Daily Archives: February 14, 2007

07MOSCOW656, OREL: VULNERABLE GOVERNOR CREATES OPPORTUNITIES

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Reference ID Created Released Classification Origin
07MOSCOW656 2007-02-14 14:56 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO7753
RR RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHMO #0656/01 0451456
ZNR UUUUU ZZH
R 141456Z FEB 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 7475
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUEHLN/AMCONSUL ST PETERSBURG 3747
RUEHVK/AMCONSUL VLADIVOSTOK 1903
RUEHYG/AMCONSUL YEKATERINBURG 2165

UNCLAS SECTION 01 OF 03 MOSCOW 000656 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PINR KDEM SOCI RS
SUBJECT: OREL: VULNERABLE GOVERNOR CREATES OPPORTUNITIES 
FOR OTHER PARTIES 
 
 
MOSCOW 00000656  001.2 OF 003 
 
 
------- 
SUMMARY 
------- 
 
1. (SBU)  Meetings during an early-February visit to Orel 
region suggested that a variety of factors could combine to 
make the March 11 regional elections very competitive. 
Rumored infighting in United Russia (YR) and an unpopular 
YR-affiliated governor have allowed the Communist Party 
(KPRF) to remain within striking distance of the 
Kremlin-sponsored United Russia party. The second 
Kremlin-approved party, Just Russia, appears to be benefiting 
from heavy financing and is in the race as well. Smaller 
parties and independent candidates are using door-to-door 
appeals in an effort to overcome the advantages of the 
majors.  End Summary. 
 
--------------------------------------------- --- 
United Russia: Burdened by an Unpopular Governor 
--------------------------------------------- --- 
 
2. (SBU) United Russia currently holds 34 out of 50 seats in 
the regional legislature and aims to retain its majority in 
the March 11 regional election.  Although the percentages 
vary, local polls show YR with a mere three percentage point 
advanta'oQocal observers, is Governor 
Yegor Stroev, who has been in power for over 20 years, and is 
now a United Russia member. Local journalist Sergey Tyurin 
claimed that Stroev is perceived as not having successfully 
cultivated a relationship with President Putin, to the 
detriment of the region's economy.  The local electorate, 
according to Tyurin, is tired of a Governor who promises, but 
does not deliver. 
 
3. (SBU) Stroev's unpopularity has reportedly led to 
infighting within United Russia.  United Russia leader and 
First Deputy Governor Pavel Merkulov, who suffered a surprise 
defeat in the 2006 Orel mayoral election, alluded to the 
problems caused within the party by the Governor in telling 
us that United Russia would demand "accountability" from 
Stroev as it went into the elections. 
 
4. (SBU) In a separate meeting, the NGO "Civic Resource" 
President Yelena Kastornova did not think that a poor track 
record necessarily complicated YR's efforts to remain on top. 
Other parties were promising a lot, she said, but United 
Russia would reap the benefits associated with stability.  In 
a February 8 meeting, Patriots of Russia Chairwoman Yelena 
Krachnakova conceded that some had done well under United 
Russia, but asserted that they were a minority: only twenty 
percent of likely voters. 
 
--------------------------- 
KPRF: Looking to Capitalize 
--------------------------- 
 
5. (SBU) In the March 2006 mayoral election, Aleksandr 
Kasyanov unexpectedly and narrowly won on the KPRF ticket 
taking 29 percent of the vote to Merkulov's 26 percent.  At a 
meeting with civil society and human rights activists, the 
"United Europe" Institute's Dmitriy Krayukhin attributed 
Kasyanov's win, despite the heavy use of administrative 
resources for Merkulov, to the Governor's unpopularity and 
the support of civil society activists, the press, and the 
KPRF rank-and-file.  While ruing the need to work with the 
KPRF, Krayukhin thought it was the only option for those 
wanting to create a true opposition to YR and Stroev, since 
all other parties were co-opted and the "against all" option 
had been removed from the ballot. 
 
6. (SBU) Although KPRF has only five deputies in the current 
regional legislature, many interlocutors in Orel described 
the region as "red."  They note that KPRF Chairman Gennadiy 
Zyuganov is a native son and that KPRF voters are disciplined 
and hence much coveted by other parties.  KPRF's Vasiliy 
Ikonnikov told us separately that local businesspeople who 
are out of favor with United Russia were now financing the 
KPRF. Many observers predicted that the KPRF as a result 
would run a close second to YR in March. 
 
----------------------------------- 
A Just Russia: Bringing in the Cash 
----------------------------------- 
 
7. (SBU) Although Just Russia has negligible poll 
recognition, no one doubts that it will finish a strong third 
 
MOSCOW 00000656  002.2 OF 003 
 
 
thanks to generous campaign financing. The Orel party office 
during our visit was swarming with young people collecting 
stacks of campaign material to distribute.  Just Russia is 
paying approximately USD150 per week, more than one month's 
average salary, to distribute campaign materials.  Just 
Russia's Marina Ivashina confirmed that all financing was 
coming from Moscow.  Just Russia is mounting a PR campaign 
that will portray YR as a party that talks, while Just Russia 
"does."  Tyurin suggested that Just Russia would portray 
itself as close to Putin in order to win votes. 
 
--------------------------------------------- ---------- 
SPS: Importing Strategists...and Localizing Its Me
ssage 
--------------------------------------------- ---------- 
 
8. (SBU)  In a February 7 meeting, Sergey Tarasov and Oleg 
Repin described SPS's message in Orel as "additional money 
for pensioners and those who depend on federal assistance." 
SPS, buoyed by its unexpected second place finish in Perm 
(where it garnered 16 percent of the votes in the October 
2006 election), has brought in campaign workers from all over 
Russia to get its message across.  It is relying largely on 
face-to-face campaigning as media access is complicated to 
access and expensive.  The party's goal is to win in enough 
regions to effect change at the federal level. 
 
------------------------------------------- 
Smaller Parties and Independent Candidates: 
Door-to-Door Canvassing 
------------------------------------------- 
 
9. (SBU)  The ballot also features LDPR (popularly predicted 
to win its "usual" 10 percent), the Democratic Party of 
Russia, Patriots of Russia, People's Will, and a host of 
independents on the individual candidate lists.  Most of 
these parties are optimistic that they will get at least one 
seat.  They and independent candidates are focusing their 
efforts on door-to-door canvassing with the expectation that 
a personal connection will instill greater confidence in 
prospective voters.  Independent candidate Olga Kurmova, who 
is running on a platform of helping families, children, and 
older people, firmly defended her ability to vote 
independently should she be elected.  "United Europe" 
Institute's Krayukhin was more cynical about the 
independents, alleging that many were actually United Russia 
proxies who are fearful of being tainted by association with 
the Governor. 
 
--------------------------------------------- ----- 
Yabloko:  Off the Ballot, but on the City Council 
--------------------------------------------- ----- 
 
10. (SBU) Yabloko's Konstantin Fedotov explained that his 
party had not been registered, despite collecting a 
sufficient number of signatures, because its documents had 
not been bound together as required by law.  Fedotov claimed 
that Regional Election Commission Head Anatoliy Trofimov had 
been willing to overlook the requirement and accept the 
signatures the next day, but was preempted when the national 
daily Kommersant reported Yabloko's exclusion.  Trofimov 
himself told PolOff that Yabloko had not submitted its 
signatures on time.  Fedotov further noted that litigation 
would be pointless as inevitable court delays would render 
the matter moot.  "United Europe" Institute's Krayukhin 
dismissed the idea that Yabloko's exclusion was politically 
motivated.  He pointed to what he said were Fedotov's local 
government ties and claimed that Yabloko in Orel was in 
reality an adjunct of United Russia. 
 
11. (SBU)  Fedotov confided that the Moscow branch of Yabloko 
had refused to finance the party's Orel efforts. (Fedotov is 
on the City Council and hopes to raise Yabloko's profile in 
the region by undertaking high profile social projects and 
supporting local businesses.) 
 
------------------------- 
The Governor: A Liability 
------------------------- 
 
12. (SBU) At a February 8 meeting with civil society 
activists, the consensus was that Stroev was similar to an 
"oriental despot."  Orel oblast had fallen behind 
economically; in part, participants surmised, because Stroev 
was hostage to a circle of obsequious advisors.  Immediately 
after the collapse of the Soviet Union, Stroev had been able 
to rely on federal connections to ensure that pensions and 
state factory salaries were paid, and had been able to 
 
MOSCOW 00000656  003.2 OF 003 
 
 
"order" that factories be built.  The governor, however, was 
unable to manage the realities of today's Russia, even with a 
daughter in the Federation Council. 
 
------- 
Comment 
------- 
 
13. (SBU)  The level of dissatisfaction in the oblast has 
created real opportunities for parties other than United 
Russia to believe they have a chance to get into power. None 
of the parties is doing a remarkable job of distinguishing 
itself from the pack. However, as the campaign progresses, 
structural features -- like the festering dissatisfaction 
with Governor Stroev -- could make this contest much closer 
than YR's inherent advantages suggest it should be. 
BURNS

Wikileaks

07MOSCOW655, HAITI: RUSSIA SUPPORTS SIX-MONTH MINUSTAH MANDATE

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Reference ID Created Released Classification Origin
07MOSCOW655 2007-02-14 14:53 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXYZ0000
PP RUEHWEB

DE RUEHMO #0655 0451453
ZNY CCCCC ZZH
P 141453Z FEB 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 7474
INFO RUEHGG/UN SECURITY COUNCIL COLLECTIVE PRIORITY
RUEHPU/AMEMBASSY PORT AU PRINCE PRIORITY 0022

C O N F I D E N T I A L MOSCOW 000655 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA/CAR TIMOTHY G. RYAN 
 
E.O. 12958: DECL: 02/14/2017 
TAGS: PREL UNSC KPKO HA RS
SUBJECT: HAITI:  RUSSIA SUPPORTS SIX-MONTH MINUSTAH MANDATE 
 
REF: STATE 16568 
 
Classified By: Pol/Min Counselor Alice G. Wells.  Reasons: 1.4 (b/d). 
 
1. (C)  We raised reftel points on February 13 with Vladimir 
Safronkov, Chief of the UN Political Affairs Section in the 
MFA's International Organizations Department, who told us 
that Russia would support only a six-month extension of the 
MINUSTAH mandate.  He argued that a mandate of six months 
vice one year would force the Haitians to begin to think 
about assuming more responsibility for their affairs.  He 
acknowledged that both the Contact Group of donors and the 
states supplying most of the peacekeepers supported the 
longer period, but claimed that the six month mandate should 
not interfere in their mission planning. 
 
2.  (C)  Safronkov told us that Russia was coordinating 
closely with China on the mandate.  When pressed to encourage 
the Chinese to take into account their responsibilities as a 
P-5 member in reviewing the mandate, Safronkov noted that it 
would also be useful if the Haitians, who were dependent on 
the goodwill of the international community and especially 
the UNSC, took into account the realities of the Security 
Council.  Russia acknowledged that Haiti, just like any 
state, could determine with whom it would have diplomatic 
relations, but at the same time, the Haitians needed to 
accept the fact that their vocal support for Taiwan at UNGA 
could have consequences. 
 
3. (C)  On February 14 we delivered the same points to Sergey 
Tarasov of the MFA's Office of Caribbean Affairs.  Tarasov 
told us that Russia valued MINUSTAH, pointing out the GOR 
contributed to the police contingent in Haiti.  He said that 
Russia would continue its support, but he judged that while 
some progress had been made in Haiti, the country would need 
MINUSTAH for several years to come. 
BURNS

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07MOSCOW648, RUSSIA AND INDIA: MAKE NEW FRIENDS, BUT DON’T

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Reference ID Created Released Classification Origin
07MOSCOW648 2007-02-14 13:07 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO7543
PP RUEHDBU
DE RUEHMO #0648/01 0451307
ZNY CCCCC ZZH
P 141307Z FEB 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 7448
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RUEHLM/AMEMBASSY COLOMBO PRIORITY 0066
RUEHKA/AMEMBASSY DHAKA PRIORITY 0119
RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 2076
RUEHBUL/AMEMBASSY KABUL PRIORITY 0439
RUEHKT/AMEMBASSY KATHMANDU PRIORITY 0049
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 1083

C O N F I D E N T I A L SECTION 01 OF 04 MOSCOW 000648 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 02/09/2017 
TAGS: PREL ENRG KNNP MASS ETRD IN RS
SUBJECT: RUSSIA AND INDIA:  MAKE NEW FRIENDS, BUT DON'T 
FORGET THE OLD 
 
REF: A. NEW DELHI 440 
     B. 05 MOSCOW 15711 
     C. MOSCOW 301 
 
Classified By: Political M/C Alice G. Wells.  Reasons: 1.4(B/D). 
 
1.  (C)  Summary:  Russia's goal is to "revitalize" its ties 
to India by concentrating on energy security and hi-tech 
joint projects according to the MFA, which provided a readout 
on Putin's trip to India and a look ahead at high-level 
meetings in February.  Moscow heralded an agreement to sell 
four new reactors to New Delhi, but acknowledged it would 
need to work with Washington in the Nuclear Suppliers Group. 
Russian experts were skeptical about further growth in 
Russia's arms relationship with India and argued that anemic 
trade figures could not be remedied by government fiat, but 
needed a private sector solution.  There are no serious 
political issues separating Moscow and New Delhi and Russia 
will continue its support for India's permanent seat on the 
UN Security Council.  Russia-China-India talks in New Delhi 
are unlikely to produce any concrete results.  Russia is 
struggling to readjust its longstanding ties with India to 
meet new realities.  End Summary. 
. 
MFA:  ROSY ASSESSMENT 
--------------------- 
 
2.  (C) The MFA's briefing after President Putin's January 
25-26 India trip highlighted agreements on civilian nuclear 
cooperation, hi-tech joint ventures and military sales, while 
downplaying political discussions.  MFA Deputy Director 
Andrey Budnik's spin was that Moscow and New Delhi were 
taking their strategic partnership to a new level by focusing 
on cutting edge technologies and increasing energy 
cooperation.  The MFA stressed that Putin's visit was not the 
end of Russia's engagement for the year, but only the 
beginning.  According to the MFA, Russia and India are on the 
same page on most international and regional issues, and the 
GOR was now looking forward to troika (Russia, China, India) 
discussions in New Delhi on February 14.  The MFA posited 
that Russian Economics Minister Gref's mid-February visit to 
India would be a start at addressing disappointing trade 
levels.  Summing up, Budnik argued that Russia's longstanding 
close ties with India were being revitalized and updated to 
reflect the realities of the new "multipolar century." 
. 
NEW IMPETUS TO AN OLD RELATIONSHIP 
---------------------------------- 
 
3.  (C)  The GOR's take on this year's summit was decidedly 
more upbeat than the assessment following PM Singh's late 
2005 visit to Moscow (ref B).  Then, the MFA was concerned 
that despite high-level and frequent discussions, firm 
results were lacking.  As Gennadiy Chufrin, Deputy Director 
of the Institute for World Economy and International 
Relations (IMEMO) explained, following the steep fall-off in 
trade and other contacts following the fall of the Soviet 
Union and after India's economic liberalization, the 
bilateral relationship was primarily based on military 
cooperation and a shared sensibility on international issues. 
 However, nostalgia and affirmations of strategic partnership 
were insufficient to propel the relationship forward in the 
absence of underlying concrete activity.  Chufrin told us 
before the latest visit that he detected a quickening pace, 
particularly in the fields of hi-tech and energy, which 
suggested that a resurgent Russia and a growing India could 
renew their ties.  At the same time, he acknowledged that 
closer ties between Washington and New Delhi constituted a 
"fact on the ground" which complicated Russian ties with 
India and challenged longstanding assumptions about India's 
strategic position. 
. 
RUSSIA IN THE NUCLEAR LEAD 
-------------------------- 
 
4.  (C)  In reviewing those factors which have deepened the 
relationship, energy cooperation looms large in the MFA's 
calculations.  The MFA highlighted the importance of the 
signing of a Memorandum of Intent to construct four 
additional nuclear power plant units at Kudankulam, while 
stressing that Russia would act in a manner consistent with 
its Nuclear Suppliers Group (NSG) responsibilities and only 
after an IAEA safeguards agreement had been concludedn (see 
ref C).  Deputy Director Budnik stressed that India had an 
 
MOSCOW 00000648  002 OF 004 
 
 
excellent record on proliferation.  While slyly noting that 
only France and the U.S. could compete in this field with 
Russia and that Moscow had "gotten there first," Budnik said 
that Russia would work with the U.S. and others in the NSG to 
address concerns about India, but said that this would 
involve "heavy lifting."  (Comment:  Budnik responded to 
another diplomat who asked whether the U.S. and Rus
sia were 
in competition in India by noting that Russia had strong ties 
to India dating back many years and had "always" demonstrated 
its reliability as New Delhi's "primary" strategic partner. 
End Comment.) 
. 
HI-TECH AND MILITARY COOPERATION 
-------------------------------- 
 
5.  (C)  Putin's visit, which had been immediately preceded 
by a visit by Defense Minister Sergey Ivanov, was also marked 
by an agreement to jointly develop and produce the 100-seater 
Multi-Role Military Transport Aircraft (MRTA) as well as by a 
verbal agreement to jointly develop a Fifth Generation 
Fighter Jet (ref A).  Recognizing that military cooperation 
remained a major pillar of bilateral ties, the MFA stressed 
that the agreements inked in New Delhi reflected growth in 
the relationship -- Russia was no longer simply selling and 
India buying, but now the two had moved on to joint R&D, 
manufacturing and marketing.  Joint development of the 
Brahmos cruise missile was held up as a model for the 
transformed relationship.  The Russians also stressed a 
stepped-up level of hi-tech cooperation, citing an 
Indian/Russian technical center to be set up in Russia to 
facilitate the commercialization of jointly developed 
technologies, as well as joint work on the GLONASS Global 
Navigation system and a project to produce titanium oxide in 
Orissa. 
 
6.  (C)  While the Russian experts we spoke to acknowledged 
that military/technical cooperation had sustained ties during 
the lean nineties, some questioned its continuing relevance, 
as India developed an independent capacity to produce the 
latest generation arms and sought more advanced electronics 
in its weapons systems.  Russian Institute for Strategic 
Studies Director Yevgeniy Kozhokin pointed out that work on 
the Brahmos joint venture had hardly been seamless. 
Difficult IPR issues remained when India attempted to 
integrate Western technology onto Russian military platforms, 
despite an IPR agreement the two sides had wrangled over for 
years before signing in 2005.  Tatiyana Shaumian, who heads 
the Center for Indian Studies at the Oriental Institute, also 
highlighted difficulties in implementing military technical 
agreements because of continuing problems in supplying spare 
parts for Russian weapons.  She said that the GOR was 
responsible for delays in refurbishing the Russian aircraft 
carrier the Admiral Gorshkov. 
. 
ENERGY:  FUTURE PILLAR? 
---------------------- 
 
7.  (C)  Despite the MFA's best efforts to suggest that 
energy ties would bolster the relationship, aside from the 
nuclear agreements, there was little concrete progress. 
While the first oil from India's investment in the Sakhalin I 
project was off-loaded in India in December, the sides could 
only agree to encourage state oil companies ONGC and Rosneft 
to discuss upstream and downstream projects.  With the 
possible exception of LNG from Sakhalin, energy experts were 
dubious that Russia could become a significant supplier for 
India.  Chufrin noted that while it might make sense that 
energy would become a larger component in the relationship 
given Russia's role as an energy supplier and India's as a 
buyer, geographic constraints and Russia's greater interests 
in Europe and Northeast Asia would limit energy ties. 
Shaumian pointed out that while Russian firms were interested 
in working on an Iran-Pakistan-India pipeline, there were 
serious political and economic barriers that made that 
project seem unlikely anytime soon.  She said pipelines from 
Central Asia through Afghanistan faced their own set of 
complications. 
. 
TRADE:  FLY IN THE OINTMENT 
--------------------------- 
 
8.  (C)  Low trade levels were the primary stumbling block in 
the relationship, according to the MFA, but the remedies 
suggested -- official target-setting and further governmental 
 
MOSCOW 00000648  003 OF 004 
 
 
talks -- were unlikely to spur increased trade according to 
Russian experts.  The MFA said that a joint study group would 
focus on identifying trade barriers with the goal of raising 
turnover from its current level of USD 3.8 billion to over 
USD 10 billion a year by 2010.  Minister Gref's mid-February 
visit is designed to boost these totals. 
 
9.  (C)  However, as Shaumian stressed, government-led 
efforts missed the point; what was needed were greater 
interaction between Russian and Indian business figures, and 
that was not happening.  Part of the problem was the thorny 
issue of business visas for Indians -- with Putin insisting 
that any deal on visas be linked to Indian willingness to 
sign a readmission agreement with Russia, which Moscow was 
compelled to do by its agreement with the EU on visas and 
readmissions.  As it was, Indians often needed to wait two 
months to travel to Russia, which put up obstacles to 
concluding business deals.  Moreover, Shaumian noted, Russian 
companies were more comfortable dealing with other Europeans 
or even the Chinese than they were with India, even though 
India offered more relevant lessons for Russia on how to 
develop hi-tech centers and encourage the growth of small and 
medium enterprises. 
. 
POLITICAL HARMONY 
----------------- 
 
10.  (C)  Political discussions at the Summit were 
unremarkable, according to the MFA's Budnik, given the 
consensus on Russia's favorite topics:  the need to recognize 
a mulitpolar world, non-interference in internal affairs, 
territorial integrity, and the central role of the UN.  On 
the latter, Russia continues to support a permanent seat on 
the Security Council, albeit without a veto, according to the 
MFA.  Counter-terrorism cooperation and India's role as an 
observer in the Shanghai Cooperation Organization were also 
touched on.  The Russians encouraged the Indians to be more 
active in Central Asia, but there was only a limited 
discussion of Afghanistan and little or none on the 
Indo-Pakistani dispute.  Russian experts we talked to were 
hard pressed to point to any serious problems on the 
political level. 
 
TROIKA:  NOT MORE THAN MEETS THE EYE 
------------------------------------ 
 
11.  (C)  The MFA highlighted the mid-February discussions 
among the Chinese, Indian and Russian Foreign Ministers in 
New Delhi as marking another milestone in the developing 
troika relationship, but were quick to add that the grouping 
was not directed against any other country.  Moscow wants the 
Troika to focus on economic cooperation, regional issues and 
counterterrorism.  During the Putin meetings, the Russians 
had also raised the possibility that the BRIC (Brazil, 
Russia, India and China), which had met on the margins of 
last year's G-8 Summit in St. Petersburg, could focus on 
political issues, but India pushed for a continued BRIC focus 
on economic topics. 
 
12.  (C)  IMEMO's Chufrin was skeptical about the Troika's 
value -- he saw an absence of concrete
 activity that could 
lead to results and viewed it as a talking shop.  In his 
view, difficulties in the India-China relationship limited 
the group's potential; China's support for Pakistan and 
territorial disputes with India and its concerns about the 
burgeoning U.S.-India relationship were stumbling blocks that 
Russia could do little to influence.  At the same time, he 
thought that rapidly expanding trade ties between India and 
China could form the basis for more constructive efforts in 
the future.  In this view, Russia would act as the energy 
supplier to the two manufacturing powerhouses, but he 
questioned whether this arrangement met Russia's interests. 
Shaumian agreed that bilateral problems between Beijing and 
New Delhi limited the ability of Russia to make something out 
of the Troika, but looked to economic ties as the driver of a 
closer political relationship. 
. 
COMMENT 
------- 
 
13.  (C)  Despite MFA's protests to the contrary, our Russian 
interlocutors are aware that growing cooperation between the 
U.S. and India challenges long held assumptions here about 
India's role as Russia's closest partner in Asia.  As 
 
MOSCOW 00000648  004 OF 004 
 
 
government-to-government economic ties dwindle and India 
turns to others for defense technology, Moscow will likely 
seek to strengthen energy, scientific and technological ties 
and promote India's enhanced role in the UN.  Russian 
supplies of oil and gas look to be a long-shot, with the 
exception of LNG from Sakhalin.  Links with India remain 
strong, and are even expanding into new areas, but Russia is 
still struggling to reposition itself to take account of 
India's rising political status and growing economic capacity. 
BURNS

Wikileaks

07MOSCOW645, MOSCOW FORUM OFFERS INNOVATION CORNUCOPIA

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Reference ID Created Released Classification Origin
07MOSCOW645 2007-02-14 12:17 2011-08-30 01:44 UNCLASSIFIED Embassy Moscow

VZCZCXRO7487
PP RUEHHM RUEHLN RUEHMA RUEHPB
DE RUEHMO #0645/01 0451217
ZNR UUUUU ZZH
P 141217Z FEB 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 7443
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
INFO RUEHDIR/IRAN RPO DUBAI 0001
RUEHZN/EST COLLECTIVE
RUEHRL/AMEMBASSY BERLIN 1890

UNCLAS SECTION 01 OF 02 MOSCOW 000645 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR EB/CIP/MA (GIBBS), EUR/RUS (GUHA), OES/STC 
(DAUGHARTY), EUR/ACE (YOUTH), NEA/ARPI 
 
COMMERCE FOR UNDERSECRETARY CRESANTI AND (BISNIS) ELLEN HOUSE 
 
BERLIN FOR ROBERT HAGEN 
 
E.O. 12958:  N/A 
TAGS: ECON EINT ETRD TNGD TSPL IR RS
SUBJECT: MOSCOW FORUM OFFERS INNOVATION CORNUCOPIA 
 
REF: 06 MOSCOW 02255 
 
MOSCOW 00000645  001.2 OF 002 
 
 
1.  (U) SUMMARY: Moscow's Seventh International Salon of Innovations 
and Investments, February 5-8, offered a cornucopia of products, 
services and financial programs for the developing innovation 
economy.  In contrast to last year's Salon (REFTEL), there were 
significantly more exhibitors, and they had many more products 
already in production and on the market.  While several exhibitors 
were Moscow-based, the vast majority were from the regions, 
representing the breadth of Russian innovation activity.  Investment 
funds offered money and advice to innovative enterprises that were 
looking for sponsors.  Reflecting its solid ties to the Russian 
economy, Iran had the largest contingent among the foreign 
exhibitors. END SUMMARY 
 
2.  (U) From February 5 to 8, more than 500 enterprises showcased 
their wares at the All-Russian Exhibition Center.  Forty regions of 
Russia represented the spread of technology beyond the center. The 
well-attended Salon was sponsored by the Ministry of Education and 
Science, the Ministry of Economic Development and Trade and the City 
of Moscow. 
 
3.  (U) Exhibitors from the regions included the innovation 
technology firm Monocrystal PLC, based in Stavropol, which produces 
synthetic sapphires for computers, optical electronic devices and 
laser diodes.  Representatives of Monocrystal told us they had 
captured 15 percent of the world market for synthetic sapphires used 
in high technology applications.  Synthetic sapphire substrates are 
used in LED displays.  Monocrystal's customers include Microsoft and 
Intel in the U.S. market, where it has a 3 percent market share. 
The company employs 600 people in Stavropol and exports 85 percent 
of its products to markets in Asia -- primarily, China, Taiwan and 
South Korea-- and the European Union.   Its revenues are 
approximately $60 million per year. 
 
4.  (U) Another typical regional technology company is the biotech 
firm Cellular Technologies that produces an anti-wrinkle beauty 
cream using stem cells extracted from animals.  A company 
representative told us the firm was created in 2005 and has granted 
a license to Dow-Corning for production in the U.S.  In its first 
year of operation in the Southern Federal District, Cellular 
Technologies produced approximately 12,000 units of the cream, which 
it sells through distributors in Eastern Europe for 30 euros each. 
The product Silky Touch is registered in Russia and the European 
Union.  Cellular Technologies has started a European operation in 
Prague to sell to Russia in order to take advantage of favorable 
export financing. 
 
5.  (U) This year's salon was distinguished by the number of 
investment funds that offer financing for regional start-up 
technology companies.  The Foundation for Assistance to Small 
Innovative Enterprises (FASIE) has been operating since 1994.  FASIE 
assists small enterprises on a highly selective basis with seed 
money closely tied to annual performance reviews.  (COMMENT: We 
visited FASIE's Moscow offices last year and were impressed with the 
professional business approach of its Director General Professor 
Ivan Bortnik. END COMMENT)   The Moscow Center for Entrepreneurship 
has been operating for two years to help science students 
commercialize their inventions and new processes.  The Center sets 
up clusters of student projects organized by a manager who takes an 
equity interest in lieu of salary.  The Center has a current annual 
budget of 30 million rubles (about $1.1 million) provided by an Alfa 
Group fund. 
 
6.  (U) The largest fund is the Russian Venture Company created 
under the Ministry of Economic Development and Trade as a collection 
of venture funds with $550 million for investment.  Its targets are 
defined as early stage companies having capitalization under 150 
million rubles or less than $5.5 million in sales in the past 12 
months.  Since July 2006, 15 such venture funds have been selected 
on a competitive basis to receive 49 percent of their start-up 
capital.  Each fund is required to invest in at least eight entities 
over five years, but not longer than 10 years.  Eligible investments 
are nanotechnology, information and telecommunications systems, 
sustainable development, renewable energy, transportation and 
aerospace systems, and counterterrorism.  Ineligible investments, 
except when based on new technologies, are natural resources, 
consumer goods, retail goods, real estate, construction and energy 
generation, and vice industries, such as alcohol, tobacco, gambling 
and weapons. 
 
7.  (U) The Salon program included several roun
dtable discussions on 
issues related to the expansion of Russian innovation.  Several 
 
MOSCOW 00000645  002.2 OF 002 
 
 
speakers focused on the need to clarify the intellectual property 
dimensions of innovations.  The confusion as to who "owns" an 
invention is slowing investment, according to the speakers.  This 
year, the Federal Agency for Science and Innovations stationed 
personnel at the entrance to the roundtables to invite people to 
fill out an extensive survey on innovation in Russia.  The survey 
solicited input on the main obstacles to innovation and opinions on 
how to spur it onward. 
 
8.  (SBU) Among the approximately 20 foreign exhibitors, Iran had 
the largest exhibition with 8 to 10 representatives present.  Their 
products, which were described in English and Russian brochures, 
included a solar boiler for heating, a voltage regulator for 
automobile wiring and an electricity generator from wave action. 
One brochure written only in university-level Russian described a 
futuristic land-sea-space vehicle.  However, the English brochures 
were generally written in grammatically-fractured form.  For so 
little product, the number of Iranian representatives was 
disproportionate compared to the other exhibitions. 
 
9.  (U) COMMENT:  The 2007 Salon represents tangible evidence of the 
spread of innovation technology and commercial sophistication to the 
regions.  The exhibitors have developed and brought products to 
market and are now looking to expand their output and their 
geographical reach.  There were more investment sources than the 
previous year, with real money in their pockets.  These developments 
presage the eventual diversification of the economy, but they also 
emphasize how gargantuan the task remains. 
 
BURNS

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07MOSCOW644, RUSSIA: LIBERAL PARTIES STRUGGLE TO STAY IN GAME

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Reference ID Created Released Classification Origin
07MOSCOW644 2007-02-14 12:16 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO7479
PP RUEHDBU
DE RUEHMO #0644/01 0451216
ZNY CCCCC ZZH
P 141216Z FEB 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 7440
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 000644 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EUR/RUS 
 
E.O. 12958: DECL: 02/14/2017 
TAGS: PGOV KDEM PHUM SOCI RS
SUBJECT: RUSSIA: LIBERAL PARTIES STRUGGLE TO STAY IN GAME 
 
Classified By: Ambassador William J. Burns:  Reasons:  1.4 (b, d). 
 
------- 
Summary 
------- 
 
1. (C) Political observers believe that the prospect of a 
liberal political party winning representation in the State 
Duma is slim, but statistically possible.  However, local 
efforts by ruling party officials to remove the 
liberal-minded Union of Rightist Forces and Yabloko from some 
ballots in the March regional elections have raised concerns 
over the ability of these parties to compete.  Party leaders 
and other election watchers peg the removal of SPS from four 
regional elections to a combination of machinations by 
regional United Russia leaders and incompetence --or 
machinations of its own-- by the SPS leadership.  Observers 
express more concern over the exclusion of Yabloko from St. 
Petersburg, where the party is an opposition powerhouse. 
While Yabloko has appealed its exclusion to the Supreme 
Court, its party chief dismissed the prospect of fair 
elections, told us he remained open to cooperation with 
Putin's successor, vilified the Other Russia opposition, and 
urged the U.S. to "leave Russia alone."  The Ambassador will 
continue to underscore U.S. concern over the use of 
technicalities to exclude parties from the March elections 
with senior GOR officials, including in upcoming meetings 
with the Election Commissioner and President's Chairwoman for 
Human Rights.  End summary. 
 
--------------------------------- 
Statistical Window of Opportunity 
--------------------------------- 
 
2.  (C)  The United Russia-contracted Center for Political 
Technologies (CPT) maintains that statistically there is 
still an opportunity for a liberal "democratic" party to 
cross the seven percent threshold into the Duma in December 
2007, but concedes the likelihood is slim.  CPT Deputy Boris 
Makarenko said that recent polling data reveal that the 
parameters of the Duma election remain largely the same as 
three months ago: United Russia can expect to win about 40-50 
percent, with the Communists securing 7-10 percent, 
Zhirinovskiy pulling in around seven percent (while 
capitalizing on his high popularity amid young voters, who 
enjoy his entertainment value), and the new political 
combination "Just Russia" attracting anywhere from 7-25 
percent.  Both Makarenko and ruling party spinmeister Gleb 
Pavlovskiy told us that there is still room for a 
"democratic" party to draw away some of those liberal ruling 
party voters (who constitute up to a third of United Russia's 
supporters in Moscow), who are dissatisfied with the 
government's performance.  In a slick briefing provided to 
the Kremlin on voting scenarios, Pavlovskiy labeled the 
"catastrophic" electoral outcome as one in which five parties 
broke into the Duma, including a rightist party, leaving 
United Russia with only 30 percent of the vote. 
 
3.  (C)  Makarenko spelled out scenarios that would increase 
the chance of a "liberal" win in the Duma: the unification of 
SPS and Yabloko, despite bitter personality divisions at the 
top; a decision by Yabloko to withdraw entirely from the 
race; or a strong showing by SPS in the March regional 
elections, which would add to the momentum of its 
surprisingly strong second place showing in Perm in December 
2006.  SPS Chairman Nikita Belykh and SPS leader Boris 
Nemtsov separately told us that they will make a final run at 
unification with Yabloko Chairman Grigoriy Yavlinskiy 
following the March elections, but were pessimistic he would 
compromise.  However, SPS eminence Anatoliy Chubais ruled out 
any merger, telling the Ambassador that "my best friend" 
Yavlinskiy "would not take yes for an answer" and had 
rejected unification despite SPS ceding to all of the Yabloko 
leader's terms.  SPS leaders were circumspect in predicting 
success in the December Duma elections, with Nemtsov 
predicting that SPS would fail in its bid unassisted, or 
would just reach the seven percent threshold if nudged 
forward by the Kremlin.  Political opposites, such as 
Pavlovskiy and Ekho Moskviy Editor Vennediktov, agree that 
the Kremlin -- meaning Putin -- has no objection to a liberal 
party reaching the Duma. 
 
------------------------------------------- 
Being Closed by United Russia Interference? 
------------------------------------------- 
 
4. (C) SPS Chairman Belykh told us that his relations with 
the Kremlin were "neutral" and downplayed speculation of a 
Presidential Administration hand in manipulating the 
registration of parties at the regional level.  However, at a 
 
MOSCOW 00000644  002 OF 003 
 
 
February 6 press conference, he explicitly traced SPS's 
inability to get on the ballot for March 11 elections in the 
Republic of Dagestan and the regions of Vologda, Pskov, 
Samara, and Tyumen to the machinations of local authorities 
in areas where the Kremlin-sponsored party United Russia (YR) 
reigns.  In his remarks, Belykh asserted: 
 
-- that in Pskov region the regional electoral commission 
found that
two SPS candidates were allegedly members of 
another party (dual membership is forbidden by law), other 
candidates had submitted "incorrectly-completed" forms and, 
allegedly, that several SPS candidates had withdrawn under 
duress; 
 
-- that the Samara regional election commission (REC) had 
disqualified the party for "errors in documentation," without 
specifying the errors (Note:  The CEC subsequently overruled 
the REC and reinstated SPS in Samara.); 
 
-- that Vologda region authorities had pressured SPS 
candidates into withdrawing; 
 
-- that Dagestan SPS representative Magomed Omarmagomedov has 
yet to be found since he disappeared in early January; 
 
-- that money submitted by SPS in lieu of signature lists had 
not been deposited in time to qualify the party for 
participation. 
 
5. (SBU) SPS has reportedly appealed to the relevant regional 
courts in all four of the five regions and Belykh has sent a 
letter urging Putin to initiate an amendment that would 
prohibit the removal of registered parties from regional 
ballots.  (Belykh allowed that SPS employees may have sent 
the deposit to the wrong bank account in Tyumen.  The party 
is investigating, he said.) 
 
6. (C) In addition to interference by local YR officials, 
Belykh traced SPS's difficulties in the five regions to the 
efforts of YR Duma deputies Aleksandr Moskalets, Andrey 
Vorobyev, and Boris Vinogradov who, he said, traveled to the 
regions in order to pressure local YR pols to remove SPS from 
the ballot. Belykh believed YR's heavy-handed behavior was 
prompted by a fear that competition from SPS and the 
recently-created "second" Kremlin party "Just Russia" could 
mean that YR would not poll as well as it had predicted.  YR 
Chairman and Duma Speaker Boris Gryzlov rejected Belykh's 
allegations.  Pavlovskiy reacted cynically, telling us that 
Belykh was no newcomer to politics and engaged in many of the 
same tactics in areas where SPS had a stronger political 
structure.  Golos Director Liliya Shebanova noted 
even-handedly that SPS was very weak in the regions where it 
had been disqualified (in contrast to Yabloko's being 
stripped from the ballot in its stronghold of St. 
Petersburg), with 2003 Duma returns in the five regions below 
the party's countrywide average of four percent.  (In 2003, 
for example, SPS received only 2.1 percent of the vote in 
Tyumen, where the deposit was not paid on time this time 
around.) 
 
------------------------------ 
SPS Games; Yabloko's Grievance 
------------------------------ 
 
7. (SBU) In a February 7 conversation, SPS regional election 
campaign manager, Duma Deputy Anton Bakov, conceded that SPS 
claims were exaggerated, noting that the party had not even 
transferred the deposit necessary to qualify the party for 
the Tyumen elections.  "We didn't have enough money to pay a 
deposit everywhere," Bakov said.  Belykh's press conference 
comments about Tyumen were designed to put YR on the 
defensive and spare his cash-short party the expense of a 
campaign in a region where its chances were slight. SPS's 
efforts in Dagestan had become entangled in clan politics, 
Bakov said.  Belykh agreed, telling us: "we picked the wrong 
clan leader."  Bakov was philosophical about Omarmagomedov's 
disappearance, noting that "hundreds of people disappear 
every year in Dagestan." 
 
7. (C) Bakov insisted, however, that the intimidation by YR 
Duma deputies of their regional confederates described by 
Belykh was true.  SPS could not prove that Deputies 
Moskalets, Vorobyev, and Vinogradov had traveled to Pskov and 
Vologda but, "in provincial Russian towns everyone sees 
everything," and the deputies' presence could not be kept 
secret. 
 
SIPDIS 
 
8. (C) Bakov dismissed the appeals process.  If SPS gets 
reinstated, he said, it will be because of "Anatoliy 
Borisovich's (Chubais)" ability to cut a deal with the 
 
MOSCOW 00000644  003 OF 003 
 
 
Kremlin. 
 
9. (C) Ekho Moskvy journalist Yevgeniya Albats described 
Central Election Commissioner (CEC) Aleksandr Veshnyakov, 
whom she interviewed February 6, as sanguine about SPS's 
problems but very disturbed about the liberal-democratic 
party Yabloko's registration problems in St. Petersburg. 
Foreshadowing Veshnyakov's February 8 decision to uphold the 
exclusion of Yabloko, Albats noted that the Commissioner had 
been "fighting for his survival" (Veshnyakov's term expires 
in March and he is seeking re-appointment), and pressure may 
be brought to bear on him.  In a recent meeting with the 
Ambassador, Federation Council International Relations 
Committee Chairman Margelov, who hails from Pskov where 
Yabloko was removed from the ballot, attributed the move to 
the Governor's unhappiness over not being placed at the head 
of the United Russia party list.  The result, Margelov 
maintained, was the Governor's decision to be hard on all 
parties.  Golos Director Shebanova and CPT Makarenko agreed 
that the problems confronting Yabloko and SPS originated at 
the regional level, and were not directed by the Kremlin. 
However, they stressed that the failure of the Presidential 
Administration to not signal forcefully that the tactical 
exclusion of the rightist parties was unacceptable made it 
culpable for the violations that occurred. 
 
-------------------- 
Yabloko:  Next Steps 
-------------------- 
 
10. (C) With its appeal for reinstatement in St. Petersburg 
rejected by the CEC, Yabloko is filing a appeal to the 
Supreme Court.  According to Moscow Yabloko Press Spokeswoman 
Yevgeniya Delendorf, the court filing would be made on 
February 13.  Delendorf did not know when the Court would 
rule, but she expected that Yabloko's final petition on the 
St. Petersburg case would not be approved by the justices. 
If so, Yabloko would feature on the ballots in Komi, 
Krasnoyarsk, Murmansk, and Tomsk regions. 
 
------------------------------------------- 
Yavlinskiy Defiant, but Open to GOR Partner 
------------------------------------------- 
 
11.  (C)  In a recent meeting, Yavlinskiy dismissed the 
upcoming election cycle as a cynical exercise, described his 
participation as a humanitarian gesture to his party staff 
and their families, and said that "like an old circus horse" 
his party would perform in the elections -- if only to retain 
the habits of democracy.  Yavlinskiy lashed out at the Other 
Russia opposition, arguing that they were "100 percent 
responsible" for creating Putin's Russia, since their 
accommodation of Yeltsin's undemocratic policies fatally 
compromised the development of institutions in post-Soviet 
Russia.  Venting at the collection of oppositionists under 
the Other Russia tent, Yavlinskiy called them "liars and 
thieves, who are romancing nationalists and fascists." 
Despite his denunciation of Putin, Yavlinskiy held out the 
possibility of ultimately co
mpromising with his successor, if 
there were any indications that the next Russian president 
was prepared to return to a more democratic path.  As for the 
appropriate U.S. role in encouraging democracy in Russia, 
Yavlinskiy responded that America should "leave Russia alone" 
and, alluding to Iraq and Abu Ghraib, "put its own house in 
order." 
 
------- 
Comment 
------- 
 
12.  (C)  The cumulative amendments to the electoral law make 
it easy for political parties to be excluded from 
participation on technicalities, and the developments of the 
last several weeks have underscored that regional leaders 
have sought recourse to the legislation to remove rivals from 
the ballot under dubious circumstances.  The Ambassador has 
raised this issue repeatedly in meetings with the senior GOR 
leadership and will do so again in upcoming meetings with the 
Election Commissioner and the President's Chairwoman for 
Civil Society and Human Rights, underscoring our particular 
concern over the removal of Yabloko from the St. Petersburg 
March ballot. 
BURNS

Wikileaks