THE HELP OF THE CLUB

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THE HELP OF THE CLUB

Izvestia, February 11, 2000, p.1

The negotiations concerning restructuring of the debts of the former USSR to the London club of commercial creditors, which began in Frankfurt on February 10, are close to success. According to certain reports, three-quarters of the creditors are ready to write off 40% of the Soviet debt.

Russia’s foreign debt remains the main factor affecting its budget. The wearisome negotiations with the International Monetary Fund are needed to solve the problem of foreign debt. Foreign debt is a more convenient instrument for the West to exert pressure on Russia than any NATO expansion or other external political actions. It will take a long time to get rid of this debt, which was voluntarily taken over by Russia after the break-up of the USSR, and which has increased considerably during these past years.

Last year Russia obtained a year’s delay from the Paris club of creditors, which consists of the countries that made loans to the USSR. If Russia manages to reach an agreement with the London club, it will have to pay the majority of the debt in the second half of this decade.

Despite the exceptional importance of this agreement, it does not solve all problems. Deputy Finance Minister Andrei Kudrin stated that “currently Russia continues to create a debt pyramid. It means that expenditure for paying the foreign debt is covered by new loans. That is why the agreements with the London and Paris clubs will not lead to a solution of the debt crisis.”

KALYUZHNY ON GAS, OIL, AND FUTURE PLANS

Trud, February 11, 2000, p. 3

VK: Currently the major issue for the fuel and energy sector is finding new resources. This was the main theme of the recent government meeting. In particular, acting President Vladimir Putin noted that over the last decade Russia’s hydrocarbon resources have been shrinking.

Q: Restructuring of Russia’s two major natural monopolies, Russian Joint Energy Systems and Gazprom, has become one of the most discussed themes lately. There are a lot of rumors around both companies. Could you clarify the situation?

VK: Any restructuring should be rational and effective. First of all, all the suggested reforms should be thoroughly assessed.

As for restructuring the Russian Joint Energy Systems, I should say that the Ukrainian energy sector used exactly the same plan as is now being suggested to us. The situation with energy supplies in Ukraine is well known.

Regarding reported statements by Rem Vyakhirev, the head of Gazprom, about breaking up Gazprom, I can say that I have heard nothing like this from Mr. Vyakhirev. Restructuring of Gazprom is going according to plan. In the words of Vyakhirev, “the company continues to carry out a complex program of internal restructuring and reorganization, which was begun in 1997 and coordinated with the government. It is planned to enlarge and then to divide into independent enterprises our service, building and other auxiliary organizations.”

All the decisions about reorganizing and restructuring Gazprom will be made and carried out in accordance with the law and the regulations of the company. All the obligations to international agreements will be taken into consideration too. The restructuring process will be also coordinated with the main Gazprom shareholder, the state.

Q: What can you say about relations between Russian gas companies and their Ukrainian colleagues?

VK: Gazprom continues negotiations with Kiev. Certain results have been achieved, the main one being that our neighbors have decreased unauthorized gas tapping from 150 million cubic meters a day to 30 million. We hope that in the future this figure will be reduced to zero.

Q: The prospects for establishing a new state-owned oil company, which would include Rosneft, Slavneft, ONAKO and others, is also being discussed. Opinions differ greatly. So, will this company be established or not?

VK: The Fuel and Energy Ministry will not discuss this question until after the presidential elections. In general I think that a state oil company can exist all right, this would not run counter to a free market.

Q: What do you think of Russia joining OPEC? Is Gazprom invited to the summit of the OPEC countries?

VK: Yes, it is. As for joining OPEC, I think it’s not the right time now. Currently we cannot do that: the economy of Russia is tied to the fuel and energy sector, and there are no opportunities to move easily on the oil market, for a number of reasons.

RUSSIAN PARLIAMENTARY LIFE

ORT, Novosti, February 10, 2000, 15:00

Three factions – Yabloko, the Fatherland-All Russia bloc, and the Union of Right Forces – have finally backed down from their earlier statements about not appointing their representatives to the posts of deputy speakers. All this time, the majority factions in the Duma have been keeping these posts vacant.

At the Duma meeting on February 10 the faction leaders announced the names of their candidates. Yabloko nominates Vladimir Lukin, the Fatherland-All Russia bloc nominates Georgy Boos, and the Union of Right Forces nominates Boris Nemtsov. On February 11 the Duma will vote on each candidate, and it is not certain that the debate will be a peaceful one.

In principle, a quarrel began in the Duma on February 10. The cause of the quarrel is the clash of interests when discussing certain draft laws. The Union of Right Forces insists on free trade in agricultural land. The Communists object to this draft law.

Gennady Seleznev: A Land Code which allows land to be squandered will never pass, take my word for it.

Anther draft law which is considered ambiguous by the deputies is the draft law on cancellation of parliamentary immunity.

Sergei Kirienko: The draft law on cancellation of parliamentary immunity, which was promoted by our faction, has brought a hysterical reaction from certain deputies. That is only to be expected.

These draft laws will not be debated at the next meeting of the Duma. The Duma has to pass an agenda for its work.

In the evening Nikolai Koshman, Igor Sergeev, and Vladimir Rushailo will attend the meeting of the Duma. The main theme of their reports in the Duma will be the Chechen crisis. The Duma also wants to clear up the fate of journalist Andrei Babitsky.

Sergei Ivanenko: Yabloko will raise the question of the fate of Andrei Babitsky and the activities of the federal authorities regarding this issue.

Yabloko insists on the presence of the press in the Duma during the discussion of this issue.

ANATOLY CHUBAIS: PUTIN WILL NEED NO EFFORT TO BECOME THE PRESIDENT

Independent Television, Segodnya, February 10, 2000, 14:00

Anatoly Chubais, head of Russian Joint Energy Systems, has held a press conference in Moscow. He mentioned the situation with journalist Andrei Babitsky. Chubais says that the exchange of the journalist for servicemen was a mistake by the federal authorities.

Anatoly Chubais: I think that this exchange, if it can be called an exchange, is a mistake by the federal authorities. I am not prepared to say who made this decision and what was the cause, but I am sure that the political consequences of this decision have been negative for acting President Vladimir Putin. I hope that this situation will be resolved.

Chubais also said that he does not plan to work in the election campaign of Vladimir Putin. According to Chubais, the acting president will not need a serious election campaign, or effort, to become the president.

RUSSIAN TROOPS WILL USE VACUUM BOMBS

Russian Television, February 10, 2000, 19:00

The federal troops will be using fuel-air explosive bombs against Chechen guerrillas in the Argun canyon. The use of these destructive weapons is not forbidden by international conventions.

The military says that the use of such bombs is the only way to achieve success in the mountains, where guerrillas use the landscape as cover from fire: crevices, caverns, and so on.

The principle of these weapons (vacuum bombs) is as follows: such bombs are filled with a liquefied high-energy explosive fuel. Such bombs explode twice: firstly a container explodes and the liquid from this container turns into mist, which spreads into any sheltered area. After that, an electronic time delay fuse ignites the mist. The explosive mix burns oxygen within a radius of about 100 meters. A vacuum is created, and low pressure causes a shockwave. When the air rushes into the vacuum, there is a second shockwave. It takes just a few milliseconds. The inevitable collapse of human lungs causes death.

Similar bombs were used by the US in Vietnam, by the USSR in Afghanistan, and by Israel in Lebanon.

Sergei Yastrzhembsky: Such bombs will actually be used by the federal forces in order to smoke guerrillas out of the bases and caverns. I think that this objective will be achieved quickly.

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