Poland: The row between Polish Prime Minister Wlodzimierz Cimoszewicz and Polish Peasant Party (PSL) leader Waldemar Pawlak has intensified following last week's PSL-instigated vote of no confidence. Mr Pawlak accused Mr Cimoszewicz of refusing to accept a plan to prepay farmers for grain deliveries. Mr Cimoszewicz , a member of the reformed communist Democratic Left Alliance (SLD), stated that the 'grain issue' was a pretext for campaigning in the Parliamentary elections to be held in four weeks time, and that it would help the SLD eliminate the PSL as a coalition partner in favour of the pro-reform Freedom Union, led by former Polish Finance Minister Leszek Balcerowicz.
Russia: President of the Chechen Republic Aslan Maskhadov met with Boris Yeltsin on Monday, and stated that he was 'very pleased' with the result of their discussions. Mr Maskhadov, a former Soviet officer, was elected President in January this year, and is a strong supporter of full independence and sovereignty for Chechnya. Following the 1994-6 war against the Chechen separatists, Russia did not grant the rebel republic full and formal independence, but Mr Yeltsin has made it clear that he is prepared to negotiate a long-term political settlement. Other matters discussed in the meeting included Russian financial involvement in the Chechen economic restoration process and the rates for oil pipelines running across Chechen territory.
The Deputy Governor of St Petersburg Mikhail Manevich was shot dead last week while travelling to his Nevsky Prospect office. Mr Manevich was also a head of the city property agency responsible for the privatisation programme in St Petersburg. This is the latest in a long series of attacks connected to corruption scandals. In response to the murder, First Deputy Prime Minister Anatoly Chubais admitted that Russia is indeed struggling with 'growing organised crime'.
Russian President Boris Yeltsin has launched a programme to restructure the multi-billion dollar Russian arms trade and to reinforce Kremlin control over it. As part of the programme, Rosnvoruzheniye, the present state-owned arms-dealing monopoly, will be dissolved and replaced by new organisation with the same name. Two other state companies, Promexport and Russian Technologies, will also be given the right to export arms. Promexport will sell surplus stock belonging to the Ministry of Defence while Russian Technologies will trade in Russian military 'know-how'. The high revenues from the arms trade will now go directly to the Ministry of Defence and to the arms manufacturers, rather than to the Rosnvoruzheniye account.
Tajikistan: According to a spokesperson for the Tajikistani President, Tajikistan has crushed a mutiny in the south of the country, and the rebel leader, Colonel Makhmud Khudoyberdyev, has fled to neighbouring Uzbekistan. Since Uzbekistan and Tajikistan have an agreement covering such eventualities, it is expected that Colonel Khudoyberdyev will be arrested and returned to Tajikistan.
Ukraine: Justice Minister Serhii Holovatyi was sacked on August 21. Mr Holovatyi, a pro-western reformer, was part of a small group of Ukrainian ministers dedicated to re-starting market reforms in the country and changing the legal infrastructure in order to develop a free market economy. Mr Holovatyi was also very active in the anti-corruption campaign; his sacking is seen as a result of ongoing conflicts between him and various anti-reform post-Soviet figures in the Ukraine Government. His replacement will be Suzannah Stanyk, previously Minister for Family and Youth.
Kazakhstan: US oil giant Texaco has this week acquired a 20 per cent stake in Kazakhstan's Karachaganak oil and gas field from the field's present development partners, the UK's BG Exploration and Production and Agip of Italy, who now control 32.5 per cent of the company each. The remaining 15 per cent of the shares are controlled by the Russian gas company Gazprom. The Karachaganak field is estimated to hold approximately two billion barrels of oil and about 18,000 billion cubic feet of natural gas. As part of the 40 year production sharing agreement signed by Texaco, the US company will also gain access to the planned oil pipeline between the Caspian and the Black Seas.
Russia: Yevgeny Zyablov, Deputy Chairman of the Moscow Municipal Government, has announced that the city is to float up to US$500 million in Eurobonds on international markets by the end of this year. This follows an earlier issue of $500 million in Eurobonds in May this year.
Sibneft, one of the biggest Russian oil companies, has increased the size of its three year Eurobond offering from US$125 million to $150 million. This follows demand from international investors, who accepted a lower premium on the bond on the basis that Sibneft has no credit rating. The Sibneft bond was the first Russian corporate debt issue to enter the international capital markets, and was priced to yield four per cent over Libor. Other forthcoming issues include those from Gazprom, Lukoil, Moscow City Telephones and Mosenoergo, the Moscow electricity utility.
Confidence in Russian companies is higher than it was six months ago, according to a new survey of US investment institutions carried out by Broadgate Consultants of New York. The main risk factors cited are political risk, corruption, crime and the paucity of shareholders' rights. The survey also highlighted a problem with the disclosure standard of Russian companies, who are frequently unable to deliver precise financial and strategic information to shareholders. Other problems include poor legislation with regard to securities and a problem with the improvement of corporate governance.