MOSCOW, July 11 (RIA Novosti)
Mitsubishi Tokyo to open subsidiary bank in Russia
International banking major Mitsubishi Tokyo has received the go-ahead from Russia's competition authorities to convert the Moscow representative office of the Bank of Tokyo-Mitsubishi (BTM) into a $25-million subsidiary, an anonymous BTM official told Monday's issue of Vedomosti.
The leading business daily reported that Mitsubishi was also planning to expand beyond Moscow, pending additional approval from the Russian authorities.
Andrei Kashevarov, the deputy head of the Federal Anti-Monopoly Service, said BTM had been given approval for its Moscow subsidiary late last week. The Russian Central Bank declined to comment.
According to Russian bankers, BTM's equity capital is four times higher than the Central Bank's capital requirement, which points to the seriousness of its intentions.
"If such a reputed and conservative bank comes to a country, they must have long-term plans for the local market," said Yelena Shirinskaya, vice president of Evrotrast bank.
BTM will not engage in short-term speculation but has probably come to Russia to support Japan's industrial capital, said Ilkka Salonen, chairman of Mezhdunarodny Moskovsky Bank. Analysts agreed, citing the huge Toyota car factory project in the northwest of Russia.
Last year, Mitsubishi Tokyo became Japan's biggest bank and No 7 in the world in terms of capital ($39.9 billion). Its $980 billion in assets, make it 12th in the world and second in Japan for this index. Its market value is around $55 billion.
Apart from its core asset, Bank of Tokyo-Mitsubishi, which has $757 billion in assets and $25.6 billion in capital, Mitsubishi Tokyo includes The Mitsubishi Trust and Banking Corporation, Mitsubishi Securities, and Union Bank of California.
Americans setting up first budget airline in Russia
Russia's first budget airline will start flying in September 2005, a daily reported Monday.
A reliable source told Biznes, a popular business paper, that the private American firm Indigo Partners and TPG Aurora, an eastern European division of Texas Pacific Group, were almost ready to launch the new airline.
The airline has been registered as a private company, Aurora, and personnel have already been hired. The airline will operate 40 Airbus A-320 planes. Advance payment has been made for the first 15.
Under the Airbus contract, the first planes will be supplied in late 2007 at the earliest. So the airline can start flights before then, it has ordered second-hand A-320s. The first two will arrive early next spring, and then one will be delivered every month thereafter. The new airline is to operate routes between Moscow and other Russian cities, and also between the Russian regions.
Experts see a number of serious obstacles. "Regional airports will probably defend the interests of their main carriers," Boris Rybak, general director of the consulting firm Infomost, said.
Utair chief executive officer Andrei Martirosov agreed: "Russia has no regional airports suitable for budget operators." He added, "In Russia the Internet is not sufficiently developed to cope with budget airline ticket sales. To be cost effective each plane should be in the air for 12-14 hours a day. This will be difficult in Russia, where airline passenger numbers are 30 million, about the same as those of the Irish company Ryanair."
In addition, Martirosov said: "A budget airline in Russia will mean dumping practices, and dumping cannot be sustained for long."
A third of Russians ready to protest
The Russian authorities have seen widespread public dissatisfaction for the first time this year, a leading pollster told the political daily Vremya Novostei.
Vladimir Petukhov, head of the analytical department of the All-Russian Public Opinion Research Center, VTsIOM, says almost a third of Russians are ready to take part in mass demonstrations. However, they do not want to politicize their protests: not a single political force has managed to front the public discontent, and political parties are simply ignored. Sociologists say the polls for the first six months of 2005 show that public confidence in political parties is at an all time low. The general public is not entirely sure what the parties are doing for the country. Even prosecutors, the courts and the security structures enjoy higher levels of public confidence.
VTsIOM says there is a gap of more than 20% between the ratings of the pro-government party United Russia and the Communist Party. After 18 months out of the parliament, the ratings of the democratic parties Yabloko and SPS have plummeted.
Experts say that the problem faced by the political opposition forces is a lack of new faces and ideas. Yet society does need a political opposition. "The number of people who want to vote, but do not know who to vote for, is growing fast," says VTsIOM's director general Valery Fyodorov.
Polls show that the public rates Mikhail Fradkov's government even lower than Mikhail Kasyanov's government. The government's image is being tarnished by economic ineffectiveness and publicly aired internal conflicts. Russians think the prime minister is incapable of formulating a common government strategy.
Sociologists say that at present politicians and journalists are much more interested in the 2008 presidential elections than ordinary Russians, and that the outcome will depend primarily on the social situation in Russia.
Russians keep savings in hard currency
Most Russians prefer to keep their savings in hard currency, reported the online publication Gazeta.ru Monday.
Whatever happens to the U.S. dollar, it is still seen by Russians as the most reliable way to save.
The market research company, ROMIR Monitoring, reported that 59% of those surveyed said they preferred to keep their money in dollars, while only 19% of respondents preferred to keep their savings in rubles. About 20% of respondents believed that the best currency for savings is the euro. Until just recently the single European currency was something of a rarity in Russia.
"Human psychology is slow to change," said Diana Polunkova, an expert from the Banki.Ru information portal. "Russians have kept their savings in dollars for more than ten years, and the dollar has steadily increased in value throughout that time. It is only in the past two years that some Russians have started to save in euros instead. The most conservative people have not yet had time to be disappointed by the dollar, while the most adventurous people have already come to believe in the euro. This explains why most Russians save in dollars and euros."
"There is a lack of popular confidence in the ruble," says Ivan Manayenko, an analyst from Veles-Kapital. "Many people remember the 1998 crisis when within a few days the exchange rate crashed, from 6.5 rubles per $1 to 25 rubles per $1. Despite all the market shocks, the American and European currencies have never let Russians down as much as the ruble has, nor have they let the citizens of any other country down."
Of those surveyed, 25% keep their savings in Russian banks, and only 7% keep their money in foreign banks. Around 7% of respondents said that they would put their money into precious metals and jewelry, while 3% said they would invest in art and antiques. The poll also showed that 29% of respondents would not keep savings anywhere.
Doctors call for tightened security at psychiatric hospitals
Leading Russian psychiatrists and human rights advocates call for federal law "On Security at Psychiatric Hospitals," reported the influential paper Kommersant.
The law would introduce increased supervision of dangerous psychiatric patients. Russia has seven psychiatric hospitals that house criminals. For example, the Oryol specialized psychiatric hospital houses 840 criminals, including 15 serial murderers. However, the hospital has almost no security.
The workload of the doctors and orderlies in the Oryol hospital is four to five times above the norm. Each doctor has 40-50 patients instead of 10. Over 95% of the personnel are women.
At night there is only one nurse on duty in each department. "In such extreme conditions emergency situations are very likely," says the hospital's chief doctor Tatiana Kotova.
The hospital used to be under the jurisdiction of the Interior Ministry, which provided guards to patrol the hospital grounds and supervise the patients in the wards. In 1988, the hospital was transferred to the jurisdiction of the Health Ministry, and the Main Corrections Department of the Justice Ministry took responsibility for hospital security.
"The Justice Ministry quickly understood that a closed psychiatric hospital is not a penitentiary institution and that its staff were not obliged to guard such institutions," Kotova says. "As a result, our security budget was slashed and we were left just with guards at the entrance."
The federal law "On Security at Closed Psychiatric Hospitals" which doctors and experts are lobbying for should oblige the department to provide guards for the perimeter of the building and for the wards.