Moskovskii Komsomolets, December 7, 2001, p. 1

Yesterday the Cabinet heard an optimistic report from the Finance Ministry on how the federal budget has been implemented over the past nine months.

At first, everyone recalled the partially-forgotten economic growth; and even statistical confirmation was provided. GDP growth was 5.4%, the volume of the GDP was 6.5 trillion rubles. Investment exceeded 1 trillion rubles, having increased by 7.8% compared to the figure for the same period of last year.

Most importantly, there is some sign that inflation is slowing! Over the past nine months the inflation rate has been 13.9%, while the annual figure factored into this year’s budget was 18%. It seems, however, we are to make up for it within the remaining months… The highest rate of inflation registered in the first quarter of the year was 7.1%, and later it started decreasing: it amounted to 5.3% in the second quarter and 1.1% in the third quarter. The increase of the money supply during these months was 25%, or 65 billion rubles. However, this should not be a cause for concern; since, as is said, the stable size of gold and currency reserves provides the required backing.

Another point is that the federal budget is showing a surplus. Revenues increased by 40% against the same period of last year, amounting to 1.1 trillion rubles. Spending in the first three quarters of 2001 was around 1.24 trillion rubles…

But this is where the rough side begins.

The government has been working on the problem of tariffs for the national monopolies – gas, electricity, and rail transport. Undoubtedly, Cabinet members have reached the conclusion that tariffs must be increased.

A proposal from the Economic Development Ministry sets out plans to increase gas tariffs just once (in January), to raise electricity and rail transport tariffs twice (in January and June for the former, January and March for the latter). The maximal extent of the increase is 35% for all three monopolies.

The monopolies have agreed to the terms of increasing tariffs, but not the extent.

As we went to press, it was unknown whether the Cabinet had managed to reach a compromise with the monopolies.


Izvestia, December 7, 2001

Supposedly, there has been a most decisive improvement in the course of the election campaign in the Komi Republic, where elections for the head of the republic will be held on December 16. The political council of the Unity party (led by Sergei Shoigu) has decided to support incumbent Komi President Igor Spiridonov. Almost simultaneously, Spiridonov’s campaign headquarters has received a similar proposal from the authorities of Fatherland, signed by Yuri Luzhkov. It is no coincidence that this has happened just as a unifying congress of Unity, Fatherland and All Russia was taking place in Moscow, resulting in the emergence of a centrist party unprecedented in power and influence.

Spiridonov, with his economic and political experience, his adaptation to market conditions and exceptional energy, has become in the eyes of Moscow not simply an acceptable candidate, but an urgently-needed one; since otherwise there is the threat of destabilization in the Komi Republic.


Izvestia, December 7, 2001, p. 4

Further details about the resignation of Alexander Potekhin, St. Petersburg deputy governor, came to light yesterday. As we reported previously, St. Petersburg Governor Vladimir Yakovlev approved everything. Potekhin is the second deputy governor Yakovlev has lost within six weeks, amidst scandal.

Unlike his predecessor Valery Malyshev, who is suspected of taking a bribe in the form of a preferential loan from a commercial bank, Alexaner Potekhin is facing a “lighter” charge – illegal involvement in business. The criminal case against him was initiated on November 27 by the deputy general prosecutor for the North-West federal district. What’s more, this was done on the eve of the congress of Fatherland, Unity and All Russia in Moscow, which Potekhin attended together with Vladimir Yakovlev.

It is hard to overlook the links between a series of notorious scandals surrounding the St. Petersburg governor’s office and the strengthening role of the presidential envoy’s office in the North-West federal district.

Potekhin says the governor’s office will not place obstacles in his way, and he will now have greater freedom to speak about politics and specific people involved in it. The fact that at the insistence of the governor Potekhin will retain his positions as chairman of the board of the St. Petersburg TV and radio company and the board of Sankt-Peterburgskie Vedomosti (St. Petersburg Bulletin) will help him greatly in this cause. “Generally speaking, I have some major plans involving the media industry,” stresses Potekhin.


Izvestia, December, 2001, p. 2

Vladimir Putin’s decree allocating 20 million rubles from the presidential reserve fund for juvenile correctional facilities within the penitentiary system was published yesterday. The Justice Ministry was charged with monitoring the targeted spending.

Overall, the president’s list includes 42 correctional facilities in various regions of Russia. It is clear that not all of them will receive money. Primarily, juvenile correctional institutions in Abakan, Arkhangelsk, Novosibirsk, Pskov, Perm, Tomsk, Yuzhno-Sakhalinsk, and Rostov-on-Don are to receive the funding.