Izvestia, August 24, 2001, p. 2

Prime Minister Mikhail Kasianov called August 23 “the day of priorities in the economy and social sphere”. At its meeting the Cabinet agreed to repay part of the debts due to the energy industry by state-financed organizations and approved 14 targeted federal programs at once.

Bearing in mind Prime Minister Kasianov’s statement last year “not to disperse the resources”, relating to targeted federal programs, the Cabinet members approached the issue of spending budget funds with utmost responsibility. Following a lengthy process of rejecting inter-department programs, only ten programs were approved, due to be financed from the budget in 2002 (versus 172 in 2000).

At a Cabinet meeting of August 23, each program was considered as a separate item on the agenda and was presented by the department bearing the main burden of responsibility for it.

Labor Minister Alexander Pochinok was the first to deliver his report. He announced the approval of the “Elder Generation” targeted federal program (scheduled for 2002-04). Having called the program “miserly in funding (with an allocation of only 780 million rubles), but significant in results”, the minister promised to expand by means of this program “the stationary basis of permanent residence for pensioners” and increase their leisure options.

The next speaker was head of the Ministry for Taxes and Duties Gennady Bukaev. He said that the government approved a draft targeted federal program of developing the tax-collection agencies. “Interests of the state and taxpayers correspond in regard to this program”, Bukaev said. He also stated that he plans to spend the sum of 2 billion rubles, due to be allocated for the program from the 2002 budget, on persuading the citizenry to pay taxes on a voluntary basis.

Vladimir Yelagin, minister coordinating activities of the federal authorities in Chechnya, stated that 4.5 billion rubles would be allocated for the “Restoration of socio-economic sphere of Chechnya” targeted federal program from the budget next year, whereas the total funding would be 14 billion rubles (together with the finance provided by non-budgetary sources). The funds will be used to restore housing, transport and road infrastructure, for repairing the electricity and water supply systems and also to “get the mass media functioning”. However, a special government commission under deputy prime minister Victor Khristenko will have the authority to amend the distribution of funding in the implementation of the program. Khristenko will see to the targeted utilization of the “Chechen money”.

A sum of 879 million rubles will be allocated next year for combating drug trafficking. Measures to increase soil fertility during 2002-05 will cost the budget 12.4 billion rubles.

Energy Minister Igor Yusufov faced the least luck. An “energy-efficient economy” draft targeted federal program (scheduled for 2002-05, and later to 2010) was sent off for a month of revision, for the most trivial reason: the 2002 budget doesn’t provide any funds to finance this program. However, Yusufov is optimistic; he expressed the hope that the 2002 budget will manage to allocate funding for the program of energy saving.


Izvestia, August 24, 2001, p. 3

On August 23, leaders of the Moscow Department for Combating Economic Crime discussed the pornography situation with the media. According to their reports, it’s necessary to establish a special system of expert appraisal to work out more specific criteria for categorizing pornographic materials.

According to Vladimir Tsvetkov, chief of the Moscow city Department for Combating Economic Crime, around 40% of Russia’s pornographic videos are produced in Moscow. The monthly output is estimated at some 2 million videocassettes, worth around 400 million rubles.

According to the current legislation, production and distribution of pornographic materials doesn’t fit into the category of major crimes. Article 242 of the Criminal Code envisages a maximal penalty of a two-year prison term. Most frequently the criminals manage to avoid imprisonment by paying fines.

Moreover, if a distributor or worker in an illegal video workshop can prove that they didn’t know they were producing pornography, this is considered an excuse, and they are released.

The borderline between erotica and pornography is unclear, from the legal rather than the cultural standpoint.

In order to fill in this gap, it has been decided to establish a special commission of psychologists, sociologists, doctors, lawyers and education experts. It’s not ruled out that this issue – which generates much debate about “where erotica ends and pornography begins” – will finally be resolved, or at least a framework will be set up.


Izvestia, August 24, 2001, p. 2

On August 23 the Stavropol Department of the Interior Ministry reported successful accomplishment of an operation in Karachaevo-Cherkessia. A special detachment of the Stavropol police and agents of the investigation group of the Prosecutor General’s Office in the North Caucasus detained in the Pervomaiskoe settlement a local resident, who is suspected of implication to acts of terrorism committed in Mineralnye Vody, Yessentuki and near Cherkessk in March.

Some 22 people had already been arrested before. Besides implication to acts of terrorism, some of them are accused of calls to violent seizures of power and enkindling inter-ethnic and inter-religious hostility.

According to Sergei Prokopov, a spokesman for the Prosecutor-General’s Office’s department in the North Caucasus, “a criminal grouping as if divided into two groups was undisclosed on the investigation. One group is specializing in acts of terrorism and is responsible for explosions in Moscow, in the Stavropol territory, and in Volgodonsk. The other group was preparing an armed rebellion”.

As has been ascertained during the investigation, an extended extremist network, building plans of establishing an integral Islamic state between the Caspian and Black seas was already operating as far back as 1999. Hundreds of followers of the Wahhabi ideology from the Republic of Karachaevo-Cherkessia had been trained in Khattab’s camps in Chechnya. Wahhabi mosques and madrasah leaders had openly been summoning to support the idea of establishing an Islamic state. Soldiers of the Karachaevo battalion in the structure of Khattab’s detachment followed this call during their invasion in Dagestan two years ago.

The battalion has still been in the action and enlistment of recruits still continues. According to the Prosecutor General’s Office, the brain-center of the extremist plot in Karachaevo-Cherkessia was destroyed after its leaders were arrested.


Izvestia, August 24, 2001, p. 4

On August 23 the headquarters of the Airborne Troops received a directive of chief of the Russia’s General Staff Anatoly Kvashnin to cut the job of deputy commander of the Airborne Troops for peacekeeping actions. Hence, the responsibility for peacekeeping operations gets over to the Ground Forces.

This step seems to be quite logic from an official point of view – the job is cut in connection with “the upcoming cessation of the Airborne Troops’ activities on the Balkans”.

By the highest standards, the issue whether the Airborne Troops of the Ground Forces represent Russia in the structure of the peacekeeping forces in Yugoslavia is not essential. To fulfill the objectives set – that’s what matters. However, even officials of the Ground Forces admit that they do not have any professionally trained peacekeepers now. To date, this has been a prerogative of the Blue Berets mainly.

Almost 4,000 paratroopers are now stationed in Kosovo and Bosnia; a battalion of Blue Berets is included into the Collective CIS peacekeeping forces in the area of Georgian-Abkhazian conflict. The Ground Forces are introduced by a single battalion in the area of the Georgian-Abkhazian conflict and a battalion of the 58th army (in Vladikavkaz), the latter being a part of the Combined forces in the area of Georgian-South Ossetian conflict. In Sierra-Leone Russia’s peacekeeping forces are introduced by a helicopter detachment of the army airforce.

Urgent measures have currently been taken in the Ground Forces to rise to the occasion. A center for training the personnel for taking part in the peacekeeping operation in Kosovo has been established in Tver. The opening training activities are scheduled for September 24.


Moskovskii Komsomolets, August 24, 2001, p. 2

Last Wednesday Russian antiaircraft services offered a heavy torment to their Kazakh counterparts. Radar stations of the Kazakh antiaircraft services spotted a Russian missile, which crossed the state border and exploded in the airspace of Kazakhstan.

A shell-hole of 14 meters in diameter and the depth of 5 meters shaped at the crash site. The explosion took place in the steppe at a 12-kilometer distance from Balkuduk. The accident caused no casualties and destruction, the State Agency for Emergency Situations of Kazakhstan reported. According to an official statement from Astana, the latest missile was the fifth one to crash in the territory of Kazakhstan over the last ten years.

This year the peak of missile crashes happened in summer. The Kazakh land is not the only one to know how Russian missiles explode. In June 2001 missile systems exploded in the Moscow region. A state commission has clarified that the fire, which broke out at storehouses of an antiaircraft missile defense unit owing to a short circuit, caused the explosions.

A commission under supervision of General Arkady Barsukov, chief of the combat training department of the Air Force is to establish the reason of the latest explosion.

It’s noteworthy that the accident took place on the eve of the day when Russia’s Finance Minister Alexei Kudrin was to meet with Kazakh Finance Minister Mazhit Esenbaev. In the course of the Moscow meeting they will discuss the issue of paying the rental of the Baikonur cosmodrome.


By the beginning of June Russia’s bank accounts held around 306 billion rubles in ruble deposits (a quarter of the country’s total money supply, including cash and non-cash accounts). Since the start of 2000 the amount of money in ruble deposits has increased by over 50%, and the sum of money deposited in hard currency accounts has doubled. What is the explanation for this powerful monetary inflow? Executive board deputy chairman of the Savings Bank (Sberbank) Gennady Melikyan clarifies this issue.

Question: How can you account for an increase of savings?

Gennady Melikyan: The material well-being of the majority of Russians has been improving over the last 18 months to two years – that’s the first reason. In 1999 the average per capita monthly income was 999 rubles, versus 2,159 rubles in 2000. A positive trend is obvious: prices have risen by 64%, whereas incomes have gone up by 216%. As a matter of fact, people’s real material situation is better than the statistics indicate, taking into account undeclared earnings. This presents an opportunity to increase savings. Restoration of trust in the banking system seems to be the second significant reason.

Question: It’s often said now that rapid economic growth is taking place in Russia. Do you agree?

Melikyan: In general, the entire economic situation is better than it was a few years ago. Industrial output has increased, as well as people’s incomes. However, following an upswing in 2000, the current situation is different. Last year’s upswing enabled us to achieve a higher level, whereas this year we are making almost no progress.

Trud, August 24, 2001, pp. 1, 5

(compared with the previous month; a negative figure means production decline)

January: -7.1%

February: -1.3%

March: 9.4%

April: -4.8%

May: -0.2%

June: 0.8%

July: 4.1%

Stagnation is out of the question thus far, but the situation is not as promising as it may seem after reading some official statistics. Despite being rather optimistic about the current economic situation, I have been feeling some concern recently. Many people in industry, with whom I often communicate, confirm my anxiety and note an increase of stock and lack of growth in orders in comparison with the previous months. In my view, all this gives us reason to carry out more thorough analytical work in our economic departments.