Nezavisimaya Gazeta
Government Considers Leasing Far Eastern Croplands to Foreign Investors

Russia may lease millions of hectares of idle cropland in the Far East to foreign agribusinesses as a contribution to international food security during its 2012 APEC presidency.

“We have idle land that could be offered to foreigners,” Deputy Economic Development Minister Andrei Slepnev told reporters, referring to the vast areas of the Far East that were abandoned during the market reform period. In fact, Russia uses only three quarters of its 168 million hectares of croplands.

The proposal will be officially announced by Russia’s new president at the APEC 2012 forum. Several investment projects are being discussed with Vietnam, Singapore, Taiwan, Japan and other countries, Slepnev said. The talks were initiated by Russia’s Far Eastern regions. The Amur Region is an attractive investment destination for North Korea.

The potential investors will pay only a token rent of 50 rubles ($1.65) per hectare.

Asian investors won’t be allowed to move west of Lake Baikal, Slepnev said. The plan is to lease out 150,000-200,000 hectares in the Primorye and Khabarovsk Territories and the Amur Region only, and, given the large investments needed, these will be long-term leases.

Independent analysts differ on the plan’s advisability. Boris Frumkin, an agriculture expert from the Economics Institute, described it as “controversial and fraught with potential conflict.” It would be safer to set up joint ventures with Vietnam or North Korea to avoid the emergence of “technological or ethnic enclaves.”

This practice is not new. China and the Gulf countries are involved in agricultural projects in Africa. The local population seems unhappy, referring to the practice as “land neocolonialism.” In Russia’s Far East, Chinese and North Korean teams also lease out plots of land. But large projects involving resources of the APEC economies will be a first.

Dmitry Balkov from PETKUS Technologie Russia thinks the plan has promise. “Idle land [in the Far East] is a problem. In fact Koreans are the only people who have ever used it productively. Back in the Soviet era they grew vegetables and watermelons there,” he said.

Sergei Shandybin from the Razvitiye Group cautioned that foreign farmers using these lands under long-term leases might employ unsafe farming methods, polluting and depleting the soil and making it difficult to restore the land’s fertility afterward.

“Wouldn’t it be more natural, before starting such projects, to offer these lands to Russian companies on the same terms? People have problems finding jobs in small towns. There should be state programs to get them interested,” he said.

Asian investors are ready to put idle land to use. This could be the start of long-term cooperation. “There are risks too,” said BCS analyst Bogdan Zykov. “They could drive the local people from their land, or deplete the soil by careless farming.” On the other hand, some of them may decide to stay on after having worked on the land for years. “Farming is not just an occupation. It’s a lifestyle,” he said.

Moskovskiye Novosti
United Russia Seeks Ways to Legitimize Elections

The ruling party, United Russia, failed to attract the non-parliamentary opposition – parties and movements that have no representatives in parliament – to the Fair Elections debate it sponsored on Thursday.

The debate, conducted in United Russia’s preferred format of a parliament meeting, was mediated by deputy speaker Oleg Morozov and focused on the expedience of changes in the election system to increase voter confidence. The leaders of the other parliamentary parties, who are also presidential hopefuls, presented their legislative motions, which for the most part had already been submitted to the Duma.
The Voters’ League association that emerged after the recent protests against election fraud and which is organizing a February 4 Fair Elections rally, refused to participate, citing the Moscow city government’s refusal to allow the rally. They still didn’t show up even after city hall finally granted approval late Wednesday night. Yabloko also rejected the invitation after its presidential candidate, Grigory Yavlinsky, was denied registration.

Morozov began by explaining that the idea was for all political parties, civic activists and experts to share proposals and work out a joint solution, to restore people’s confidence in the elections and ensure that those involved respect the process and the results.

Communist leader Gennady Zyuganov proposed changing the format of televised debates: as it is now a candidate has just “50 seconds on Channel One to explain his plans to boost national security.” Liberal Democratic candidate Vladimir Zhirinovsky warned that observers “should not be barred from the polling stations” and that his main rival, Vladimir Putin, should be on the air less: “Even Brezhnev was not on TV this often.” 

Sergei Mironov from A Just Russia said election commissions should be formed by parties, but was immediately opposed by Central Election Commission Secretary Nikolai Konkin. Mironov also proposed limiting regional governor and mayor tenures to two terms, and, most ambitiously, abolishing the possibility for a president to serve two consecutive terms.

Andrei Vorobyov, head of the United Russia group in parliament, said the debate with the opposition was a “major step forward” and expressed hope that it would be held regularly. Vladimir Medinsky, a senior party official, proposed reintroducing the earlier cancelled None of the Above line on ballots to heed popular complaint.

Boris Titov, head of the association, Business Russia, does not believe many changes can be made this soon before the presidential election. “They should admit any observers and cooperate with the Voters’ League, which has wisely chosen a non-political platform. If all these people confirm that the voting is fair it will be legitimate and people will trust the results,” he said.

Hours after the debate ended, the VTsIOM national pollster published its latest voter confidence rating of political parties and leaders. Prime Minister Vladimir Putin’s approval rating dropped to its January 7 level of 58% from last week’s 60%. If the voting took place next Sunday, 49% would vote for him (down from 52%). Dmitry Medvedev’s approval rating shrank from 57% in mid-January to 55%, while United Russia’s popularity remained flat at 42%.

Gazeta
Davos Forum: Khodorkovsky and Capital Inflow into Russia 

Russian delegates at the World Economic Forum in Davos, Switzerland, promised investors reforms in state governance, education and in the pension system. Mikhail Khodorkovsky should be given amnesty in the first weeks of the new president’s term, said Alexei Kudrin, the ex-Finance Minister, who is not viewed as an opposition politician.

Unlike last year, there was only one Russian session at Davos in 2012, Russia Outlook, but it attracted more people than the room could hold. This time First Deputy Prime Minister Igor Shuvalov, former Finance Minister Alexei Kudrin and presidential aide Arkady Dvorkovich answered awkward questions behind closed doors.

Like last year, CEO and founder of Hermitage Capital Management, William Browder, asked about the Magnitsky case. He said that the Russian officials, implicated in the lawyer’s murder and the embezzlement of budgetary funds, had not been punished, that it was bad for Russia’s image, and asked Shuvalov what was happening.

This question was asked twice before Browder asked it, once by Alcoa CEO Klaus Kleinfeld and again by Troika Dialog director Ronald Freeman.
A Hermitage Capital representative explained that Shuvalov said a criminal case had been opened against two physicians and that it was not true that the Russian authorities were covering up for anyone. He said it was “Medvedev’s team who ensured that those [implicated in the Magnitsky case] had been fired and charged.” He admitted that there are obstacles to the investigation but said he believes the case will be solved and the guilty punished.

The general debates focused on the expectations for Russia. “Investors expect Russia to show positive growth and macroeconomic indicators,” VTB President Andrei Kostin told Gazeta.ru. First Deputy Chairman of Russia’s Central Bank, Alexei Ulyukayev, promised 3.5% yearend growth and a net inflow of capital for the first quarter (net capital outflow exceeded $80 billion in 2011).

The issue of the upcoming presidential election was discussed briefly and in a positive atmosphere. “Most business leaders believe that political stability will be maintained in Russia,” Kostin said.

Renova head, Viktor Vekselberg, said all the session participants expected a sharp debate on the recent political events in Russia, but the discussion went calmly, which points to “a high level of predictability for Russia.”

Kudrin supported the idea of amnesty for Khodorkovsky and said that Russia’s economic program stipulates reforms regardless of who wins the March 4 election.

“We need major institutional reform, primarily to improve the quality of government and of all state institutions, to enhance transparency, to combat corruption and to improve the investment environment,” Sberbank President German Gref said after the session. “The agenda includes pension and education reform, efforts to improve demographic statistics and a long list of other issues.”

“It is clear that everyone attending WEF 2012 has an action plan,” said VTB head Kostin. “It is clear that everyone is working hard. There’s no confusion or sullenness, but there is the will to resolve problems.”

RIA Novosti is not responsible for the content of outside sources.