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Saturday, December 17, 2005

Foreign CEOs beneficial to Russian companies - Putin

SOCHI, December 16 (RIA Novosti) - Russian President Vladimir Putin said Friday that inviting foreign managers to run Russian companies would promote inter-state relations and benefit the companies. Asked whether former U.S. Secretary of Commerce Donald Evans had been offered the position of chairman in Russian state-owned oil major Rosneft, Putin said: "Any public company, and Rosneft is going to be public - you know it will hold an IPO - seeks to attract top- notch managers irrespective of their ethnic origin or nationality." A leading Russian business daily reported Tuesday that Evans, a long-time ally of U.S. President George W. Bush, had been offered the position in a personal meeting with Putin in Moscow on December 7. "Rosneft has a real opportunity to turn into a global [oil] company, and I am positive it will. Inviting top-notch foreign experts to work for it is possible," the president said. Putin said this would make the Russian economy more open and Russian business entities more transparent, helping them advance their interests and benefiting the state at large. Evans could become the second former senior foreign official to head a Russian energy company. Last week, former German Chancellor Gerhard Schroeder agreed to head the North European Gas Pipeline, a direct natural gas link between Russia and Germany. According to a government official, Russian Prime Minister Mikhail Fradkov discussed the idea of offering the top position to Schroeder with German Economy Minister Michael Glos at the pipeline opening ceremony. Glos supported the idea and said the new chancellor, Angela Merkel, would approve it. The shareholders then approached Schroeder with the proposal, which he accepted, a government source said Friday.

Friday, December 16, 2005

600 foreigners denied entry into Russia in 2005 - FSB

MOSCOW, December 16 (RIA Novosti) - Russia's Federal Security Service (FSB) denied entry to more than 600 foreigners this year, service head Nikolai Patrushev said Friday. "With the help of leads provided by our partners, we denied entry into Russia to more than 600 foreign citizens who are suspected of extremist activities," he said. According to Patrushev, the FSB maintains official contacts with 104 law enforcement bodies in 67 countries and with 42 border guard services in 35 countries. "We have an extensive information exchange with law enforcement agencies in Azerbaijan, Belarus, Germany, the UK, Israel, Kazakhstan, the U.S., Ukraine, Uzbekistan and South Korea," the FSB head said, adding that joint operations remained the most effective method of cooperation. "We conducted more than 120 joint operations this year," he said.

Wednesday, December 14, 2005

U.S. Expert Says Washington Treats Russia Unfairly in WTO Negotiations

Joseph Stiglitz / Photo from www.cooperativeindividualism.org12.12.2005 MosNews - Former vice-president of the World Bank and winner of the 2001 Nobel Prize for economics, Joseph Stiglitz, said on Monday, Dec. 12 that the position taken by the United States in WTO accession negotiations with Russia is unjust. Stiglitz was in Hong Kong for the sixth ministerial WTO conference and gave an interview to Russia’s RIA Novosti. “I would call the thing that the Americans are doing in negotiations with Russia extortion at the gate,” the expert said. “They are trying to use this situation in order to get preferential treatment for themselves, which I consider to be highly unjust,” Stiglitz stressed. The expert also noted that accession to the World Trade Organization is in Russia’s interests. “WTO accession is doubtlessly in Russia’s interest. Overall Russia should take part in as many international organizations as possible,” the U.S. expert said. In his opinion all of the countries that want to join the international trade organization should be allowed to do so without any additional conditions presented by its old members. Stiglitz is in Hong Kong for the presentation of his new book “Fair Trade for All”. He is among many experts and officials who forecast a bleak outcome for World Trade Organization talks that begin here on Tuesday, Dec. 13. It is expected that during the conference Russia will hold a next round of negotiations with a number of countries that have so far failed to sign bilateral agreements allowing Russia to join the WTO. Earlier a source in the Russian government told RIA Novosti that Russia’s accession to the WTO may be delayed by as much as a year if Moscow and Washington fail to agree on key points of dispute — level of customs tariffs for passenger aircraft and access to Russia’s financial services market. “If we don’t reach an agreement, this will delay Russia’s WTO accession to anywhere from six months to a year. But most likely it will be for a year,” the agency’s source said. He said that at the present time Russian and U.S. negotiators are holding consultations on a daily basis, but have been unable to reach agreement on key issues. The United States continues to insist that Russia removes all import tariffs on aircraft and that U.S. banks and insurance companies are allowed to open direct branches in Russia.

Russia gaining strength on global IPO market -- experts

MOSCOW, December 14 (RIA Novosti) - Russia's position on the IPO market gained strength as overall global IPO activity saw a considerable growth in 2005 according to figures released Wednesday by Ernst & Young and Thomson Financial. The audit and consulting companies found in their survey that $138.5 billion was raised on the IPO market in the January - November period, exceeding the $124 billion raised in the whole of 2004. The survey showed that a sustained IPO growth was registered in Europe with a 68% increase in capital raised in 2005 to $51.2 billion year-on-year. Russia, among the emerging European markets, increased the number of closed deals by 33% against last year and capital increased by 386%. The increase in global IPO activity was led by larger deals in 2005, the survey said. There were 59 deals, raising more than $500 million in January - November 2005, compared to 44 of similar size in the same period in 2004. The three largest deals in 2005 included China Construction Bank, which raised $9.2 billion, making it the largest IPO in five years. China's capital increased 43% in 2005 against last year and the country continues to retain the leading position in Asia. The two other largest deals in 2005 were for state-owned French enterprises: Electricite de France ($7.3 billion raised) and Gaz de France ($4.8 billion). While none of the three top IPOs were in the United States, the country managed to preserve its leading position in terms of both the total capital raised and the number of deals. The U.S. closed 175 deals with $27.9 billion raised in capital. Ernst & Young partner for the CIS Doug Gardner said the strong position of Russia in the survey is evidence of Russia's economic growth and its integration into the world economy. He said Russia's combined economic growth in the past six years was approximately 45%. He said this economic success was the result of a consistent economic strategy aimed primarily at the restoration of the financial system in the country, the improvement of the investment climate and the development of the market infrastructure.

Putin for banning foreign banks' branches in Russia

NOVOSIBIRSK, December 14 (RIA Novosti) - The Russian government agrees with the banking community that the activities of foreign banks' branches in the country should be banned, President Vladimir Putin said Wednesday. "The Russian government agrees with our [Russia's] banking community that branches of foreign banks and their activities in Russia should be now be restricted, and in practice prohibited," Putin said. "This is due not only to the competitive war, but also to the need to monitor the movement of funds and capitals under modern conditions," the president said. It is also linked to anti-terrorism measures and the need to counter laundering of criminally obtained funds, he said.

Sunday, December 11, 2005

Corruption Casts Doubt on Russia as G8 Leader

12-12-2005 The Moscow Times - By Stephen Boykewich Staff Writer - A steady increase in corruption and the lack of political will to fight it will present major obstacles as Russia assumes the G8 chair in 2006, Transparency International said Friday. The Berlin-based watchdog released its 2005 World Corruption Barometer on Friday, with results showing Russians increasingly pessimistic about the institutions meant to protect them and increasingly certain corruption will get worse. That's not just bad news for business, it's bad news for President Vladimir Putin as he claims one of the biggest spotlights on the world stage, TI Russia head Yelena Panfilova said Friday. The Kremlin-sponsored bill cracking down on NGOs is likely to exacerbate the problem, she said. The Group of Eight's Forum for the Future agenda, reaffirmed at the Gleneagles summit in July, "has a huge anti-corruption component that has to be fulfilled with the participation of civil society organizations," Panfilova said at a news conference. "How these organizations will be able to carry out that requirement of G8 leadership after these changes, to tell you the truth, I can't imagine." In the new TI survey, conducted by Romir Monitoring, 1,630 Russian citizens named the police, political parties and the parliament as the most corrupt institutions, and NGOs and the church as the least. This makes a government crackdown on NGOs "a logical inconsistency," the TI Russia director said. Sixty-two percent of survey respondents said corruption has increased a little or a lot in the last three years, and 50 percent expected it to grow further over then next three -- a sign pessimism is deepening. In last year's survey, only 38 percent expected corruption to get worse in the near future. TI's World Corruption Barometer tracks personal experiences of corruption, as opposed to the organization's better-known Corruption Perception Index, which ranks countries according to a poll of independent experts. In that poll, Russia dropped to 126th out of 159 this year, its lowest level since 2001. Vladimir Vysenko, a representative of the liberal Republican Party, said corruption was increasing due to the lack of a single high-profile corruption prosecution within the Kremlin leadership over the past five years. "As long as that kind of signal is lacking in our country, people will keep doing what they're doing. People always watch what's happening at the top," Vysenko said, speaking at the conference. "It's curious how Putin will handle himself when he heads the G8. There are going to be quite a few questions put to him, in part about this," Vysenko added. Citizens believe corruption has the greatest influence on political life, with survey respondents putting the degree of influence at 3.4, with 4 being the greatest possible influence. Corruption's influence on business was a close second, at 3.1. The release of the report coincided with UN Anti-Corruption Day, and Panfilova said that officials fed up with consistently grim corruption rankings should push for the ratification of the UN Convention Against Corruption, which Russia signed in 2003 but has yet to ratify.

Saturday, December 10, 2005

Russia Ranks Sixth in Global Direct Investment Attractiveness Rating

Photo from www.gettyimages.com08.12.2005 MosNews - The poll, conducted by consulting company A.T.Kearney among top managers of world's largest companies, showed that Russia is among top 10 most attractive investment destinations, right behind Poland and ahead of the rest of Eastern Europe. The consulting company's press release, published on Wednesday, Dec. 7, said that the first place on the list is occupied by China, which has been the world's most attractive investment destination for four years straight. Second place is occupied by India, which is followed by the United States, Great Britain and Poland. Russia occupies the sixth place. Meanwhile in another A.T.Kearney research which was published in March of this year Russia occupied 11th place in terms of attractiveness for direct business investment. The press release also noted that global executives are more eager to commit foreign direct investment in China, India and Eastern Europe than at any time since 1998. This year 54 percent of executives say they are planning foreign investment increases, the largest number since 2000. Global foreign direct investment inflows rose by 2% to $648 billion in 2004, the first positive change in this figure since 2000. Eastern European markets experienced a sharp increase in FDI confidence levels — with Poland (fifth), Russia (sixth), Hungary (11th), the Czech Republic (12th), Turkey (13th) and Romania (25th) all rising in the rankings and all achieving record highs save Poland. Poland, Russia, Turkey, the Baltic States and the Czech Republic rank among the top ten countries with the most upbeat outlooks among investors. As MosNews reported on several occasions, Russia has been receiving record-high levels of foreign direct investment and investor confidence has been on the rise, as proved by various researches and expert opinions.

Wednesday, December 07, 2005

Capital outflow to be $5.4bn in 2005

12–07–2005 RBC News – The net outflow of capital from Russia would be less than $5.4 billion this year, Alexei Kudrin, the Finance Minister of Russia, said at a meeting of the Federation Council on Tuesday. The Economy Ministry forecast a higher net capital outflow, at $8.5 billion, but Kudrin said it would be lower due to large borrowing by state companies. He also noted that the outflow of private capital from the country remained high. By December 15, the Finance Ministry would submit a draft federal budget for the next three years, for the first time, Kudrin said. "Three years' draft budget is a significant step forward improving the quality of economic regulation," he stressed. The Economy Ministry was reviewing its forecast for Russia's socio-economic development in connection with changes in oil prices, Kudrin said. The Economy Ministry had projected GDP to be RUR 21 trillion this year, RUR 24 trillion in 2006, RUR 27.84 trillion in 2007 and RUR 31.3 trillion in 2008. Real economic growth is expected to be 5.9 percent this year, 5.8 percent in 2006, 5.9 percent in 2007 and 6 percent in 2008. Inflation is set at 11.5 percent this year, 8.5 percent next year, between 6 and 7.5 percent in 2007 and between 4 and 4.5 percent in 2008. The ruble/dollar exchange rate is projected to be RUR 28.3 RUR/USD this year, 28.6 RUR/USD in 2006 and 2007, and 28.5 RUR/USD.

Restrictions on capital transactions may be lifted

RBC, 06.12.2005, Moscow 19:06:10.The Finance Ministry and the Central Bank are discussing the possibility of abolishing restrictions on capital transactions. Discussion is in progress, Finance Minister Alexei Kudrin told journalists. The current restriction on capital inflow is up to half a year and for capital outflow - up to 15 days. This change will liberalize the capital and investment market and increase the economy's appeal for foreign investors. Though there is a risk of a considerable speculative capital inflow.

Tuesday, December 06, 2005

No News is a Good News?

Dear readers,

Our blog was suspended pending further investigation of alleged spamming.
An absurd contention, but we have to cope with it.
Sorry for inconvenience.

Blog staff

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