Publication: Monitor Volume: 3 Issue: 56

In another sign that the government may be serious about change, Russia’s tax authorities have launched initial bankruptcy proceedings against 90 corporate tax-laggards, including AvtoVAZ, maker of Lada cars, and Yuganskneftegaz, one of the country’s biggest oil companies. (Financial Times, March 20) The government urgently needs to hike tax collection in order to pay wage arrears and thereby weaken worker support for a general strike called for March 27. Prime Minister Chernomyrdin failed yesterday in an effort to persuade the trade unions to call off the threatened strike. But the government also has a longer-term aim, which is to force a change of enterprise ownership structure and oust the apparatchik-dominated managements of some of Russia’s largest enterprises. The tax authorities will pressure persistent debtors to raise money by selling a controlling share in the companies to outside investors. The government’s perception of the link between the two processes is underlined by the news that, as part of the present government reshuffle, Privatization Minister Alfred Kokh has been given oversight of the Internal Revenue Service.

Stalemate in Russian-Chechen Talks.