21 - 27 July 1997
Russia: According to Russian Agricultural Ministry officials, Russia forecasts its grain production for 1997/98 at 80 million tonnes, 10 million tonnes more than in 1996. The Russian Government made additional loans of Rbs500 billion (US$87 million) earlier this year to help Russian farmers to buy fuel, fertilisers, pesticides and machinery.
Anatoly Chubais, Russia's first Deputy Prime Minister, has taken personal charge of negotiations with the World Trade Organisation (WTO) in Russia's bid to join the world trade body, it was announced on Tuesday. Georgy Gabunija, Russia's Vice Minister for Foreign Trade, said in Moscow that Russia intends to submit an offer on market access for foreign goods including farm products in the autumn, and on liberalisation of services towards the end of the year. This follows Russia's 1993 application to join GATT, the WTO's predecessor. The US pledged in March to support Russia's entry in 1998, provided it can satisfy WTO obligations.
Poland: Following the recent floods, Poland has been offered emergency and reconstruction loans from a number of world institutions. According to Munich Re, the world's biggest reinsurer, the total cost of flood damage in both the Czech Republic and Poland is estimated at more than DM1.5 billion (£500 million). The World Bank and the European Investment Bank offered loans worth $300 million. The disaster is set to inflict more than 3.4 billion zlotys worth of damage (£600 million) to the Polish economy.
Ukraine: According to Anatoly Galchinsky, Deputy Head of the Presidential Administration, the International Monetary Fund (IMF) will grant the Ukraine a $750 million one-year stand-by loan. The loan comes as part of the three year $3.1 billion loan arrangement agreed in October 1996 between the IMF and the Ukraine, intended to aid the country's transformation to a market economy. It is expected that the loan will be released next month.
Bosnian Serbia: The power struggle between Bosnian Serb President Biljana Plavsic and hardline supporters of Radovan Karadzic added a new threat to the Dayton Peace Plan and could split the Bosnian Serb republic. It comes just after the recent bombing (Saturday) of Nato forces and international observers by Bosnian Serbs. Ms Plavsic has been expelled from the ruling Serb Democratic Party (SDS), but is still supported by regional members of her party, especially in the northern town of Banja Luka, her political base. Mr Karadzic, who has been indicted as a war criminal, is strongly supported in Pale, the wartime Bosnian Serb headquarters near Sarajevo. Ms Plavsic first ran into trouble when she tried last month to crack down on smuggling, and suspended Dragan Kijac, a Karadzic supporter, from his post as Interior Minister. However, she can only be removed from the presidency by a referendum.
Albania: Albanian President Sali Berisha resigned on Wednesday. He will remain in Parliament as head of a weakened Democratic Party, which previously dominated the country, but which lost its popularity following the national crisis engendered by the numerous Albanian pyramid investment schemes which collapsed earlier this year.
Hungary: Two new terrestrial commercial television channels are to be launched in Hungary. The Hungarian national radio and television commission, ORTT, awarded concessions for the channels to consortia led by OLT-ULFA, Europe's largest independent broadcaster, and the Scandinavian Broadcasting System SBS, 22.8 per cent of which is owned by Walt Disney. Both western television groups believe that this will rapidly increase the advertising market in Hungary, now estimated at $188 million. According to SBS President Martin Lindskog, one of the new channels, RTL Klub, will start broadcasting before the end of the year.
Russia: Russian gas company Gazprom announced it had cut the gas supplies to neighbouring Belarus by 25 per cent, in order to force Belarus to pay what it owes for past supplies. According to Russian news agencies, Gazprom claims that Belarus owes it $203 million. Gazprom has also cut gas supplies to the Ukraine by 16 per cent, for very similar reasons.
Russian central bank Moscow Narodny (MNB) announced the appointment of Rigor Suvorov as the new Chief Executive of its London branch, a move intended to raise the commercial profile of the bank in the UK. Mr Suvorov previously ran the Singapore branch of MNB.
Poland: The Swedish Government approved plans yesterday (21 July) to build a Skr2.5 billion (£190 million) under-sea electricity cable linking Sweden and Poland. The cable, to be laid under the Baltic Sea, will enable the direct exchange of electricity between Poland and the deregulared Nordic power market. Cable operator SwePol Link is partly owned by Swenska Kraftnat, the Swedish state electricity grid operator and Vattenfall, the country's state power utility. Plish PPGC, the state-owned electricity company has a one per cent stake in the venture.
Czech Republic: After heavy flooding crippled much of the country, the Prague Stock Exchange saw sharp losses in Czech Komercni Banka shares, which went down Kcs50 on Monday to Kcs1,590.
Czech Finance Minister Ivan Pilip announced on Wednesday that next month he would submit a plan to sell controlling stakes in three of the largest Czech commercial banks: Komercni Banka, Sporitelna Bank and CSOB Bank. A 15 per cent stake in Komercni and about one third of the CSOB Bank are held by the Slovak National Property Fund as a result of the 'velvet divorce agreement'.
Japanese investment bank Nomura Securities is to pay Kcs12 billion ($350 million) to acquire control of Investicni & Postovni Banka (IPB), the third biggest commercial bank in the Czech Republic. The Czech Government approved on Thursday the sale of its 36 per cent stake in IPB to Nomura for Kcs6 billion. Nomura will pay another Kcs6 billion to increase IPB's capital.
Kazakhstan: Kazakhstan's largest private bank, Kazkommertsbank, has become the first Kazakh company to access international capital markets, with a $43 million offering of American Depository shares representing 28 per cent of the bank's equity. Founded in 1991, Kazkommertsbank was the first Kazakh bank to obtain an international commerce rating of B-, and recently took out a $20 million syndicated loan arranged by Bankers Trust.