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. Last Updated: 07/27/2016

Duma Passes Budget In Marathon Session

MOSCOW — After a marathon debate that lasted for more than 11 hours Friday, the State Duma passed the draft 2001 budget on its third reading.

The Duma, which had to consider more than 5,000 proposed amendments, voted 279-87 with three abstentions to approve the 1.19 trillion-ruble ($42.7 billion) bill, the country's first balanced budget since the 1991 Soviet collapse.

Earlier in the day, the Duma passed an amendment banning privatization of big companies until a law on the privatization program for next year is passed.

Deputies supported the amendment by 267 votes to 84, with one abstention.

Yevgeny Ishchenko, deputy head of the Duma's property committee and one of the authors of the amendment, said the bill aimed to suspend privatization of companies whose assets exceeded $150 million.

This would put on hold further sales of natural gas giant Gazprom, oil major LUKoil and oil companies Rosneft and Slavneft, he said.

Deputy Prime Minister and Finance Minister Alexei Kudrin told deputies the government would introduce a draft of next year's privatization program to the Duma soon, but did not specify the date.

"It's impossible to stop the privatization process," Kudrin said, adding sales should not be confined to small enterprises.

The government has already budgeted 18 billion rubles ($600 million at a projected rate of 30 rubles per dollar) of expected privatization revenues for 2001 and is counting on proceeds from state property sales for possible funds to pay foreign debt, Kudrin said.

The budget has been criticized for relying on the assumption that oil will stay high.

The government said earlier this week it considered the sale of a 6 percent stake of LUKoil through American Depositary Receipts a priority for 2001.

The government also planned to sell about 2.5 percent of Gazprom and a blocking stake of 25 percent plus one share in Rosneft next year.

A fourth and final reading of the budget is tentatively scheduled for Dec. 14. The government won the State Duma's approval on the second reading by agreeing to redistribute spending to boost allocations for the military, education and science.

The Communist Party made good on its promise and voted against the budget Friday, but that failed to prevent the draft from garnering far more than the required minimum of 226 votes.

Some observers have said that the budget relies too heavily on the assumptions that high oil prices will continue and that Russia would be able to renegotiate payments on $48 billion in Soviet-era debt to nations known collectively as the Paris Club.

Negotiations collapsed this month with the International Monetary Fund on arranging a line of credit that the Kremlin could draw on if oil prices fall. Such an arrangement also would have been an IMF imprimatur that could boost Russia's attempts to renegotiate payments to the Paris Club.

Kudrin claimed Friday that the absence of IMF loans does not undermine the budget. "The budget will not collapse without IMF loans," Interfax quoted him as saying. "We will be able to settle the matter with additional revenues."

(Reuters, AP)