GRYZLOV WILL HAVE A HARD TIME

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GRYZLOV WILL HAVE A HARD TIME

Moskovsky Komsomolets, November 22, 2002, EV

There have been many skeptical responses to Interior Minister Boris Gryzlov’s election as head of the supreme council of United Russia.

Duma Deputy Speaker Vladimir Lukin (Yabloko faction) considers that the Interior Ministry “is among the most problematic and complicated ministries – and now the person who heads all this, and who apparently has little free time, will take on heading Russia’s largest political party.”

Duma Speaker Seleznev echoes his colleague: in his opinion, with Gryzlov’s arrival, United Russia has taken on responsibility for the work of the Interior Ministry as well: “Voters will extend their grievances against the Interior Ministry to the party.” Seleznev also said that Russian law does not allow A-category state officials to be active in political parties. “It appears that an experiment is underway. We’ll wait and see what its outcome will be,” said Seleznev, ambiguously.

Alexander Mitrofanov, a leader of the LDPR, suggests that Gryzlov will give United Russia a tremendous amount of administrative resources and provide it with “exclusive conditions”: “It appears that a political structure headed by the interior minister – that is, a security minister – has a great advantage since this structure is essentially represented everywhere – in every district and in every village.”

NORILSK NICKEL BUYS ITS U.S. RIVAL

Izvestia, November 22, 2002, p. 2 EV

Yesterday a Russian company made the largest purchase of an American company in Russian business history, and gained an opportunity to entrench itself in the North American market. Norilsk Nickel, a mining and metals company, purchased a controlling interest in the Stillwater Mining Company (SWC), the market leader in platinum-palladium group metals. The deal is valued at $341 million. Norilsk Nickel will pay part of that amount in palladium (about 876,000 ounces, estimated value $241 million as at November 19, 2002), and $100 million in money. If the price of SWC shares falls below $7.50 within 15 working days after the transaction is completed, the contract says that within 30 days Norilsk Nickel is supposed to make an offer to SWC shareholders for the purchase of an additional 10% of shares in circulation at the price of $7.50 per share. As a result, Norilsk Nickel’s stake in Stillwater could rise to 56%.

The boards of directors of Norilsk Nickel and Stillwater have already approved the transaction. Its completion still requires the agreement of Stillwater’s shareholders and the introduction of amendments which are acceptable for Stillwater’s creditor banks to the credit contract (valued at $250 million) after the waiting period set by US anti-monopoly laws expires. The deal is expected to be finalized in the first half of 2003.

STATE SERVICE IN TEST MODE

Izvestia, November 22, 2002, p. 4 EV

There are 1,053,000 public servants in Russia at present, and all of them are facing some substantial changes. The president has submitted the bill on the system of state service in the Russian Federation to the parliament, and signed a decree related to the federal program for reforming state service. Public servants are being told to become “more compact and better integrated”, and work according to a system “which is free of Soviet-era holdovers, but does not anticipate events either”.

Both documents are results of lengthy work by a committee headed by Dmitry Medvedev, Deputy Director of the Presidential Administration. The Duma will be advised to give this bill high priority, and the decree has already come into force.

According to Medvedev, the bill creates a “framework” for future changes in the legislation: three kinds of state service have been determined (civil, military and law enforcement); a universal system of rated ranks will appear; procedures for resolving conflicts in state service will be laid down. The program, which thus far is meant to cover three years, offers an opportunity to test further measures through pilot projects: determining optimal salary levels for officials, sorting out the personnel training situation, and working out how greater openness may be introduced to state service. The program’s costs will be minimal – 539 million rubles, over half of which will be spent on research efforts. The program developers say only its results will enable the overall costs of reforms to be calculated.

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