RUSSIAN COMPANIES UNDERSTATE THEIR PROFITS

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RUSSIAN COMPANIES UNDERSTATE THEIR PROFITS

Nezavisimaya Gazeta, August 28, 2002, p. 3

Against the background of the recent economic scandals in the US and Europe, after Western investors have been shocked by bankruptcies of the largest companies and have realized the fact that nearly all of the financial gians (an not they alone) have overstated their profits, the figures for Russian companies announced on August 27 seem rather exotic. The Western analysts could even envy them.

Over the first six months, the balanced financial results (profits minus damage) of the industrial enterprises in Russia in terms of established prices decreased 48.6% as compared to the same period of 2001, the Macroeconomic Research Center said referring to the State Statistics Committee.

The fact that in Russia, where the accounting is aimed at payment of taxes, it is habitual to understate the profits, rather than over state them, is clear. However, the figures presented by the State Statistics Committee proved to be very scary. In particular, the balanced financial result decreased 55.3% in the fuel industry (even though in the gas industry it increased 6.9 times), 63.6% in the energy and electricity industry, 11.7% in the transportation industry, 31.8% in the construction industry and 53.4% in the commerce and catering industries. The communication enterprises with the rise of 11.2% became the only exception.

The advanced growth of expenses of the industrial enterprises, which wasn’t compensated by the growth of prices set by manufacturers of various industrial products to the full extent, caused a drop in the financial results.

PUTIN PROPOSES VISA-FREE TRAVEL BETWEEN RUSSIA AND EUROPE

Nezavisimaya Gazeta, August 28, 2002, p. 2

Vladimir Putin has proposed the leaders of the European Union nations to consider Russia’s new integration initiative.

The Kremlin’s press service said that the Russian president sent messages regarding the Kaliningrad problem to the chair of the European commission and leaders of the EU nations. According to Russia’s new integration initiative, Russia and the European Union should cancel visa requirements to Russians and citizens of European nations in the prospects.

In other words, the problem of the Kaliningrad region has been paraphrased. The problem is connected with the fact that Russia did not try to reach an agreement with Europe regarding the Russian-European problem, not the Kaliningrad problem.

INVESTIGATORS FIND MORE RUSSIAN TALIBS

Izvestia, August 28, 2002, p. 3 EV

In addition to the three Russian citizens arrested during the US military operation in Afghanistan, another two Russian citizens are being held at the US military base in Guantanamo. Boris Karnaukhov, Deputy Head of the department of Russian Prosecutors’ Office in the North Caucasus, discusses this.

Question: How did you learn of another two Russian citizens at Guantanamo?

Karnaukhov: The US informed us. We have a mutual aid concerning the criminal case of Kudayev, Gumarov and Sharipov. They are three “Russian Talibs”, whose presence in Guantanamo has been already ascertained. Surnames of the new captives and the information about their origin aren’t divulged in the interests of the investigation. The Americans arrested them and conveyed them to Guantanamo later. Our American colleagues should get in a week a letter concerning the mutual aid. I can’t exclude that some other Russians can appear in Guantanamo. They can be arrested recently or don’t advertise their citizenship.

Question: When might the investigation be completed?

Karnaukhov: It is difficult to say. We have written to the Americans concerning the questions which we would like to put to Gumarov, Sharipov and Kudayev. Unfortunately, a diplomatic letter goes to one end very long. Now we gather the evidence of their guilt, according to the articles of our Criminal Code. As soon as all the information will be got, we will put a question concerning their extradition. The investigation concerning two other Russians will be finished later.

Question: Do our investigators plan to go to Cuba to examine these two Russians?

Karnaukhov: Not yet. The Americans have an opportunity to do everything necessary concerning these two people.

NOBODY WILL FREEZE IN WINTER

Izvestia, August 28, 2002, p. 2 EV

Yesterday’s Cabinet meeting discussed preparations for the 1002-03 winter heating season. Prime Minister Mikhail Kasianov expressed regret at the fact that the winter question became a traditional one for the government meetings. He also stressed that the deterioration of the housing equipment came to 65% and the situation with the fuel is not satisfactory in some regions. The Prime Minister offered to prepare for winter “punctual and systematically”. It means to allocate 5 billion rubles to RJES to buy fuel, to give money to the regions in order to repair the heating mains and to decide how to make fuel oil prices fall. However, Kasianov didn’t support Ministry of Energy that offered to introduce into practice the balance tasks concerning the fuel oil supplies.

At first, the government commission, with Victor Khristenko at the head of it, will consider this question. According to our source in the White House, Mikhail Kasianov charged to elaborate the ways of the systematic adjustment of the fuel oil market.

Not counting some disagreements concerning the fuel oil problem, the discussion of the winter question was tranquil. The regional representatives didn’t demand money from Kasianov. Only Anatoly Chubais asked to allocate 5 billion rubles to RJES for fuel purchase. RJES is practically ready for winter. The coal supply comes to 99.7% of the planned task. The fuel oil supply exceeds the estimate for 4%. These figures give an opportunity to the oil companies to doubt about the necessity of the balance tasks. Chubais didn’t comment on this question.

After the reports of Ministry of Energy and State Construction Office, the government arrived at a conclusion that there will not be the fuel crisis in the country and “freezing” doesn’t threaten even to the inhabitants of the Prymoriye territory.

AUTHORITIES EVALUATE LIVES OF LOST SERVICEMEN IN DIFFERENT WAYS

Izvestia, August 28, 2002, p. 3 EV

A human life is priceless. However, it is set out in Russian legislation what compensation should be paid for a soldier’s death.

Military Insurance Office (MIO) spokesman Andrey Kazakov said: “Each close relative gets an insurance payout equivalent to 25 times the minimum monthly wage. Besides, a one-time grant equivalent to 120 times the minimum monthly wage is also provided. It is divided between the near relatives of the deceased,” the representative of the press service of the.

According to him, every family of conscripts who died in the Mi-26 helicopter crahs will get 182,000 rubles. Families of contract soldiers will get about 300,000 rubles, families of the junior officers about 500,000 rubles, and families of senior officers will get 600,000 rubles.

The Russian government doesn’t plan any extra measures concerning the relatives of those killed in the crash last week. But when the Kursk submarine sank, everything was different.

“The state’s so-called concern for the families of the Kursk crew might be more credible if officials cared about the parents of all the soldiers who are killed in Chechnya every day. Those 50 families of the Kursk crew are sure that the authorities wanted to pay compensation,” said Veronika Marchenko, head of the Mothers’ Rights Foundation.

Marchenko went on: “Parents write to us asking why the authorities consider it ‘more honourable’ to die underwater then in a burning tank in Grozny. In addition to the state support, the relatives of the Kursk crew got a lot of money from various charities. The army headquarters of the North Caucasus opened a special account too but the situation with it is different.”

“This happens because a death in the zone of hostilities is a usual thing for people. The sinking of the Kursk during exercises was an extraordinary event for the public,” the psychologist Reynaldo Peres Lovelle thinks.

RUSSIA INTENDS TO LEGALIZE PROSTITUTION

Nezavisimaya Gazeta, August 28, 2002, p. 7

The most implacable fighter against prostitution – the Interior Ministry – has now admitted that the oldest profession exists, only because it is impossible to eradicate it. They concluded that the legalization of the prostitution will help to reduce crime.

Vladimir Putin signed a decree aimed at resolving legal conflicts in the sphere of legislation concerning human trafficking. The Interior Ministry has set up a working group to develop the proposals into bills, aiming to develop the legislation.

The Interior Ministry considers prostitution to be the main customer in human trafficking, and intends to strengthen surveillance over any commercial structures that can be used as covers for the people trade.

According to Victor Plekhanov, the legalization of the oldest profession can become a positive event. “The legalization of prostitution has both positive and negative sides but the number of positives is greater. In that case, the number of crimes connected with abduction will decrease.”

It is necessary to note the economic aspects of the battle against prostitution. The government allocates great sums of money for this purpose, but the results fall short. In addition to this, the annual turnover of the Russian “intimate services” market comes to $770 million. So, taking into account the experience of the European countries, the legalization of prostitution seems to be the most effective mechanism in the struggle against its negative manifestations.

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