From Volume 5, Issue Number 9 of EIR Online, Published Feb. 28, 2006
Russia and the CIS News Digest

Russia Details Nuclear Power Expansion Plans

Following a Feb. 22 meeting in Moscow of the board of an association of Russia's territories, and nuclear energy operators, the head of Russia's nuclear energy agency, Sergei Kiriyenko, said the regions could receive $1.5 billion in federal investment, to build new nuclear power plants. This amount would represent the federal government's contribution; the rest is to be paid for through investments. The regions will present their plans, and compete for the funding. He said that the government had issued instructions to prepare a map for the location of new generating plants in the country. Russia expects to build 40 new plants by 2030, raising the nuclear power portion of its electricity output from 17% to 25%.

Kiriyenko Visits Tehran on Nuclear Program

Russian Atomic Energy Organization (Rosatom) head Sergei Kiriyenko, who also co-chairs the Iran-Russia Economic Cooperation Commission, headed for Tehran on Feb. 23 for talks that Foreign Minister Sergei Lavrov said were aimed to resolve the showdown over Iran's nuclear energy program. Moscow talks on Russia's proposal to provide facilities on Russian soil for a joint Russian-Iranian uranium-enrichment program, held Feb. 20, were inconclusive. More time was needed, a Russian official told Irna Feb. 24, while an Iranian official was quoted saying, "If an agreement is reached on full details of Russia's proposed project in the upcoming meeting in Tehran, Iran's nuclear dossier will remain on the agenda of the UN nuclear watchdog [the International Atomic Energy Agency (IAEA)] rather than being reported to the UN Security Council."

Lavrov told reporters Feb. 24 that Kiriyenko was to meet with Iranian Vice President and head of the Atomic Energy Organization, Qolamreza Aqazadeh, and other Iranian officials. Lavrov reiterated that Russia respects Iran's right to use peaceful nuclear technology, and also stresses that the provisions of the Non-Proliferation Treaty should be adhered to." Other issues of mutual interest were also on the agenda.

U.S. Seeks Georgian Help for Possible Iran Strike

According to the Jerusalem Post of Feb. 20, American officials have been probing whether the government of the Republic of Georgia would participate in a U.S.-led attack on Iran. The Post cited unnamed, high-ranking Georgian Foreign Ministry officials, who seem worried that such participation would have a negative effect on Georgia. Tbilisi fears Iranian military retaliation, were U.S. forces to use Georgian territory, yet they feel obligated to please the United States. Both U.S. and Georgian officials denied these waters were being tested.

Russia Moves To Consolidate Auto, Aircraft Industries

On top of recent Russian government moves to consolidate several leading auto firms under the aegis of the state-run armaments export company, Russian President Vladimir Putin announced Feb. 22 the consolidation of all aircraft building into one corporation. The purpose of this move, he said, "is to maintain the scientific-industrial potential of Russia's aircraft manufacturing complex, and to ensure the country's security and defense capabilities." According Putin's decree, the United Aircraft-Building Corporation (UABC) will be at least 75% owned by the Russian state. The new company will include the MiG, Tupolev, Sukhoy, Irkutsk, Ilyushin, and Yakovlev aircraft design and production companies. UABC, according to Novosti, will consolidate companies and state assets "engaged in the manufacture design and sale of military, non-military, transport and unmanned aircraft."

In the case of the auto industry, the weapons export agency Rosoboroneksport took over the Volga Auto Plant (VAZ) in 2005. Now, what's under discussion is the consolidation of VAZ together with the Soviet-era auto giants GAZ (the Gorky Auto Plant, in Nizhny Novgorod) and KamAZ (the Kama River auto plant, built with assistance from Fiat), into a single state-owned holding company.

While moves to salvage the production capacities of the old Soviet defense-linked manufacturers are understandable and necessary, the plans for each of these industries—as they now stand—also incorporate some of the insanities of doing business in a "globalized" world economy. During his Jan. 31 annual press briefing, Putin pointed up, as an alleged great success, Russia's reaching agreements with six major foreign car makers, and negotiations for 19 more, on setting up auto assembly plants inside Russia. While the cars to be produced there are intended, at least in part, for the Russian domestic market, there is no way around the fact that these assembly operations are essentially outsourcing of the foreign producers' operations, to take advantage of cheaper Russian labor power. Boris Kagarlitsky of the Institute for Globalization Studies commented in the Moscow Times of Feb. 9, "A country without a developed industrial sector cannot afford the luxury of specialized R&D. It doesn't need to come up with its own designs. Even the much heralded new automobile holding may well do little more than assemble vehicles that have been designed abroad."

Boeing and Airbus are both buzzing around the Russian aircraft industry, in search of outsourced engineering skills, among other things. The Financial Times of Feb. 21 quoted Airbus senior VP Axel Krein, who said that his company wants a "marriage" with the new Russian entity: "a $25 billion 'lifetime' partnership to develop a new aircraft." Meanwhile Aeroflot, the Russian national airline, is being courted by Airbus and Boeing to sign a contract for the supply of long-haul airplanes. The New York Times, in a Feb. 22 feature on the attempt to revive Russia's aircraft industry through creation of the UABC, noted the outsourcing: "Boeing's design center in Moscow, which opened with a dozen or so engineers hired through a cooperative program with Ilyushin in 1998, employs more than 1,200 Russians today. About 300 Russian engineers designed parts of the Boeing 787." Airbus, too, the article reported, plans to be "tapping Russian engineering talent for future airplane designs."

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