From Volume 37, Issue 31 of EIR Online, Published Aug. 13, 2010
Russia and the CIS News Digest

Sapsan High-Speed Train Service Launched in Nizhny Novgorod

Aug. 5 (EIRNS)—High-speed train service has started on the 255-mile Moscow-Nizhny Novgorod line, making it possible to travel the 650 miles between St. Petersburg and Nizhny (Russia's second and fourth biggest cities) in eight and a half hours, including stops at Moscow and Vladimir. Russian Railways President Vladimir Yakunin presided over the launch ceremony in Nizhny on the traditional July 30 date of Railway Workers Day. Yakunin said that the Sapsan high-speed train, running between Moscow and St. Petersburg since last December, "is becoming a symbol of everything new and progressive. It is not only changing the profile of domestic rail transport. Sapsan represents our country's prudent approach to development, with an emphasis on breakthrough technology."

Along with Prime Minister Vladimir Putin, Yakunin has been one of the Russian officials most actively working to focus Russia's "modernization" policy on crucial areas of infrastructure and industry, such as rail, the aviation industry, shipbuilding, and nuclear power—and not only the agenda of IT and pharmacological "market niches," promoted by Anatoli Chubais and other representatives of hard-core British monetarism.

Located at the confluence of the Volga and Oka Rivers, east of Moscow, Nizhny Novgorod was the historical site of Russia's national industrial and commercial fairs. Called Gorky in the Soviet period, it is still a center of industry. Farther to the east, Sverdlovsk Gov. Alexander Misharin and other Ural Mountain area officials are in discussions with Russian Railways about instituting Sapsan service between the two Ural cities with populations over 1 million—Yekaterinburg and Chelyabinsk, which are only 125 miles apart.

Russia Announces New Privatizations; London Demands More

Aug. 5 (EIRNS)—Alexei Kudrin, the Russian finance minister and darling of London, announced July 29 that Russia will sell minority stakes in 11 key state-owned corporations, aiming to raise $30 billion towards reducing its budget deficit in 2011-12. On the block are 10-49% shares in three banks, and one transport, four energy, and three agriculture-related companies. The national pipeline and electric power distribution companies are included. Russian Railways was dropped from the list at the last minute because, as an Economics Ministry official put it, "RZhD has not yet exhausted its role as an instrument for infrastructure reform."

Minister of Economics Elvira Nabiullina said July 29 that the goal is not only fiscal management, but "to influence the structure of the economy." Nabiullina said foreign investment would be sought.

Along the same lines, President Dmitri Medvedev announced at the St. Petersburg Economic Forum in June that he had removed hundreds of companies and facilities, many of them military-related, from the list of entities protected from privatization for strategic reasons.

"They'll have trouble selling it," observed Lyndon LaRouche in a discussion yesterday, adding that the whole approach of trying to attract foreign streams of money stemmed from the "British Intelligence penetration of Russia."

The announcement is in line with Russian economist Stanislav Menshikov's characterization of what Medvedev is doing. In a July 12 article, Menshikov wrote that Medvedev's economic policies are marked by "a return to mass privatization, smashing of the state sector, and reliance on the oligarchs and foreign capital." These are the biggest privatizations since the loans-for-shares swindle of the mid-1990s, when the young "oligarchs," cultivated under Mikhail Gorbachov's Soviet regime and the Gaidar-Chubais post-Soviet government—all according to a scheme cooked up at the International Institute for Applied Systems Analysis (IIASA)—grabbed the flagship industrial companies of Russia.

London has attacked the new privatizations as not enough, as long as the government keeps majority control of these firms. The Financial Times of Aug. 2 carried an article coauthored by Sergei Guriev, a continuer of the Gaidar-Chubais line from his position as Morgan Stanley Professor of Economics and Rector of the New Economic School in Moscow, insisting that "selling non-controlling stakes is not sufficient." According to Guriev, "Russia has to create a better investment and business climate.... The demand for such institutional reforms can only come from the private sector."

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