Trud, April 27, 2001, p. 2

In his opening speech at the Third National Congress of Manufacturers, Duma deputy Nikolai Ryzhkov immediately addressed the problems faced by Russian producers. There are many such problems.

In the oil, gas, and metals sectors, 60-70% of infrastructure is worn out; in some other sectors the figure is as high as 80%. This poses the risk of rapidly increasing numbers of industrial accidents. Russia’s intention to join the WTO makes the investment shortage in industry a more acute problem. According to the government, joining the WTO will make Russia an equal member of the global community. Russian producers believe that once Russia joins the WTO, they will lose the domestic market.

Moscow Mayor Yuri Luzhkov quoted some interesting figures. Last year alone, Volkswagen sales in Moscow quadrupled; Audi sales doubled. Zhiguli sales fell by 3%. Henry Novozhilov, chief executive of the Iliushin Aviation Plant, gave another example. Aviation, one of the most technologically progressive sectors, is losing out to the competition – many Russians are already flying in Boeing planes.

It’s usually said that productivity in Russian industry is low. Professor Dmitrii Lvov says this is untrue. According to his data, Russia is ahead of the United States in terms of labor productivity per ruble of the GDP. So why are most people in Russia so poor? Natural resources exports now account for 80% of Russia’s revenue; after privatization, these resources ended up as private property, and the tax royalties paid for their use are disproportionately low. Meanwhile, the government seeks to avoid clashes with tycoons, and practically encourages such policies.


Izvestia, April 27, 2001, p. 2

It seems that the president’s address to the Federal Assembly wasn’t just a declaration of intentions, but a guide to action; the Cabinet will soon submit some bills to the Duma which are aimed at implementing the ideas outlined by the president. Duma deputies will have to work overtime, and the Duma will remain in session longer than planned. This schedule will be confirmed at the plenary session on May 16.

By that time, four packages of bills will be submitted: the first is linked to changes in taxation policy; the second is aimed at structural changes (the Land Code has already been submitted to the Duma); the third concerns pension reforms; and the fourth deals with the judiciary. If the proposed natural resources tax changes follow the principles expressed by the president, it will mean a real revolution in the economy. The president considers it necessary to raise taxes for the natural resources industries, and cut taxes elsewhere. These changes will obviously run into some strong opposition from the oil lobby in parliament. That is probably why these bills are being submitted toward the end of the season, when exhausted Duma deputies are more amenable.


Izvestia, April 27, 2001, p. 3

Former governor Yevgeny Nazdratenko returned to his home turf of Primorye (Maritime territory) – incognito. He proceeded directly to the north of the territory, accompanied by his loyal followers. Those who oppose Nazdratenko are sure that the former governor intends to return to power. There is much talk of the Primorye elections being disrupted. On April 26, the territorial branches of Yabloko and the Union of Right Forces issued a warning to that effect.

Curiously enough, Nazdratenko’s visit to Primorye coincided with the start of legal proceedings aimed at restoring his closest associate, Konstantin Tolstoshein, to office. Nazdratenko resigned in favor of Tolstoshein, but the latter stepped down after presidential envoy Konstantin Pulikovsky arrived in Primorye.

Now Tolstoshein is saying that the present acting governor, Valentin Dubinin, basically forced him to submit his resignation – and he wants the court to restore him to power. He has some chance of success; lawyers think there were obvious infractions of the rules in the process of Tolstoshein’s resignation. The subsequent plan of action runs as follows: disrupting the elections won’t be difficult, it’s enough for four members of the Primorye election commission to resign on the eve of the vote. Under those circumstances, Nazdratenko’s opinion could be the deciding factor, since he personally supervised the appointment of election commission members.

If the elections are postponed, Tolstoshein will not give his office back to Dubinin. This would enable him to run Primorye, with the entire former team, until new elections are held – a period of up to six months. Therefore, Tolstoshein would be in charge of preparing for the election of a new governor and new members of the territorial parliament; if this is so, the election results will be entirely predictable.


Moskovskii Komsomolets, April 27, 2001, p. 1

A court has decided that Alexander Biriukov, member of the ultraradical New Revolutionary Initiative group, will be confined to a psychiatric hospital. As we predicted last summer, the Moscow City Court has declared the revolutionary insane and committed him for treatment.

Biriukov was suspected of involvement in a bomb blast which occurred on August 13, 1998 near the FSB reception office on Kuznetskii Bridge. It was a home-made bomb with a timer, containing the equivalent of 3.918 kilograms of TNT. Fortunately, the main charge failed to explode, and the FSB building only suffered damage worth 1,584 rubles; there were no casualties.