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. Last Updated: 07/27/2016

The Government Moves to the Beach

As the dog days of August continue, the Russian press has taken a more reflective tone. The main news from the government this week was who is on vacation and where.





According to an unconfirmed source, seven ministers of the Russian government are currently vacationing in Sochi, including Defense Minister Pavel Grachev and Foreign Minister Andrei Kozyrev. Over the weekend, that number is expected to increase, as Trud has been told that a meeting of the Council of Ministers is scheduled for September 8 and 9 in Sochi.


Reliable sources report that Prime Minister Viktor Chernomyrdin will arrive in Sochi for that meeting and President Boris Yeltsin will come immediately after the conclusion of his cruise along the Volga and the Don. There are also reports that the presidents of some of the newly independent states will come to Sochi during this time.


In addition to our ministers, a group of deputies from both houses of parliament, including Duma Speaker Ivan Rybkin, are also vacationing here.


Trud, August 16





Factories in Trouble


In the absence of news from the usual sources, Russian reporters have fanned out and filed reports from a number of major industrial sites, providing interesting insights into what is really happening as the economy is reformed.





For more than half a year, the several thousand employees of the Tula Combine Factory have not received their wages. The plant's director blames the local and federal authorities, while the workers are demanding his removal and that the factory be declared bankrupt.


The plant's management has known since the end of last year that the factory was near bankruptcy. One after another, banks began refusing to grant credits. Director Vladimir Dronov accused local authorities of interfering. According to a report by Ksertbank, the Tula plant owes just that one bank 16 billion rubles.


Dronov continues to demand government credits. He has split with the plant's union and has held an endless series of press conferences.


While the factory has been going under, Donov has been engaged in several private ventures. As the president of company called Niva, Dronov earned 4.2 million rubles last year. His assistant at the combine factory earned 6.5 million rubles as the general director of Niva. He, however, recently received a nine-year sentence for egregious bribe-taking.


Meanwhile, at the last meeting of factory workers, a proposal was made to sell the plant's clinic for seven billion rubles in order to pay wages.


Rossiiskaya Gazeta, August 16





Valery Saikin, director of the ZIL automobile manufacturer, announced that his plant is near bankruptcy. Without help, he said, ZIL will simply collapse in the next few months. He complained that the plant's customers are unable to pay for their orders and that the price of automobiles is increasing at only half the rate of the prices of their components. The factory is being suffocated by taxes, with the end result that the company spends one ruble and 60 kopecks for each ruble of income. Last year, the firm sold only 15,000 trucks, while it needs to sell nearly 58,000 to break even.


First Deputy Prime Minister Oleg Soskovets stated that the government will help the factory but only after it finds a way to sell its products both in Russia and in the CIS, and begins to recover the debts it is owed.


On the other hand, Moscow Mayor Yury Luzhkov said that the city will take all necessary measures to prevent this factory from going under and to keep its 75,000 employees from ending up on the streets. Luzhkov stressed that the joint-stock company should revert back to a government-owned enterprise and only be privatized after it has passed through the current crisis.


Vechernyaya Moskva, August 12





During his recent visit to Togliatti, President Boris Yeltsin spent almost all of his time at the VAZ automobile plant. He spoke to journalists about his impressions and shared his predictions for the plant's future.


"VAZ is perfectly capable of competing with the world's major automakers," Yeltsin remarked.


However, this powerful firm has had its share of troubles in recent times. For the first six months of this year, the plant produced 45,000 fewer cars than expected, primarily because it has lost contacts with its suppliers, it has not been paid for past orders, and because of high taxes. The plant has shut down production on Saturdays for the summer, and 7.5 per cent of the company's workers were sent on leave.


And is it possible to escape from this situation? The plant's general director says that it is not hopeless. He believes that about 10 billion rubles in government credits would enable enterprises that owe VAZ money to pay their debts. He also believes the plant could earn an additional 10 billion rubles by selling its products to customers that can pay. In addition, the firm's lawyers are pursuing several dozen cases of breach of contract.


Rossiiskaya Gazeta, August 17





What the Public Thinks


The difficulties facing Russia's policy makers are daunting. Moreover, they must confront an extremely confusing set of expectations from the public, as the following opinion poll shows.





It has been noted many times that public opinion in post-perestroika Russia is highly contradictory and paradoxical. A recent survey of 1,700 people in 11 regions of Russia was conducted by the Independent Institute of Social and National Problems.


Respondents were asked to evaluate both the current situation in Russia and their own personal situations. If you consider their views on Russia, you will conclude that the majority of the population is currently in a state of deep, collective depression. In all, 5.9 per cent of respondents said that the situation in the country is normal; 39.8 percent described it as a "crisis"; while 27.1 percent said it was "alarming"; and fully 22 percent said that it was a "catastrophe."


At the same time, despite this social crisis, 72.5 percent of respondents characterized their personal situation as either "good" or "satisfactory." Among them, 72.5 percent of workers, 95.4 percent of white collar employees, 84 percent of military personnel and 69 percent of pensioners.


The majority of respondents were also optimistic about the future. While in February 52.2 percent of people questioned expressed confidence that life would get better soon, now 66.2 percent say so.


Nezavisimaya Gazeta, August 16