Izvestia, June 6, 2003, p. 4 EV

Moscow has been bewildered by statements from US Undersecretary of State John Bolton, who practically accused Russia of conniving at the supply of weapons of mass destruction technology to IRan. According to the Itar-TASS news agecny, the Interior Ministry has described these statements as “empty words”, declaring that at both the St. Petersburg summit and the G-8 meeting in Evian world leaders confirmed their united stance in favor of common efforts to counter one of the main challenges in the world today: the proliferation of weapons of mass destruction. The question now being asked in Moscow: “Is this senior official expressing his personal opinion – ‘extravagant’, as usual – or is he simply expressing the views of those groups in Washington which are opposed to the strategic choice in favor of partnership and cooperation confirmed by the presidents of Russia and the United States?”


Izvestia, June 6, 2003, p. 3 EV

In Mozdok yesterday, a female suicide bomber detonated the explosives around her waist when standing next to a bus carrying personnel from a military airfield. Seventeen people besides the terrorist herself were killed in the resulting explosion, and 16 more injured. Most of the dead were women.

The Laz service bus was making its usual run from central Mozdok to the airbase yesterday morning. The driver was a contract serviceman named Oleg Angelopov. At 7:30 a.m. the bus passed a railway crossing, around 1.5 kilometers from the end of the bus route. There were 40 to 45 people aboard the bus, most of them women who worked at the airbase.

Sergei Babaev, head of the Mozdok emergency services directorate: “Witnesses said that a woman dressed in white was standing by the side of the road, asking for a ride. But the bus didn’t stop, since the driver was strictly forbidden to carry civilians. As the bus drew level with the woman, there was an explosion.”

The terrorist herself was blown to bits, and investigators who arrived on the scene were unable to identify her. Six passengers on the bus died instantly; eleven others died in hospital. Sixteen more people have been hospitalized with various injuries.

Prosecutor General Vladimir Ustinov immediately informed President Vladimir Putin of this terrorist attack. According to Ustinov, a connection with Chechnya cannot be ruled out.


Trud, June 6, 2003, EV

A Cabinet meeting yesterday discussed and approved a draft of the federal budget for 2004. The Finance Ministry’s draft promises economic growth of 5% and a 10% inflation rate. Prime Minister Mikhail Kasianov promised that living standards and real wages would rise next year. Among the budget’s priorities are national security, science, education, and health care. The government has not yet determined where the money required for all these fields will come from. The prime minister promised that funding sources for all specified spending items would be found within the next two months.

The draft budget assumes that the GDP in 2004 will be 15.1 trillion rubles; state revenues will be 2.686 trillion rubles; and state spending will be 2.591 trillion rubles. There should be a budget surplus of around 95.057 billion rubles. As usual, the budget for the year ahead is being described as “socially oriented”. Initial proposals have been to increase spending on defense and law enforcement by 65 billion rubles, on education by 18 billion rubles, and on science by 6 billion rubles. The issue of improving the primary vocational education system has finally been included among the budget’s priorities; Education Minister Vladimir Filippov presented a special report on this at the Cabinet meeting.

Distribution of budget money will be a topic of debate in the Duma today; Duma members have no intention of conceding to the government on the issue of continued taxation reforms. The chief complaints from the Duma relate to reducing VAT, abolishing sales tax, and tax on gas. All three of these issues have a major impact on revenues for both the federal budget and regional budgets. Until the taxation bills are passed, any attempts to consider the figures for next year’s budget are no better than fortune-telling. The approach of the parliamentary elections is making Duma members less inclined to compromise. At any rate, members of the trilateral commission have been unable to find a compromise. Neither is there any consensus in the Federation Council on the taxation bill package. Under the circumstances, analysts believe the government will have serious problems in getting amendments to the Tax Code passed by the Senate.

Finance Minister Alexei Kudrin said that reducing the tax burden from 34.5% to 33.5% in 2004 will require “restraint in spending”. However, he is confident that the budget can cope with an increase in spending on social services and science to 465 billion rubles. In order to improve relations with the regions, the Finance Ministry’s draft raises assistance to regional budgets by 32 billion rubles, to a total of 305 billion rubles.

Immediately after the Cabinet meeting, Kudrin told journalists that “the government has no intention of returning to sales tax”. He said that the package of taxation bills should be approved by the Duma in the first reading within the next week. Whether recalcitrant Duma members agree with Kudrin will become clear today, when they count up all the compensation money the Finance Ministry proposes allocating to the regions.