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Tatar-Bashkir Report: April 29, 2003


29 April 2003
DAILY REVIEW FROM TATARSTAN
Government Confused By Industrial Growth And Falling Profits
Tatar Prime Minister Rustam Minnikhanov told a meeting of the republic's financial and tax collection bodies on 28 April that "one should not relax after reviewing the figures of [Tatarstan's] industrial growth in the first quarter of 2003, which reached 5 percent" compared to the same period of 2002, RFE/RL's Kazan bureau reported today. Minnikhanov cited the profits of major republican enterprises as having decreased by a total of 1 billion rubles ($31.7 million) in the first three months of this year compared to last year. In Minnikhanov's words, the gap between output growth and falling profits was explained by "smart managers [that] have learned how to conceal profits, thus making the republican budget suffer." Minnikhanov asked that financial monitoring bodies set up special commissions that investigate republican enterprises, which report falling profits. Rinat Kheerov, head of the Russian Tax Ministry's board in Tatarstan told the same meeting that the new federal tax code, which has been in existence from 2002, "allowed industries to manipulate the financial flows and report all their expenses as production costs for lowering the profits and tax payments." However, he avoided naming "a number of major industries" that evaded taxes or the punishments they might receive.

Tatarstan's Prisons Chief Complains About Insufficient Funding
Daufit Khemedishin, head of the Russian Justice Ministry's Penitentiary Department in Tatarstan, told a press conference on 28 April that the republic's prisons are facing a strong shortage of medicines, having purchased only 45 percent of necessary drugs and equipment in the first quarter of 2003, RFE/RL's Kazan bureau reported today. The prison chief added that despite that, 16,000 convicts held in local prisons have produced 48.1 million rubles ($1.5 million) worth of goods and services in the first quarter of the year. Meanwhile, 847 convicts are suffering from tuberculosis and 941 are HIV-positive. Another reported problem is the wear and tear of prison buildings, many of which, in Khemedishin's words, were built in the 18th and 19th centuries. In addition, during the first three months of 2003, five wardens were fired for trying to handover drugs, cell phones, and other illegal goods to the prisoners.

State Council To Convene In Late May
The Presidium of Tatarstan's State Council issued a resolution on 28 April scheduling the next plenary session of the republican parliament for 29 May, RFE/RL's Kazan bureau reported today. The deputies will discuss 18 documents including draft amendments to this year's budget and the republic's tax regulations proposed by President Mintimer Shaimiev. Despite a recent letter from Prime Minister Rustam Minnikhanov, the parliament will discuss the amendments to the republic's Land Code. In his letter, Minnikhanov had stated that it would be premature to reconsider the code "before there is a final legal definition of what is to be considered state property" and what is not.

Interior Ministry To Get Its Own Mosque And Church
The complex containing Tatarstan's Interior Ministry buildings at the Black Lake in Kazan will include a mosque and an Orthodox church, RIA Novosti reported on 28 April from the same ministerial meeting. Interior Minister Esget Seferov emphasized at the meeting that since his ministry's budget is unable to cover the construction costs, some unnamed "sponsors" will fund the majority of the project. Recently, a number of Interior Ministry departments across Tatarstan were reported to have donated some of their funds for the construction of the church and mosque.

Compiled by Iskender Nurmi

DAILY REVIEW FROM BASHKORTOSTAN
Russian Fund For Free Elections Opens Branch In Ufa
A branch of the Russian Fund for Free Elections (RFSV) has begun operating in Bashkortostan, RosBalt reported on 28 April. The Ufa branch -- the fund's fifth in Russia's regions alongside Kaliningrad, Pskov, Irkutsk, and Ulan-Ude -- is headed by Aleksei Morozov, an Ufa city council deputy and former general director of the Ufa Gostinyi Dvor trade complex. The main aim of the branch is to prepare public opinion and the representatives of political parties for the December State Duma elections and the 2004 Russian presidential campaign. The body will work with observers and members of electoral commissions, in order to combat electoral crime in the republic. RFSV was established in March 2001 by the Russian Central Electoral Commission, the Social and Political Studies Institute of the Russian Academy of Sciences, and the Moscow State Judicial Academy.

Bashneft Halts Production Fall...
The Bashkir oil company Bashneft produced over 12 million tons of oil in 2002, a 1.3 percent growth compared to the previous year, RosBalt reported on 28 April, citing the oil company's press service. The increase in production is the first in the last 20 years and was reportedly due to the company's activity in Khanty-Mansii Autonomous Okrug. Bashneft is developing 150 deposits and, over the past year, has prospected new deposits in Bashkortostan and West Siberia. The company provides 20 percent of Bashkortostan's industrial production and one sixth of its budget revenues.

...Prevents Minor Shareholders From Participating In Its Shareholders Meeting
Bashneft's minor shareholders were prevented from taking part in a company shareholders meeting on 28 April and did not manage to elect David Geovanis, the executive director of metals group Basic Element, to the Bashneft board of directors as they planned, "Vedomosti" reported on 29 April. Alex Williams, a representative of Vostok Nafta Investment Ltd., told the daily that Bashneft's minor shareholders, including Basic Element, Vostok Nafta, and the Association on Defense of Investors' Rights, had consolidated more than 10 percent of Bashneft shares and wanted Geovanis on the board in order to get "a strong partner to resolve a lot of political issues existing in Bashkortostan." Williams said minor shareholders had problems registering and could only join the meeting by the time it was over. "We were deprived of the right of not only voting but also of stating our position," Williams said, adding "[while in Ufa], I felt I was not in Russia. What we saw persuaded us once more that Bashneft needs independent directors." Bashneft's major shareholder is the state-run Bashkir Fuel Company, which owns 63.7 percent of the oil company's shares. The Bashkir government has a 2.5 percent share in the company.

Compiled by Gulnara Khasanova
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