Izvestia, December 1, 1999, p. 1

From now on, Russian missiles will protect the skies of the Greek and Cypriot sectors of the Mediterranean. Moscow has confirmed its readiness to finish the implementation of its obligations stipulated by the largest export contract of the Russian defense industry for the past few years: the contract with Cyprus on delivering S-300PMU1 anti-aircraft missile systems. The missiles were brought to Crete last summer and stored there until better times, and now they are being deployed.

In Moscow, the last details of this delicate operation have been coordinated this week. On Tuesday, in the course of Greek Foreign Minister Georgios Papandreu’s visit to Moscow, the final agreement with Athens was made. This week Yannakis Khrizostomis, Defense Minister of Cyprus, will come to Moscow in order to discuss purely military-technical aspects of unfolding the “missile umbrella” in Crete. These aspects will be discussed on December 3, at the meeting with Russian Defense Minister Igor Sergeev and in the course of consultations with the authorities of the Rosvooruzhenie state company.


Komsomolskaya Pravda, December 1, 1999, p. 7

Aslan Maskhadov as the president of Chechnya has one official residence: the former building of the Grozneft company. But lately, bombardments surrounding him, he has been continually changing his dwellings. Now the bomb strikes on Grozny have become so intensive that it has become too dangerous for Maskhadov to leave his reinforced-concrete underground shelter. But it is terribly difficult to command troops from underground. Therefore, Maskhadov has temporarily shifted his main command point to the town of Shali. The only television transmitter left in Chechnya is said to be located there. The Chechen president and his adherents are broadcasting for two or three hours every night. Yesterday, for instance, Maskhadov described the defense of the settlement of Novogroznensky.

However, the shift of the command point from Grozny to Shali does not mean that Maskhadov has decided to give up Grozny without a fight. When Russians approach the city, Maskhadov will return to Grozny again and will personally lead the defense of the Chechen capital.


Parlamentskaya Gazeta, December 1, 1999, p. 1

In the middle of 2000 another financial crisis may start in Russia. It will be caused by activities of Russian internal “offshore zones”: closed administrative territorial organizations (CATO).

Senior Deputy Prime Minister Viktor Khristenko believes that the losses of the federal budget in 2000, caused by tax exemptions in these areas, may amount to 200 billion rubles.

There are about 40 CATO areas in Russia. Every closed city or settlement mostly attracts companies involved with the oil business, especially trading in oil products. A lot of impressive examples may be cited, but an elementary analysis shows that there are a lot of sham firms in Russian “offshore zones”, by means of which large oil companies evade taxes.

During the discussion of the 2000 draft budget, representatives of the government and Duma factions had to urgently assemble to decide what to do with the CATO areas. The problem is obvious: where there are tax exemptions, there are abuses. But another problem is how to save 200 billion rubles from swindlers and at the same time not to rob the “offshore zones” themselves of all their revenues. No solution to this problem has been found so far.


Rossiyskaya Gazeta, December 1, 1999, p. 1

An enormous batch of forged dollar bills of the “Chechen” AB27123…D series dated 1996 has been confiscated by officers of the Main Department for Combating Organized Crime (MDCOC) and its subordinate agencies in several regions of Russia.

Earlier MDCOC officers were told that an organized criminal group had printed $4 billion in counterfeit bills. These data are being checked now.

In May, MDCOC officers began to confiscate $100 bills of the aforementioned series in Kabardino-Balkaria, the Primorye and Stavropol Territories, the Khanty-Mansi Autonomous Area, in the Vladimir, Kaluga, Murmansk, Nizhny Novgorod, and Penza Regions, and in Moscow. Several thousand counterfeit bills have been confiscated.


Moskovsky Komsomolets, December 1, 1999, p. 1

The recent announcement of IMF Director Michel Camdessus, that it is impossible for the IMF to lend to Russia for political reasons, may cause the ruble to fall against the dollar.

Still, there is no panic on the currency market and among dealers so far: the dollar has risen only by 11 kopecks.

Meanwhile, the Central Bank is getting ready for distribution of its bonds: on November 29, the Finance Ministry was to register the issue of the bonds. Although the issue will hardly exceed one billion rubles, these securities will attract part of “free” rubles of commercial banks. The fall of the ruble against the dollar will also be delayed by the Japanese credit of $375 million. This credit will soon be transferred to accounts of the Finance Ministry.

What else can prevent the fall of the ruble, even if a hard currency panic breaks out? There are two such factors: holidays and the account campaign of enterprises. Holidays attract part of savings of citizens: they spend their money on presents and expensive food, so this money will not be taken to a currency exchange. And the account campaign is based on the ruble only. Therefore all enterprises will have to convert part of their dollars into rubles. Besides, it is necessary to pay taxes in rubles.

Common sense suggests that at the end of December the dollar will cost no more than 27.00-27.30 rubles.


Tribuna, December 1, 1999, p. 1

Chroniclers of recent Russian history have calculated that President Yeltsin has been on vacation or on sick-leave for 530 days of his time in office.

Rumors are circulating in Moscow that the president’s current ailment had been planned beforehand, and that such surprises as a transference of presidential powers to Prime Minister Vladimir Putin may be in store for Russia. Duma Speaker Gennady Seleznev has indicated the probability of this scenario. Other possible scenarios are being forecast in the campaign centers of all electoral blocs and offices of oligarchs.


Izvestia, December 1, 1999, p. 2

The Primorye Territorial Court is finishing the so-called case of police officers. The culprits are several former interior ministry officers, among whom there are former Director of the Main Interior Affairs Department of the Primorye Territory Vladimir Ipatov, and his deputy Alexander Bondarenko. They are accused of fabricating a bribery case against former Vladivostok Mayor Viktor Cherepkov in 1994. As a result of this fabrication, Cherepkov was dismissed. In the opinion of the state prosecutor, V. Dudin deserves eight years in jail, V. Bugrov deserves six years, A. Bondarenko five years, and V. Ipatov only two years of conditional punishment.


NTV, Segodnya, November 30, 1999, 12:00

Prime Minister Vladimir Putin has said that the president’s state of health is satisfactory. As we have already reported, Boris Yeltsin is now in the Central Clinical Hospital: his illness has a preliminary diagnosis of pneumonia. Putin has said, “The president did not even want to go to hospital, but doctors convinced him that this is a necessary measure. I think this was a right decision. I think this will let him recover very soon, which is necessary now that he intends to sign the agreement with Belarus. Besides, the president showed keen interest in the state of the Russian economy. He is in the picture about the current situation in the country.”

According to our sources, the president’s travel schedule has not been changed despite his illness. According to the Interfax agency, a special commission for preparation of Yeltsin’s visit to China has already arrived in Beijing. This visit is preliminarily scheduled for the beginning of December. Yeltsin is to meet with Chinese Premier Jiang Zemin.

Duma deputies have commented on the current hospitalization of the president in the following ways.

Duma Speaker Gennady Seleznev: I don’t see any political consequences. Nothing can hinder either the upcoming parliamentary and presidential election or the work of the Duma of the current convocation.

Viktor Ilyukhin: I don’t wonder that he is in the hospital today. Even when the president is not in the hospital, there is not much sense in this president.

Chairman of the Russian Regions Duma faction Oleg Morozov: Our president can be in two states: he is either sick or well. We saw him healthy in Turkey, but now he is sick again. I don’t rule out the possibility that tomorrow he will be hale and hearty again and resume his work.

Vladimir Ryzhkov, leader of the Our Home is Russia Duma faction: I don’t think the current ailment of the president should be connected with his possible resignation. As far as we know Yeltsin, he is keeping hold of power not only with both hands but also with his teeth and whatever limbs possible. Therefore, we should not expect any surprises.


ORT, Novosti, November 30, 1999, 09:00

A group of governors has announced its support for Prime Minister Vladimir Putin as a potential candidate for president. A special message has been signed by Bashkortostan President Murtaza Rakhimov, Sverdlovsk Governor Eduard Rossel, Tyumen Governor Leonid Roketsky, Chelyabinsk Governor Pyotr Sumin, and others.

The regional leaders of the Urals are convinced that if the feverish change of prime ministers begins again, there will be no stability in the work of the government. Their message states that it is strange that there is a flow of ill-grounded criticism of Putin in the media now. The authors of the message are also indignant at the rumors about his possible, if not certain, dismissal. Members of the Federation Council have supported the Urals governors.

Governors are criticizing those politicians who are trying to discredit Putin in the eyes of the international community, thus earning political scores for themselves.

It is rumored in circles close to the Federation Council that governors will soon estimate the rumors about Putin’s possible dismissal and will make a decision on Parliament’s support for the current prime minister.


ORT, Novosti, November 30, 1999, 15:00

Minister of Extraordinary Situations of the Russian Federation and leader of the Unity bloc Sergei Shoigu has stated that the government will pay all its debts to the military-industrial complex until the end of the year for the defense order. According to him, funding for national defense will be increased by about 45% in 2000.