Nezavisimaya Gazeta
Politicians on Judicial Reform
Sergei Mironov, speaker of the Federation Council, last week made a proposal that the Supreme Qualification Commission of Judges and heads of the Court Department be appointed on the president's recommendation and approved by the Federation Council. What is the point of the judiciary being dependent on the executive branch? Nezavisimaya Gazeta asked Russian politicians to comment on the issue.
Lyubov Sliska, first deputy speaker of the Duma, said, "We cannot afford to throw another branch of power into disarray. This branch has to be reformed delicately and carefully. It might be a good idea to appoint head of the Court Department by presidential decree in order to hold him accountable for his work. However, judges' independence should be approached with more caution."
Irina Khakamada, co-chairwoman of the liberal committee 2008: Free Choice, commented, "The thing is that the president appoints all the ministers and [agency] heads too, but admits that corruption in the power structures has reached unprecedented levels. Therefore, the appointment principle has nothing to do with the drive against corruption."
Oleg Kulikov, secretary for ideology of the Communist Party's Central Committee, said, "This has nothing to do with the fight against corruption. It will only create a new source for it. The president will in no way know who he is appointing, as officials will be in charge of it, and officials are generally directly involved in bribe taking."
Valentina Petrenko, chairwoman of the Federation Council's committee for social policy, argued, "Today, plenty of serious violations are taking place in the judiciary. In the current circumstances, judges almost feel like God's messengers on Earth, and some do not understand their responsibility. Therefore, control over the personnel in this sphere should be increased. The system of appointments will help avoid corruption and other legal violations."
Vremya Novostei
Who Will Buy the Yukos Subsidiary?
Last week, all the likeliest potential bidders for Yuganskneftegaz (the court bailiffs service is going to sell this asset at an auction to collect Yukos tax debts for 2000 and 2001) announced that they would take no part in the bidding, writes Vremya Novostei. "At the moment we are not even contemplating participating in the auction," said Gazprom CEO Alexei Miller. "The price seems to be enormous and our investment program and budget lack the resources," he said. Similar statements - with a varying degree of caution - have been made by representatives of TNK-BP, Surgutneftegaz and LUKoil.
Meanwhile, the investment bank Dresdner Kleinwort Wasserstein, which is completing an independent evaluation of Yugansk, has leaked information about the unit's price as being $15.7-17.3 billion. Analysts regard the price as fair, but none of the Russian oil or gas companies has such funds - either public or private. Even a consortium created by these companies will not be able to raise enough money to purchase the asset. If the auction is not held, it may not be inconceivable that the state will collect the Yukos tax debt itself with Yugansk shares, which may then be contributed to Gazpromneft, a company now being set up. Another option is to sell Yugansk at a so-called Dutch auction, when the price is knocked down until there are bidders willing to acquire its stock.
Kommersant
IMF Unveils Report on Russia
The IMF has released a report on Russia, which is built upon the information collated by Fund experts by August of this year, and will be further used as background material for consultations between the IMF and Russia on economic matters, says Kommersant.
The report says that 2003 was the first year to see virtually no net outflow of private capital from Russia (it trickled down to a mere $0.2 billion, while the 2002 figure was $10.8 billion, 2001 $16.6 billion, and 2002 as much as $25.5 billion). But, even with no net outflow, some budget items did show capital flight, and considerable levels at that. For example, under the "other private capital" heading (apart from direct and portfolio investments, and capital attracted by banks and enterprises), 2003 saw $13.4 billion going out - more than, for example, in 2001 when the figure was $8.2 billion. All this was compensated by banks making unprecedented borrowings abroad - $10.3 billion (compared with a maximum of $2.2 billion in the previous years) - and to a greater extent by corporate loans ($12 billion).
Russia's banks themselves issue loans to foreign banks: these credits increased from $1 billion in 2001 to $28 billion. The credits are mainly deposits placed by Russian banks in foreign banks, and commercial credits advanced to Russian exporters by their partners via Russian and foreign banks, says the report.
IMF experts are also trying to understand how the money supply in Russia almost doubled (32% in 2002 and 61% in 2003), while inflation dropped from 15% to 12%.
The solution, in their view, lies in the "de-dollarization" of the Russian economy - which happened in 2003 - as to some extent the ruble supply had to grow because ordinary people swapped their hard currency for rubles. And the "effective money supply" (the rubles plus the hard currency held by the population) did not grow as fast as the ruble supply alone.
Vedomosti
MiG and Irkut Ready for Single Corporation
Chief of the Federal Agency for Industry Boris Alyoshin said recently that the government was studying the possibility of merging two aircraft building giants: MiG and Irkut. The merger will be difficult, he noted, because of the difference in the quality of the companies' assets. "It is impossible to establish either a completely state-run or private company," he explained. "We work towards a mixed form of property." According to Vedomosti, MiG is a state unitary enterprise, while Irkut is a public private company, not simply a joint-stock company.
Yelena Sakhnova, an analyst with United Financial Group, considers that it would be more logical to merge the companies by merging MiG with Irkut, thereby increasing the state's role. Bringing the assets together would allow the company to make considerable savings on costs and borrowings.
Thies Ziemke, a spokesman for Irkut shareholders - the Kreml Capital Management and Warburg Invest funds - believes a merger would benefit shareholders. "It is still unclear how the companies will be amalgamated, but even if our block of shares if diluted, its value will not be reduced," Mr. Ziemke pointed out. In his view, the merger, and also EADS' joining the Irkut shareholders, will be help the development of the entire Russian aviation industry.
The MiG Russian Aircraft-Building Corporation was established in 1999. According to the company, its portfolio of orders totals $1.4 billion.
The Irkut corporation was established on the basis of the Irkutsk Aviation Industrial Association and a number of research and design firms. It main produces Su-30MK fighters and Be-200 amphibious planes. Irkut president Alexei Fyodorov and nine managers of the company control about 57% of the shares, while about 14% belong to the Sukhoi holding company. The portfolio investors have a 25% stake.
Rossiiskaya Gazeta
Average Age Of Russians - 37
Today, the average age of a Russian is 37. Compared to the previous census, the country has become younger. In fall 2002, the average age was 37.7 years, Rossiiskaya Gazeta writes. However, demographers believe that this phenomenon is a short-term one.
When commenting on Russia's social and economic situation in January-August 2004, Irina Zbarskaya, the head of the census and demographics department at the Russian Statistics Committee, said the death rate in the country had declined a little since the end of last year. However, life expectancy remains low compared to economically developed countries: 58 for men and 72 for women. These figures will grow significantly only after 2008-2010, Zbarskaya believes.
According to international standards, old people are those aged above 65. In Russia, this means 13% of the population, compared with 17% in Spain and Sweden. The nation's aging may be slowed down by two factors: a surge in birth rates and an influx of immigrants of a childbearing age. Neither has happened so far. Immigration is decreasing, and today immigrants compensate natural population loss by just over 2%. This year, however, 47 regions have registered an increase in birth rates. Yet demographers believe that this will not carry on for long. This increase is most likely due to so-called postponed births, when parents delay starting a family for some considerations, most often, economic ones.
