Izvestia, September 2, 2000, p. 3

According to Mikhail Lapshin, leader of the Russian Agrarian Party: “Creation of the State Council will make it possible to improve administration of the economy of Russia, and to place the agricultural sector among the priorities of its development. The rich potential of regional governors and presidents of republics, most of whom are ‘people close to the land’, will aid to improve the administration of the major sectors of the Russian economy.”

Defense Minister Igor Sergeev thinks: “I am positive about creation of the State Council. I think some structural changes of the Russian state power are highly necessary. Creation of the State Council lays a special stress on the executive branch of power. The Russian government passes lots of laws, but unfortunately, their quality does not correspond to reality.”


Izvestia, September 2, 2000, p. 2

Russian and Norwegian specialists finished negotiations on retrieving the bodies of the Kursk sailors. According to Igor Spassky, general director of the Rubin central design bureau, Rubin and Norwegian Stolt Offshore signed a protocol on the beginning of raising the bodies of the dead Kursk sailors. Spassky said in his interview with St. Petersburg TV that he had already given to Norwegian specialists the major document “Cutaways in the submarine Kursk for divers’ access into the submarine compartments”. According to a Norwegian rescuer, divers will make eight holes in the body of the submarine; torpedo and reactor sections will not be touched.

According to Spassky, not all of the bodies are likely to be found in the submarine; he also added that “we will try to do our best to fulfil the task”. The evacuation operations will involve three divers, one Norwegian and two Russians. The Norwegian diver will be coordinating the submerge and control the operation; a Russian diver will get inside the ninth compartment; another Russian diver will be staying in the cutaway and secure the work inside the submarine.

The protocol does not give the exact date of the beginning of the operation. The leaders of the Northern Fleet do not confirm the announced earlier September 25. According to the North Fleet press service, that referred to the speech of Deputy Prime Minister Ilya Klebanov, the rescue operation is supposed to be started in late September. Klebanov also added in his speech that “most different reasons are able to change the plans”. The Northern Fleet press service refuse to comment on the possible “reasons”, but sources in the Rubin design bureau hint that it is not only the weather that might interfere with the beginning of the rescue operation – however they give no comments either.


Izvestia, September 2, 2000, p. 2

On September 1, Gazprom board of directors held a meeting in Moscow. it was expected that the board of directors would discuss the next meeting of Gazprom shareholders, where a number of amendments to the regulations of the company is to be made. According to the present regulations, the director of Gazprom can be dismissed by unanimous decision of the governing board of the company only. The suggested amendments suppose dismissal of director by the overwhelming majority of voices. The meeting lasted until late at night; however, according to the latest data, no extraordinary shareholders’ meeting was announced as yet. Thus, so far making amendments to the Gazprom regulations has been postponed. Another issue for the company board of directors is the initiative of former Deputy Prime minister Boris Fedorov, who insists on liquidating the division of the Gazprom share market on Russian and foreign.

On the Russian stock market ordinary shares of the concern are being sold, they cost about $0.3 per a share; meanwhile, each certificate, which is ten shares, sold on the western market, costs about $6 per a share. According to experts’ calculations, if Fedorov initiative is realized, a Gazprom share will cost about $0.5 – then Russian shareholders would profit, and western ones would lose. Judging by everything, so far Fedorov has not succeeded with his plan.

As a result, the only decision of the meeting was the decision to pay intermediary 0.07 rubles per a share dividends to the company shareholders. According to the Gazprom press service, the dividends will be paid from the company profit, which, after repaying all the taxes, totaled 59.6 billion rubles. 1.6 billion rubles are to be spent on paying dividends to shareholders.


Segodnya, September 2, 2000, p. 2

Lubov Sliska, Duma deputy speaker: “The decision of the president on establishing the State Council proves that the long-needed state power reform in Russian will be revolutionary. Creation of the State Council, which will involve all regional leaders and presidents of republics will “equalize” the regions. Besides, the work of regional leaders in the new consultative body will mean that all the decisions are made collectively. In particular, none of the regional leaders objects to improving the state institutes.”

Yury Luzhkov, Moscow Mayor: “The State Council will be a useful body, since it will be analyzing the political and economic situation in Russia and will recommend only the best decisions to the Russian president. However, it is not a constitutional body, and its functions ill be only consultative; it will not be a strategic and decisive structure, at least, until the new Constitution is passed. So far, nothing has been said about any changes of the Constitution. It is necessary to determine the major functions of the State Council: it should take its place in the system of the Russian state power.”

Gennady Raikov, leader of the “People’s deputy” Duma faction: “The major objective of the State Council should be brining the regional legislation in conformity with the Constitution of Russia. Forming of a consultative body like the State Council corresponds to the major objective of strengthening the state power structure and establishing control over the activities of the regional leaders. If the State Council works effectively, if it helps reinforce the state, it is not rules out that in the future it will become a constitutional body, of course, after certain changes t the Russian Constitution are made. But amending the constitution is a very difficult process; and even if there is a way to make it easier, it will take time to introduce the novelties.”

Aman Tuleev, governor of the Kemerovo region: “I support the idea of creation of the State Council, and in my time I suggested its establishment myself. It is very good that only regional governors will work in the State Council – then, their responsibility for their proposals will increase since they will propose only things they know very well about. It is very important that they meet with the president regularly, that they could discuss vital issues and effectively realize the made decisions.”


Moskovsky Komsomolets, September 2, 2000, p. 2

During the yesterday’s meeting with students of the journalism department of the Moscow State University, Mikhail Gorbachev was attacked by neo-fascist hooligans.

Two 25-year-old men pretended to be students and sneaked into the hall where Gorbachev was making his speech. Both hooligans wore light-colored jackets, and at first nobody paid much attention to them; but suddenly one of then took of his jacket, under which he wore a red arm-band with a swastika, jumped into the center of the room and started shouting loudly: “Death to Jews!”. The security neutralized the hooligan very quickly. At the same time another hooligan jumped on a table and started to wave a human skull.

Gorbachev was not flustered, he even offered to his opponents to make a speech from the platform, if they had anything to say. The “opponents” had nothing to say and had to leave the room. By the way, students are at a loss about how the hooligans could find out about the meeting: Gorbachev’s arrival was a surprise for them too.


Segodnya, September 2, 2000, p. 5

Ashot Yegiazaryan, deputy head of the Duma budget committee, commented in his interview on considering the 2001 federal budget by the Duma: “Redistribution of the budget revenues in favor of the federal budget is undoubtedly a positive moment. For example, next year funding those whom the government granted privileges will be fulfilled from the federal budget. Before such funding was made from the regional budgets; but, perhaps for some objective reasons, the funds were not always spent on what they should have been spent. Since June both the Federation Council and the Duma have been considering the bill on transferring to the regions some of the tax revenues to compensate for the lost revenues. The budget draft stipulates allotting 208 billion rubles to aid regional budgets.

Over the past week it was demanded many time to increase the defense spendings. Defense spending is the largest budget spending, besides, 206 billion rubles allocated for it are 47% more comparing to 1999. Secondly, it should not be forgotten that the budget draft was made socially oriented; amending the defense spending article, we will make it military oriented. As for the opinion that the announced 4% GDP growth has been understated, many people think that if this year the GDP growth will amount 5.5%, it will surely be no less than 4% next year. To my mind, this forecast is a bit too optimistic, we should not forget what allowed such a high GDP growth this year. So far the budget committee has no common position on amendments to the budget; but we believe there should not be any principal changes. Overall, considering the current situation, I can see nothing negative in the budget draft: it is adequate to the current economic situation in Russia, which, to my mind, is still very difficult.”


Novie Izvestia, September 2, 2000, p. 3

According to Mikhail Zurabov, chair of the Russian Pension Fund, in 2001, pensions in Russia will be increased by 18.8%, which is higher than the expected 12% inflation rate.

According to him, next year pensions will be increased by 340 to 450 rubles a month; the average pension in Russia will amount to 1260 to 1300 rubles a month.

In September the government will consider the issue of funding the pension reforms; the model of paying pensions in the future will also be considered. The government will also have to decide if the pension payment system should remain distributive, but slightly modified, or if it should become accumulative.


Novie Izvestia, September 2, 2000, p. 2

Last Thursday the government approved a draft of the new law on privatization – now it is to be considered by the Duma. According to Vladimir Pekhtin, member of the Unity faction and the head of the Duma property committee, “previously, privatization has been carried out without giving a second thought to its consequences. According to different esteems, currently there are 13,000 to 15,000 state-owned enterprises, which had better be sold, in order to support small businesses to make it grow. Of course, the privatization should be transparent, and all state interests should be taken into account, as well as all the previous mistakes.” Pekhtin also added: “Selling its property, the state must be assured that the money received from the sale will be invested into development the small businesses, in order to make up for all the mistakes and insults of the first privatization. Currently we ask very often two questions: ‘why does everything go abroad?’ and ‘why do everybody steal?’ the answer is easy: ‘because there is no stability’. Fortunately, now the politics is changing in Russia. The ruling bodies and the head of the state should be strong; while the electorate, who advanced the president with trust, should aid the authorities: to work for the state.”


Vremya MN, September 2, 2000, p. 4

On September 1, the State Auditing Commission considered a report on the audit of the use of state property by Russian Joint Energy Systems (RJES). Sergei Stepashin, head of the commission, has not sparked a conflict with the RJES leaders, though he has not denied the words he said to President Putin a week ago: that the State Auditing Commission discovered many problems, including some privatization problems. Still he has not finalized all the details. According to him, the commission “appealed to the prosecutor’s office, so that it carried out the final juridical expertise of the RJES activities”. The board of the State Auditing Commission has arisen the question three times: considering the results of the July inspection were postponed. According to the official data, because of the urgent necessity of a further juridical examination; according to unofficial data, because of the fuss raised by RJES. Yesterday Stepashin showed miracles of diplomacy: he even praised Anatoly Chubais for his good work. Obviously, Stepashin has tried to avoid any responsibility; that’s why he transferred the case to the head of the government, so that he had to decided hat to do with the results of the inspection of the RJEO. Stepashin said commenting on this: “If the law cannot be implemented, and if there are some violations of the Constitution in the law, there is a procedure of resolving the conflict in the Constitutional Court, that is to be initiated by the government.”

Chubais was pleased with the results of the audit. He said in his interview with Interfax: “It is very important that the State Auditing Commission and even auditor Sokolov agreed that the claims in question are not the claims to the leaders of RJES.”


Argumenty i Fakty, No. 35, September, 2000, p. 9

According to the Social Political Institute of the Higher Economic School, headed by Yevgeny Yasin, real incomes are still 10% down against June 1998. Russia has not been able to regain the pre-crisis living standards as yet. At the same time, the situation is better than could be expected.

If in 1998 the IMF did not mind granting Russia a $5 million loan, currently it refuses to lend Russia even money to repay its debts. Nonetheless, over the past six months economic growth in Russia has totaled 7% (though officially only 5% economic growth is being announced, in order not to pay debts to the IMF). According to expert appraisals, savings of Russian citizens have been increasing, though the number of banks has been reduced. Over the past five months of 2000, the number of bank accounts in Russia has increased by 20%. The majority of accounts are long-term: for two years and more (at the beginning of June 2000, there were 30.1% of such accounts in banks, which is 1.7% more than for the same period of 1999).

According to Sergei Aleksashenko, head of the Center for Development of Russia, “The government should first of all resolve three major issues: first, the Central Bank of Russia has printed too many rubles, and the Russian economy is currently unable to ‘digest’ them. Secondly, after the crisis the quality of Russian products has not improved in the least, and people buy them only because imported goods are too expensive for them. And finally, there is still capital flight from Russia. If the Russian government resolves these issues, everything will be great.”