RUSSIAN BANKS TO QUIT COOPERATION WITH US BANKS

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RUSSIAN BANKS TO QUIT COOPERATION WITH US BANKS

Vremya MN, June 10, 2000, p. 1

The Financial Information Agency has conducted a poll among a number of Russian banks in connection with the recent reports in the Western media that the US Congress is toughening requirements for American banks which accounts for Russian banks. According to this poll, Russian banks are gradually quitting cooperation with American banks and are reorienting toward European banks.

KASIANOV MOVING TO THE LEFT

Kommersant-daily, June 10, 2000, p. 1

On June 9, Prime Minister Mikhail Kasianov presented his economic program to members of the board of the Russian Union of Industrialists and Entrepreneurs (RUIE). His program hardly resembles the liberal program compiled by Herman Gref. Kasianov’s proposals are more like those of Communist Yuri Maslyukov. The prime minister’s speech was so radical that even the ruble exchange rate fell on June 9.

RUIE members were satisfied, since they heard what they had been eager to hear. This is a rare event in the history of relations between prime ministers and the RUIE. In October 1998, at the ninth congress of the RUIE, Moscow Mayor Yuri Luzhkov told then Prime Minister Yevgeny Primakov: “You are the first prime minister who speaks our language!”

Kasianov is the second. Arkady Volsky’s industrialists could not be dissatisfied with Kasianov’s statement that “the state is ready to share risks with banks in the cause of lending to the real sector of the economy.” This referred to the state’s readiness to guarantee up to 50% of commercial bank loans to enterprises that have won investment competitions.

Besides, Kasianov promised to radically cut interest rates to 20% in 2000, and to 11% in 2001. Industrialists were cheered, since cheap credit is their dream.

Wishing to strengthen the positive impression on the audience, Kasianov announced once again that he would not allow the ruble to fall. Thus, he again joined in debate with Central Bank President Viktor Gerashchenko, who is also in favor of reducing interest rates, but is against strengthening the ruble. Recently, Gerashchenko expressed his negative attitude toward opponents of a strong ruble. It is worth noting that Kasianov’s announcement immediately caused the ruble to fall by 10 kopecks against the dollar. Currency traders have directly expressed their concern about the disagreement between Gerashchenko and Kasianov.

BOTH CHECHENS AND RUSSIANS VIOLATE HUMAN RIGHTS IN CHECHNYA

Vremya MN, June 10, 2000, p. 1

Pavel Krasheninnikov, Chairman of the Duma Legislation Committee and the Public Commission for Investigation of Human Rights Abuses in the North Caucasus, announced at a press conference on Friday that many violations of human rights do take place in Chechnya, but they are not ubiquitous.

Krasheninnikov recently returned from Chechnya and has already met with the general prosecutor of the Russian Federation. He has also conducted a meeting of his commission, at which it was decided to open public reception offices in the North Caucasus and in Moscow. According to him, the offices “will register complaints about human rights violations committed both by Chechen guerrillas and Russian forces, since such cases also take place.”

Krasheninnikov noted at the press conference that the most important problem affecting human rights observance in Chechnya is the complete lack of a judiciary system in the republic, which makes it necessary for many suspects to be sent to the Stavropol Territory and North Ossetia. They require security during transportation. The commission will sent a letter to Vladimir Putin on this issue, as well as some other topical issues.

Pavel Krasheninnikov also noted at the press conference that “there is no overall leader in Chechnya, which makes the situation even more complicated. But there are some people there whose public confidence rating is about 20-25%. As far as our position is concerned, it would be good to establish a kind of provisional administration, like a state council, in Chechnya, which will include people with such a high confidence rating, as well as religious authorities and elders.”

OBSERVER TO COME TO CHECHNYA

Vremya MN, June 10, 2000, p. 2

Vladimir Putin’s decree setting up a provisional administration in Chechnya has actually abolished the triple power system in Chechnya. To date, the republic has been ruled by the representative office of the Russian government, led by Nikolai Koshman; the military commandant of Chechnya; and the temporary administration consisting of Chechens and having no actual power. By the president’s decree, the provisional administration has been merged with the representative office of the Russian government. And the commandant’s offices will soon become “territorial departments.”

Putin has not yet named the new head of the Chechen administration, thus launching more speculations. But Koshman is still the most likely candidate, since one should not change horses mid-stream. According to our sources, Nikolai Koshman may get a higher status: either that of special envoy of the Russian president in Chechnya, or deputy envoy of the Russian president in the North Caucasus federal district.

Regardless of who will head the administration of the Chechen Republic (among candidates for this position are Bislan Gantamirov, Akhmad Haji Kadyrov, Yakub Deniev, Malik Saidullaev, Umar Djabrailov, and General Gennady Troshev), financial activities of the previous administration will be revised at the request of Koshman himself. Sergei Stepashin, head of the State Auditing Commission, will visit Chechnya this month. Nikolai Koshman has told a “Vremya MN” correspondent that there have been some cases of embezzlement of budget funds in Chechnya, but they are insignificant and not numerous. For instance, Koshman recently had to dismiss the head of the Achkhoy-Martan District because he failed to account for the money allotted for teacher salaries.

However, according to our sources in the State Auditing Commission, Sergei Stepashin is also interested in other funds: those related to oil. About 1,000 tons of oil a day is extracted in Chechnya. This oil is then transported to Astrakhan for processing. Koshman complained to journalists in one of his latest interviews that all these “oil rubles” get stuck in the Finance Ministry afterwards, and it is extremely difficult to get them back to Chechnya.

RUSSIAN PRESIDENT TO MAKE FRIENDS WITH NORTH KOREA

Vremya MN, June 10, 2000, p. 4

Although Vladimir Putin’s visit to North Korea was planned long ago, it has still caused a sensation. The Russian president will pay a visit to Kim Jong-Il and other Korean authorities in July, on the eve of the G-8 summit in Okinawa.

The reports about Putin’s upcoming visit met with an ambivalent response in the US. An official in Washington has said that Vladimir Putin’s plans mean North Korea is emerging from its isolation and making contact with the world. However, in the Pentagon, Ken Bacon’s announcement carried a tinge of anxiety. Knowing that Vladimir Putin and Kim Jong-Il will discuss defense issues, Bacon expressed a wish that Russia would advise North Korea to give up its missile program and would convince it not to sell its weapons “throughout the world.”

BRUSSELS SHOULD TAKE HEED OF MOSCOW’S PROBLEMS

Vremya MN, June 10, 2000, p. 4

According to news agencies, Italian Foreign Minister Lamberto Dini has given a very positive assessment of Russian President Vladimir Putin’s proposal to create a joint anti-missile defense system. At the same time, he has criticized the position of the US. In his opinion, America’s policy in this field may lead to a renewal of the arms race. In the opinion of Dini, US plans to create a national missile defense system are undermining the entire system of nuclear parity in the world, since current agreements on strategic weapons do not envisage new global defense systems like the one planned by the US.

GAS GETTING MORE EXPENSIVE

Vremya MN, June 10, 2000, p. 2

On June 9, at the final meeting of the 21st Gas Congress in Nice, Gazprom General Director Rem Vyakhirev announced that Russian gas consumers will bear greater costs in the near future.

Judging by Vyakhirev’s words, Russian domestic gas prices are to rise to the level of the world prices over the next few years, and within a few days the first step in this direction will be taken. As Vyakhirev reported at the meeting, it is possible that by Sunday or Monday Vladimir Putin will receive a proposal to raise gas prices.

KALMYKIA SURRENDERS VOLUNTARILY

Vremya MN, June 10, 2000, p. 3

On June 9, Kalmykian President Kirsan Ilumzhinov and Viktor Kazantsev, presidential envoy for the North Caucasus federal district, reached full accord on the distribution of powers between the federal center and the region.

The Kalmykian president caused a sensation by his announcement that he had brought ten Kalmykian laws that contradicted federal laws into accord with the federal Constitution before any threatening signal from above. According to Ilumzhinov, this important event took place two hours before the press conference, when the People’s Hural of the Republic of Kalmykia reported to the president of the republic that all local laws were now 100% in compliance with federal law. Kirsan Ilumzhinov said that this step was taken in order to demonstrate the republican authorities’ support for the president’s reforms. Although Vladimir Putin has given regional leaders until October 2001 to amend local laws, Kalmykian lawmakers did it within two weeks.

GOVERNMENT WITHOUT A PRESIDIUM

Nezavisimaya Gazeta, June 10, 2000, p. 2

On June 9, Prime Minister Mikhail Kasianov informed journalists about the nature of structural changes within the Cabinet. To all appearances, the new Cabinet will not have a presidium. Although the final decision has not been made yet, there are sufficient grounds for this measure. Formerly the Cabinet was comprised of 30 ministers, half of whom were included in the presidium. Now the number of ministers has been reduced to 23, and there is no point in creating a narrower circle within this group.

HOT TOPICS IN RUSSIAN-UKRAINIAN RELATIONS

Nezavisimaya Gazeta, June 10, 2000, p. 2

On June 9, Ukrainian President Leonid Kuchma announced that Ukraine’s state budget had lost $3 billion when nuclear warheads that used to be located in Ukraine in Soviet times were transported to Russia several years ago. Kuchma has created an investigation commission to clarify details of this event. It concerns the relocation of several nuclear warheads on tactical missiles in the early 1990s by specialists of the 12th Main Department of the Russian Defense Ministry, responsible for security at nuclear sites.

On June 8, at a meeting devoted to the fuel and energy sector, Leonid Kuchma touched on another important topic in Russian-Ukrainian bilateral relations. According to him, over the past five months alone Ukraine has illegally tapped 13 billion cubic meters of Russian gas, to the value of $700 million. The Ukrainian president said that on June 1, he issued a decree on stopping these gas thefts, and told Ukrainian fuel and energy sector authorities to discontinue this practice. The Ukrainian leader told participants of the meeting that Russia has a right to sue Ukraine in the World Court and put in a claim to the IMF.

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