Year: 2008

Hello,

(Part 1)

Vitalik’s mother made him a present of a crucian carp and a small aquarium for it to live in. It was a beautiful little fish and Vitalik was very excited about it at first, he fed it and changed the water in the bowl regularly. But after a time he lost interest in it and sometimes he even forgot to feed it.

Vitalik had a kitten, too, called Murzik, a grey fluffy kitten with large green eyes. Murzik loved to watch the fish swimming about in its bowl. He could sit for hours beside the bowl with his eyes glued to the carp.

“You’d better keep an eye on Murzik,” Vitalik’s mother warned him. “He’ll eat up your fish one of these days.”
“No, he won’t,” said Vitalik. “I’ll see he doesn’t.”

One day when his mother was out, Vitalik’s friend Seryozha came to see him. When he saw the fish he said:
“That’s a nice little carp you’ve got there. I’ll give you a whistle for it if you like.”
“What do I need a whistle for?” said Vitalik. “I think a fish is much better than a whistle.”
“No, it isn’t. You can blow on a whistle, but what can you do with a fish?”
“You can watch it swimming in its bowl. And that’s more fun than blowing a whistle.”

“Rats,” said Seryozha. “Besides, the cat can gobble up your fish any time and then you won’t have a whistle or a fish either. But the cat won’t eat a whistle, because it’s made of iron.”
“Mummy doesn’t like me to swap things. She’ll buy me a whistle if I want one.”

“She’d never get one like this,” said Seryozha. “You can’t buy them in the shops. This is a real militiaman’s whistle. When I go outside in our yard and whistle everyone thinks it’s the militia.”
Seryozha took a whistle out of his pocket and blew a piercing blast on it.
“Let me have a try,” begged Vitalik.
He took the whistle and blew on it. It responded with a loud trill. Vitalik was enchanted. He longed to own the whistle but at the same time he didn’t want to part with his fish.
“Where would you put the fish if I changed with you? You haven’t got an aquarium.”
“I’d put it in a jam jar. We have a big one at home.”
“All right, take it,” said Vitalik, finally giving in.
They had a hard time taking the fish ,out of the bowl. It kept slipping out of their hands. At last, after splashing water all over the floor, Seryozha managed to catch it, wetting his sleeves up to the elbow in the process.
“I’ve got him!” he shouted. “Quick, bring me a glass of water.”

Vitalik brought a mug full of water and Seryozha dropped the fish into it. Then the two friends went to Seryozha’s place. The jam jar turned out to be not quite so big as Seryozha had said, and the fish had much less room than in its bowl. The boys stood watching it swimming back and forth in the jar. Seryozha was very pleased, but Vitalik felt a little sad. He was sorry he had given away his fish, and what is most important, he was afraid to tell his mother that he had exchanged it for a whistle.

To read continue please click at the little picture….

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Previous stories:

ZIS

Cucumbers

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Best wishes and we’ll continue next Wednesday!

Svet

comments always welcome

Village: Sunrise To Freedom!

Hello,

I was drinking my morning cup of coffee & thinking about this last weekend. We went to our Dacha in the Village called “Sunrise to Freedom!”

I have written about a church being built there again and
http://kylekeeton.com/2007/08/russian-church-rising-from-ruins.html
http://kylekeeton.com/2007/10/russia-sunrise-to-freedom.html
I also wrote about a death that happened there.
http://kylekeeton.com/2008/01/russia-life-is-more-important-than.html

It seems that the murder stopped the process of rebuilding the church. Seems that there was a lot of underhanded things going on that should not have been going on. So the Orthodox Church wisely shut down, the escapades of one “preacher boy” as I called him.
http://kylekeeton.com/2007/06/life-in-village-is-it-too-crowded.html

The village is back to normal and quiet as always. There was a new public phone that had been put in, the cow was still there, goat ladies still there and of course we (the American & his Russian wife). It was a fantastic weekend full of fun & Bugs!

Kyle & Svet

comments always welcome.

RBC, 17.06.2008, Moscow 17:54:53.Russian Railways is drafting an offer on its potential participation in the funding of Deutsche Bahn’s railways, the Russian company’s President Vladimir Yakunin told journalists today. He said that, while it was a very attractive asset, it was within the government’s competence to decide whether Russian Railways could take part in the funding. He stressed that Russian Railways’ investment program needed to be approved by the government, adding that the company was now preparing a project analysis to be introduced to the cabinet.

RBC, 17.06.2008, Moscow 16:52:26.The Russian stock market rose more than 1 percent in the afternoon. After 3 p.m., the RTS index was up 1.09 percent at 2,392.14 points and the MICEX index was up 1.12 percent at 1,852.55 points. The trade volume approached USD 20m on the RTS and topped RUB 23bn (approx. USD 967m) on MICEX.

RBC, 17.06.2008, Moscow 15:26:47.The number of ways in which the National Welfare Fund can be invested needs to be increased, Russian President Dmitry Medvedev said during a meeting on economic issues in the Kremlin today. The fund must increase the number of options available for investment in various securities, including shares and bonds of both Russian and foreign companies, the President noted. He reiterated that, according to the Russian Budget Code, the National Welfare Fund was created to help finance pension payments and support the pension system as a whole. Therefore, it is vital that the fund be invested in reliable securities, Medvedev stressed.

RBC, 17.06.2008, Moscow 14:55:38.LUKoil expects to increase hydrocarbon output outside Russia to 170,000 barrels of oil equivalent per day in 2008, up more than 20 percent compared to the previous year, a spokesman for the Russian oil company Andrei Gaydamaka said during the 12th investor conference today. He noted that LUKoil’s hydrocarbon production had risen more rapidly abroad than in Russia. This can be attributed to the company’s implementation of new foreign projects, including gas ones. Gaydamaka named Azerbaijan, Kazakhstan, Uzbekistan, Columbia, and Venezuela as the most promising countries in terms of hydrocarbon output growth. The suspended Western Kurna-2 project may also contribute to a further increase in hydrocarbon production, according to Gaydamaka. He stated that LUKoil was becoming an oil and gas company, as it was actively developing gas projects. LUKoil, which produced some 16bn cubic meters of natural gas in 2007, expects the figure to exceed 20bn cubic meters this year.

RBC, 17.06.2008, Moscow 13:42:26.Gazprom is willing to allow its foreign partners to participate in the share capital of the holding’s energy assets, the company’s President Alexei Miller told journalists today. He explained that Gazprom was in the process of forming a production and supply chain, starting with geological surveys and natural gas production and ending with its gas supplies to end users. Miller added that foreign companies could come in at any stage, noting that exchange of assets could potentially become a means of foreign participation in the holding. Miller reiterated that Gazprom was nearing the completion of deals with its German and Italian partners E.On and Enel.

RBC, 17.06.2008, Moscow 12:39:44.Russia is still undecided about the price of its oil, Deputy Prime Minister and Finance Minister Alexei Kudrin told journalists today. He pointed out that in recent years growth resulted in a slow increase in oil prices, yet currently oil prices continue to rise, despite a slowdown in global economic development. Kudrin explained that in such circumstances Russia must be prepared both for a rapid rise or fall in the price of oil. He also stated that nobody could accurately foretell what the next pricing trend might be, as it potentially could surge to $250 per barrel or tumble to $70 per barrel. He added that if the oil price remained high, Russia could not spend revenue from oil sales rapidly, as it would result in the ruble’s significant appreciation against the dollar.

RBC, 17.06.2008, Moscow, Sergei Mironov, Chairman of the Federation Council upper chamber of the Russian parliament, is convinced that the Russian ruble can become a regional currency for the Commonwealth of Independent States (CIS).

“The Russian ruble is stronger than ever before, and it could become a regional reserve currency very soon. This is entirely realistic,” he told reporters on Monday.

The ruble is already beginning to assume the role of a regional reserve currency for the CIS, according to Mironov. Its stability is supported by the country’s dynamically developing economy and growing exports and imports. “Concerning the supply of Russian oil and gas with our CIS partners, why not make the ruble the currency of payment and include this condition as part of our contracts with them?” he asked, adding that in the future, Moscow would become one of the world’s major financial centers.

He stressed that Moscow had the potential to become just such a center but that the process would not happen over-night and that it would require significant structural changes.

Boris Listov, a member of the Federation Council’s Committee for Financial Markets and Money Circulation, feels the same. He said that, “using the ruble as a regional currency would not entail the need for any CIS country to stop using their own national currency, which is one of the most important elements of state sovereignty.” As a regional currency, the ruble would only be used in international trade and economic relations, to determine the price and currency for contract payments. “All the necessary preconditions exist, this could become part of our state policy in our foreign economic ties with neighboring countries,” Listov said.

“As for the ruble’s role as a currency for saving on the international market, it is too early to speak about that,” he noted. “It will depend on a number of factors, including the ‘authority’ of the national currency, its sustainability and the demand for it. In other words, our goal for now is to expand the use of the Russian national currency as a full-fledged means of exchange in a particular trade and economic space,” Listov reckons.

Hello,

I hope that Oil price stays at only $120 to $130 a barrel, but I do not think that it will I think that the price will get to the $200 a barrel by the end of the year…..
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MOSCOW, June 17 (RIA Novosti) – Oil prices may level out at $120-130 per barrel, a spokesman for Russia’s largest private crude producer LUKoil said on Tuesday.

World crude prices reached almost $140 per barrel on Monday, rising from an average of $90.64 in February, $99.03 in March and $105.16 in April.

“I believe the prices will level off at $120-130 per barrel,” Sergei Kukura, LUKoil’s first vice president, said on the sidelines of an investor conference in Moscow.

He said he did not rule out that the prices could eventually reach $250 per barrel, referring to forecasts by analysts.

“We consider $130 per barrel to be a fair price,” the official added
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Lets hope I am wrong! What do you think?

Kyle & Svet

comments always welcome.

Hello,

The NATO dance between Russia and Ukraine continues…..
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Russian authorities have refused to purchase Ukrainian motors for cruise missiles. That decision was announced by Evgeny Kablov, general director of the Aviation Materials Scientific Research Institute, Reuters reports. His announcement coincides with NATO General Secretary Jaap de Hoop Scheffer’s visit to Ukraine. According to Kablov, whose institute specializes in designing alloys for use in air and space engines, specific goals were set by Russian Prime Minister Vladimir Putin for reducing the dependence of Russian defense on Ukrainian producers. Putin mentioned motors for Kh-55 and Kh-59 cruise missiles and Kh-35 anti-ship missiles in particular.
Moscow now buys missile motors from the Motor Sich plant in Zaporozhye. That plant is the largest manufacturer of propulsion units for air and naval equipment in the CIS. Two days before Kablov’s announcement, Russian Deputy Prime Minister Sergey Ivanov spoke of the need to break ties between the Russian and Ukrainian defense industries in case Ukraine joined NATO.
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Ukraine could be a big looser in the NATO issue. NATO is not going to be a save all to Ukraine…..

Kyle & Svet

comments always welcome.

Hello,

It gets better everyday…..
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The White House and the National Intelligence regard the growing financial wealth of Russia a serous threat to the national security of the United States.
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An article about the paranoid American Government…. Kommersant

Kyle & Svet

comments always welcome.

Hello,

The days of being swarmed by gypsy taxi drivers is over, (That is how it felt when I first came to Moscow!)
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The unappealing choice between overpriced taxis and overcrowded minibuses stuck in traffic should be a thing of the past, after Sheremetyevo finally became the last of Moscow’s big three airports to get a direct rail link to the city center.
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Yippy Yea! That is a beautiful train….

Kyle & Svet

Kind of an Interesting Picture: Iran is surrounded by USA Military Bases!

“We don’t know what’s going on behind closed doors in Washington — or what Mr. Olmert heard from Mr. Bush. But saber-rattling is not a strategy. And an attack on Iran by either country would be disastrous.”

“If sanctions and incentives cannot be made to work, the voices arguing for military action will only get louder. No matter what aides may be telling Mr. Bush and Mr. Olmert — or what they may be telling each other — an attack on Iran would be a disaster.”

New York Times

RBC, 10.06.2008, Moscow 16:50:14.The average price of Gazprom’s natural gas supplies to Europe has now reached $410 per 1,000 cubic meters, the energy holding’s CEO Alexei Miller said during a meeting of the European Business Congress (EBC) in Deauville today. Miller reiterated that Gazprom had originally expected the figure to reach $400 by the end of 2008. However, the company underestimated the price growth potential, even though it had very detailed information on gas markets, the CEO noted. The gas price volatility may be attributed to the current surge in hydrocarbon prices. For instance, the oil price is expected to close in on $250 per barrel in the near future, Miller stated.

RBC, 10.06.2008, Moscow 16:24:03.Gazprom has finally determined the route of the South Stream gas pipeline, the Russian energy holding’s CEO Alexei Miller said during the 11th annual meeting of the European Business Congress in Deauville today. Miller reiterated that the holding had earlier signed agreements on the construction of the pipeline with Bulgaria, Hungary, Serbia, and Greece. He added that Gazprom agreed with its partners during the St. Petersburg International Economic Forum on June 7-8 that Slovenia and Austria would also join the project. Miller stressed that the South Stream project did not compete with the Nabucco pipeline project, thanks to the rising demand for gas in Europe.

RBC, 10.06.2008, Moscow 14:39:03.Sitronics and China’s ZTE have signed an agreement on the creation of a joint venture, General Director of the Russian provider of telecommunication solutions Sergei Aslanian told RBC today. Sitronics will hold a controlling stake in the new company. Before the end of 2008, Sitronics and ZTE are poised to launch a plant in China, where the Russian company will relocate its main production. This would allow a cut in production costs by at least 20-25 percent. Aslanian pointed out that the plant had already been built.

RBC, 10.06.2008, Moscow 13:52:43.Russian Deputy Prime Minister Sergei Ivanov believes that it is necessary to start exchange trading in aviation fuel. The price of jet fuel currently represents 70 percent of an airline ticket price, which is “very costly” for an air carrier, he told journalists. Once aviation fuel becomes an exchange-traded commodity, the problem will be solved, as there will be more than the existing 3-4 companies supplying the fuel to air carriers, the Deputy PM said.

RBC, 10.06.2008, Tbilisi 09:16:50.Georgia’s President Mikhail Saakashvili believes that the Abkhazian conflict can only be settled through a dialogue with Russia. He stressed, however, that a decision to bring troops into the region would mean switching to a dangerous stage in the conflict, and added that he hoped that Russia would change its policies, Georgia’s TV channel Rustavi 2 quoted him as saying.

RBC, 09.06.2008, Moscow 19:24:10.The management of the Russian gold producer Polyus Gold has attributed the 15-percent revenue increase in 2007 to higher gold process. Commenting on the company’s IFRS-based financial results released today, executives said that the positive dynamics were linked exclusively to the market situation, as Polyus Gold sold a total of 1.21m ounces of gold in 2007, 6,000 ounces less than a year earlier, while the price of gold rose over 30 percent that year, enabling the company to post a record annual revenue of $849.023m

June 6, 2008,
Konstantin Palace, St Petersburg

THE WORLD ECONOMIC FORUM!

EXECUTIVE CHAIRMAN OF THE WORLD ECONOMIC FORUM KLAUS SCHWAB: Mr President, ladies and gentlemen, friends,

It gives me great pleasure to welcome President Dmitry Medvedev to our forum today. This is a special pleasure because I remember very well your concluding remarks at Davos a year-and-a-half ago, when you amazed everyone with your views on Russia’s future and impressed us all with your knowledge of English. Our relations with Russia go back a long way. We first arrived in St Petersburg in 1991 and our hosts then were from the St Petersburg City Hall. As far as I remember, you and Prime Minister Putin were both here when our delegation first arrived, and today we are celebrating our longstanding partnership and friendship. Thank you very much for finding the time in your schedule to meet with us this evening.

I would like to introduce your colleague, Arkady Dvorkovich, who is one of your aides and is also Russia’s Sherpa in the G8. He is playing an important part in preparations for the G8 summit and, before we begin our discussions, I would like to specially thank you and the Minister for your work and for the cooperation between the St Petersburg Economic Forum and the World Economic Forum in Davos. I would like to thank you for this. I have already received a positive first reaction to this cooperation.

Mr President, we have calculated approximately that the people here today, the senior executives of many different companies, represent more than $1 trillion between them. We would like to hear view of the current situation in Russia. I am sure that this will be a productive discussion. Once more, I would like to wish you welcome, Mr President of the Russian Federation.

PRESIDENT OF RUSSIA DMITRY MEDVEDEV: Ladies and gentlemen, colleagues,

Today’s meeting during this Forum’s work is not taking place simply in order to continue tradition. Life and recent events have shown that only this kind of direct dialogue can help us discuss a number of serious issues that are equally important for business and for the authorities in our country and have an overall positive impact on the business and investment climate in Russia.

I would like to begin our discussion by naming five things that I consider important today. You can probably draw my attention to things I may have overlooked, things that you consider important for developing cooperation with Russian companies and with Russia in general.

As you know, and as I already said today, we have set ourselves the not very easy goal of setting Russia on an innovative development track and becoming one of the world’s five biggest economies by 2020. The ability to raise new long-term investment will be a determining factor in our progress towards this goal.

Last year, investment in basic capital increased by more than 21 percent (almost double the figure for 2006). We are consolidating this positive trend and laying the foundations for further economic diversification and, most importantly, for technological modernisation. That is the first point.

Second, we want to bring capital into as wide a range of economic sectors as possible. Most investment in past years has been in Russia’s mining and extraction industries and the transport sector, but now we are also seeing investment in agriculture, machine-building, real estate, timber processing and trade. We think these sectors are all just as important for Russia today as the traditional sectors of mining and extraction and transport.

At the same time, direct foreign investment accounts for a share of around 5 percent of our gross domestic product. Most direct foreign investment is in retail, construction and the commodities sector. We have taken a number of measures to change this situation. Above all, we have acted to put in place a full-fledged legal and regulatory framework defining the conditions for investment development.

This is probably the third important point to note. We have spent quite some time in Russia discussing the preparation of a special law on key strategic areas for investment. Just recently, on April 29, the Federal Law ‘On Procedures for Foreign Investment in Economic Companies of National Strategic Importance’ was passed. This law contains clear and concrete provisions, and this is what foreign investors wanted from us. It covers 42 types of business activities and clearly regulates procedures for investment in these sectors. Investors interested in purchasing a blocking or controlling stake in a company considered strategic must first get government approval. This document, which has now become law, has a lot in common with the procedures set out in a similar law in place in the United States. I specially made a comparison of the two documents and ours is more straightforward. If a particular sector is not on the list in the law then the question does not even arise and investment is carried out absolutely freely without the need for permission of any kind.

Another moment I wanted to draw to your attention, colleagues, is that we are currently drawing up a series of proposals on improving taxation conditions for foreign investors and for investors in general. We want to encourage investment in human capital, in intellect. In particular, we are looking at the possibility of introducing tax exemptions for spending on corporate education, which is very important for our country, and medical insurance – also an important new step.

We also want to introduce a special rule making it possible for businesses to co-finance employees’ mortgage loan interest payments and benefit from a tax exemption for a certain period.

We are aware of the difficulties the mortgage market in a number of big countries is facing at the moment, but we do not intend to abandon this instrument. We simply want to take into account the negative experience the developed economies have gone through lately.

Last but not necessarily least, as a lawyer I know very well that a country’s investment climate is determined not just by the laws themselves and the state of the legislative foundation in place, but by the way the laws are enforced and, above all, by the existence of an effective court system. This is a very important matter for Russia: over these last 15 years we have created a quite modern court system that is radically different to the Soviet system, but we cannot say yet that we are fully satisfied with all of its institutions. Our task is to create absolutely independent and modern courts that measure up to the level of economic development in our country. This is an extremely important objective and this is why one of my first decrees as President was about developing the court system.

We consider it very important to remove administrative barriers and fight corruption, which as you know is unfortunately a serious problem in Russia. We will therefore tackle this issue. We also need to create new opportunities for small and medium businesses.

These are the five points I think are of key importance for developing the economy and attracting investment. Now we have the chance, as I said at the start of my speech, to discuss these and any other matters you wish to raise. Thank you.

QUESTION: Thank you, Mr President. The five points that you mentioned are all things for which we are grateful, especially for what you said regarding the strategic sectors. You anticipated my question. Significant progress has been achieved in this area. For my part, I would like to give this law my firmest support. But of course, in order to be able to prepare for acquisitions or for cooperation with Russian companies, we need to know as soon as possible how predictable this law will be. Once it takes effect, what will be the procedures for resolving disputes? Is there anything more you can tell us about this or about the way the law will be implemented in practice, especially as concerns how promptly and predictably its provisions will be enforced?

DMITRY MEDVEDEV: I am very conscious of the fact that any law, even such a long-awaited law as that on the strategic sectors, cannot solve all the problems that exist today. Being a lawyer by training I always warn my colleagues against having illusions as far as the law is concerned. I remember in the early 1990s when people thought it was enough to pass a law and wake up the next day to find everything going just great, but this was not the case. You are right in that predictability and the way laws will develop and change are very important issues for any civilised legal system and legal order.

I think that we have gained a decent understanding of this issue today. Russia is a country whose legal system is based on continental law, and this brings with it both advantages and disadvantages. One of the advantages is that by passing a number of fundamental laws we have laid the system’s foundation for the future. I think that the legal protection of property rights and the guarantees of contractual obligations that our legal system offers today are completely consistent with world standards and of a similar level to what exists elsewhere in Europe.

We cannot use the precedent-based common law system to protect foreign investment because we have our own legal system, although in the case of foreign investment that comes under the jurisdiction of foreign law this possibility does exist, of course. This can create certain problems because we very often turn to the decisions of courts in countries using the precedent-based common law system. But I say again that in my view our legal system is quite well prepared and offers quite a high level of predictability. Our main task today as I see it is to ensure that the courts enforce all these legal provisions at all stages, from filing lawsuits and examination of cases in the courts to delivering verdicts and ensuring that court decisions are enforced. This is something the state will work on extremely attentively. This is a somewhat more difficult task than laying a developed legal foundation, but I have no doubt that we will achieve results. I hope that within a reasonable number of years we can fully expect that our court system will be just as effective as that of most of the world’s developed countries.

QUESTION: This morning and on earlier occasions you spoke of innovation as one of the ‘I’s that are crucial for Russia’s future social and economic development. Could you say a bit more about Russia’s information strategy as far as information and communications technology is concerned? What part do you want global companies to play in this development?

DMITRY MEDVEDEV: Thank you. I listened very attentively to what you said today. I think that global companies have without any doubt an absolutely fundamental part to play in reaching our ambitious goals of an IT and communications revolution and developing an innovation economy. No matter what the criticism levelled at the big global companies, it is nonetheless they that bear the main responsibility for advancing what we could call the new society.

Every time we switch on a computer (I usually never turn mine off), we look at the screen through different eyes and think our different thoughts (sometimes good and sometimes not so good) about the people who develop the content we see before us. But we realise full well that the new digital world would not exist without it, that without it we could not say today, as one well-known work put it, that ‘the world is flat’. And the world today is indeed flat and we are becoming more conscious of this fact with every passing day. But I think that small and medium companies can also make a contribution. I think they too are entirely capable of this and, what’s more, talented specialists often start out in small companies and go on to become leading experts and sometimes managers in global companies. This is also something we see today. But it is nevertheless the global companies that bear the main responsibility for uniting rather than dividing the digital world of the twenty-first century, and we hope very much for cooperation with these big companies and wish you success in selling your products in the Russian Federation.
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I thought it was an interesting speech…..

Kyle

comments always welcome.