SPOTLIGHT ON THE AUTHORITIES

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SPOTLIGHT ON THE AUTHORITIES

Izvestia, December 19, 2002, p. 4 EV

Presidential aide Sergei Yastrzhembsky has spoken out against the idea of declaring a state of emergency in Chechnya, which is being promoted by some politicians.

“I think the situation in Chechnya at present does not require a state of emergency to be declared,” Yastrzhembsky said Wednesday in an interview with Ekho Moskvy radio. He observed that over the past few years the situation in Chechnya had been even more precarious at times, “far more so than it is at present”.

Yastrzhembsky said: “Now we have to concentrate on different tasks, including preparing for a referendum on the draft Constitution of Chechnya.” He maintained that the federal government would be able to ensure security during the referendum.

The Duma has requested Prime Minister Mikhail Kasianov “to consider issues related to the Air Force as soon as possible”. The request notes that since early 2000 Russia has seen 50 aircraft crashes – killing 178 people and destroying 24 planes and 24 helicopters belonging to the Air Force and federal executive agencies related to military service.

Foreign Minister Igor Ivanov reported Wednesday that the Russian-Japanese “action plan” which is expected to be adopted during the mid-January visit of Japanese Prime Minister Junichiro Koizumi to Russia will be finalized by the end of this week. Ivanov stressed that the “action plan” is likely to be a “unique document”.

BANKERS GIVE AWAY DEBTORS

Izvestia, December 19, 2002, p. 5 EV

While the Economic Development Ministry is drafting a bill on loan offices, the banking sector has resolved to take the initiative and establish an organization which will provide information on security for borrowers. It was announced at an annual meeting of the Interbank Settlement System, uniting some 90 Moscow-based and regional banks, that a Credit History Office will start operating in January in Russia. The Central Bank is backing this idea, believing that apart from putting general principles into practice such offices will promote confidence between loan market operators.

The Office will operate in compliance with worldwide principles of collecting information from banks that are willing to participate in the project. An ordinary file will contain general data, favorable and unfavorable information, financial reports of the borrower. The bank secrecy problem will be solved by means of written consent from a borrower for information to be revealed. Each information request is expected to cost a bank five to ten dollars.

RUSSIA EXTENDS OIL PIPELINE

Izvestia, December 19, 2002, p. 5 EV

Russia, Hungary, Slovakia, Croatia, Ukraine and Belarus have signed an agreement on cooperation in integrating the Druzhba and Adria oil pipelines. Due to this project, Russia will be able to export 15 million tons of oil a year via the Port of Omisalj (Croatia). Russian oil companies will pump the first petroleum through the new pipeline as soon as next year. However, they have not revealed the direction in which oil will flow through the new pipeline. This may come as a surprise for the world market.

YUKOS and Tyumen Oil Company (TNK) have provided their guarantees for the first phase of the project and promised to supply 5 million tons of their oil through a joint pipeline. Parties to the agreement have agreed to set at the initial stage of the project a single transit fee of $0.64 per 100 tons per kilometer.

The oil companies have their reasons for not revealing their plans completely. Now they have an opportunity to expand sales to Europe. The announcement by Aramco, the Saudi Arabian state oil company, about cutting its supplies in January by 10% has been very timely. This will enable Russian oil companies to occupy the niche released by OPEC member states.

An analyst with the Troika-Dialog brokerage says: “It is a very lucrative project for the Russian oil industry, no matter who has initiated it. Linking the pipelines will surely boost Russia’s export of oil by 5-7%. Russian oil companies badly need new outlets. The domestic market is completely saturated: and the domestic oil price is the equivalent of $5 a barrel.”

CHRONICLES

Izvestia, December 19, 2002, p. 5 EV

Currently, Russia is seeing a rather law level of capitalization of banks and as a consequence a low level of loans. This is what deputy chairman of the Central Bank Oleg Vyugin said at a press conference on “Lending for economic growth: problems and prospects” which took place at the Complex Strategic Studies Institute. Oleg Vyugin pointed out that well-established banks prefer to lend to large companies, not paying enough attention to the medium and small ones. In his words, this situation is conditioned by the very structure of the economy. The top priority for the Central Bank in future, in Vyugin’s view, is establishing and maintaining a stable market of short-term financial resources in order to support commercial banks in loan provision. Vyugin also reported that the Central Bank intends to preserve depository auctions and set interest rate ranges for deposits. Thus, clear checkpoints for refunding rates will be established.

A new freight and passenger ferry, the Georg Ots, sailing between St. Petersburg and Kaliningrad, will be brought into service from December 27. The administration of the sea port of St. Petersburg says the Georg Ots is capable of carrying up to 250 passengers and nearly 100 vehicles. The ferry covers the distance between St. Petersburg and Kaliningrad within 36 hours.

THE SLAVNEFT AFFAIR IS OVER

Izvestia, December 19, 2002, p. 1 EV

At an auction yesterday, the Russian government sold its 74.95% stake in the Slavneft oil company for $1.86 billion, which exceeded the starting price by $160 million. It took Sibneft and Tyumen Oil Company (TNK) three minutes to divide the shares after they had ousted such giants as LUKoil, Surgutneftegaz and the China National Petroleum Company (CNPC). A little-known company called Invest-oil bid on behalf of Sibneft and TNK.

HUNGARIAN PRIME MINISTER’S VISIT OF RECONCILIATION

Izvestia, December 19, 2002, p. 1 EV

An official visit by Hungarian Prime Minister Peter Medgyessy to Russia began yesterday. Just like all other negotiations between the Russian government and the authorities of East European countries (the former satellite states of the former USSR) this visit has its own implications. Medgyessy and Russian senior officials will have to revive bilateral relations that have been virtually frozen since 1998. Medgyessy’s predecessor, Victor Orban, had never concealed his negative attitude to the former “elder brother”, Russia. Moscow felt the same towards Budapest. The last visit by a Hungarian prime minister to Russia occurred in 1995. It is not surprising that the break in political contacts was followed by decline in trade relations. Peter Medgyessy, who took office in May 2002, had dissociated himself as long ago as the election campaign from the nationalist slogans of Orban directed against East European neighbors and, more importantly, against Russia. The new prime minister is a socialist. Hungarian left-wing forces, as well as those of other East European countries, have traditionally been less wary of Moscow than the right-wing forces.

In his first interviews after taking office, the new prime minister made it clear that he had set himself the objective of restoring close political and economic relations with Russia.

CHECHEN TERRORISTS IN PARIS

Izvestia, December 19, 2002, p. 2 EV

“It is very serious. This is a significant case”. That is how French Interior Minister Nicolas Sazrkozy commented on the arrest of four Islamic extremists in the suburbs of Paris. French secret services had real reason for concern, indeed. A group of militants who had been trained in Afghanistan and Chechen camps was preparing to use chemical weapons in the capital of France.

According to French secret agencies, the arrested militants had been watched for nearly a month. They did not have enough time to chose a target for a prospective chemical attack, but no one has any doubt about their designs. The police of Western Europe know Miruan bin Ahmed very well. In 2000, he was associated with the so-called Frankfurt terrorist group created by al-Qaeda. The group was planning to carry out a terrorist act at the world’s largest New Year Fair in Strasbourg.

Bin Ahmed had contacts with the al-Qaeda top leaders. Together with his associates, he was trained in al-Qaeda camps located in Afghanistan. After those camps were destroyed by U.S. forces, they moved to Chechnya where the training was completed. It goes without saying that the French secret services kept an eye on the Islamic extremists. Fortunately, the terrorists were caught red-handed before they managed to carry out their plans.

A well-known French judge was commissioned to investigate the case. He is in charge of the majority of investigations into activities of Islamic militants in France. The fact that the militants were linked to Chechen separatists has come as a great shock to France. Most likely, further investigation into this case will have a serious impact on the attitude of France to Chechen militants – who have enjoyed its sympathy until recently.

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