MARKET ECONOMY STATUS FOR PIG-IRON ONLY

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MARKET ECONOMY STATUS FOR PIG-IRON ONLY

Nezavisimaya Gazeta, January 15, 2003, EV

The fact that Washington granted Russia market economy status last year has not influenced the practical actions of the US officials. We have recently learned that the US Department of Commerce has again decided to impose prohibitive import duties on sheet steel.

Washington’s decision to make life difficult for Russian exporters comes despite an agreement on a voluntary freeze on importing sheet steel produced by Severstal, the Magnitogorsk metallurgical plant, and NOSTA.

The value of the problem is fairly high. In 2002 Severstal supplied sheet steel worth $8 million to the American market. In 2003, the plant could in theory raise its deliveries to $20 million – this is what the US Department of Commerce decision is estimated to cost the Russian metals sector.

Even if the US decisions don’t have a considerable impact on the economic activities of specific enterprises, the consequences of these decisions could be much more long-term. For the first time, the extent to which granting Russia market economy status was merely a matter of words has become obvious. The decision to recognize Russia as a market economy state didn’t entail automatic revision or cancellation of existing duties, bans and quotas. Now each Russian exporter will have to achieve this independently. The metals sector has only proved to be the first. The Americans are strictly limiting imports of any more or less processed products, but gladly accept supplies of raw materials.

HOLIDAY TIME FOR HONEST PEOPLE

Izvestia, January 15, 2003, p. 5 EV

The annual meeting of the World Economic Forum (WEF) will be held in the resort town of Davos, Switzerland on January 23-28. Its theme will be “building trust”, and the main topics for discussion will be: global security, countering terrorism, prospects of developing the world economy and current problems of corporations. Over 2,000 guests are expected to attend the forum, including some heads of state and heads of government. This year, a “second-rank” group will represent Russia; Prime Minister Mikhail Kasianov won’t go to Davos.

It is still unknown which of the deputy prime ministers and ministers will take part in the forum. Most of them haven’t yet organized their schedules and will decide on attending the forum when the issue arises. Sources in the Cabinet staff say Kasianov has not issued any specific instructions to anybody. Thus far, our sources said, only Communications Minister Leonid Reiman intends to visit Switzerland. The prime minister thinks his own presence in Davos would be superfluous.

The topic of Russia has not been a focus for Davos participants for a long time. Russia’s economic situation is not a cause of concern; GDP growth is at a record level relative to global rates; and the Russian government is servicing its foreign debts on schedule. But Mikhail Kasianov has already told the WEF about his Cabinet’s achievements, at last year’s forum.

PROSECUTORS WILL NOT ALLOW AN ARTILLERY PLANT TO COLLAPSE

Izvestia, January 15, 2003, p. 2 EV

The Military Prosecutor’s Office of the Leningrad military district (LMD) has announced that the bankruptcy of the State Unitary Enterprise 775th Artillery Repair Plant will be prevented. Alexander Zhadnov, the external arbitration manager, has been discharged and criminal proceedings have been instigated against him.

According to the Military Prosecutor’s Office, a company called Prometei-Engineering was deliberately trying to ruin the largest artillery plant in the region and sell off its assets. The other day the Defense Ministry transferred 23 million rubles to the plant’s creditors, thus almost clearing its debts. Now the Military Prosecutor’s Office of the LMD will have to suspend the bankruptcy proceedings at some other major defense industry enterprises, including the Kronstadt shipyards.

A source at the LMD Military Prosecutor’s Office told us: “Prometei-Engineering demanded that external management be introduced at the plant. Alexander Zhadnov, who was appointed arbitration manager at the suggestion of Prometei-Engineering, began spending the plant’s funds; and later on, at a meeting of creditors, he attempted to pass a plan of external management according to which the assets of this strategic enterprise would be sold off.”

A source at the Main Military Prosecutor’s Office told us: “We have been keeping an eye on this artillery plant for some time. Our main goal is to have the bankruptcy proceedings recognized as unlawful.”

The Military Prosecutor’s Office of the LMD has managed to obtain a court decision on the replacement of the plant’s external manager.

CRIME IN MOSCOW

Nezavisimaya Gazeta, January 15, 2003, EV

Victor Zakharov, head of the Federal Security Service (FSB) for Moscow and the Moscow region, said at a meeting of the Moscow city administration yesterday that the Moscow FSB department has received a report from Interpol that Shamil Basaev intends to organize further terrorist acts in Moscow.

Vladimir Pronin, chief of the Main Interior Ministry Department in Moscow, said that the crime situation in Moscow is very difficult. According to him, 163,400 crimes were registered in Moscow last year, almost twice as many as in 1999. The city administration is concerned about crimes committed in residential areas and threats of terrorist acts. Officials propose to create special rapid response services in prefectures in order to protect Muscovites. However, this problem has not been solved yet.

PULIKOVSKII WANTS TO HELP JAPAN

Izvestia, January 15, 2003, p. 3 EV

Konstantin Pulikovskii, presidential envoy for the Far Eastern federal district, who accompanied Japanese Prime Minister Junichiro Koizumi last weekend, has arrived in Moscow to continue discussing Japanese issues. Mr. Koizumi’s visit to the Khabarovsk region conveyed that Japan would appreciate Russia’s assistance in solving some problems with North Korea. First and foremost, this concerns Japanese citizens abducted by the North Korean special services.

Pulikovskii’s visit to Moscow took place immediately after Japanese Prime Minister Koizumi’s visit to Khabarovsk. The Japanese leader talked to the presidential envoy for an hour and a half.

Mr. Pulikovskii said: “Mr. Koizumi was interested in my relations with Kim Jong-il.”

The meeting was held in private. Nevertheless, we have obtained some information about the talks. Mr. Koizumi noted that normalization of relations between Japan and North Korea requires a solution to the problem of Japanese citizens abducted by the North Korean special services in the 1970s and 1980s. Japan hopes that Pulikovskii’s influence on Kim Jong-Il would contribute to solving this problem.

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