Chubais Says Banks' Role Will Be Limited

The rules of future loan-for-shares auctions should be revised to automatically exclude from the investment tender any bank or company organizing the auction on behalf of the State Property Committee, First Deputy Prime Minister,Anatoly Chubais told a press conference Friday.


"We consider it our mistake that the organization registering the applications -- a bank -- is also taking part in the auction. Not so much from the legal but ethical point of view, this was our mistake," he said, responding to criticism that Uneximbank and Bank Menatep, which were authorized by the State Property Committee to carry out loans-for-shares auctions which they subsequently won, might have exploited their positions.


Alfred Kokh, the acting chairman of the State Property Committee, which oversees the loans-for-shares program, has already said auction organizers could be excluded from bidding in forthcoming auctions.


Inkombank said Thursday that it had started legal proceedings over the results of the loan-for-shares auction last week in which its bid for 33 percent of Yukos was rejected. A Menatep-backed company, Laguna, won a 45 per cent stake in Yukos for a $159 million loan to the government in the loans-for-shares auction and another stake of 33 percent for a cash bid of $150 million.


Chubais said consumer price inflation in November was a monthly 4.5 percent, the lowest since economic reforms began in Russia in 1992. Consumer prices have risen only 1 percent in the first two weeks of December, and monthly inflation was expected to be below the 3.5 percent level, he said.


Chubais dismissed inflation forecasts of 6 percent a month for the first quarter of 1996 and said he believed the average consumer prices inflation in that period would be between 4 percent and 1.5 percent a month. But the year-on-year inflation increase in 1995 was still 161 percent, according to a report issued Friday by the Russian Statistics Committee.


"We are sure that 1996 will inevitably become the first year of economic growth in Russia," Chubais said.


Inter-enterprise debts remain one of the most acute problems holding the growth of Russia's industrial output, Chubais said. "In fact, we have come back to the January level, when their volume was 10 to 12 percent of the gross domestic product," he said.


Another black spot, the State Statistics Committee said Friday, is industrial production, which in the first 11 months of this year was 3 percent below a year ago. However, on a seasonally adjusted basis, output in November was 3 percent higher than a year ago, growing for the second successive month, the report said. October's seasonally adjusted year-on-year rise was a strong 4 percent.


Chubais cited declining inflation as the main reason for the drop in the number of Russians living below the poverty threshold, from 44 million people at the start of this year to 30 million in November, according to government statistics. He added that the gap in the standard of living between rich and poor in Russia has begun closing steadily since March.


Signs of recovery were reinforced by news that the number of unemployed in November, calculated according to international methods, was 5.9 million people, or 8.1 percent of the work force, unchanged from October.


The Statistics Committee also said industrial prices had risen only 3 percent in November, the lowest increase since reforms began in January 1992, after 5 percent in October.


Thursday it issued inflation figures showing consumer prices had risen only 1 percent in the first half of December, and he noted that this was the first time it had registered only "minimal increases" in prices for two weeks in a row.