EASY MONEY

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EASY MONEY

Moskovskii Komsomolets, April 11, 2002, p. 1

It looks like the hopes of our ministers for extra profits from the rise in world oil prices are doomed to disappointment. Oil prices returned yesterday to the level they had been at before the statement from Iraq about suspending its exports. The official price of Brent for the next month amounted in London to $26.08 a barrel (a 0.94% fall).

We note that three days ago one of the world’s main oil suppliers (Iraq has been selling two million barrels of oil a day) announced that it was suspending its exports for thirty days or until Israel withdraws the troops from Palestinian territories. There was nothing unusual about this statement: Iraq had already made similar political moves before, but this time Saddam Hussein called for other Arab countries to follow him. If they, especially Saudi Arabia and Kuwait, decided to join Hussein, a fuel crisis would become inevitable.

Right here livened up our governmental officials who at once began to comment on the situation and calculate how much money Russia could make if it took over the vacant “Arab” niche. Of course, every dollar added to the oil price is an extra 25 billion rubles for the treasury… Alas, no such luck! The US, the world’s main consumer, says its fuel reserves will be enough for a long time, so Iraq’s embargo would in no way affect the economy of the United States. Kuwait took the wait-and-see attitude, without responding to the statement of Hussein. As for Saudi Arabia, it stated it was ready to increase oil supplies to the market. Israel also withdrew its troops from two Palestinian towns, having suffered the greatest loss since the start of the counter-Palestinian operation – 12 soldiers. Overall, oil prices went down again.

THE MILITARY CHOOSES TRAINING PLANES

Izvestia, April 11, 2002, p. 2

The Defense Ministry has selected a winner in the tender for production of a training-combat plane. The Yak-130 won in the final contest between MiG and the Yakovlev design bureau, according to a statement by the head of the Air Force tender commission, Anatoly Maksimov, at yesterday’s press conference. Although it would be good if MiG continued the work on the MiG-AT plane, since “Russia’s skies are broad, and there is space enough for this machine too,” the general added.

OLIGARCHS ARE MADE, NOT BORN

Moskovskii Komsomolets, April 11, 2002, p. 2

The Russian stock market is in a state of unrest. A company will be listed on the Russian stock exchange, and its shares will be available to anyone who wishes to purchase them.

The RosBusinessConsulting (RBC) company will become the pioneer. The company, which specializes in IT and information services, is growing rapidly. Analysts value RBC at $125 million currently. It is no wonder the excitement about the impending event this month has reached its peak.

RBC will sell its shares on Russia’s two biggest exchanges simultaneously – the Moscow Interbank Currency Exchange and the Russian trading System. Sixteen million shares will be sold. This amounts to exactly 16% of the RBC joint stock. Specialists say that the company chose the most fortunate moment to reach the market that has fully recovered from the crisis of 1998. So the rivals can only be whipping the cat and sending anonymous messages to newspapers, blaming RBC for every deadly sin. Another’s success is often perceived as a personal slight in Russia.

In case of success – and most analysts forecast exactly this – RBC will manage to make a most powerful move ahead on the information field, and not only in the center, but also in regions. This is especially relevant in light of the elections, already looming. As for the plan for making their own business TV, this will make it possible for the company to catch up with well-known media empires and to change considerably the alignment of forces in this market.

ENVIRONMENTAL ACCOUNTING

Izvestia, April 11, 2002, p. 1

The other day, President Vladimir Putin and World Bank president James D. Wolfensohn agreed on another loan, “on profitable terms”, to be provided to Russia. The loan will be for reconstruction of the Baikal Pulp and Paper Mill, an enterprise which has been polluting the unique Lake Baikal for over forty years. The interesting aspect here is that Russia has received money enough for such reconstruction, over a long period. And absolutely free, in the form of grants that are not liable to be repaid, with interest or without it. However, it turned out that these funds have been used extremely inefficiently.

From 1992 to 2001, Russia spent $8.7 billion to protect the environment, according to expert assessments. This sum does not only include money of the state, regions, and individual companies. Various international environmental organizations absolutely freely allocated big money too. The fashion for environmental protection was especially great in Russia in the nineties. No one knows exactly now much money actually came to Russia. The State Statistics Committee has no such data, the Natural Resources Ministry was also at a loss when trying to name the sum total to us. The matter is that international charity grants for environmental protection may both be received by a private individual and the state in general. The rate of a grant is from $150 to $60 million. However, there are expert appraisals for the amount of funds allocated to Russia as grants for ten years. This is said to be $2 billion.

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