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Tatar-Bashkir Report: July 26, 2002

26 July 2002
Tatarstan, India To Boost Ties
Meeting with India's Ambassador to Russia Krishnan Raghunatkh on 25 July, Tatar President Mintimer Shaimiev said, "Possibilities for developing bilateral cooperation should be increased" and called for Indian companies, including those producing pharmaceutical and tea, to be more widely represented in Tatarstan, reported the same day.

Raghunatkh suggested that a joint venture be set up to pack Indian tea in Tatarstan. A group of Indian businessmen is due to arrive in the republic these days to study local market and prospects of joint tea production, he said. The ambassador said the rate of trade turnover between the two sides is much lower than its potential, something that he blamed on a lack of mutual information. He invited Tatarstan's businessmen to visit India to get acquainted with his country's trade and investment conditions. It was agreed to include Tatarstan's manufacturers in annual international exhibitions in Delhi. India was Tatarstan's seventh-largest trade partner in 2001 with $110.7 million trade turnover, while in 1998, it ranked 25th.

Tatarstan was one of the first Russia's regions visited by the recently appointed Raghunatkh. The Tatar-Indian Cultural Center has been in operation for several years in Kazan while Chally features the Sarasvati Center of Indian Culture. Kazan is a sister city of Hyderabad, the capital of India's Andkhra Pradesh state.

Volkswagen Denies Plans To Open Assembly Line At KamAZ
Volkswagen does not plan to negotiate the opening of an assembly line at KamAZ, reported on 25 July citing a Volkswagen press release. The agency cited spokesman Gunter Shereliz as saying that no information is available about the carmaker's plans to establish vehicle assembly in Russia.

During his visit to Kazan last week, Russia-Belarus Union State Secretary Pavel Borodin suggested that such an assembly be arranged at the KamAZ truck firm and said a Volkswagen delegation is due to visit KamAZ in August to discuss the project.

Egyptian Ambassador Arrives In Tatarstan
Egyptian Ambassador to Russia and Belarus Reda Akhmed Shehata arrives on 26 July in Kazan for a two-day visit,, reported on 25 July. Egypt is among Tatarstan's top 10 trading partners. Tatarstan exports KamAZ and Oka vehicles, helicopters, compressors, and refrigerators to Egypt. The two states are also developing a joint project on producing Tu-214 jets for the international market. Tatarstan's trade turnover with Egypt totaled in 2001 some $9.8 million, 30 percent more than in 2000, while export from Tatarstan reached $9.6 million.

EES, Tatenergo Discuss Reform Of Energy System
Visiting Russia's Unified Energy Systems (EES) Deputy Board Chairman Pavel Smirnov took part on 25 July in a meeting of a working group in charge of reforming of Tatenergo and in a discussion of a package of draft laws on energy planned to be considered by the State Duma in September, reported the same day.

The working group, uniting representatives of Tatarstan and Russia and headed by Tatar Deputy Prime Minister and Economy and Industry Minister Anatolii Pakhomov, was formed under an agreement by Tatar President Mintimer Shaimiev and EES head Anatolii Chubais reached on 1 July in Kazan. The most disputes were caused by a draft law on state regulation of electrical and heating energy tariffs under which only the Federal Energy Commission and its regional bodies will be given such a right while local authorities will be deprived of the possibility to affect energy tariffs.

Eight Interior Employees To Serve In Chechnya For A Year
Eight policemen left on 25 July for Chechnya to work for a year in a recently established permanent interior affairs department in Gudermes, reported the same day citing Tatarstan's Interior Ministry. Tatarstan's representatives will serve with 17 other policemen from Nizhnii Novgorod Oblast. Salaries of interior employees during their service in Chechnya are 20,000 rubles ($634), while Tatar policemen who stay in the North Caucasus for more than three months are paid 4,000 rubles ($126.8) more, according to a Tatar government resolution.

Compiled by Gulnara Khasanova

Government Delegation Discusses Terms Of Credit Repayment In England
An official delegation of the Bashkir government headed by Prime Minister Rafael Baidavletov left for Great Britain on 24 July, Rosbalt reported the same day. Bashkir Finance Minister Airat Gaskarov and representatives of Uralo-Sibirskii Bank are delegation members. One of the visit's aims is negotiating with the heads of Midland Bank, which gave the Bashkir government a $45 million credit in March 1998. The agency cited forecasts that further prolongation of a term of the credit's repayment will be on the agenda. The initial term was set for September 2000 and later moved to March 2002. The visit will end on 26 July.

Finance Minister Promises To Include Bashkortostan's Expenses In Russian 2003 Budget
Bashkir Prime Minister Baidavletov met on 23 July in Moscow with Russian Deputy Prime Minister and Finance Minister Aleksei Kudrin to discuss interbudget relations between the republic and Moscow, Finmarket reported on 25 July. Kudrin confirmed that money allocated for financing the federal program on social and economic development in Bashkortostan until 2006 will be included in the draft 2003 federal budget. The officials also negotiated the issue of compensation of damage caused to the republic by natural forces in the current year.

Bashkortostan To Open More Offices In Russia's Regions
The Bashkir government plans to increase the number of permanent offices in Russia's regions, Bashinform reported on 24 July, citing the Industry, Foreign Relations, and Trade Ministry. The number of representatives is planned to be brought up to 30-40 persons. Currently, Bashkortostan has three permanent offices -- in Moscow, St. Petersburg, and Chelyabinsk Oblast. The Bashkir president is expected to sign a decree soon to set up republican missions in Khanty-Mansi Autonomous Okrug, Nizhnii Novgorod, Novosibirsk, and Yekaterinburg.

Global Deposit Receipts On Bashneft Shares To Be Issued
Bashneft shareholders, the Obyedinennaya Finansovaya Gruppa (United Finance Group), and Deutsche Bank, will issue global deposit receipts (GDR) on oil companies' shares, reported on 25 July. Deutsche Bank appealed to the Federal Securities Commission for permission to issue receipts on Bashneft shares in Western markets. Foreign clients will be able to deposit Bashneft shares in Deutsche Bank in exchange for GDRs.

Bashneft's main shareholder is the state-owned Bashkirskaya Toplivnaya Kompaniya (Bashkir Fuel Company), which owns a 63.7 percent stake in the oil company. The Bashkir government directly owns 2.5 percent of Bashneft's shares. Some 8 percent of the shares circulate in a free market. On 23 July, one Bashneft share cost $2.8 in Russia.

Bashneft reduced its production from 17.7 million tons of oil in 1995 to 11.8 million tons of oil in 2001. The company received $1.5 billion in income and $400 million in net profits last year.

Compiled by Gulnara Khasanova