THE CABINET DISCUSSES OPTIONS FOR RUSSIA’S DEVELOPMENT

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THE CABINET DISCUSSES OPTIONS FOR RUSSIA’S DEVELOPMENT

Izvestia, April 19, 2001, p. 1

At this stage, the Cabinet will just discuss the options for development. Discussion of the programs will take place in May.

The president has not approved the programs yet (mid-term or long-term), so it is still possible to amend them. Our sources in the Economic Development and Trade Ministry say that the availability of detailed economic programs has made it possible to draft two scenarios. They differ in the forecasts for oil prices ($17 a barrel in one, and $22-24 in the other) and gas prices (to a smaller extent). Both scenarios indicate that Russia will service its foreign debts in full.

Yevgeny Gavrilenkov, Deputy Director of the Economic Analysis Bureau: Essentially, this is the same scenario, with few differences. The first option places GDP growth at 18.1% over four years, the second at 15.3%. The difference is less than one percent a year, within the bounds of statistical error.

All this veils the Cabinet’s caution on capital flight, and creating an attractive investment climate – i.e. factors no less important than oil prices.

Both options are similar in predicting inflation rates as well: 10-13% in 2002 and 2003, 8-10% in 2004 according to the first option; and 9-12% in 2002 and 2003, 7-9% in 2004 according to the second option.

The scenarios are also similar on the ruble exchange rate. Both strive to preserve the situation in which the ruble is weak enough to protect domestic producers against imports from advanced countries, yet strong enough to give Russian goods some advantage over imports from the CIS.

In other words, both scenarios contradict the programs drawn up by the Economic Development and Trade Ministry itself. This does not mean abolition of the reforms. However, in this case both scenarios should be viewed as tranquilizers rather than economic programs.

A FEW WORDS ABOUT THE 2002 BUDGET

Izvestia, April 19, 2001, p. 2

At its meeting on April 19 the Cabinet will discuss the macroeconomic structure of the 2002 budget, and the main parameters of its expenditures will be defined by May 17.

The Cabinet is focusing on raising the wages of state-sector employees and military personnel. Wage expenses in the consolidated budget will be increased by 101 billion rubles, and in the federal budget by 50 billion rubles. At the same time, wages of state-sector employees will be raised by only 20%, while the wages of military personnel will be doubled.

VLADIMIR GUSINSKY WILL NOT BE EXTRADITED

Izvestia, April 19, 2001, p. 3

In turning down the request, Spanish judges did not resort to explanations that the case against Gusinsky had been fabricated for political reasons. Disregarding the fact that failure to repay a loan is a crime in Russia, the judges merely emphasized that it was not considered a crime under Spanish law.

Outwardly, the Prosecutor General’s Office took the defeat in stride.

Prosecutor General’s Office spokeswoman Natalia Veshnyakova: It’s all right. We still have some leverage to be used for Gusinsky’s extradition.

ATTACK ON DUMA MEMBER PROBABLY A MISTAKE

Izvestia, April 19, 2001, p. 3

In the People’s Deputy group, Tyutin handled all the red tape – send out deputy enquiries, organized meetings with voters, registered appeals, and so on.

An investigation is underway, personally supervised by Interior Minister Boris Gryzlov. Detectives believe that Tyutin was stabbed by mistake, and that the attackers were really after a businessman next door.

PUTIN’S PR CAMPAIGN NEVER ENDS

Izvestia, April 19, 2001, p. 4

The documentary is likely to go to air on the anniversary of Putin’s inauguration.

RUSSIA WILL IMPORT SPENT NUCLEAR FUEL

Izvestia, April 19, 2001, p. 4

The council of pro-presidential factions (Yevgeny Primakov, Vladimir Pekhtin, Gennadi Raikov, and Oleg Morozov) unanimously supported the initiatives of the Nuclear Energy Ministry.

The parliamentary majority turned down all amendments which were unfavorable to the Nuclear Energy Ministry. Two of them were actually important. The first concerned the Duma’s right to ratify each deal separately. The second group of amendments concerned mandatory return of the nuclear waste to the country from which it was imported. If Russia cannot reprocess the fuel within 20 years, it should be sent back – this is what the amendments demanded. The Duma voted in favor of leaving it in Russia permanently.

GAIDAR VERSUS NEMTSOV

Moskovsky Komsomolets, April 19, 2001, p. 2

Gaidar and Nemtsov are energetically lobbying delegates to the future congress and party functionaries. So far, neither can claim to have the open support of political heavyweight Anatoly Chubais. Chubais himself says he is staying neutral. However, sources close to Nemtsov say Chubais did promise to support Nemtsov during his audience with the president. Duma deputy speaker Irina Khakamada is also for Nemtsov. Nemtsov has the support of many business leaders, which is also important. As for ordinary deputies, opinions differ. Russia’s Democratic Choice claims to have the majority. Nemtsov’s team does not expect the “rebels” to get more than 30% of votes.

Observers do not rule out the possibility that Gaidar will not be able to claim the post of chairman. Leaders of the Union of Right Forces decided that all its component organizations should disband themselves now, and all their members should join the party individually…

Russia’s Democratic Choice came up with a cunning plan. According to our sources, the next congress of Russia’s Democratic Choice will probably approve the decision to disband – but within a year. Gaidar and his supporters believe this will enable them to attend the inaugural congress of the new party within a delegation. However, in that case Boris Nemtsov intends to invite only one representative of the “old democrats” to the congress.

THE NEW U.S. AMBASSADOR TO RUSSIA

Rossiiskaya Gazeta, April 19, 2001, p. 1

The new US ambassador to Russia will be Alexander Vershbow, aged 48. At present, he is the US ambassador to NATO. He is known as a specialist in Russian affairs. It should be noted that Colin Powell appealed to George W. Bush to assign Vershbow to Russia immediately after his own appointment.

As the US ambassador to NATO, Vershbow came to Moscow find out whether the Kremlin had changed its mind about restoring contacts with the Alliance.

Vershbow is a steadfast advocate of NATO eastward expansion and deployment of a national missile defense in the United States. He also knows the Russian defense concept in detail. So it’s reasonable to assume that Washington is going to focus its attention on these elements in Russian-American relations.

CONFERENCE ON TERRORISM

Tribuna, April 19, 2001, p. 1

An international conference on “International terrorism – sources and prevention” opened in St. Petersburg yesterday. Parliamentary delegations from nations of the CIS Parliamentary Assembly and representatives of more than 30 countries are taking part.

Federation Council speaker Yegor Stroyev, who also chairs the Council of the CIS Parliamentary Assembly: “We are meeting here to discuss how long terrorism is going to continue its attacks, and what we can do to put an end to it.”

Better coordination of counter-terrorism efforts within the CIS was recommended.

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