Parlamentskaya Gazeta, December 5, 2002, EV

Central Bank deputy chairman Oleg Vyugin has come out in support of the proposal to exclude political aspects from the relationship between Russia and the IMF, placing their interaction on a business level only.

“It is important that political aspects should not be involved in Russia’s cooperation with the IMF,” he stressed at a round-table meeting at the Federation Council on interaction between Russia and international financial organizations.

Vyugin favored retaining the option of borrowing from the IMF in case external economic conditions deteriorate. This possibility must be retained, though currently Russia is pursuing a well-balanced budget policy. It also has to participate in IMF programs for prevention of legalization of the proceeds of crime.

Russia’s debt to the IMF currently totals $6.335 billion, according to the director of the Federal Center of Project Financing, Alexander Shamrin.


Parlamentskaya Gazeta, December 5, 2002, EV

Prime Minister Mikhail Kasianov has taken part in the celebration of the 50th anniversary of the East Committee on the German Economy, an organization promoting commercial economic relations and financial investment in the states of Eastern Europe, Southern Europe and Asia, which has contributed greatly to the development of Russian-German business. However, not surprisingly, the scope of the Russian prime minister’s visit was much broader than mere participation in anniversary ceremonies.

An exchange of opinions with chairman of the East Committee on the German Economy Klaus Mangold was also very helpful. The Russian prime minister emphasized that German companies might be interested in investing not only in the raw materials sector, but also Russian high-tech sectors like aviation, aerospace, transportation and communications.

Kasianov held talks with Chancellor Gerhard Schroeder. They discussed several energy projects, including construction of the Baltic (more frequently called the North European) pipeline. According to Kasianov, the German government, as well as Ruhrgas (negotiations with Ruhrgas management were also discussed) are keenly interested in the project, since its realization will make it possible to meet the European Union’s steadily growing demand for gas. Construction of the Baltic gas pipeline is closely connected with development of the Shtokmanovsky gas deposit in the Barents Sea. Moreover, the two officials discussed the issue of the gas consortium’s operation, with Ukraine participating. They exchanged information on talks with the Ukrainian government regarding legal, technical and economic issues.


Izvestia, December 5, 2002, p. 2 EV

Yesterday, the Russian Federal Property Fund sold its stake in Russia’s petroleum giant LUKoil, once and for all. Having waited for four months, the government managed to obtain at least $70 million more than had been expected by investors in August. Successful accomplishment of the privatization deal proved to have a favorable impact not only on the government but also the company itself. Analysts believe that LUKoil shares will now increase in value.

The government’s stake of 50 million shares was floated on the London Stock Exchange. Without revealing its intentions, the government managed to forestall a drop in the share price (when investors learn that a large stake is expected on the market, share prices usually fall). Consequently, the shares were sold at $15.50, demand being double the supply.

The government has made up for a mistake it made in August, when a premature announcement about the date of sale led to a share price drop. According to an analyst with the Aton Company, Timerbulat Karimov, the government acted in accordance with market principles, since it took advantage of the market’s mood against the background of positive news regarding the company’s restructuring and a surprise factor. The latter secured over $70 million of extra revenue for the budget. In August LUKoil shares were priced at around $14.07.

As we went to print, the price was still falling, staying at $15.79 (0.25% less than on Tuesday). Analysts are confident, nonetheless, that soon the shares will recover. According to the estimates of Troika-Dialog Company, on the eve of the auction’s close too many investors were eager to purchase the shares while the price for them was low. Some 12 million LUKoil shares (approximately 1.5% of the total volume) were sold.


Izvestia, December 5, 2002, p. 3 EV

The Interfax news agency reports that it was officially announced in Grozny yesterday that a draft constitution for the Chechen Republic has been finalized. “The draft document underwent all essential tests and can be put up for a referendum,” head of the administration of Chechnya Akhmat Kadyrov told journalists. According to him, five versions of the Constitution had been submitted for consideration, originally. But in the course of discussion, the constitutional commission selected out one out of the five. Kadyrov is confident that all Chechens will take part in the referendum and thus express their attitude to the processes that are currently taking place in Chechnya and give their approval to the policy aimed at peaceful resolution of the situation in Chechnya. Earlier, it was reported that the referendum on the Constitution might take place in spring 2003.


Izvestia, December 5, 2002, p. 1 EV

On Tuesday, after leaving their base without permission, 16 soldiers of the Taman military division approached the Soldiers’ Mothers Committee office in Moscow to ask for some form of restraint on their excessively cruel commander. The soldiers arrived marching in formation, and unarmed, as if to stress that they were willing to continue military service in their division. Once the objectionable officer had been removed from the base, the soldiers returned to their unit. Three months ago, 54 soldiers in the Volgograd region carried out a similar plan. In this way, citizens of the new Russia are learning how to insist on their rights – although for the time being it takes the form of going AWOL.

It emerged later that the sixteen soldiers of the first company of military unit No. 61896 of the Taman Motorized Division had left their unit without permission.

The desertion of 16 soldier caused turmoil throughout the Moscow Military District. The runaways were taken to the assembly point of the Moscow Garrison. Officials from the press service of the Moscow Military District stressed that it was not to be considered a detention cell. Commander-in-Chief of the Moscow Military District Ivan Yefremov met with the protesting soldiers yesterday. Having seen that the soldiers were indeed willing to continue with military service, the commander-in-chief gave orders to dispatch them back to the unit.

This incident is reminiscent of an event three months ago. On September 8, five ringleaders took 49 other soldiers with them when they left military unit No. 20004 of the North Caucasus Military District without permission. A day later they reached the city of Volgograd, where they submitted a collective appeal to a local human rights group called Mother’s Rights. The soldiers were asking for measures to be taken against officers who had allegedly assaulted five privates several days earlier. It emerged, however, that behavior of the privates had caused the violence of the officers. Apart from that, the soldiers had commandeered an amphibious reconnaissance vehicle while under the influence of alcohol. Then the commanders managed to find the runaways and bring them back. The Military Prosecutor General’s Office instituted legal proceedings against one of the officers participating in the assault.

Tatyana Zozulenko, a representative of Mother’s Rights, told us that this organization is monitoring the situation. “The guys are all right now. They were brought back to the same military unit. We learned from the investigator that one of the five soldiers was prosecuted, whereas the rest were recognized as victims. We do not know whether the trial has taken place or not.”