Page 43 - Countertrade

levied on the difference between the minimum rate and the actual rate
paid. In such a case, 60,000 roubles would be taxed - at 40 per cent.

The general inflation rate during the week, Jan 31 - Feb. 7, 1995 was
103.8 per cent, and 122.2 per cent from the beginning of the year. The
average cost of a basket of essential food supplies was 142,000 roubles
per month. This represented an increase of 5.1 % during the week or 32%
from the beginning of the year. The Ural districts experienced the lowest
rise in food prices - 2.2%. In Moscow the cost of a basket rose by 6.7%
during that week and cost 173,000 roubles.

Early in February, the prices of non-food items were increasing more
slowly than those on food and services. The rise was 2.8% in the first
week in February, a slight increase over the 2.6 per cent rise in January.

Late in 1994 a proposal was put before the Duma (Parliament) to
increase the minimum wage to 154,000 Roubles per annum. At the time

it was feared that this would not be promulgated as it would cost the
government too much in lost revenue.

In the period December 1994 - February 1995 the Enterprise 13 suffered
losses. It was trying to maintain competitive, stable prices by not passing
on the inflationary increases in its own costs. It had been able to do this
thanks to the advance orders it had received. In February 1995 it was
working on orders for August. It had no other orders on its books beyond
that time.

Despite this lack of orders Alexander decided that wages rates which
inevitably had lagged behind inflation, should be doubled from February
1995. On Thursday 9th February 1995 the Federation Council (Duma's
upper chamber) rejected the proposal to raise the national minimum wage.
The decision was reversed the following day and the new minimum was
51,000 roubles per month.