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. Last Updated: 07/27/2016

Business in Brief

33% State Wage Hike

MOSCOW (Prime-Tass) -- State employees' wages are to be hiked 33 percent as of Oct. 1, Finance Minister Alexei Kudrin told the Federation Council on Wednesday.

"This is a necessary measure to compensate for rising prices," he said.

The government expects inflation to amount to 12 percent this year.

15% More Oil Exports

MOSCOW (Reuters) -- The government said Wednesday that the country's oil exports would reach 4.34 million barrels per day this year, a 15 percent increase over 3.77 million bpd in 2002.

The government approved an economic forecast for Russia in 2004-06 based on two possible scenarios. The price of oil, crucial for budget revenues, features as a key factor in both. Both scenarios predict oil prices for Urals crude, the main export blend, to stand at about $25.5 per barrel in 2003, up from $23.7 per barrel in 2002.

17.8% MMK Auction

MOSCOW (Prime-Tass) -- The entire 17.8 percent state-owned stake in No. 1 steel maker Magnitogorsk Metallurgical Plant, or MMK, will be offered at a regular auction, First Deputy Property Minister Alexander Braverman told reporters Wednesday. He said no special auction for MMK shares is planned.

5% GDP Forecast

MOSCOW (Reuters) -- The government may raise its 2003 gross domestic product forecast to 5 percent from the current 4.5 percent, First Deputy Economic Development and Trade Minister Ivan Materov said Wednesday.

"Perhaps in July we will make the change," Materov said. "I would not like it to be seen as an official forecast by the ministry, but I think we may get 5 percent by the end of the year."

In the first quarter of 2003, GDP expanded 6.4 percent.

Last month, Prime Minister Mikhail Kasyanov criticized his ministers for slow reforms and sluggish economic growth, setting a target of 7 percent to 8 percent GDP expansion by 2007 or 2008.

$4.7Bln VAT Revenues

MOSCOW (Prime-Tass) -- Consolidated budget revenues from value-added tax increased 38.5 percent on the year to 147.1 billion rubles ($4.7 billion) in January-March, the Tax Ministry reported Wednesday.

Income-tax revenues stood at 90.4 billion rubles ($2.9 billion) in the period, up 33.5 percent on the year.

Revenues from VAT are transferred to the federal budget, while revenues from income tax are transferred to regional budgets.

Gazprom 1? Dividend

MOSCOW (Reuters) -- The management of the world's biggest gas producer, Gazprom, has proposed to the board that the company pay a 0.4 ruble ($0.013) dividend for 2002, a source close to the company said Wednesday.

The figure is below the 0.44 rubles paid on 2001 results. Analysts said they had expected lower dividends, and were happy with the number.

The board was to meet later Wednesday to discuss the dividend, which, if approved, will be proposed to the annual shareholders meeting to be held on June 27.

Last year, Gazprom paid a dividend of 14.6 percent of net profit.

In 2001, Gazprom approved a dividend strategy setting the first, fixed part of the annual dividend at 2 percent of market capitalization, but not above 10 percent of net annual profit.

Pipeline Politics Denied

TOKYO (Prime-Tass) -- The government, expected to decide on the route of the pipeline from Angarsk in May, will be guided by economic rather then political reasons, Deputy Foreign Minister Alexander Losyukov told reporters Wednesday.

"This is not a choice between Japan and China, this is a choice based on what is more profitable to Russia," Losyukov said. "However, the long-standing negotiations with China should be taken into account."

Housing Bill Passes

MOSCOW (Prime-Tass) -- The Federation Council passed the housing and municipal utilities reform bill Wednesday, Itar-Tass reported.

The State Duma passed the bill in its second and third readings on April 9. The bill must now be signed by the president before taking effect.

Duma Puts off PSAs

MOSCOW (Prime-Tass) -- The State Duma Council on Tuesday postponed the second reading of amendments to the law on production-sharing agreements and changes to the Tax Code for PSA projects until May 14.

Andrei Loginov, the government's representative in the Duma, had requested the delay.

The proposed amendments attempt to make PSA terms harder for companies to obtain.

Alrosa's Roadshow

MOSCOW (Reuters) -- Diamond monopoly Alrosa said Wednesday it had launched a European roadshow for a planned five-year, $300 million bond in Paris and Vienna.

The Siberian company's spokesman, Yury Beskakotov, said the tour would continue in Milan and Frankfurt on Thursday. More meetings with potential investors are scheduled for Friday in Zurich and Geneva.

"The roadshow will conclude in London next Monday," he said.

Investors have said Alrosa plans to issue about $300 million worth of eurobonds with a five-year maturity. ING Group is a lead manager of the deal.

The company's officials have said Alrosa hopes the bond will bear a yield below 9 percent.

GAZ's $20.9M Plan

NIZHNY NOVGOROD, Central Russia (Prime-Tass) -- No. 2 carmaker GAZ plans to invest more than 650 million rubles ($20.9 million) in the development of production and other facilities this year, the company's press service said Wednesday.

GAZ wants to improve its Volga car model, implement an environmental program and structurally reorganize the company, the official said.

Within three years, the company hopes to create a modern auto company with workers making $450 to $500 per month.

Deposit Insurance Bill

MOSCOW (Prime-Tass) -- The State Duma has postponed the first reading of the government bill on bank deposit insurance until May 14, Central Bank Deputy Chairman Gennady Melikyan told reporters Wednesday.

He said that initially the bill was to be considered Friday but the government asked the State Duma to postpone the reading.

Under to the bill, the maximum amount of compensation for lost savings would be set at 95,000 rubles ($3,055), meeting international standards.

The bill is designed to protect in

More Oil Sent by Sea

LONDON (Reuters) -- Seaborne oil products exports from the former Soviet Union rose by 35,000 barrels per day last month to 1.78 million bpd, but the flows were down from March 2002, an industry expert group said Wednesday.

The March total was 50,000 bpd, or 2.7 percent, lower than in the same month last year, according to data on FSU exports from Baltic, Black Sea and Far East ports compiled by Geneva-based oil consultancy Petrologistics.

MTS in Rostov

MOSCOW (Prime-Tass) -- Rostov region-based mobile operator Dontelecom, a fully owned subsidiary of leading mobile operator Mobile TeleSystems, started providing all its services under the MTS brand name Wednesday, MTS said in a press release.

MTS bought 100 percent of Dontelecom last fall and now has licenses covering 57 of the country's 89 regions.

For the Record

The excise collection to Russia's consolidated budget rose 43.3 percent on the year in the first quarter to 92.6 billion rubles ($2.9 billion), the Tax Ministry said Wednesday. The consolidated budget includes the federal budget as well as regional and local budgets. (Prime-Tass)

Royalty tax collection for Russia's consolidated budget rose 40.7 percent on the year in the first quarter to 78 billion rubles ($2.5 billion), the Tax Ministry said Wednesday. (Prime-Tass)

Russia's annual inflation rate will not exceed 12 percent in 2003 and will rise 8 percent to 10 percent in 2004, First Deputy Minister Ivan Materov told reporters Wednesday. (Prime-Tass)