November 7, 1999    
This Date's Issues: 3610 • 3611 

Johnson's Russia List
#3611
8 November 1999
davidjohnson@erols.com


[Note from David Johnson:
1. Reuters: East Europe still undergoing change after 10 years.
2. Reuters: BP chief fears collapse of Russia reforms.
3. The Independent (UK): Rupert Cornwell, War will force oil pipeline to avoid Caucasus region.
4. Reuters: General says would quit if Chechnya attack halted.
5. Financial Times (UK): Andrew Jack, PM assails Chechen 'criminals' 
6. EURASIAN BUSINESS ROUNDTABLE in Washington.
7. Christian Science Monitor: Peter Ford, A decade of life without the Wall. The Berlin Wall fell 10 years ago tomorrow, setting Eastern European states on different tracks. 
8. Marian Dent: Graduate exchange programs.
9. Los Angeles Times editorial: Rising From Red Ruins.
10. Los Angles Times: Robert Bruce Ware, Clan Rivalries Sowed Seeds of Conflict. Chechnya: No sooner did it free itself from Moscow than it proved itself incapable of constructing a modern state. 
11. Stratfor Commentary: Russia’s Silent Coup Becomes Public.
12. Reuters: Russians bomb Chechnya, refugees try to flee.] 


*******


#1
East Europe still undergoing change after 10 years
By David Chance

LONDON, Nov 8 (Reuters) - Ten years after the fall of the Berlin Wall,
predictions that the transformation to capitalism in East Europe would be
complete by now have proved too optimistic, the European Bank for
Reconstruction and Development said on Monday. 


The EBRD, set up in 1991 to help centrally planned economies move to the
free market, said in its annual Transition Report that many years and more
reforms would be needed before the chapter on transition could be closed. 


``The transition is not necessarily a steady march forward; there have been
and will be setbacks and crises along the way. It has a long way to go,
even in more advanced countries,'' said the EBRD, the region's largest
investor in the private sector. 


The picture for some countries, mainly in Central Europe, is promising. 


Their economies have returned to the same level of output as 1989 and
Poland, Hungary, the Czech Republic, Estonia and Slovenia have succeeded to
such extent they can look forward to European Union membership in the next
decade. 


Their institutions have also proved remarkably robust in the face of the
potentially destabilising Russian financial crisis, while Balkan states
such as Bulgaria, Macedonia and Albania have doggedly stuck to reform
despite the war in Kosovo. 


However, much of the optimism of the mid-1990s, which led the Czechs to
declare that they had graduated from the reform class, has not been
justified, the EBRD said. 


``At the beginning of the reform process we and others did not appreciate
deeply enough the importance of market supporting institutions,'' said EBRD
former Chief Economist Nick Stern. 


``Looking back, we should have placed more emphasis on that,'' said Stern,
who compiled the report. 


Nowhere is the lack of institutional reform more evident than in the
successor states to the Soviet Union, which many analysts had initially
predicted would follow Central Europe down the path to fully-fledged market
economies. 


Some economies in the Commonwealth of Independent States are half the size
of 10 years ago and living standards are falling. 


Although the EBRD believes overall rankings are misleading, Turkmenistan
takes bottom spot on transition, followed by Belarus, while Russia ranks
seven from bottom, above Ukraine. 


Hungary emerges as the most successful transition economy, followed by
Poland and the Czech Republic and Estonia, with Slovakia catching up
quickly after years of stagnation. 


PAYING A HEAVY PRICE FOR INADEQUATE REFORM 


The EBRD, which had commitments worth 10.3 billion euros ($10.69 billion)
in the region in the middle of this year, said failure to reform had
resulted in a great deal of misery. 


In Russia, average life expectancy has declined to 66.9 years from 69.2
years while inequalities have risen and 30 percent of the population was
classified by the government as living in poverty in November 1998. 


These people are excluded from participation in the economy, and if that
continues, the EBRD warned enthusiasm for reform could diminish. 


Less desirable aspects of capitalism have appeared over the past 10 years. 


According to a survey of 3,000 businesses in 20 countries in the the
region, 29.2 percent of firms surveyed in Russia said they paid bribes
``frequently.'' 


There was also a good deal of corruption in Hungary, where 31.3 percent of
firms surveyed said they bribed frequently. In Poland the figure was 32.7
percent. 


CALLS FOR MORE REFORM, NOT LESS. 


The EBRD believes that after surviving the shock of the Russia crisis, the
Confederation of Independent States will see one percent growth in 2000
after a flat 1999. 


It sees the economies of Central and Southern Europe and the Baltic States
growing an average 1.6 percent this year and 3.1 percent in 2000. 


Key to sustainable recovery is the creation of a legal framework which
stimulate small business, which will democratise the economy and create a
constituency for reform. 


``We must pull down the barriers to new business with the same conviction
that tore down the iron curtain ten years ago,'' EBRD President Horst
Koehler said. 
($1-.9636 Euro) 


*******


#2
BP chief fears collapse of Russia reforms

LONDON, Nov 8 (Reuters) - BP Amoco Plc is frustrated at the deteriorating
Russian economic and investment outlook and fears a reversal of reforms and
there, Chief Executive John Browne said on Monday. 


``We find ourselves at a point where we are frustrated by the absence ...
of a society in which citizens can live and work together successfully,''
he told a business strategies conference here. 


``There now seems to be a risk that the whole (economic reform) process
will be reversed,'' he said, calling Russia ``an area of great opportunity
but arguably of even greater danger.'' 


Last week Moscow-based BP Amoco officials warned the company may pull out
of the country that holds the world's largest non-Middle East oil reserves
if oil company Sidanko, in which it is a shareholder, loses control of a
bankrupt subsidiary. 


BP paid $571 million for a 10 percent shareholding in Sidanko in late 1997.
It later wrote down the value of its investment by $200 million. 


A Moscow spokesman for BP Amoco said that if an auction later this month of
a production unit went against the company it would not rule out
withdrawing from Russia and writing off the remaining $371 million
investment. 


Bankrupt Sidanko production unit Chernogorneft CHGZ.RTS is due to be
auctioned on November 26. 


Last month another bankrupt Sidanko subsidiary, Kondpetroleum, was sold
against the wishes of both Sidanko and BP Amoco to the Tyumen Oil Company. 


Sidanko was sued for bankruptcy in January and declared bankrupt in May.
Several of its subsidiaries have been declared bankrupt separately and are
being sold off, leaving Sidanko without some of its core assets. 


BP Amoco's other interests in Russia include a gasoline retail network,
interests in a huge eastern Siberian gas field, Kovykta, and in a project
offshore Sakhalin in the far east of the country. 


Browne's comments, ahead of the group's third quarter results due later on
Monday, were made the context of a debate on issues of corporate social
responsibility. 


``My sense is that the problem (in Russia) is so large that systematic and
structural solutions aren't going to work,'' Browne told delegates. 


He said the best approach would be to take one or two achievable priority
areas of reform and improvement ``that you can shine a light on and say
these are working to mutual advantage.'' 


*******


#3
The Independent (UK)
8 November 1999
[for personal use only]
War will force oil pipeline to avoid Caucasus region 
By Rupert Cornwell 


Moscow's savage war in Chechnya is making more likely an early deal for a 
pipeline to carry Caspian oil to the West, bypassing the unstable northern 
Caucasus region of Russia. 


Industry experts say that Turkey, Georgia and Azerbaijan will probably sign 
an agreement at this month's 54-nation European security summit in Istanbul, 
for the new pipeline running from the Azeri capital Baku through Georgia and 
then south-west to Turkey's Mediterranean port of Ceyhan. 


The long-envisaged scheme has the strong backing of Washington, which sees it 
both as a major boost for Ankara, the most important US strategic ally in the 
region, and as a means of shifting both Georgia and Azerbaijan further from 
Russia's sphere of influence and into the Western orbit. 


But the project has been held up by arguments over financing. Doubts have 
also long been expressed over whether Caspian output by the BP-Amoco-led 
consortium, which is due to build the pipeline, was enough to justify the 
$2.4bn cost, when an existing pipeline from Baku to the Russian Black Sea 
port of Novorossiysk could be expanded at much less cost. 


Now however the financial difficulties have been largely cleared up, and the 
fighting in Chechnya has cast a long shadow over the Novorossiysk pipeline, 
which runs directly through the heavily bombarded Chechen capital of Grozny. 


In a bid to allay these doubts and head off the Azerbaijan to Turkey route, 
Moscow has promised to build a new segment of pipeline through the republic 
of Dagestan, bypassing Chechnya completely. The new link could be ready 
within six to eight months, giving Russia a much stronger hand in the 
geo-political jockeying over the vast potential energy riches of the Caspian 
and Central Asia. 


But Chechen insurgents have warned they would sabotage it even before it 
started operations – a threat not being taken lightly given that it was 
Chechen incursions into Dagestan last summer that provoked the first 
instalment of the new conflict. 


The US is also leaning hard on Armenia and Azerbaijan to announce a 
settlement of their 11-year dispute over Nagorno-Karabakh. This too would 
reduce Russia's scope for meddling in the Caucasus, but last week's murder of 
the Armenian Prime Minister and other top officials makes it unclear whether 
it will be signed in Istanbul, as had been hoped. 

******


#4
General says would quit if Chechnya attack halted


MOSCOW, Nov 7 (Reuters) - One of the commanders leading Russia's offensive in 
the rebel region of Chechnya said on Sunday he would quit the army if ordered 
to halt his advance. 


Major General Vladimir Shamanov, the commander of the Western federal forces 
in the North Caucasus, also told Russia's state-owned television he supported 
Prime Minister Vladimir Putin as the man to lead Russia in the future. 


Russian newspapers have said there is a struggle in the country's leadership 
over Chechnya, with some urging moderation and talks with the region's 
leadership and others backing the fight for it to be taken back under 
Moscow's total control. 


Asked if he would carry out an order to stop his troops' advance in Chechnya, 
Shamanov said: ``The army will fulfil its order, no one should doubt this.'' 


``But for myself, I would say that I would tear off my shoulder boards and go 
and do something in civilian life. I would no longer serve in such an army.'' 


Russian Defence Minister Igor Sergeyev and the head of the general staff, 
Anatoly Kvashnin, issued a rare joint statement on Saturday to deny a split 
between the administration of President Boris Yeltsin and the military over 
the conflict. 


The Newspaper Moskovsky Komsomolets said on Friday Yeltsin's administration 
was considering opening talks with Chechen leader Aslan Maskhadov and 
Kvashnin had threatened to resign if the plan was carried through. 


Shamonov also said he believed Putin, the former head of the country's 
domestic security service, was the best leader. 


Putin's prosecution of the Chechnya campaign has earned him the reputation as 
a strong leader and his rating in opinion polls has risen during the 
conflict. 


``I would say that Vladimir Vladimirovich (Putin) is today a symbol behind 
which many people march. I am in the first rank, without a doubt,'' Shamonov 
said. ``All russians are sick of the fact that Russia is humiliated, 
insulted, asking for hand outs.'' 


``We have it bad today but let us be patient and tomorrow will come and it 
will better. We will go with Putin and tomorrow will come,'' he said. 


*******


#5
Financial Times (UK)
8 November 1999
[for personal use only]
RUSSIA: PM assails Chechen 'criminals' 
By Andrew Jack in Moscow


The breakaway North Caucasus republic of Chechnya is depriving the Russian 
economy of "billions and billions of roubles" through criminal activities, 
Vladimir Putin, prime minister, claimed this weekend.


In an interview with the Kommersant newspaper, Mr Putin broadened his 
justification of the military bombardment of the region by federal forces 
away from terrorist attacks, stressing that the "Chechen tribute" extending 
as far as neighbouring Stavropol and Dagestan was depriving pensioners and 
the Russian budget.


His comments came as shelling continued of the Chechen capital Grozny, and 
military leaders took the unusual step of stressing publicly their "united 
and effective front" following suggestions in the Russian press of divisions 
in the military and rumours that President Boris Yeltsin was considering 
halting the conflict and firing Mr Putin.


Mr Putin's opinion poll rating has risen sharply on the back of the Chechen 
conflict, before general elections scheduled for December 19 and the 
presidential race to replace Mr Yeltsin next summer. Registration of the 28 
parties competing for the race for the national parliament was completed at 
the end of last week.


The prime minister has taken a tough line in spite of growing criticism by 
the west of Russia's apparent failure to find a political solution to the 
crisis.


Separately over the weekend, Boris Berezovsky, the oligarch who is standing 
as an independent candidate in the December elections, accused Yevgeny 
Primakov, the former prime minister and presidential contender, of 
engineering investigations by the public prosecutor's office against him.


He was speaking after the prosecutors' office said on Friday it had dropped a 
criminal case against him.


*******


#6
From: Eurasia@aol.com
Date: Sun, 7 Nov 1999
Subject: UPDATE ON EURASIAN BUSINESS CONFERENCE


THE EURASIAN BUSINESS COALITION
& THE EURASIAN CENTER


Invites you and your colleagues to a Caviar Reception
& the EURASIAN BUSINESS ROUNDTABLE


"FORECASTS FOR AMERICAN-
EURASIAN(European and Asian)
BUSINESS, TRADE and IT(Information Technologies)
in the NEW MILLENNIUM


Tuesday, November 9, 1999
At THE RUSSIA HOUSE


1800 Conn. Ave., NW
(Dupont Circle Metro, corner of Conn. & Florida Aves.)


Reception: 5:00-6:00 p.m.
Discussion: 6:00-7:00 p.m.


List of Speakers:


V. Grushetskiy, Trade Represenative, Embassy of the Russian Federation
Keisuke Sadamori, First Secretary of the Embassy of Japan, Representative of 
MITI
Deng Cheng, Area Expert on the Chinese Economy
Ben Slay, Senior Economic Analyst, PlanEcon, Washington, D.C.
Dr. Gerard Janco, Director, The Eurasian Center
Dr. Isaac Tarasulo, Vice President, Eurasian Business Coalition
Dr. Leonid Malkov, President and CEO of Cogitum, LC
Join us as our experts will try to answer the following questions:


Will the Asian tigers make a comeback in the new century?
Will the Russian economy revive its economy?
Will be China be successful in transforming its economy?
Which nations in Eastern Europe are models for economic growth?
How will the U.S. stock market adapt to this time of enormous growth and 
flux?


Questions: The event is free ?'s contact the Center at (202)966-8651 
or e-mail to Eurasia@aol.com (cash bar)
Please visit our new website which was designed by 
our Moscow office at http://www.eurasiacenter.org


We are featuring speaker Dr. Leonid Malkov, President and CEO of Cogitum LC, 
a Russian-American computer firm. He believes that Russia holds a valuable 
untapped resource of programmers, software engineers, and web-designers, and 
this resource could be easily utilized through the internet connections and 
organizational structure within the United States. He believes that "with 
the revolution of the Internet there is no difference between people working 
side-by-side in an office or people working on different continents."


******


#7
Christian Science Monitor
8 November 1999
A decade of life without the Wall
The Berlin Wall fell 10 years ago tomorrow, setting Eastern European states 
on different tracks. 
By Peter Ford, Staff writer of The Christian Science Monitor


As she meets an acquaintance in the restrained turn-of-the-century elegance 
of Budapest's smartest coffee house, Emö Józsa's fashionably bobbed hair, her 
well-cut suit, and her practiced English proclaim her success: she has 
grabbed with both hands the opportunities that the new Hungary has offered 
her. 


To the northeast 120 miles, in the depressed steel town of Miskolc, Elemer 
Kotai stands outside his rundown apartment block, waiting on the corner for 
the mailman to bring his welfare check. 


A middle-age crane operator, Mr. Kotai lost his job when his state-run 
factory was privatized in 1994, and with it he lost all hope in the future. 


In the 10 years since the fall of the Berlin Wall signaled the end of 
communism's grip on Central and Eastern Europe, a pattern of winners and 
losers has emerged. You can see it in the individual lives - like Kotai and 
Ms. Józsa - as well as in the progress of individual nations. 


Hungary and Poland, for example, have made a relatively rapid transition from 
totalitarian states with socialist economies to constitutional, participatory 
democracies with free markets. Neither country, however, would claim that 
it's been an easy - or a complete - transformation. 


But others, such as Bulgaria and Romania, are still struggling to make the 
adjustments that will bring them into a semblance of accord with the rest of 
Western Europe. 


"Our societies have yet to adapt to the changes," says Gabor Demszky, once a 
prominent Hugarian dissident and now mayor of Budapest. 


Mr. Demszky adds, "In general it is fantastic how rapidly the transition has 
happened. But the price we would have to pay for it was not clear in 1989." 


Emö Józsa look-alikes can be seen all over the region, cell phones to their 
ears, working and playing hard, wearing the same clothes, listening to the 
same music, and sharing the same aspirations as their West European cousins. 
Nor is Elemer Kotai alone: millions of people have been "shoveled out of the 
gate" as he puts it, in the economic upheavals that have shaken Central and 
Eastern Europe. 


But if similar forces are at play everywhere, the countries of the region 
that were once blurred in many Western minds into one gray "Soviet bloc" have 
now sprung into individual relief. 


History (suspended by Soviet diktat), and geography (distorted by the Iron 
Curtain), have reasserted themselves. And though the mantra from the Baltic 
to the Balkans is the same - capitalist democracy - naturally some countries 
are closer to this goal than others. 


One overriding trend has swept them all, though. As the Russian bear's hug 
loosened, capitals that had been obliged to look East for 40 years swung 
their eyes westward. Nations that had been members of the Soviet-dominated 
Warsaw Pact lined up to join NATO (Hungary, the Czech Republic, and Poland 
joined last May), and as Comecon collapsed, its members applied to join the 
European Union instead. 


"Our countries need capital, technology, markets, and security," points out 
András Balogh, head of the Hungarian Institute for International Affairs, an 
independent think tank. "NATO and the West are the only reference points." 


It is not surprising that Hungary experienced one of the easiest transitions 
from a totalitarian state running a Socialist economy to a constitutional 
democracy and free markets. Although the 1956 uprising against Communist rule 
was crushed by Soviet tanks, the Hungarian authorities developed a style of 
"goulash communism" that allowed many reforms. 


Hungarians often traveled to the West, small private enterprise was allowed, 
and by 1989 "our managers were already thinking along profit lines, they knew 
how to make deals," says Pál Réti, an editor at the leading business weekly 
HGV. 


Likewise, in Poland, the atmosphere was westernized by the tens of thousands 
of workers who had taken jobs in western Europe, and by Solidarity, the 
anticommunist trade union. Farmland had never been collectivized, and more 
than 50 percent of Polish trade was with Western countries. 


This was very different from the situation in Bulgaria, for example, which is 
still struggling to implement market reforms. There, the economy was 
dominated by massive state-run heavy industrial plants that depended on cheap 
Soviet oil and gas, and exported 85 percent of their output to the Soviet 
Union. When the energy supplies and the market dried up overnight, Bulgaria 
was bound to be in difficulties. 


Nor was Romania well-placed to implement changes: President Nicolae Ceaucescu 
had denied his citizens all contact with the West, and his successors were 
hardly cut from the same democratic cloth as the new rulers in the rest of 
the region. 


Even Czechoslovakia, which split into the Czech Republic and Slovakia, was at 
a disadvantage, despite its proximity to the West. "All individualistic or 
entrepreneurial thinking was uprooted" by the Communist government, says 
László Lengyel, a noted Hungarian political analyst. 


Once the regimes changed, economic theorists who had been used to working 
with models suddenly found themselves with a crop of live economies on which 
to experiment, and different Central and Eastern European governments 
followed a wide variety of different counsels. 


Some privatized their economies by simply selling off public companies 
wholesale for cash; others gave citizens vouchers they could use to buy 
shares; some organized management buyouts; others broke up firms and sold off 
bits. Most did a little of everything. 


In retrospect, says Jacek Rostowski, an economic adviser to the Polish 
government, "the consensus is that selling off" public companies, as Hungary 
did, "is the much better option," since the companies that bought them - 
almost always from the West - brought in technology, management skills, and 
investment. 


The vouchers that the Czech government issued dispersed ownership widely; in 
the absence of any tradition of corporate governance, many managers took 
advantage of the lack of firm oversight to ransack their firms' assets. 


Though the upheavals happened differently, there have been casualties 
everywhere. Indeed, Poland is the only formerly Socialist country that has 
yet managed to achieve the same per capita gross domestic product as it 
enjoyed 10 years ago. "Even in Hungary, a success story, two-thirds of the 
population are losers in terms of how much they consume" says András Vértes, 
an economic consultant. "Just imagine what it's like in Romania." 


The resulting social inequalities have shocked Central Europeans, accustomed 
to the egalitarian principles of the past. But recent World Bank figures 
suggest that these inequalities are approximately the same as in Western 
Europe and much less pronounced than in the United States. 


Overall, the European Union found in a survey last month that Poland, 
Hungary, the Czech Republic, Slovenia, Latvia, and Estonia are "functioning 
market economies," while Slovakia and Lithuania are "close" and Bulgaria "has 
made substantial progress." That left Romania where "the economic situation 
is very worrying," the report said. 


Likewise, the study found formal parliamentary democracy and the rule of law 
working satisfactorily throughout the region, with free elections and human 
rights respected almost everywhere. 


But from Estonia in the North to Macedonia in the South "you can turn a 
one-party system into a multiparty democracy overnight - that is not the same 
as democratizing society" points out Ferenc Miszlivetz, author of a book on 
civil society in Central Europe. 


Not even in the most radically transformed of the Eastern bloc countries have 
thinking patterns changed in institutions such as the police, universities, 
government ministries, and other public bodies, say reformers. And corruption 
fueled by poverty, greed, and the legal uncertainties of transition economies 
has flourished throughout the region. 


Even allegedly democratic politicians suffer from old habits, observers say. 
"A primitive interpretation of democracy is very common everywhere," says Dr. 
Miszlivetz. "They think that once they have a majority, they can do whatever 
they want." 


"It takes decades to establish a democratic mentality in peoples' minds," 
says Dr. Lengyel. "But it is not even rooted in the elites yet. The logic of 
one-party rule prevails; governments cannot imagine the opposition winning an 
election, and in some countries the opposition is simply the enemy." 


For ordinary people, conditioned by decades of repression, the state is still 
the enemy. A problem in fighting rising crime, says Leslie Kaciban, an FBI 
agent who runs a US-funded training school for policemen in Budapest, is that 
cooperation with the police "is still embryonic. It may take a generation to 
build a partnership between the police and society." 


Meanwhile, the sort of values that reinforce civil society - and that fueled 
the resistance to Communist rule - have retreated in the face of the 
hurly-burly of economic survival, says Miszlivetz. "Cooperation, tolerance, 
solidarity, nonviolence, negotiating a consensus, these have not totally 
disappeared but they have been pushed into the background." 


But citizens' groups are springing up around the region, mobilizing around 
such issues as health care, minority rights, and the environment. Eventually, 
says Miszlivetz, Central European societies will develop new strength. "They 
have to," he says. "Otherwise there is no chance of a successful integration 
into Europe." 


******


#8
From: "Marian Dent" <pericles@glasnet.ru>
Subject: Graduate exchange programs
Date: Sun, 7 Nov 1999


Without getting involved in the visa debate, I want to express my agreement
with Sarah-Lindemann's comments on educational exchanges (JRL 3605).


After working for a number of years for a US organization that sometimes
sent Russian lawyers to the West for training trips, I came to the
conclusion that, while the trips invariably did the recipients a lot of
good, US government money could be better spent training people here. I
went to work for a Russian university and tried to do exactly that, but was
not particularly successful due to organizational bureaucracy, and also due
to the minor problem that the Russian professor's salary wasn't enough money
for me to live on. Finally, my husband (a Russian lawyer) and I started our
own NGO for training Russian lawyers and law students (where the money isn't
much better but the satisfaction level is higher).


Our NGO is not grant funded (except for a couple of small, very specialized
grants), but charges tuition to those who are sponsored or employed by
Western companies, runs test prep and English courses to generate extra
income, and uses the money we raise to fund the training of law students who
really need practical legal training and can't afford it. I pass on this
information so that readers can identify my potential biases up front.


This past spring I was invited to a conference at Yale on the future of aid
to legal reform in Russia, where I sat on the legal education panel. My few
minutes were dedicated to stressing that, if the US government really wanted
to help Russian legal education, it should do so not by funding more Russian
students for graduate study in the US, but by funding Russian students for
studying in Russia. Note the figures that Ms. Lindemann points out--the
astronomically high per-student cost of a Muskie compared to that of
training students in Russia. (We once trained thirty students here in
Russia in a year long program on NGO law for less than the cost of one
Muskie recipient. Several of those students are now working for NGO's, and
one has started a private law firm specializing in NGO clients.)


Taking the best Russian students to US law schools can actually harm the
long term prospects of graduate legal education in Russia. It takes the
best graduate students out of the Russian classrooms, and it makes a Western
LL.M or J.D., rather than a Russian Candidate of Laws, the competitive
degree for the top law jobs. Indeed, almost all my law students see a US
LL.M. as a required credential for employment with a multi-national law firm
in Moscow. Thus, even top Russian law schools are perceived as less
prestigious and have trouble obtaining and keeping graduate students.


Finally, when we fund young Russian law professors and aspirants for study
abroad we must consider the affect on the teaching population in Russia.
Russian law schools are already having trouble keeping good professors and
graduate teaching assistants because of low budgets and pressure from
private employers. To take a professor to a Western school, even if they
only stay a year, further depletes the good teachers available in Russian
law schools.


I argued at the conference that US money would be better spent on funding
student loans for bright Russian students to study law in Russia. Right
now, students who pass entrance examinations study for very little money
and, as a result, if a Russian law school wants top students it has to
tighten its budget and has trouble building the facilities and teaching
staff that will create or maintain the success of the institution. If the
school needs money, it drops its entrance requirements and starts a
"commercial" faculty, where the students are less bright, but often end up
better educated due to the faculty's ability to pay more to its teachers.
Even the brightest scholarship students are treated as a burden to the
school, rather than as the school's clientelle.


By establishing a cadre of top students, who can pass an entrance exam but
who enter the Russian law schools funded from the West, you create an
incentive for the law schools to compete for these students by the
facilities, courses and teaching staff they offer. You also create a way
for Russian law schools to educate top students while still increasing their
budgets and paying their teachers; and you create less need for accepting
unqualified students for higher degree programs. All this, in the long run,
would increase the quality of Russian graduate education.


Don't get me wrong--I believe that the recipients of Muskies and other
funding truly benefit from the study abroad opportunities. I also believe
that a good number will return to Russia, and agree that some will influence
the future direction of this country. Muskie is a good program, but I
believe that it is a very costly way to gain the benefits afforded.


So what was the result of my remarks at the conference? My comments went
completely against the grain of the American academics on the panel, as well
as with the Russians (who, having studied in Western law schools, were quick
to express the benefits of what they had received.) Thinking back, I
should have expected as much because I should have more closely examined the
goals of exchange programs. I was mistakenly thinking of indiginous capcity
building--the goal we most publicly proclaim--as the main reason for sending
students to the West for training. But of course there are many additional
goals. One is the increased exposure of the American students and law
schools to the Russian students. American graduate schools have a
valuable interest in accepting these top Russian students, who add diversity
and a new intellectual perspective to their classrooms. Another goal is
the Westernization of Russian intellectuals in a way that would not happen
from our funding their study in Russia. And, it's true that at the moment
graduate law students can't get as high quality education in Russia as they
can in the West. So, I realized that my ideas should not be implemented to
the exclusion of exchange programs. But still, exchange programs should be
kept at current levels or more limited, and additional funding, when
available, should be channelled to other, less costly and potentially more
beneficial programs.


In conclusion, in our lauding of exchange programs and the notable good that
they do, please don't forget that if we really want the long term good of
Russia (especially in the area of legal education--a key to a democratic,
law-based state)we should consider options that fund top Russian graduate
students to stay in the Russian schools. Only in that way can we help build
the quality of Russia's own graduate education system.


Marian Dent
ANO Pericles
American Business & Legal Education Project
Tverskaya Ul 10, Suite 319
Moscow 103009 Russia
7-095-292-5188/6463
pericles@glasnet.ru


*******


#9
Los Angeles Times
8 November 1999
Editorial
Rising From Red Ruins 


The fall of the Berlin Wall 10 years ago, symbolizing the collapse of
Communism in Europe, freed the Eastern bloc countries to pursue their own
economic and social dreams. With high hopes, they set out in the same
general direction--market economies and some form of representative
democracy. A decade later, some have gone far while others lag. But the
demise of Communism has changed all of them, and much of the rest of the
world. Without the superpower rivalry the chances of a nuclear holocaust
have markedly diminished, and the world is a far safer place. 


The dismantling of the Communist regimes in the fall of 1989 was remarkably
quick and peaceful. With the exception of Romania, where hundreds, perhaps
thousands, died battling the military and security forces, the Soviet bloc
governments toppled like dominoes. Everything was possible in those heady
days when dissident playwrights became presidents. 


But uprooting regimes built on discredited Marxist theories turned out to
be the easy part. Replacing them with a more just, prosperous society has
proved to be far more difficult. 


Transition from the old regime to the new became a continent-size
experiment, as each country tried its own way to rebuild. Ten years on, the
countries with the most radical plans--those that dumped not only the old
dogmas but much of the old guard as well--have done best. Others, including
most of the republics of the former Soviet Union, have accomplished little
more than a change of labels. They still run their economies on the same
corrupt principles of the past. 


Even the countries with the most far-reaching reforms were devastated by
the collapse of the centrally planned economies and the disintegration of
trade among them. Their gross domestic products plunged by a third on
average, and some are still trying to reach pre-1989 levels. But now they
are beginning to reap the benefits. Last year, the Czech Republic, Estonia,
Hungary, Poland and Slovenia were accepted as candidates for membership in
the Western-based European Union and are expected to join within two or
three years. 


Other countries, spurred by the prospect of joining the European fold, have
accelerated the pace of reforms. Among them are Bulgaria, Latvia,
Lithuania, Romania and Slovakia. All five will probably begin membership
negotiations next year. 


But the list of losers is just as long. It includes countries like Belarus,
Ukraine, Kazakhstan, Uzbekistan, the rest of Central Asia and the Caucasian
republics. In most of these now-independent countries, the old Communist
bureaucrats--the nomenklatura--remained in power, controlling vast swaths
of the economy. Under the guise of privatization, they took control of
state enterprises, stripped their assets and pocketed the proceeds. A
result: The odds that Ukraine, the only European country with a Ministry
for European Integration, will join the EU any time soon are slim. 


Despite the unexpectedly severe economic hardship and the disillusionment
with government policies, most Eastern bloc countries, including Russia,
have come to accept democracy. The voters take it out on the politicians at
the ballot box, instead of at barricades, often bringing even the old
Communists back into power if other parties fail to deliver. 


The moral scars of Communism will take a long time to heal, but the
foundation of what former Czech President Vaclav Havel calls "civil
society" has been laid and a useless system buried. 


*******


#10
Los Angeles Times
8 November 1999
[for personal use only]
Clan Rivalries Sowed Seeds of Conflict 
Chechnya: No sooner did it free itself from Moscow than it proved itself
incapable of constructing a modern state. 
By ROBERT BRUCE WARE


Russians say that in every victory there is a defeat, and in every defeat a
victory. As the West grows increasingly alarmed at the grim prospects of a
Chechen defeat, it is helpful to consider how the seeds of the cataclysm
were sown by Chechnya's triumph over Russian forces in 1996. 


During the previous conflict, Chechens were united in their struggle with
Moscow, while Russians were deeply divided in their views of that
disastrously unpopular war. Yet in the three years after the war, Chechen
solidarity disintegrated in the face of Chechnya's traditional clan
rivalries. 


In Chechnya, blood is everything. Chechen social organization is based on
entrenched kinship hierarchies without a history of overarching political
organization, save that which was imposed from Moscow. Chechnya is in many
ways a pre-modern society, and no sooner did it free itself from Moscow
than it proved itself incapable of constructing a modern nation-state. In
compensation for this absence of political organization, the Chechens had
recourse to three expedients, all of which proved disastrous. 


First, Chechens found comfort in their national mythology. In their
ferocious resistance of Russian imperial forces in the early 19th century,
Chechens united with their Dagestani neighbors under the legendary Imam
Shamil, who was himself Dagestani. The enduring legacy of the struggle was
a heroic mythology that served as inspiration for, and drew further
intensification from, the 1994 to 1996 conflict. 


Chechens like to say that a Chechen fighter is worth one Russian tank or a
hundred Russian soldiers. Yet this warrior mythology is self-destructive,
particularly because it is self-perpetuating. The Chechen self-conception
is an altar that demands human sacrifice. Hence the dual invasions of
Dagestan in August and September by Chechen warlord Shamil Basayev. 


As a principal feature of Chechen self-conception, Islam also served as an
expedient through which the Chechens sought to address the deficiencies of
their political organization. The Sufi brotherhood, which was the
organizational basis of Imam Shamil's 19th century resistance, has emerged
as a principled force for education, moderation and tolerance in
neighboring Dagestan. Yet its role in Chechnya was complicated not only by
warrior mythology and clan-based membership but by an ideological
intensification that occurred during the last three years as competing clan
leaders staged appeals to Islam in order to obtain political legitimacy. 


It also was complicated by the introduction of Wahhabite Islamic
fundamentalism, which spread rapidly through Chechnya and Dagestan with the
help of supporters in the Persian Gulf, Pakistan and Afghanistan, including
suspected terrorist Osama bin Laden. Yet the spread of Wahhabism was also a
response to the deepening impoverishment of the region. 


Hampered by their lack of effective political organization, and by their
reflexive resort to a raiding tradition that is part of their mythology,
Chechens have been unable to organize a legitimate economy. Apart from
subsistence farming and barter, income is earned by organized crime, by the
widespread tapping of the petroleum pipeline bound for the West, by
kidnapping and, evidently, by counterfeiting $100 bills. 


This economy of violent criminality has served as a further substitute for
modern social organization. Chechens have been kidnapping Russians for
hundreds of years, but since 1996 the practice has become one of Chechnya's
principal industries. More than 1,300 Westerners and Russians, including
women and children, were taken hostage in those three years--more than one
a day. Hostages are held under brutal conditions for exorbitant ransoms,
which are extorted with the help of Chechen-produced video documentation of
their torture and dismemberment, including that of the children. 


Once taken, hostages are subsequently bought and sold among the Chechen
clans, in much the same way as another culture might exchange money or
securities. The result is a contemporary slave trade from which many
Chechens have directly or indirectly benefited, and in which many are more
or less accomplices. 


Since social organization is dependent on kinship ties, Chechens are spared
the moral complications that might come from a capacity to empathize with
outsiders. Yet in line with the Russian maxim, this practice has had an
ironic twist: The reason there have been no international observers or
relief workers helping inside Chechnya is that the Chechens long ago
murdered or kidnapped them all. Despite the complications of Moscow
politics, despite its deficiency of candor and its unconscionable military
excess, Russia's current conflict has its roots in Chechnya's clan culture,
which perpetuates this violent criminality while preventing political
integration. 


The settlement negotiated in 1996 contributed to the Chechen myth of
self-sacrificial militancy, and the tragedy is that another negotiated
settlement would be unlikely to produce a different result. In a war in
which it is difficult to distinguish "militants" from "civilians," it may
be impossible to identify the victor and the vanquished. The only clear
victor is likely to be the dark and barbarous past. 


Robert Bruce Ware Is an Assistant Professor of Philosophical Studies at
Southern Illinois University Edwardsville


******


#11
Stratfor Commentary
1515 GMT, 991106 ­ Russia’s Silent Coup Becomes Public


The silent coup that left the Russian military in control of Russia’s
national security policy has broken into the open, apparently the result of
a desperate gamble by members of the Kremlin "Family." According to the
Russian newspaper Moskovsky Komsomolets, presidential chief of staff
Alexander Voloshin and his deputy Sergei Prikhodko provoked the crisis on
Nov. 3 when they told military commanders to prepare for negotiations with
Chechen President Aslan Maskhadov.


Enraged, Gen. Anatoly Kvashnin, chief of the armed forces, reportedly
called President Boris Yeltsin, then vacationing in Sochi, and threatened
to resign, along with other senior military commanders, if combat
operations in Chechnya were halted. Maj. Gen. Vladimir Shamanov, a top
commander in the Chechen operation, later framed the threat as one of civil
war, in an interview with the newspaper Nezavisimaya Gazeta. The generals’
threats have been echoed by several other senior military commanders as
well, including North Caucasus Military District commander Col. Gen. Viktor
Kazantsev and Lt. Gen. Gennady Troshev, a commander in Chechnya.


In response to Kvashnin’s threat, Yeltsin immediately rushed back to Moscow
where he reportedly disavowed support for his aides’ actions. In addition,
according to an unconfirmed report by the Interfax news agency, Yeltsin
issued Kvashnin, Defense Minister Igor Sergeyev, and the heads of the
Federal Security Service and the Foreign Intelligence Service Russia’s
highest award ­ the "Hero of Russia".


The speed and intensity of Yeltsin’s response suggests he was concerned
with something far more serious than just replacing a handful of rebellious
commanders. Any secure civilian president would have fired generals who
issued such an ultimatum. Yeltsin’s response was more appropriate to an
unspoken threat of a coup. In fact, evidence continues to suggest that the
coup already happened.


On the night of June 11, the Russian military rejected the Kremlin’s
decision to capitulate to NATO in Yugoslavia and ordered Russian troops to
advance into Kosovo and seize the airport at Pristina. This unilateral
decision, which caught both NATO and the Kremlin off guard, was the opening
shot in a silent coup in Russia. The Russian military’s high command,
undoubtedly collaborating with Russian intelligence services, took charge
of the country’s national security policy. The power grab was formally
accepted by the Yeltsin administration on June 15, when it agreed to
require the foreign ministry to coordinate its activities with the military
and security apparatus.


The Yeltsin administration was likely left in office to avoid adverse
domestic and international responses. Nevertheless, the Russian military
has retained firm control of the security policy and subsequent events
suggest that control extended to the replacement of Prime Minister Sergei
Stepashin. Stepashin was taking a timid approach to the incursion of
Chechen guerrillas into Dagestan when he was sacked and replaced by
then-Federal Security Service Director Vladimir Putin.


Stepashin later told reporters that an unnamed faction forced Yeltsin to
sack him for his refusal to do their bidding, a comment the Russian media
has interpreted as referring to manipulation of the upcoming elections in
favor of the Kremlin Family. Yeltsin’s dash to Moscow to support the
military against Family member Voloshin suggests otherwise.


Stratfor initially interpreted Yeltsin’s trip to Moscow as a response to
Western pressure and an attempt to temper Prime Minister Vladimir Putin and
the military’s management of the Chechen conflict. If, as Moskovsky
Komsomlets reports, it was really Voloshin that sparked the crisis, it does
not change the fact that the military remains on top. What the report does
suggest is that the privileged Family so fears the potential domestic and
international repercussions of the military’s campaign in Chechnya that it
was and is prepared to expose the silent coup.


Thus far, the sole result of this move has been a division in the Kremlin,
with Yeltsin siding with the military. That alone is significant, as it
illustrates the degree to which the Kremlin Family has fallen from power.
But now the issue is the subject of public debate and Family members are
desperate to keep it there. Unless Yeltsin can rein in the Kremlin
dissidents and return to the silent agreement he had accepted with the
military, Russia’s military and security apparatus may be forced to carry
out their coup in a more public, traditional and thorough manner.


******


#12
Russians bomb Chechnya, refugees try to flee

ON THE CHECHEN-INGUSH BORDER, Russia, Nov 8 (Reuters) - Russian planes and
artillery pounded targets in Chechnya on Monday as crowds of refugees
queued on the border of the breakaway region in hopes of fleeing. 


Russia's most wanted man, renegade Chechen warlord Shamil Basayev, earlier
said in a videotaped remarks obtained by Reuters on Monday that the worst
fighting lay ahead. 


``The real battles have not yet begun,'' Basayev said on a Grozny street at
the weekend. Bombs could be heard in the distance as he spoke and plumes of
smoke covered the city. 


``The flatlands, only a few big open spaces, is all that is left for the
Russians,'' he said, referring to the northern part of Chechnya already
seized by Russians troops. 


``There are places where we can't get up to them, because they have so much
armour.'' 


>From the border checkpoints, heavy artillery fire could be heard hitting
the western Chechen stronghold of Bamut. 


The Russian advance and bombings have driven nearly 200,000 Chechens from
their homes to try to get to safety in the neighbouring region of
Ingushetia. Thousands are queuing at the border, unable to cross through a
narrow corridor periodically closed by the Russians. 


A Reuters reporter at Chechnya's border with Georgia to the south saw
planes bomb the mountain area of Itum Kale overnight. 


Russia's Interfax news agency said they also struck targets in the centre
of the capital Grozny, ripping 12-metre (40-foot) craters in the ground. 


Russian troops moved into Chechnya in September to attack Islamic rebels
who invaded a neighbouring province and whom Moscow blames for apartment
bombings in Russia that killed nearly 300 people. The guerrillas and
Chechnya's President Aslan Maskhadov deny the allegation. 


The Russians now occupy high ground overlooking Grozny, and have surrounded
the second city, Gudermes. 


Basayev led the attack on neighbouring Dagestan province in August, and has
been Russia's public enemy number one since 1995, when he staged a raid on
a hospital in a southern Russian town. 


Many Chechens blame him for provoking the current fighting, but others see
him as a hero of the 1994-96 independence war which ended with Russia
losing control of the region. 


RUSSIA CONTINUES BOMBING 


Russian generals, who have bet on the extensive use of artillery and
warplanes to minimise losses among their troops, deny reports of heavy
civilian casualties and say they will not stop until the whole region is
under their control. 


Interfax quoted Maskhadov as saying on Sunday he had written to U.S.
President Bill Clinton appealing for help in stopping what he described as
the genocide of his people. European and U.S. leaders have pressed Russia
to find a political solution. 


Maskhadov also said he had sent a letter to members of the Organisation for
Security and Cooperation in Europe asking them to discuss Chechnya at their
November 18-19 summit in Istanbul. 


The Russians say Maskhadov must cooperate in their campaign against
warlords like Basayev if he wants to negotiate peace. 


Prime Minister Vladimir Putin, whose opinion poll ratings have leaped
during the campaign, has dismissed Maskhadov's plea. 


As the Russians rallied behind Putin in his drive to end Chechnya's
self-proclaimed independence, the feeling of defiance strengthened among
many Chechens. 


``They bomb schools, hospitals, everything, so that people will run away.
They are just trying to humiliate us. They don't look where they are
bombing -- they just want to kill us all, women, children, everyone,'' said
a woman at a Grozny bazaar. 


******