What the papers say - 14 August, 2003


Vladimir Putin believes that there is no point trying to airbrush the real situation in Russia, as its good and bad points are all too obvious. "No matter what clothes the wolf puts on, he still will not be a grandmother and will eat Little Red Riding Hood anyway," the head of state said during a meeting with twelve businessmen representing the country's manufacturing sector. "Purposeful work should be conducted, but this is not the main thing," the president said. "The most important thing is to change the structure of the Russian economy, make business more civilised and strengthen democracy. This is the main thing and it will be met with the appropriate response from our partners."


Foreign investment in the Russian economy in the first six months of the year rose by one and half times in comparison with the same period last year. The inflow of foreign investment was even more impressive reaching 69%. The State Statistics Committee has reported that aggregate investment hit $12.66 billion, i.e. 1.51 times more than in the January-June period in 2002. This year investors repatriated $6.9 billion, meaning that pure investment accounted for $5.8 billion.


The Russian Interior Ministry has decided to combat terrorism independently. Interior Minister Boris Gryzlov has officially announced that he has signed an order on forming an anti-terrorism centre within the ministry. He stressed that the Federal Security Service ( intelligence and counter-intelligence) will still do the bulk of the work to counteract political terrorism. However, the paper notes that there is an opinion in Chechnya that the establishment of the new centre will change nothing.


The government will today set ceiling for tariff increases on the natural monopolies' services. The Cabinet has already decided that gas sector will remain untouchable and next year tariffs will rise by 20% on average. The energy sector and the railways are less than pleased with the government. The ceiling for charges on electricity and heat will be 14% at best, while the railways will have to make do with a 12% cap on price rises.


"The poor are getting poorer too quickly, as the growth in the subsistence minimum is twice the inflation rate," the paper writes. The government has officially raised the minimum subsistence level from 2,047 to 2,137 rubles (approximately 30 rubles equals 1 dollar), i.e. by 4.4%. The inflation rate for this period was 2.6%. This means that the expenses of the least well-off sections of the population, who only buy the absolute necessaries, are increasing at twice the rate of those of affluent citizens. Accordingly, despite the overall favourable economic indicators, the number of poor people is not falling and still accounts for about a quarter of the Russian population.

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