October 28, 1999     
This Date's Issues: 3590 3591 3592

Johnson's Russia List
#3592
28 October 1999
davidjohnson@erols.com


[Note from David Johnson:
1. Reuters: Russian premier vows to rebuild military might.
2. Interfax: RUSSIA DENIES CONDUCTING TALKS WITH U.S. ON ADJUSTING ABM 
TREATY.
3. Stanislav Menshikov: My homepage.
4. The Times (UK) editorial: CAUCASIAN GHOSTS. Wars over history, fuelled by oil.
5. Stratfor Special Report: Armenian Crisis Opens Door for Russia.
6. Boston Globe: Jeff Jacoby, Putin's cruel war is fueled by US dollars.
7. Boston Globe: A plea from a Chechen commander By Shamil Basayev.
8. Itar-Tass: Daily Claims Missiles Missed Basayev and Hit Grozny Market.
9. Nathan Stowell: Response to Hough-3590. (Re academic exchanges).
10. Yale Richmond: Hough on Student Visas.
11. New York Times: Michael Wines, Ukraine Election Seems Rigged to Help the Incumbent.
12. Washington Post: David S. Hilzenrath, Tiny Island Shelters Huge Cash Flows. (Nauru)
13. Bloomberg: Russian Industrial Output Rises 20% in September vs Year Ago.] 


*******


#1
Russian premier vows to rebuild military might

VLADIVOSTOK, Russia, Oct 28 (Reuters) - Prime Minister Vladimir Putin vowed 
on Thursday to rebuild Russia's military might because of growing instability 
at home and abroad and the increasing use of force in world affairs. 


``The government has undertaken to rebuild and strengthen the military might 
of the state to respond to new geopolitical realities, both external and 
internal threats,'' Putin told officers at a navy base in Russia's Far East. 


Putin said military spending would be increased by 57 percent to 146 billion 
roubles ($5.7 billion) in 2000. 


``If we let our defence potential weaken, our independence as a sovereign 
state will be compromised,'' he said. 


Moscow's once-mighty forces crumbled with the Soviet Union and the military 
is now underfunded and demoralised. 


Putin said Russia had to reconsider military strategy. 


``Events in the North Caucasus, Tajikistan, Kyrgyzstan, Uzbekistan testify 
that new threats have emerged on our southern frontiers,'' Putin said. 
``Developments in Europe, in Yugoslavia, also prompt a lot of thought.'' 


Putin, whose hard line on Chechnya has won him wide support in Russia, took 
the opportunity to reinforce his image as a strong leader ahead of next 
year's presidential election. 


He went to sea aboard a rocket-carrying cruiser and watched several missile 
launches. Last week, he flew a sortie in a fighter jet during a trip to 
Russia's North Caucasus. 


Putin saw his approval ratings soar in opinion polls after he sent troops 
into rebel Chechnya to pursue Islamic rebels who had twice invaded 
neighbouring Dagestan and whom Moscow blames for devastating apartment block 
bombings across Russia. 


Russia's operation in Chechnya has drawn criticism from the West, which has 
expressed concern about civilian suffering and deaths. But Putin again said 
the campaign would go on. 


``You should always fight terrorism to the end and you should always keep 
your gunpowder dry,'' he said. 


*******


#2
RUSSIA DENIES CONDUCTING TALKS WITH U.S. ON ADJUSTING ABM TREATY


MOSCOW. Oct 28 (Interfax) - The Russian Foreign Ministry has
denied reports circulating in the U.S. that the two countries have
initiated intensive and constructive talks on amending the 1972 ABM
treaty under the Cologne agreements reached by the Russian and U.S.
presidents.
U.S. sources are also saying that the goal of the talks is
Russia's consent to changes in the ABM treaty that would allow the U.S.
to deploy a national anti-missile system in exchange for U.S.
concessions on START-III, or broader cooperation in missile defense and
other areas.
"Russia is not conducting any talks on amending the ABM treaty and
adjusting it to the well-known American plans to create and deploy a
national anti-missile defense system banned by the ABM treaty," a
highly-placed representative of the Russian Foreign Ministry told
Interfax Thursday.
This source said that "in accordance with the Cologne statements
by the Russian and American presidents, the two countries are holding
talks on the START-III and ABM treaties." During these talks the
Russian side is trying to show "all the dangerous consequences of
ruining the ABM treaty," he said.
"No one has the right to put an equals sign between these consultations
and Russian consent to amending the ABM Treaty," the diplomat said.


******


#3
From: Stanislav Menshikov <menschivok@globalxs.nl>
Subject: My homepage
Date: Thu, 28 Oct 1999


Dear David:


Perhaps, JRL readers might be interested in visiting my personal homepage
which is now on http://www.fast.ane.ru/smenshikov/ both in Russian and
English.
Apart from background on myself it contains a recent detailed paper (in
English) on Re-Starting Growth in Russia which might be of interest to
economists. This is the only place where it can be read so far. I will
expanding the page with other stuff, as I go, including my regular column in
"Slovo", articles in other publications and unpublished papers.


*****


#4
The Times (UK)
October 28 1999
LEADING ARTICLE (editorial)
CAUCASIAN GHOSTS 
Wars over history, fuelled by oil 
The shocking political assassinations in Armenia's Parliament yesterday are 
the latest bloody manifestation of the turbulence to which the whole oil-rich 
Caucasus region between Russia, Turkey and Iran - and not just nearby 
Chechnya - is tragically prone. The deaths of Vazgen Sarkisyan, Armenia's 
Prime Minister, and the tiny country's parliament Speaker, Karen Demirchyan, 
came at the hands of mystery gunmen who burst in claiming to be launching a 
coup; but these killings are part of the larger, darker picture of political 
violence which has haunted the whole region since before the Soviet Union's 
collapse in 1991. 


The modern motive for much of this regional violence is the billions of 
dollars' worth of oil discovered east of Armenia, in the Caspian Sea, in 
waters now ruled by Armenia's regional rival, Azerbaijan. The prospect of a 
21st-century oil boom has divided the area, long a hilly hotbed of local 
rivalries, into two broad and hostile camps. The riches which 
Turkic-speaking, Muslim Azerbaijan stands to inherit have made it new foreign 
allies, notably Britain, the United States and Nato; its local ex-Soviet 
friend is Eduard Shevardnadze's Georgia, and its nearest non-Soviet friend is 
Turkey. The camp of the have-nots, to which impoverished Armenia belongs, is 
led by Moscow, which cannot claim its satellite states' mineral assets now 
that it no longer runs the Soviet Union. Iran, also a Caspian littoral state, 
is loosely allied. However modern the oil drama, the conflicts between these 
two camps take older forms. Armenians blame their collective sense of trauma 
on Ottoman Turks who massacred a million of them in 1915; now, however, it is 
Armenians who fought, for control of disputed Nagorno-Karabakh and other 
parts of Azerbaijan. 


If Caspian oil is to be transported out of the region to be sold, the region 
must quickly become peaceful enough to find a route for a pipeline that can 
carry crude to world markets. That has so far proved impossible; with no one 
playing strictly fair, small wars and internal turbulence have become common. 
Many analysts suggest that the Chechnya war of 1994-96 was part of a regional 
power struggle for pipeline routes. 


The US is now determinedly attempting to make peace by solving the most 
intractable local problem - that of Nagorno-Karabakh. Yesterday's killings 
may be related. Strobe Talbott, the US envoy, had just left Armenia and 
Azerbaijan has complained that recent talks have gone too much Armenia's way. 
The Armenian President, Robert Kocharyan, is a strong nationalist; the two 
powerful victims of yesterday's shootings were also Karabakh hawks. But wild 
forms of nationalism flourish in the fund-providing Armenian diaspora; 
extremists who suspected concessions might act before thinking. 


There are, too, a multitude of possible local reasons for the attempted coup. 
There were tensions between the President, Mr Sarkisyan, the strongman of 
Armenian politics, and Mr Demirchyan, an ex-Soviet boss. Resentments smoulder 
over corruption. Poverty, after the 1988 earthquake and a Karabakh-related 
blockade by Azerbaijan, is painfully visible. Whatever did prompt the latest 
murders, the only real solution for Armenia's woes and those of its 
neighbours must be to look ever more urgently for a viable peace. 
*******


#5
Stratfor Special Report 
Armenian Crisis Opens Door for Russia
28 October 1999


SUMMARY


The attack by gunmen on the Armenian Parliament Oct. 27 could have 
implications beyond Armenia, exerting significant strategic impact on the 
entire Caucasus region. Russia could use the attack as an excuse to increase 
economic and strategic involvement. Russia needs control of the southern 
Caucasus and cannot afford to pass up the opportunity the crisis offers for 
increased involvement. The situation in Armenia is especially important now, 
since Russia's relations with the rest of the region is strained due to 
disagreements over Russia's campaign in Chechnya.


ANALYSIS


Ultra-nationalist gunmen attacked the Armenian Parliament Oct. 27, killing 
Prime Minister Vazgen Sarkisian and several other top government officials. 
President Robert Kocharian is negotiating with the gunmen, who hold an 
estimated 30 hostages in Yerevan, Armenia's capital. 


This situation is a significant strategic opportunity for Russia, which can 
use the crisis to step-up involvement in Armenia, with the larger goal of 
asserting power over the entire Caucasus region. Caucasus stability is 
necessary for Russia. Economically, the southern Caucasus is the planned 
highway for the West to circumvent Russia in exploiting Caspian and Central 
Asian oil. If Russia is to retain control of those resources, it must 
maintain a presence in and pressure on the South Caucasus. 


But Russia first needs control of the region. Because of its strained 
relations with Georgia and Chechnya due to the Chechen war, it does not have 
control. Both Georgia and Azerbaijan are thorns in Russia's side. Both 
actively support the Chechens and are actively courting NATO. And although 
Russia has a close relationship with Armenia, it has not had a legitimate 
reason to increase its authority there. The crisis gives Russia its needed 
opening into the region.


Relations between Russia and Azerbaijan are generally stable; however, in the 
course of its war in Chechnya, Russia has accused Azerbaijan of supporting 
Chechen rebels, possibly with weapons, a safe haven and uninhibited passage 
over their borders. Russia has also accused Azerbaijan of allowing the 
Chechen rebels to maintain an information center in Baku, the Azerbaijani 
capital. Azerbaijan denied these charges. 


The southern Caucasus is wracked with political and economic instability, 
further inhibiting Russia's control of the region. Armenia and Azerbaijan 
have had a long-standing, and often violent, feud over the autonomous region 
of Nagorno-Karabakh, which lies in Azerbaijani territory.


Recently, the Armenian and Azerbaijani leaders have held numerous conferences 
negotiating the future of Nagorno-Karabakh. They expected to sign a 
preliminary agreement at the Organization for Security and Cooperation in 
Europe (OSCE) conference slated for Nov. 17-19 in Istanbul. This issue is of 
great concern to the citizens of both countries. In fact, Nairi Unanian, the 
alleged lead gunmen in the attack on Parliament today, had formerly been 
allied with a political party whose main goal was the independence of 
Nagorno-Karabakh. 


However, if the gunmen hoped to alter the political process, they would more 
likely have targeted Armenian President Robert Kocharian. He was the main 
negotiator in the recent talks on Nagorno-Karabakh. Prime Minister Vazgen 
Sarkisian had actually been in support of Nagorno independence, as was 
evidenced by his leading the volunteer army that fought there and his term as 
president of the region.


Georgian-Russian relations have fared much worse due to the Chechen issue. 
The two are engaged in a political confrontation over Russia's campaign in 
Chechnya. Russia claims Georgia is allowing Chechen arms smuggling and the 
flow of Chechen rebels across its border. Georgia stated it would not close 
its border to Chechen refugees. Also, Russia has amassed a huge amount of 
military equipment on the southern rim of the North Caucasus, which is in 
violation of the Conventional Arms Reduction Treaty. At the November OSCE 
summit, Georgia is expected to insist that Russia adhere to the treaty's 
prescribed provisions. 


Considering Russia's tense relations with the rest of the region, Armenia is 
of central strategic importance to Russia. The hostage situation in Yerevan 
may give Russia the excuse it needs to move heavy power into Armenia. If 
Armenia invites Russian intervention either to resolve the hostage situation 
or to secure political stability after the crisis ends, Russia can fall back 
on its historic tradition of exploiting a crisis to usurp power. 


All Russia needs is for its strategic partner, Armenia, to ask for its help 
unless it decides to fabricate its own excuse and act unilaterally. If 
invited, Russia can increase its cooperation with the Armenian government, 
and potentially have significant influence, in light of the political chaos 
that will inevitably follow the numerous assassinations. Also, Russia can 
increase its military force in the region, giving it the leverage to have 
more influence. 


There are two impediments to Russia's involvement. First, Armenia is already 
closely allied with Russia, but is an independent nation that does not desire 
a permanent Russian presence, which Armenia's leadership must realize would 
ensue if Russia moved in. Second, Russia's forces are already spread thinly 
and would be hard pressed to find the resources necessary to pull together an 
influential amount of power. 


Regardless of these obstacles, Russia will do what it can to turn out the 
winner in the end. If Russia takes the opportunity to assert more control in 
Armenia - either by invitation or design - Russian power in the Caucasus 
could be significantly increased, completely swaying the regional balance of 
power.
*******


#6
Boston Globe
28 October 1999
[for personal use only]
Putin's cruel war is fueled by US dollars 
By Jeff Jacoby, Globe Columnist,


Let us call it by its real name. What Russia is committing in Chechnya is the 
mass murder of civilians. Moscow's propagandists speak of creating a 
''security zone'' and of targeting ''terrorist bases,'' but these are 
euphemisms. Russia is butchering Chechens by the thousands and driving them 
from their homes by the tens of thousands. And not only is the West failing 
to rise up against this bloodbath, it is actively helping to finance it.


Last week Russian rockets slammed into the main marketplace in Grozny, 
Chechnya's capital. More than 140 shoppers and passersby were killed, 
according to local health officials; hundreds more were wounded. The attack 
turned the marketplace into a scene from hell, complete with dead children, 
dismembered bodies, and pools of blood. One day later, Russia's Prime 
Minister Vladimir Putin, a former KGB man, gave it as his opinion that the 
Chechens had probably blown up the marketplace themselves.


In the wake of the rocket attack on Grozny, thousands of additional refugees 
joined the flood of frightened civilians leaving Chechnya. By now as many as 
200,000 men, women, and children have fled across the border into neighboring 
Ingushetia. But this, too, is a put-up job, Putin says. The Chechens are 
pretending to be terrified refugees in order to ''make the situation look 
worse'' and to ''give the world the impression of a humanitarian 
catastrophe.''


To prevent the world from being deluded by those crafty Chechens, Putin's 
forces have taken the precaution of bombing TV stations, radio towers, and 
telephone facilities, along with such other ''military'' targets as 
hospitals, buses, and bridges. Moscow has made it clear that it will not look 
favorably upon reporters who try to cover Chechnya honestly - for example, by 
broadcasting images of the carnage caused by Russian attacks. It has also 
created a new propaganda ministry whose function, its director says, is to 
supply ''completely objective information that shows the official point of 
view of the Russian government.''


Moscow defends its new war on Chechnya as an effort to rout the Islamic 
terrorists it claims were behind a series of apartment building bombings in 
several Russian cities that claimed nearly 300 lives last summer. This 
justification has been repeated unquestioningly by the US press, but it 
suffers from a flaw: There is no evidence to back it up.


Nothing about the apartment bombings resembles the modus operandi of the 
Chechens who have been fighting to free their homeland of Russian domination. 
The guerrillas have attacked Russian military installations and killed 
Russian soldiers, but they have steadfastly avoided taking civilian lives. In 
addition, the Chechen commanders routinely claim responsibility for their 
anti-Russian operations. Yet they vehemently deny any connection to the 
apartment-building bombs.


What would Chechens have to gain by blowing up Moscow apartments? The certain 
outcome of any such attacks would be a wave of Russian rage against Chechens. 
And as Miriam Lanskoy of Boston University's Institute for the Study of 
Conflict, Ideology, and Policy asks: ''If the Chechen field commanders did 
set the initial explosions, why have they stopped? Why aren't more buildings 
in Moscow going up in smoke as retribution for the bombing of population 
centers in Chechnya?''


The apartment bombings did nothing to advance Chechnya's cause, but they have 
been a boon for Putin and the security agencies in which he rose to power. 
The police have been given a free hand to crack down on ''criminals.'' 
Buildings and people have been searched at random. Thousands of Chechens and 
other ''blacks'' from the Caucasus have been expelled from Moscow, often 
after being viciously beaten. The bombing of Chechnya - and the heavily 
slanted cheerleading it is getting in the semi-censored Russian media - has 
given Putin an enormous popularity boost, so much so that he is now a 
favorite in Russia's upcoming presidential election.


Wasn't it just a short while ago that the United States led NATO into a war 
to end Serbia's assault on its Albanian population in Kosovo? Such ethnic 
''cleansing'' was intolerable, the allies insisted then; if Belgrade wouldn't 
stop its brutality voluntarily, it would be stopped by force.


But Russia's savagery in Chechnya evokes no outrage from the White House or 
the State Department. Madeleine Albright managed to say that ''the events of 
the last 36 hours'' - her antiseptic reference to the Grozny marketplace 
massacre - were ''deplorable and ominous.'' That was it. No furious demand 
that Russia halt the killing. No impassioned plea for the Chechens' safety. 
No warning that Moscow sit down to negotiate or face economic sanctions.


Washington would much rather discuss how many more billions of US dollars 
should be funneled into Russia's corrupt economy than discuss the butchery 
underway in the Caucasus. But the one is tied to the other: Those dollars are 
being used, in part, to blow up children in the streets of Grozny. Putin's 
cruel war is but the latest installment in Russia's centuries-old quest to 
subjugate the proud people of Chechnya, but this time the United States is 
underwriting the bloodshed. We can cry out in protest and try to halt it, or 
we can look the other way. But we cannot escape our responsibility. It is 
Russian pilots who are dropping the bombs, but the Chechens' blood is on our 
hands, too.


*******


#7
Boston Globe
28 October 1999
[for personal use only]
A plea from a Chechen commander 
By Shamil Basayev
Shamil Basayev is chief field commander in charge of the eastern front of 
Chechnya under Chechen President Maskhadov. 


GROZNY, Russia


False rumors and accusations against me are being used to divide the Chechen 
people, misinform the world about the true reasons for Russian military 
action in Chechnya, instill fear and anti-Chechen sentiments among the 
Russian people, and create a no-win situation for all. This is a dangerous 
game that must be stopped. We must hold peace talks now or else stability 
will continue to elude Chechnya and the entire North Caucasus.


Our people are being killed, driven away, and vilified in the Russian press. 
The Russians are not sparing women, children, or elderly, as markets, 
schools, and villages are indiscriminately bombed. In less than five weeks, 
2,000 civilians have died, thousands have been wounded, and one-fifth of our 
population has fled. Borders are now sealed, cutting us off from the world. 
Few journalists are allowed inside. Communications are scarce. The Russians 
refuse negotiations, despite our restraint and pleas. What the Russians are 
doing to us, with greater cruelty and disregard for civilian life, is what 
they so highly criticized NATO and the United States for doing in Serbia. 


Since the Russians are putting the blame on me, here is my statement: 


First, I am a Muslim, not a fundamentalist or an extremist. There is a big 
difference. I am against all types of extremism, for it breeds violence and 
terrorism. As I will fight to my last breath for independence, peace, and 
human rights, I will also fight against extremists, criminal gangs, and 
terrorists who come into or near our borders. I have been trying very hard, 
since my days as deputy prime minister, to seek out and punish criminal gangs 
that are terrorizing our people and preventing foreigners from coming in. 
Effective campaigns have been waged to stop my unified efforts with President 
Aslan Maskhadov to hunt them down. 


I am not a terrorist or a criminal. I am not responsible for the explosions 
in Russia. I believe whoever is behind them is also responsible for many 
terrorist acts that have recently been waged in Chechnya and throughout the 
North Caucasus. Blaming me for the explosions conveniently coincides with 
renewed Kremlin power struggles as elections draw near and with desperate 
attempts to divert attention away from high-level corruption scandals and 
other woes. What is happening now would have happened with or without me. It 
was in the making for more than a year. Unfortunately the Daghestan 
campaigns, for which the truth needs to be told, fueled a fire already begun. 
I did not begin Daghestan. I became the scapegoat. 


I do not have the money, weapons, or connections that some officials say I 
do. If I did, or if any of my fighters did, the Russians would not be inside 
our borders at this moment. 


War is not a solution. Despite our many differences, President Maskhadov and 
I are urging a peaceful, equal, and just route while showing unusual 
restraint at a time when our people are being killed and lies are being said 
about us. There are many who are waiting for us to retaliate. We can, but we 
have not. Does anyone honestly think that if I were a warlord or terrorist, 
as Russians portray, that I would be showing restraint at this moment? If I 
had all the money and weapons in the world, I would still be taking this 
course right now. Will our cries fall on deaf ears once again?


The very existence of the Chechen people is at stake. I will fight to the 
bitter end to protect my homeland. We may not have weapons or money, but the 
Russians have unified us and made our spirits strong. I urge peaceful 
negotiations, but if the Russians want this battle to be long, so be it. I am 
ready for them. 


Finally, I am very committed to independence, democracy, and human rights. 
And I must thank the Russians for my passion. Their actions in the North 
Caucasus, and how they treat their own, has sealed my fate.


Look what Russia has done to us. The human rights atrocities during the last 
war have never been accounted for. There have been no efforts to gain the 
trust and good will of our people after the war, never mind helping us 
rebuild what they destroyed. Instead, we are subjected to ethnic slurs and 
threats by Russian officials, as well as to tactics that provoke, isolate, 
and intimidate. 


There have been no apologies for the 100,000 dead or for the 2,000 innocent 
civilians who have died this month from Russian bombing campaigns. Moreover, 
the majority of our people are starving, sick, and living in subhuman, filthy 
conditions. This only fuels crime, corruption, and lawlessness: something new 
to us but mirrored well in Russia. So I would like someone to look tell my 
four small children or the families who have lost loved ones why we should 
want to be part of Russia. The shame of it all: It would have been so easy to 
endear the people to Russia. 


Today the Russian authorities are waging an ethnic campaign against our 
people. Today the Russian military has been given carte blanche to finish its 
dirty war in Chechnya once and for all. The Russians are continuing what they 
began unsuccessfully generations ago and continued under Stalin: Chechen land 
without Chechen people. What Russia has done and is doing now is a perfect 
example of how Russia intends to treat us. Isolate us, starve us, murder us, 
divide us, subjugate us. Find ways to keep the world out so no one can find 
out what happened during and after the war and so no one will know the true 
motives behind the military campaigns today and the reasons why the Russians 
refuse to talk. It is not about me. It is not about Daghestan. And it should 
serve as a warning to the rest of the world.


I believe that the current chain of events were in the making for a long time 
and are meant to serve many purposes that have little to do with Chechnya or 
me personally. Meanwhile, Russia refuses to listen or respond to our unified 
overtures for peaceful resolutions. We are showing restraint under the most 
dire of circumstances. No one gives us credit for that. The failure of the 
Russian leadership to respond to our overtures will prove disastrous for all. 
Military solutions are not the way to bring peace to our region. The massive 
disinformation campaigns and information blockades going on now are just as 
dangerous to the future of Russia. The truth will come out sooner or later. 
The Russians are on a self-destructive path. 


So I have a proposal. Russia is asking the world to support their fight 
against terrorism. Well, I will begin that fight. I want to see those 
responsible for the explosions in Russia, as well as all terrorist acts 
inside Chechnya (including the latest bombing massacre in our central 
market), brought to justice. I want to get rid of criminal gangs that have 
crossed into our borders in recent years. Terrorism has isolated and starved 
us. Peace begins with finding a common ground. The Russians and Chechens have 
a lot to talk about. I ask the Russians and international community to work 
with us urgently before it is too late. If the Russians insist on continuing 
their bombing campaigns, we will fight to the bitter end and Russia will be 
defeated not just militarily but in other ways also. So I want to challenge 
the Russians to do the following:


Stop the bombing, withdraw all Russian troops, and talk with the legitimately 
elected Chechen authorities under neutral international mediation.


Allow peacekeeping forces to come in to help.


Work with us to seek out those responsible for the explosions in Moscow and 
now Grozny as well as join our fight against terrorism and criminal gangs in 
Chechnya and in Russia. If the Russian authorities truly feel that their 
hands are clean, then we shall work together to seek out those whose are 
dirty.


The money spent on this fight should be used to help us rebuild, take care of 
our sick and begin mutually beneficial programs. 


The war of '94-'96 taught many lessons. Hopefully Russia will not repeat its 
mistakes. Hopefully the world will not keep its eyes shut. What happens in 
Chechnya is indicative of how Russia runs its affairs elsewhere. Terrorism is 
a serious threat to world peace. But we are not waging it. The Russians 
consider me their top enemy. I am not what they say I am. It is time to turn 
that opinion around, seek truth, and seek peace. It is time for us to work 
together for the sake of innocent lives and the future of Russia, the 
Caucasus, and the world. 


*******


#8
Daily Claims Missiles Missed Basayev and Hit Grozny Market.


MOSCOW, October 28 (Itar-Tass) - A Russian daily claimed on Thursday that the 
explosions at the Grozny market last week were an attempt of the military to 
kill Chechen warlords who were meeting downtown. However, the missiles missed 
and hit the market, killing from 60 to nearly 300 people, according to 
various reports. 


"Last Thursday the leaders of Chechen illegal bandit formations gathered at a 
meeting in their headquarters. They were brothers /Shamil and Shirvani/ 
Basayev, Khattab, Abdul Khadzhiyev, Aslanbek Ismailov and others", Kommersant 
said without disclosing its sources. 


According to the daily, the Russian Generals decided to kill the warlords in 
their headquarters and reportedly fired four missiles. 


However, only one of them exploded close to the headquarters, while the 
others hit the market. The Russian military said 60 militants had been killed 
and 150 wounded, while according to Chechen President Aslan Maskhadov, the 
strikes took a death toll of 282 people and over 400 were wounded. 


Kommersant said that another attempt to kill Basayev was made on Wednesday 
when a missile was fired at his house in Grozny. "Three bodyguards of the 
terrorist were killed", the daily said adding that Basayev was out of home at 
the moment. 


Russian authorities have recently announced a bounty of one million US 
dollars for the head of Basayev. 


*******


#9
From: "Nathan Stowell" <nys@aha.ru>
Subject: Response to Hough-3590
Date: Thu, 28 Oct 1999 


I was extremely disheartened to read Jerry Hough's comments on long term
academic exchanges. What a shame that such a prominent Russian scholar can
so easily dismiss what is surely an invaluable means for both Russians and
Americans to gain enormous linguistic, academic and cultural skills, not to
mention personal experience.


Having been a participant and later a regional resident director on an
undergraduate year long exchange program, I feel that Jerry's remarks do a
great disservice to the the students who studied on these exchanges and to
the people who selected them. To imply that a majority of the applicants
were "blatniye" or from special English schools is simply incorrect. To the
contrary, many of the long term exchanges were free to the Russian side
(sponsored usually by USIA, etc) so being affluent enough to send your child
abroad had nothing to do with it. Students hailed from ordinary schools and
represented a rather large cross-section of Russian culture from Moscow to
Vladivostok. I would add that on the exchange I worked for, I recall only
one or two instances of students not returning back from the US in order to
obtain citizenship. A far smaller number of people than the Americans who
opted to become "lifers" here in Russia.


Really, more of these programs should exist, given the relatively profound
lack of understanding between our countries. Remarks such as Jerry's carry
that cold war mentality that all Russians want to defect or emigrate, or
"invite papa". They perpetuate misunderstanding. I hope some of the
Russians who might have participated and read this list will speak up.


Sincerely,
Nathan Stowell
Commercial Director,
ACI Industries Moscow Office


*******


#10
Date: Wed, 27 Oct 1999 
From: Yale Richmond <yalerich@erols.com>
Subject: Hough on Student Visas


Jerry Hough (in JRL 3590) is both right and wrong on the question of
issuance of U.S. visas to Russian students, and, as usual, he is
provocative.


Hough is right in saying "The exchange programs of the Soviet period
were far more important than Reagan in bringing down the Soviet system.
But that was because the programs had to take Soviet officials who
needed the exposure to the West, not those who supported US foreign
policy." I thank him for that statement which I will use in the book I
am now writing on how 30 years (1958-88) of Soviet exchanges with the
West, and with the US in particular, brought changes to the Soviet Union
that helped to prepare the way for the reforms of the 1980s.


In those years, the State Department was criticized for issuing visas,
under the US-USSR cultural agreement, to Soviets who were members of the
Communist Party and had the approval of the KGB for travel abroad. But
under the ground rule of "sending side nominates," we had no choice but
to accept those people nominated by the Soviet authorities, and since
the exchanges were mostly reciprocal, we would not have wanted the
Soviets to tell us whom to send to the Soviet Union. That policy was
correct, we now know, because the Soviet reforms of the 1980s came from
within the Party, and Gorbchev himself has admitted that he and his wife
were influenced by their many foreign trips and their reading of
restricted foreign literature translated into Russian, much of it
American, available only to senior party members.


But Hough is wrong when he argues that exchanges "should be limited to
the high school level or short term visits," and we should be inviting
Russians from the provinces and "those who don't know English--or know
it badly." True, some of the young Russians who come to the US these
days are indeed graduates of the English-language special schools and
have family names that are familiar to old Sovietologists like Hough.
But many others who come to study at our universities speak English well
but are not graduates of those elite schools and do not come from
families of the old nomenklatura. We should not deny them the
opportunity to study in the US simply because we may run the risk of
their establishing residence here.


This discussion recalls the old debate among practitioners of exchanges
as to whether we should be bringing to the US high school students still
in their formative years, undergraduates who have yet to prove
themselves, or graduate students who have started to make their mark in
their chosen careers. As a former US Foreign Service cultural officer
who worked on exchanges for many years in three countries--Germany,
Poland, and the Soviet Union--I come down strongly in favor of graduate
student exchanges. That's where the payoff has been proven to be.


*******


#11
New York Times
October 28, 1999
[for personal use only]
Ukraine Election Seems Rigged to Help the Incumbent
By MICHAEL WINES


KIEV, Ukraine -- Ukraine, which often boasts of being the first post-Soviet 
society to freely elect a President, looks poised to re-elect one. This time, 
however, don't expect much bragging. 


With the first of probably two elections to chose its next leader looming on 
Sunday, Ukraine's 1999 presidential campaign already is being judged a 
political and democratic disaster. 


It is not merely that the incumbent and favorite, President Leonid M. 
Kuchma, is running on a five-year record of economic decline. Nor is it just 
the grenade attack on one candidate, this month, or the fatal stabbing of 
another candidate's senior aide last week. 


Far more dismaying is the extent to which the campaign seems to have been 
rigged to favor Kuchma -- sometimes with a brazenness that would have made a 
Soviet autocrat turn an even deeper red. 


"It's the dirtiest election in the history of modern Ukraine," said Nikolo 
Tomenko, the nation's most respected political analyst. "In a nutshell, 
democratic elections in Ukraine aren't happening this year." 


The tactics include blizzards of phony leaflets promoting stands that 
opposition candidates say they have not taken, the emergence of a radical 
populist candidate who has split the two leading opposition candidates and 
retribution against private media that have given favorable coverage to the 
President's rivals. 


In fact, Kuchma's rivals have been all but ignored by the state-run 
television and the major independent channels, largely controlled by 
pro-Kuchma tycoons. 


The handful of private stations that have covered the opposition have 
received such a hail of Government harassment that one owner finally sold his 
stake to Kuchma's supporters. 


The major newspaper in Kiev, run by a man said to be Kuchma's son-in-law, ran 
a hagiographic serial of the President's life story. 


Popular Russian singers are barnstorming the countryside, staging free 
concerts punctuated with Kuchma endorsements, which are then replayed on the 
evening news as, well, news. 


Tax police officers, fire inspectors and other bureaucrats have been pressed 
into campaign service, with the result that shops and offices across the 
nation are plastered with Kuchma posters. 


"There are phenomenal shenanigans and accusations, including even this 
so-called assassination attempt," said Bohdan Krawchenko, a democratic 
activist. 


As the campaign enters its last week, the share of undecided voters is high 
-- 25 to 30 percent, by some counts -- in part out of disgust. "For most 
people there is no one they want to vote for," Krawchenko said. 


Kuchma may need all the extra help he is getting. Until now, he has prospered 
by casting himself as a pro-Western bulwark against Communists who want to 
trash his market-oriented economic programs and merge Ukraine back into 
Russia. 


But those arguments have lost potency this year. For one thing, Kuchma's 
economic program has balked at basic reforms like selling off big 
state-controlled industries. Foreign debt has ballooned, corruption is 
endemic and, except among the young, disillusionment with the West is high. 


For another, Ukraine's Communists are moderating their own economic program 
and pledging to leave existing businesses more or less alone. And as Russia's 
tin-cup economy staggered and Belarus's freedoms shrank this year, the 
Communists have mostly shelved the notion that Ukraine should reunite with 
its neighbors. 


That has left Kuchma in something of a jam. Opinion polls indicate that he 
can count on about 25 percent of the vote, far less than the 45 or 50 percent 
of the electorate that is loyal to the left. To win re-election, he must 
finish among the top two vote-getters on Sunday and then win a majority in 
the November runoff. 


The left has been divided by the emergence this year of a hard-hitting 
populist, Natalya Vitrenko, who is running the most radical campaign of any 
serious candidate. 


Ms. Vitrenko's throw-the-bums-out campaign -- she would eject the 
International Monetary Fund from Ukraine and send the Government's economic 
reformers to work in uranium mines -- have won the loyalty of nearly a fifth 
of the electorate. But her platform makes her unpalatable to the remaining 80 
percent. 


It is taken for granted by Tomenko and most other experts, but never proven, 
that Kuchma's supporters jump-started Ms. Vitrenko's campaign with cash 
donations. Regardless, her candidacy has crippled the two leftists most 
likely to rival Kuchma, Petro Simonenko of the Communist Party and Oleksandr 
Moroz of the more centrist Socialist Party. 


Politics since then have gotten stranger and more savage. On Oct. 2 someone 
tossed a hand grenade at Ms. Vitrenko during a rally, wounding her and 33 
others, some seriously. Hours later, the Government said it had arrested two 
Russian assassins -- and traced the grenades to Moroz's campaign manager. 


Ms. Vitrenko and Moroz both recovered, one physically, the other politically. 
"Practically no one in the elite believes it," another prominent political 
analyst, Mikhailo Pohrebinsky, said of the accusation. "As for the voters, 
for a short period Moroz's ratings dropped, but then they returned." 


Moroz's aides assert that that is but one of hundreds of instances in which 
the press has been used against their man and other Kuchma critics. 


Tomenko, the analyst, has his own political bent. For a while, he advised a 
band of four centrist candidates, including Moroz, who were considering 
uniting behind one of their own. But he insists that the evidence of campaign 
abuses speaks for itself. 


Some do not entirely agree. Pohrebinsky, the analyst, says much of the media 
manipulation in this campaign differs little from the last presidential 
campaign in Russia, when the state television and private networks began a 
pro-Yeltsin blitz to prevent a Communist victory. 


Another well-known journalist, Oleksandr Tkachenko, said Westerners 
unreasonably demanded a robust and open democracy in a nation that was still 
learning the ropes. 


"According to Polish standards, the situation with freedom of the press here 
is lower, though not that much lower," said Tkachenko, the head of a new 
private channel, Noviy Canal. "By Belarus standards we have complete freedom 
of the press. In the '94 campaigns there wasn't a single private national TV 
channel. Now there are three or four. We had no private national newspapers. 
Now we have many. Again, the question about Ukraine is, 'Compared to what?' " 


And in fact, Kuchma took a step on Monday that emulated more robust 
democracies and, surely, was aimed at silencing carpers. He appeared briefly, 
beamed in remotely from his hometown of Dnipropetrovsk, in the first of five 
nationally broadcast presidential debates. 


Most Ukrainians still may not know that the debate started at 10:45 P.M. and 
was not reported in the next day's newspapers. The Government later postponed 
the remaining debates until further notice. The moderator, officials said, 
developed heart trouble. 


*******


#12
Excerpt
Washington Post
28 October 1999 
Tiny Island Shelters Huge Cash Flows
By David S. Hilzenrath


The tiny Pacific island of Nauru has enjoyed extraordinary wealth over the 
past few decades exploiting a precious natural resource--fossilized bird 
droppings. But these phosphate deposits are nearly depleted, and strip mining 
has turned most of the island's eight square miles into an arid, pitted 
desolation. Now Nauru is cultivating a new source of income.


It is reinventing itself as an offshore banking center and selling foreigners 
the means to cloak transactions.


Over the past two years, tens of billions of dollars appear to have flowed 
from Russia's troubled economy through banks and other companies registered 
in Nauru, Russian and U.S. government officials said.


In 1998, $70 billion was transferred from Russian banks to accounts of banks 
chartered in Nauru, primarily to evade taxes, Victor Melnikov, deputy 
chairman of the Russian central bank, said in an interview yesterday.


A senior U.S. official said: "The central bank of Russia has come to us and 
confirmed that large amounts of Russian capital are flowing into and out of 
Nauru, and that has raised concerns on their part and on ours and certainly 
raised suspicions."


International authorities say Nauru is increasingly providing cover for 
Russian organized crime.


Melnikov's $70 billion figure is near the middle of a wide range of 
estimates. The very nature of offshore banking makes it difficult to measure 
the amount of money transferred through companies registered in Nauru. It 
would be surprising if any of the money ever touched the island at all; it 
merely moves through accounts the Nauruan banks maintain at other faraway 
institutions.


The emergence of this speck in the Pacific as a major offshore player is a 
recent phenomenon, fueled in part by the growth of the Internet, and it 
illustrates how difficult it is for international authorities to keep up in 
the war on money laundering. Even as law enforcers persuade more established 
offshore havens to let them peek behind the veil of secrecy, suspicious money 
moves somewhere else.


To the frustration of international law enforcement, the Republic of Nauru 
provides even stricter secrecy than such legendary havens as Switzerland and 
the Cayman Islands.


"Nauru's current offshore banking regime . . . is an open invitation to 
financial crime and money laundering," the State Department said in a 1998 
report published this February. While Nauru's banking-secrecy legislation has 
been in place since the 1970s, Nauru was listed as having "no priority" on 
State's annual list of money-laundering trouble spots as recently as 1996.


The general manager of the Nauruan agency that registers the offshore 
businesses said secrecy is a matter of state policy. But S.B. Hulkar said the 
Nauru Agency Corp. maintains "very rigorous documentary requirements" and 
"that in itself ensures that responsible, reliable people apply."


Asked if the Nauru Agency Corp. verifies the information submitted by 
applicants, Managing Director Kelly Emiu answered, "No comment."


Nauru's president, Rene Harris, also declined to comment on the island's 
offshore services. "What's it got to do with you?" he asked angrily before 
hanging up.


Less than one-seventh the size of the District in land area, with a 
population estimated last year at 10,850, Nauru might seem an unlikely focal 
point for global finance. The coral atoll, which was admitted to the United 
Nations last month, is one of the smallest nations in the world. It's near 
the equator, between Australia and Hawaii, where its closest neighbors 
include Banaba and the Nukumanu Islands.


Nauru's economic diversification is a lesson in the ways of offshore finance, 
a vast, far-flung industry routinely used to hide ill-gotten gains, dodge 
taxes and shield assets from creditors.


Phosphate may be finite, but Nauru is mining an unlimited treasure: its 
national sovereignty. The island is using its status as an independent state 
to charter offshore banks and corporations. For a price, clients gain access 
to the international financial system with the comfort that Nauruan law 
conceals their identities.


Unlike the rock that made Nauru rich, this export is ethereal--a corporate 
name, an out-of-the-way mailing address, the aura of legitimacy.


"They're selling the hole in the doughnut," said a representative of Baltic 
Banking Group in Latvia, which helps clients register offshore businesses.


How easy can it be to open a bank on Nauru? From the Internet, promoters 
shout the answer. The World Wide Web site of the Offshore Secrets Network, 
for example, shows clients where to click to get right down to business: 
"YES! I WANT TO ORDER MY OWN BANK NOW!"....


Complete text:
http://www.washingtonpost.com/wp-srv/WPcap/1999-10/28/057r-102899-idx.html


******


#13
Russian Industrial Output Rises 20% in September vs Year Ago


Moscow, Oct. 28 (Bloomberg)<
/A> -- Russian industrial production rose at a faster annual pace in 
September than in the previous month, as oil, metals and paper producers 
continued to benefit from the ruble's plunge and rising world commodities 
prices. 


September industrial output grew 20.2 percent from the same month last year, 
compared with a 16 percent annual rise in August, the State Statistics 
Committee said. Output rose 7 percent in the first nine months from the same 
period in 1998. The September rise stems mainly from a plunge in output a 
year ago after the government stopped protecting the ruble, analysts said. 


``The main stimuli for growth is the ruble devaluation,'' said Alexei 
Zabotkine, economist at United Financial Group in Moscow. ``Devaluation 
(helped) in some industries and in others a change on world markets.'' 


The ruble's almost 75 percent decline in the past year quadrupled the price 
of imported goods on average, making domestically produced goods more 
attractive. At the same time, the currency's plunge helped exporters by 
lowering their costs at home. Oil producers, the country's main exporters, 
also benefited from higher world oil prices. 


The oil and petrochemicals industry, along with producers of metals, 
machinery, paper and construction materials led the rise. 


Surgut, GAZ Output 


OAO Surgutneftegaz, the No. 3 oil producer, increased output by 6.3 percent 
in the first nine months as soaring world prices and the weak ruble allowed 
it to boost investment. Surgut last month revised up its forecast for output 
growth to 5.7 percent this year. 


Crude oil for December delivery fell as much as 19 cents to $22.40 a barrel, 
on the International Petroleum Exchange in London, traders said. 


The fall in imports led to substitution by cheaper Russian- made goods as 
consumers' purchasing power plunged. 


AO Gorkovsky Avtomobilny Zavod, Russia's second-biggest carmaker, boosted 
output by 11 percent in January to September and expects the rise to reach 18 
percent by year-end. Output of its popular Gazelle trucks, is up 47 percent 
this year from a year ago. 


In the first seven months, output rose 4.5 percent from the same period in 
1998. 


Output in the petrochemicals and oil industry grew 20.3 percent in the first 
nine months. Steel and metals production is up about 10 percent, machine 
production 13.1 percent and timber, paper and cellulose output grew 14.5 
percent. Production of glass rose 9 percent in the same period. 


The current level of output is sustainable, Zabotkine said, though further 
growth would need more government investment. 


``All benefits of the devaluation have been absorbed,'' he said. 


*******