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TT Business Intelligence Report Vol. 1, No. 26, 21 July 2002 Business Intelligence, Crime, Corruption and Debt in Europe and the former Soviet Union  CROATIA YUGOSLAVIA, CROATIA, BOSNIA TO STRENGTHEN TIES The presidents of Yugoslavia, Croatia and Bosnia on Monday July 15, voiced their commitment to launching a new era of stronger ties between their countries, still bearing the scars of the bloody 1990s wars. In a final declaration at their first meeting since the end of Bosnia's 1992-95 War, the Balkans leaders stressed their will "to open a new period in ties between the three countries and in the region." The future, it said would be "characterised by a general orientation towards European integration." The statement was signed by Yugoslav President Vojislav Kostunica, Croatian counterpart Stjepan Mesic and the members of Bosnia's tripartite presidency, Muslim Beriz Belkic, Serb Zivko Radisic and Croat Jozo Krizanovic. The leaders said they were "strongly convinced that the process of normalisation and improvement of relations between our countries has to be directed to fully establishing good neighbourly relations in all areas." They also pledged full co-operation with the UN War Crimes Tribunal in The Hague, a willingness to facilitate the return of refugees and to co-operate in all other areas. They also emphasised the importance of good relations between countries in the volatile Balkans region, saying they were the "only basis on which it is possible to build and maintain the stability of the region."The leaders of the three countries later met Bosnia's top internationalenvoy Paddy Ashdown. (NewsBase 17.vii.02) CZECH REPUBLIC COMMUNIST PARTY PLAN "COUNTER-SUMMIT" TO NATO SUMMIT The Communist Party of Bohemia and Moravia (KSCM) is preparing a "counter-summit" international conference during the NATO summit scheduled for November in Prague, according to KSCM spokeswoman Vera Zezulkova, who said demonstrations against the summit will be held in the city's main square. She said some 40 European leftist parties have been contacted for the purpose of the "counter-summit" and some confirmations have already been received. The conference is to offer "a different security alternative" than that offered by NATO, she said. (NewsBase 18.vii.02) KLAUS WILL NOT BE IN SHADOW CABINET ODS leader Vaclav Klaus said yesterday that he does not want to be included in the shadow cabinet currently being created by the party. Klaus also said that it is not certain whether he will re-stand for chairmanship of the ODS at party’s upcoming congress. Asked whether he would candidate for President, Klaus said that “it could certainly happen.” (PBJ 17.vii.02) HUNGARY STABILITY IN CENTRAL AND SOUTH-EASTERN EUROPE From the point of view of stability in central and south-eastern Europe, it is particularly important that all countries of the region are being governed by democratically elected parliaments and governments for the first time ever, and all despotic nationalist regimes have fallen. This was the conclusion drawn by a weekend meeting in Ljubljana of the Central and Southeast European Committee of the Socialist International. Returning from Ljubljana, Laszlo Kovacs, Chairman of the Hungarian Socialist Party said on Sunday that the meeting had discussed the south-eastern European region, EU enlargement, and trends in the positions of socialist and social democrat parties in central and eastern Europe. Kovacs reported that participants in the meeting welcomed the fact that in contrast with trends in Western Europe, left-wing parties had been winning elections in central and Eastern Europe, the most recent of them being in Poland, Hungary, and the Czech Republic. "Counting Croatia, Slovenia, Romania, and Albania, most of theregion is being governed by socialist or social democrat administrations," said Kovacs. He added that several leading politicalparties in the Yugoslav Federation were seeking closer relations with the Socialist International, which is another part of the trend. "People at the meeting found that earlier ethnic conflicts had reached a resting point and economic reconstruction and growth were now underway. In addition, cooperation among the countries of the region is gaining ground and they are now adjusting or readjusting to international relations," said Kovacs. (NewsBase 17.vii.02) VALEO MOVES FURTHER PRODUCTION TO HUNGARY The French Valeo Group, one of the world's biggest car component makers, will move the production of switches for trucks and utility vehicles from Germany to its plant in Veszprém, western Hungary, within weeks, according to unnamed sources. The Hungarian subsidiary, Valeo Auto-Electric Hungary Kft, will hire 50 new employees due to the expansion. At the same time the French giant has postponed setting up a new production facility in the industrial park of Szekszárd, southern Hungary. Valeo moved the production of switches and sensors from Baumenheim, Germany, to Veszprém in October 2001. (BBJ 17.vii.02) POLAND LUKOIL AND ROTCH ENERGY PLACE BID FOR RG Rotch Energy and Lukoil have finally placed a bid, reported at $300 million, for a 75% stake in Poland's second largest oil firm, the Gdańsk Refinery (Rafineria Gdańska - RG) but did so well after the July 9 deadline. Nafta Polska, the state agency in charge of privatization of the oil sector, is now analyzing the bid but many doubts remain over the matter. According to a source quoted by Puls Biznesu, Lukoil is to take a 100% stake in the company created to buy RG and pay Rotch to withdraw from that company. However, such a change would mean that Nafta Polska would have to open a new tender for RG as, under the current terms, Rotch is supposed to have a majority stake in the consortium. Meanwhile, Rzeczpospolita points out that the delay in placing the bid could lead to a protest from rivals MOL of Hungary. (WBJ 21.vii.02) TROUBLED ELEKTRIM EXTENDS TALKS Troubled telecom and energy group Elektrim said in a statement that it had extended by one month exclusive talks with BRE Bank and the retailer Eastbridge on selling its stake in Poland's leading mobile operator Era GSM. Elektrim began exclusive talks in May on selling its 49% stakes in two holding companies that own 51% of Polska Telefonia Cyfrowa (PTC), the operator which owns Era GSM. PTC/Era GSM, which has been valued at three billion euros, is the largest mobile operator in central Europe.In March, BRE Bank and Eastbridge floated a plan to buy Elektrim Telekomunikacja (ET) for 400 million euros, which if successful would likely give them control of PTC/Era GSM. That is because Vivendi Universal, which controls the other 51% in the holding companies ET and Carcom Warszawa, agreed in March to sell those stakes to Eastbridge and Citigroup for an undisclosed price. The 49% remaining in PTC/Era GSM is owned by Deutsche Telekom. BRE Bank, which is half-owned by Germany's Commerzbank, is already the biggest shareholder in Elektrim, which defaulted on 480 million euros in bond repayments last December. It struck a deal with creditors in May to repay the debt over a period of three years with the help of a loan from BRE Bank. Eastbridge is a Belgian-registered company active in the Polish consumer goods market. (NewsBase 17.vii.02) RUSSIA FINANCIAL RESERVE CONTINUES TO DECREASE The financial reserve, set aside by the Russian government for foreign-debt payments in 2003, continues to decrease, and Russia's Finance Ministry fears that by the end of 2002 it will be below the required target. According to a ministry source, the financial reserve equalled roughly R40 billion in mid-2002, compared to R88 billion at the beginning of the year, and R47.6 billion at the end of then first quarter. By the end of the year, the reserve may rise by R71 billion and not R109.8 billion as envisaged in the 2002 budget. Reserve shortages were caused by a tax shortfall and lower-than-planned oil prices. (NewsBase 18.vii.02) FORMER FSB OFFICER CLAIMS NEW INFORMATION ON 1999 BOMBINGS Former FSB Colonel Aleksandr Litvinenko, who lives in exile in London, announced on 16 July that he has new information about the 1999 apartment-building bombings in Moscow and other Russian cities that he intends to present to a special commission headed by Duma Deputy Sergei Kovalev on 25 July, Russian news agencies reported on 17 July. Litvenenko, who was convicted of treason in absentia by a Moscow court on 25 June, said that he had been in contact with Achimez Gochiyaev, who is regarded by the FSB as one of the organizers of the explosions, and that Gochiyaev provided him with crucial information. (RFE/RL 17.vii.02) MINFIN OPPOSED TO AMNESTY OF ILLEGALLY EXPORTED RUSSIAN CAPITAL The Russian Finance Ministry and the Russian presidential administration have said they are opposed to the amnesty of illegally exported capital in Russia. The tax amnesty idea was unveiled a month ago by Alexei Volin, a deputy chief of staff of the government, and Mikhail Barshchevsky, a government representative in the courts. The two men suggested "legalising" capitals taken out of the country by businessmen on condition that capital exporters pay the income tax on the total declared amount. However, this initiative is unlikely to be supported. (NewsBase 17.vii.02) MEDIA COMMUNITY CREATES LOBBYING BODY Leaders of Russia's media community on 15 July created a new corporate organization that will be tasked with lobbying the interests of the media sector, Russian news agencies reported on 16 July. Participants in a Moscow media conference selected National Association of Broadcasters head Eduard Sagalaev to organize the new body. According to "Izvestiya," the new organization was formally founded by VGTRK General Director Oleg Dobrodeev, ORT General Director Konstantin Ernst, Ren-TV's Irena Lesnevskaya, STS's Aleksandr Rodnyanskii, NTV's Boris Jordan, Interfax's Mikhail Komissar, Media Union President Aleksandr Lyubimov, Video International's Yurii Zapol, and about 20 others. The only person present at the conference who voted against the lobbying organization was "Kommersant" Editor Andrei Vasilev. After heated discussion, organizers decided not to invite Media Minister Mikhail Lesin or his deputy, Mikhail Seslavinskii, to join the body. "What would Lesin do? Lobby against himself or for himself," the daily quoted one unidentified participant as saying. (RFE/RL 16.vii.02) THE OLIGARCHS ARE DEAD -- LONG LIVE THE WTO? In an article in "Moskovskii komsomolets" on 13 July, commentator Aleksandr Budberg, who is considered close to the Union of Rightist Forces, argues that Russia's imminent entry into the World Trade Organization is evidence that "state interests have gained the upper hand over the interests of a large group of tycoons" and represents a change "that is truly historic." Budberg asserts that while discussions over the conditions and timing of Russia's entry will continue "for at least another year," the main point is that "Russia will become a member of the WTO." With WTO membership, Budberg believes, the rules of the game will become much more transparent, and he predicts that the current practice of some oil companies being taxed at half the rate of others will be stopped, since it will be defined as form of state support, drawing fines of billions of dollars. He concludes that "big business will always be linked to government," but the mechanisms of these interactions are becoming more complex. (RFE/RL 16.vii.02) GAZPROM SEEKS 34 PERCENT OF LIETUVOS DUJOS Gazprom will participate in a privatization tender to acquire 34 percent of the Lithuanian company Lietuvos Dujos. Gazprom's press service said it intends to conform to the criteria set forth in privatization documents. According to AKM.ru on 10 July, under the terms of the deal, the investor must guarantee for 10 years the delivery of natural gas "at generally acceptable prices," supplying Lithuania with 70 percent of its natural-gas requirements. According to the tender, Lithuania's consent is required prior to the sale of any acquired stock. RosBusiness Consulting reported on 10 July that submissions for the tender must be received by the 15-16 July deadline and initial tender proposals should be submitted by 10-11 September. The final proposals will be submitted on 11-12 November. The Russian government will retain a 24.36 percent stake in the Lithuanian gas company, while private investors will maintain a 68 percent share. In the first stage of the privatization, Gazprom's German partner, Ruhrgas, and E.ON Energie acquired 34 percent of Lietuvos Dujes shares for $33.8 million, according to the RosBusiness report. (RFE/RL 16.vii.02) BEREZOVSKII PARTY DENIED REGISTRATION The Justice Ministry confirmed on 13 July that it has decided not to register Liberal Russia as a political party, Interfax reported. Deputy Justice Minister Yevgenii Sidorenko said that the group's documents "were inconsistent with legal requirements." Liberal Russia co-chairman and Duma deputy Sergei Yushenkov told Ekho Moskvy that the grounds for the refusal were "laughable" and that the group plans to appeal the ministry's action to the Supreme Court. Exiled oligarch Boris Berezovskii is another of the group's co-chairmen. (RFE/RL 15.vii.02) RUSSIANS WHO TRAVEL ABROAD SHOULD BE CAREFUL "Izvestiya" reported on 15 July that Russian tourists abroad are being increasingly victimized by Russian organized-crime groups. The report recounted a recent incident in Egypt where criminals robbed 12 hotel rooms at one resort after spending the previous evening drinking with a group of tourists from Russia and Ukraine. Incidents of con games and robbery were also documented in Italy, Spain, and France. (RFE/RL 15.vii.02) INFORMATION PROVIDERS NEWSBASE NewsBase is a leading provider of business and economic news and intelligence from Russia, Central Europe and the FSU. Daily bulletins and industry specific weekly reports backed by an archive containing over 10 million words combine to provide a comprehensive service to a global blue chip client base. Contact: Duncan Cunningham T: +44 (0)131 478 8535 F: +44 (0)131 478 7001 E: [email protected] W: www.newsbase.com, www.newsbaseworldmonitoring.com NEW WORLD PUBLISHING New World Publishing is a primary source of business-related information for Central Europe, through its publications the Prague, Budapest and Warsaw Business Journals. Contact: Mark Child T: +420 2 4608 6524 F: +420 2 4608 6501 E: [email protected] W: www.ceebiz.com, www.pbj.cz, www.wbj.pl, www.bbj.hu RADIO FREE EUROPE / RADIO LIBERTY Radio Free Europe/Radio Liberty is a private, international communications service to Central, Eastern and Southeastern Europe; the Caucasus; and Central and Southwestern Asia funded by the U.S. Congress through the Broadcasting Board of Governors. Contact: Peter Baumgartner T: +420 (0)2 2112 2039 F: +420 (0)2 2112 2012 E: [email protected] W: www.rferl.org EVENTS NEW WORLD PUBLISHING - Prague Business Journal Business Breakfast with Esther Dyson Date: Thursday, August 22, 2002 Location: Hotel Andel's, Stroupeznického 21, Prague 5, Czech Republic This is a special invitation to interact with the world's foremost Information Technology guru, and to discuss Central Europe's IT industry and how its needs are being met by local venture and human capital providers, entrepreneurs, corporate investors and the government. Further details about this event can be found at: www.pbj.cz/events/edbb.htm TEMPLETON THORP T +44 (0)20 7520 9380 F +44 (0)20 7504 8180 E [email protected] W www.templetonthorp.com |
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