Izvestia, February 8, 2002, p. 2, EV

At its meeting on February 7 the Cabinet discussed measures for ensuring macroeconomic stability. The issue turned out to be timely: according to reports of the State Statistics Committee, inflation in January exceeded the crucial level of last year and was 3.1%. The prime minister criticized Cabinet members for their inability to spend money properly. The Economic Development Ministry kept insisting on leaving the annual inflation forecast as it stands.

Inflation is the most evident sign of the macroeconomic stability, and therefore the government does not like to debate the inflation. Moreover, this issue has also the political tint for the Cabinet: the impossibility of restraining the prices within the framework of 12-14% installed into the budget at the same time with increasing the pension and wage rates for state employees and the rates for services of natural monopolies was clear from the very beginning. That is why Premier Mikhail Kasyanov prohibited discussing the topic of inflation and especially making any conclusions before the end of the first quarter of the year. However, the State Statistics Committee hurried up and published the figure of 3.1% (for January) right on the eve of the meeting. A similar slump in the prices would never be reasoned by mere “seasonal factors” (inflation growth is usually covered for in the government).

Deputy Economic Development Minister Arkadiy Dvorkovich who presented “measures to provide stability” at the meeting stated that the actual growth in the prices for foodstuffs and nonfoods was 2.8% at most, the same like last year. The highest rise was registered for medicines and printed matter, at which the VAT was introduced. Moreover, the State Statistics Committee has prematurely considered introduction of a full-payment scale for housing in Moscow as an inflation factor. Meanwhile, only 5 to 10% of the population in Moscow has to pay in full for housing, Mr. Dvorkovich said.

However, even if the committee actually overstated the inflation, the figure of 2.8% for a month is too much for a budget with the installed level of inflation of 12-14%. The situation of 2001, when the government had been insisting that the forecast for prices growth of 14% installed in the budget was executable, seems to reiterate itself. As a result, by the end of 2001 the inflation was 18.6%.

Members of the Cabinet swear that the errors committed last year would never be repeated owing to timely “anti-inflation measures.” On February 7 Kasyanov proposed to teach officials of the Finance Ministry the subject of spending the budget funds correctly. The government intends to bar the ruble from the over-growth and introduce clearing between the enterprises. The Cabinet promises to elaborate a package of measures for stimulating growth in the processing industries within one to two months, since the speed of economic growth gives no reason for rejoicing. The growth of prices nearly stopped in the fourth quarter of 2001 and the Economic Development Ministry explained with mysterious “seasonal factors.”


Izvestia, February 8, 2002, p. 2, EV

Over 250 extremist groups are operating in Russia at present. As a rule, their headquarters are based in Moscow. According to the Moscow Anti-Nazi Center, the capital has around 10,000 extremists: nationalists, neo-monarchists, anti-Semites, and national-bolsheviks. None of them call themselves Nazis, in order not to be prosecuted. However, this is a matter of semantics. The organization of similar groups in the provinces is worse, but they are just as aggressive.

Nationalist groups in Russia has been under surveillance of the Department for Combating Extremism and Regional Separatism of the FSB, we were told at the PR service of the FSB. “To control activities of similar organizations is among the main field of our work, and we devote peculiar attention to this very extremist component. When the organizations go beyond the framework of social safety – stimulate mass disorders or acts of terrorism, we have to employ repressive measures: we warn them that such organizations can be eliminated or, like in case of Limonov, accuse them of terrorism and forming criminal groupings.”

However, skinheads, members of Limonov’s and Barkashev’s groups commit unrevealed extremist actions rarely, confining themselves to assaults on foreigners and visitors from the North Caucasus.

The authorities of St. Petersburg deny that nationalistic organizations and racist spirits exist in the city, even despite an incident, which shocked the entire city. In late January a crowd of skinheads beat up Chinese student Van Chaoi on Nevskiy Avenue, Yelena Olen reported. The student escaped with concussion, contusions around the waist, and eye injuries. The youth speaks poor Russian but was sure that he had been beaten by local neo-Nazis, since all of them had been covered with swastikas. The police do not acknowledge that this crime, like many others, was racially motivated. Foreign students in St. Petersburg are close to despair. In the fall they went on strikes and sent an address containing a demand to stop the massacre to the law enforcement agencies. The address remained unanswered.

In mid-January a group of skinheads burst upon a concert by a local band at the local cinema Pioner of Irkutsk and caused a riot. The disturbance was stopped only after the police intervened. The majority of the detained skinheads turned out to be students from prestigious higher education institutions in Irkutsk. While questioned they did not conceal their affiliation with a neo-Nazi group and shared their ideology eagerly. According to the detainees, their task is to “cleanse Russia of non-Russians.”

Ten Chinese students left Orel late in 2001 and explained their departure by the fact that the city had become too dangerous to stay there, Sergei Zhdakayev said. Skinhead teenagers in black jackets were besieging the student dormitory and marching along its walls. “None of the Chinese students escaped being beaten up by skinheads,” said Galina Timokhina, dormitory superintendent of the Orel State Technical University. She was bandaging the heads of the injured students with her own hands.

A few dozen members of Barkashov’s group gather each weekend in the center of Krasnodar for mini-rallies. African students try not to leave their dormitories on these days. Graffiti reading: “Jews out of Russia!” can be seen on every second fence. Residents of Kuban cite their conservatism as a reason for that, Ararat Petrosyan reported. Even officials love repeating that non-Russian ethnic groups – Kurds, Yezids, Meskheti Turks – can only be guests in the Krasnodar territory, but not for long. Thus, attempts by extremist groups to draw attention to themselves in the south of Russia are failing so far, against the background of widespread nationalist sentiments.


Rossiiskaya Gazeta, February 8, 2002, p. 3

A new economic record has been held – Russia’s foreign trade displayed the best result over the past decade.

The State Customs Committee (SCC) has published dull statistic figures about Russia’s foreign trade in 2001, and they can be called a sensation. The country’s foreign trade turnover in 2001 was the biggest over the past decade and amounted to $141.9 billion, which is almost 4% higher than in 2000.

The foreign trade balance, as become habitual over the past few years, remained positive, what means we still export more than we import. However, the foreign trade balance figures shifted a little, and the imports snapped almost $10 billion off the exports. Everything was fine until the middle of the year, but then the importation began increasing suddenly and exportation started falling. Collapse of the oil prices was the reason, officials of the SCC think. If its price at the beginning of the year was $166 for a ton, in 12 months its price was $122 for a ton only. Even though the companies tried to repair for an omission by supplying more black gold to the foreign markets, a gap still appeared.

Reduction of the exports of metals, the prices for which decreased also, was the second reason for the shift. The price for nickel, for instance, fell 35%.

Now a few words about imports: it increased almost as regards to all categories of commodities. The purchase amount of engineering products increased 39%, purchase amount of foodstuffs rose 34% (purchase amount of meat increased 2.1 times, that of fowl doubled, and the exportation of butter increased 2.7 times). If an increase in importation of modern equipment can only be praised (as a matter of fact, the Economic Development Ministry proposed an initiative of decreasing the import duties for means of production in order our plants could acquire better equipment), something strange is happening with meat and butter. The official point of view is comforting, however: the imports increased “on paper” only, since all the goods are registered in the documentation, which means fewer smuggled goods are imported. However, the experts did not make out whether it is true or not yet.

Germany is in the lead among the most active foreign trade partners with Russia, with a large gap followed up by Italy, and the US. CIS nations are in the very end of the list. It seems they either have no money to purchase goods, or have nothing to sell.