Archive for July 2011
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How Can Kazakhstan Take Advantage of Russian Expansionism?
No comments · Posted by Aigerim in Uncategorized
During an on-line conference on news portal Zakon.kz, Kazakhstan’s Prime Minister Karim Masimov admitted that the Customs Union has created problems at customs controls along the Russia-Kazakhstan and Russia-Belarus borders transferred to the external borders of the Customs Union on July 1, 2011.
Experts are now seeing both advantages and disadvantages of the Customs Union; for example, Russian businesses want to go under Kazakhstani jurisdiction in order to take advantage of a more comfortable business environment. During the past four months, around 400 Russian companies in various industries have been registered in Kazakhstan. It is expected that this procces will increase after elimination of internal customs barriers.
“Due to the fact that customs are the same but administrative and economic regulations are different, swings between various national laws are created,” says Dmitry Abzalov, a leading expert at the Analytical Centre of Political Conjuncture. “As a result companies can move under the jurisdiction of another country and retain the ability to sell their production also on the previous markets.”
Belarus · customs union · Investment · Kazakhstan · Russia
The end is in sight, but the finish line keeps moving further away.
Russia has promoted a series of trade policies lately that violate some of the World Trade Organization’s (WTO) conditions for accession. After a bid to join the WTO that has been in the pipeline for seventeen years and finally seemed to be drawing to a close in the past year and a half, is the Russian leadership souring on membership in the trade club?
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The Russian Government Will Take Science and Technology Under Its Wing
No comments · Posted by Katya_P in Uncategorized
The Ministry of Education and Science of the Russian Federation has prepared a concept paper “On the Policy of the Russian Federation in the Field of Science and Technology Development Through 2020 and Beyond.” In this comprehensive document, the Ministry developed the basis for politics in the sphere of science and technology through 2020. The Security Council of the Russian Federation (SCRF) is responsible for the policy’s approval while the Ministry will take an active part in all stages of its development.
The Ministry believes that the state needs to assume a role in scientific development and creation of a technological base. One of the problems of Russian science today is that neither the private nor public sector is interested in innovating based on or using the results of Russian research institutes. Therefore, the Ministry suggests, the state must correct the situation by strengthening the influence of the Russian sector of innovative research and scientific development by ensuring the global competitiveness of Russian science and by creating the conditions for scientific and technological breakthroughs and advanced technology developments in selected areas. (more…)
innovation · Russia · Skolkovo
Image courtesy of RFE/RL
Russian Foreign Minister Sergei Lavrov was in Washington, DC this week, meeting with President Obama and Secretary of State Hillary Clinton to discuss U.S.-Russia cooperation on a variety of economic and foreign policy issues. Discussions related to the economy may have been overshadowed to talk related to the upheavals in the Arab world, charting a new path for Libya, and the renewal of tattered adoption relations between the two countries, but a few significant announcements illuminated the United States’ growing role as Moscow’s business partner on the international market.
- At a joint news conference with Secretary Clinton on Wednesday, Lavrov said a new visa regime between Russia and the United States would be in effect by the year’s end. Earlier this year, President Medvedev and President Obama announced plans for new multiple-entry three-year business and tourist visas at a unified and reciprocal fee, a significant liberalization of the visa regime intended to encourage business between the two countries. Should the deal be realized, it would be an important change for travel that saw 75,000 Americans enter Russia last year alone. Of the changes, Secretary Clinton said, “This is a big deal for those who are doing business, and we are laying the groundwork for even more trade and travel.” Echoing a meeting in March between Prime Minister Putin and Vice President Biden, Lavrov even hinted at a visa-less future in U.S.-Russia relations.
Last week President Dmitry Medvedev issued an order removing limitations on placing Russian stock abroad and provide Russian companies easier access to foreign stock exchanges. The order also will create a central securities depositary. The changes are expected to make it easier for Russian companies to conduct IPOs and issue depositary receipts abroad. Getting rid of these financial barriers is also expected to help Moscow become an international financial center and advance Medvedev’s goals of modernization and diversification of the Russian economy. The order will come into effect on September 1, 2011.
On this date, the government is required to lift all limitations on the placement and organization of equity securities issued by Russian companies abroad. This will allow for Russian securities to be traded freely in the form of ADRs/GDRs (American Depositary Receipts/Global Depositary Receipts) on foreign stock exchanges. According to analysts, this development will level out the prices between Russian securities in the local market and GDRs abroad. Currently, due to the limited supply of Russian GDRs, they are traded at premium (since foreign demand is higher than the supply). Canceling the limitations will reduce the spread between domestic and foreign prices as domestic stock prices will rise and GDR quotes will also adjust themselves due to the larger supply.
Currently, companies registered in Russia are only able to place a small portion of their stock on foreign stock exchanges. This amount is defined by the category in which the companies were included when they listed on the Russian stock markets (based on a Federal Service for Financial Markets regulation dating from January 1, 2009). Companies like phone provider MTS, wholesale distributor Magnit, major airline Aeroflot, car manufacturer KamAZ and others are included in Group A and are allowed to place 25% of their stock abroad, while Group B (which includes the majority of the companies traded on the MICEX and RTS stock exchanges, as well as Severstal and Rosneft) is limited to only 15% of foreign stock.
The World Economic Forum recently published “The Russia Competitiveness Report 2011: Laying the Foundation for Sustainable Prosperity.” The 237-page report analyzes the state of Russia’s competitiveness and focuses on innovation in Russia, or, rather, what it sees as the lack of innovation in Russia. The authors are optimistic about the potential of the country, but ask the question: why, despite having so many strengths and so much potential, is Russia not growing at the same pace as other emerging markets? It assesses 139 countries on the World Economic Forum’s Global Competitiveness Index (GCI) and finds that Russia comes out in 63rd place. Its labor productivity is less than half of that in OECD member countries.
The report identifies a “three-plus-five” formula for Russia to realize its full potential. The “three” are the strengths Russia possesses and the “five” are the obstacles it must overcome. The first strength is an abundance of natural resources, notably oil, gas, coal, and precious metals. The second strength is the large domestic market and growth rate. The third strength is a highly educated population, which the report put at 25 out of 139 in terms of quantity of people educated nationwide.
The first target for reform is an inefficient and corrupt institutional framework. The second challenge is the quality of education, in particular in math and science, and brain drain. The third challenge is overcoming low levels of competition, brought on by a lack of foreign participation and high levels of government involvement. The fourth is stabilizing financial markets and facilitating access to finance for business and the final challenge is making business practices more sophisticated (e.g. by introducing more clusters).
In 2007-2010 the world economic crisis did not impede the progress of the global nuclear renaissance. Global leaders not only increased their plans to develop their atomic energy sectors, but also set new ambitious objectives, despite the economic turmoil.
Unlike the world economic crisis, the Japanese tsunami and subsequent disaster at the Fukushima reactor caused a high level of uncertainty to the uranium industry and has frozen the uranium renaissance. According to the experts, crisis at Fukushima brought uncertainty in terms of assessing current and long-term demand for uranium. Additionally, the disaster revived the fears caused by the accident at Three Mile Island in the U.S. (1979) and Chernobyl (1986), which halted the growth of nuclear power for decades and only began to revive in 2000s. Germany has already become the first major post-industrial power, officially declaring that it would not connect its future to nuclear energy. Subsequently Italy and Switzerland voted to prepare a decree prohibiting the construction of new nuclear power plants. India, China and Russia declared that they did not intend to change their nuclear programs after Japanese tragedy.
energy · Kazakhstan · Kazatomprom · nuclear power plants · uranium
