January 12, 2000    
This Date's Issues: 4028 4029 4030

Johnson's Russia List
#4030
12 January 2000
davidjohnson@erols.com

[Note from David Johnson:
1. Reuters: Putin faces test as Chechen campaign sours.
2. AP: Russian Ruble Continues To Slide.
3. Moscow Times: Simon Saradzhyan, Suspending Offensive Is Only Hope.
4. Itar-Tass: Russia Builds up Support for Vladimir Putin.
5. The Guardian (UK): Gloom in the east. Jonathan Romney on Russian cinema.
6. STRATFOR.COM: 2000 Annual Forecast: The Year of Eurasia.
7. Moscow Times: Yulia Latynina, Governors Use Energy 'Debt' To Fuel Feuds.
8. al-Hayaat on Russia.
9. Izvestia: Andrei Stepanov, PRIMAKOV'S CONFIGURATION.
10. Novye Izvestia: Otto Lacis, A VERY RUSSIAN EMERGENCY SITUATION. Meaning of Personnel Changes in Government.]

********

#1
Putin faces test as Chechen campaign sours
By Peter Graff

MOSCOW, Jan 12 (Reuters) - Acting President Vladimir Putin faced his first
test on Wednesday after Chechen raids that dealt Russian forces their worst
setback in nearly four months of fighting. 

Russian troops were still battling rebels who raided Russian-held towns
over the weekend while the military promised tougher security measures to
prevent more such attacks. 

The reversals could signal a change in fortune for Putin, who took office
when Boris Yeltsin resigned on New Year's Eve. He faces little opposition
ahead of an election in March, but owes his popularity mainly to earlier
successes in the war. 

Moscow's media, once supportive, have voiced fears that the war is
following the course of Russia's 1994-96 defeat, when Russian forces
captured the whole of Chechnya but were forced to withdraw in humiliation
after failing to halt guerrilla raids. 

``One is left hoping that the head of state has received realistic
information, and not the tales that journalists are hearing from the
military,'' the daily Nezavisimaya Gazeta wrote on Wednesday. 

SHALI UNDER CONTROL, CONFLICTING REPORTS ON OTHER TOWNS 

Russian television stations broadcast reports late on Tuesday from Shali, a
major town in southeast Chechnya which was again under Russian control
after a day of fierce fighting. 

Russian troops had taken the town weeks ago, but Chechens attacked it and
several others simultaneously on Sunday, and Russian troops were forced to
blast their way back in. 

There were conflicting reports about the situation in other major
Russian-held towns that had come under attack, including Achkhoi-Martan,
Argun and Gudermes. 

Russian military officials said they had restored control over all the
towns. But their Tuesday evening status reports said they fired artillery
at guerrilla targets near Goiti, Argun, Shali and Urus-Martan, scattered
across the breadth of a Chechen heartland they had cleared of rebels weeks
ago. 

A Chechen rebel Internet website said ``operations to destroy Russian
aggressors in the regions of Argun, Shali and Achkhoi-Martan are
continuing.'' It said guerrillas also controlled key roads in the eastern
lowlands. 

FIGHTING CONTINUES IN MOUNTAINS AND GROZNY 

Both sides described clashes in and around the shattered capital Grozny and
in the southern mountains, where Russia's military said it also carried out
air strikes. 

Russian troops seemed to be making progress in the mountains. The Chechen
rebel website said guerrillas had withdrawn from the key mountain
stronghold of Vedeno, which could signal a substantial Russian gain. 

Itar-Tass news agency said Russian paratroops had successfully dropped onto
heights overlooking another rebel mountain stronghold, Sharoi, and secured
the area. 

But the weekend raids have brought home the point that taking Chechen
territory is only part of the battle. Securing Russian-held positions from
rebel attacks is more difficult. 

Russian generals have said they have changed their tactics in response to
the raids, but have given few details. 

Defence Minister Igor Sergeyev said on Tuesday Putin had approved
unspecified ``new measures.'' 

Asked at a briefing on Wednesday for details, Sergei Ivanov, secretary of
Russia's advisory Security Council, said: ``The tactic is to strengthen
control in those settlements which are already successfully in the hands of
the Russian military.'' 

An NTV correspondent reported from Russian headquarters in Mozdok outside
Chechnya that special police units would sweep through Argun and Shali more
thoroughly than before. 

``Before they did not fully clean out the towns because they were invited
in by elders,'' the NTV correspondent said. ``This time they will search
absolutely every house looking for arms.'' 

He said there were still rebels showing ``pockets of resistance'' in Argun
and Shali. 

The setbacks followed a surprisingly swift advance that had seemed to lay
to rest the ghosts of the 1994-96 defeat. Before resigning, Yeltsin had
called the campaign ``flawless.'' 

But in the last two weeks Chechen guerrillas holed up in Grozny and in
mountain bases have resisted Russia's advance. 

Russia launched its assault on Chechnya at the end of September after
blaming separatist rebels there for a series of bomb blasts in Moscow and
other cities that killed almost 300 people. 

Security Council secretary Ivanov said on Wednesday Russia had obtained new
evidence conclusively proving the rebels were behind the blasts. Rebel
leaders have denied responsibility. 

*******

#2
Russian Ruble Continues To Slide
January 12, 2000
By NICK WADHAMS

MOSCOW (AP) - The Russian ruble continued its slide against the dollar
Wednesday, but Russian officials played down the drop as an expected shift
and said the currency would stabilize soon.

The ruble finished the day's trading session at 28.84 to the U.S. dollar,
down from 28.5 to the dollar the day before. It marked a fall of 3.8
percent for the ruble from its Monday close of 27.7 to the dollar.

In addition to ordinary Russians, economists watch the ruble's rate
closely, considering it the main barometer of the nation's economic health.

Russian officials played down the slide, saying the trend was seasonal and
would peter out this week.

``Nothing extraordinary is happening,'' said Alexander Livshits, Russia's
presidential envoy to international financial institutions. ``The situation
will continue for maybe a couple of days, after which the rate will
stabilize somewhere between 28 and 29 rubles to the dollar.''

Livshits attributed the drop to the Central Bank, which he said was
hoarding dollars to boost its hard-currency reserves and pay off foreign
debts.

On Tuesday, Central Bank Chairman Viktor Gerashchenko insisted the slide
was a temporary technical drop and that the bank would not intervene
heavily to support the ruble.

In positive economic news, Tax Minister Alexander Pochinok said Wednesday
that Russia had exceeded its tax collection estimate last year, bringing in
$11.7 billion. Tax revenues of $8.1 billion had been forecast.

Speaking at a news conference, Pochinok declined to discuss tax collection
in any detail. But it was likely that the improved tax figures came in part
because of high world oil prices. Russia is highly dependent on oil exports
for much of its tax revenue.

Russia's economy grew for the first time in years in 1999. High oil prices
contributed to the expansion, as did the weak ruble, which made imports too
expensive for many Russians and gave a boost to domestic producers.

The European Bank for Reconstruction and Development, meanwhile, may triple
its loans to Russia this year, provided it sees significant improvement in
Russia's investment climate, bank officials said Wednesday.

EBRD First Vice President Charles Frank met with Russian economic officials
Wednesday to discuss the possible new credits. He said that the bank could
lend Russia from $550 million to $750 million this year.

The loans will probably go to Lukoil, the country's biggest oil producer,
steel maker Severstal, and power monopoly Unified Energy Systems to finance
new electricity exports to Finland, the Interfax news agency reported.

The bank's 1999 loans to Russia totaled just $220 million, the lowest level
ever. However, Russian economic forecasts for 2000 are better than last
year, allowing for EBRD loans of up to $750 million.

********

#3
Moscow Times
January 12, 2000 
NEWS ANALYSIS: Suspending Offensive Is Only Hope 
By Simon Saradzhyan
Staff Writer

Russia's military campaign in Chechnya has bogged down after the rebels' 
successful raids, and federal troops must rethink their strategy to prevent a 
repeat of their disgraceful 1996 defeat. 

Their best hope may be in reasserting their control over villages in their 
rear and putting off their offensive into the southern mountains at least 
until spring. 

Alexander Iskandryan, head of the Center for Caucasian Studies, predicts 
Russian commanders will only need a few days to push Chechen guerrillas out 
of the settlements of Shali, Argun, Gudermes and Achkhoi-Martan, which they 
either fully or partially occupied in surprise raids Sunday and Monday. 

But once pushed back into the mountains of southern Chechnya, the rebels will 
regroup and stage more raids unless Russian troops do a better job "mopping 
up" the flatlands they already occupy, Iskandryan said Tuesday. 

Makhmut Gareyev, head of the Academy of Military Sciences, said Interior 
troops and police commandos should regularly check the flatland settlements 
to expose undercover rebels and their hidden arsenals. Also, the local male 
population should be counted, registered and required to report regularly to 
military commandants' offices, the retired general said. 

Only "strict control of areas near combat lines" can help to prevent future 
raids, he said. 

A Defense Ministry officer said in a telephone interview Tuesday the raids 
had been well planned but could have been foiled had Interior troops and 
police commandos properly mopped up those settlements already conquered by 
his ministry's units. 

Gareyev and Iskandryan both said Russian troops also should try to seal off 
the republic's southern mountains to keep Khattab and other field commanders 
at bay. 

This, however, would take many more troops. Russia already has 100,000 
Defense Ministry soldiers and 40,000 servicemen from the Interior Ministry in 
Chechnya, which already is more than double the number of the 1994-96 
conflict. 

Despite the greater troop strength, Monday's raids showed the current war is 
evolving along the same pattern as the previous one. 

Just as then, Russian troops easily rolled over the flatlands only to see 
their offense bogged down by fierce resistance in the Chechen capital and in 
the Argun gorge, with Chechen rebels staging surprise raids to take over 
entire settlements in flatlands of the republic. 

"The real war has just begun, and Russian troops will no longer be able to 
stroll forward as they did only a few weeks ago," Iskandryan said. 

Russian troops have "no other realistic choice," he said, but to try to 
strengthen their grip on those flatland settlements that they already claim 
to control, as well as to continue their efforts to conquer Grozny. 

Since entering Chechnya in September, troops have seized seven of the 
republic's 14 districts and 122 of its 199 settlements, according to the 
military. 

Yet any attempts to advance further into the mountains in winter will lead to 
heavy casualties, which could in turn cause a public backlash and endanger 
the electoral chances of acting President Vladimir Putin in the March 26 
presidential poll. 

"The troops can't do anything but tread in one place for the rest of the 
winter if they want to hold on to what has been taken," Alexei Malashenko of 
the Moscow Carnegie Center said. "Any large-scale mountain campaign would be 
suicidal now." 

While optimal for Russian troops, the lack of any further advance would not 
play well on television screens, he said. 

Therefore, even though no real victories can be won until spring, "the 
generals should and will keep roaring in a victorious tone on TV screens" to 
ensure that Putin's ratings don't fall, Malashenko said. 

The latest raids, however, have prompted Moscow-based media to begin drawing 
parallels with the disastrous Chechen campaign of 1994-96. 

"For the first time this new war recalls the events of 1994-96," Nezavisimaya 
Gazeta said. 

NTV television said between 50 and 150 fighters had been killed in the 
fighting in Shali, while between five and 15 Russian soldiers had been 
killed. Official reports said eight soldiers were killed and four were 
injured in the Shali fighting. 

In addition to purely military methods, Russia's attempt to crush Chechnya's 
independence bid should be supplemented by efforts to win over the civilian 
population, Malashenko said. 

Gas, electricity and health and social services should be restored in Chechen 
settlements that have come under the control of Russian troops, Malashenko 
said. 

Above all, Russian troops should try to avoid civilian casualties even in 
settlements where the population is believed to openly support the rebels, he 
said. 

The military, however, has shown little regard for civilians. 

On Tuesday, Russian troops pounded Shali and Argun with artillery shells and 
sent aircraft to bomb the settlements. Many civilians were killed in the 
often indiscriminate fire, NTV said. 

Dozens of peaceful Chechens were executed in a punishing attack last month on 
Alkhan-Yurt, villagers and human rights activists say. 

Alkhan-Yurt is the home village of Malik Saidullayev, head of Chechnya's 
pro-Moscow State Council. 

Saidullayev said in a recent telephone interview that Russian troops will not 
be able to succeed in Chechnya unless they bring prominent field commanders 
over to their side by promising them personal safety and posts in the local 
administration for them and their supporters. 

Saidullayev said he has already met with 27 Chechen warlords, who have a 
total of some 4,000 fighters under their command, and they would agree to 
take a neutral stance in the war provided Russian troops did not attack their 
strongholds. 

********

#4
Russia Builds up Support for Vladimir Putin.

MOSCOW, January 12 (Itar-Tass) - Regional leaders, who joined an initiative
group who nominated Vladimir Putin a candidate to the Russian presidency
today, are convinced that Putin is the best and worthiest presidential
candidate now. 

Saratov regional governor Dmitry Ayatskov told Tass on Wednesday that the
prime minister "is exactly the man who can reach accord in society even
between its diametrically opposite poles". "He does not mind associating
with anyone, and his flexibility and ability to communicate with quite
different political figures arouses admiration," Ayatskov said. Putin as a
successor of the first Russian president" will pursue a reasonable policy
relying on the experience of the older generation," Ayatskov said. 

A similar opinion was expressed by Vice-speaker of the Federation Council
Vladimir Varnavsky. Speaking to Itar-Tass today, Varnavsly said that "the
prime minister's dignity, honor and patriotism appeals to me." 

Tyumen regional governor Leonid Roketsky has expressed support to Vladimir
Putin on behalf of the population of his region. Roketsky told Tass that
the majority of the population in the Tyumen region had voted for the Unity
bloc in the parliamentary elections, which is a great factor in Putin's
favor. 

Chairman of the Federation Council Committee for constitutional legislation
and judicial issues Sergei Sobyanin has declared that "Putin is the very
man who turned out to be in the right place and at the right time so as to
become president." 

"The prime minister is the very man who can implement tasks given to him,
restore Russia's unity and establish order in the country," Sobyanin said
in a Tass interview. 

********

#5
The Guardian (UK)
12 January 2000
[for personal use only]
Gloom in the east 
Jonathan Romney on Russian cinema

In 1904, a Russian peasant in the back of beyond murders his brother with an 
axe, then hops the train to St Petersburg. Arriving in the city, he steps on 
to the platform and sees something he can't begin to understand - a Frenchman 
turning a handle on a wooden box. Our man peers closely at this marvel, and 
gets booted out of the way for his pains. Ninety years later, documentary 
makers open a can of film - a roll of 1904 Pathé cinematograph footage, 
showing a train arriving at St Petersburg. It's pretty much a direct remake 
of the Lumière Brothers' train film of 1895, except for this inopportunely 
curious hick from nowhere, sticking his bearded face into the lens just when 
the footage was looking usable. The documentarists trim the film and toss the 
rejected footage, with our hero on it, into the bin, never to be seen again. 

This poignant vignette is the story of Trofim, a 1995 short by Russian 
film-maker Alexei Balabanov. Trofim can be taken either as a Borges-style 
parable of the way that history's best anecdotes - the blood-and-passion, 
true-crime stuff - are invariably consigned to oblivion, or as a scathing 
comment on practices of film preservation in the former Soviet Union. Or you 
might see it as an oblique comment on the current status of Russian cinema, 
which these days, like Trofim the peasant, might as well not exist at all. 

The last time the west really noticed Russian-language film was in the early 
90s, when there was a brief buzz about the prospects for post-perestroika 
cinema. But hardly any new Russian films were released in Britain in the 90s, 
and the few exceptions were barely noted: Sergei Bodrov's critically praised 
Prisoner of the Mountains made not the faintest stir with audiences, Valery 
Todorovsky's superb Katia Ismailova - film noir in a Chekhov setting - even 
less. 

There's next to no chance of British exposure for Alexei Guerman's film 
Khroustaliov, My Car!, a Fellini-esque delirium set in the Stalin era, which 
provoked disgruntled walk-outs in Cannes in 1998, but went on to be acclaimed 
as a masterpiece when released in Paris and New York. The only film-maker who 
has any real western following is Aleksandr Sokurov, whose brief, enigmatic - 
and for my money, indigestibly mystical - Mother and Son had high-powered 
pundits such as Paul Schrader and Susan Sontag acclaiming it as the spiritual 
real deal. 

Since the western art-house circuit is still ruled by the cult of the auteur, 
then a cultish auteur is surely Russian cinema's best chance to re-establish 
itself on the map. Such a contender gets an airing in Britain this week: 
Trofim's director Alexei Balabanov, with his first feature Happy Days 
screening at the ICA. It's the least confident of the three Balabanov 
features I've seen - the fourth is a version of Kafka's The Castle - but it's 
as bizarre and distinctive as debuts come. 

Tenuously based on Beckett, it has a nameless hero who wanders through St 
Petersburg's eerily deserted streets, takes up with a faintly demented 
prostitute and tangles with an angry clock-seller. The logic is entirely 
dream-like, and although the romantic melancholy takes a little swallowing, 
Balabanov's eye for grandeur and squalor, from sweeping shots of palace 
rooftops to explorations of ancient corridors and stairwells, makes Happy 
Days seem like a film from another time and another planet. 

Also due for release this year is the fabulously perverse Of Freaks and Men 
(1998), a tale of early 20th-century St Petersburg in which two respectable 
families fall prey to a gang of pornographers: their speciality is filming 
young Russian maidens getting spanked with birch brooms by stout baboushkas. 
The silent-era pastiche, all sepia tints, is spot-on, although nostalgists 
would be horrified by Balabanov's scabrous picture of an art form developing 
in such profoundly sordid circumstances. 

But it's Balabanov's venture into hard realism that has caused most stir in 
Russia. The 1997 thriller Brother has an apparently clueless young man 
signing up as a mafia hireling and showing such a propensity for businesslike 
killing that he soon rises to the top of the criminal tree. A brutally 
streamlined piece of storytelling, Brother struck Russian audiences as a 
timely state-of-the-nation horror tale, although there was much debate about 
its seemingly amoral stance. While young audiences eagerly took to 
Balabanov's young hood Danila as a modern folk hero, more conservative 
viewers saw Brother as a shockingly amoral tale that boded ill for the 
nation's spiritual welfare. Its most notable opponent was the veteran 
director Nikita Mikhalkov, who attacked it for being "imbued with 
destruction". 

Then again, Mikhalkov himself did Russian cinema no favours with his 
international pudding of a historical epic, The Barber of Siberia, starring 
Julia Ormond. This three-hour repertoire of touristic myths of old Russia - 
bears, vodka and gallant waltzing cadets - proved something of a laughing 
stock at Cannes last year. Amoral or otherwise, the bracingly cynical 
Balabanov has succeeded in taking Russian cinema out into the world, and is 
now completing Brother 2, in which Danila takes on America. 

There are no plans yet for The Barber of Siberia 2. 

*******

#6
Excerpt
STRATFOR.COM Weekly Global Intelligence Update
January 10, 2000

2000 Annual Forecast: The Year of Eurasia

We had called 1999 "A New and Dangerous World"
[ http://www.stratfor.com/services/giu/1999.asp ]. The year 2000
will be the year in which the world gets down to the business of
creating the new epoch in world affairs: the serious business of
great powers and their conflicts and alliances. The world will be
in the process of defining the constellation of relationships that
will characterize the coming generation. At the center of that
process are the two great question marks: Russia and China. In our
view, these two countries will not only be at the center of
attention in the next year, but will be the keys to the operation
of the global system.

Russia and China together constitute the geographic and demographic
center of gravity of the Eastern Hemisphere. How they behave is one
of the engines driving the history of any epoch. When Moscow and
Beijing rule unified empires and ally with each other, as they did
in the 1950s, they create an enormous mass around which the rest of
Europe and Asia fearfully revolve. When they are united but hostile
to each other, as they were in the 1970s and 1980s, they neutralize
each other, creating opportunities for other powers. And if they
were to collapse into simultaneous chaos, they would create a
massive vacuum that would suck in the rest of the world in conflict
and cause a feeding frenzy.

Usually, the reality of Eurasia's heartland is fairly well defined
and stable. The year 2000 marks one of those rare moments where
nothing can be taken for granted. Both Russia and China are, in our
view, in the process of redefining themselves and their
relationship with each other and the rest of the world. Nothing in
2000 will be more important than how these two countries define
themselves. In a very real sense, what happens there defines what
will happen elsewhere.

Let us begin with the easier question: Russia.

1999 saw the formal end of liberalism in Russia. The real
foundations of that liberalism had already exploded in August 1998.
Russian liberalism was less ideological than geographical; it was
the desire to become a European nation participating in Europe's
economic expansion. Between desire and reality there is a massive
chasm that can only be bridged by wrenching transformations of
society. The Russians focused on a flow of investment from the
West. Of course, a flow of investment without Western institutions
- courts that enforce property rights without fear or favor, and
banks that exercise fiduciary responsibility - is simply a river
that will disappear. For nearly a decade, Western politicians,
bureaucrats, businessmen and bankers worked mightily to ignore the
obvious, which was that their investments would, on the whole and
with some exceptions, never amount to anything. In August 1998,
during the great Russian financial crisis, it was no longer
possible to avoid the obvious. Russia's experiment with reform and
liberalism had failed.

Western investment, from public or private sources, dried up. The
dream that Russia would join in European prosperity dried up with
it. The chasm could not be bridged. Russia has been transitioning
since August 1998 from a country that had hoped it could bridge the
chasm to a country that recognized that it was hopeless. Russia's
inability to construct institutions that are the prerequisite to
capitalism dried up the flow of Western cash.

In one sense, Russia was trapped. In another sense, it was
liberated. Ever since Mikhail Gorbachev, the Soviet Union and then
Russia were obsessed with how they were perceived by the West.
Endless policies were set in terms of Western perceptions on the
assumption that the solution to Russia's problems lay with the
West. With the collapse of the financial flow into Russia, Russia's
internal politics no longer had to be constructed with the IMF or
with Western bankers in mind. The result was Vladimir Putin.

Now, it is important not to think of Putin as the antithesis of
Boris Yeltsin. He grew out of the same soil and participated in the
same policies, but there is a fundamental difference between Putin
and Yeltsin. Putin has the institutional foundation in the
intelligence services to at least attempt to craft a new policy for
Russia. That policy is clear and has the following elements:

* Use Russian nationalism to cement together a fragmenting nation.
Putin's enormous popularity in Russia derives from two points. The
first is that he does not appear paralyzed. Russians badly want a
strong leader. The second is that he appears determined to reverse
Russia's deterioration in its international standing. Russians know
that Putin has no magic formula for economic recovery. They are
nonetheless delighted with resurrected national pride.

* Use military force, very publicly and very brutally in Chechnya to
signal the rest of Russia and the rest of the former Soviet Union
that a change has taken place in Moscow. The public brutality is
important in two senses. First, it signals to other countries about
Russian resources and the willingness to use them. Second, it
signals to them that the West will not protect them nor will Russia
be concerned about repercussions in the West.

* Maintain a flirtation with China to demonstrate to the West, and
to the United States in particular, that Russia's policy reversals
are not merely tactical but strategic, and can affect the global
balance of power.

* Use the popularity of his government, regional aggressiveness and
his relationship with China to force the West to reconsider its
economic embargo on Russia, and to resurrect, on some basis,
financial flows into Russia.

There is, therefore, a deep tension in Putin's policies. On one
side, liberated by the absence of financial support, Putin can
create a popular regime and secure Russia's frontiers while
becoming a global player. This is an end in itself. At the same
time, Putin cannot resist the hope of rebuilding the bridge to the
West. Therefore, a policy that is an end in itself is also being
used as a means toward an end-a very different and even
contradictory end. That causes good policy-making to be difficult
indeed.

This is Putin's Achilles' heel. He is prepared to act as a Russian
nationalist, but he is not quite prepared to rupture relations with
the West. This will lead, in the short run, to complex and
contradictory policies. Putin needs to liquidate the oligarchs. He
is, however, not only personally linked to them, but they are his
link to the West. Therefore, he will continue half measures. Putin
needs to not only crush the Chechens but also needs to establish
Russia's sphere of influence in the Caucasus, particularly in
Georgia. At the same time, Putin does not want a confrontation with
U.S.-backed Georgia.

Putin could easily wind up in the same place that Yeltsin was, not
because he lacks will, but because he dreams contradictory dreams.
We expect this to dominate Russian politics during much of the year
2000. But it will not go on indefinitely. Whether it is Putin or
someone else, Russia crossed a line in 1999 from which it will not
return. We will see increasing pressure all along Russia's
frontiers, from the Baltics to Central Asia, as Russia works to
recreate, at the very least, a sphere of influence where the former
Soviet Union used to be.

Russia can do this tactically, country by country, but it requires
a strategic foundation. To be more precise, while it has sufficient
power to shape events along its borders based on the regional
balance of power, it needs to block Western, and particularly
American, support for countries like the Baltic states or Ukraine.
In order to achieve its tactical ends it needs a strategic block to
the United States.

Part of that strategic solution is nuclear weapons. Russia's mere
possession of them gives the United States pause, but not
paralysis. To paralyze the United States, Russia needs to either
divert American attention or to create a coalition that is of
sufficient weight to deter American meddling. That is why China is
so important to the Russians. An American obsession with China
gives Russia room for maneuver.

Now it is important to understand that we are not predicting a new
Cold War, certainly not in 2000 or any time after that. The Cold
War was a global confrontation between two superpowers. Russia is
incapable of posing a global threat. What we are talking about is
Russia increasing its presence and pressure within the frontiers of
the former Soviet Union and the environs, thereby increasing
friction, but not confrontation, with the United States. Indeed,
that is why the China card is so important. It increases pressure
without increasing confrontation. And that is why China is so wary
of playing Russia's game, although it is certainly tempted.

********

#7 
Moscow Times
January 12, 2000 
INSIDE RUSSIA: Governors Use Energy 'Debt' To Fuel Feuds 
By Yulia Latynina 

As most were watching the overhaul of the Kremlin spheres of influence, 
Russian governors, who had been left without a babysitter, wasted no time on 
deals of their own. 

December saw events in the Krasnodar and Kemerovo regions that can only be 
viewed as a new level of property transfer in Russia. 

What I am referring to is the decision of the Eastern Siberian arbitration 
court finding that the Krasnoyarsk aluminum plant owes 3 billion rubles ($108 
million) to the energy utilities. A similar decision was handed down by the 
court against the Novokuznetsk aluminum plant. 

Each plant had its own agreement with the electrical utilities: They were 
paying lower than average prices. In both cases, these and other agreements 
were found to be illegal by the court. In both cases, the utilities' lawsuits 
were backed by the regional governor, who was battling the management of the 
plants. In the case of the Krasnoyarsk's KrAZ plant, the management was 
Anatoly Bykov. In Kemerovo, the management at the NkAZ plant was the MIKOM 
group. 

The decisive factor in Krasnoyarsk could have been something Governor 
Alexander Lebed did. He sent a group of court bailiffs to the plant to 
inventory KrAZ's property. KrAz's armed workers however - egged on by 
management - would not let the bailiffs into the plant. 

At first glance the governor's aspirations toward recouping the discounts 
seem silly. It's as if you bought a pair of jeans at a store a couple of 
years back for 200 rubles and now the store wants to sue you because the 
value of the jeans, according to them, has jumped to 800 rubles. 

Unfortunately, governors Lebed and Aman Tuleyev are technically right. There 
is a law in Russia on the state regulation of electric and heating utility 
tariffs. The laws says the tariffs are set by the Regional Energy Commission 
and they apply to all utilities in the region - and it doesn't allow for 
separate agreements like the ones KrAZ and NkAZ benefited from. 

True, the letter of the law departs from the realm of common sense. Thus, 
having so-called "discount" tariffs, KrAZ was one of the single sources of 
live money for the Krasnoyarsk energy system. That is, insisting on a 
formally lower tariff than, say, "Sibtyazhmash," KrAZ was able to set a 
precedent for giving discounts to other companies in need, thus ensuring 
they'll stay afloat. 

Lebed and Tuleyev aren't acting only for themselves. It's widely known that 
they want to oust MIKOM from all the Kemerovo aluminum conglomerates. 

Industrialists who are using the governors to seize industries and the 
governors who are trying to settle scores with enemies are setting a truly 
monstrous precedent. The fact is that the absolute majority of enterprises in 
good working order in Russia have side deals with utilities for better rates. 

It would seem that every enterprise in Russia is in millions of rubles in 
debt to the utilities, and the slightest dissatisfaction of a governor - or a 
competitor - can convert the potential energy of debt into the kinetic energy 
of bankruptcy. This would put a tombstone on all investments in the country, 
where property rights are written on toilet paper. Used toilet paper, that 
is. 

Yulia Latynina writes for Segodnya. 

*******

#8
Date: Tue, 11 Jan 2000
From: Daniel Kimmage <dkimm@mail.rcom.ru> 
Subject: al-Hayaat on Russia

David,
While reading the BBC summary of materials which appeared in
ash-Sharq al-Awsat, I was struck by how little attention is focused on
coverage of Russia outside of the West. In the light of various
comments contributed by JRL readers on the issue of Islamic
fundamentalism, it might be worthwhile to include in the list
occasional excerpts from the press in the Muslim world. (As a reader
with more than a passing familiarity with the Arab world, my personal
impression is that most of the comments on "fundamentalism" derive
from a markedly incomplete understanding of actual conditions there.
Of course, the Arab world is only a part of a much larger Islamic
realm, but too much Western commentary, especially by commentators who
do not know any of the major languages of Islam, concentrates on the
"threat of extremism" to the exclusion of other themes.)
In any case, I send along translations from Arabic of two articles
from today's al-Hayaat, conventionally described as "an influential
daily". If you feel the inclusion of such materials is worthwhile, I
will try to provide other translations in the future. I also read
Persian and will keep my eye out for appropriate materials in
Hamshahri and other Iranian newspapers available on the web.
The translations are, of course, for personal use only. Best
wishes, Daniel Kimmage

Al-Hayaat, Jan. 11, 2000
Opinion Page
Jalaal al-Maashita
Russian President Faces Election in Chechnya

If Vladimir Putin is blessed with Russia’s presidency in the March
elections, then funereal music will sound as he enters the Kremlin and the
sweetness of victory will be leavened with the bitterness of death as the
number of dead vies with the number of voters who choose a president who
makes war in Chechnya his steed and bulwark in a dash to power.
Since his appointment as head of the government and assumption of
presidential powers after Boris Yeltsin’s resignation, Putin has garnered
popularity by conducting a Caucasian campaign that has become an expression
of Russians’ burning desire for authority that will guarantee them internal
security and revive, at least in their memories, the past glories of a
nation that was one of two superpowers.
It seemed as though the screenplay for the “election war” in Chechnya was
on firm footing and that former president Boris Yeltsin had limned its
basic outlines when he announced that the subjugation of Grozny would take
place “with Chechen support”, referring to those who collaborate with
Moscow, and that this would be accompanied by a war that would last only
two months, ending a short time before scheduled elections. All of this
would take place as artillery pounding Grozny aimed simultaneously at the
gates of the Kremlin before the author of victory in this great Russian
battle..
It is clear that recent events have sent undesired winds blowing into the
sails of federal forces. They had announced that Chechen fighters were on
the verge of death and defeat or capitulation after planes flew hundreds of
intensive sorties, artillery roared, missiles raged, and encircling
blockades stood firmly in place. But cities which had taken days and weeks
to “liberate” after pounding [by artillery] and “combing through” to rid
them of men capable of bearing arms were recaptured by the Chechens in
hours. And Federal forces, which used to announce the deaths of three of
their men as compared to a total of 300 for the enemy, began to admit with
shame that the war was mowing down dozens of their own.
The Kremlin, which had painted a rosy picture of the “war elections”, was
startled to discover the canvas turning suddenly as vivid as human blood,
or as black as the remains of the buildings in Grozny which came crashing
down on the heads of their inhabitants.
Unease has now taken on the signs of confusion and disarray, as the
announcement came today of the removal of the two most important generals
who represent the “hawks”, and then, hours later, the president said that
he “would not scorn” them. Moscow also rejected an offer from [Chechen]
president Aslan Maskhadov to announce a cease-fire in order to remove the
corpses of the dead, and then went on to announce a unilateral “cessation”
of operations, the most evident proof of which is ... the intensification
of shelling.
It seems that Putin has rejected suggestions proffered by a number of
politicians and analysts who called on him to halt the war while federal
forces blockaded Grozny and were capable of negotiating from a position of
strength and to shift from a policy of war to one of peace in order to
achieve his goal ... the throne of the Kremlin.
But it is more likely that Putin has decided to break the olive branch and
make the gun his stairway to the summit, although the ascent now appears to
rest on shaky supports.

Al-Hayaat, Jan. 11, 2000
International Affairs
Moscow, Jalaal al-Maashita

Moscow steps back from removal of military commanders at the front in
indication of internal conflict in the army

In the Chechen “triangle of fear”, the Russians call for urgent reinforcements

Russian forces did not succeed in imposing a media blackout on the
fighting which began the day before yesterday. Groups ranging from 300 and
1500 men attacked cities in the “triangle” which during the last war served
as a second line of defense for the Chechens after their withdrawal from
Grozny.
Reports trickling in from the from the front indicated that Russian forces
suffered extremely heavy losses in the city of Shali, where the Chechen
flag was raised and several hundred members of Russian special forces were
blockaded in a building in the center of the city.
Long-range artillery began to pound locations in the center of Shali,
seeking to force the Chechens to lift the blockade of the encircled building.
Violent clashes continued near the main airport in the city of Argun (15
kilometers south of the capital) and at places within Gudermes, the
second-largest city in Chechnya, where [Chechen] fighters succeeded in
occupying a school which served as headquarters for Russian units.
Hostages were taken there.
Near Gudermes, the Chechens ambushed a column of trucks described by the
Russian Ministry of Defense as carrying “cisterns with water”. A group of
armored vehicles encountered heavy fire as it hurried to the rescue.
The agency “Interfax” reported that Russian forces lost 26 dead and 33
wounded there.
Russian interim president Vladimir Putin met with key members of his
government, after which the Minister of Defense announced that [Russian]
forces had “succeeded in establishing control” over the triangle, although
the most recent military reports indicate that fighting continues.
Sergeev termed the Chechen attack a “traitorous blow” and a violation of
the “initiative” announced by Moscow to coincide with
‘id al-fitr and the
new year. He added that “there can be no talk of a cease-fire now”.
It is known that Moscow decided on a unilateral “cessation” of operations
only in Grozny, while continuing the shelling and destruction of various
[other] areas in Chechnya. It has been noted that rebel fighters
[al-mujahidiin] did not attack any locations in the capital.
The Russian Ministry of Defense confirmed that it had resumed operations
in Grozny, hitting the city from the air and with artillery. Viktor
Kazantsev, commander of forces in the Caucasus, noted that the goal of the
attack on the “triangle” was to ease the pressure on fighters in the
capital. He also confirmed that his forces “will strike without mercy”.
In addition to the intensification of military operations, military forces
imposed a ban on movement in the regions of Shali, Argun, and Gudermes.
Recent events have caused confusion in the Russian military and political
elite. Moscow retreated from its decision to remove generals Vladimir
Shamanov and Genadii Troshev from their command of the Eastern and Western
fronts in Chechnya. Observers saw in the return of Shamanov and Troshev
confirmation of a struggle within the military establishment and an
indication that the “hawk” party may be gaining the upper hand.
The announcement came yesterday of the additional transfer of forces to
support Russian units already in South-Eastern regions. Attacks on Grozny
and other cities from the air also began to intensify.
Malik Saydallaev, president of the “government” set up by Moscow to rule
Chechnya, an entity which includes Chechens allied with Moscow, said that
“the situation seems to be changing to the detriment of Russian military
interests.” He also expects the Chechens to shift to the techniques on
which they relied in the last war, retaking cities and holding them for a
week or two with the aim of wearing down Russian forces and then slipping
away to the mountains with minimal losses.

*******

#9
Izvestia
January 12, 2000
[translation from RIA Novosti for personal use only]
PRIMAKOV'S CONFIGURATION
By Andrei STEPANOV

Yevgeny Primakov now finds himself in an extremely
unpleasant situation. He has to make a quick decision about
accepting his Duma mandate. As is known, he only makes serious
decisions after having weighed everything and thought it all
over. Judging by how fast he responded to Luzhkov's offer to head
the Fatherland-All Russia (OVR) bloc this past summer, he needs
no less than a month, or better two. However, the present
situation requires quick decision-making, and he simply cannot
wait for a more favorable and understandable political
configuration to develop.
Obviously, the Duma seat proper is hardly attractive for the
former premier; the issue he is pondering now, giving it so much
effort, is whether or not he stands a chance of being elected
Duma speaker and whether he needs that position at all. Primakov
tended to keep silent at Tuesday's meeting of leaders of
associations capable of forming factions in the Duma; when asked
directly about an OVR candidate for speaker, he said that his
bloc was still "undecided."
Meanwhile, the configuration of the Duma is becoming less
and less favorable for the former premier. Half of OVR - All
Russia - has practically broken away from the bloc, moreover, its
leaders - Mintimer Shaimiyev, Murtaza Rakhimov and Vladimir
Yakovlev - pledge in unison their support for Vladimir Putin as a
presidential hopeful. Heading this "injured" faction thus makes
no sense for Primakov - it will be no use when he decides to run
for the presidency, if he does at all. The path to the speaker's
seat has also become barred, because neither the communists, nor
Yabloko, SPS and Unity are dying to see an OVR member as the Duma
chairman. Moreover, the Kremlin seems to be starting some complex
game around the speaker's post. Putin's party has indicated its
willingness to back Lyubov Sliska, who has no political weight
whatsoever. The only hope left for Primakov is some unexpected
proposal on the part of the Kremlin. 
The Kremlin, on the other hand, emits no clear signals. It
isn't clear whether it will "consent" to the re-election of
easily manageable Gennady Seleznyov as a speaker, or whether it
is going to withdraw its "own" candidate (Sergei Stepashin or
Lyubov Sliska) and offer the position to Primakov under some
conditions as a great favor. The configuration being built by the
administration is wholly unclear. According to the available
information, there are plans to open "information fire" at the
new generation of industrial and political figures, who could
make an alternative to the old corrupt oligarchs for the new
president.
As reports the well-informed on-line newspaper Pravda.ru,
the targets have been set - the potential allies of Putin, like
Chubais, Kiriyenko, Nemtsov, Titov, and the "young directors,
like Dmitry Zimin (Vympelcom), Igor Lisinenko (Maisky Chai), Oleg
Deripaska (Sibirsky Aluminy), and Mikhail Paramonov (Doninvest).

******

#10
Novye Izvestia
January 11, 2000
[translation from RIA Novosti for personal use only]
A VERY RUSSIAN EMERGENCY SITUATION
Meaning of Personnel Changes in Government
By Otto LACIS

The December 19 elections have changed the landscape in the
Duma, the lower house, beyond recognition--not so much due to the
use of special election techniques, which are very "in" these
days, as due to the directly expressed will of the voter. 
In the final count, Boris Yeltsin was certainly counting on
that will of the voter when he decided to resign after his
political opponents had been defeated in the elections, although
he had refused to go while they were strong and seemed to be
about to take power in their hands. 
The people of Russia want to live a normal life. There is no
reason why they shouldn't, but that does not mean that the
government's job has become easier to do. On the contrary, there
can be no excuses for the government if it fails in its duty. 
There has been a lot of talk that Vladimir Putin's high
rating is explained exclusively by the government's successes in
combating terrorists in Chechnya. The idea is that fighting a war
is a more or less easy job to do, while tackling economic tasks
is much harder to do and bound to drive the high rating way down.
This idea is thoroughly wrong. Fighting a war is not easy,
and the government is tackling economic tasks. It is correct to
say that Putin has been concentrating on the short-term
objectives in the first months in office to eventually
--especially after having been appointed the acting president--
demonstrate that he can deal with the longer-term affairs, too. 
This is true of both Chechnya and the economy. The events of
the past few days bear this out. The broad public would hardly
learn soon of what stands behind the suspension of the onslaught
in Grozny and the simultaneous quasi-dismissal of two Generals,
Heroes of Russia. 
But the facts that are public knowledge are strange, indeed:
General Troshev has gone on the air to report his dismissal, and
the understanding is that something extraordinary has happened.
Another extraordinary thing: the official report that the federal
troops in Chechnya lost 26 men dead on January 9--instead of 2-4
a day, as is usually the case.
The anti-terrorist operation is entering a stage where the
military-political objectives cannot be tackled as pure tactics;
what is needed is strategic ideas, which are largely political
ideas concerning life after the war. Unless somebody produces
such strategic ideas which the majority of Chechens could accept,
Russia is bound to fight a guerilla war which may last for
decades. 
In principle, the same goes for the economy. It is hard or
outright impossible to deliberate on un-popular decisions which
are inevitable at the initial stage of all market reforms, but if
the reforms indefinitely mark time winters would always create
emergency situations. 
It is not true that the premier paid more attention to the
war than he did to the economy: his schedule testifies to the
contrary. But it is true that his economic strategy is still
rather vague. 
It is high time for clarity. Putin does not need to put
forth yet another programme--the people have had more than enough
of them. Incidentally, a team of talented economists are devising
an economic programme for the government. 
These days, the choice of a policy is best discernible in
personnel decisions. The meaning of the latest personnel changes
in the government is clear. Nikolai Aksenenko, who has lost his
post of a first vice-premier, presents no mystery: executives of
this kind are ideal for the job of urgently delivering furnace
fuel by air to the freezing regions. 
But if Russia wants to never have to deal with such
humiliating tasks again, it needs keen economists capable of
erecting a market mechanism. One of them is Mikhail Kasyanov who
has been appointed the first (and only) deputy to the premier. 
Clearly, Kasyanov's appointment to being the PM's right-hand
man for the economy is both strategic and tactical: the objective
is to improve relations with the West, the IMF in the first
place. The 6 billion dollars from foreign sources, built into the
2000 budget, cannot be collected in the country, no matter what
ideas the Central Bank head may come up with after having
proposed the sale of all currency revenues. 
Kasyanov, the latest main negotiator with the international
financial institutions, has been tasked to demonstrate to the
Western world that Russia strives to continue the reforms and to
develop relations with the West.
In the course of a poll conducted by the Agency of Regional
Political Research on January 2 through 4, the question: Do you
think Yeltsin's resignation heralds in a new epoch, or nearly
everything will be as it used to be? was answered as follows: 25%
of the polled had nothing to say, 30% believed that Yeltsin's
departure marks the beginning of a new epoch, and 45% expected
everything to be as it was. 
A sad conclusion, especially against the background of
replies to the other question asked in the course of the same
poll: Putin's personal rating. After the premier was appointed
the acting president, his exceptionally high rating (52%) rose to
an all-time high of 62%, while that of runner-up, Gennady
Zyuganov, went down from 19% to 16%. Which means that the
pessimism fed by the eight years of dual power is so deep that it
is little connected to personalities. 
Emergencies minister Sergei Shoigu has been made a deputy
PM. His higher status seems to be an adequate reaction to the
will of the voter who supported the movement the politician
heads. But emergencies should lose their status of being routine
phenomena of Russian life.

*******

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