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Russian military leaders have expressed concern about US plans for a national missile defense system. Will defense technology be limited by possibilities for a strategic imbalance? Is this just SDI all over again?

possumdag - 05:47pm Apr 25, 2001 EST (#2591 of 2603)
Possumdag@excite.com

Russia sees 4% growth and falling inflation By Robert Cottrell in Moscow Published: April 23 2001 17:56GMT | Last Updated: April 23 2001 22:23GMT Russia foresees steady economic growth, inflation under control, and no need for new borrowing next year from the International Monetary Fund, according to statements from the government, the central bank and President Vladimir Putin.

Growth will average 4 per cent to 5 per cent a year in the medium term, with inflation falling to 7 per cent to 8 per cent, the government and central bank said on Monday. For this year they forecast growth of 4 per cent.

The joint statement included targets of the kind that in past years the government has written into agreements with the International Monetary Fund.

But last month Russia decided not to sign a new agreement with the IMF covering this year, mainly because it had no need of new loans. Instead, it has made a unilateral statement of policies and targets.

In a separate statement about budgetary policy, President Vladimir Putin said Russia intended to proceed without new IMF credits, and with an independent economic policy, this year and next.

He proposed new rules for drawing up the federal budget. The government should prepare the budget in two parts, starting with the 2002 budget, which the finance ministry is due to present in a first draft in the middle of May.

Mr Putin said the first part of the new-style budget should be a conservative budget, based on pessimistic forecasts for world commmodity prices, and hence for Russian export earnings and tax revenues. A second part would provide for any revenues exceeding those predicted in the first half of the budget.

Mr Putin did not give further details of how he intended these additional revenues to be used. But comments by his economic adviser, Andrei Illarionov, suggest the government wants to endow a stabilisation fund. The fund would accumulate windfall tax revenues in years of high commodity prices, and cushion the federal budget in leaner years.

Both Mr Putin and the government foresaw a balanced federal budget in future years. The government says a broadening of the tax base should compensate for cuts in some marginal tax rates, including the introduction this year of a 13 per cent flat rate of income tax.

The government and central bank set out some modest economic reforms yesterday, including further reductions and simplifications of import duties.

The statement promised better regulation of the banking system, including new procedures for winding up bankrupt banks. It also promised tighter supervision of public spending, and in particular of defence spending. (www.ft.com)

possumdag - 05:55pm Apr 25, 2001 EST (#2592 of 2603)
Possumdag@excite.com

Deal boosts Putin's pal Published: April 24 2001 19:13GMT | Last Updated: April 24 2001 19:33GMT Plenty of celebrations at the Russian oil company Sibneft on Tuesday after it was awarded licences to develop three oil and gas fields in the far eastern region of Chukotka - without the formality of a tendering process.

The deal will have brought a smile to the face of Sibneft's principal shareholder, the secretive and politically well connected "oligarch" Roman Abramovich, who just happens to be governor of Chukotka.

It's further intriguing evidence of Abramovich's clout. While the star of fellow tycoons Vladimir Gusinsky and Boris Berezovsky has fallen dramatically since Vladimir Putin moved into the Kremlin, the governor unquestionably retains the ear of the president.

The special relationship was obvious earlier this year when Abramovich bought a 49 per cent share in the ORT television network previously held by his former business partner Berezovsky - and generously allowed the Kremlin to appoint the board.

But there shouldn't be too much gnashing of teeth over this latest deal. Given the remoteness of Chukotka, the equally remote prospect of finding fresh reserves, and the modest volumes of oil and gas so far identified, prospective buyers were not exactly stampeding to the eastern outpost to stake a claim.

On Tuesday Sibneft soothingly stressed that the project would cost it only a little over $10m this year, and would be ended if it did not turn out to be profitable. But will the company's minority shareholders view the unpromising acquisition in quite so benign a light?

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Smoked out

Sweaty faces all round in Russia's security services. On Monday night a fire gutted an annexe of the notorious Lubyanka, home of the former KGB secret police.

Officials said the basement blaze was particularly sensitive because the building held "secret information". But the biggest secret of all was the place where the fire started: a previously undisclosed sauna.

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