TAX COLLECTION HAS INCREASED

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TAX COLLECTION HAS INCREASED

Izvestia, April 26, 2000, p. 3

Judging by the results of the first quarter of this year, 89% of the budgets of Russian regions consist of cash. This statement was made by Deputy Prime Minister Victor Khristenko on April 25 at an online conference with the leaders of Russian regions, in which they discussed wages payments for state-sector employees.

At the same time, Khristenko noted that some regions have collected only 40% in cash. According to ITAR-TASS, Victor Khristenko noted that tax collection has proved to be above target. He said in particular: “As a result, Russian regions are able to allocate about 64 billion rubles for wages to state-sector employees.”

FIFNANCE MINISTRY TO CONTINUE ISSUING TREASURY NOTES

Izvestia, April 26, 2000, p. 5

This summer the government will pay for the state savings loan debentures (SSLD). The Finance Ministry has decided to continue issuing these securities in order to give work to banks.

On April 24 Bella Zlatkis, Chief of the Finance Ministry Department for Internal Debt, said at the “Investment in Russia” conference that in the first half of this summer the Finance Ministry will issue SSLD with a term from one to three years, the returns on which will be linked to the inflation rate. She said in particular: “If the the new loan issue is worth 2 billion rubles, there will be two installments of 1 billion rubles each.”

In addition to the statement regarding the issue of SSLD, Bella Zlatkis described the general policy of internal borrowing which the Finance Ministry will pursue in the future. According to Zlatkis, in 2000-01 the Finance Ministry plans to issue securities with a floating coupon to the value of 10 billion rubles, which will probably be sold through the Moscow Inter-Bank Currency Exchange. The Finance Ministry will also continue to issue short-term treasury notes for a total of 2.5-3 billion rubles.

Bella Zlatkis also said that the Finance Ministry will “never” issue securities pegged to the US dollar.

HAS STEPASHIN OBTAINED A LICENSE TO KILL?

Moskovsky Komsomolets, April 26, 2000, p. 3

The hopes of those who thought that the State Auditing Commission’s new head was a meek and mild politician have evaporated. After taking this post, Sergei Stepashin described his plans: he intends to establish order in his native city of St. Petersburg. No one doubts that Stepashin makes such statements with Putin’s approval.

The tough talk of Sergei Stepashin have caused a great stir in St. Petersburg. Such news disappoints current St. Petersburg Governor Vladimir Yakovlev.

The point is that Stepashin has not given up the idea of running for St. Petersburg governor. He just followed Putin’s advice when he withdrew his candidacy in March.

Sergei Stepashin decided to avoid a direct confrontation with Vladimir Yakovlev, choosing an indirect approach. It is possible that a special maneuver has been worked out in order to guarantee Stepashin victory in the election: Stepashin agrees to take a post which allows him to conduct audits and gather materials needed for defeating Vladimir Yakovlev.

The fact that Stepashin used to work in the Interior Ministry, and has Putin’s support, turns the head of the State Auditing Commission into a very significant figure. Vladimir Yakovlev will be the first person who will feel the impact of this. And it does not matter whether there will be one or two rounds of voting in the elections. It is possible that after a scrupulous audit Yakovlev will be forced to resign. In this case, the post of St. Petersburg governor will be taken by someone like the head of the State Auditing Commission.

Why does Putin need to do this? Why was Matvienko “asked” to withdraw her candidacy? Vladimir Putin has become very cautious since Gromov’s victory in the gubernatorial elections in the Moscow region. And he does not want to be defeated again, especially on his home turf.

US LIFTS SANCTIONS – AND IMPOSES THEM AGAIN

Nezavisimaya Gazeta, April 26, 2000, p. 1

On April 25 the US lifted sanctions from the INOR scientific center and the Polyus scientific enterprise in connection with the cancellation of the contacts of these Russian organizations with Iran. At the same time, US spokesman James Rubin said that the US has decided to impose sanctions on the Baltic State Technical University and its Rector Yury Savelyev, because an inspection conducted by the Russian Education Ministry indicated that Iranian post-graduate students who studied at this university had access to missile technologies. Despite the decision of the Russian Federal Service for currency and export control, the university continued to receive Iranian students. The US appreciates the efforts of the Russian government aimed at preventing leakage of military technologies, but does not intend to remove sanctions imposed in 1998-99 on several Russian scientific organizations and universities.

DRAFT ECONOMIC STRATEGY IS READY

Nezavisimaya Gazeta, April 26, 2000, p. 2

On Tuesday news agencies carried the statement of Finance Minister Alexei Kudrin regarding the fact that the Strategic Developments Center has completed the first draft of a long-term economic development strategy for Russia. Alexei Kudrin said that this version will be considered by the new Cabinet, but declined to reveal the main principles of this document, explaining that he has not managed to familiarize himself with it yet. The Strategic Developments Center does not intend to exaggerate the significance of this document, but confirmed that the draft strategy has been sent to the Presidential Administration and the ministries.

LEFTIST ECONOMISTS MAKE SUGGESTIONS

Nezavisimaya Gazeta, April 26, 2000, p. 2

“The revival of industry means the revival of Russia!” is the motto of the second national congress of commodity producers. Deputy Nikolai Ryzhkov, Secretary of the Coordinating Committee noted that 1,100 people participated in the congress. The nature of this event was determined by the political orientation of the speakers. Nikolai Ryzhkov was the main speaker. His speech was a critical appraisal of the current economic situation in Russia. In addition there were certain demands in his speech that the government should “lead the country out of the bitter economic crisis which was caused by ten years of stupid reforms.” According to these demands, the state should reorganize the State Property Ministry and the Economy Ministry, and also create a few branch ministries. According to Sergei Glazyev, Secretary of the Duma Committee for Economic Policy and Business, who also delivered a speech at the congress, the government has not worked out its economic policy yet. A program for the development of the real sector of the economy, suggested by Glazyev, ought to help the new president. The program resembles the campaign platform of the Communists. Almost all speakers noted that the state does not pay attention to the opinion and views of the coordinating committee. It is hardly likely that Vladimir Putin will listen to their advice, because he now has a personal advisor – Andrei Illarionov.

MILITARY EXERCISES ENVISAGE ATTACKS FROM AFGHANISTAN

Nezavisimaya Gazeta, April 26, 2000, p. 2

On April 24 the Russian Army began command exercises in the Privolzhsky and Ural military districts. The exercises are commanded by General Anatoly Kvashnin, Chief of the General Staff, who arrived from Chechnya. This is the largest exercise in the post-Soviet period. The fact that these exercises are commanded by a battle general testifies that the Russian military leadership considers them very important. Representatives of Kazakhstan and Kyrgyzstan are participating as observers. Tajik detachments cooperate with the 201st infantry division in Tajikistan. In addition, detachments of the Air Force and the Anti-Aircraft Forces are involved in the exercises.

The main objective of the exercises is the protection of CIS borders and resistance to attacks from the territory of Afghanistan. In order to prevent an invasion by extremists, Russia and the Central Asian republics are being trained to destroy terrorist camps in Afghanistan. It is planned to launch air strikes on the terrorists. It is not out of the question that the military airfields of Tajikistan and Uzbekistan will be used.

THE COUNCIL OF MINISTERS IN ACTION

Parlamentskaya Gazeta, April 26, 2000, p. 1

On April 25 in Moscow, the Council of Ministers of the Russian-Belorussian Union discussed further unification between the two countries. Russian First Deputy Prime Minister Mikhail Kasianov, Secretary of the Council of Ministers, said at the beginning of the first meeting: “The Council of Ministers of the Russian-Belorussian Union is meant to carry out a policy aimed at creating common tax, customs and economic zones in order to guarantee equal conditions to all economic subjects.”

Kasyanov thinks that the Council of Ministers “has to form a policy outlined in the Treaty on the creation of the Russian-Belorussian Union.” Belorussian Prime Minister Vladimir Yermoshin said that the first meeting of the Council of the Russian-Belorussian Union is based on a great deal of preliminary work.

PUTIN: OUR PRODUCE MUST BE HIGH-QUALITY, BUT CHEAP

Trud, April 26, 2000, p. 1

President-elect Vladimir Putin has praised the results of reforms in the Orel Region. He made this statement on April 25 at a meeting with the directors of the agricultural enterprises of the Orel Region.

Putin noted: “You have created a system which allows proprietors to accumulate land.” According to Putin this system is not ideal, because proprietors face a lot of difficulties when they intend to expand their businesses. “Bureaucracy must be defeated. It is very important for the state to keep these lands in agricultural use.”

Putin said that Russian agricultural enterprises have received 43% of the target amount of fertilizers.

According to Putin the government will work out a plan for providing agricultural enterprises with agricultural machinery.

Putin admitted that in Moscow, St. Petersburg and other large Russian cities foreign producers have an advantage over Russian companies. The president-elect thinks that “we must be meticulous. Our produce must be high-quality, but inexpensive.”

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