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. Last Updated: 07/27/2016

Business in Brief

January GDP Up 5.7%

MOSCOW (Reuters) -- The economy grew 5.7 percent in January compared with a 3.3 percent annual rise in the same month last year, Interfax reported First Deputy Economic Development and Trade Minister Ivan Materov as saying Wednesday.

He also said that consumer prices rose 0.7 percent in the first 10 days of February after growing 2.4 percent in January.

The ministry declined to elaborate.

Gross domestic product rose by 4.3 percent in 2002. Officials expect GDP will grow between 3.5 percent and 4.4 percent this year, depending on global oil prices.

Officials also want to curb inflation to between 10 percent and 12 percent this year from 15.1 percent in 2002.

PSAs Axed?

MOSCOW (Vedomosti) -- The government has decided to cease awarding production-sharing agreements to develop oil and gas fields except in "exceptional cases," the government press service said Tuesday.

The decision was made at a meeting between government officials and representatives of major oil companies chaired by Prime Minister Mikhail Kasyanov.

A PSA may be concluded only if no one buys a license to develop an oil and gas field, a source close to the meeting said.

The bulk of the 27 licenses that the State Duma has included on its list of potential PSAs already belong to companies, the source said.

The Duma is expected to consider amendments to the Tax Code that would promote PSAs in a second, crucial reading in mid-March.

Oil majors and government officials oppose PSAs, saying they put companies in unequal positions and are unprofitable for the budget.

Last week, Kasyanov said proceeds to regional budgets from oil and gas fields explored under PSAs are less than from fields where normal taxation is applied.

Energy Minister Igor Yusufov said at the same time that some PSAs -- including the Sakhalin and Kharyaga gas projects -- "are not effective for Russia."

Cargo Transport Jumps

MOSCOW (MT) -- Transit cargo traffic to Europe from Asia via the Vostochny port in the Primorsk region and the Trans-Siberian Railroad rose 12 percent in 2002, the RIA news agency reported Wednesday, citing a railways official.

No absolute figures were provided.

Traffic has gone up by a further 6 percent on last year's levels in the first weeks of 2003, a Far East railway spokesman said.

Experts are forecasting that the overall volume of cargo traffic from Asia to Europe via the Trans-Siberian Railroad will rise 15 percent in 2003.

Pension Hikes

MOSCOW (Prime-Tass) -- Insurance pension payments will be hiked 12.6 percent from April 1, Prime Minister Mikhail Kasyanov said Wednesday.

The hike in basic pension payments will exceed 10 percent in the first quarter of this year, Kasyanov said at a Labor Ministry meeting.

Russia uses two systems to make pension payments: the base pension, which does not depend on past contributions, and the insurance pension, which is paid from current contributions and depends partially on past contributions of the pensioner.

The average pension payment will increase by 150 rubles ($4.75) per month in the first quarter, Kasyanov said, adding that pension payments rose an average of 346 rubles per month last year.

South Korean Pirates?

MOSCOW (Prime-Tass) -- The Press Ministry has demanded that South Korea's LG Electronics adhere to Russian and international copyright laws, the ministry's press service announced Wednesday. The Press Ministry has received complaints from authors and copyright holders saying LG Electronics has been selling a karaoke CD bearing songs the company does not have the right to use, First Deputy Minister Mikhail Seslavinsky said in a statement.

This CD is sold along with LG Electronics' karaoke machines.

"A large company like LG Electronics should be careful about complying with copyrights," Seslavinsky said.

Some Russian musicians, such as popular songwriter and performer Alexander Rozenbaum, have filed suit over the alleged copyright violation, he said.

The ministry hopes any problems can be resolved outside the courts but will support the interests of Russian musicians if any infractions continue, he said.

Alcohol Exports Soar

MOSCOW (MT) -- Alcohol export revenues soared 52 percent year on year to $91.17 million in 2002, the National Alcohol Association said late Tuesday.

Vodka export revenues rose 31 percent to $49.23 million, while beer exports rose 52 percent to $20.59 million in 2002.

The most revenue came from alcohol exports to Germany, which reached $17.73 million, followed by Latvia with $14.55 million, the United States with $13.23 million, Kazakhstan at $9.45 million, Ukraine with $7.54 million and Israel with $5.55 million, the association said.

The biggest exporters were No. 1 beer maker Baltika Brewery, controlled by Baltic Beverage Holding, a joint venture of Carlsberg AS and Scottish & Newcastle; state-controlled vodka exporter Soyuzplodoimport; and Moscow-based vodka maker Kristall.

Telecoms Cooperation

MOSCOW (MT) -- Two of Russia's Big Three cellular operators, Vimpelcom and Megafon, have agreed to share base station sites outside Moscow, the companies announced Wednesday in a statement.

Megafon already rents 10 base station sites from Vimpelcom in the Moscow region to cut network development costs. Vimpelcom plans to use Megafon's base station sites in the Rostov and Krasnodar regions and along the road connecting Tver and St. Petersburg.

Sberbank Profit Surges

MOSCOW (Reuters) -- No. 1 bank Sberbank's net profit almost doubled in 2002 to 31.4 billion rubles ($994.3 million) according to Russian accounting standards, a high-ranking source said Wednesday.

Sberbank posted a net profit of 17.5 billion rubles in 2001 according to RAS.

According to international accounting standards, Sberbank's net profit was 27.4 billion rubles ($867.6 million) in 2001.

The bank had a target net profit of 27.2 billion rubles in 2002 according to RAS, but it raised its forecast to 30 billion rubles after reporting a net profit of 28.7 billion rubles in the first nine months of last year.