WHAT THE RUSSIAN PAPERS SAY

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MOSCOW, September 12 (RIA Novosti)

Nezavisimaya Gazeta

Putin takes charge of election campaign strategy

Preparations for 2008 presidential elections are in full swing. According to a Kremlin source, Vladimir Putin has taken charge of the election campaign, but the aim is to promote his intended successor.

Experts believe that the name of the successor who is being chosen by the president will not be announced for a long time to come. "The new leader must meet certain essential criteria, such as absolute loyalty and absolute powerlessness," said Irina Hakamada, leader of the Our Choice party. A potential successor must lack any resources, which would enable him to play his own game. On the other hand, weakness must go hand in hand with absolute loyalty because any powerful politician would prove disastrous for the incumbent authorities, she says. "They are looking for a figure without a team of his own, one that has no connections to any financial groups which may influence him," Hakamada believes.

Sergei Markov, head of the National Civic Council of International Affairs, says that Putin may play it safe by creating a new system that would strip his successor of full powers. According to the expert, the most likely scenario is that Putin would be appointed the ruling party's leader. "Quite possibly, a new organization, such as a socio-economic council, will be created for this purpose," Markov believes.

In this context it would seem quite logical to curtail some expensive reforms, focusing instead on a number of populist initiatives, such as those unveiled by Putin last week. It is essential to deal with such disgruntled voters as doctors, teachers and other public sector employees. Teachers and doctors will have their wages raised. Local schools and hospitals will receive computers and medical equipment.

"The president would only run for the third term if the political situation changes drastically. But he will step down, if everything remains stable," Markov stressed.

Novye Izvestia

Can Parliamentary Elections be Moved to 2000?

Former Prime Minister Mikhail Kasyanov, who hopes to rally the liberal opposition by next federal elections (December 2007), believes they will be held earlier - in 2006. Experts see no grounds for that.

Irina Khakamada, leader of the unregistered Our Choice party says: "I have been hearing from various sources that parliamentary elections may take place next year. The reason given is that the Kremlin is afraid it will not be able to stay in power until 2008. The presidential administration wants to get rid of Rodina and the KPRF and make the State Duma still more loyal. But I just don't see how this could be carried out. It is not so simple to disband the Duma - to do so the law requires that it should fail to approve a candidate prime minister three times."

Mark Urnov, president of the Ekspertiza foundation, says: "The State Duma can be dissolved ahead of time in a deep economic crisis, but the oil prices we have today make such a scenario unimaginable. Alternatively, the authorities and their institutions may be destabilized if massive terrorist attacks lead to an overwhelming response of the population. It stands to reason that the authorities are inefficient and the economy is unstable, but that is no reason to call for early parliamentary elections in 2006."

Gennady Seleznyov, former house speaker, an independent State Duma deputy, says: "Elections may take place if the parliamentary majority stirs up trouble in the State Duma and decides to disband itself. I quite allow that United Russia may take such a step to gain majority in the parliament with a slightly renewed membership. It is clearly time for the party to think of its political future."

Vyacheslav Nikonov, president of the Politika Foundation, says: "I am puzzled by Kasyanov's conjecture that federal elections may be moved to 2006. I cannot foresee such an outcome, as there are absolutely no grounds for it."

Kommersant

Bashkiria wants to continue special relations with Russia

Now that the federal center has agreed to reanimate the treaty on delimitation of powers with Tatarstan, Bashkiria too has decided to claim special relations with the federal authorities. A renewal of the Bashkir treaty may confirm the Kremlin's firm intention to grant additional competences to the regions.

Bashkiria legislature deputies suggested to Vladimir Putin at the weekend that the revision of the 1994 treaty be initiated. They said a further improvement of treaty-based relations between the center and its constituent members was a "strategic line of development for Russia as a federal state." They emphasized that the renewal of the treaty would be most welcome ahead of the 450th anniversary of Bashkiria's voluntary joining Russia in 2007 (the president decreed that the anniversary be marked on a federal level).

In Bashkiria itself the proposal has met with a mixed reaction. "We have the Constitution of the Russian Federation, which regulates relations between constituent members and the center equally for all the regions," said deputy Gennady Shabayev.

Some observers consider, however, that the Bashkir initiative was coordinated with the Kremlin: the legislature, as a rule, never undertakes any moves without consulting President Murtaza Rakhimov, who on the day before the appeal was adopted had a series of meetings in the Kremlin administration, where he may have been given the go-ahead.

Final touches are currently being put to the new wording of the treaty on delimitation of powers between the center and Tatarstan (the first such agreement in Russia signed in February 1994). The text is nearly finalized, but "Moscow is not happy with a single clause in one of the articles," said Tatarstan's State Council speaker Farid Mukhametshin. It concerns reducing the mineral resource extraction tax.

If the sides find a compromise, Ufa is certain to try and keep up with its neighbor and, as in 1994, become the second region to have special relations with the center.

Biznes

China to help build Eastern oil pipeline

The China National Petroleum Corporation (CNPC) has announced its intention to invest in the Eastern Siberia-Pacific export oil pipeline. While seeking to gain a foothold in the Russian oil business, it is also trying to secure a transport corridor for itself.

The state-owned company released no details of the deal or the possible sum of investment. The Chinese are willing to sponsor only a branch line from Skovorodino (Amur region) to Daqing in north-eastern China.

Andrei Gromadin, an analyst with MDM-Bank, thinks they would invest about $1-2 billion. One kilometer of such a pipeline costs $1 million to lay, says Dmitry Mangilev, an analyst with Prospekt brokerage, and a more precise estimate of CNPC potential expenses is difficult to make.

No final route has yet been decided for the Eastern Pipeline. The government plans to announce in September whether the line will be directed from Skovorodino to Daqing or Perevoznaya Bay (in the Amur Gulf on the Sea of Japan).

By declaring such financial intentions China competes with Japan, which has promised to grant state-owned Transneft a $6-8 billion low-interest credit in exchange for directing the route to Perevoznaya, believes Gromadin.

However, China's aspirations may go even further. Mangilev is confident that by giving Rosneft a loan to purchase Yuganskneftegaz, CNPC will try to buy into the Russian company by purchasing the stake Rosneft plans to sell next year to pay back the credit of a western bank syndicate. Besides, CNPC may obtain full or shared ownership of the pipeline on Chinese territory.

Specialists allow that the decision may not be made in September. They point out that if the pipeline is to become operational in 2010, project needs to be approved by January at the latest.

Vedomosti

Tax agencies increase pressure on Russian business

Tax agencies will increase pressure on Russian business. The 2006 draft budget stipulates a big gap between estimated taxes owed and taxes actually collected. This gap appears because of additional tax claims as a result of inspections, experts say.

The Finance Ministry's draft budget stipulates collecting of 90.3% of taxes, though the figure was never below 97% in the previous four years.

Mikhail Motorin, the head of the ministry's tax department, said tax collection would decline next year because the figure of collected taxes usually included back taxes on previous years. There will not be such additional funds in 2006, as the statute of limitations will prevent tax agencies from checking companies' operation in 1999-2001, when tax avoidance was common.

But tax consultants say that the gap between imputed and collected taxes appears only when tax agencies claim additional tax payments for previous years. Yevsey Gurvich, the head of the Economic Expert Group, said decline in planned tax collection alongside an increase in actual tax collection figures points to a toughening of fiscal policy. "The volume of estimated taxes grows faster than the enterprises pay," he said.

In 2004, 9% of profit taxes added to the federal budget were paid under duress. This figure will dwindle to 7.5% in 2005 and grow to 9.2% in 2006. The Finance Ministry expects to collect 28.5 billion rubles ($1.01 billion) in profit tax during tax inspections.

"We would like the Finance Ministry to explain why this is happening and have sent a relevant request," said Tatyana Popova of the Federation Council (upper house of parliament) budgetary committee.

"I hope these plans will not result in another Yukos case," said an employee of Tatneft, a regional oil producer.

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