As local information agency BelTA reports, the increase in the gold and foreign exchange reserves was facilitated by the second tranche of the EurAsEC Anticrisis Fund loan to the tune of US$440 million and the transfer of part of the syndicated loan provided to OAO Belaruskali by Sberbank of Russia and the Eurasian Development Bank.

Belarusian gold and foreign exchange reserves rose over the New Year to US$7.9 billion due in part to the US$2.5 billion paid by Russia’s Gazprom for control of pipeline operator Beltransgaz, Reuters reports.

The conditions of a Russia-led rescue loan stipulated that Belarus must sell state-owned assets in order to free up cash. Gas monopoly Gazprom said in November it would buy the 50 percent of Beltransgaz it did not already own for US$2.5 billion.

The country’s central bank National Bank of Belarus (NBB) said reserves had grown as a result of the sale to US$7.915 billion from US$7.355 billion in early December.

Last year, the severe financial crisis devalued the Belarusian ruble and sent inflation spiraling by more than 100 percent.

The monetary policy guidelines are aimed at limiting inflation, while the Belarusian ruble’s exchange rate is to be set by market forces with minimal intervention from the NBB.

The NBB promised that it would carry out only limited interventions for curbing drastic fluctuations of the ruble’s exchange rate.

Earlier, the NBB said gold and foreign exchange reserves are expected to total US$6.1 billion to US$7 billion at the end of 2012.

“Keeping the reserves at a level sufficient for the economic security of Belarus and ensuring timely settlement of foreign and domestic obligations in foreign currency in full are priority tasks of the government and the National Bank,” central bank official said to BelTA.

The NBB said that its base refinance rate would be reduced to 20-23 percent towards the end of 2012.

The bill, approved early Friday, is designed to overhaul Ukraine’s Soviet-era pension system as the government seeks to slash spending in the wake of the Global Financial Crisis.

Ukraine’s parliament approved a government bill on pension reform at first reading on June 16.

The parliament discussed amendments to the document all night (consideration of the bill lasted 8.5 hours) before passing the final text in the early hours of Friday. It is expected to be signed into law soon by President Viktor Yanukovych.

The bill, which will enter into force on September 1, would gradually raise the retirement age for women from 55 to 60 years and increase by 10 years the period when workers make salary contributions to their retirement funds. The retirement age of male civil servants men was raised to 63 years.

The adopted bill stipulates the maximum pension cannot exceed 10 times the living wage, which is currently around US$95 a week. Previously, the maximum amount was 12 time.

The bill also decreases from 90 percent to 80 percent the wage for calculating pensions for civil servants. The maximum pension is limited to 10 minimum incomes (some US$1,000 at present).

The Ukrainian government put forward a draft pension reform bill parliament last year in a bid to overcome the Pension Fund’s growing annual deficit and to meet IMF requirements. But its passage has been postponed several times.

As a result the IMF froze funding this year because of the failure to pass the bill, and the government hopes the aid will resume once the law is passed. The bill now awaits presidential approval to become law.

“If the parliament will vote for the pension reform, in early August we can get the decision of the IMF Board of Directors,” Ukrainian Deputy Prime Minister for Social Policies Sergei Tigipko said to reporters.

Tigipko suggested that the two tranches of the IMF might be combined. “We might be able to obtain two tranches simultaneously – about US$3 billion, which will be added to the foreign exchange reserves of the National Bank.”

According to official data, Ukraine has the world’s largest share of spending on pensions – 18 percent of GDP in 2010. Moreover, one of the highest levels of pension contributions in Europe, representing 35 percent of gross salary. In addition, despite that in 2010 an amount equivalent to 7 percent of GDP was transferred from the budget to the pension fund.

Martin Raiser, World Bank Director for Ukraine, Belarus and Moldova assures that once the bill is be signed by the Ukrainian president to come into force, it will allow annual savings on pension costs amounting to about 1.5 percent of GDP starting 2012. And till 2015 Pension Fund deficit budget financing will disappear.

According to the survey, conducted by the Gorshenin Institute on June 11-13 2011, 52.3 percent of interviewed respondents living in Ukraine’s regional centers, cities, towns and villages, including Kiev and Sevastopol, agree that the pension reform is definitely necessary.

At the same time, only 6.7 percent of respondents are taking some actions to ensure their financial security upon retirement, while 68.3 percent of respondents, as it was in Soviet time, are “doing nothing and count on a state pension.”

Foreign direct investment in Georgia fell 16 percent in 2010 year on year to US$553 million, official data shows, well below the US$1 billion target already set for last year. Nevertheless, FDI still accounted for 5 percent of gross domestic product in 2010.

The decline in FDI is officially attributed to the ongoing impact of the global recession; however, investors are also cautious due to the political climate and Russia’s military build-up in the breakaway provinces of Abkhazia and South Ossetia, which slashed foreign investment.

Kobalia said recent improvements in the country’s sovereign ratings outlook should help restore investors’ confidence. Ratings agencies Standard & Poor’s and Fitch both raised their outlook for Georgia to “positive” in March.

Georgia placed a US$500 million 10-year Eurobond last month with a coupon rate of 6.79 percent and tendered to buy back US$416.7 million worth of its outstanding US$500 million 2013 Eurobond via an “any and all” tender ahead of a new issue.

The International Monetary Fund, which forecasts economic growth of 5.5 percent in Georgia this year versus 6.4 percent in 2010, has said the Eurobond issue should help spur greater FDI.

Kobalia highlighted tourism and hydroelectric power among the most attractive sectors for foreign investors. She said Georgia was using only 18 percent of the hydropower that it generates and was exporting the rest to neighboring countries.

“Turkey, our neighbor, has a deficit already so it’s a great investment for companies to build hydropower plants and to transfer electricity to Turkey,” she said.

Georgia was also offering investors a 15-year tax break on investments in two tourism sites in the Black Sea, she said.

Earlier this March, American real estate mogul Donald Trump announced his plan to invest US$250 million in the construction of two 40-storey skyscrapers in the country — the Trump Tower in the capital Tbilisi and the residential Trump Riviera, in the resort town of Batumi.

Meanwhile, Georgian media reports that remittances from migrants back to Georgia now exceed FDI flows. This can be seeing as a troubling fact for the government and for President Mikhail Saakashvili’s high-profile campaign to attract outside investment, Menas Associates Blog speculates.

Annual inflation hit 13.7 percent in February, continuing a trend of rapidly rising prices: year-on-year inflation has climbed almost 1 percent every month since October, and has soared since June 2010 figure of 3.7 percent.

Most concerning for Georgian politicians are the fact that food and soft beverages is the biggest contributor to inflation, making up almost all of the 2.8 percent jump from January’s figures. Taken alone, inflation on these products is running at 28.4 percent. The social and political impact of such a sharp rise in food prices is potentially very serious indeed.

The government responded by distributing one-off food vouchers of around US$17 to poor households. Although these might be effective at alleviating immediate concerns, economists have warned that in the long term these could distort the economy and actually contribute to galloping inflation.

Some observers are skeptical of FDI flows doubling this year, saying that Donald Trump’s expansion into Georgia may not be enough to start a new wave of foreign investment.

The Metsamor nuclear power plant is only 20 miles from Armenia’s capital and most populous Yerevan city. Its location in a seismic zone has drawn renewed attention since Japan’s nuclear crisis, NatGeo magazine said in its article “Is Armenia’s Nuclear Plant the World’s Most Dangerous?”

The power plant Metsamor was built in 1979 and closed in 1989 after an earthquake prompted officials to reconsider the safety of the location.

On December 10, 1988, a 6.8-magnitude earthquake struck, killing 25,000 people. Some 60 miles from the epicenter, Metsamor, then with two operating reactors, survived the earthquake without damage, according to Armenian officials and the International Atomic Energy Agency.

In 1996, one reactor resumed operations with Western financial assistance for upgrades. Then in 2003, Russia’s state-run power monopoly, Unified Energy System, took over operations in return for Moscow’s cancellation of a US$40 million debt.

Despite the upgrades to the plant, Antonia Wenisch of the Austrian Institute of Applied Ecology in Vienna said that “the overall safety has not improved sufficiently.”

Armenian officials remain confident that their antiquated nuclear power plant can ride out any Japanese-sized tremor. Of course, they have little choice but to believe in its infallibility, The Moscow Times speculates.

Metsamor provides Armenia with more than 40 percent of its energy consumption, and the country has very few alternative energy resources.

Seven years ago, the European Union’s envoy was quoted as calling the facility “a danger to the entire region,” but Armenia later turned down the EU’s offer of a US$289 million loan to finance Metsamor’s shutdown.

Since the EU failed to persuade Armenia to close the plant, it has focused on providing aid for improving its safety, spending more than US$85 million on such projects as well as for renewable energy, and regional energy cooperation efforts.

Armenia has made efforts to obtain other sources of fuel, such as a natural gas pipeline from its southern neighbor Iran, which opened in 2007. But the amount of fuel to be imported remains in question. The conduit poses potential competition to Russia, a country on which Armenia remains highly reliant, for everything from nuclear fuel to grain.

The 3 million people of landlocked Armenia are unique in their energy dependence on one aging nuclear power reactor.

Azerbaijan to the east and Turkey to the west closed their borders with Armenia, cutting off most routes for oil and natural gas.

Armenia has been forced to store spent fuel on-site for 22 years because of a blockade by its two neighbors.

The broadcasting operations are going to close in Serbian, Portuguese, Macedonian, Albanian, and English in Balkan republics Serbia, Macedonia, Bosnia-Herzegovina, and Kosovo.

Only the agency’s web sites, featuring online broadcasts in languages mentioned above will remain in operation.

BBC already has closed its services in Bulgarian, Slovenian and Croatian.

“I can’t advise the British government on how it should spend its money, but this is a sad thing,” Leonid Gozman, co-chairman of the pro-business Right Cause Party, said to The Moscow Times by telephone.

“Now we are able to listen to variety of radio stations, but possibly a day will come when we would again have to turn to foreign radio stations for the truth,” Gozman said.

The Russian Service began broadcasting to the Soviet Union in 1946 and quickly established a reputation with Soviet listeners, in the brief period before the onset of the Cold War.

From 1949 until 1987, the jamming of the signal by the Soviet authorities consumed vast amounts of money and technical expertise. For many years, a significant part of the USSR’s entire radio broadcasting system was devoted to blocking transmissions from abroad.

According to the BBC Europe, despite Soviet jamming, millions were listening to BBC radio broadcastings in Russian by shortwave during the Cold War. The total audience reached 6 million by 1999.

In its heyday, the Russian Service provided a full range of news and current affairs, analysis, musical, medical, scientific, cultural and religious programs. In the past week, the Russian Service has revived some outstanding material from the archives: an interview with Paul McCartney and a ground-breaking hour-long, live studio interview with Margaret Thatcher, answering questions from listeners across the Soviet Union.

Among the service’s most popular programs was music show “Rok-Posevy” (”Rock Seeding”), hosted by iconic rock journalist Seva Novgorodtsev since 1977. He was awarded the Member of the Order of the British Empire in the 2005 Queen’s New Years Honors List for his services to broadcasting.

“Unlike many other ‘enemy voices,’ the BBC dedicated more time to music and culture,” political analyst, and a long-term listener, Stanislav Belkovsky said. For him the first hook was even more exquisite — a show dedicated to 17th-Century English philosopher Francis Bacon.

The closure was not entirely unexpected after the Russian BBC left the FM broadcast band in 2007, switching to middle waves and losing a chunk of its audience in the process.

“I think we have already lost the majority of our audience, when we switched to medium waves. I don’t think so many people will notice the disappearance,” a BBC Russian Service employee told to the Russian business daily Vedomosti.

However, the BBC is planning to concentrate in TV programming in Indian languages like Urdu, Hindi, and in Sub-Saharan Africa in the days to come with additional funding.

The BBC is aiming to cut expenses by 16 percent by 2014, when its current government grant ends. Axing the foreign-language broadcasts is expected to result in net savings of £46 million (US$74 million) – and the loss of some 30 million listeners worldwide, the broadcaster said in a January statement.

The new amendment to the Latvian Law on Immigration came into force in July, 1, and allows foreign investors and their family members including those from non-EU countries to receive a 5-year residence permit in Latvia along with the right to travel in the Schengen area freely, if they purchase Latvian property of at least 70,000 euros (US$95,000) in value, or invest in a business.

“The meaning of the amendments is to encourage investment in Latvia, to attract investors. We wanted to make sure that people who in one form or another contribute to the economic development of our country have more opportunities to obtain a residence permit,” Boris Tsilevich, deputy of the Saeima (Parliament) of Latvia explained to local press.

The volume of investment in one of Latvia’s companies has to be at least 36,000 euros. The minimum amount of paid corporate taxes has to amount to 28,000 euros per year.

Although the law does not give investors the right to work anywhere within the European Union, they can still enjoy the freedom of movement within all 25 EU countries in the Schengen zone.

Before the amendments, the foreigner could actually get a temporary residence permit in three cases: if he/she learns in Latvia, running (in which case the employer had to justify why he needs a foreign worker), and for family reunification purposes.

Since the law was introduced in July, it has already given the property market a boost. “In essence the whole initiative restarted the real estate market in Latvia,” apartment building owner Kristaps Kristopans said to the BBC.

“One year ago it was completely dead. No transactions. Nothing. And now a lot has changed. Sales are picking up nicely.” According to him, almost all his buyers are Russians who have been attracted by the Latvian residency permit offer.

According to Latvia’s immigration authorities, more than 100 foreigners have already applied for the rights after purchasing property or investing in business in Latvia — all of them from the former Soviet Union.

Robert Zile, a Latvian member of the European Parliament, agrees with the opponents of the new law and says the influx of Russian investments will increase Moscow’s influence in the country.

Along with other protesters, members of the Latvian National Party think the incentive to foreign buyers will inevitably increase prices, making real estate unaffordable for locals.

“The government is trying to sell our country. They do not bother to think how to bring back Latvians who left the country,” said Hardis Paradnieks, one of those opposed to the new law.

In response to fears, the government says that all applicants are thoroughly checked out before being awarded residency rights, and forbids cash payments to prevent money laundering.

In addition to their contribution to Latvia’s economy, foreign investors as well as other categories of residence seekers must pass an examination on Latvian language. “Actually it is the exam to the lowest category, i.e. candidate for permanent residence must speak the language to a bare minimum,” said Tsilevich.

Meanwhile, the local banks are offering the useful assistance to their new customers, who’ve been provided the possibility to conclude deposit placement agreement within one day without requiring coming in to Riga.

The draft list of enterprises includes stakes that have been offered multiple times in the past but never sold.

“We continue to campaign, that the electricity should go for privatization. And it will be privatized. This will be the main event of the privatization of the year,” Alexander Ryabchenko, Ukrainian State Property Fund (SPF) chairman said earlier in December 2010.

In the oil sector, the SPF plans to sell 50 percent plus one share in Ukrnaftaprodukt. It will also offer 25 percent plus one share in Sumyoblenergo, and 46 percent in Cherkassyoblenergo.

Ukraine International Airlines (UIA) is also in the privatization draft list. By selling 61.58 percent of its stake the cabinet plans to earn around US$31.6 million.

“The UIA stake won’t be sold if the assessment will be less then US$31.6 million,” official familiar with the matter told reporters.

The sale of Ukrtelecom will be the largest privatization deal in Ukraine since 2005, when ArcelorMittal bought Kryvorizhstal.

With revenue from the sale of 92.79 percent stake in the company, according to preliminary estimates, could reach 10-12 billion hryvnia (US$1.5 billion).

According to Ryabchenko, the sale of state telecommunications company, Ukrtelecom, originally scheduled for December 2010, will help implement this year government’s economic development program.

“The real price of Ukrtelecom is about US$2 billion, but it was slightly little underrated,” Tomas Fiala, the managing director at the Dragon Capital investment company, said to KievPost.

“Ukrtelecom is the champion of the privatization plans. But the process is not transparent,” said Ihor Mitiukov, the former Ukrainian finance minister, the director of Morgan Stanley Ukraine and the director general of the Financial Policy Institute.

Fiala said that despite the lower price, the privatization of Ukrtelecom was a good sign for investors. He predicted that competition for Ukrtelecom would unfold between Ukrainian and Russian companies, which he declined to name.

Director of International Relations and Investor Relations at System Capital Management Jock Mendoza-Wilson said that under the current situation, Ukraine should conduct the last stage of Ukrtelecom’s sale as transparently as possible in order to attract investors to the privatization of the energy sector in 2011.

He said that without the privatization, it was impossible to resolve energy problems in Ukraine and that the successful privatization of this sector would attract foreign investors.

Mitiukov said that apart from privatization, Ukraine’s energy sector should arouse the interest of investors in the recently adopted very attractive legislation in the field of green energy, which obliged the state to buy such energy at 100 percent at high tariffs.

Among other interesting objects for privatization in Ukraine, investors also named ports and a number of large state-owned engineering enterprises, like 94.9 percent of Ukrpapirprom paper mill, 25 percent of Chernigov Radio Instruments Plant, 100 percent of Kyiv Motorcycle Plant, 100 percent of Feodosia Shipyard More and 91.6 percent of photo materials producer Svema.

“Given the domestic consumption in the west of the country and gas supplies from there to Iran, we will have 40 billion cubic meters of gas annually for export, so that European countries do not have to worry,” Turkmenistan’s Deputy PM Baymurad Khodzhamukhamedov said at the Oil and Gas Turkmenistan-2010 Forum in Ashgabat.

This amount is larger than the projected capacity of 31 billion cubic meters of gas annually which Nabucco is supposed to transfer from the Middle East, the Caucasus, and the Caspian Region through Turkey into Bulgaria and the rest of the European Union.

Nabucco is expected to cost about US$11 billion and come online with about 15 billion cubic meters of gas by the end of 2014, and would have to cross a disputed border between Turkmenistan and Azerbaijan – a conflict which has held up progress on Nabucco for years.

Khodzhamukhamedov pledged there would be an agreement on constructing a trans-Caspian pipeline along the bottom of the sea to transport Turkmen gas across the Caspian to Azerbaijan where it would be fed into pipelines linking up with the Nabucco pipeline.

In his words, a pipeline from gas fields in Eastern Turkmenistan to the Caspian Sea was already under construction.

Turkmenistan is seeking to diversify exports from its traditional market, Russia, and has already boosted supplies to China and Iran.

It could potentially become a major supplier of gas to the European Union-backed Nabucco project to supply the fuel to European markets.

At the same time experts consider that in reality it will be very difficult to bypass Russia and Iran, two actual major gas players of the region.

“Russia and Iran want to undermine the investment case for the Nabucco pipeline and block Turkmenistan from selling gas to it,” ING bank’s energy analyst Igor Kurinnyy said to The Moscow Times.

The race between Nabucco and its rival, Russian-sponsored project South Stream, appears to be tightening after last week Bulgaria and Russia signed a key deal for the construction of the South Stream section on Bulgarian soil.

According to Sofia news agency novinite.com, Bulgaria, which is a crucial participant in both projects, has lent support for both Nabucco and South Stream.

“Europe is the world’s biggest spender on energy imports. Turkmenistan is ideally placed to catch a piece of the action,” said Wolfgang Peters, head of supplies for Caspian, Central Asia and Russia for RWE Supply & Trading.

“The question about building a pipeline under the sea is very difficult because it is not just economics involved. There is also ecological safety,” said Alexander Medikov, a maritime lawyer for Jurinflot.

“The decision to build a pipeline should be agreed upon by all parts, or else it could end quite badly. Iran, whose Caspian sector borders on the Azeri and Turkmen waters in the south, would suffer greatly from an accident there.”

Turkmenistan has not formally committed yet to any supplies for Nabucco even though its officials have mentioned the 3,300 kilometer-long pipeline as part of the country’s scheme to diversify its markets.

Still, today’s announcement marks a big step forward to the EU backed pipeline.

The terminal will cost US$1.21 billion to US$1.38 billion and will reduce dependence on Russia by around one-third, Petro Miroshnikov from Ukraine’s National Project state body, the manager of the project, said in handout given to reporters in Kiev on Tuesday.

The LNG terminal is planned to be situated near Odessa. Other possible locations were Ochakov in the Mykolayiv region or Feodosia in Crimea.

Once the terminal is complete, the country can import as much as 10 billion cubic meters of liquefied natural gas every year.

Miroshnikov told reporters that the government would announce a tender this month to work out a detailed blueprint for the terminal, which could cost about US$4 billion.

Ukraine, the major consumer of Russian natural gas, ships about 60 percent of needed gas and has repeatedly said the price for it is too high to allow domestic goods to compete on the world markets.

This year, the country will import at least 36.5 billion cubic metres (bcm) of gas compared to 26.8 bcm in 2009 and 49 bcm in 2008.

“The terminal will allow 10 billion cubic meters of gas or 20 percent of our gas balance to be imported. We are talking about a serious diversification of our gas import system,” Miroshnikov said.

According to the National Project state body, Ukraine may import fuel from the Middle East, North Africa and Azerbaijan. The country is seeking to sign supply contracts by the first quarter of 2013.

Azeri President Ilham Aliyev said last week that he was looking to strengthen energy issues cooperation with Ukraine.

According to government data, gas from Azerbaijan would travel a route of about 2,300 kilometers.

The former Soviet state wants to attract investors to the project.

Miroshnikov said an international venture with as much as 10 percent of the state stake would be established next year.

A draft bill requiring Eesti Gaas AS, an Estonian natural gas company which imports and sells natural gas, to split the ownership of sales and networks by Jan. 1, 2013 is “90 percent ready,” said Igor Grazin, a lawmaker with Prime Minister Andrus Ansip’s Reform Party, in a interview with Bloomberg.

The new bill would include the requirement of a forced sale for the Eesti Gaas transmission unit if a buyer is not found and a fine of US$44,622, Grazin said.

Eesti Gaas is owned by Gazprom (37.02 percent), Germany’s E.ON Ruhrgas (33.7 percent), Finland’s Fortum Oyj (17.72 percent), and Itera Latvija (9.9 percent).

The transmission division would be sold to a company based in the European Union.

Earlier this year, Lithuania announced a similar plan at Lietuvos Dujos AB, spurring criticism from Gazprom and Germany’s E.ON AG, which also has a stake in Eesti Gaas.

In order to connect Lithuania, Latvia and Estonia to wider EU energy networks and to unify the Baltic electricity grid, the EU Commission and its Baltic members signed the Baltic Energy Market Interconnection Plan in June 2009.

At present, Baltic countries pay the highest prices in the EU for Russian gas. Estonia bought Russian fuel in the first quarter at US$340 per 1000 cubic metres. At the same time, Gazprom was selling gas to Europe for an average of US$307 for the same volume. Prices for natural gas in Lithuania are US$100-150 above the gas prices in Western Europe.

“We can resist an uncontrolled rise of gas prices only by fighting the Gazprom monopoly,” said Rauno Veri, a spokesman for the junior government partner, Isamaa ja Res Publica Liit.

In an interview with Estonian business newspaper Äripäev, Raul Kotov, board member of Eesti Gaas, insisted that separation does not bring new suppliers, reduce the prices, nor reduce Gazprom’s importance in the gas that’s used in Estonia.

Kotov also argued that the ruling coalition’s allegation that Gazprom is barring newcomers from the market is wrong, as 63 percent of Eesti Gaas belongs to non-Russian enterprises, so Gazprom cannot decide on the destiny of the Estonian gas economy.

According to Kotov, gas prices aren’t more expensive in Estonia than in the rest of Europe. In July, the gas price in Estonia is 0.43 euros per cubic meter, while in Hamburg, Germany the price is 0.7 euros per cubic meter and in Finland 0.65 euros per cubic meter.

Gazprom Deputy Chief Executive Officer Alexander Medvedev warned the EU on October 14 that changes in pipeline ownership and a move away from long-term contracts may lead to a drop in supply and a shift in Russian gas exports to Asia.

Gazprom, which has traditionally accounted for about a quarter of Europe’s gas needs, supplied 140.6 billion meters of the fuel last year.