- The Washington Times - Sunday, April 22, 2007

LONDON — A boycott by top Moscow officials cast a cloud over yesterday’s opening of a showcase event for Russian businesses.

A Russian press report suggested that the Kremlin ordered the no-show because of increasing strains between Moscow and London.

Missing from the 10th annual Russian Economic Forum will be Alexander Medvedev, deputy chairman of Russia’s energy giant Gazprom, and Sergei Bogdanchikov, president of the country’s oil company Rosneft.

“There won’t be any high officials this year at the forum,” said Jonti Small, spokesman for event organizer Eventica.

According to three sources close to the Kremlin quoted Friday by the Russian newspaper Kommersant, the sudden decision to boycott the event was “an order from above.”

One of the sources said that the move came after a dispute with the British Foreign Office.

Russian businessman Boris Berezovsky, who was granted political asylum in Britain in 2003, provoked fury in Moscow last week when he called for the overthrow of Russian President Vladimir Putin.

Ties between London and Moscow have been strained since the assassination by radioactive poisoning of former Russian spy Alexander Litvinenko in November.

His associates accused Moscow of poisoning Mr. Litvinenko because of his opposition to Mr. Putin, a claim rejected by the Kremlin.

Before the forum opened, the head of the European Bank for Reconstruction and Development (EBRD) called on Russia and the European Union to resolve their political and economic differences.

“It is necessary [for them] to engage, to discuss, to treat political issues, but increasingly there are matters that can be tackled concerning business matters,” EBRD chief Jean Lemierre said.

“Relations between Russia and the European Union have never been as intense as they are currently, since the end of the Cold War,” he added.

The EBRD, which since 1991 has helped former Soviet bloc countries make the transition to market economies, last year doubled investment in Russia to $2.6 billion.

Mr. Lemierre is scheduled as one of the official speakers at the forum, which opened yesterday with an informal gathering of delegates. The forum continues with speeches and presentations today and tomorrow.

The EBRD in January turned down a request from Gazprom for a $400 million loan.

The loan was for the Sakhalin-2 liquefied gas project in eastern Russia, but after Gazprom became a majority shareholder in the undertaking, the EBRD said Sakhalin no longer fit the category of projects usually financed by the bank.

Gazprom’s dramatic entry into the giant Sakhalin-2 energy project has raised serious questions about the safety of foreign investments in Russia, analysts contend.

They think that the state mounted a campaign to force Anglo-Dutch energy giant Royal Dutch Shell to relinquish its grip on Sakhalin-2, using a series of tough environmental checks as a negotiating ploy.

The European Union, meanwhile, is facing other economic problems stemming from Russia’s rising power since the end of the Cold War.

Late in 2006, when Ukraine refused to pay inflated prices for Russian gas, Moscow briefly halted supplies to its neighbor, leading to a disruption of supplies across Western Europe.

Filled with new wealth, Moscow is seeking to invest in and take over Western companies, while attempting to prevent them from acquiring interests in Russian enterprises.

In September, the Russian state bought a 5.02 percent stake in European aerospace giant EADS via Vneshtorgbank, sparking fears that the oil-rich country was seeking to exert control over the company, whose principal unit, aircraft manufacturer Airbus, is grappling with major financial woes.

Elsewhere, Russian company Severstal struck a deal in 2006 to buy European rival Arcelor before the latter decided to merge with Mittal Steel instead.

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