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Tatar-Bashkir Report: January 30, 2003

30 January 2003
U.S. Agency Provides $176,000 To Set Up Regional Bank Of Development In Tatarstan
Tatar Trade and Foreign Economic Cooperation Minister Khafiz Salikhov told reporters that the U.S. Agency for Development and Trade allocated a $176,000 grant to establish in Tatarstan a regional bank of development, AK&M reported on 29 January. The money will be distributed to the Hogan&Hardson company to develop the bank's business plan. The Agency for Development of International Cooperation under the Tatar Cabinet of Ministers will sign a corresponding agreement with Hogan&Hardson, Salikhov said. The project was discussed for the first time in 1997 during a visit to Tatarstan by a delegation from the U.S. ExImBank. Participation in the project by the European Bank for Reconstruction and Development is also being negotiated. The share of the Tatar government in the bank won't exceed 25 percent.

Tatarstan, Colorado To Cooperate In Innovations, Technology Sector
Salikhov and visiting Colorado Secretary of Technology Mark Holtzman signed on 28 January a cooperation protocol aimed at the development and deepening of cooperation and exchange of technology and trade and the promotion of direct ties between companies and organizations of Tatarstan and the state of Colorado,, reported on 29 January. According to the document, the sides will promote cooperation in communications and information technology, extraction and processing of oil, education and training personnel, and information exchange.

Tatar Deputies Support Defense Industry
The Tatar State Council's Economic Development and Reforms Committee on 29 January backed the legislative initiative of the Chelyabinsk Oblast Legislative Assembly to amend the federal law on defense contracts, reported the same day. The draft legislation developed by the Chelyabinsk legislature promotes making federal bodies responsible for delays in payment of state defense orders. The defense industry made up 6.7 percent of the gross republican product in 2002.

KamAZ Re-Equips Engine Production...
The installation of the first line of engine-producing equipment financed by Japanese credit has been completed at the KamAZ truck company, and reported on 29 January, citing the company's press service. The $176 million credit was allocated by the Japanese Bank of International Cooperation in 1993 to replace equipment that was destroyed during a fire at KamAZ's engine plant. The project, which is guaranteed by the Russian government, was frozen after Russia's August 1998 default and revived a year ago. The second stage of the Japanese contract will begin in mid-2003.

...Joins Russian Automakers Union...
Severstal-avto, RusPromAvto, AvtoVAZ, and KamAZ established a union of Russian automakers, reported on 29 January, citing the press service of the Ulyanovsk Automotive Plant. The new organization is intended to help increase competitiveness and attract investments to the Russian auto industry. The participants plan to develop common proposals to improve management in the sector and production quality. The organization will defend the interests of automakers in their relations with neighboring industrial sectors, as well as with state bodies and public associations. It will also represent Russia's interests in the International Organization of Motor Vehicle Manufacturers and promote Russian vehicles on foreign markets.

...As Radiopribor Joins Aerokosmos
The Tatar government passed to the St. Petersburg-based Aerokosmos aerospace corporation a 50 percent-plus-one share in the Kazan-based Radiopribor company, Tatarinform reported on 29 January. The event came in the wake of the agreement signed in November between the Russian Property Ministry, the Tatar government, and Aerokosmos. The agreement also includes transferring by Tatarstan to Aerokosmos of a 51 percent stake in the Elmet Radiopribor plant in exchange for membership of a Tatar representative on the corporation's board. Aerokosmos, which was established in 1998, controls some 60 percent of the Russian aviation-instrument market and provides 60 percent of orders to Radiopribor.

Compiled by Gulnara Khasanova

Premier Comments On Economic Performance in 2002...
Prime Minister Rafael Baidavletov discussed several of Bashkortostan's economic indicators in 2002 at a meeting of the Republic's Cabinet of Ministers on 29 January, an RFE/RL Ufa correspondent reported the same day. Baidavletov said industrial output in the republic increased by 2.5 percent in 2002 in comparison with the previous year, while agricultural output increased by 8.6 percent. The prime minister added that Bashkir companies extracted 12.2 million tons of oil in the republic in 2002 and another 600,000 tons in western Siberia, more than half of which was processed in the republic, along with another 18 million tons from other regions of Russia.

...And Announces Plans For 2003
Baidavletov told the same meeting that the republican government has to increase its gross regional product by 4 percent in 2003, as required by the federal program for Bashkortostan's socioeconomic development for the period 2003-2006. The government also plans to complete construction on the Polief Chemical Plant and a hydroelectric-power plant at the Yumaguzin water reservoir. In addition, the government is to work on reforming the timber, metallurgy, and defense industries.

National Bank Chairman Notes Decline In Investments
The chairman of Bashkortostan's National Bank, Roestem Merdenov, said at the same meeting that 2002 was characterized by a sharp decline in investments into the republic's economy, an RFE/RL Ufa correspondent reported on 29 January. Merdenov said the amount of annual investment necessary for the "normal functioning" of the economy is between 60 million and 70 million rubles ($1.9 billion-$2.2 billion), while only 51 billion rubles in investments were made into the Bashkir economy in 2002. Merdenov added that the lack of investments was mainly the result of the lack of profitability of republican companies.

President Insists Bashkir Oil Meets International Requirements
During the same meeting, the president of the Bashkir Academy of Sciences, Robert Nigmatullin, expressed concern about the high level of sulfur in oil extracted in the republic, an RFE/RL Ufa correspondent reported on 29 January. President Murtaza Rakhimov responded, however, saying that Bashkortostan's oil refineries have no problem processing oil with a high sulfur content, adding that Bashkir oil contains no more than 0.05 percent sulfur, "which corresponds to international requirements."

Compiled by Iskender Nurmi