iraq was a "a step in the right direction", according to Putin.
• Iran has signed a deal with Russia to put two satellites into orbit.  Defence Tech says they are telecoms satellites; Kommersant says the satellite is for "remote probing of the earth" which it says is a fancy way of saying spying.
• Spying certainly seems to be a good career choice in Russia today.  First the FBI claims there are as many Russian spies in America today as there were during the Cold War.  Then a German magazine claims that Germany is also swarming with Russian agents.  And, finally, Mikhail Fradkov, Russia’s Prime Minister, makes a speech saying the FSB should spy on businesses in Russia itself.
• But it’s perhaps not such a good time to be a foreign spy in Russia though.  The FSB claims to have rounded up more than forty in Vladivostok alone during 2004.

Former Soviet Union

• A car bomb exploded in Gori, Georgia on Tuesday, killing three policemen and injuring many others. Gori is close to South Ossetia, the breakaway region.  Georgian President Mikhail Saakashvili condemned the bombing as an act of terrorism.  One of his aides went further, and accused "forces in Russia" of being behind the attack.
• The UN Security Council has extended for a further six months the mandate of UNOMIG, the observer mission monitoring the uneasy peace between Georgia and its other breakaway republic, Abkhazia.  Georgia’s ambassador the the UN, though, claims that Russia made it impossible for him to participate in the Security Council debate on the matter.
• Viktor Yushchenko and Mikhail Saakashvili have been jointly nominated for the Nobel Peace Prize by US Senators Hilary Clinton and John McCain.
• Russia and Belarus plan to create a common economic zone by 2006, with Belarus adopting the rouble.
• Boris Berezovsky, the oligarch currently domiciled in London, says he plans to move to Ukraine.  The Ukrainian Foreign Ministry has denied reports that he has applied for a visa.
• A Ukrainian MP has claimed that Ukraine sold nuclear capable cruise missiles to both Iran and China while Leonid Kuchma was President.

And finally…

• The Finnish-Russian Chamber of Commerce has published a book describing how to bribe Russian officials.  Sadly for Finnish businessmen – who come from the world’s least corrupt state and would never dream of actually taking bribes themselves –  the book has been withdrawn from sale.