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Russia sets out to tackle "2003 problem"
By Andrei Shukshin

   MOSCOW, Sept 13 (Reuters) - Russia's Parliamentary leaders and President
   Vladimir Putin agreed on Wednesday to embark on a three-year crash course to
   thwart what they said was an anticipated chain of disasters due to hit the
   country in 2003.

   "(These are) issues of extraordinary importance, strategic issues which may
   degenerate into a serious threat for the existence, I want to stress this,
   for the existence of Russia," former Prime Minister Yevgeny Primakov told
   reporters.

   Some experts have singled out 2003 as the year when three problems -- a big
   debt bill, eroding infrastructure and an ageing population -- could combine
   to throw Russia into turmoil.

   Primakov, leader of the centre-left OVR parliamentary faction, was one of
   several top members of the State Duma lower house of parliament to meet Putin
   in the Kremlin.

   In addition to the "2003 problem," the agenda included next year's budget and
   media freedom and ownership. Both sides agreed urgent measures had to be
   taken to avert the looming disaster.

   Problems of Russia's crumbling industrial base were highlighted last month
   when a nuclear-powered submarine sank with the loss of all 118 crew on board
   and a day-long fire gutted Moscow's Ostankino television tower, a national
   symbol.

   Putin said at the time the fire was proof of the dangerous condition of the
   Russian infrastructure.

   A power shortage last weekend also forced officials to shut down nuclear
   reactors, including those at a giant, top-secret fuel reprocessing plant
   whose boss said that only staff discipline prevented a major crisis.

   PRO-KREMLIN PARTY BROUGHT UP THE 2003 PROBLEM

   Boris Gryzlov, leader of the pro-Kremlin Unity faction which was the first to
   raise the issue, said Russia would also have to deal in 2003 with a colossal
   $17 billion foreign debt payout and a massive population shrinkage.

   Gryzlov said the problems had already been discussed with cabinet ministers
   and the parliamentarians had agreed with Putin to set up a commission to
   tackle the issue head-on.

   "The question was discussed at length and the president approved our
   initiative and said he would dispatch representatives of his administration
   to the working group," Gryzlov said after the Kremlin meeting.

   He said the commission could start work as early as Monday and suggested the
   government could alleviate the crisis by using budget windfalls, such as
   extra revenue from higher oil prices, on paying off straight away debts
   maturing in 2003.

   Some observers said the 2003 deadline was rather artificial and might serve
   political purposes.

   Dmitry Pinsker, Kremlin-watcher for the liberal weekly Itogi, said Kremlin
   spin doctors planned to make a fuss over the initiatives, in part to answer
   critics who charged them with inaction during the Kursk submarine disaster
   last month.

   Economic analysts say Russia's financial and infrastructure problems are
   real, but picking a date is somewhat arbitrary.

   "A lot here is artificial," Oleg Vyugin, a former first deputy finance
   minister and now executive vice president at Troika Dialog investment bank,
   told Reuters.

   Russia is due to pay slightly more than $16 billion in debt payments that
   year, compared with $11.3 billion due in 2001, he said. But there was still
   plenty of room for restructuring.

   "Everyone knows that the infrastructure is deteriorating, but that does not
   mean that this will all happen in 2003. The television tower burned up this
   year," he said.

   Al Breach, an analyst with Goldman Sachs, said investors would applaud reform
   talk, however artificial the deadline.

   "For these guys to be thinking three years ahead is pretty good," he said.

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