DREAMS NOT COMING TRUE

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DREAMS NOT COMING TRUE

Izvestia, August 15, 2001, p. 5

The legal action against a group of Russian companies, among which are Siberian Aluminum and Russian Aluminum, has drawn no great international response. Some analysts had supposed that a new scandal was possible. The scandal, however, did not interest the American or European authorities.

Essentially, the new lawsuit – consisting of 601 points – is a continuation of the legal action taken in the United States by companies close to Mikhail Zhivilo last December. Base Metals Trading, Alucoal and a number of other trading companies claimed damages over losses sustained after the bankruptcy of the Novokusnetsk aluminum plant. The plaintiffs evaluated their loss at $2.7 billion. Nonetheless, the West did not take the claim too seriously, especially since the Russian companies managed to attract foreign funds.

The affair is practically over. The response to the possibility of a trial has been almost zero. The lawsuit has proved unfounded, and no one is eager to support it. On the contrary, the American authorities are now trying to normalize relations with Russia.

Meanwhile, there are several possible outcomes. Considering the situation, the American judge can suspend the case – although no one can prevent the plaintiffs from finding new suspects. However, no one finds this case interesting – not even in Russia – except, perhaps, Mikhail Zhivilo.

ANDREI KOZLOV’S NEW PROFESSION

Izvestia, August 15, 2001, p. 6

Andrei Kozlov, former vice president of the Russia Bank, has become managing director of the volunteer corps for financial services. This organization was created by former US secretary of state Cyrus Vance and his deputy John Whitehead, for contributing to building a secure financial infrastructure in countries in transition to a market economy or experiencing a financial crisis.

Andrei Kozlov is considered to be the father of the GKO (short-term treasury bonds). Shortly before the wreck of this pyramid in 1998, Kozlov left the Russia Bank. After that he worked at the Russian Standard Bank, and then, unexpectedly, headed the tourism company Aeroflot World. One of the first partners of this company was American Express.

STILL EXPECTED IN NATO

Izvestia, August 15, 2001, p. 10

Henry Kissinger has expressed support for the idea of Russia’s immediate participation in the NATO political system. This move should be viewed as a recognition of Russia’s political and economical evolution. However, Russia’s membership in the NATO military structure ought to be postponed.

SURPLUS AT ANY RATE

Izvestia, August 15, 2001, p. 1

The Finance Ministry collegium has approved the draft budget for 2002. The draft budget hasn’t even reached the Duma yet, but people are already singing its praises. Deputy Prime Minister Alexei Kudrin said that next year’s budget has been planned to ensure the implementation of all the government’s promises and commitments, even for 2003-04, when Russia will have to pay out over $30 billion on its foreign debts alone.

Budget revenues will even suffice to launch reforms in the military, pensions, judiciary, and other reforms.

However, even this super-strong budget does not inspire enthusiasm. The reason is that all the extra revenues are planned to be spent only on servicing debt – not on raising people’s living standards.

The government wants to cut funding for kindergartens, schools, hospitals, and libraries; to reduce expenditure on servicing internal debts, developing industry, agriculture, and transport. This will primarily affect the real sector of economy. From January 1, 2002, it is planned to start direct bankruptcies of insolvent enterprises. Most of the insolvent plants and factories are already closed. Only essential services, strategic companies and the like remain untouched. Clearly, their closure could cause severe disruptions for the whole society.

Reforms in housing and utilities will be restricted to raising tariffs. The relatively oil high prices will lead to rising prices for petroleum products, and by extension for everything else.

However, this does not seem to intimidate the government.

RUSSIAN AVIATION DOES NOT SURRENDER

Nezavisimaya Gazeta, August 15, 2001, pp. 1, 2

Opening the Moscow aerospace exhibition, President Vladimir Putin noted that this year 537 organizations from 34 states are taking part in it. Such planes as the Ukrainian An-225 Mria, the Russian Mi-26 helicopter, and so on are being exhibited here. The Mria is the largest cargo plane in the world, and the Mi-26 is able to transport up to 20 tons at a time. Unlike the Ukrainian monster, the Mi-26 is selling well. These helicopters are popular with customers from India, South Korea, Greece, Mexico, and Cyprus. Now this helicopter has a chance to win a tender arranged by the Brazilian Air Force.

Most Russian companies view this exhibition chiefly as a commercial one. Both giants of Russian aviation and minor firms are seeking to open up new markets. General Director of the Russian Aerospace Agency Yury Koptev has reported that contracts for selling about 20 Russian aircraft may be signed in the course of the Moscow aerospace exhibition of 2001.

The Tupolev company has merged with Aviastart-SP and the Kazan Aviation Manufacturing Enterprise. They have exhibited a number of planes with the Tu trademark. According to expert estimates, over the next decade such aircraft as the short-range Tu-334 plane and midrange Tu-204 plane will have no rivals in the air transport market in Russia and the CIS. The regional Tu-324 and long-range Tu-204-300 and Tu-204-500 planes may claim 50% of the total of flights.

However, Tupolev will have to compete with Boeing and Airbus Industries, which have started to expand into the Russian market.

Military correspondents focus their attention on products of the unitary enterprise Rosoboronexport (Russian Defense Exports), which handles over 80% of Russia’s arms exports. Rosoboronexport is offering the Mirage-F1, an updated version of the Mirage fighter. This model will be offered to countries with Mirage fighters in their armed forces.

WILL TV-6 FOLLOW NTV?

Argumenty i Fakty, No. 33, August, 2001, p. 2

According to some sources, the TV-6 television network may soon experience the same misfortunes as NTV. The Kremlin is concerned about the possibility of Yevgeny Kiselev and Sergei Dorenko joining forces. According to our source close to the Presidential Administration, everything is in place for an attempt to shut down TV-6. If it criticizes the government too much, some financial irregularities will soon be found there.

Boris Berezovsky is also aware of the fact that his network is in a very shaky position. Recently he handed over his 75% stake in TV-6 to Media-Most, or to Yevgeny Kiselev, more precisely. The reason for this gesture of generosity is quite plain: if anything happens to the network, Berezovsky will look like an innocent victim of actions against freedom of speech, just like Vladimir Gusinsky.

However, unlike Gusinsky, Berezovsky does not rule out the possibility of returning to Russia. He is rumored to be eager to resume his political activities. According to some rumors, he may come to Russia in late September. This time his activities will be focused on preparations for a probable early Duma election. The tycoon intends to lead the “united anti-Putin bloc” to victory.

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