Russia Reform Monitor: No. 1614

December 24:

Russia's Gazprom is branching out into the Balkans. The Russian natural gas monopoly has just inked a new deal with Serbia's NIS under which it will acquire a 51 percent stake in the Serbian state-owned natural gas firm. The agreement was signed following talks in Moscow between Russian president Dmitry Medvedev and Serbian president Boris Tadic, at which the two leaders pledged closer bilateral energy cooperation in a move that both leaders pledged "will ensure energy security of our nations and other European countries." But the move is anything but uncontroversial, the Associated Press reports. Serbian nationalists have raised fears that the energy arrangement will greatly increase Moscow's energy leverage over the Balkan state, even prompting the resignation of Economy Minister Mladjan Dinkic.


December 27:

Finance Minister Alexei Kudrin is warning ordinary Russians to brace for a bumpy 2009. "In 2009, the budget will have a deficit of 1.5 to 2 trillion rubles, which we will have to make up from the national Reserve Fund," Kudrin has told the Vesti television channel in comments carried by RIA Novosti. "2009 will be the most difficult for the Russian and world economies. I cannot remember a worse year since the end of the Second World War... This will be the worst year for the economy in modern times." Kudrin's glum assessment comes on the heels of similar comments by Kremlin aide Arkady Dvorkovich, who warned that unless Russia's economic prospects take a turn for the better by mid-2009, the national budget deficit could exceed 5 percent of the country's GDP.

One-time Kremlin insider Alexander Voloshin's assumption of the chairmanship of the board of Norilsk Nickel this week marks a political victory for the government of Dmitry Medvedev, who has jostled in recent times with oligarchs Oleg Deripaska and Vladimir Potenin for control over the Russian metal giant. Voloshin, who quit the Kremlin in 2003 in protest over the Khodorkovsky affairs, has taken pains to distance himself from the official line on Norilsk, although he has declared that the Russian government's interests in nationalizing the firm are "close to my heart." All of which, the Wall Street Journal reports, suggests that Norilsk is a bellwether of sorts for how the Russian government will respond to the global financial crisis, with many fearing that "the Kremlin will use the opportunity to reassert control over prime assets."

Amid growing tensions with Ukraine over Russian natural gas supplies to Europe, London's Telegraph reports that Moscow's plans for a "natural gas OPEC" are about to take a giant leap forward. Early in 2009, the paper reports, the energy plant on the Russian Far Eastern island of Sakhalin will begin to produce liquefied natural gas (LNG), a liquefied version of the fuel commodity that can be transported by tanker, much like oil. Experts predict that that step will tilt the world energy equation still further in Moscow's favor, strengthening the Russian government's efforts - initiated during Vladimir Putin's presidency and still overseen by him in his new role as Prime Minister - to cobble together a natural gas cartel to rival the Organization of Petroleum Exporting Countries, and imbuing the nascent energy bloc with even greater power to set the global price of natural gas.


December 29:

A nationwide poll of most popular historical figures has ended in Russia, with unsettling results. Reuters reports that Joseph Stalin - the Soviet dictator responsible for the deaths of millions of his own countrymen - was voted the third most popular "name in Russia" in a six-month survey of fifty historical personalities conducted by the Rossiya television station. Alexandr Nevsky, the 13th century prince responsible for defeating German invaders, and 20th century reformist prime minister Pyotr Stolypin, came in in first and second place, respectively.

The news has left some in Russia's intelligentsia aghast. "We now have to think very seriously, why the nation chooses to put Josef Vissarionovich Stalin in third place," actor and film director Nikita Mikhalkov, who served as one of the contest's judges, said following the announcement of the results. "We may find ourselves in a situation where absolute power and voluntarism that ignores people's opinions may prevail in our country, if a fairly large part of the nation wants it."