In June 1996 the total industrial output of defense complex enterprises equaled to 73.2% of the June 1995 figure. The worst June 1996 results were registered in the departments of communications industry (57.7%), electronics (60.6%), ammunition and special chemistry (65.7%) compared to June 1995 level. In June 1996 industrial output of civil products was 65.7% of the June 1995 result, of military products - 86.1%.
The submarine will become the first product of finance and industry group "Sea Engineering of Non-Atomic Submarine Construction", which united the bank and the enterprise. The group includes not only Incombank and "Admiralteiskye Verfi", but also the Central Designing Bureau for Sea Engineering "Rubin". 8-10 submarines are supposed to be produced. "Rubin" bureau head, the group president Igor Spassky believes that the most prospective market for these submarines is South-Eastern Asia. The group's 5-year sales revenue should reach $1 mn.
The general technical agreement was signed by "Avtotor" board of directors chairman Valery Sokolov on behalf of the Russian side and by KIA Motors vice-president Pak Je Hek on behalf of the South-Korean side. According to this document, the auto-assembling plant will be licensed by KIA and receive a 10-year technical support and spare part packages to assemble cars and mini-vans. The plant will occupy about 10% of "Yantar" shipbuilding plant production premises. However, "Yantar" will not quit its main specialization. The general agreement stipulates both opening of an auto-assembling plant and $1bn investments into industrial development of regional enterprises and into organization of regional enterprises, which will produce 65% of spare parts for the main plant.
At present this oil concern shares equal to $0.37. In early June "Surgutneftegas" shares were sold at $0.58. In late June the company's shares moved down to $0.30. The number of buyers went up by 24%, the number of sellers - by 96%. Foreign capital is very inactive at the market of oil companies' securities.
He said that liquidation of the least profitable mines is part of the complex reform of the mining industry, the strategy of which was defined by the Russian government.
MICM rate (Rb/$) CB rate (Rb/$)
August 13
5276
August 15
5283
5285
The par Buying
Selling
Market
value (rbls) price
price
value
LukOil
25
10.00
10.10 10.05
Rostelecom
12.5
2.7
2.73
2.725
Norilsky Nickel
250
7.83
7.88
7.89
RAO Edinye
500
0.0871
0.0877 0.0879
Energeticheskiye Sistemy (Unified Energy Systems)
During the first 6 months of 1996 RF Defense Industry Ministry's enterprises received 46.3% of the money budgeted for the first half of 1996 in the Budget Law. The budget received 1,099,000 bn rbls from defense enterprises, while they transferred 1,289,000 bn rbls to the federal budget (4,006,000 bn rbls to all the budgets). The companies' credit debt is 54,673,000 rbls and debit debt - 23,661,000 bn rbls. These figures prove that the defense complex enterprises are in a very hard financial situation and most of them are unable to improve it.
The projected 1996 inflation tempos are approx. 10% less than last year. Evgeny Yasin pointed out limitation of internal market loaning as one of the government's achievements. At present it equals to 12% of GDP, while in the USA this figure reaches 20% . Since the beginning of the year the amount of cash rubles in the country increased by the average 4% per month. Minister said he is against any significant increase of cash amount as it may cause another twist of inflation.
The first deputy minister of finance Andrey Vavilov reported that in the first half of 1996 the budget revenue was 130,700 bn rbls which is 84.2% of the budgeted figure. For the first 6 months of the current year the federal budget spendings equaled to 139,300 bn rbls (94.8% of the budgeted figure).
Primorie region Tax Police Department press-service reported that Primorie debt to the budget is 63.5 bn rbls bigger than the total wage debt to striking Primorie miners. The department organized a special group to provide budget debt payment by Primorie enterprises and organizations. Within 3 weeks the group members arrested the property of over than 20 different organizations which did not make the necessary payments to the state budget. Tha accounts with 84.4 bn rbls belonging to these organizations were arrested.
"The Committee for Social Policy Issues offers not to approve the laws due to the real economic situation", the committee chairman Vladimir Torlopov said. The offered wage law would require un-budgeted 8,700 bn rbls to indexate social payments to people. Realization of this law would lead to a complete revision of the federal and regional 1996 budgets, experts calculated.
In the first half of 1996, 32% (instead of budgeted 15%) of all the budget spendings were used to finance wage and wage debt payments, the first deputy chairman of the RF government Oleg Lobov said during his speech at the Federation Council. However, he said, that the summary wage debt reached 29,900 bn rbls by the end of June.
In 1995 315,000 tons of vegetable oil were imported in 1995, twice as much as in 1994. Russian vegetable oil production declines. About 80% of oil seeds are processed in three regions: Northern Caucuses (41%), Central Chernozemie (23%) and Povolzhie (16%). Prices for vegetable oil are the lowest in Stavropol, Krasnodar, Saratov, Maikop. In 11% of Russian cities, Northern region and Sakha Republic oil prices are the highest - over 15,000 rbls per liter. The average price 11,000-15,000 rbls is registered in mid-Russia.
The leading participants of the sugar market intend to organize an association of sugar-producers. The committee experts expressed concern, that organization of the association will lead to appearance of a new monopolist capable to influence sales and pricing policy at the sugar market.
The people spent 70% of their incomes on goods and services, 7% - on fees and taxes, 4% - on savings (deposits and securities), 10% - on foreign currency.
75% of the total grain purchasing volume will be corn. This year Russian agriculture producers will harvest 77 mn tons of grain (compared to 63.5 mn tons in 1995). The minister does not deny, that the reduction of grain demand in Russia is due to the reduction of livestock. The country depends on food import by 35%. Within the several years Russia has a chance, minister said, to lower this index down to 10%.
The Federation Council approved changes in the law "Concerning Customs Tariff" and, thus, two types of import duty privileges. First, equipment, mechanisms and materials as part of loans granted to Russia by foreign countries and international organizations under corresponding agreements may be imported duty-free. Second, equipment and spare parts having no domestic analogues may be also imported duty-free.
At present Russian industry spends 0.906 rbls per 1 rbl of production earnings, while last week this figure equaled to 0.72 rbl. Fuel and energy costs share 21% in the structure of the industrial product price.
As of August 1 1996, pharmaceutical products, electronic integral schemes and micro-assembling and all excise goods (alcohol and tobacco products, gasoline, cars, jewelry made of precious metals and stones and pearls) are to be no more under effect of preferential import regime. From now on import of the above mentioned goods, no matter where they were made, is imposed according to the basic rates of the import tariff. Earlier they were levied by 75% of the basic rates in case they were imported from developing countries. Provided that these goods were made in underdeveloped countries, they used to be imported duty-free.
Duty privileges are not valid for excise goods imported to Russia as a humanitarian support. Humanitarian goods, which are to be paid for by Russian residents, according to the foreign- trade agreement, are not covered with import duty privileges either.
The supporters of investments into extraction industry will submit two lists of oil, gas, gold and other fields of the first and second priority instead of one list of 250 fields. The first- priority list will include 30-50 fields. Foreign investors will be allowed to take part in the development of only approx. 4% of all Russian mineral resources. The total amount of investments, that may be attracted to Russia, after the new rules are adopted, is estimated to be worth $100 mn.
According to the law, if import of dumping-price goods affects Russian industry, a decision to levy anti-dumping customs duty on all sources of dumping import can be made. Besides, if import of any goods, production of which was subsidized by foreign countries may affect the domestic industry, compensation measures may be used against such imports. In case Russian internal market lacks certain types of goods the law allows to introduce temporary prohibition or limitation of export of these goods.
The first sale of a kind is to be held soon at "Tulaelectroprivod" Corp., which owes about 36 bn rbls to the local and federal budgets. The corporation's board of directors decided to sell part of property, which is not involved in the main production, such as a cafe, a summer camp for children and a dozen of cars and trucks. "Arsenal" plant, "Melodia" Corp. are facing the same future.
Although the Federal Department for Bankruptcy Cases declared the air- company bankrupt and decided to sell it at an investment competition, regional government prepares a letter to the State Property Commission with a request to make the airport a regional property. Although in October 1994, the air- company was announced insolvent, the company still operates.
The loan is aimed to finance a project, under which the department-owned residential fund will become municipal property. The project is estimated to be worth approx. $551 mn. It is targeted to create a stable model of the residential fund financing and managing at the expense of the private sector. 6 Russian cities were chosen by a competition to join the project. The project developers decided that Orenburg, Petrozavodsk, Ryazan, Vladimir, Volhov and Cherepovetz are the cities, where the real estate reform was the most successful.
A 15% stake in the plant was sold by Perm Regional Property Fund to a Swiss company "Minmet Financing Co". 53% of the shares were left to the plant employees and 32% are owned by several private Russian companies. The regional authorities pay back foreign loans with "Solikamsk Magnum Plant" Corp. products. Particularly, the corporation's products were used in Russian-German credit and a trade agreement regarding supplies of German equipment to streamline Perm enterprises. According to the conditions of the stock agreement, the Swiss side is obliged to invest $3 mn into the enterprise.
The city will pay about $6 mn to buy "ZIL" controlling interest. When Moscow buys Mikrodin's stock of ZIL the plant will finally have to publish its plan of crisis overcoming. Not much is known now: ZIL will move its casting department out of Moscow and lay off about 4,000 people.
Nickolai Ryzhkov was elected a chairman of the executive coordination council of the People's National Patriotic Forces (PNPF) movement. Gennady Zuganov became the chairman of the movement. Orthodox communists like Ampilov and Tulkin are not among PNPF leaders. The opposition is for the "variety of property types" and an evolutionary way of the society development. One of the PNPF leaders Stanislav Govorukhin claimed that the communist idea can not be supported by either an absolute or relative majority of people and alleged that "orthodox communists" are the main threat to salvation of the nation from the criminal regime.
It's the first time since the beginning of the war, when the fighters could start such a huge attack in three sectors at the same time. The head of Chechnya separatists Zelimkan Yandarabiev and the head of the Chief Headquarters of the opposition formation Aslan Maskhadov were against the fighters' August 6 attack on Grozny. They had to accept this decision under pressure of the most irreconcilable part of the military opposition, the head of the OSCE support group in Chechnya Tim Guldimann said.
The Union administration plans to start the strike on August 25, Miner's Day. The main demand of the miners is payment of the wage debt, which comes up to 1,700 bn rbls.
Most of the Russian Navy enterprises with 150,000 employees working for them are on the edge of closure. RF Defense Ministry owes 450 bn rbls to Russian Navy employees, who have not received their wages for 2-3 months, or even since April in some regions .
According to the official information, for almost a week of Grozny battles, 155 federal servicemen were killed and 553 wounded. In Grozny fighters destroyed 5 tanks, 16 military vehicles and 3 artillery weapons of the North-Caucasian military district.
The separatists' headquarters spokesmen reported that Mr.A.Maskhadov "agreed to accept A.Lebed's plan of Chechnya conflict regulation". Chechnya opposition would be satisfied with a Tatarstan- style status of Chechnya within the Russian Federation. Such an opinion was expressed by Aslan Maskhadov during his talks with Alexander Lebed in Chechnya.
AN UN-PLANNED SESSION OF THE STATE DUMA CONFIRMED VICTOR CHERNOMYRDIN IN PRIME-MINISTER'S OFFICE. "OHR", "Russian Regions", LDPR, communists, agrarians and "People's Power" factions voted for Chernomyrdin, "Yabloko" voted against him.
"While exercising the authorities of the Russian Federation president, I swear to respect and protect human rights of a citizen, to follow and protect the Constitution of the Russian Federation, to protect sovereignty and independence, security and integrity of the state, to be loyal to my service to people", Boris Yeltsin said at the solemn inauguration ceremony holding his hand on the Constitution of the RF.
This program is conducted within the frames of the joint program of Baltiisky Bank and Russian-American Investment Fund, organized by the US government to credit Russian small and medium business. Farmers count on $5,000 to $100,000 loans. Loan interest is defined in each case individually, but usually it is 18% annually.
At present, governor Vladimir Yakovlev said, St.Petersburg ports process 16-17 mn tons of cargo annually. Taking into consideration ecological restrictions, wishes and possibilities of the railroad and other roads, the highest cargo turnover will come up to 60 mn tons a year. The total length of St.Petersburg moorings is 33.96 kilometers. They are supposed to be extended by 78 kilometers more (the city's total coastal line is 280 km). The city plans to reach a 60 mn ton cargo turnover by 2010. However, at present most of experts doubt the possibility to fulfill these terms. To carry out the offered projects a lot of money should be attracted from investors, while signing of an investment agreement is a delicate and long process.
For the first six months of the current year St. Petersburg customs made about 55,000 import customs declarations and 23,000 export ones. The total volume of import was 3.55 mn tons and that of export - 1.8 mn tons. During the first half of the year about 68,000 trucks, 73,000 railroad carriages and 17,000 containers passed the customs. 301 declarants, 46 customs shippers, 57 customs warehouses (313,500 sq.km) and 169 temporary warehouses (1,543,700 sq.km) were registered in the territory covered by St.Petersburg customs.
The council will get a status of a consultative board of the city government and will develop and expertise municipal bills in the sphere of credits and finance, and also define the priority of the city programs crediting. The banks are ready to take part in investment projects, however their financial investments should be backed and guaranteed. That is why the association president said that St.Petersburg should form its own pledge fund.
The following variant is very likely to be adopted: apartment power tariffs up to certain limits - about 200 rbls, over the limit - 400 rbls per kWt/hour.
In case the high- speed railroad reached the Moscow Station in St.Petersburg the city will loose 19 historical buildings. All the buildings are located in the preservation zone and are covered with the law "Concerning Preservation of Memorials". There is another problem: if downtown traffic increases by 15%, it will be possible to get there only by subway. It may lead to the necessity of broadening roads by destroying many historical buildings.
© A&G Information Services Inc. 1996