Johnson's Russia List
#4613
1 November 2000

RFE/RL: Ron Synovitz, OECD Praises Putin For Signs Of Advances
In Economy.

The Straits Times (Singapore): John Helmer, RUSSIA DEFIES US EMBARGO
BY SUPPLYING AWACS TO CHINA.


******

Russia: OECD Praises Putin For Signs Of Advances In Economy By Ron
Synovitz

Russia is a long way from attaining membership in the Organization for
Economic Cooperation and Development (OECD). But the Paris-based
institution is praising talks yesterday between its chief and Russian
President Vladimir Putin as a good sign for Russia's economic reforms.

Prague, 31 October 2000 (RFE/RL) -- Russian President Vladimir Putin's
talks in Paris with the head of the OECD today are seen by the institution
as a signal Moscow is ready to move forward on economic reforms.

The OECD groups 29 economically developed countries, with the aim of
promoting stable growth by sharing economic data. Russia is not a member,
but Moscow has cooperated with OECD researchers even before Russia's
formal request for membership in 1996.

The talks today between Putin and OECD Secretary-General Donald Johnston
are the highest level of contact since Putin became president this year.

Eric Burgeat, who directs the OECD's Center for Cooperation with
Non-Members, also attended the meeting. Burgeat told RFE/RL that the
momentum of cooperation with Russia has been renewed.

"It is very important for the secretary-general of the OECD to hear
[directly] from President Putin...to hear from him what are Russia's main
priority policy issues. It shows a commitment by the [Russian] government
to speed up the process of reform. And also, it can help us to better
target our program of cooperation on the really critical issues."

Putin is in the middle of a three-day visit to Paris with a focus on
improving economic cooperation with the European Union and institutions
like the OECD. Putin said yesterday he is happy about progress in talks
with French President Jacques Chirac. France currently holds the rotating
post of the EU presidency.

"I greatly appreciate the fact that President Chirac has demonstrated a
firm political will to develop relations between the European Union and
Russia in all directions, and more importantly, in the sphere of economics
and ecological safety."

For their part, officials from the EU and the OECD have been eager to hear
more from Putin about his economic reforms. Burgeat says the Russian
program looks good on paper. But he tells RFE/RL that more information was
sought on the implementation of the plans.

"We see it as a very ambitious program. A key element there will be how it
is implemented and how the Russian government will establish the capacity
in the public administration, both at the center and in the regions, to
implement that very ambitious program."

Despite the optimism expressed by Burgeat, the OECD still has a long list
of recommendations for Moscow that must be followed before Russia can join
the elite group. But once a member, Russia can expect investor confidence
to rise and risk assessments by international credit rating agencies to be
upgraded.

The OECD says Russia's failure to collect taxes efficiently and fairly
continues to be one of the greatest obstacles in the transition to market
economics. Russia has adopted some tax policy recommendations from the
OECD in an attempt to bolster the budget and reduce the amount of money
illegally sent abroad by tax evaders. But the OECD says the Kremlin needs
to reinforce the rule of law by improving public governance.

Protection for foreign investors also is high on the list of OECD
priorities.  OECD research shows that potential investors have little
confidence in Russia's legislative environment. The lack of adequate
property and contractual rights, as well as sufficient bankruptcy laws,
are just a few examples of the legislation being urged.

The organization says it wants to see regulatory agencies created to
oversee private pension funds, capital markets, and institutional
investors.

The OECD says the reliability of economic statistics in Russia needs to be
improved, despite nearly 10 years of work on the issue. Russia now uses
the internationally accepted system of national accounting. But the OECD
says statistics remain unreliable because so much economic activity in
Russia is clandestine.

OECD agriculture reports say the emergence of profitable private farming
in Russia has been blocked by problems with the market infrastructure --
including the lack of land ownership rights and short-term credits for
small farmers.

Under a joint project between the OECD and the World Bank, a roundtable on
Russian corporate governance is planned for Nov. 15 and 16 in Moscow. The
panel is preparing research that the OECD expects will boost internal
reforms as well as international efforts to help with those reforms.

Members of the OECD include the United States, the European Union and
other advanced industrial countries. Three of the leading EU candidate
states in Central Europe -- Poland, Hungary, and the Czech Republic --
became OECD members in 1996. Slovakia's application has been approved and
is expected to formally take effect in a few weeks.

*******

From: "John Helmer" <helmer@atom.ru> Subject: RUSSIA DEFIES US EMBARGO BY
SUPPLYING AWACS TO CHINA Date: Wed, 1 Nov 2000

The Straits Times (Singapore), November 2 RUSSIA DEFIES US EMBARGO BY
SUPPLYING AWACS TO CHINA >From John Helmer in Moscow

It has taken a little more than three months for the Chinese and Russian
governments to agree on a substitute for a major military technology deal,
which Washington blocked in mid-July.

Russia agreed this week to supply China with the A-50 airborne radar
system, according to reports in Moscow. They confirm a statement in
Beijing this week by Russia's Deputy Prime Minister Ilya Klebanov, who is
preparing for the visit on Friday and Saturday by Prime Minister Mikhail
Kasyanov.

Speculation that China would turn to Russia for the air control technology
began in July, after Israel agreed to a United States demand that it
cancel the sale to China of several Phalcon radar systems worth at least
US$250 million.The cancellation was announced by Israel on July 13.

Russia's President Vladimir Putin arrived in Beijing four days later, and
promised President Jiang Zemin to consider supplying the Russian- made
version of the radar system.

Comparable to the US-built Advanced Warning and Air Control System
(AWACS), the Israeli Phalcon and Russian A-50 would give China's airforces
the capability to monitor a large number of attacking aircraft, and
coordinate an attack of its own.

The Israeli offer of the Phalcon included installation in the
Russian-built Ilyushin-76, a four-engine jet with a range of about 3,000
kilometres.

Russian sources claimed this week that China is seeking at least five of
the aerial command posts. Two models are to be leased for immediate
operation.  Five more will be fitted with new equipment for the advanced
A-50E version by the Moscow Scientific Research Institute of Instrument
Engineering.

Prime Minister Kasyanov will also agree this weekend on the construction
of new vessels for the People's Liberation Navy, to follow the two that
have just been completed by a St. Petersburg shipbuilding yard, and a
third that has been ordered.

According to Svetlana Yermolayeva, spokesperson for Northern Shipyard, the
yard is dependent on the Chinese naval orders for most of its work. "At
the moment 20% to 30% percent of the production capacity is in use,"  she
told Straits Times. "A considerable part of our production site is
standing idle. We are building one ship and repairing three Russian
submarines. In the days of the Soviet Union, up to 17 ships used to be
under construction in our shipyard simultaneously. Last year only two
ships were under way."

"At the moment," Yermolayeva added, "we are finishing the second
torpedo-boat for China. The first one was done last year. Al in all, the
contract calls for three boats."

*******

Humanities & Social
Sciences Online

Copyright © 1995-2006 - Contact Us
RSS | Validate: XHTML | CSS