January 4, 2000    
This Date's Issues: 4007 4008 4009

Johnson's Russia List
#4009
4 January 2000
davidjohnson@erols.com

[Note from David Johnson:
1. AFP: In Chechnya, a "Wag The Dog" Kremlin ploy is seen.
2. Voice of America: Barry Wood on Putin and the economy.("Mr. Aslund says Mr. Putin is relying on known reformers Anatoly Chubais and Yegor Gaidar for economic advice.")
3. AP: Judith Ingram, Putin Has Chance To Change Russia.
4. Irish Times: Vladimir Putin, Russia at the turn of the millennium.(Complete text of the Putin mission statement)
5. RFE/RL: Paul Goble, Ending 'The Breakup Of Russia'. (re Putin and Chechnya)]

******

#1
In Chechnya, a "Wag The Dog" Kremlin ploy is seen

MOSCOW, Jan 4 (AFP) - 
Vladimir Putin prepared Tuesday for a snap election amid new unverifiable claims and counter-claims in Chechnya, a war experts call a ploy to keep Boris Yeltsin's anointed successor in the Kremlin.

The Kremlin said Putin was doing his job as acting president, speaking for example by telephone with Ukrainian President Leonid Kuchma. They talked about bilateral relations and a summit later this month, one agency report said.

But Putin's hour-by-hour schedule aside, talk in political circles was about the upcoming elections and, specifically, how best the Kremlin can spin the Chechnya war to ensure maximum voter backing for the wildly-popular Putin.

"The Russian plan is to win in Chechnya as quickly as possible," explained noted independent Russian defense analyst Pavel Felgenhauer.

"This victory will not happen in reality ... specialists know that this kind of war is not possible to win," he said. "But victory is what the television says it is, and this war was designed to make Putin president."

His remarks reflected a conviction gaining credence here that the conflict was choreographed purely to rally public support behind a presidential candidate, a scenario dramatized in the 1999 US film "Wag The Dog."

When it launched its offensive on Chechnya four months ago, Russia said it was a response to Chechnya-based terrorism, notably bomb attacks on apartment buildings here and in other cities that killed nearly 300 people.

No one has claimed responsibility for those attacks.

Since then, and due largely to uniformly pro-war coverage by Russian media, the conflict has successfully been transformed into a nationalist-patriotic "win at any cost" crusade in the Russian public psyche, analysts said.

"After Putin becomes president, everyone will forget about Chechnya," Felgenhauer predicted. "I think it will be presented as over and successful in one month from now."

The upper house of the Russian parliament, the Federation Council, meets Wednesday to set a date for early presidential elections, and analysts predicted Putin will declare a Chechnya victory before that vote happens.

With his popularity at record high levels for a Russian politician, Putin stands to gain little from a protracted election campaign and will also push for a plebiscite as soon as possible, they said.

"Putin understands perfectly that elections need to be held as quickly as possible," said Andrei Piontkovsky, director of the Moscow-based Center for Strategic Studies.

"Comments by the president of the Constitutional Court reflect the horse-trading that is currently taking place" on the timing of the elections, he said.

Under the Russian constitution, presidential elections must be held not later more three months after an outgoing president quits -- in this case by March 31. But they can also legally be called any time within that period.

But if Putin's electoral chances can only rise the sooner a vote is held, he must also calculate the price to pay if domestic political rivals feel they have been robbed of a chance to air their views adequately in a campaign.

"The law says that candidates must declare they are running, and submit a half-million (petition) signatures, at least two months ahead of the elections," Piontkovsky said.

"March 26 was a realistic date" for Putin rivals, but holding a vote much before then "presents difficulties" for other candidates, he added.

Felgenhauer, Piontkovsky and other political and military experts said the Russian high command is well aware of the difficulties in achieving a genuine and comprehensive military victory in Chechnya.

But both said the "real" problems there would start for Russia only after the war is officially declared over and Putin has been elected.

Then Russian troop numbers will be reduced and their forces therefore more vulnerable to hit-and-run guerrilla attacks that will prove costly in lives, they said.

******

#2
Voice of America
DATE=1/3/2000
TITLE=RUSSIA'S ECONOMY (L-ONLY)
BYLINE=BARRY WOOD
DATELINE=WASHINGTON

INTRO: Western economists are cautiously optimistic 
that Russia's acting president, Vladimir Putin, could 
bring a renewed commitment to market-based reform in 
Russia. V-O-A's economics correspondent, Barry Wood, has more.
TEXT: Vladimir Putin has said in recent weeks that he 
wants to attract more foreign direct investment into 
Russia and make the economy more efficient. He says a 
long-term growth reform strategy is required to bring 
Russia into the world economy.Ariel Cohen, a Russia expert at 
Washington's 
conservative Heritage Foundation, is optimistic that 
Russia's economy will improve under Mr. Putin. 
/// COHEN ACT ///
I believe that we may see, after the appropriate 
steps are taken by the Russian government in 
terms of strengthening corporate governance, 
land reform and some form of guarantee for 
foreign investment, I believe we will see an 
increase in foreign investment into Russia in 2000.
/// END ACT ///
Mr. Cohen says he hopes Mr. Putin will move swiftly to 
privatize land and guarantee private-property rights.
Another Washington-based researcher on the Russian 
economy, Anders Aslund of the Carnegie Endowment, says 
land reform is likely under Mr. Putin. 
/// ASLUND ACT ///
I think there are two reforms that are likely to 
happen rather soon. One is a big tax reform, 
which has long matured, and many people are now 
in favor of it. And here it is a matter of 
political will and initiative to get it done. 
The other that has become possible because the 
communists lost so many seats in the last 
election is land reform, private ownership of 
agricultural land.
/// END ACT ///
Mr. Aslund says Mr. Putin is relying on known 
reformers Anatoly Chubais and Yegor Gaidar for 
economic advice. Mr. Aslund says the prospects for 
meaningful reform in Russia are now excellent.
Experts say the task of reforming Russia's still 
declining economy is daunting. Forecasters say little 
or no growth is anticipated for this year. And the 
more formidable challenges of financial crime, the 
absence of the rule of law, and a flawed privatization 
of state assets continue to hobble the Russian economy.

*******

#3
Putin Has Chance To Change Russia
4 January 2000
By JUDITH INGRAM

MOSCOW (AP) - Like Boris Yeltsin, the man who handed him power, Vladimir Putin has the opportunity to change the face of Russia. 

Just as Yeltsin threw wide the doors to reform that Mikhail Gorbachev, the last Soviet president, had opened a crack, Putin has the chance to drive home democratic and market reforms that Yeltsin was unable to realize. 

First Putin must win presidential elections expected to be held March 26. He is the firm favorite because many Russians see him as a strong leader who can clean up the corruption and disorder that bedevil the country. 

While Putin has benefitted from his strong handling of the war in Chechnya, he has yet to outline any detailed plans for what he would do as leader of the world's largest nation - something he is slowly trying to remedy. 

``Putin is now extremely popular and doesn't have to do much except hold the course'' until the election, said Rani Kronick, an analyst at Control Risks Group Ltd. in London. ``I think we need to wait and see who's reappointed to the Cabinet and see what figures emerge before we can really understand what policy directions he's likely to take.'' 

In one of his first official acts, Putin fired Yeltsin's daughter Monday, moving quickly to distance himself from Yeltsin's scandal-tinged administration. 

The terse announcement of Tatyana Dyachenko's dismissal as ``image adviser'' marked Putin's first personnel change since taking office Friday. 

Dyachenko had been accused of exercising undue influence over government policy, and has recently been a focus of an investigation into allegations of Kremlin bribery. 

Swiss and Russian prosecutors have been investigating whether Dyachenko and her sister Yelena Okulova, as well as other Kremlin officials, took bribes from a Swiss company, Mabetex, that won lucrative Kremlin construction contracts. 

When Yeltsin was in office, he launched a series of reforms, including an initiative to allow the free purchase and sale of land, simplification of the unwieldy tax system, transition to a professional army and reduction of the government bureaucracy. 

Yet in each case, he saw his initiatives blocked by the Communist-led opposition - or he lost interest in them as he withdrew from the day-to-day business of governing in the last years of his administration. 

If Yeltsin rarely followed through on policies in recent years, Putin is perceived by many Russians as a leader who will try to break the government's chronic inertia. He is known as a consensus-builder, and will have a largely supportive parliament behind him - unlike the legislatures that tried to block Yeltsin practically every step of the way. 

Still, analysts predict Putin will be unlikely to rock the boat - at least in the near future. 

``Everybody stands for tax reform. Certainly I think he'll do that, but that's hardly radical,'' said Margo Light, a Russia expert at the London School of Economics. ``But I think he's going to be very careful on land reform because it's such a sacred cow.'' 

Perhaps the toughest test for Putin will be his approach to fighting corruption. Analysts say the issue is a natural for a former KGB operative and a leader who is as yet unsmeared by corruption allegations. As prime minister, Putin warned bureaucrats that he would not tolerate corruption, but no action followed. 

Putin has said he will pursue reform, although he has stressed that it must be implemented at a slower pace and with close state control that includes more emphasis on social welfare programs. 

``There is no alternative to it,'' he wrote in a recent article posted on the Russian Cabinet's Web site. ``The question for Russia now is what to do next. How can we make the new, market mechanisms work to full capacity?'' 

After months of concentrating almost exclusively on Chechnya, Putin has gradually begun assembling a political platform - and broadening his circle of political advisers. 

In late December, he established the Center for Strategic Elaboration, which he described as ``an intellectual club tied directly to the government.'' The center, which brings together scholars from several economic and legal institutes, is charged with forecasting developments that will have an impact on policy. 

He outlined broad goals in the Web page article, which was posted just five days before Yeltsin's surprise resignation and transfer of presidential powers to Putin. They include a streamlined, more professional bureaucracy; a stronger fight against corruption and crime; a strengthened judiciary; and creation of conditions to encourage non-governmental organizations ``to balance out and monitor the authorities.'' 

``He's fairly firm in that article about the evil that comes from too strong an executive power,'' giving reason to be optimistic about his support for democratic reforms, said Light. 

*******

#4
Irish Times 
December 31, 1999 
Russia at the turn of the millennium 
By Vladimir Putin, Prime Minister of the Russian Federation 
This article first appeared Government of the Russian Federation's website
(http://pravitelstvo.gov.ru/ 

Humankind lives under the sign of two signal events: the new millennium and
the 2000th anniversary of Christianity. I think the general interest for
and attention to these two events mean something more than just the
tradition to celebrate red-letter dates.

New Possibilities, New Problems 

It may be a coincidence - but then, it may be not - that the beginning of
the new millennium coincided with a dramatic turn in world developments in
the past 20-30 years. I mean the deep and quick changes in the life of
humankind connected with the development of what we call the
post-industrial society. Here are its main features.

* Changes in the economic structure of society, with the diminishing weight
of material production and the growing share of secondary and tertiary
sectors.

* The consistent renewal and quick introduction of novel technologies and
the growing output of science-intensive commodities.

* The landslide development of the information science and telecommunications.

* Priority attention to management and the improvement of the system of
organisation and guidance of all spheres of human endeavour.

* And lastly, human leadership. It is man and high standards of his
education, professional training, business and social activity that are
becoming the guiding force of progress today.

The development of a new type of society is a sufficiently lengthy process
for the careful politicians, statesmen, scientists and all those who can
use their brains to notice two elements of concern in this process. The
first is that changes bring not only new possibilities to improve life, but
also new problems and dangers. 

They were initially and most clearly revealed in the ecological sphere. But
other, and acute, problems were soon detected in all other spheres of
social life. Even the most economically advanced states are not free from
organised crime, growing cruelty and violence, alcoholism and drug
addiction, the weakening durability and educational role of the family, and
the like.

And the other alarming element is that far from all countries can use the
boons of modern economy and the new standards of prosperity offered by it.
The quick progress of science, technologies and advanced economy is
underway in only a small number of states, populated by the so-called
golden billion.

Quite a few other countries reached new economic and social development
standards in this outgoing century. But it cannot be said that they joined
the process of creating a post-industrial society. Most of them are still
far away from the mere approaches to it. And there are grounds to believe
that this gap will persist for quite some time yet.

This is probably why the humankind is peering into the future with both
hope and fear at the turn of the new millennium.

Modern Situation in Russia 

It would not be exaggeration to say that this feeling of hope and fear is
expressed especially graphically in Russia. For there are few states in the
world which faced so many trials as Russia in the 20th century. 

First, Russia is not a state symbolising top standards of economic and
social development now. And second, it is facing difficult economic and
social problems.

Its GDP nearly halved in the 1990s, and its GNP is ten times smaller than
in the USA and five times smaller than in China. After the 1998 crisis, the
per capita GDP dropped to roughly 3,500 dollars, which is roughly five
times smaller than the average indicator for the G7 states.

The structure of the Russian economy changed, with the key positions held
by the fuel industry, power engineering, and the ferrous and non-ferrous
metallurgy. They account for some 15% of the GDP, 50% of the overall
industrial output, and over 70% of exports.

Productivity in the real economy sector is extremely low. It rose to well
nigh the world average in the production of raw materials and electricity,
but is 20-24% of the US average in the other industries. 

The technical and technological standards of finished commodities largely
depend on the share of equipment that is less than five years old. It
dwindled from 29% in 1990 to 4.5% in 1998. Over 70% of our machinery and
equipment are over ten years old, which is more than two times the figure
in the economically developed countries.

This is the result of the consistently dwindling national investments,
above all to the real economy sector. And foreign investors are not in a
hurry to contribute to the development of Russian industries. The overall
volume of direct foreign investments in Russia amounts to barely 11.5
billion dollars. China received as much as 43 billion dollars in foreign
investments.

Russia has been reducing allocations on R&D, while the 300 largest
transnational companies provided 216 billion dollars on R&D in 1997, and
some 240 billion dollars in 1998. Only 5% of Russian enterprises are
engaged in innovative production, whose scale is extremely low. 

The lack of capital investments and insufficient attitude to innovations
resulted in a dramatic fall in the production of commodities that are world
competitive in terms of price-quality ratio. Foreign rivals have pushed
Russia especially far back on the market of science-intensive civilian
commodities. Russia accounts f or less than 1% of such commodities on the
world market, while the USA provides 36% and Japan, 30% of them.

The real incomes of the population have been falling since the beginning of
the reforms. The deepest fall was registered after the August 1998 crisis,
and it will be impossible to restore the pre-crisis living standards this
year. The overall monetary incomes of the population, calculated by the UN
methods, add up to less than 10% of the US figure. Health and the average
life span, the indicators that determine the quality of life, deteriorated,
too.

The current dramatic economic and social situation in the country is the
price, which we have to pay for the economy we inherited from the Soviet
Union. But then, what else could we inherit? We had to install market
elements into a system based on completely different standards, with a
bulky and distorted structure. And this was bound to affect the progress of
the reforms.

We had to pay for the excessive focus of the Soviet economy on the
development of the raw materials sector and defence industries, which
negatively affected the development of consumer production and services. We
are paying for the Soviet neglect of such key sectors as information
science, electronics and communications. 

For the absence of competition between producers and industries, which
hindered scientific and technological progress and made Russian economy
non-competitive on the world markets. This is our payment for the brakes,
and even a ban, put on the initiative and enterprise o f enterprises and
their personnel. And today we are reaping the bitter fruit, both material
and mental, of the past decades.

On the other hand, we could have avoided certain problems in this renewal
process. They are the result of our own mistakes, miscalculation and lack
of experience. And yet, we could not have avoided the main problems facing
Russian society. The way to the market and democracy was difficult for all
states that entered it in the 1990s. They all had roughly the same
problems, although in varying degrees.

Russia is completing the first, transition stage of economic and political
reforms. Despite problems and mistakes, it has entered the highway by which
the whole of humanity is travelling. Only this way offers the possibility
of dynamic economic growth and higher living standards, as the world
experience convincingly shows. There is no alternative to it.

The question for Russia now is what to do next. How can we make the new,
market mechanisms work to full capacity? How can we overcome the still deep
ideological and political split in society? What strategic goals can
consolidate Russian society? What place can Russia occupy in the
international community in the 21st century? What economic, social and
cultural frontiers do we want to attain in 10-15 years? What are our strong
and weak points? And what material and spiritual resources do we have now?

These are the questions put forward by life itself. Unless we find clear
answers to them which would be understandable to all the people, we will be
unable to move forward at the pace and to the goals which are worthy of our
great country.

The Lessons Russia to Learn 

The answers to these questions and our very future depend on what lessons
we will learn from our past and present. This is a work for society as a
whole and for more than one year, but some of these lessons are already
clear. 

1 For almost three-fourths of the outgoing century Russia lived under t he
sign of the implementation of the communist doctrine. It would be a mistake
not to see and, even more so, to deny the unquestionable achievements of
those times. But it would be an even bigger mistake not to realise the
outrageous price our country and its people had to pay for that Bolshevist
experiment. 

What is more, it would be a mistake not to understand its historic
futility. Communism and the power of Soviets did not make Russia a
prosperous country with a dynamically developing society and free people.
Communism vividly demonstrated its inaptitude for sound self-development,
dooming our country to a steady lag behind economically advanced countries.
It was a road to a blind alley, which is far away from the mainstream of
civilisation.

2 Russia has used up its limit for political and socio-economic upheavals,
cataclysms and radical reforms. Only fanatics or political forces which are
absolutely apathetic and indifferent to Russia and its people can make
calls to a new revolution. Be it under communist, national-patriotic or
radical-liberal slogans, our country, our people will not withstand a new
radical break-up. The nation's tolerance and ability both to survive and to
continue creative endeavour has reached the limit: society will simply
collapse economically, politically, psychologically and morally.

Responsible socio-political forces ought to offer the nation a strategy of
Russia's revival and prosperity based on all the positive that has been
accumulated over the period of market and democratic reforms and
implemented only by evolutionary, gradual and prudent methods. This
strategy should be carried out in a situation of political stability and
should not lead to a deterioration of the life of the Russian people, of
any of its sections and groups. This indisputable condition stems from the
present situation of our country.

3 The experience of the 90s vividly shows that our country's genuine
renewal without any excessive costs cannot be assured by a mere
experimentation in Russian conditions with abstract models and schemes
taken from foreign text-books. The mechanical copying of other nations'
experience will not guarantee success, either. Every country, Russia
included, has to search for its own way of renewal. We have not been very
successful in this respect thus far. Only in the past year or the past two
years we have started groping for our road and our model of transformation.
We can pin hopes for a worthy future only if we prove capable of combining
the universal principles of a market economy and democracy with Russian
realities.

It is precisely with this aim in view that our scientists, analysts,
experts, public servants at all levels and political and public
organisations should work.

A Chance for a Worthy Future 

Such are the main lessons of the outgoing century. They make it possible to
outline the contours of a long-tern strategy which is to enable us, within
a comparatively short time, by historic standards, to overcome the present
protracted crisis and create conditions for our country's fast and stable
economic and social headway. The paramount word is "fast", as we have no
time for a slow start. I want to quote the calculations made by experts. It
will take us approximately fifteen years and an annual growth of our Gross
Domestic Product by 8 percent a year to reach the per capita GDP level of
present-day Portugal or Spain, which are not among the world's
industrialised leaders. If during the same fifteen years we manage to
ensure the annual growth of our GDP by 10 percent, we will then catch up
with Britain or France.

Even if we suppose that these tallies are not quite accurate, our current
economic lagging behind is not that serious and we can overcome it faster,
it will still require many years of work. That is why we should formulate
our long-term strategy and start fulfilling it as soon as possible. We have
already made the first step in this direction. The Strategic Research
Centre created on the initiative and with the most active participation of
the Government began its work in the end of December. This Centre is to put
together the best minds of our country to draft recommendations for the
government and proposals and theoretical and applied projects which are to
help elaborate the strategy itself and the more effective ways of tackling
the tasks which will come up in the process of its implementation. I am
convinced that ensuring the necessary growth dynamics is not only an
economic problem. It is also a political and, in a certain sense, - I am
not afraid to use this word - ideological problem. To be more precise, it
is an ideological, spiritual and moral problem. It seems to me that the
latter is of particular importance at the current stage from the standpoint
of ensuring the unity of Russian society.

(A) Russian Idea 

Fruitful and creative work which our country needs so badly today is
impossible in a split and internally disintegrated society, a society where
the main social sections and political forces have different basic values
and fundamental ideological orientations. Twice in the outgoing century has
Russia found itself in such a state: After October 1917 and in the 90s.

In the first case, civil accord and unity of society were achieved not so
much by what was then called "ideological- educational work" as by power
methods. Those who disagreed with the ideology and policy of the regime
were subjected to different forms of persecution up to repression. As a
matter of fact, this is why I think that the term "state ideology"
advocated by some politicians, publicists and scholars is not quite
appropriate. It creates certain associations with our recent past. Where
there is a state ideology blessed and supported by the state, there is,
strictly speaking, practically no room for intellectual and spiritual
freedom, ideological pluralism and freedom of the press, that is, for
political freedom.

I am against the restoration of an official state ideology in Russia in any
form. There should be no forced civil accord in a democratic Russia. Social
accord can only be voluntary. That is why it is so important to achieve
social accord on such basic issues as the aims, values and orientations of
development, which would be desirable for and attractive to the
overwhelming majority of Russians. The absence of civil accord and unity is
one of the reasons why our reforms are so slow and painful. Most of the
strength is spent on political squabbling, instead of the handling of the
concrete tasks of Russia's renewal.

Nonetheless, there have appeared some positive changes in this sphere in
the past year or a year and a half. The bulk of Russians show more wisdom
and responsibility than many politicians. Russians want stability,
confidence in the future and possibility to plan it for themselves and for
their children not for a month but for years and even decades to come. They
want to work in a situation of peace, security and a sound law-based order.
They wish to use the opportunities and prospects opened by the diversity of
the forms of ownership, free enterprise and market relations.

It is on this basis that our people have begun to perceive and accept
supra-national universal values which are above social, group or ethnic
interests. Our people have accepted such values as freedom of expression,
freedom to travel abroad and other fundamental political rights and human
liberties. People value that they can have property, be engaged in free
enterprise, and build up their own wealth, and so on, and so forth.

Another foothold for the unity of Russian society is what can be called the
traditional values of Russians. These values are clearly seen today.

Patriotism. This term is sometimes used ironically and even derogatively.
But for the majority of Russians it has its own and only original and
positive meaning. It is a feeling of pride in one's country, its history
and accomplishments. It is the striving to make one's country better,
richer, stronger and happier. When these sentiments are free from the tints
of nationalist conceit and imperial ambitions, there is nothing
reprehensible or bigotedly about them. Patriotism is a source of the
courage, staunchness and strength of our people. If we lose patriotism and
national pride and dignity, which are connected with it, we will lose
ourselves as a nation capable of great achievements.

Belief in the greatness of Russia. Russia was and will remain a great
power. It is preconditioned by the inseparable characteristics of its
geopolitical, economic and cultural existence. They determined the
mentality of Russians and the policy of the government throughout the
history of Russia and they cannot but do so at present.

But Russian mentality should be expanded by new ideas. In the present world
the might of a country as a great power is manifested more in its ability
to be the leader in creating and using advanced technologies, ensuring a
high level of people's wellbeing, reliably protecting its security and
upholding its national interests in the international arena, than in its
military strength.

Statism. It will not happen soon, if it ever happens at all, that Russia
will become the second edition of, say, the US or Britain in which liberal
values have deep historic traditions. Our state and its institutes and
structures have always played an exceptionally important role in the life
of the country and its people. For Russians a strong state is not an
anomaly which should be got rid of. Quite the contrary, they see it as a
source and guarantor of order and the initiator and main driving force of
any change.

Modern Russian society does not identify a strong and effective state with
a totalitarian state. We have come to value the benefits of democracy, a
law-based state, and personal and political freedom. At the same time,
people are alarmed by the obvious weakening of state power. The public
looks forward to the restoration of the guiding and regulating role of the
state to a degree which is necessary, proceeding from the traditions and
present state of the country.

Social Solidarity. It is a fact that a striving for corporative forms of
activity has always prevailed over individualism. Paternalistic sentiments
have struck deep roots in Russian society. The majority of Russians are
used to connect improvements in their own condition more with the aid and
support of the state and society than with their own efforts, initiative
and flair for business. And it will take a long time for this habit to die.

Do not let us try to answer the question whether it is good or bad. The
important thing is that such sentiments exist. What is more, they still
prevail. That is why they cannot be ignored. This should be taken into
consideration in the social policy, first and foremost. I suppose that the
new Russian idea will come about as an alloy or an organic unification of
universal general humanitarian values with traditional Russian values which
have stood the test of the times, including the test of the turbulent 20th
century.

This vitally important process must not be accelerated, discontinued and
destroyed. It is important to prevent that the first shoots of civil accord
be crushed underfoot in the heat of political campaigns, of some or other
elections. The results of the recent elections to the State Duma inspire
great optimism in this respect. They reflected the turn towards stability
and civil accord, which is being completed in our society. The overwhelming
majority of Russians said No to radicalism, extremism and the opposition
with a revolutionary tint. It is probably the first time since the reforms
have begun that such favourable conditions have been created for
constructive cooperation between the executive and legislative branches of
power.

Serious politicians whose parties and movements are represented in the new
State Duma, are advised to draw conclusions from this fact. I am positive
that the feeling of responsibility for the destinies of the nation will
have the upper hand, and Russian parties, organizations and movements and
their leaders will not sacrifice the common interests of and prospects in
store for Russia, which call for a solidary effort of all healthy forces,
to the narrow partisan and time-serving considerations.

(B) Strong State 

We are at a stage where even the most correct economic and social policy
starts misfiring while being realized due to the weakness of the state
power, of the managerial bodies. A key to Russia's recovery and growth is
in the state-policy sphere today. Russia needs a strong state power and
must have it. I am not calling for totalitarianism. History proves all
dictatorships, all authoritarian forms of government are transient. Only
democratic systems are intransient. Whatever the shortcomings, mankind has
not devised anything superior. A strong state power in Russia is a
democratic, law-based, workable federative state.

I see the following directions of its formation:

- a streamlined structure of the bodies of state authority and management,
higher professionalism, more discipline and responsibility of civil
servants, keener struggle against corruption;

- a restructuring of the state personnel policy on the basis of a selection
of the best staffs;

- creating conditions beneficial for the rise in the country of a
full-blooded civil society to balance out and monitor the authorities;

- a larger role and higher authority of the judiciary;

- improved federative relations, including in the sphere of budgets and
finances; and

- an active offensive on crime.Amending the Constitution does not seem to
be an urgent, priority task. What we have is a good Constitution. Its
provisions dealing with the individual rights and freedoms are seen as the
best Constitutional instrument of its kind in the world. It is a serious
task, indeed, to make the current Constitution and the laws made on the
basis thereof, the norm of life of the state, society and every individual,
rather than draft a new Basic Law for the country.

The Constitutional nature of laws in the making is a major problem in this
respect. Russia currently operates over a thousand federal laws and several
thousand laws of the republics, territories, regions and autonomous areas.
Not all of them correspond to the above criterion. If the justice ministry,
the prosecutor's office and the judiciary continue to be as slow in dealing
with this matter as they are today, the mass of questionable or simply
un-Constitutional laws may become critical legally and politically. The
Constitutional safety of the state, the federal Center's capabilities, the
country's manageability and Russia's integrity would then be in jeopardy.

Another serious problem is inherent in that tier of authority which the
government belongs to. The global experience prompts the conclusion that
the main threat to human rights and freedoms, to democracy as such emanates
from the executive authority. Of course, a legislature which makes bad laws
also does its bit. But the main threat emanates from the executive
authority. It organizes the country's life, applies laws and can
objectively distort, substantively and not always maliciously, these laws
by making executive orders.

The global trend is that of a stronger executive authority. Not
surprisingly, society endeavors to better control it in order to preclude
arbitrariness and misuses of office. This is why I, personally, am paying
priority attention to building partner relations between the executive
authority and civil society, to developing the institutes and structures of
the latter, and to waging an active and tough onslaught on corruption.

(C) Efficient Economy 

I have already said that the reform years have generated a heap of problems
that have accumulated in the national economy and social sphere. The
situation is complex, indeed. But, to put it mildly, it is too early to
bury Russia a great power. All troubles notwithstanding, we have preserved
our intellectual potentiality and human resources. A number of R&D
advances, advanced technologies have not been wasted. We still have our
natural resources. So the country has a worthy future in store for it.

At the same time, we must learn the lessons of the 1990s and ponder the
experience of market transformations.

1 I see one of the main lessons in that throughout these years we have been
groping in the dark without having a clear understanding of national
objectives and advances which would ensure Russia's standing as a
developed, prosperous and great country of the world. The lack of a
long-range development strategy for the next 15-20 and more years, is badly
felt in the economy.

The government firmly intends to build its activity on the basis of the
principle of unity of the strategy and tactics. Without it, we are doomed
to close holes and operate in the mode of fire-fighting. Serious politics,
big business are done differently. The country needs a long-term national
strategy of development. I have already said that the government has
started devising it.

2 Another important lesson of the 1990s is the conclusion that Russia needs
to form a wholesome system of state regulation of the economy and social
sphere. I do not mean to return to a system of planning and managing the
economy by fiat, where the all-pervasive state was regulating all aspects
of any factory's work from top to bottom. I mean to make the Russian state
an efficient coordinator of the country's economic and social forces that
balances out their interests, optimizes the aims and parameters of social
development and creates conditions and mechanisms of their attainment.

The above naturally exceeds the commonplace formula which limits the
state's role in the economy to devising rules of the game and controlling
their observance. With time, we are likely to evolve to this formula. But
today's situation necessitates deeper state involvement in the social and
economic processes. While setting the scale and planning mechanisms for the
system of state regulation, we must be guided by the principle: The state
must be where and as needed; freedom must be where and as required.

3 The third lesson is the transition to a reform strategy that would be
best suited for our conditions. It should proceed in the following directions.

3.1. To encourage a dynamic economic growth. The first to come here should
be the encouragement of investments. We have not yet resolved this problem.
Investments into the real economy sector fell by 5 times in the 1990s,
including by 3.5 times into fixed assets. The material foundations of the
Russian economy are being undermined.

We call for pursuing an investment policy that would combine purely market
mechanisms with measures of state guidance. At the same time, we will
continue working to create an investment climate attractive to foreign
investors. Frankly speaking, the rise would be long and painful without
foreign capital. But we have no time for this. Consequently, we must do our
best to attract foreign capital to the country.

3.2. To pursue an energetic industrial policy. The future of the country,
the quality of the Russian economy in the 21st century will depend above
all on progress in the spheres that are based on high technologies and
produce science-intensive commodities.. For 90% of economic growth is
ensured today by the introduction of new achievements and technologies.

The government is prepared to pursue an economic policy of priority
development of industries that lead in the sphere of research and
technological progress. The requisite measures include:

- assist the development of extra-budgetary internal demand for advanced
technologies and science-intensive products, and support export-oriented
high-tech productions;

- support non-raw materials industries working mostly to satisfy internal
demand;

- buttress the export possibilities of the fuel and energy and
raw-materials complexes.

We should use the mechanisms, which have long been used in the world, to
mobilise the funds necessary for pursuing this policy. The most important
of them are the target-oriented loan and tax instruments and the provision
of privileges against state guarantees.

3.3. To carry out a rational structural policy. The government thinks that
like in other industrialised countries, there is a place in the Russian
economy for the financial-industrial groups, corporations, small and medium
businesses. Any attempts to slow down the development of some, and
artificially encourage the development of other economic forms would only
hinder the rise of the national economy. The policy of the Government will
be spearheaded at creating a structure that would ensure an optimal balance
of all economic forms of management.

Another major sphere is the rational regulation of the operation of natural
monopolies. This is a key question, as they largely determine the structure
of production and consumer prices. And hence they influence both the
economic and financial processes, and the dynamics of the people's incomes.

3.4. To create an effective financial system. This is a challenging task,
which includes the following directions:

- to raise the effectiveness of the budget as a major instrument of the
economic policy of the state;

- to carry out a tax reform;

- to get rid of non-payments, barter and other pseudo-monetary forms of
settlement;

- to maintain a low inflation rate and stability of the rouble;

- to create civilised financial and stock markets, and turn them into an
instrument of accumulating investment resources; - to restructure the bank
system.

3.5. To combat the shadow economy and organised crime in the economic and
financial-credit sphere. All countries have shadow economies. But their
share in the GDP does not exceed 15-20% in industrialised countries, while
the figure for Russia is 40%. To resolve this painful problem, we should
not just raise the effectiveness of the law-enforcement agencies, but also
strengthen the license, tax, hard currency and export control.

3.6. To consistently integrate the Russian economy into world economic
structures. Otherwise we would not rise to the high level of economic and
social progress that has been attained in the industrialised countries. The
main directions of this work are:

- to ensure an active support of the state to the foreign economic
operation of Russian enterprises, companies and corporations. In
particular, the time is ripe for creating a federal agency to support
exports, which would provide guarantees to the export contracts of Russian
producers;

- to resolutely combat the discrimination of Russia on the world markets of
commodities, services and investments, and to approve and apply a national
anti-dumping legislation;

- to incorporate Russia into the international system of regulating foreign
economic operation, above all the WTO.

3.7. To pursue a modern agrarian policy. The revival of Russia will be
impossible without the revival of the countryside and agriculture. We need
an agrarian policy that would organically combine measures of state
assistance and state regulation with the market reforms in the countryside
and in l and ownership relations.

4 We must admit that virtually all changes and measures entailing a fall in
the living conditions of the people are inadmissible in Russia. We have
come to a line beyond which we must not go. Poverty has reached a
mind-boggling scale in Russia. In early 1998, the average-weighted world
per capita income amounted to some 5,000 dollars a year, but it was only
2,200 dollars in Russia. And it dropped still lower after the August 1998
crisis. The share of wages in the GDP dropped from 50% to 30% since the
beginning of reforms.

This is the most acute social problem. The Government is elaborating a new
income policy designed to ensure a stable growth of prosperity on the basis
of the growth of real disposable incomes of the people. Despite these
difficulties, the Government is resolved to take new measures to support
science, education, culture and health care. For a country where the people
are not healthy physically and psychologically, are poorly educated and
illiterate, will never rise to the summits of world civilisation.

Russia is in the midst of one of the most difficult periods in its history.
For the first time in the past 200-300 years, it is facing a real threat of
sliding to the second, and possibly even third, echelon of world states. We
are running of time left for removing this threat. We must strain all
intellectual, physical and moral forces of the nation. We need coordinated
creative work. Nobody will do it for us.

Everything depends on us, and us alone. On our ability to see the size of
the threat, to pool forces and set our minds to hard and lengthy work.

******

#5
Russia: Analysis From Washington -- Ending 'The Breakup Of Russia'
By Paul Goble

Washington, 3 January 2000 (RFE/RL) -- Vladimir Putin's latest justification 
for Moscow's campaign in Chechnya -- to "bring about the end of the breakup 
of Russia" -- raises some disturbing questions about the kind of policies he 
may try to pursue as acting president of the Russian Federation. 

During a visit to Russian-controlled portions of Chechnya on New Year's Day, 
Putin told Russian soldiers that their campaign against the Chechens was "not 
simply about restoring honor and dignity to the country." Rather, he 
continued, "it is about how to bring about the end of the breakup of Russia." 

Most immediately, these remarks call into question the claims Putin and his 
supporters have made in the past about this conflict. Until this weekend, he 
had insisted that the conflict was about extirpating "extremists" and 
"terrorists," goals which many Western leaders have found difficult to oppose 
even when they are appalled by the way in Russian forces have conducted 
themselves. 

By shifting grounds so quickly and completely, Putin unintentionally has 
invited those governments to reexamine both his earlier claims about the 
conflict and their response to it. And he has equally unintentionally raised 
questions on only his second day in office as to how reliable a partner he 
may be in any negotiations with Western governments. 

But as significant as these consequences may prove in the future, Putin's 
words on this occasion clearly have even more serious implications for the 
Russian Federation, for its relationship with its neighbors, and hence for 
the world as a whole. 

For the Russian Federation, Putin's new position on Chechnya points to a more 
authoritarian future, one in which the reconstitution of state authority and 
the defense of a particular territory takes precedence over any move toward 
greater freedom and democracy. 

As all polls show, Putin's popularity in the Russian Federation reflects the 
longing of many Russians for a stronger and more effective state capable of 
responding quickly and harshly to any challenge be it from often despised 
ethnic minorities, criminal groups or Western governments. 

But a state reconstituted on the basis of such expectations is unlikely to be 
the peaceful and liberal democratic regime that many in both Russia and the 
West have been hoping for. 

Under such leadership, the Russian Federation could become an increasingly 
authoritarian Rechtstaat, a regime in which the state is capable of enforcing 
the laws it issues rather than responding to expressions of population in 
whose name it rules. 

For many Russians who have lived through the lawlessness of the Yeltsin years 
as well as for Western business interests there, such a state might appear to 
be a major improvement on current conditions. 

But precisely because such a regime is likely to have to seek support through 
nationalist appeals, it might rapidly become something much less attractive 
and ever more nationalistic. Should that happen, the Putin government might 
move on from its current campaign against "persons of the nationalities from 
the Caucasus" to open and state-sponsored discrimination against other ethnic 
and religious groups not judged by Putin's brand of Russian nationalists to 
be truly Russian. 

For the countries surrounding the Russian Federation -- especially the 11 
former Soviet republics and three Baltic countries -- Putin's new position is 
if anything even more threatening. 

At a minimum, the nationalistic Russia Putin's policies point to almost 
certainly will be far more difficult to get along with. But many in these 
countries are likely to be especially concerned that the Russian nationalist 
resurgence he is sponsoring will not stop at the borders of the Russian 
Federation. 

Even the Yeltsin government showed itself willing to exploit the presence of 
more than 20 million ethnic Russians in these states to pressure them into a 
special relationship with Moscow. Putin will certainly do no less and is 
quite likely to do a great deal more, thus further ethnicizing politics in 
many of these countries and undermining stability in some of them. 

But Putin's words on Saturday are potentially more ominous for the 
non-Russian countries. Many Russian are likely to view his words less as a 
call to firm up the borders of the Russian Federation, an entity many of them 
do not see as their country, than as a demand for a revision of the results 
of 1991. 

Putin may thus push even harder for both a Russian Federation union with 
Belarus than did Yeltsin and may also put more pressure on the members of the 
countries of the Commonwealth of Independent States to defer to Moscow's 
interest. 

For the international community, Putin's new position may be the most 
troubling of all. One of the bases of Putin's popularity has been his 
willingness, even eagerness, to dismiss Western criticism of his policies in 
Chechnya, a dismissal underlined by his assertion last month that Russia 
should not act as if it now has no enemies. 

Such a leader seems an unlikely candidate for serious talks with the West 
anytime soon, even though Russia's economic problems may lead him to change 
his tone at least enough to extract more resources from Western governments 
who do not want to see the situation in Russia get even worse. 

But far more that Yeltsin, Putin will find it hard to make any broader deals 
with the West. And consequently, his words about defending the borders of 
Russia may have the effect of creating precisely those dividing lines in 
Europe that leaders in both Moscow and the West have said they hope to avoid. 

******