February 24, 2000    
This Date's Issues: 4129 4130

Johnson's Russia List
#4130
24 February 2000
davidjohnson@erols.com

[Note from David Johnson:
1. AFP: Grim Tales Of Terror From Behind The Walls Of Chernokozovo.
2. Washington Post: Jim Hoaglad, Fawning Over Putin.
3. Itar-Tass: Earnings in Russia Are Impermissibly Low, Kasyanov Says.
4. Trud: Vitaly Golovachev, WAGES OR ALMS? Despite the Record Growth of Industrial Production Over the Years of Reform, Real Wages Dropped Almost by One-Quarter Last Year.
5. Reuters: Putin leads mourners for reformer Sobchak.
6. Financial Times (UK): Quentin Peel, Runaway leader of Russia's one-horse race.
7. Reuters: Russia revives GKO mkt, says no more pyramids.
8. Washington Times: Jamie Dettmer, Soros on Apartment Bombings.
9. Moscow Times: Yegenia Albats, BONY Scam To Test Putin As Reformer.
10. BBC MONITORING: PUTIN TOP COVERAGE IN NEWSCASTS LEAVES COMMUNISTS FEELING TREATED UNEQUALLY.
11. RIA Novosti: BRITISH FOREIGN SECRETARY VISIT SIGNALS WEST'S GROWING PRAGMATISM ON RUSSIA.
12. Segodnya: Alexei Makarkin, WHO WILL BECOME RUSSIA'S NEXT PRIME MINISTER? The Choice of This Country's Next Prime Minister Would Highlight Vladimir Putin's Subsequent State-Development Policies.]

*******

#1
Grim Tales Of Terror From Behind The Walls Of Chernokozovo

CHERNOKOZOVO, Russia, Feb 24, 2000 -- (Agence France Presse) You can tell 
from the imposing concrete walls and barbed wire that it's a prison.

But it is only from the harrowing testimony of Chechens who have survived its 
violent excesses that you can understand what is going on behind the walls of 
Russia's most notorious detention camp.

Three young Chechen men interviewed by AFP after being released from 
Chernokozovo described sickening brutality meted out to those transferred to 
the so-called 'filtration camp', which Moscow insists is merely used to weed 
out fighters from refugees.

"I never fought, I have nothing to hide," said Lyoma, 22, whose family paid 
$400 to free him from the almost mediaeval privations of Chernokozovo. "I was 
to look after my parents. My father is old and unwell. They beat me for a 
long time, just kept on asking: 'boyevik' (fighter)?

"After they moved me to Chernokozovo I thought I would be able to explain 
things to people, but it was worse," Lyoma went on. "Only they didn't just 
hit you in the face and they had truncheons.

"If I lost consciousness they poured water on my head and continued beating 
me. They didn't even ask anything."

Witnesses have said that Chernokozovo detainees were forced to run a gauntlet 
of truncheon-wielding camp guards upon arrival before being kept in small 
cells, ordered to remain silent, and beaten and tortured during interrogation.

Human rights groups have demanded access to verify the allegations, reports 
and testimonies for themselves. A Russian officer at the camp told AFP that 
efforts had recently been made to repaint Chernokozovo and clean up its 
detainees "because we are expecting foreign guests."

Russia has thus far denied international observers access to the camp and 
refuted allegations of abuses in the facility, which it says houses less than 
100 people.

"The conditions there are normal right now ... like in any other detention 
center in Russia," Justice Minister Yury Chaika said, according to ITAR TASS, 
adding that there were currently 78 people held in the camp.

A second refugee, who requested anonymity, told AFP that one of those held 
had been missing Russian journalist Andrei Babitsky, and that he had been 
badly beaten.

The refugee, who spoke to an AFP reporter in Nazran in neighboring 
Ingushetia, said he had heard Babitsky's name called out and seen guards lead 
him away shortly before his transfer to the rebels.

"I heard someone say 'That Babitsky is pretty hardy. If they had beaten me 
like that I'd be dead.'"

Another detainee badly beaten was Ruslan, 30, who was still moving gingerly 
when he told his tale to AFP weeks after his release from Chernokozovo.

"Early one morning, they started picking people out and taking them off 
somewhere," said Ruslan, who still cannot digest solids, and has an almost 
permanent cough.

"We thought they were going to shoot us, but when it came to my turn they 
took me off to a forest and let me go," he said. "I went up to a house, the 
people took me in, fed me, and after two days put me on a bus. I myself still 
could barely walk."

The New-York-based Human Rights Watch group has already detailed testimony 
gathered from other Chernokozovo victims, describing the brutality as 
"unspeakable" and insisting that Russia not be allowed to get away with 
committing the abuses.

Besides the camp allegations, Russia has also been accused of violating human 
rights in Chechnya by indiscriminate bombing of areas populated by civilians, 
while fresh reports of a massacre of 62 natives of Grozny emerged on 
Wednesday.

*******

#2
Washington Post
24 Feburary 2000
[for personal use only]
Fawning Over Putin
By Jim Hoagland

President Clinton acts as if a drop or two of flattery for a fellow 
politician always greases the wheels of statecraft. But applying soft soap 
instead of hard truth can be a serious mistake. Russia today is such a case.

Clinton unstintingly praised Boris Yeltsin even as the befuddled Russian 
leader stumbled to an ignominious resignation on New Year's Eve. Now Clinton 
tries the same tactic with Yeltsin's successor, Vladimir Putin, using buttery 
words that may come back to haunt American policy.

"The United States can do business with this man," Clinton said in a Feb. 14 
CNN online interview. The president's comments echoed Margaret Thatcher's 
1985 description of Mikhail Gorbachev, but went further: Putin is "obviously 
highly intelligent, he's highly motivated, he has strong views," Clinton 
added.

Out of context, there is nothing exceptional in one member of the presidents' 
club welcoming a newcomer with fawning words. Where's the harm?

The harm in Clinton's casual choice of words lies precisely in the fact that 
they are out of context. They ignore what Putin has done in his short time in 
office, the means by which he has come to power and the threat to Russian 
democracy he may still represent.

One person who does see all of this in context is Sergei Kovalyev, a 
biologist and Duma member who spent a decade in Stalin's gulag and is now a 
champion of human rights and democracy in Russia. Kovalyev's scathing 
denunciations of the brutality of both Russian campaigns to subdue Chechnya 
are far more courageous than anything the Clintonites have said on the 
subject, even though he risks punishment and they do not.

What are your chances of going back inside, I asked the Moscow-based 
dissident when he visited Washington the other day. Has Russian democracy 
entrenched itself deeply enough to prevent the reestablishment of gulags 
under Putin or the others who seek power by grinding Grozny to dust?

"Democracy is not strong at all in Russia," Kovalyev said through an 
interpreter at a meeting sponsored by the National Endowment for Democracy. 
"But the government is weak. It fortunately does not have the power now to 
make the people go back to those days."

That is the context Clinton misses: A race is underway in Russia between the 
entrenchment of democratic freedoms and this regime's desire for power. The 
president's words are heard in Russia as support for Putin's stated ambition 
to restore the authority of the Russian state. Democracy is losing ground, 
and Clinton either does not notice or falls silent.

Kovalyev in contrast dismisses Putin as "an ex-KGB colonel who is busy 
restoring monuments" to Yuri Andropov rather than helping reformers. Putin 
ordered the return of a bust and plaque honoring the former KGB and Politburo 
head to a place of honor in Moscow on Dec. 20, nine years after they had been 
removed.

Kovalyev and others are engaged in a small but symbolically very different 
effort to memorialize the Soviet past. They want to preserve the Perm-36 
prison camp, where Kovalyev and thousands of others were prisoners, as a 
museum. This will help educate Russian young people about the gulag system 
that Andropov helped run. In this bit of history, Putin and friends show no 
interest.

They instead pursue the path to power by destroying Grozny, without any 
significant condemnation by Clinton or his aides. Clinton wrote in Time 
magazine in January that Russia was embarked on a campaign "to liberate" the 
Chechen capital, even as Russian troops were systematically destroying Grozny 
and its inhabitants.

Again, Clinton ignores context in using the value-charged word "liberate" for 
what the Russians are doing to Grozny. Not even his loyalist secretary of 
state, Madeleine K. Albright, would join him on that excursion into puffery.

"Do you consider the invasion of Chechnya as it has been described as a war 
of liberation?" Sen. Jesse Helms asked Albright in a Feb. 8 Senate hearing. 
"No," Albright replied without any elaboration. It was the flattest (if 
indirect) public repudiation of a president's use of language by a secretary 
of state that I can recall. Administration officials acknowledge that a draft 
of the Time article cleared by Albright's department did not contain the 
loaded word, which was written in later.

Remarkably Albright's answer received almost no coverage here. This is 
perhaps another measure of how much Clinton has devalued the meaning of 
language at home.

But abroad, an American president's words still carry weight. In Russia that 
weight is slowing down the democrats who are trying to out-race Vladimir 
Putin and his uncertain intentions. 

*******

#3
Earnings in Russia Are Impermissibly Low, Kasyanov Says.

MOSCOW, February 24 (Itar-Tass) - The average monthly earnings in Russia, 
amounting to 1,520 roubles or approximately sixty-two U.S. dollars, are 
impermissibly low, First Vice-Premier Mikhail Kasyanov told the Thursday 
meeting of the Russian government, which is discussing the state policy in 
this field. 

Kasyanov, who is chairing the meeting in the absence of Acting President and 
Premier Vladimir Putin, stressed that "the government has not discussed this 
problem for nine years. Many problems have heaped up in this domain, and the 
state has, in fact, lost hold of the instruments to influence the level of 
earnings in the non-state sector". He said that "such a mechanism as social 
partnership was not used at all". 

The first vice-premier also noted that "there is a huge gap between the 
average earnings and the subsistence minimum". He pointed out that the 
government "has failed to substantially improve the situation after the 
August 1998 crisis". The average level of earnings now equals to only 74 per 
cent of the figure for the pre-crisis period. 

*******

#4
Trud
February 3, 2000
[translation from RIA Novosti for personal use only]
WAGES OR ALMS?
Despite the Record Growth of Industrial Production 
Over the Years of Reform, Real Wages Dropped Almost 
by One-Quarter Last Year
By Vitaly GOLOVACHEV, political observer of Trud newspaper 

In a confidential talk a highly informed specialist of the
Labour Ministry told me that two months ago over 4 million people
were paid less than 350 roubles per month. 
Over a brief period of time since then the situation with
the size of wages, if we don't take into account an insignificant
traditional wage increase in December, has not changed radically.
Today the pay of millions of Russians is less than half a US
dollar per day in terms of the US currency. The calculation was
made in terms of US dollars to use international criteria,
according to which the level of incomes equalling one US dollar
per day is considered to be the boundary of poverty. As can be
seen, many of our enterprises have already overstepped this
threshold. Over half a million citizens, according to the data of
my interlocutor, receive (from time to time or regularly) up to
100 roubles per month. It is hard to believe this - three roubles
per day! Over one million Russians earn from 100 to 200 roubles
per month and another a million and a half - from 200 to 300
roubles. It would be appropriate to recall that the subsistence
minimum for an able-bodied resident of the country calculated
according to the old methodology constituted 1,054 roubles in the
fourth quarter of last year. If we take a new and more realistic
methodology (the State Statistics Committee will soon switch over
to it), this figure will be 1,250 roubles. It turns out that
today's monthly pay which is received by 4 million citizens can
last them only several days (from 3 to 9 days). And what should
be done in the remaining three-four weeks? What kind of a system
is it in general, if every tenth hired worker receives a wage
amounting to half the subsistence minimum?
One-quarter of the population survives through subsidiary
gardening plots, unofficial additional earnings and the shadow
economy. There have appeared in the country "the new poor" -
able-bodied people who have a job but live poorly. One thing is
clear: the system which has been formed is, in principle, wrong.
This can be illustrated by the size of the minimum wage - about
85 roubles. One can frequently hear that in actual fact no one
gets such a figure and that this is just "a technical instrument"
which is used exclusively for calculating penalties and various
benefits. However, 500,000 Russians who earn up to 100 roubles
per month can testify that this is not true. Even if we take into
account unofficial earnings, far from all of them manage to keep
afloat. 
Millions of low income families, as the surveys of
households have revealed, are simply half-starving. In the first,
(so-called decile) group involving 14.5 million the most
underprivileged citizens, per capita consumption of meat and
dairy products is 4-5.5 times lower than in the households with
high incomes. On average, a poor man gets less than two packs of
milk and half a kilogramme of meat products per month. This
actually means one third of a glass of milk and half a piece of
sausage (16 grams) per day. However, many of the poor do not have
even this. Those who count every rouble are forced to cut their
requirements significantly, including those for bread which until
recently was their basic food product. Now low-income families
eat on average half the amount of bakery products consumed by
well-to-do families - just two-three pieces of bread.
Undernourishment leads to weaker immunity, early aging and death.
In the first eleven months of last year the number of deaths in
Russia increased by 138,000 people (as compared to the similar
period of 1998 and came close to two million. Deaths exceeded
births by 836,000 people in Russia. In less than a year it is as
if we have lost another big city. 
Large-scale poverty has indeed become a serious obstacle on
the path of the country's development, the conduct of market
transformations and the steady revival of industry. Having grown
tired of life's burdens, a substantial part of the population
wants to return to the past, to the pre-reform period. In other
words, in all spheres - economic, social, moral and ethical ones
- low wages (and, naturally, large arrears of wage payments) are
currently major concerns among Russians. 
One of the most wide spread opinions consists in the fact
that, first of all, Russians do not work well and labour
productivity is very low and, secondly, the country is
experiencing an economic crisis, hence low wages. It seems it is
hard to argue with this since in terms of labour efficiency we
are indeed far behind developed countries and the economic crisis
is also very conspicuous. This is true, but not entirely
accurate. Let's return to the most recent statistical data - the
1999 figures. In 1999 industrial output rose by 8.1 per cent and
the gross domestic product by 1.5 per cent; exports exceeded
imports by $28 billion. Russia has not had such good economic
performance figures and such growth over all the previous seven
years of reform. In many industries output rose by 15-29 per
cent. Meanwhile, wages in real terms did not increase and, on the
contrary, went down and quite considerably - by about one-quarter
(by 23.2 per cent). One of the economists I talked to, said that
when getting out of the crisis the funds received by enterprises
were first of all invested in production and not used for wage
payment. This would be understandable if not for one thing: the
point is that Russia did not witness a large inflow of
investments last year - their growth constituted only one per
cent. Therefore, investments are not the only factor that
matters. 
Let's use as an example the situation in the oil and oil
refining industry. In January-November last year oil production
in the country did not decrease (as compared to the similar
period of 1998). Oil refining rose by 2.5 per cent. However, the
main point is that according to figures of the State Statistics
Committee, over the period of ten months profits reached 77.16
billion roubles in the oil producing industry and 13.1 billion
roubles in oil refining, which in both cases is many times more
than in January-October 1998. Moreover, last year 133 million
tonnes of oil were exported from Russia with oil proceeds
amounting to as much as $15 billion. These are excellent results.
Now let's see what the workers of the said industries got from
all these large sums. In the oil producing industry the average
wage equalled 3,318 roubles in November 1998 and 6,500 roubles in
November 1999. In oil refining the wage rose over that period
from 2,483 roubles to 3,878 roubles. Against the background of
our overall poverty these sums may seem to be impressive but,
first of all, it is necessary to take into account the hard
conditions for oil employees and, secondly, this example clearly
demonstrates that the wages of the bulk of workers is very weakly
linked with the profits which the sector sees. It may rise, let's
assume, by 6-11 times while the level of wages will go up only by
1.5-2 times. Meanwhile, directors of enterprises and top managers
get a monthly pay of $10,000-$15,000 and even more (in terms of
US currency). Possibly these specialists are worth this money but
isn't the gap in wages too large? 
It is also possible to cite many other examples when the
increase of the average wage noticeable lags behind the rate of
profit growth in a particular sector. For example, in
machine-building and metal-working the favourable balance for the
first ten months of the previous year equalled 33 billion roubles
or 11 times more than in the respective period of 1998 while the
wages rose over the same ten months by only 1.5 times.
Incidentally, the wages failed to reach the country's average
pay. On the whole, over that period profits in industry increased
by 27 times while wages did so by only 1.5 times. Taking into
account the fact that prices also simultaneously rose by
one-third, the real wage increase will turn out to be quite
insignificant. 
As for the employees of the budget-financed sphere,
authorities of all levels significantly owe teachers, doctors,
nurses and social workers. In the spheres of education, culture
and art the average pay is even below the subsistence level in
general and in health care it has barely exceeded the poverty
line. In these sectors the salary level is two times lower than
in industry. The situation is aggravated by the multi-billion
arrears of wage payments (the greatest arrears are in the
education sphere). 
Finally, we cannot but mention the minimum wage. Its current
size is about 85 roubles, which actually makes a mockery of
common sense. 

*******

#5
Putin leads mourners for reformer Sobchak
By Konstantin Trifonov

ST PETERSBURG, Russia, Feb 24 (Reuters) - Acting Russian President Vladimir
Putin choked back tears of grief on Thursday as he led tens of thousands of
mourners at the funeral of Anatoly Sobchak, the reformer and former mayor
of St Petersburg. 

Putin was clearly upset after standing silently with bowed head at the open
coffin of Sobchak, whom Putin has called his teacher and who restored the
city's Tsarist-era name. He died of a heart attack aged 62 at the weekend. 

``He did not die, he fell a victim to persecution,'' Putin was quoted by
RIA news agency as telling a local radio station, talking of the time
Sobchak left Russia fearing he was about to be charged with corruption. 

Sobchak gained fame as a Soviet-era reformer and became mayor of the city,
then called Leningrad, in 1991. He gave Putin his start in government by
naming him deputy mayor. 

Putin, whose arrival in St Petersburg was kept a secret amid reported
threats of an assassination attempt, paid his last respects to Sobchak in
the Tauride Palace before an estimated 50,000 ordinary citizens were
allowed to file past the coffin. 

PUTIN FIGHTS BACK TEARS 

Putin and his wife Lyudmila sat next to Sobchak's widow, who laid her head
on Putin's shoulder and wept as the acting president put his arm around her
in a tender embrace. 

The usually dour Putin, an ex-KGB spy who has cultivated a tough guy image
since his meteoric rise to power, clenched his jaws to stop his own tears
flowing. 

``He was a dreamer, that is true. He always set himself and all of us high
standards in everything, which of course he did not always reach. But there
was always a chance he would reach the aims he set himself,'' Putin said in
the radio broadcast. 

Outside the palace, seat of Russia's pre-revolutionary parliament,
thousands queued in temperatures of minus 15 Celsius (5 Fahrenheit) to bid
farewell to Sobchak, whose coffin was surrounded by flowers and had an
honour guard of soldiers. 

Russia's political elite also paid their last respects to Sobchak, many
carrying red roses to lay at the coffin. 

``They persecuted and destroyed him,'' said Anatoly Chubais, one of the St
Petersburg circle of liberals, now head of Russia's giant electricity
company UES. 

``But the people who persecuted him rejoice in vain as the work of Anatoly
Alexandrovich (Sobchak) will be taken to its end: the life of people will
get better in a free country.'' 

TIGHT SECURITY FOR PUTIN 

Security ahead of Putin's visit was elaborate and officials would not
confirm he was even in the city. RIA quoted security officials as saying
they had information that an attempt on Putin's life was being planned. 

They did not identify any group, but officials have warned that Chechen
rebels whom Russia has fought for five months may try to stage attacks
outside the region. 

Sobchak fled Russia in 1997 after being narrowly voted out of office a year
earlier. Complaining of heart problems, he said the authorities were
planning to charge him with corruption. 

He returned to Russia in 1999 and the charges were later dropped. His
career had seemed set for a new lease of life thanks to his links with
Putin before his unexpected death in a seaside town in the Baltic enclave
of Kaliningrad. 

Sobchak was one of a group of deputies during Soviet President Mikhail
Gorbachev's perestroika reforms who formed the first effective opposition
to the Communist government. An ally of former Russian President Boris
Yeltsin, Sobchak was once tipped as a possible presidential candidate
himself. 

*******

#6
Financial Times (UK)
24 February 2000
[for personal use only]
Runaway leader of Russia's one-horse race
By Quentin Peel

There is just over a month to go before polling day in the Russian 
presidential election, and yet the campaign is all over, bar the shouting. 
Vladimir Putin, just six months ago a faceless apparatchik heading the 
national intelligence agency, will become undisputed master of the Kremlin. 

Indeed, his victory has seemed a virtual certainty ever since Boris Yeltsin 
announced his premature retirement on December 31. It has looked a 
probability since he became prime minister last September and launched the 
military campaign in Chechnya. In fact, it stinks of a stitch-up. 

In early January, I am reliably informed, Mr Putin met the inner circle of 
Russia's ruthless and powerful financial oligarchs, who had financed Mr 
Yeltsin's re-election campaign in 1996. They are the men who control the 
Russian banking system, much of the energy industry and most of the media. 
They offered to throw their money behind the acting president. 

On this occasion, however, Mr Putin politely refused. He didn't need the 
cash. That was the extent of his self-confidence. A few days later, he 
announced that he wasn't even going to bother to campaign. 

This week, even Russia's political spin doctors have thrown in the towel. 
They have forsworn dirty tricks in the coming campaign. The truth is that 
their work has already been done. Serious challengers such as Yevgeny 
Primakov, the former premier, and Yuri Luzhkov, the mayor of Moscow, have 
been successfully smeared. There may be 10 other runners, but it is obviously 
a one-horse race. 

Yet far from crying foul, most of the Russians I have met in recent weeks 
seem to be relieved by the prospect of such a fix. Although Mr Putin looks 
like a classic creation of KGB casting, with a smile that never reaches his 
eyes, they fiercely defend him as a man of conviction and independence. 

There seem to be two explanations for Mr Putin's remarkable popularity in 
Russia that go beyond the cynical conclusion that he has simply exploited a 
terrorist threat in distant Chechnya. One relates to the state of democracy 
in the country, less than a decade after the end of one-party rule. The other 
relates to perceptions of national pride - and not necessarily just of the 
vengeful, knee-jerk variety. 

Take Russian democracy. It really has not got very far. A few years ago 
Grigory Yavlinsky, one of the few Russian politicians who can be described as 
a social democrat, said that democracy was about learning to lose, as well as 
winning. He should know: he is going to lose once again on March 26. But I do 
not suppose that more than a handful of Russian voters would understand what 
he was saying. For them, politics is about power - vlast, in Russian. It is 
not about losing. 

Mr Putin represents vlast. The party he created last autumn, Yedinstvo, is 
already referred to as the "party of power". The KGB, which he served for 
some 15 years, was a pillar of vlast in the Soviet system, alongside the 
Communist party and the Red Army. Despite the detestation in which it was 
once held, that no longer seems to count against Mr Putin. To have been a 
loyal Chekist seems almost reassuringly familiar. 

He also offers something else peculiarly Russian that his predecessor, Mr 
Yeltsin, signally failed to deliver: poryadok, which means something between 
order and discipline. For the first time since Mr Gorbachev and Mr Yeltsin 
jointly brought the Communist temple crashing down, a man is sitting in the 
Kremlin who seems to understand what discipline is about. Hence the feeling 
of relief. 

An excellent new periodical* has just been published, which seeks to give 
western readers an idea of what Russians are thinking in this confusing 
post-cold war world. Yuri Senokosov, one of the joint editors, puts his 
finger on what is missing in Russian democracy. "There have never been any 
democratic institutions in Russian history. I mean opposition institutions," 
he says. "There were opposition ideas and proponents of those ideas, but 
there was no opposition as an institution, which is one of the mainstays of 
western democracy. We have to build all the political institutions from 
scratch." 

The volume quotes a seminar organised by the Moscow School of Political 
Studies last July, two months after the Nato campaign in Kosovo. It gives a 
very good reflection of the nationalist mood that Mr Putin has so 
successfully tapped. It is a mood more of humiliation than aggression. 

Alexei Salmin, president of the Russian Public Policy Centre, talks of his 
country's "isolation phobia". It has not just lost an empire, but finds 
itself surrounded by a belt of "new foreign countries". Most, if not all, 
aspire to join other political alliances, excluding Russia. Transit routes 
north-south and east-west are avoiding Russian territory, he says. His 
country has lost most of its ports both on the Black Sea and the Baltic. 

The perception is that Russia is an outsider once more, a condition that is 
not self-inflicted, as it was in Soviet days, but a result of western 
carelessness. It is not just Nato enlargement that shuts Russia out. It is 
also expansion of the European Union, Mr Salmin says. That is a fair comment. 

Few can say what sort of nationalism Mr Putin will come to represent, nor 
whether he will prove a decent democrat, in spite of his antecedents. The war 
in Chechnya represents an aggressive, bullying nationalism. That is 
counter-productive. 

Yet Russia needs to recover its national pride as a decent, law-abiding state 
with which people are delighted to do business. The manner of Mr Putin's 
inexorable victory is disturbing. But he will have the power and authority to 
prove the doubters wrong. 

*Russia on Russia. Moscow School of Political Studies, and the Social Market 
Foundation. 11 Tufton St, London SW1P 3QB.

*******

#7
FOCUS-Russia revives GKO mkt, says no more pyramids
By Artyom Danielyan 

MOSCOW, Feb 23 (Reuters) - Russia revived its domestic GKO treasury bill 
market on Wednesday by placing two new issues at very low prices, and the 
government promised the paper would not be the first brick of another 
ill-fated debt pyramid. 

The Finance Ministry sold 3.52 billion (correct) roubles of 98- and 196-day 
t-bills both of which were heavily oversubscribed. 

The 196-day paper, proceeds from which can be used to buy dollars for 
repatriation under a restructuring scheme for previous GKOs, was sold at 
premium and its average yield was an unprecedented minus 0.54 percent. 

For nearly a year ``GKO'' was almost a curse word for foreign and local 
investors in the Russian domestic debt. The government defaulted on it in 
August 1998 in the face of heavy short-term obligations coupled with low 
budget revenues. 

The government later restructured, but many foreign banks called the scheme 
confiscatory and the government's inability to repay on time was a major 
factors which led many big Russian banks to bankruptcy. 

Local agencies quoted First Deputy Prime Minister Mikhail Kasyanov as saying 
government debt would not collapse again and the new GKOs were meant as an 
aide to the market, in need of tools to regulate liquidity, rather than to 
raise budget cash. 

``The GKO pyramid will not repeat itself, if the government implements a 
correct policy without being carried away by borrowing on the domestic market 
to plug gaps of low revenues,'' he said. 

``Market participants have been waiting for the securities,'' he added. 

Valentina Pryanishnikova, head of the Finance Ministry's government 
securities issue department, told Reuters the ministry did not plan to place 
more short-term paper yet and would follow market trends when making 
decisions on new issues. 

``The placement was done at good terms. We took what we wanted,'' she said. 

International Moscow Bank dealer Yevgeny Krayev said that although the 1998 
crisis weighed on the market, banks believed there would be no rouble 
devaluation in the next several months. 

``People have a short memory, and the situation is defined by the fact the 
Finance Ministry now services all its existing securities on time,'' he said. 

However, he said the high price of 100.29 percent for the 196-day paper meant 
foreign investors were still unwilling to operate on the market. 

``Non-residents are nonetheless leaving the market and are ready to pay the 
Finance Ministry for it,'' he said. 

*******

#8
Washington Times
23 February 2000
Soros on Apartment Bombings
By Jamie Dettmer

MOSCOW _ International investor George Soros yesterday questioned
Russia's
claim that Chechen rebels alone were behind the devastating apartment
bombings in Moscow last fall, saying he believed the Kremlin had a 
hand in the blasts.
His remarks, published in the Russian-language weekly Moscow News,
are likely to revive a debate about who was responsible for the bombings 
that left nearly 300 people dead. The explosions, along with the Chechen 
incursion in August into neigboring Dagestan, were cited by Russian 
authorities as among the main reasons for launching a full-scale i
nvasion of Chechnya.
Skeptical reporters and opposition politicians have suggested that
either
Kremlin officials and, or, the Russian security services were involved in
planning and carrying out the bombings in a bid to increase popular
support for launching a military campaign against the Chechens.
Although Mr. Soros says he has no evidence for his suspicisons he
points the finger at Russian tycoon Boris Berezovsky, a Kremlin-insider 
close to former Prime Minister Boris Yeltsin and to current Russian 
leader Vladimir Putin.
Mr. Soros emphasized he had difficulty believing Mr. Berezovsky
could have had a hand in the bombings, but added: ``All the same I can't 
exclude it, and from the point of view of Boris Berezovsky it would be 
logical and it would give him an instrument of control over Putin.''
Last night, the Kremlin had no comment on Mr. Soros' interview and
Mr. Berezovsky could not be reached. Mr. Berezovsky in the past has 
admitted to having had dealings with Chechen rebels but has claimed they 
involved negotiations for the release of hostages kidnapped for money.
Mr. Berezovsky's name has been associated with most of the Kremlin
scandals of the past few years and he is currently being investigated 
by Swiss
prosecutors probing kickbacks from Swiss firms to top Russian government
officials and the suspected embezzlement of funds from Aeroflot, Russia's
state airlines, through Swiss companies apparently set up by Mr.
Berezovsky.

******

#9
Moscow Times
Thursday, February 24, 2000 
POWER PLAY: BONY Scam To Test Putin As Reformer 
By Yevgenia Albats 

The new round of scandals regarding the Bank of New York case will pose a 
real challenge to acting President Vladimir Putin. Many have questioned his 
democratic aspirations, and for good reason. But many believe that his 
inclination toward establishing "the dictatorship of law" and market reforms 
in Russia are his firm stands, not just campaign slogans. 

Now the Bank of New York case will put him to the test. 

It has been reported that the two Moscow-based banks directly involved in 
funneling money out of Russia were apparently front companies for much more 
prominent credit institutions closely associated with the Russian ruling 
elite, with the Kremlin in particular. 

One is MDM bank. It has long been known as a home bank for the presidential 
administration. It was that bank into which salaries of Kremlin employees 
were transferred monthly. SBS-Agro, now bankrupt, served the same purpose for 
other governmental institutions: the FSB, MVD, Ministry of Defense, State 
Duma, and the federal government. 

Whether the money of important people was transferred further to offshore 
accounts remains an unsolved mystery. But the hypothesis that home banks for 
the Russian elite might be involved in channeling money outside the country 
is an issue that should be the first question placed on the acting 
president's agenda. It should be thoroughly investigated and disclosed to the 
public if Putin really stands for establishing law and order in Russia. 

The issue remains especially hot since one of the banks, SBS-Agro, now owes 
about 7 billion rubles to private depositors who have every reason to ask if 
their money was funneled to the Bank of New York. Names connected with those 
banks f Alexander Mamut and Boris Berezovsky, influential advisers to former 
president Boris Yeltsin's inner circle f make Putin's task even harder. But 
it is an "either þ or" situation: Either the acting president does in fact 
believe in law and order, or his understanding of order has nothing to do 
with the law. 

The widening BONY scandal will challenge Putin as a market reformer as well, 
since it focuses attention once again on capital flight from Russia. Thus 
far, no one knows what portion of the $7 billion smuggled out of Russia via 
BONY accounts might have been money stolen from government coffers, private 
depositors or revenues owed the tax police. Various sources estimate capital 
flight at $15 billion to $30 billion per annum f near or equal to the 
country's yearly budget. It is clear that a weak Russian state and corrupt 
law enforcement agencies will be unable to prevent that flight unless the 
Russian government provides the economic means to make it profitable for 
Russian money to stay and work safely inside the country. 

Current tax, customs and other such regulations are very profitable and 
beneficial to the bureaucracy; they turn nearly every businessman into a kind 
of a crook and help those involved in looting the country justify their 
deeds. Statistics shows that each attempt by the government or Central Bank 
to tighten control over money does nothing but increase the amount of money 
that rushes out of the country. Thus, the current rules of the game in Russia 
allow neither for law, nor for order, nor for the development of true market 
reforms. Changing those rules will demand from Putin real political will f 
not just the will for power. 

*******

#10
BBC MONITORING
PUTIN TOP COVERAGE IN NEWSCASTS LEAVES COMMUNISTS FEELING TREATED UNEQUALLY
Source: Russia TV, Moscow, in Russian 2100 gmt 23 Feb 00 

[Presenter] Now about Moscow politics. The main events are taking shape on 
the battlefield for the presidency. That is natural. The headquarters of the 
two main rivals, Gennadiy Zyuganov and Vladimir Putin are already almost for 
the campaign. Their work is possible aimed at mutual political annihilation. 

So, what are the plans of the supporters of Putin and Zyuganov? Which forces 
and what means do they intend to use to achieve their cherished aim ? 

Here is Tatyana Aldoshina with a report we have promised. 

[Correspondent video report] Thirty two days remain until the presidential 
elections. The election headquarters are preparing their candidates for the 
struggle for the Kremlin. Vladimir Putin and Gennadiy Zyuganov are the two 
main competitors. 

Putin is acting president. He is prime minister and therefore he is always in 
the public eye. 

Zyuganov has another advantage: his voters have known him for a long time and 
they know hem well... 

After the parliamentary elections, the communists' election headquarters were 
not disbanded and, from a formal point of view, participation in the 
presidential elections is not a problem for the communists. But Gennadiy 
Zyuganov's comrades-in-arms are very stung by the fact that his main 
competitor for the post in the Kremlin has almost constantly been getting top 
coverage in news programmes. Zyuganov's election headquarters has already 
complained to the Central Electoral Commission. 

[Valentin Kuptsov, captioned as first deputy chairman of the Central 
Committee of the Communist Party of the Russian Federation] Our headquarters 
believes this to be definitely the case. But the whole of society believes 
that already now totally unequal opportunities have been created for 
candidates in the news field. 

The Central Electoral Commission is the main controlling agency now. It is 
responsible now for the observance of the law. It must warn non-complying 
candidates. 

[Correspondent] While the Central Electoral Commission has not replied and 
while Gennadiy Zyuganov is not being shown as frequently on the TV as the 
acting president, his headquarters has been using modern technologies. The 
Internet makes it possible to use such sites like KPRF [Communist Party of 
the Russian Federation], Zyuganov, Pravda and Sovetskaya Rossiya. These are 
so-called mirror sites, that is to say, a system of duplicating information 
has been envisaged in the event of competitors wishing to destroy something 
on the web. 

The most crucial period of the election campaign is the month remaining 
before the elections. Staff officers are planning for their leader the role 
of fighter against corruption. During the election campaign Zyuganov is to 
name those who, in his view, has pandered to the export of Russian capitals 
abroad. 

[Kuptsov] You know that during the privatisation itself there has been no 
state control at all of the flow of hard currency, nor is there any now. I 
wish to say at once that we expected that Vladimir Vladimirovich himself, as 
acting president, should expose who is plundering society... 

*******

#11
BRITISH FOREIGN SECRETARY VISIT SIGNALS WEST'S GROWING PRAGMATISM ON RUSSIA

RIA Novosti
Moscow, 23rd February: Russian Foreign Secretary Robin Cook's visit to Moscow 
has shown yet again the great interest the West has in Russia's domestic 
political situation, especially during presidential elections, in its 
positions on global problems and its readiness for Europe-wide economic and 
political cooperation. 

Suffice it to say that the foreign ministers of Italy, the USA, Germany and 
France have visited Moscow in the last few months on similar missions. 
However, observers say, the content of these visits showed that the West 
still has a dual approach to relations with Russia. On the one hand, 
"concern" was expressed about alleged human rights abuses during the 
antiterrorist operation in North Caucasus. At the same time, almost no-one 
casts any doubt on the principle that international terrorism must be fought. 

Analysts say that Cook's visit showed a slight shift of emphasis in the 
West's policy toward greater pragmatism in relations with Russia. 

Acting President Vladimir Putin drew Cook's attention, above all, to the fact 
that the antiterrorist operation in Chechnya is moving into a political phase 
and sketched out the Russian leadership's approaches to a political 
settlement in Chechnya. He said that the Chechen problem is complex, which is 
why various approaches to solving it had arisen. However, Putin confirmed 
Russia was open to working with all international organizations in providing 
humanitarian aide to forced migrants from Chechnya. Also, Putin stressed the 
extreme importance the Russian leadership attaches to full and objective 
coverage of events in Chechnya, including by the foreign media, within the 
framework of the corresponding laws and order. 

Cook said he was "surprised by Putin's openness and readiness for frank 
dialogue". He said the British cabinet views with understanding the efforts 
being taken by the Russian leadership to fight international terrorism in 
Chechnya. Cook said Britain "knows first-hand the threat international 
terrorism carries with it, and has already experienced many times the 
elements of instability it brings with it". 

Observers draw attention to the fact that during his talks with Putin, Cook 
did not mention at all claims that Russia "was using excessive force in 
Chechnya", which have been actively whipped up in the West. 

In the end, the sides said they were ready for broad cooperation in the 
struggle against international terrorism. 

The situation is the North Caucasus was also one of the main topics of 
discussion during today's meeting between Cook and Russian Foreign Minister 
Igor Ivanov. At a news conference after the meeting, Cook spoke out against 
taking severe measures against Russia due to events in Chechnya. He said it 
was absolutely necessary that "we openly express our opinions and our 
concern, but maintaining good and close relations with Russia is no less 
important". 

Cook said that setting up and strengthening a strategic partnership with 
Russia is a foreign-policy priority for Britain and the entire European 
Community. 

It was not by chance that issues connected to developing bilateral trade and 
economic cooperation were actively discussed during the talks. Cook welcomed 
the Russian leadership's plans to create the conditions for effective 
cooperation in trade and investment. The plans aroused great interest on the 
British side, since, experts say, it is the most effective investor in the 
Russian economy - Britain accounts for 13 per cent of all foreign 
investments. 

Most observers think that Russia and Britain today moved along the path 
toward creating a global economic and security system. Igor Ivanov said "I 
think today we took an appreciable step toward what my British counterpart 
calls working together in the global economy and the global security system." 

*******

#12
Segodnya
February 23, 2000
[translation from RIA Novosti for personal use only]
WHO WILL BECOME RUSSIA'S NEXT PRIME MINISTER?
The Choice of This Country's Next Prime Minister Would
Highlight Vladimir Putin's Subsequent State-Development Policies
By Alexei MAKARKIN

The Russian presidential election race hasn't yet been
launched in real earnest. However, the local political elite is
now debating the candidacies of this country's prospective prime
ministers under Vladimir Putin. Three possible candidates for
this post are being named today. However, this doesn't
necessarily mean that some other candidates won't appear on the
horizon some time from now. Each candidate should not be
perceived as a mere political-solitaire character. The choice of
the next prime minister amounts to choosing the relevant state
and state-administration model; and that choice will have to be
made by the next president-elect.
Following below are three possible scenarios in this
context.
Scenario one, e.g. the "all-in-the-family" scenario.
Reporters suspect acting Prime Minister Mikhail Kasyanov, 42, of
being friends with State-Duma member Roman Abramovich from
Chukotka. Kasyanov didn't accomplish anything special, before
becoming the only First Deputy Prime Minister. He was a career
Gosplan (State Planning Committee) bureaucrat, subsequently
working for the Ministry of Finance and dealing with Russia's
external debts there. Kasyanov struck a deal with the London
Club, right after becoming First Deputy Prime Minister. True,
some experts and State-Duma deputies claim that this agreement
won't benefit Russia. But, most importantly, Russia has been
allowed to repay its debts in line with easy-term plans during
the next few years; meanwhile no one wants to assess long-term
prospects at this stage.
Kasyanov has a good chance of becoming prime minister;
nonetheless, the candidates' "family" base seems narrow enough.
Nikolai Aksenenko is now history. Viktor Kalyuzhny, who is not
the best man for the job, must try hard to retain his present-day
post. State-Duma members Abramovich and Berezovsky are also
highly unlikely to land this job. Consequently, "family" members
would have trouble finding an adequate replacement for Kasyanov,
in case his candidacy becomes unacceptable for some particular
reason. 
Scenario two, e.g. the "technocratic" scenario offering a
greater range of candidates. Their list includes Alexander
Zhukov, 43, who chaired the second State Duma's budgetary
committee, and who also holds this position inside the third
State Duma. Zhukov narrowly missed becoming first deputy premier
for macro-economic issues inside Sergei Stepashin's cabinet, with
the "family" opposing his appointment. Zhukov is a member of the
State Duma's Russian Regions group, trying hard to avoid the
discussion of political issues during his interviews. He is also
known to be a liberal, albeit not radical, economist. However,
Zhukov has never been a minister or a governor; well, this seems
to be his drawback. Besides, one should not overlook the
"family's" possible interference once again.
Zhukov is not the only "technocrat" candidate. They say that
Sergei Kiriyenko was also nominated for premier, eventually
proving to be overly politicized. (Kiriyenko used to be a
"technocrat" in the spring of 1998 -- Ed.) Besides, the Union of
Rightist Forces doesn't behave loyally enough toward Vladimir
Putin; for his own part, Kiriyenko is perceived as Chubais' man.
The men in the Kremlin have already lost their devout attitude
toward Chubais, who chairs the RAO UES (Unified Energy Systems)
board. Therefore the possible appointment of his candidate as
Russia's next prime minister seems to be highly unlikely.
Scenario three, e.g. the "regional" scenario. Pskov-region
governor Mikhail Prusak, 40, was re-elected rather easily last
year. He has won the reputation of a successful reformist, also
receiving a top state award, i.e. the order For Services to the
Fatherland, second class, from Boris Yeltsin. Incidentally, very
few Russian governors have so far received that award.
Prusak is just about the only regional governor, who is
perceived as a reformist by the men in Moscow, and who can claim
the right to become premier. Meanwhile Konstantin Titov has
decided to run for president without prior approval from above.
The Kremlin views Dmitry Ayatskov as a scandalous figure in the
wake of a brothel scandal that has rocked his home region. It is
believed that Federation-Council members will like Prusak's
candidacy. Nevertheless, most of the top parliament house's
sedate senators didn't react very enthusiastically to the
appearance of that young and energetic Boris Nemtsov in Moscow
over the 1997 period.
Given the rather rich choice of candidates, these three
scenarios have one thing in common. The afore-said prospective
premiers are younger than the main presidential contender. All of
them advocate market economics to a varying extent. By all looks,
Yury Maslyukov won't become premier, in case Putin is elected
president, at least during the latter's initial tenure. However,
the significance of choosing Russia's prime minister should not
be exaggerated or underestimated. You see, a Russian-style
presidential republic implies that, instead of being an
independent figure (such as France's Lionel Juspin), any local
prime minister plays the part of a senior bureaucrat under the
president's auspices. By the way, Boris Yeltsin has proved the
above-mentioned dictum rather convincingly. Considering Putin's
program, one is inclined to think that he will opt for Kasyanov
alone. But how many days will Kasyanov have? Will he work for
less than 100 days, just like Stepashin had; or will he stay in
office for more than five years, like Chernomyrdin?

*******

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