Kudrin Takes Aim at Saturn Management

The management of Saturn, the provider of jet engines for the Superjet 100 civil airline venture, is ineffective, and the government will take measures to change the composition of the firm's shareholders, Finance Minister Alexei Kudrin said Friday, Interfax reported.

He added that the management had not bothered to certify the aircraft according to international standards, even though 70 percent of the aircraft are to be sold abroad.

Speaking at a State Duma session, in which it passed the 2008-2009 budget in a third and final reading, Kudrin assured lawmakers that the government was not worried that slowing global demand might push oil prices as low as $40 a barrel, saying social payments to teachers, doctors and pensioners would be made on time.

"We aren't afraid of oil at $50 a barrel or at $40 a barrel," he said. "This is not 1998."

The country was pushed to the edge of bankruptcy in 1998 when the oil price dropped to $10 a barrel and the government defaulted on $40 billion of debt.

The price of Urals crude fell to $59.90 per barrel Friday after peaking at $142.50 in July, according to Bloomberg data.

"But the scale of the crisis not only refuses to diminish; it is increasing, which means the risks for Russia are increasing. That wasn't predicted either by global financial analysts or by us," he said, Interfax reported.

The country's banks, however, are continuing to lend money to domestic companies with outstanding loans growing from 1 percent to 2 percent per month, even during the credit squeeze on global markets, he said.

"Russia currently has 17 trillion rubles [$630 billion] in outstanding loans," he said.

"I stress it's not declining, but continuing to grow."

(MT, Bloomberg)