Table The average monthly world prices in November of the respective year 1996 1997 1998 1999 2000 2001 Oil (Brent), USD / metric ton 22,8 17,8 11,5 24,1 25,6 19,35 24,Natural gas, USD / thous. m3 3,093 2,393 2,251 2,558 5,767 2,843 4,Gasoline, USD / metric ton 0,6691 0,5648 0,3739 0,6986 0,7649 0,5454 0,Copper, USD / metric ton 2273,3 1834,7 1601,6 1748,1 1914,4 1481,0 1610,Aluminum, USD / metric ton 1459,9 1535,5 1305,0 1470,7 1562,5 1326,6 1373,Nickel, USD / metric ton 6920,0 6099,0 4202,0 7984,2 7315,4 5159,7 7316,Source: calculated in accordance to the data presented by London Metal Exchange (UK), International Oil Exchange (London) In November of 2002, the imports grew by 9.8 % in comparison with the November indicator of 2001, while decreasing by 3.4 % as compared with the figures registered in the preceding month. A decrease in imports was observed across practically all commodity groups in comparison with the October figures, with the exception of food imports, the amount of which continued to grow. In November, import of foodstuffs increased by 8.2 % in comparison with October. While in October of 2002 the share of foods in the total imports from countries outside NIS made 20.2 %, in November this indicator was at 23.4 %.
On the whole, in the 11 months of 2002, volumes of food imports from countries outside NIS significantly increased across all commodity groups. For instance, the volume of import of fresh and frozen meat increased by 32.1 % in the first 11 months of 2002 as compared with the figures observed in the respective period of 2001, while the amount of respective imports grew almost by 50 % - up to 997 434 metric tons, or US $ 1140.6 million. Countries outside NIS accounted for imports worth US $ 969.1 million, what is by almost 60 % above the level registered in the first 11 months of 2001.
At present, the RF government is very much concerned about the food security of the country.
Besides, the task to protect domestic producers has become one of the most important over the last years. As a result, in late January of 2003, there was taken decision to introduce import quotas in relation to poultry, beef, and pork.
The quotas related to poultry is distributed among importing countries in accordance with the proportions formed in 1999 through 2001. The US quota makes 443.5 thousand metric tons, EU – 139.9 thousand metric tons, Brazil – 33 thousand metric tons. The governmental resolution prohibits imports of chicken meat over the established quota. This year, the quota comes into effect in April, therefore 704 thousand metric tons may be imported until December 31, 2003, while imports in the next two years are allowed at 1 million 50 thousand metric tons. The respective imports since January 1, 2006 and until the abolishment of the quota shall be at 306 thousand metric tons. In the past years only US imports exceeded the total present quota.
The mechanism of tariff quota relating to beef and pork requires an amendment to the Customs Code. These amendments have already passed two readings in the State Duma, therefore, these quotas may be introduced before poultry quota. It is planned to limit import of beef by 315 thousand metric tons, while the respective duty will make 15 % (but no less than Euro 0.15 per kilo). It is permitted to import 337.5 thousand metric tons of pork a year, the duty shall be at 15 %, but no less than Euro 0.25.
The duty on imports of beef and pork exceeding the quota shall be at 60 % (but no less than Euro 0.6 per kilo), and 80 % (but no less than Euro 1.06 per kilo) respectively.
The quotas shall be distributed by country and suppliers in accordance with the method of traditional importers: the State Customs Committee shall submit the list of importers of poultry, beef, and pork covering the last 3 years to the Ministry for Economic Development, which should calculate the average annual amounts of imports carried out by companies and distribute quotas in respective proportion. As concerns new operators on the meat market, they shall participate in an auction. It is planned to put out % of quotas relating to import of beef and pork to tender.
In the beginning of 2003, there shall be introduced import duties on sugar and unrefined sugar, as envisaged by the governmental resolution “On tariff regulation of imports of unrefined and refined sugar in 2003,” which was approved in July of 2002.
The rate of import duty on unrefined sugar from January 1 to June 30 of 2003 shall be at Euro 0.2 per kilo, from July 1 to December 31 of 2003 – at Euro 0.23 per kilo (in 2002 the rate was at Euro 0.12 per kilo, since July 1 imports of unrefined sugar were subject to the seasonal 50 % duty (but no less than Euro 0.15 per kilo).
The rate of import duty on refined sugar from January 1 to June 30 of 2003 shall be at Euro 0.24 per kilo, from July 1 to December 31 of 2003 – at Euro 0.27 per kilo (in 2002 the rate was at Euro 0.14 per kilo, since July 1 imports of unrefined sugar were subject to the seasonal 50 % duty (but no less than Euro 0.18 per kilo).
The tariff quota related to imports of unrefined sugar in 2003 is set at 3.95 million metric tons (in through 2002 it was at 3.65 million metric tons). The rate of import duty on unrefined sugar imported within the quota is set at Euro 0.095 per kilo. The quota was sold at the auction held on September 25 for Euro 405.25 million.
According to the data for November of 2002, the turnover of Russia’s trade vis--vis CIS countries made US $ 2.63 billion, while the outpacing growth in exports continued (exports were registered at US $ 1.billion and exceeded the respective indicator of 2001 by 17.4 %, while imports grew only by 6.5 % making US $ 1.10 billion).
Ukraine remains a major trade partner of Russia and accounted for about 5.5 % of the total Russian foreign trade turnover in 2002.
In the course of the meeting of the heads of CIS member countries taking place in Kiev in January, Ukrain supported the idea to join the zone of free trade planning to barter its agricultural produce for Russian natural gas.
On the other hand, Ukraine hesitates to join EvrAzES, in spite of the possible abolishment of VAT on oil supplied to local oil processing factories. According to the present practices, Belorussia and all countries of East and West Europe receive Russian hydrocarbon products at prices 20 % below the price paid by Ukraine.
In 2002, the amount of mutual trade of two countries decreased almost by 10 %. To a certain extent, it is related to numerous reciprocal antidumping investigations and restrictions on a number of staple exports.
For instance, only in the last few months of 2002 there were initiated several large bilateral investigations.
According to the Ukrainian party, the membership in EvrAzES can not resolve dumping conflict between two states.
The Ukrainian Economic Ministry initiated a special investigation in the end of December and is planning to introduce an import duty at 30 % to 50 % (and later quotas) on five types of mineral fertilizers, for instance, on ammonium nitrate and phosphorous fertilizers imported from Russia, since the increase in imports of these products damages national producers.
In January, representatives of Russia and Ukraine signed the protocol related to imports of Ukrain-made pipes in Russia in 2003. According to the protocol, the volume of imports shall remain at the level set forth in 2002 (620 thousand metric tons, including 135 thousand metric tons of large diameter pipes).
On May 21, 2001, Russia introduced a three-year duty on import of Ukrainian pipes made from ferrous metals at 40 % of the customs value of all pipes and at 20 % of large diameter pipes, the duty was enacted on January 1, 2002.
In the end of March, the Ukrainian government approved a resolution introducing a 20 % duty on Russian commodities in the case Russia would have enacted export duty on Ukrain-made pipes.
As a result of negotiations, on November 7 the RF government abolished the duty on import of Ukrainian pipes made of ferrous metals introduced in the beginning of 2002, however, it declared the intention to continue the regulation of export of Ukrainian pipes made of ferrous metals to Russia.
N. Volovik N. Leonova On the progress of reforms in In 2002, the Government of the Russian Federation focused on the following: the reform of the systems of education and health care, the pension reform, creation of a favorable environment for the development of small businesses, continuation of the reform of natural monopolies, housing, and public utilities, the reform of the banking system and government.
At present, modernization of educational system is carried out as an experiment in many spheres:
for instance, in 2002 it was experimented with the introduction of the single state exam, certain measures aimed at the improvement of the structure and subject matter of higher education, transition of certain higher professional education establishments to the financing based on state personal financial certificates, and measures aimed at the restructuring of the network of general education establishments in rural areas.
Besides, on November 1, 2002, the RF Government issued its resolution No. 1536-r approving the plan of measures aimed at the support of exports of educational services on the part of Russia’s educational establishments.
As concerns the reform of the health care system, there was continued the elaboration of procedures governing paid and free health services to citizens. Respective draft resolutions were submitted to the government of the Russian Federation in December of 2002.
The pension reform is underway. In July of 2002, there was approved the federal law “On the investment of funds for the financing of the accumulated part of the labor pensions in the Russian Federation,” which established the legal basis of formation and investment of pension savings designed for the financing of the accumulated part of labor pensions. The State Duma is considering a number of bills, including “On the insurance contributions for the financing of professional pension systems” (passed in the first reading on June 26, 2002).
As concerns the reform of the taxation system, there was approved an article of the Tax Code regulating taxation of small businesses.
In December of 2002, the President of the Russian Federation signed the federal law “On technical regulation.” This law is aimed to adjust legal basis of standardization and certification to international rules and regulations. Besides, there was approved a number of normative legal acts necessary for the implementation of laws approved in 2001, which concerned the de-bureaucratization of the economy, including the federal law “On state registration of legal entities.” A number of laws was approved in the framework of antimonopoly policy: in October of 2002, there was approved the federal law “On amendments to the RSFSR law “On competition and restriction of monopoly activities on commodity markets,” while in December of 2002, the draft federal law “On amendments to article 178 of the Penal Code of the Russian Federation” was submitted to the Government of the Russian Federation.
On September 23, 2002, the draft federal law “On amendments to the federal law ‘On protection of competition on the market of financial services’” was submitted to the Government of the Russian Federation. The draft law is aimed to improve the antimonopoly control over agreements and concerted actions of financial organizations.
The draft federal law “On amendments to article 7 of the federal law ‘On protection of rights of legal entities and individual businesspersons related to state control (oversight)’” was submitted to the government of the Russian Federation in December of 2002. The draft law stipulates that there shall be introduced a moratorium as concerns inspection of small businesses in the first three years of their operation.
The President of the Russian Federation signed the federal law “On insolvency (bankruptcy) in October of 2002. The law extends the list of entities which may be declared insolvent (bankrupt). The law embraces all legal entities with exception of state owned enterprises, state agencies, political parties, and religious organizations.
An important step towards the creation of the legal basis of the functioning of the market of farm lands was the approval of the federal law “On the turnover of farm lands” in July of 2002.
In 2002, there banking reform was underway. The reform was carried out in correspondence with the development strategy for the banking sector of the Russian Federation. In July of 2002, there was approved the federal law “On the Central Bank of the Russian Federation (Bank of Russia),” which more precisely defined the status, authority, and functions of the Central Bank.
The Government of the Russian Federation has approved the draft federal law “On insuring deposits of individuals with the banks of the Russian Federation.” In September of 2002, the Government of the Russian Federation approved the Concept of development of insurance in the Russian Federation. Besides, on October 4, 2002, the Government of the Russian Federation approved resolution No. 737 “On tenders among insurers allowing insurance at the expense of funds of respective budgets.” In December of 2002, the President of the Russian Federation signed federal law “On amendments to certain legal acts of the Russian Federation aimed at the development of the system of mortgage housing crediting (borrowing)” concerning relocation of mortgagers who forfeited property rights for housing, and family members to temporary housing.
By issuing on January 18, 2003, resolution No. 69-r, the Russian Government approved the Concept of development of forestry in the Russian Federation for 2003 – 2010. The concept sets forth goals, objectives, and priorities of development of forestry and state management of forestry assets and forests outside the forestry assets, as well as stipulates measures aimed at the improvement of efficiency of the state management of the forestry assets. On September 19, 2002, the Government of the Russian Federation approved the key guidelines for the restructuring of sectoral research and development institutes. The restructuring of the network of state sectoral scientific establishments is aimed to concentrate scientific and technical potential in priority areas of scientific, technological, and technical development approved by the President of the Russian Federation on March 30, 2002.
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