RUSSIA’S ELITE

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RUSSIA’S ELITE

Profil, September 16, 2002, p. 2

The RosBiznesConsulting agency’s recent poll asked people to describe those who make up the elite in Russian society today. Around 28% of respondents said the contemporary elite are members of criminal organizations; 23% of respondents named the oligarchs; and only 8% of respondents included politicians in the elite.

ARE THINGS GETTING BETTER?

Profil, September 16, 2002, p. 2

The Public Opinion Foundation has done a poll on the question of whether the situation in Russia has been improving recently. The results: 36% of respondents consider that the overall state of affairs is not changing; 35% say that things are getting better; 21% say things are getting worse; and 8% are uncertain.

SHAIMIEV DOES NOT BELIEVE IN THE RUSSIA-BELARUS UNION

Inostranets, September 17, 2002, p. 6

President Mintimer Shaimiev of Tatarstan, in a recent speech in Kazan, was very skeptical about the prospects of creating the Russia-Belarus Union. In his view, “Belarus will never accept the loss of its sovereignty”.

Russia’s regional leaders have always been irritated by plans to create some form of “union state” in which Belarus would have privileged status compared to Russian regions. This time, Shaimiev noted that he had been among the first to say: “There can be no agreement on creating a Russia-Belarus state.” According to Shaimiev, “there is the example of the European Union, which is deeply integrated and has a common currency; there is no other way.”

Shaimiev also said: “President Putin’s statement has finally made everything clear. People should not be left in confusion. How can they unite? There is no conclusive answer to that question. There can be a union; everything else is mere decoration. Even if President Lukashenko of Belarus wanted unification, and it suddenly did happen, it would only be a headache for Russia. The Belarusian opposition, Belarusian political parties and movements, and all the people of Belarus who have had sovereignty – they will never consent to lose it. And subsequent events could lead to the collapse of the unified state.”

OUR NUCLEAR FACILITIES ARE VULNERABLE TO TERRORISTS

Inostranets, September 17, 2002, p. 4

Last week, Greenpeace Russia sent a report to the IAEA saying that Russia’s nuclear facilities are “insufficiently protected”. The environmentalists reached the following conclusion: “The terrorist attacks in the United States have shown that existing security systems at nuclear facilities, including those in Russia, are vulnerable to terrorist attacks. A year has passed, but the situation remains practically unchanged.”

In part, the report notes that a federally-operated storage facility for spent nuclear fuel at the Leningrad nuclear power plant “is in lamentable condition, and lacks special security measures”; while the storage facility for spent nuclear fuel at the VVER-1100 reactors in the Krasnoyarsk territory “is almost entirely unprotected from terrorist attacks, not only from the air, but from the ground as well”.

OIL TURNS TO THE EAST

Novaya Gazeta, September 16, 2002, p. 14

The Russia-China oil pipeline will be completed by 2005. Russia will supply China with up to 30 million tons of oil a year.

At the recent meeting between the prime ministers of Russia and China, the Angarsk-Dajin pipeline project was described as “a shining example of economic cooperation”. Moreover, Prime Minister Mikhail Kasianov and his Chinese counterpart Zhu Rongji gave it most favored project status.

The corresponding 25-year contract will soon be signed. Russia is represented by the YUKOS and Transneft companies. In the near future, Russia will submit the first set of the project’s technical and economic plans for an environmental impact assessment. Oil will start flowing from Russia to China in 2005, at the rate of 20 million tons a year. By 2010, oil exports via this pipeline will reach 30 million tons a year.

China’s interest in Russian oil is so great that the Chinese participant in the project (PetroChina) has already said it is prepared to lend over half the money required to build the Russian part of the pipeline. China already has energy shortages, and by 2005, when the Angarsk-Dajin pipeline goes into operation, those shortages will be worse, having a painful impact on China’s burgeoning economy.

Selling oil to China via the new route will be very profitable for Russia. This “move to the east” will enable Russia to diversify its oil exports, by gaining and securing a substantial and wealthy customer as China.

Around $1.1 billion will be invested in the transport sector, and this money will reach Russian enterprises in the form of orders. The oil pipeline will run across Buryatia, the Irkutsk region, and the Chita region; local specialists will be employed to build and operate it. It will create thousands of jobs, and regional budgets will benefit from extra tax revenue. This will provide a boost for regional economies. Actually, for Buryatia the construction of the pipeline will be just about its main source of tax revenue for several years. Around $1.5 billion of revenue will be directed into state coffers at various levels.

DRUG ADDICTION REACHES DISASTROUS LEVELS

Shchit i Mech, September 12-18, 2002, p. 1

President Putin has held a meeting with representatives of all agencies which are meant to be fighting the spread of illicit drug trafficking and drug addiction as a whole.

Putin said: “The overall situation in this area resembles a disaster. It’s as bad as the situation in some parts of the country which have been hit by flooding… The scale of the disaster is too great for us to calmly observe what is happening here… Ordinary measures are not enough; we need some new proposals which would lead to some real changes in the battle against drugs.”

Putin issued instructions to prepare proposals within the next month for improving inter-agency coordination and developing additional measures for countering the spread of drugs and drug addiction.

At a news conference after the meeting, Interior Minister Boris Gryzlov said Interior Ministry figures put the number of drug users in Russia at 2 million – and that this presents a threat to Russia’s national security.

Gryzlov said that this year police have focused their efforts on putting a halt to the activities of organized crime groups. “The results have had an effect,” said Gryzlov. According to him, police have found 20% more crime groups this year than last year. Assets to the value of 1.2 billion rubles have been confiscated from organized crime groups.

Gryzlov also drew attention to the performance of the courts; in his view, the sentences they hand down are often too lenient. According to Gryzlov, last year over 60% of those responsible for major crimes escaped punishment.

MOSCOW MAYOR’S TAX AMNESTY PROPOSAL

Kompaniya, September 16, 2002, p. 6

Moscow Mayor Yuri Luzhkov has presented President Putin with a proposal for a limited “tax amnesty”. This would only apply to those who put their money into purchasing housing, building hospitals and schools, or agriculture. In that case, the state’s taxation agencies would not require them to file income tax returns or pay taxes.

In a letter to Putin, Luzkhov has already set out his ideas and asked for support. The president’s response is unknown as yet. But the issue here is worth several billion dollars – that’s how much money the Moscow government hopes to attract into the city’s construction industry.

In early summer, there was some high-level discussion of a “tax amnesty”. At a meeting of the Chamber of Commerce and Industry, President Putin said it was essential to return capital from offshore zones to Russia, and pledged not to be too harsh on those who invest in the Russian economy. Now the mayor of Moscow has decided to “support” this fashionable issue. The underlying motive for his proposal could be a wish to facilitate the growth of Moscow’s construction industry, which is the municipal treasury’s major source of revenue. According to some estimates, there are around 600,000 construction workers in Moscow – and they all need to be employed. And the Moscow mayor, being a “strong manager”, is naturally concerned about this.

THE NATION PREPARES FOR PUTIN’S BIRTHDAY

Versiya, September 16, 2002, p. 13

Russia is being swept by birthday fever. President Vladimir Putin will turn 50 on October 7. Rumor has it that one tycoon wants to hire the Kremlin State Palace for a grandiose concert starring singer Josef Kobzon. Some of the Moscow mayor’s subordinates have already proposed to re-name a street or square in honor of Putin. One oligarch wants to give Putin an asteroid which will carry his name; another wants to give him a yacht. Sergei Shoigu’s gift might be expected to be a live bear-cub; leaders from the east may give a herd of horses. It’s already clear that Putin will be given many paintings: landscapes from the regions.

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