04 June 2004 05:50
Daily Headline News for June 4, 2004
The following is a digest of headline news as of 5:30 p.m. on June 4, 2004: ZHUKOV TOUTS REFORMS
The situation in Russia following the March presidential elections provides a favorable environment for a wide range
of reforms, Deputy Prime Minister Alexander Zhukov told the Corporate Governance and Economic Growth In Russia
conference on Friday.
The president's task of bringing the country's annual
inflation rates down to 3% is feasible, Zhukov said at the
Administrative reforms will be further accelerated, simultaneously reducing the number of governmental functions and
governmental institutions. In addition, a new system of budget planning will be introduced, Zhukov said. ZHUKOV SAYS
RUSSIAN GDP GREW AT LEAST 8% IN 5 MTHS
Russian GDP grew at least 8% in January-May, which was higher than in Q1 2003, Zhukov said at the Corporate
Governance and Economic Growth in Russia conference. Economic growth of 8% in the first quarter of 2004, Zhukov
said.
"Now, if we were to estimate growth in the first five months of 2004, we could say that growth has been
sustained and will be at least 8%," Zhukov said. Although the economy slowed a little in March-April, the
government hopes high growth rates will last through the year, he said. ZHUKOV SAYS 3% ANNUAL INFLATION IS POSSIBLE
Corporate Governance and Economic Growth in Russia conference in Friday.
"I think that given certain conditions, we will able to meet this target by 2008," the deputy prime
minister said.
The government has not yet made its final decision on
Eurobond placement plans for 2004, Deputy Prime Minister
Under Russia's three-year forecast, inflation is expected to slow down to 8% in 2005, 6%-7% in 2006, and 4%-6%
in 2007. SHORT-TERM CAPITAL INFLOW, OUTFLOW NEEDS REGULATING - ZHUKOV
The government and Central Bank of Russia need to have a way to regulate short-term capital inflows and outflows to
prevent large fluctuations on the market, Deputy Prime Minister Alexander Zhukov said Friday at the conference on
"Corporate Governance and Economic Growth in Russia," Friday.
Zhukov told Interfax that the ministry now plans to submit
its 2005 budget parameters to the government by June 10 for
"It is in investors interests' for the government to have such instruments," Zhukov added. GOVT
UNDECIDED ON EUROBOND ISSUES IN 2004
Alexander Zhukov told Interfax on Friday. Earlier, Zhukov said that he personally did not see a great need for
Eurobond placements in 2004.
Finance Minister Alexei Kudrin said earlier that the outlook for Eurobond placements in 2004 would become clear on
June 5 when the ministry submits the forecasts for the 2005 budget and budget implementation in 2004 to the
government.
consideration at a June 17 meeting. ZHUKOV SAYS GOVT. TO LOWER VAT 2-3% IN 2006
The State Duma on Friday passed in the second reading
amendments to the law On the Government of the Russian
The government intends to introduce a flat VAT rate in 2006, lowering the tax at least 2%-3%, Zhukov said at the
Corporate Governance and Economic Growth in Russia conference.
VAT was reduced from 20% to 18% on January 1 this year. Russia also has a discount VAT rate of 10%. Although VAT is
now 18%, discounts do exist: some taxpayers don't pay VAT at all and others pay at the reduced rate of 10%, Zhukov
said. ZHUKOV SAYS STABILIZATION FUND TO REACH 300 BLN RUBLES BY END 2004
The stabilization fund into which Russia is channeling oil revenues will reach 300 billion rubles by the end of 2004,
Zhukov said at the Corporate Governance and Economic Growth conference. DUMA PASSES AMENDMENTS TO LAW ON GOVT
Federation, concerning the powers and functions of the government and the government structure and including the
judiciary in the executive authorities that report to the president.
State Duma Speaker Boris Gryzlov said the amendments would open up the way for completing structural and staff
changes in the government. MOODY'S SAYS RUSSIA WILL FIND IT HARD TO DOUBLE GDP
Russia's goal of doubling GDP by 2010 and reducing inflation to 3% annually is a salient one but will be hard to
achieve, Jonathan Schiffer, sovereign ratings analyst at Moody's Investors Service, told Interfax.
Moscow's Tagansky Court on Thursday has ruled that the
prohibition of a human rights rally staged on February 23 at
There are factors that the Russian government can control, such as natural monopoly tariffs, but there are many
factors outside its influence, he said. It is important for the Russian government to carry out the best policy in those
areas that it can control, in order to achieve the set aims, he added. CITIGROUP OFFICIAL: RUSSIA'S SELECTIVE
APPROACH MAY SCARE INVESTORS
MOSCOW. June 4 (Interfax) - Corporate management in Russia is generally improving, but the state's use of
selective measures towards individual companies, like what happened in the Yukos case, may scare investors away,
Citigroup Vice-Chairman and International Monetary Fund (IMF) deputy director Stanley Fischer said at the Corporate
Governance and Economic Growth conference in Russia on Friday. DUMA PASSES LAW ON RALLIES
The State Duma on Friday passed the controversial law on rallies, demonstrations, marches, and pickets in the third
and final reading. Following a major outcry, the bill was amending prior to the third reading to allow demonstrations to
be held near government buildings and embassies. However, mass events may be banned in areas directly adjacent to
facilities and structures where special safety rules are in force. The minimum allowable for organizers has been lowered
to 16. COURT RULES DISPERSING OF HUMAN RIGHTS RALLY ILLEGAL
Lubyanka Square in Moscow was unlawful. The rally marked the 60th anniversary of the Chechen people's
deportation, said the leader of the For Human Rights movement, Lev Ponomaryov, who filed the suit. GAZPROM ISSUES MAIN
SHAREHOLDER LIST
Russian gas giant Gazprom issued a list of shareholders with stakes of over 2% as of December 31, 2003:
Gazprominvestholding, Novye Finansovye Tekhnologii and Finkom owned 4.83% of Gazprom, Gazprom Finance BV - 4.58%, Bank
of New York was a nominal shareholder with 4.42%, Gazfond - 3.17%, Gazprombank - 3.08%, Gerosgaz - 2.93%, and Ruhrgas AG
- 2.5%.
The government owns 38.37% in Gazprom, companies own 36.28%, private shareholders - 13.85%, and foreign investors -
11.5%. TNK-BP HOPES TO SIGN KOVYKTA AGREEMENT BY OCT
TNK-BP hopes that an intergovernmental agreement on supplies of gas from the Kovykta gas condensate field to South
Korea and China will be signed by October 2004, when President Vladimir Putin is scheduled to visit China, TNK-BP
Managing Director for Production and Technology Victor Vekselberg said at a press conference in Irkutsk on Friday.
Vekselberg said that Gazexport would participate in talks with China and Korea on conditions for supplies of gas from
the Kovykta field. CREDITTRUST TRANSACTIONS STOPPED, BANK IN VOLUNTARY BANKRUPTCY
All payment transactions have been stopped in Credittrust bank branches and depositors are not sure whether they will
get their money back from the bank, after the bank went into voluntary bankruptcy, an Interfax correspondent reported
from the bank's headquarters Friday.
A bank official told Interfax Friday morning that depositors were advised to take questions to a bankruptcy
commission, which - he said - had started work. Bank managers Friday afternoon could not say who is on the
commission.
Fitch Ratings downgraded Russia-based Commercial Bank Credittrust's (Credittrust) international long-term
ratings to 'CC' from 'CCC+', with rating watch negative.
Olympic Committee President Leonid Tyagachev was chairman of Credittrust's supervisory board, said his press
secretary Darya Chervonenko, he is not involved in the bank's activities. CHUBAIS SLAMS RUSAL OVER SIBERIAN HYDRO
PLANTS
Unified Energy System CEO Anatoly Chubais accused aluminum giant Rusal of involvement in "aggressive
attacks" that were against the interests of all UES shareholders in Siberian hydroelectric power plants. He
appeared to be referring to an attempt to re-nationalize the Sayano-Shushensk hydroelectric power plant, an additional
share issue by the Krasnoyarsk hydro plant and a dispute concerning the construction of the Boguchany hydro plant.
A "major conflict exists with one UES shareholder - [namely] Rusal," Chubais said at a Corporate Governance
and Economic Growth conference in Moscow on Friday. "This shareholder is also one of our biggest consumers."
BOMB BLAST AT SAMARA MARKET KILLS AT LEAST 9
An explosive device with a capacity of approximately 1 kilogram of plastic explosives blew up at a market in Samara,
killing at least 9 and sending at least 33 to the hospital, the local police and sources in the Emergency Situations
Ministry's Samara branch told Interfax.
The Ukrainian Prosecutor General's Office has promised to
take on the case of former Ukrainian prime minister Pavlo
The bomb was activated by a hand-lit fuse. It was placed between a fence that separated the market from railroad
tracks and a shipping container, near a busy railway platform. CIS AND THE BALTICS AZERBAIJAN MAY STOP IMPORTING RUSSIAN
GAS FROM 2007
Azerbaijan may stop importing gas from Russia from 2007- 2008, a source in the republics Fuel and Energy Ministry
told Interfax.
"This year we are importing 4.5 billion - 5.5 billion cubic meters of gas. Next year we plan a similar volume,
but from 2006 we will reduce gas import volumes and from 2007-2008 we may stop them altogether," the source said.
UKRAINIAN PROSECUTOR'S OFFICE TO TAKE ON LAZARENKO
Lazarenko if he returns to Ukraine, deputy presidential chief-of- staff Vasily Baziv told a briefing in Kyiv.
On Thursday, a federal jury in California convicted the former prime minister of money laundering and fraud. He was
not sentenced.
Lazarenko announced plans earlier to return to Ukraine and resume his political career.
[Interfax] |
RUSSIA IN FACTS
