CEP20021212000224 Moscow Vedomosti in Russian 04 Dec 02
[Commentary by Kirill Rogov: "Whirlpool of Reform"--taken from html version of source provided by ISP.]
[FBIS Translated Text]
Today, we can say with full assurance that the main structural reforms declared by the Putin command at the moment of its ascent to power and proclaimed in Gref's program have been relegated to the next presidential term.
The four monopolies--MPS [Ministry of Railways], Gazprom, RAO [Russian joint-stock company] YeES and the ZhKKh [housing-municipal complex], which comprise a colossal non-market sector of the Russian economy--will not be reformed before the new presidential elections. Furthermore, the prospects of reform appear to be even more ephemeral today than they did 3 years ago. In any case, at that time it seemed that the new team had a relative consensus about their necessity and primary vector.
The reason for this, in essence, is clear. While in the Spring of 2000, the concepts of reform were developed by economic theoreticians, after Putin's victory in the presidential elections the Gref program turned into a governmental program (these were specifically the words of Prime Minister Kasyanov at that time). And this meant that the development of reform had for the most part fallen under the auspices of the actual departments which were to be reformed.
Two reforms--of the ZhKKh and RAO YeES--hobbled to parliament through the sweat and trouble of endless discussions. However, in both cases the executive branch, presenting its compromise revisions to the deputies, in fact already does not have consolidated positions in regard to them. As a result, both are subjected to criticism from the left and from the right. From the left--for the fact that they presuppose liberalization of consumers prices. From the right-because they do not give guarantees of creating a competitive environment after this liberalization.
It is easy to note that these discussions almost exactly repeat the main debate at the beginning of the 90's: First liberalization, then privatization, or vice versa. It is no accident that one of the main ideologists of resistance to both reforms is Grigoriy Yavlinskiy. On one hand, liberalization under conditions of monopolization of the market leads to the fact that the management collects monopoly rent. And, having concentrated the capital, re-distributes property in its own favor. On the other hand--it is also unclear how to perform privatization under conditions of fixed prices and absence of profitability (not the profitability which emerges as a result of internal re-distribution and enriches management, but the one which attracts the investor).
As for the history of reformist ideas in regard to the two other monopolies, it appears even more pedantic. After administration had been taken over by representatives of the Putin command as a result of the complex political and power operations, both the MPS and Gazprom found themselves practically removed from the orbit of the government discussion. Liberal-reformist rhetoric was needed as long as it was aimed at the former management and served as a political justification for its replacement. But now, why beat at one's own? Furthermore, while both super-corporations constantly emphasized their wealth before the change of management, the new leadership of the monopolies, on he contrary, is trying hard to popularize the topic of domestic crisis and extreme financial troubles. Which must at the same time become an argument in favor of raising tariffs and postponing restructuring.
In other words, as the real political positions of the Putin command have steadily grown stronger, the political support for reform within the command itself was reduced. Today, in its political rhetoric, questions of structural reform are obviously unpopular. Instead of Gref's reforms, now it is Kozak's reforms that embody the undying reformist vein for the public. They too have many interesting ideas.
[Description of Source: Moscow Vedomosti in Russian -- Business paper published jointly with The Wall Street Journal and Financial Times; reportedly friendly with Kremlin.]
Russia: Proposed 2003 Electricity Tariff Increases Detailed
CEP20021213000097 Moscow Kommersant in Russian 11 Dec 02 P 18
[Unattributed report: "Ministry of Economic Development and Trade on Electricity Tariffs in 2003"]
[FBIS Translated Text]
"The Russian Ministry of Economic Development and Trade considers it necessary for federal stations to receive tariff proceeds of R12.8 billion from the Federal Wholesale Market for Electricity and Generating Capacity, leading to a 31.5 percent increase in commodity proceeds [tovarnaya vyruchka] in 2003 compared to 2002. Moreover, the increase in the electricity tariff for federal power stations operating on coal or fuel oil will, according to the Russian Ministry of Economic Development and Trade proposal, be 3.01 percent, as against the stations' planned 19.9 percent. The increase in the heat energy tariff in 2003 will be 41.09 percent instead of 64.26 percent. The increase in the electricity tariff for federal hydroelectric power stations in 2003 will, according to the Russian Ministry of Economic Development and Trade proposal, be 88.46 percent, as against the stations' planned 103.91 percent; and the increase in the heat energy tariff will be 13.81 percent, as against the stations' planned 35.57 percent. The increase in the tariff for gas-powered federal power stations in 2003 will, according to the Russian Ministry of Economic Development and Trade proposal, be 31.03 percent, as against the stations' planned 49.71 percent, and the increase in the heat energy tariff in 2003 will be 43.43 percent, instead of the stations' proposed 71.59 percent.
"The overall increase in tariffs for the YeES Rossii [Unified Energy System of Russia] Russian Joint-Stock Company's 29 federal stations will be 25.97 percent compared to 2002."
[Description of Source: Moscow Kommersant in Russian -- Informative daily newspaper purchased by Boris Berezovskiy in 1999 and often reflecting his viewpoint.]
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