Russia plans biggest war games since Soviet era

The Russian navy has announced that it will hold its biggest war games since Soviet times in the Mediterranean and Black seas later this month.
The ambitious exercises, which will involve ships from all four major Russian fleets, are a sign of growing confidence on the part of Russia's military as it begins to enjoy the benefits of President Vladimir Putin's huge budget allocations for renewing and re-equipping all branches of the armed forces.
The purpose of the war games will be to strengthen integration between different types of forces and gain practice with major military deployments outside Russia's immediate neighborhood, the Defense Ministry said in a statement Tuesday.
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As part of the maneuvers, naval ships will arrive at an "unprepared" coast in the Russian northern Caucasus region to take amphibious troops onto transport vessels.
"The primary goal of the exercise is to train issues regarding formation of a battle group consisting of troops of different branches outside of the Russian Federation, planning its deployment and managing a coordinated action of a joint Navy group in accordance with a common plan," the ministry's statement said.
The participating ships, it said, will be drawn from all of Russia's four major naval formations: the Northern, Baltic, Pacific, and Black Sea fleets.
Some experts suggest the war games may be cover for an increasingly nervous Moscow's preparations to evacuate Russian citizens and their dependents from war-torn Syria.
About 9,000 Russians are registered with the Russian embassy in Damascus, but some experts say the full number may be 30,000 or more. Over the nearly half a century that Moscow has enjoyed good relations with Syria, thousands of Russian women have married Syrian men and moved to the country. Many of them may urgently demand to return with their children to Russia if the situation turns critical.
This week the Russian navy refreshed a fleet, including several huge amphibious assault ships capable of carrying thousands of people, which it had deployed to the eastern Mediterranean last summer.
Experts say the replacement fleet dispatched this week is of similar makeup, with at least five huge troop-transport ships at its core.
As part of Russia's 8-year, $659-billion rearmament program, the navy is slated to receive 50 new warships by 2016, including new Borey-class nuclear-powered ballistic-missile submarines – the third of which entered service last weekend – 18 major surface warships, and dozens of special purpose and support vessels.

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Gerard Depardieu's latest drama: a Russian passport

Vladimir Putin flourished his pen Thursday morning and signed what must be the oddest decree of his long years in power: an order granting a Russian passport to French actor and tax exile Gerard Depardieu.
A terse announcement posted on the Kremlin website noted that Mr. Putin acted "to satisfy an application for citizenship of the Russian Federation by Gerard Xavier Depardieu, who was born in 1948 in France."
Mr. Depardieu, star of over 170 films and possessing what is often politely referred to as a "colorful" public personality, has been locked in a high profile battle with France's new socialist government over an emergency tax that would levy a 75 percent rate on people earning more than $1.3 million. He recently renounced his French citizenship and took up residence in Belgium, which offers a friendlier tax regime for the super-rich.
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France's high court struck down the law last week as "unconstitutional," but the government announced it will soon reintroduce the measure after taking the court's concerns into account.
It's not clear whether Depardieu actually applied for residence in Russia, which has a 13 percent flat income tax for all, but in a far-ranging press conference last month Putin declared "If Gérard really wants to have a residence permit or a Russian passport, you can consider it done, the issue solved positively."
Putin also said that he has long enjoyed "kind, friendly, personal relations" with the French actor.
COME TO CHECHNYA
Depardieu is no stranger to Russia. He has appeared in several ad campaigns and filmed the 2011 movie Rasputin in St. Petersburg. He is also rumored to be close to Chechen strongman Ramzan Kadyrov, and was guest of honor at the pro-Kremlin leader's birthday party in Grozny last October.
Mr. Kadyrov has said that he would happily invite Depardieu to come and live permanently in Chechnya if he wanted to. "If the country's leadership decides in favor of granting Depardieu Russian citizenship, we will be glad to create deserved conditions for the great cultural figure in our republic," Kadyrov said last week.
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Russia's blogosphere erupted in derision and sarcastic comment Thursday, with some people writing painfully of their own troubles with Russia's notoriously bureaucratic passport department.
One man posted on Facebook his own tale of trying for years to repatriate his own Russian-born elderly mother from next-door Belarus, but he has so far failed to move Russian authorities because her Belarussian documents show a slightly different spelling of her name than appears on her Russian birth certificate.
PART OF SPAT WITH WEST?
Sergei Strokan, a foreign affairs columnist with the liberal Moscow daily Kommersant, says the granting of citizenship to Depardieu should be seen in context with the escalating war of words between Russia and the West. Last month President Barack Obama signed the Magnitsky Act, which aims to punish corrupt Russian officials, and Moscow responded by enacting the Dima Yakovlev Act, whose main feature is a ban on US citizens adopting Russian orphans.
"Russia is very much on the defensive right now. The vindictive nature of Russia's adoption ban has shocked not only the US, but also many in Europe and here in Russia as well," Mr. Strokan says.
"We seem to be entering into a cold war-like battle of images, in which Russia is trying to show that it offers a better life, has higher ideals, and is more friendly to humanity than the West.... So this may be seen as a calculated PR move, an effort to demonstrate that we understand and care for the beloved French actor more than his own homeland does," he adds.
"I can't imagine that Depardieu would actually want to live here and experience the life of Russians, though. Let's see how it goes the first time he attempts to travel with that new Russian passport.

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Lending to businesses still weak in Europe

FRANKFURT, Germany (AP) — Bank loans to companies fell again in Europe, another sign that the economy remains slack in the 17 European Union countries that use the euro.
The European Central Bank said Thursday that loans to non-financial corporations fell by 1.4 percent in November from the year before.
It's a sign that businesses remain reluctant to take on risk and borrow, despite the ECB's record low benchmark interest rate of 0.75 percent. The ECB expects the eurozone economy to shrink 0.3 percent in 2013 and only start to recover in the later part of the year.
Howard Archer, an analyst at IHS Global Insight, said the figures indicate "households and firms are reluctant to take on new debt amid weak economic activity levels and still appreciable uncertainty regarding the economic outlook."

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German jobless rate up to 6.7 percent

Germany's unemployment rate crept up to 6.7 percent in December due to seasonal factors and a more sluggish economy, but the labor market remained robust and the average number of people out of work last year was the lowest in more than two decades.
The unadjusted jobless rate rose from 6.5 percent in November, the Federal Labor Agency said Thursday. Some 2.84 million people were registered unemployed in Germany, Europe's biggest economy — 80,000 more than the previous month and 60,000 higher than a year earlier.
Germany's economy has enjoyed robust growth that kept down unemployment even as many debt-troubled European partners have seen output shrink and joblessness soar — to about 25 percent in the cases of Spain and Greece.
Still, the economy saw slower growth in 2012 than in previous years. Official growth figures for 2012 are due on Jan. 15; the government has forecast growth of 0.8 percent.
Excluding seasonal factors such as the Christmas holidays, Germany's unemployment rate was static at 6.9 percent in December, while the number of jobless was a modest 3,000 higher than the previous month.
Germany's labor market remains healthier than that of most other European countries, but "ramifications of the eurozone debt crisis ... have at least halted any further improvement for the time being," said Timo Klein, an economist at IHS Global Insight in Frankfurt.
Still, he noted that the upturn in unemployment figures "remains extremely subdued" and in fact slowed in the final months of 2012. German business confidence has rebounded lately, and Klein said he doesn't expect "any major deterioration with large increases in joblessness during the coming months."
The labor agency said that the number of people out of work averaged just under 2.9 million last year — 79,000 lower than in 2011 and the lowest figure since 1991, shortly after German reunification. The average unadjusted unemployment rate was 6.8 percent, down from 7.1 percent the previous year.

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Japan's finance minister in Myanmar with development pledges

NAYPYITAW, Myanmar (Reuters) - Japan's new government confirmed its support for the emerging democracy in Myanmar on Thursday when Finance Minister Taro Aso visited the country to reaffirm Japan's intention to cancel debt and help develop a big industrial zone.
Myanmar has implemented rapid economic and political reforms since President Thein Sein's quasi-civilian government took over from a long-ruling military junta in March 2011 and Japan has moved quickly to cement business ties.
Aso, also deputy prime minister, had already arranged the visit, prior to his ministerial appointment after an election last month, in his capacity as a senior member of the Japan-Myanmar Association, a lobby group set up to advance Japanese business interests in the Southeast Asian country.
"Following the change of government in Japan, just like the previous government, we want to maintain a good relationship with Myanmar," Aso told reporters after meeting the president at his palace in the new capital, Naypyitaw.
Senior members of the association with established ties to the former junta have been central to securing a debt waiver and fresh loans for the Thilawa industrial zone.
Thein Sein told Aso his government was delighted a "long-standing and sincere friend of Myanmar" has taken key posts in the cabinet.
Aso reaffirmed Japan's intention to waive part of the 500 billion yen ($5.74 billion) Myanmar owes it in debt.
About 300 billion yen would be waived in two stages in 2013 while a consortium of private Japanese banks led by Mitsubishi UFJ Financial Group was working on a bridging loan for the remaining 200 billion, sources familiar with the matter said.
On top of these pledges, Japan's government-linked Bank for International Cooperation will provide a $900 million bridge loan to clear Myanmar's debt arrears with the World Bank and the Asian Development Bank in January, allowing them to restart lending.
Myanmar owes nearly $400 million to the Washington-based World Bank and almost $500 million to the Manila-based ADB.
STRATEGIC INVESTMENT
Japan is Myanmar's largest creditor and the arrears of 300 billion yen had to be cleared before a fresh 50 billion yen loan could be given to develop the planned 2,400-hectare (5,930-acre) Thilawa special economic zone, renovate the country's ailing power plants and develop its regions.
With a land mass as large as Britain and France combined, Myanmar lies in a strategic location, sharing borders with 40 percent of the world's population in India, China, Bangladesh and Thailand.
Thilawa has grown into a flagship project for both Japan and Myanmar and could become a magnet for Japanese manufacturers that have started rethinking investment plans in China after a flare-up in a territorial dispute between Tokyo and Beijing.
A chunk of the 50 billion yen loan, which Japan hopes to implement by the end of March, is likely to mark the first tranche of its lending for infrastructure in Thilawa, which is to be developed by Japanese construction companies.
Over several years Tokyo's lending may add up to $12.6 billion, according to officials familiar with the project.
Mitsubishi Corp., Marubeni Corp. and Sumitomo Corp. form the Japanese side of the joint venture developing the industrial park. The plan is to build the first 400 hectares of the park by 2015 and start luring Japanese and global manufacturers.
Aso will visit Thilawa on Friday.
This is the first overseas trip by a member of the Japanese government that took office last month. Prime Minister Shinzo Abe plans to visit Washington around the end of January. ($1 = 87.1700 yen)

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Uganda holds key rate with eye on growth, inflation

KAMPALA (Reuters) - Uganda's central bank held interest rates on Thursday, treading a path between managing inflation and supporting an economic upturn it said would likely lead it to cut borrowing costs in the coming year.
With the country's currency under pressure, traders and analysts had mostly expected the Central Bank of Uganda to leave the key lending rate at 12 percent - ending a run of growth-boosting cuts that began last June when the base rate was 21 percent.
The bank said leaving rates unchanged would allow it to encourage economic growth while keeping inflation - which ticked up in December - around its medium-term target of 5 percent.
The bank also said the economy had grown faster than projected since the first quarter of 2012.
The Ugandan shilling weakened slightly after the rate announcement, falling 0.1 percent to 2697/2707 per dollar, a day after the central bank intervened to prop it up after it fell to a five-week low against the dollar.
Annual inflation rose last month to 5.5 percent from 4.9 percent in November, which the bank said was due to seasonal demand.
The bank's policy stance was "accommodative and supportive of economic growth as well as anchoring inflation expectations around the medium-term target," its acting deputy governor Justine Bagyenda told a news conference.
It had cut rates by 50 basis points in early December, citing sluggish economic growth.
Bagyenda said on Thursday that annualised economic growth in the last three quarters of 2012 had, at 5.2 percent, been "much higher than previously projected".
However, private sector credit growth remained subdued partly on account of the high lending rates on shilling loans, he said.
With rates of economic and credit growth likely to pick up later in 2013, "I expect a further reduction in lending rates," he added.
Analysts also saw room for further easing, and said the decision to hold rates this time was not surprising.
"The decision was in line with our expectations," said Mark Bohlund, a senior economist for IHS Global Insight.
"We still see potential for further monetary easing in the first half of 2013 as we are forecasting inflation to dip again amid sluggish domestic demand and limited pressure from food and energy prices."

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Botswana GDP growth at 1.1 pct q/q in Q3 2012

JOHANNESBURG (Reuters) - Botswana's economy grew by 1.1 percent quarter-on-quarter in the third quarter of 2012 after rising by a revised 0.3 percent in the second quarter, data from the Central Statistics Office showed on Thursday.
On a year-on-year basis growth was at 5.7 percent in the third quarter compared with a revised 8.5 percent in the previous quarter.

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