From Volume 37, Issue 22 of EIR Online, Published June 4, 2010
Russia and the CIS News Digest

Yakunin: 'Overcome the Crisis Through Infrastructure'

May 31 (EIRNS)—The kind of investment approach Russia really needs, as against the silly "Silicon Valley" replica scheme being marketed by City of London/Wall Street tool Anatoli Chubais and his followers, was voiced by Russian Railways CEO Vladimir Yakunin during last week's Strategic Partnership 1520 conference, held in Sochi. The name of the event refers to the wide-gauge track used in the Russian rail system.

Interviewed May 27 on RTR Vesti state television, Yakunin said that the concept of the Russian Railways investment program "as a kind of locomotive" for the economy is shared by Prime Minister Vladimir Putin. "We create demand for the products of our industry, our economy," he explained. "At the same time, we are of interest to foreign investors and producers. It means integration on a global scale, plus investment.... On the whole, infrastructure, as such, is a staging ground for the key economic objectives which society has, and the government has. And I hope that this process will continue, and in the coming years, from the standpoint of implementing the strategic program for developing of rail transport in Russia to 2030, yes, there may be some delay, some correction associated with the crisis, but if we don't overcome this crisis through infrastructure, then I don't know how to overcome it."

Asked about Russian Railways policy for the "post-crisis period, or period of stagnation," Yakunin warned: "First of all, I would not rush to call the period we are living in 'post-crisis.' One of the findings of the scientific analysis, which I have made public, is that we believe the crisis phenomena have not been overcome. Today, going even just by the TV reports on what is happening in world markets, European markets, that evidently confirms that we have a long way to go, both from a global standpoint and, in my view, from a domestic standpoint, before we overcome the crisis. Stagnation can only be overcome by specific actions, geared toward development. You can't just sit there on your money, you can't sit there on your piggy-bank and think that now everything is stabilizing, and any minute now the market will rise, and we'll be able to get a higher price. We're losing time. We need to invest, and to invest in promising sectors. The promising sectors, under crisis conditions—and this was demonstrated by the American crisis in the 1930s—are infrastructure, jobs, and, without question, investment in 'human capital,' as it's put these days: education, and youth."

During the Sochi conference, Russian Railways announced it is ordering 221 freight locomotives from the Ural Locomotive plant, a joint venture of Germany's Siemens and the Russian company Sinara. The 42 billion ruble ($1.4 billion) contract is for production in 2011-16. Under another contract, Russian Railways, Siemens, and Aeroexpress will set up rolling stock production in Russia, building Desiro Rus model trains. Another large locomotive contract, for 200 passenger train units, was finalized between Russian Railways and Transmashholding, working with the French firm Alstom Transport.

Yakunin announced that Russian Railways is studying the possibility of a project for high-speed rail service between Moscow and Kiev. The recent change of government in Ukraine, he said, "means there is the necessary level of political support for this project." A May 28 article in the German daily Frankfurter Allgemeine Zeitung described Yakunin as seeking to develop Russia's high-speed rail network, while making Russia a bridge for freight between Western Europe and the Far East. Siemens-built Sapsan high-speed trains have begun to run between Moscow and St. Petersburg.

Medvedev Meets Venture Funds; LaRouche's 'Pirates' Sweeps Russian Internet

May 31 (EIRNS)—Twenty-two leaders of U.S.-based "venture capital" funds were the guests of Russian President Dmitri Medvedev on May 25 at his residence outside Moscow. The delegation was organized by Rosnano CEO Anatoli Chubais, purveyor of British-school monetarism in Russia for the past two decades, along with the American Business Association of Russian-speaking professionals (AmBAR). Details of the visit, featuring leading figures from what's left of the U.S. Silicon Valley, were also developed by Kremlin aide Arkadi Dvorkovich during his April visit to Stanford University in California.

Hence it was fitting that the Kremlin meeting coincided with the release of a Russian translation of LaRouche's blockbuster April 24 briefing, "Free Russia from the Pirates of the Caribbean!—The Case of Arkadi V. Dvorkovich." The document is now sweeping Russian-language Internet sites.

The confusion of Russian economic policy-making, even as figures such as Prime Minister Vladimir Putin and Russian Railways CEO Vladimir Yakunin continue to emphasize the priority of physical infrastructure development, was expressed by President Medvedev himself in greeting the "venture" group. One of Russia's "competitive advantages," Medvedev said, is that it has deregulated financial flows, positioning Moscow to become "one of the world's financial centers." He also boasted of the country's 13% flat income tax.

Siguler Guff, a fund with $8.5 billion under management, announced a $250 million investment to set up IT services for Skolkovo, the future office park in suburban Moscow, which is supposed to become Russia's Silicon Valley replica. Chubais's pet project Skolkovo, so far, is overwhelmingly oriented to IT, although Medvedev has called for it to do biomedical R&D, as well, and named senior Academy of Sciences physicist Zhores Alfyorov to the board.

Obama Administration official Michael McFaul was in on the meeting with Medvedev.

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