Izvestia, May 12, 2000, p. 2

On May 11, President Mintimer Shaimiev of Tatarstan commented on the new Russian government and the prospects for relations between Tatarstan and Moscow. According to him, the government should focus more on strategy, rather than on everyday issues. The Tatarstan president mentioned strategic tasks such as reducing the tax burden, changing customs policy, and resolving the problem of private ownership of land. Shaimiev also stressed that he still supports division of the powers of the center and regions, and that he still thinks it makes no sense to restrict the independence of regions. “Starting to restrict the freedom we now have will lead to an unprecedented open confrontation,” he said.


Moskovsky Komsomolets, May 12, 2000, p. 2

Sergei Stepashin, recently appointed as head of the State Auditing Commission, intends to have his department swing into action. In particular, he plans to build closer relations with the Finance Ministry and the Federal Treasury.

Yesterday, Stepashin announced that his commission has prepared an agreement between the Auditing Commission and the Finance Ministry, which is currently being considered by the latter. The agreement in question entails joint use of the intellectual, informational, and organizational resources of both bodies.

According to Stepashin, this agreement will make it possible to monitor the implementation of the federal budget much better, since currently the federal budget has many shortcomings. For example, in 1999 and in the first quarter of 2000 financing of budget expenditures was far from being even, which in turn caused failures in meeting a number of commitments on social and technical programs.

Finally, according to Stepashin, tax arrears now amount to 200 billion rubles, while total debts to the budget, including fines and penalties, amount to 500 billion rubles. That’s why in the near future Stepashin plans to suggest to the president some measures for improving the situation.


Izvestia, May 12, 2000, p. 2

On May 11, First Deputy Finance Minister Aleksei Kudrin made a sensational statement: in 2001 Russia will have its first deficit-free budget in recent history. The government will have to be positive, and at the same time cynical, to achieve this aim.

The audience to which Kudrin revealed the ambitious plans of the Cabinet proves that the intentions of the government are very serious. It is clear that the people who attended the national conference of regional departments of the Federal Treasury know the details of the budget process.

Kudrin also reported that according to the results of the first quarter of 2000, the absolute surplus of budget revenue over budget expenditures (the primary surplus) totaled 0.6% of the GDP. No wonder, since in 1999 Russia drew up a budget including a primary surplus under pressure from the IMF. This meant that in early 1999 Russia deliberately tried to minimize its expenditures, but in the second half of the year it quickly made up for that, and eventually the budget went into deficit again.

From now on, everything will be different. The government has firmly decided not to spend more than the budget revenues. According to Kudrin, “we are planning to stick to a deficit-free budget until the end of the year”. In any case, all the development strategies for Russia which are being discussed in the government and in the media contain proposals for a harder line on social services. The proposals are very different: from increasing the number of paid services to a sharp reduction in social subsidies. Theoretically, all this is very reasonable. Russia annually produces goods worth approximately $1200 per capita. This is far from enough to let the state be exceedingly generous. Given Russia’s poverty, pensions and welfare payments are not sufficient to keep really poor people above the poverty line. So, some cynicism is needed to reduce these expenditures even further.

So far, Kudrin has announced that the government intends to develop the 2001 budget taking the new Tax Code into account. He ended his speech very optimistically: “Over the last two years, Russia has learned how to live in accordance with its means.”


Izvestia, May 12, 2000, p. 3

On May 11, Chechen guerrillas again attacked a column of the Russian Interior Troops, which was on its way to North Ossetia via Ingushetia. At approximately 10:15 a.m. a column of two trucks, escorted by an armored vehicle, came under fire from the woods lining the road. Both trucks, which carried soldiers, were set on fire practically at once; guerrillas opened heavy fire from automatic weapons and sniper rifles. According to official reports, 16 soldiers of the Interior Troops were killed in this battle. According to the North Caucasus law enforcement bodies, 18 soldiers were killed, three more were wounded and one is missing.

Almost immediately after the ambush, heads of the Interior Ministry of Ingushetia, representatives of the Ingushetia Prosecutor’s Office and the Ingushetia Federal Security Service department came to the site of the battle; a patrol regiment was put on alert.

This was the sixth attack on columns of the federal forces since the beginning of March. However, the previous five ambushes took place in Chechnya.

Currently, North Caucasus law enforcement bodies have to not only locate and destroy the guerrillas, but also to find out how a group of well-armed guerrillas managed to cross the border between Ingushetia and Chechnya unnoticed. However, the answer to this question seems fairly obvious: guerrillas do not cross the border legally, and now that the forest is in leaf it provides ample cover for individual snipers and mobile guerrilla detachments.


Parlamentskaya Gazeta, May 12, 2000, p. 2

General Anatoly Kvashnin, Chief of the General Staff of the Russian Armed Forces, is visiting the NATO headquarters in Brussels. It is the first time since the air-strikes on Yugoslavia and the notorious freeze in relations between Russia and NATO that a senior Russian army commander has taken part in a meeting of the Russia-NATO Joint Military Committee, which was held during a meeting of chiefs-of-staff of NATO member states.

Russia made it clear long ago that, depending on the results of negotiations with NATO, it will be resuming its relations with the alliance, which keeps declaring a wish to resume contacts in full and in accordance with the Russia-NATO Basic Act.

However, in order for all this to happen, it is necessary for NATO to observe the provisions of the Act strictly and implement them unconditionally. The Act says that Russia should make plans together with NATO, as well as implement tasks; this is currently entirely neglected. Nevertheless, it should be admitted that Russia and NATO have a mutual understanding on some basic aspects of their cooperation in Kosovo.

Italian Admiral Guido Venturani, Chair of the NATO Military Committee, said that it is high time “to melt the ice and thaw the cold relations between Russia and NATO”; to which General Kvashnin replied that “there can also be movement in cold water”.

Currently, nobody believes that relations between Russia and NATO will improve rapidly. Russia justifiably believes that new relations with NATO can be established only on the condition that Russia takes part in all decisions concerning European security. Besides, Russia’s relations with the alliance should involve mutual obligations, rather that being unilateral, as they are now. Anatoly Kvashnin touched upon these issues in the course of negotiations with Germany’s Chief of Staff, General H. P. von Kirchbach, Belgian Chief of Staff Vice-Admiral V. Herteller, and others.


Parlamentskaya Gazeta, May 12, 2000, p. 2

Question: Yegor Semenovich, there were several candidates for the post of prime minister, including some senators. However, the president has chosen Mikhail Kasianov. What do you think of this?

Yegor Stroev: I believe Mikhail Kasianov suits this position very well. And not only because he knows how to manage finances; currently the situation in the world shows that money makes money, while the production of goods stands aside. In this situation the question is who can manage global problems of economy and finances in the government; and I think Kasianov is the right man.

Q: You said that in June the new President will address the Federation Council. What would regional leaders like to hear in this address?

Stroev: Today all Russia is waiting for normal state order to be established under the conditions of a market economy. And those who say that we should start from the very beginning, and start regulating everything, are wrong. Only social issues should be resolved by the state, those concerning ordinary people. It would be folly to let Russian pensioners, doctors and teachers live below the poverty line.

We would like to hear a fundamentally new concept for the budget. Currently, the main principle of budget formation is which region will give to the country, and how much – instead of who should pay, and how much.

Q: Yegor Semenovich, do you think the Duma will endorse Mikhail Kasianov for prime minister in the first hearing, or will it start its usual bargaining?

Stroev: When Vladimir Putin was appointed as head of the government, I said that Mikhail Kasianov would be the next prime minister. I still hold this view. He will be endorsed in the first hearing. I repeat: currently the government needs a prime minister who is an experienced financier. And Kasianov is the right man.


Rossiyskaya Gazeta, May 12, 2000, p. 5

Yesterday the fifth annual Russian Economic Forum opened in Yekaterinburg. This time its motto is: “Russia’s strategy of socio-economic development should be based on innovation.”

In past years, the attitude of the participants of the Urals forum to the federal government was rather critical, and they talked a great deal about the inequality of inter-budgetary relations between the center and regions, and lack of investment in industry. This year it has been decided to drop the criticism. Sverdlovsk Governor Eduard Rossel, who opened the forum, said the major theme would be innovation in domestic industry. This means that the expected economic growth will be possible if all Russian economic sectors and industries work together, and if internal resources are used properly. Industry leaders do not want to beg for help from the West anymore.

The city exhibition center organized an exhibition of products, in which about 190 defense sector enterprises took part. On the first day of the forum its participants divided into six groups, so that by the second day clear and developed proposals for the government could be made from the platform. There were many well-known politicians and economists among the invited guests, such as: acting Deputy Prime Minister Ilya Khlebanov, State Duma Chair Gennady Seleznev, Duma Deputy Chair Georgy Boos, Director of the Institute of Economy Leonid Abalkin.

President Vladimir Putin sent a greeting to the participants of the forum, in which he said: “I’m sure that the forum will make new proposals, which will contribute to increasing the economic potential of Russia, and to ensuring a decent life for the citizens of our country.”


Komsomolskaya Pravda, May 12, 2000, p. 2

Yesterday morning, tax police officers arrived at the offices of Most Bank in Moscow. Rushing into the building, they started searching and confiscating documents. The office of Vladimir Gusinsky, president of the Media-Most Group, and three other bank departments are in the Most Bank office building. However, Gusinsky was not in the building during the search. According to reliable sources, he is not even in Russia; he flew to Malaga Wednesday night. According to observers, this visit by the tax police to the Most Bank was linked to Gazprom’s suit against the Most Bank to recover a large loan. Official reports said that the search was due to criminal proceedings instituted against a former leader of the Finance Ministry.

People in balaclavas stood all around the building, attentively watching the windows, so that nothing could be thrown out of them. They made no comments; neither did several Most Bank staff who were let out of the building after noon. Reporters of the NTV television network were first to arrive on the scene. They started a direct broadcast; however, nobody was able to enter the building. The tax police department said that their staff were only ensuring the physical security of the operation, while confiscation of documents was being done by representatives of the General Prosecutor’s Office, as well as the Federal Security Service (FSB).

The FSB PR Center confirmed that FSB officers had participated in the operation, but refused to make further comments, saying that it was the General Prosecutor’s Office which had carried out the operation. The General Prosecutor’s Office also refused to comment on the events in the Most Bank building.


Nezavisimaya Gazeta, May 12, 2000, p. 1

On May 11, Vladimir Putin met with American media magnate Ted Turner. According to Turner, in the course of their conversation they touched on issues relating to the situation in Chechnya, “although not much was said on this matter.” Turner did not impart any details of their talk on this topic. The second topic they discussed was the destruction of nuclear, chemical, and biological weapons and other kinds of weapons of mass destruction. Turner noted that both countries can do without these weapons, since currently relations between Russia and America are friendly. However, Turner noted that there is a danger that weapons of mass destruction could be used illegally. According to Turner, in the course of the meeting he and Putin also discussed further cooperation between Russia and the US.


Nezavisimaya Gazeta, May 12, 2000, p. 3

Ludmila Narusova, the widow of former St. Petersburg Mayor Anatoly Sobchak, has presented a resolution of the St. Petersburg Political-Consultative Council. According to this resolution, 22 representatives of all parties and movements (except for the Communist Party and the Liberal Democratic Party) propose to vote for any candidate other than Vladimir Yakovlev. Narusova also asserts that Yakovlev is not supported by the federal authorities or President Vladimir Putin. She said, “I believe that Vladimir Putin’s personal feelings toward the governor have not changed. It is the situation that has changed. Now being the president, he has no right to take sides in a regional election campaign.” Moreover, Ludmila Narusova has accused Yakovlev of having made Smolny (the municipal administration) a place of protection for criminal structures; with Yakovlev’s wife, Irina Yakovleva, acting as a link between him and crime bosses. Sobchak’s widow has also announced that Boris Gryzlov, Sergei Stepashin, and Valentina Matvienko support Yakovlev’s rival, Igor Artemyev, in the election campaign.