Moskovskii Komsomolets, October 18, 2002, EV

Pension Fund chairman Mikhail Zurabov announced yesterday that there will be at least three increases in pension payments next year.

According to Zurabov, the first indexation (5%) will happen as early as February 2003. In April, pensions will be raised by a further 11.2%. In August they will rise by 6%. Thus, the core payment for the old-age pension will reach 550 rubles a month in February and 600 rubles in August.

Workers’ pensions will rise by 21% in the course of next year. The Pension Fund promises that by January 2004 the average workers’ pension will be 1,777 rubles a month.


Izvestia, October 18, 2002, p. 5 EV

Deputy Economic Development Minister Maxim Medvedkov, Russia’s chief negotiator on membership of the World Trade Organization (WTO), admitted yesterday that no dates have been set for Russia becoming a WTO member. Russia will complete the consultations only when the Europeans and other partners in the talks agree to make some concessions. Essentially, this means there is nothing to show for the latest Russia-WTO meetings. Moreover, Russia may run into problems with having Europe recognize its market economy status.

Medvedkov said the other nations are frequently introducing new demands which haven’t been made before. The Russian delegation is in no hurry either. The Cabinet has requested the Russian Academy of Sciences to prepare a detailed analysis of the consequences of WTO membership for all sectors of Russian industry; this will be ready no earlier than December. So it appears that Russia is resigned to the fact that the Russian delegation is no longer working with any specific accession dates.

It’s no secret that if Russia is recognized as a market economy, this will reduce the ability of other nations to restrict access to their markets for Russian goods. Other nations will at least have to stop using “approximate” prices, and trust Russian statistics rather than applying figures which they consider to be closer to the truth. The European Union is proposing a form of compromise: Russia will get market economy status, but since its domestic energy prices are lower than export prices, the real value of Russian goods will be calculated based on energy costs in Hungary, for example. That would mean the adjusted prices of Russian exports could automatically rise by up to 40%. And Russia is not prepared to be considered a market economy on those terms.


Izvestia, October 18, 2002, p. 6 EV

Alexander Lebedev, president of the National Investment Council and chairman of the board at the National Reserve Bank, said at a news conference at the Izvestia Media Center that a balance has been reached between the amount of capital being taken out of Russia and the amount being brought in.

According to various analysts, the sums deposited by Russian citizens in bank accounts abroad total $150-200 billion. Lebedev said that only 3-5% of this money is of criminal origin. He painted an optimistic picture of Russia’s economic and investment future. According to Lebedev, there is now a balance between the amount of capital being taken out and brought into Russia. In his view, the main problem nowadays is something quite different: many foreign banks do all they can to hinder the return of money to Russia. Lebedev considers that the Russian regime can be described as one of the most stable in the world, in terms of political and economic risks.


Izvestia, October 18, 2002, p. 8 EV

In Moscow yesterday, Foreign Minister Igor Ivanov and a trio of ministers from the European Union discussed preparations for the Russia-EU anniversary summit in Copenhagen. The key topic on the agenda will be resolving the question of transit for Russian citizens across Lithuanian territory, to and from the Kaliningrad region. Both Russia and the EU say the decision will be “mutually acceptable”, but they are not revealing details about it.

Foreign Minister Igor Ivanov said after the talks with EU ministers: “We still have some differences, but we are already seeing a significant rapprochement between our positions, and eventually we are prepared to achieve a mutually acceptable solution to the Kaliningrad problem, one which takes into account the position of Russia, the laws of the European Union, and the sovereignty of Lithuania.” Ivanov later added: “As I understand it, that is our mutual view.”

When asked how flexible the EU was prepared to be in finding a solution to the Kaliningrad problem, EU foreign policy and security chief Javier Solana answered: “I would like to emphasize once again that we all want to find a solution to thid problem… But it is not a political problem; rather, it is a technical problem – and a solution which satisfies everyone and doesn’t affect Russia-EU relations should be sought at the technical level.”

Igor Ivanov said: “Russia is interested in seeing this summit produce some real results. But they should also realistically reflect the nature of the strategic partnership between Russia and the EU.”


Trud, October 18, 2002, EV

Yesterday’s Cabinet meeting discussed progress on preparing the nation for winter.

Prime Minister Mikhail Kasianov said: “The electrical energy system is ready for operations during the winter period. Fuel reserves are above target, and all scheduled maintenance work has been done.”

But the picture isn’t uniformly so fortunate. In a number of regions, fuel stockpiles are below target: Tatarstan (79.3%), the Bryansk region (95%), the Kurgan region (95.1%), and the Irkutsk region (97.8%).

Overall, the housing and utilities sector is significantly less prepared for winter than it was last year, said the prime minister. There are problems in 15 regions; and a shortage of money is apprent.