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CDI Library > Johnson's Russia List

Johnson's Russia List
 

 

March 8, 2000    
This Date's Issues: 4153 4154 4155

 

Johnson's Russia List
#4155
8 March 2000
davidjohnson@erols.com

[Note from David Johnson:
1. AFP: Russian govt must "jump-start" reform if economy to grow: OECD.
2. Reuters: OECD says Russian economic problem based in regions.
3. Washington Post: Madeleine K. Albright, Clear on Chechnya.
4. wps.ru: ANALYSTS ON VOTER PARTICIPATION IN ELECTION and HALF OF RUSSIANS NOT READY FOR CHANGES.
5. Financial Times (UK): Russian elections have oligarchs on the hop: Andrew Jack on fears of a purge within the business community if Vladimir Putin wins the presidential poll as predicted.
6. Stratfor Commentary: Russia and NATO: Putin’s Diplomatic Judo.
7. Stratfor Commentary: Russia’s Economy: The Outlook for 2000.
8. Washington Times: Helle Bering, Totalitarian wannabes.
9. Novaya gazeta: Interview with Sergei STANKEVICH.
10. RFE/RL: Michael Lelyveld, Will Petroleum Divide Or Unite Caspian Nations?
11. Reuters: Russian military admits new losses in Chechnya.
12. Segodnya: Putin's Campaign Headquarters: In Search of Enemies. NUMBER ONE CANDIDATES' HEADQUARTERS DECLARES COLD WAR ON THE MEDIA.]

*******

#1
Russian govt must "jump-start" reform if economy to grow: OECD

PARIS, March 8 (AFP) - 
The Russian economy is stabilising but prospects remain very fragile and 
there is no chance of future growth unless the government can jump-start 
reform, the OECD said Wednesday.

"The future growth and prosperity of the Russian economy depends, first and 
foremost, on the ability of the government to jump-start the process of 
structural reform in this difficult context," the OECD said in a report on 
the Russian economy.

Russia is not a member of the Paris-based Organisation for Economic 
Cooperation and Development (OECD) but the 29-member group of industrialised 
countries also works with non-members and the Russian report is the third of 
its kind. The last was in 1997.

The OECD praised the Russian government for its "responsible fiscal and 
monetary response" to the financial crisis of August 1998, which it said had 
helped stabilise inflation and the exchange rate.

The report, finalised in early December, estimated that the Russian economy 
grew three percent in 1999 after shrinking five percent the previous year, 
while inflation slowed to 37 percent from 84 percent the previous year.

But the crisis "fundamentally changed the scope and prospects for economic 
policy and transition," and "the degree of macroeconomic stability remains 
fragile," the report said.

Even without the crisis, "while Russia has made some progress toward the 
creation of a market economy in the last decade, the record of economic 
performance has been disappointing," it said.

The report stressed the importance of preserving the independence of the 
Russian central bank and warned of the dangers of a burgeoning "virtual" 
economy where cash payment is often replaced by barter or offsetting one 
claim against another, frequently in a way that over- or undervalues items.

This trend is "particularly alarming," and has imposed "formidable" economic 
costs to the economy and transition, the OECD said.

Another key problem is the "disarray" of the fiscal system, and the wide gap 
between an officially centralised tax system and actual practice where 
regional and local government basically go their own way, the report said.

Atypically for a transition economy, lower levels of government in Russia 
tend to be less favourable to competition, free enterprise and the rule of 
law than the central government, the OECD said.

They "can often also be associated with a high degree of corruption," which 
"represents one of the primary obstacles to reform and economic growth."

*******

#2
OECD says Russian economic problem based in regions
By Peter Henderson

MOSCOW, March 8 (Reuters) - Moscow's failure to sort out local government 
finances and successfully devolve fiscal responsibility to the regions has 
hobbled economic growth, the OECD said in a report published on Wednesday. 

The Organisation for Economic Co-operation and Development said in an 
economic survey of Russia that growth since the country's 1998 financial 
crash had been marred by widespread poverty and needed to be buttressed with 
basic reforms. 

The central bank has resisted pressure to print roubles and the government 
has written tight budgets for 1999 and 2000, but much remained to be done, 
the OECD said. 

The state had to reform tax laws, force through bankruptcy of deadbeat 
companies and even regions, and dismantle incentives for the non-cash barter 
which accounts for nearly 40 percent of industrial trade. 

The Paris-based group, whose members are major industrial economies, focused 
in the survey on Russia's recent attempt to spell out regional and federal 
government responsibilities. 

"Retrenching much of the fiscal decentralisation of earlier years on the 
basis of increasingly rigid regulations and mandates has apparently 
backfired," the report states. 

Regions were forced to marshal informal means to meet crushing social burdens 
that they have been allotted. 

For example, regions swap tax debts for supplies with companies in order to 
avoid splitting cash taxes with federal coffers, a system which distorts the 
tax system and limits regions' financial choices along with cash at hand. 

It also made it tougher to do business and start firms. 

"The high degree of centralisation, lack of transparency and (often) 
unfeasiblity of formal interbudgetary arrangements seriously weakens 
financial responsibility at lower levels of government and encourages 
corruption," the OECD said. 

It urged the federal government to shoulder more social costs, continue new 
policies to allocate some funds to regions on the basis of need, and then 
impose temporary fiscal managers in regions which failed to meet obligations. 

Russia also needed to use bankruptcy, and the threat of it, to force 
companies to pay taxes on time and in cash, it said. 

But it argued that the policy needed to go hand in hand with budgetary 
reforms and would not solve the problem so much as clarify it. 

Hidden debtors would be exposed, clarifying choices of whether to bankrupt, 
reform or subsidise a debtor company, including broke but strategic firms 
like those in the defence industry, and regions themselves. 

Along with a focus on regional-federal relations, the OECD said Russia needed 
to press on with stalled or slow reforms by improving the method for 
creditors and government to restructure broke banks and guaranteeing the rule 
of law. 

*******

#3
Washington Post
8 March 2000
Clear on Chechnya
By Madeleine K. Albright
The writer is secretary of state. 

Russia is in the middle of a historic presidential campaign as well as a 
bloody military campaign in Chechnya, which has shocked international 
opinion. It's obvious that American policymakers should avoid taking sides in 
Russia's electoral politics, while stating with utter clarity our strong 
objections to this brutal, futile war.

Yet there seems to be a view that the Clinton administration has actually 
"endorsed" Acting President Vladimir Putin and that we have hesitated to 
criticize Russia for what it is doing in Chechnya. The truth, however, is 
very different.

American officials, from President Clinton on down, have described Mr. Putin 
as capable and energetic, knowledgeable on the issues, blunt and direct, with 
some positive things to say about economic reform, the rule of law and arms 
control. All simple statements of fact, but hardly an endorsement.

I have myself frequently noted the challenge of reconciling the two main 
strands in Mr. Putin's biography. He has, on the one hand, been associated 
with the economic reformers of St. Petersburg. On the other, he spent most of 
his adult life in the KGB and has overseen the massively destructive Chechen 
military campaign. Russian commentators themselves have struggled to 
reconcile these facts, asking whether Mr. Putin really desires a society 
built on the rule of law or prefers something different--what I've called 
"order with a capital O."

I have said there's little to be gained by trying to make a final judgment at 
this point--because we can't really know the answer; because we're going to 
have to deal with what Mr. Putin does, not with what he thinks; and because 
it's our job to try to influence what he does, by what we ourselves do and 
say.

On no other issue has it been more important for us to be clear than on the 
war in Chechnya. We respect Russia's territorial integrity, and we don't 
question its duty to combat terrorism on its own soil. But where Russian 
actions have called for criticism, we have not minced words.

Last September, when, even before the war began, bombs leveled two Moscow 
apartment buildings, we warned that this event must not become a pretext for 
abridging civil liberties. When Russian forces bombed a Grozny market in 
October, I called it "ominous and deplorable." As the military campaign took 
an increasingly cruel toll in civilian casualties, we said the Russian army's 
indiscriminate use of force was "indefensible, and we condemn it."

When President Clinton attended the Istanbul summit in November, he 
confronted Boris Yeltsin across a huge table of European leaders and told him 
that Russia could not consider this war simply an internal affair. After 
Radio Free Europe-Radio Liberty reporter Andrei Babitsky's disappearance in 
January, we held the Russian government accountable for his fate and called 
on it "to come clean." In February our annual human rights report detailed 
the appalling human consequences of the war.

When Human Rights Watch published reports of summary executions in Grozny, we 
called for full and transparent investigations--with international 
observers--and punishment for those responsible. (For such statements, let me 
note, the Russian foreign ministry accused the State Department of 
"information terrorism.") I told Acting President Putin face to face last 
month that only by getting to the bottom of these charges can Russia credibly 
claim to take its international commitments seriously. He heard the same 
strong message when President Clinton wrote to him about Chechnya last week. 
And I put the issue at the top of my agenda when I met with Foreign Minister 
Igor Ivanov in Lisbon on Friday.

I've heard it said that the administration won't criticize Russia because we 
fear that doing so will damage prospects for arms control. Our record of 
criticism is clear enough, but the very idea of such linkage requires a 
comment. We are definitely working hard on arms control (and in fact last 
fall we reached a major agreement on conventional forces in Europe, signed at 
the very meeting at which President Clinton expressed his views on the 
Chechen war). But pulling our punches on Chechnya would be contrary to 
American principles and interests, and we won't do so.

No matter what agreements we seek on other issues, we have to bring Russia to 
see that this war--and last week's Russian casualties suggest that it is far 
from over--must be resolved by political, not military means. Russia's 
failure to recognize this fact can only lead to increased international 
isolation. To deliver that message, we will continue to tell it like it is.

********

#4
Majority of Russians Want Stability, Not Change

Mar 8, 2000 -- (WPS) RUSSIAN TELEVISION NEWS

ANALYSTS ON VOTER PARTICIPATION IN ELECTION

On March 4, Duma Speaker Gennady Seleznev said in St. Petersburg that he 
believes there will be a second round of voting in the presidential election, 
in which the candidates will be Vladimir Putin and Gennady Zyuganov. The Duma 
speaker does not deny that Putin has the advantage. However, Seleznev doubts 
that there will be a high voter turnout for the election on March 26. But the 
estimates of analysts say quite the opposite. For instance, the Indem 
Foundation and the Agency for Regional Political Studies (ARPS) have 
published the results of their observations.

A. Melekhin, ARPS: According to the latest opinion polls, 69% of respondents 
assert that they will definitely vote, and 19% say they will probably vote.

G. Satarov, the Indem Foundation: It is not surprising that a lot of Russians 
intend to turn out to vote on March 26, since presidential elections have 
been the most important elections in Russia for the past decade. Besides, 
Russian citizens are aware that this election is especially important.

According to opinion polls conducted by the Russian Public Opinion Studies 
Center (RPOSC) at the end of February, 55% of voters definitely intend to 
vote, and about 11% will probably vote. According to analysts, these figures 
are stable enough, they have not changed since the beginning of the year. 
Besides, any insignificant changes will not considerably affect the results 
of the presidential election.

Melekhin has noted that, according to opinion polls, if Putin had not run for 
president, his votes would have been distributed between Yavlinsky and 
Zyuganov.

NTV, Bolshiye Dengi, March 7, 2000, 07:50

HALF OF RUSSIANS NOT READY FOR CHANGES

According to the Public Opinion Fund, 10% of Russians have increased their 
income levels over the past five years. Thirty percent of Russians think that 
their material well-being has grown much worse. Some 68% expect a sharp rise 
in prices by the end of the year. However, 57% of employed Russians have not 
changed their jobs in the past decade, and 63% of Russians do not want to 
lose their jobs despite wage arrears and low wages; thus, more than half of 
Russians are not prepared to make changes independently. However, this does 
not mean that all of them want restoration of the Soviet order, or do not 
want anything at all. This picture of contemporary Russia resembles that of 
the Primakov period, when people were hoping for the restoration of a strong 
state with pragmatic professionals in power.

NTV, Bolshiye Dengi, March 7, 2000, 07:50 ((c) 2000 WPS) 

*******

#5
Financial Times (UK)
8 March 2000
[for personal use only]
Russian elections have oligarchs on the hop: Andrew Jack 
on fears of a purge within the business community if Vladimir Putin wins the 
presidential poll as predicted

Vladimir Putin, Russia's acting president, has been running a low-key 
campaign for the country's presidential elections on March 26. 

Mr Putin has held no rallies. He has refused television debates. He has not 
even bothered to issue any detailed statement of his proposed policies. 

But Mr Putin's apparent air of cool detachment stands in stark contrast to 
the increasingly fevered manoeuvring triggered by the approaching poll in 
Russia's highly politicised business community. 

There have been trips abroad, discussions in ministries about licences and 
permits, and unverifiable statements about forthcoming sales of companies in 
sectors such as the cash-rich aluminium sector, or the politically 
influential world of the media. 

The machinations reflect fears that Mr Putin's widely predicted victory could 
mark a change in the relationship between the Kremlin and Russia's 
influential business "oligarchs". 

Lilia Shevtsova, a veteran political analyst, says Russia is set to see a 
shift from the Yeltsin era, when the oligarchs controlled important political 
decisions. 

Instead, she predicts, Russia's new political leaders will in the future 
nominate their own chosen favourites from among the oligarchs to run big 
business, a prospect which has triggered the current outbreak of byzantine 
manoeuvring. 

While Mr Putin is expected to move cautiously until after the election, many 
analysts expect that if he wins he will clean out many officials associated 
with the Yeltsin regime. 

Some think Rem Vyakhirev, the long-standing head of the giant gas monopoly 
Gazprom, could be pushed into early retirement, for example. Others point out 
that Anatoly Chubais, the former finance minister who runs the electricity 
utility UES, has been publicly criticised by Mr Putin. 

Boris Berezovsky, another former Kremlin insider, also appears to be under 
pressure. There have been calls by government officials for a new tender for 
the broadcasting licence of the state-owned TV company ORT and the creation 
of a second national airline to compete with Aeroflot. Mr Berezovsky has 
stakes in both companies. 

In some areas, the battlelines have already been firmly drawn. 

While Mr Putin was prime minister last year he appointed a number of 
colleagues from his native St Petersburg to high-level posts, including 
Leonid Reyman to communications minister and Valery Yashin to chairman of 
Svyazinvest, the state-controlling telecoms company. 

Svyazinvest holds stakes in 89 separate local telecoms companies, each too 
small to be efficient, yet sources of prestige, influence and money for 
governors across the nation's regions. Both the business case and the 
political "strong government" beliefs of Mr Putin argue for mergers into a 
handful of regional companies, pointing to a potential conflict in the 
telecoms sector. 

Nikolai Petrov, a specialist on regional policy at the Carnegie Moscow 
Centre, argues that Russia's governors have been trying to gain control over 
enterprises in their regions, giving them greater power and money in their 
own fiefdoms. 

But he believes Mr Putin will be almost impossible to resist. "The governors 
are eager to offer him something to keep their positions," he says. "The 
battle now is not about how to get more for them, but how to lose less to 
him." 

Nowhere are such tensions more evident than in the opaque aluminium sector. 
If official statements can be believed, the Swiss-based Trans-World Metals 
and the regional company Mikon are on the verge of selling their stakes in 
four different smelters to investors linked to Mr Berezovsky and Roman 
Abramovitch, a director of the oil group Sibneft. 

This would suggest that Mr Berezovsky is amore politically effective operator 
or that he is set to concentrate on his business interests in exchange for 
stepping back from an active role in politics. 

At the least, it highlights a nervousness and the need for the appearance of 
some reshuffling of ownership in anticipation of Mr Putin's being elected. 

What he would do in the business sphere is not clear. He has talked about the 
need for a "dictatorship of the courts" and an anti-corruption drive and he 
has given the impression in public of distancing himself from the oligarchs. 
His most direct comments on the subject last week ambiguously referred to 
keeping oligarchs at "an equal distance" from power. 

After all, the Centre for Strategic Research, a think-tank run by a close 
associate, which he set up to generate policy ideas at the end of last year, 
is located in the luxurious "Alexander House". 

This is the former headquarters of collapsed SBS Agro Bank, which was run by 
the oligarch Alexander Smolensky. The centre is funded by, among others, 
Gazprom, UES and Transneft, the state oil pipeline company. 

*******

#6
Stratfor Commentary
www.stratfor.com
Russia and NATO: Putin’s Diplomatic Judo
March 8, 2000

Acting Russian President Vladimir Putin surprised the world March 5 when he
said he would not rule out the possibility of Russia joining NATO. Putin
told BBC interviewer David Frost that this would only happen if Russia were
treated as an equal partner. NATO and the United States rejected the offer.
Putin’s statement appeared at odds with his agenda and offensive to his
base of nationalist supporters. Far from being a diplomatic blunder,
however, his comments were crafted to bait a NATO rejection and ultimately
form cracks in the alliance. 

There was never any question that the alliance would reject such a Russian
overture, and NATO Secretary-General George Robertson clarified that point
when he replied that “at present, Russian membership is not on the agenda.”
If NATO allowed Russia into the alliance, it would lose any ability to form
consensus and act as a military unit. NATO would effectively become a
political organization like the United Nations. 

On the international level, Putin’s comments are a form of diplomatic judo.
They allow him to spread confusion among his Western counterparts and
retain the diplomatic initiative. Putin is still an enigma to outside
observers, as exemplified by a recent Economist profile with the headline:
“Man of steel or Russia’s reformer?” By abruptly adopting a conciliatory
stance on NATO, Putin softens his image as a militaristic hard-liner.
Increased Western uncertainty will give Putin more room to maneuver. 

Domestically, this incident allows Putin to portray Russia as an
accommodating nation, eager to be an ally and asking only to be treated
with respect. The resultant snubbing infers that NATO, not Russia, is
responsible for strained relations between the two. Putin can argue that
NATO, a military alliance, has rebuffed the possibility of partnership –
thus defining Russia as foe by refusing to consider it as friend. 

Putin can argue that the alliance, not Russia, is restarting the Cold War.
It has challenged Russia by holding a NATO meeting in Kiev. It is
interfering with Russia’s handling of Chechnya. It is setting up spy bases
near Russia’s border. And now it has rejected Russia’s olive branch. 

In setting up this incident, Putin lays the groundwork for a new line of
political rhetoric that will accomplish two objectives. It will produce
domestic political benefits for Putin by showing the few remaining
pro-Western reformers that he tried to engage NATO, while not being a
serious enough initiative to drive away his nationalist supporters. The
rhetoric will also sow the seeds of discord among NATO members. The more
accommodating members, or those with precarious domestic politics, will be
hard pressed to defend themselves against Putin’s accusations and will
likely attempt to dilute NATO's actions. 

*******

#7
Stratfor Commentary
Russia’s Economy: The Outlook for 2000
March 7, 2000

Russia’s budget projections for 2000 provide an interesting window into the
country’s economic situation. It appears that the government is counting on
a variety of unlikely economic events; these fundamental miscalculations
are instead likely to force confidence in the ruble to fall, as early as
next month, and spark a new round of inflation in Russia this year.

The government in Moscow projects approximately $28 billion in spending for
the 2000 budget. Yet this budget – which would also boost defense spending
by 50 percent – rests on three shaky pillars. The government of acting
President Vladimir Putin is assuming that oil prices will remain high,
international institutions will continue to lend and that the war in
Chechnya will fade.

The reality is likely to be different. The International Monetary Fund
suspended assistance in September 1999, yet Moscow is still counting on
$4.5 billion in funding. The price of oil hovers at $30 per barrel but is
unlikely to remain at this peak and when it falls, the budget’s chief
source of income will fall as well. Every time the price of oil drops $1,
Russia’s oil revenues plummet by $1.2 billion. Finally, the Chechen war
consumes $100 to $200 million each month. The budget does not account for
this.

In a shortfall, Moscow would have few options. It could seek additional
loans abroad, but this seems unfruitful. The IMF is increasingly hostile
and foreign creditors recently took a $31.8 billion loan to restructure
more than a third of Russia’s Soviet-era debt. Russia is on the verge of
expanding certain exports – mainly arms and oil – but these won’t raise
cash quickly. Deputy Prime Minister Ilya Klebanov recently said that Russia
aims to increase weapons exports from $3.5 billion in 1999 to $4.5 billion
in 2000. But the $4.5 billion figure will be measured in contracts, not
cash. The Russian oil industry plans to expand its export pipeline
networks. But these won’t be complete until 2001.

As a result, the stage is set for a familiar combination: default on
remaining debt and increased borrowing at home. Default would free up as
much as $10.2 billion but cut off any prospect of additional loans. It’s
been done before, however, and First Deputy Prime Minister Mikhail Kasyanov
recently hinted at default. According to Russian law, the government can
borrow up to $1 billion of Russia’s $7.8 billion of currency reserves, but
doing so will cause the recently stabilized ruble to fall again. An unhappy
Kasyanov has already said that he will take this step. Using a bit of
financial wizardry, the government could borrow an additional $1 billion in
ruble-denominated loans. This is Central Bank speak for printing currency.
Such a move will trigger a rise in recently tamed inflation.

The net effect of both policies will be to sap confidence in the ruble,
again, and trigger inflation, again. This will send shudders through the
Russian financial system; the economy is just starting to recover from the
August 1998 financial crisis. Additional borrowing would complicate debt
service even further. For all its problems, accumulating more debt remains
the most politically feasible option. Kasyanov possesses the political
clout to get approval from the Duma to remove borrowing restrictions, a
goal he must achieve if the budget is to be fully funded. When he does,
most likely early this spring, the ruble will begin its decline. 

*******

#8
Washington Times
March 8, 2000
Totalitarian wannabes 
By Helle Bering
Helle Bering is editorial page editor of The Washington Times. Her column 
appears on Wednesdays. 

Canary in a coal mine - that's the state of the Russian press today. The 
new Russian leadership under acting President Vladimir Putin - culminating in 
a Potemkin election taking place March 26 - is slowly sucking the oxygen of 
free expression out of Russia. When that is gone, Mr. Putin will undoubtedly 
set his sights on other hard-won rights of the Russian people. All this 
barely 10 years after the fall of the Soviet Union.
Somehow, the only people who don't seem to get it are the president of 
the United States and the secretary of state (well, perhaps a few 
woolly-headed European leaders, too). Mr. Clinton has welcomed Mr. Putin as 
"a man we can do business with" and Mrs. Albright has applauded his "can-do" 
attitude. Really.
Only three months have passed since the dramatic New Year's resignation 
of Boris Yeltsin, but the ruthlessly steely performance of his chosen 
successor rather makes you nostalgic for the alcoholic, bumbling and 
unpredictable former president. For a while, at least, his heart was in the 
right place. As Thomas Dine, director of Radio Liberty/Radio Free Europe put 
it during a recent visit to The Washington Times, "One of Boris Yeltsin's 
first acts was to invite Radio Liberty to Moscow to open a bureau. The first 
act of Vladimir Putin involved the capture of Andrei Babitsky," a Radio 
Liberty reporter who was captured by the Russians in mid-January and only 
released last week after a harrowing ordeal. It was surely a preview of 
things to come.
Mr. Putin, a former KGB man himself, has packed his cabinet with 
graduates of the Yuri Andropov secret service, and he has created alliances 
with the communists in the Duma. At the former KGB headquarters in Moscow, 
the bust of Andropov is back on its pedestal, restored to former glory at Mr. 
Putin's bequest in a ceremony in December where the acting president, by the 
way, took the opportunity to raise a glass to good old Josef Stalin. 
Thin-lipped and unsmiling, he speaks of the need for central control, and is 
demonstrating what he means by that in the genocidal Russian campaign in 
Chechnya. "Why did the Soviet Union break up?" he asked in an interview in 
December. Not because the communist system failed or the peoples of the 
Soviet Union wanted to shed their yoke of oppression, but because of 
"laxness."
"If we continue like this, Russia will fall to pieces," he said. The man 
practically cries out for Freudian analysis.
Western-minded reformers who rotated in and out of Mr. Yeltsin's various 
governments have deserted his successor in droves. Liberals who initially 
grasped at Mr. Putin's coattails in the last parliamentary election, are now 
saying they will back no one in the first round of the presidential election. 
This includes well-known names like Anatoly Chubais, Yegor Gaidar and Boris 
Nemtsov.
Mr. Putin has set about reassembling the power of the state, controlling 
the press, while at the same time speaking of progressive economic reforms. 
It is a combination that will surely prove impossible to achieve. In fact, 
one Russia expert calls the Putin Cabinet "incompetent totalitarian 
wannabes." What will happen when you attempt to reimpose central control in 
Russia of the third millennium is a question that will be answered in the 
fairly near future.
At a gathering on Capitol Hill last week, Vladimir Gusinsky, head of the 
only independent Russian television broadcaster, NTV, told of the sudden 
re-emergence of political commissars in the offices of media and other 
enterprises. "I told my people they should have out the man on the air, and 
interviewed him," Mr. Gusinsky said, displaying a commendable lack of respect 
for the new political class. Asked what kind of ideology might be enforced 
under the Putin regime, assuming that old-style communism is a thing of the 
past, Mr. Gusinsky said it didn't really matter. "Nationalism, communist 
nationalism, it's all the same. They want power and any ideology will do."
During the second Chechen war of the 1990s, press coverage has been much 
what the government wanted it to be, an important reason for Mr. Putin's 
nationalistic appeal to ordinary Russians. Few media outlets have told the 
gruesome truth, such as NTV, which is finding itself under growing attack; 
the German television station that brought out images of mass graves; and 
Radio Liberty whose three reporters on the ground risked life and limb to 
bring out the story. Mr. Babitsky clearly got under the skin of the Russian 
authorities.
Even though Mr. Babitsky has been released after foreign pressure on the 
Russian government, he is not yet really free. Mr. Babitsky said yesterday in 
Moscow that Russia will not allow him to leave the country to speak to the 
Council of Europe, which is considering expulsion of Russia as a consequence 
of the massacres in Chechnya. As Mr. Dine said of the Babitsky case, "We are 
not only dealing with the life of a human being here, but also with a Russian 
government that wants to repress freedom of expression. Putin and his 
lieutenants are up to the old Soviet ways."
But Russians may not take so easily to those old ways again. Recently 
over 3,000 of them demonstrated in favor of human rights in Pushkin Square, 
the first such demonstration since the end of the Cold War. As we did then, 
we owe them our support — and that goes for the Russian free media as well.
E-mail: bering@washtimes.com

*******

#9
Novaya gazeta
March 6, 2000
Interview with Sergei STANKEVICH
By Yelena Afanasyeva
[abridged translation for personal use only]

For those who haven't yet forgotten the live TV sessions of the first
Congresses of People's Deputies ten years ago, Sergei Stankevich's name
stands alongside the names of Boris Yeltsin, Anatoly Sobchak, Andrei
Sakharov. [Translator's note: in 1990-91, Stankevich, a young historian, was
deputy chairman of the Moscow city council and one of the leaders of the
social democratic wing of the Russian reform movement. Later, he briefly
served as Yeltsin's foreign policy adviser before having to fly to Poland.]
It so happened that Stankevich returned from his forced four-year-long
emigration on the occasion of Sobchak's funeral. Having spent only six days
in Russia, Stankevich departed back to his home in Warsaw.
- Sergei Borisovich, does your sudden arrival mean that you are planning a
comeback?
- This wasn't planned, and I came on a rather sad occasion. I cannot just
pack my suitcases and leave Poland, where I've spent several years with my
family. In Warsaw, I have a small commercial company, I have obligations and
plans. Now, I go back to think through what I have seen and to work out a
comeback plan.
- You left Russia unwillingly, because of a criminal case against you that
you believe to be a political persecution. Did you have any fears that your
arrival would lead to more unpleasant experiences?
- Of course, I wasn't sure of the outcome of my trip. When Sobchak lived in
Paris, we spoke over the phone now and then. When he was going back to
Russia, he told me: Wait a little bit. I'll come back and settle down, and
you'll be the next. Now, it all happens according to his words...
- Were there any formal obstacles to your return?
- I didn't have a Russian foreign passport. First, I was offered a one-time
pass for a one-way trip to St.Petersburg, so that I would have to sort out
by myself what to do afterwards. When I agreed and came to receive the entry
pass, I was met by our consul who told me about the decision to issue a
passport in my name. The order came from the above: to my knowledge, it was
[Sobchak's widow] that told Putin, during the preparation for the funeral,
about my problem - and the issue was resolved momentarily <...> In this
regard, Russia does not change with time.
<...> What struck me most of all was the bitterness and hostility among
people in Moscow. This is most visible in business circles, but it has also
spilled over into politics - same aggression, takeovers and partitions of
booty. Over these years, Russian politics has become a carbon copy of the
robber economy.
- Do you mean it wasn't the same in your time?
- In 1993, I saw how the partition of the booty began. But it was still
case-by-case, it was not that ubiquitous. And there was still a whole lot to
partition. It was since 1996 that all the rules were thrown away in a war of
all against all.
- What was, in your view, the single major turning point toward this game
without rules?
- It was the privatization. <...> This process should have been under a
fuller and more efficient control of the state than our bureaucrats could
have managed at the time. If 1993 was the starting point for the great civil
war for property, then in 1996 we got a merger between the big money and the
big government. They adopted a new reading of the Marxian law: money begets
power, and power begets even more money. This is the law by which Russia has
been living all these years.
- Will current elections help to amend in this law?
- The present point bears a lot in common with the early '90s, when Russia
also had a leader with a colossal resource of support. But a decade of
reforms has been squandered for nothing. <...> Putin's position today is
even more favorable than Yeltsin's in the early '90s. He has no political
background of his own, he has fewer obligations from the past, his hands are
freer - he can move either to the right or to the left, he can rule in a
semi-dictatorial way or opt for a controlled type of democracy. <...>
- You mentioned enormous resources of popular confidence in Yeltsin and in
the new regime ten years ago. But we all know how this confidence was
exploited...
- There was no revolution in the world that used its potentialities in full.
But comparing Russia to countries of Eastern Europe, I can say that we made
bigger mistakes. The major achievement is that Russia changed tracks in
terms of its civilizational identity. But our losses on the way could have
been much fewer. In fact, we did not resolve the central economic goals that
every revolution has to face. We did not create an efficient property owner.
In Central and Eastern Europe, one cannot imagine auctioning out a huge
enterprise to an individual who will play with its assets for a couple of
years and throw it away to move to something else. This does not conform to
liberal values.
- Why did this become possible in Russia but not in Eastern Europe?
- At a certain stage, Russian reformers became hostages to their leader who
had no ideas about which way to move the reforms. He turned to what all
Russia's nomenklatura leaders did at all times - playing chess in which
people were his pawns. And he did it at the time when a government will was
required to achieve reform goals. For example, in the early '90s it was
possible to arrange the writing off of all the Soviet debt in exchange for
troop withdrawals from Europe. If we wouldn't have this huge debt burden, we
might have been spared from the GKO pyramid. It was Yeltsin's duty to
negotiate this with Western leaders. Francois Mitterand, who felt some
regret for his earlier mistreatment of Yeltsin, offered his assistance in
this regard, but it was not used. <...> Russia had to survive through the
Yeltsin era to get a ticket for a new start.
- Do you believe we are already through the Yeltsin era?
- What Putin cannot do under any conditions is to continue the Yeltsin era.
- But does Putin have any ideas of his own on how to reform Russia?
- In this regard, the situation is repeating itself: large freedom of
maneuver, enourmous resource of authority and complete absence of ideas of
his own. But there is no room for continuing the same - the system will not
survive another round. All resources left over by the Soviet Union have been
consumed. <...>
- Do you feel that your fellow democrats, who began their political careers
by fighting the regime and the privilege only to end up by scandals with
real estate and bribes, ought to bear the blame? Ten years ago, democrats
were trusted. Now they are increasingly being asked - what did you do with
our faith?
- I would rather not see this as a collective responsibility. Each
individual made his own choice, based on his own ethic. I did not become an
oligarch, though I could easily do it, just by signing a couple of contracts
with Western companies.
- Do you have any property left in Moscow.
- I didn't even privatize my apartment. But I have relative and friends, so
I will find a place to return. It is much more important for me to decide -
does the present-day Russia need me, and if so, in what capacity. I would
rather not come back as a memoirs' writer, for a nostalgic reflection over
the first wave of the democratic reforms. In this trip, it was important for
me to understand, what happened over the four years of my absence.
- What became your biggest surprise?
- Being abroad, I did understand, in abstract, that Russian politics became
reduced to a squabble among mafia clans. But only here did I experience the
impact of this upon human beings and their relations. Just one episode:
Russian political class comes to the funeral to say farewell to Sobchak.
Hundreds of people, the cream of society, stand at the grave and discuss
their business problems. Many of them came to the ceremony because they knew
they will meet important officials and be able to push their agendas. <...>
This would have been totally unimaginable at Sakharov's funeral. Having
carried his coffin a part of the way, I could have never thought that ten
years later I would see this: at a solemn ceremony, next to Starovoitova's
grave, cell phones ringing all over the place. These details tell you a lot
about the present Russia.
- I imagine, it's not a pleasure to come back to such a Russia.
- There is no other Russia today.
- What do people think about in emigration?
- I did not go through the classical emigre repertoire with drunken tears in
cheap bars. Me and my family had to earn our bread. For the first time, we
had some support from our friends. Then, myself and three of my Polish
partners invested $1,000 each to set up a small agricultural company that
trades with Russia and neighboring countries. In Russia, a newcomer would
not be able to survive with a small private company. Whereas in Poland, more
than 62% of GDP is produced by small and medium-size business. There is no
racket, no suffocating taxes, and laws are being observed. <...> For Putin,
the main challenge today is to give opportunities for a large number of
people to earn money in a similar way, instead of having a narrow circle of
people earning billions of dollars. <....>

*******

#10
Caucasus/Central Asia: Will Petroleum Divide Or Unite Caspian Nations?
By Michael Lelyveld

Disputes among Caspian nations may dash hopes for regional cooperation. But 
countries that have already developed strong bilateral ties seem likely to 
prevail. Our correspondent Michael Lelyveld looks at the issues. 

Boston, 7 March 2000 (RFE/RL) -- More than five years since the signing of 
the first Caspian contract, it is still unclear whether petroleum will drive 
the nations of the region toward common goals.

Events of the past week suggest that oil and gas may instead play a divisive 
role in the Caucasus and Central Asia, particularly if Azerbaijan and 
Turkmenistan cannot settle their differences over a trans-Caspian pipeline.

Last week, Turkmenistan President Saparmurat Niyazov let it be known that he 
will skip a summit of Turkic countries in Baku next month because of a "busy 
working schedule," the Interfax news agency reported. Regional leaders may 
well be watching Niyazov's public events on April 6 and 7 for a sign of what 
he considers to be more important business.

One possible interpretation is that Turkmenistan's president may wish to 
slight Azerbaijan because of their dispute over transit terms for the 
trans-Caspian gas line. Another possibility is that Niyazov may not want to 
risk a similar slight over the issue if he visits Baku.

Whatever the reason, Niyazov has chosen to set his country apart at the first 
major regional gathering since November 18, when pipeline agreements were 
signed at the OSCE security summit in Istanbul.

In nearly four months since the summit, little has happened to advance either 
the trans-Caspian gas line from Turkmenistan or the Baku-Ceyhan oil line from 
Azerbaijan. National demands have blocked progress on both projects.

Azerbaijan has claimed half the capacity of the trans-Caspian line as a 
condition of transit, even though it has announced plans to deliver its own 
gas to Turkey through existing lines. Meanwhile, Azerbaijan has been stalled 
on Baku-Ceyhan because of Georgian demands for higher transit fees and a 
share of the oil.

Last month, Azerbaijan became so impatient with Georgia that it reportedly 
declined to send a delegation to Istanbul for talks on the problem, until it 
was persuaded to do so by Washington. The delay in negotiations has taken so 
long that the schedule for "main flows" of oil from the Azerbaijan 
International Operating Company have been pushed back from 2004 to 2005, 
Interfax reported last week.

But so far, Azerbaijan has not allowed its disagreement over a pipeline to 
wreck overall relations with Georgia. Last week, President Heidar Aliev 
issued a decree awarding the country's highest honor, the Istiglal order, to 
Georgian President Eduard Shevardnadze, recognizing his contributions to 
bilateral ties.

Perhaps the reason for the continued closeness between the two countries, 
despite frictions, is that energy routes have already developed. Most of 
Azerbaijan's oil already moves through Georgia by either pipeline or rail. If 
Azerbaijan does pipe its gas to Turkey through existing lines, those 
deliveries will also be through Georgia. Bilateral interests are larger than 
the Baku-Ceyhan line.

Ties have not developed in the same way between Azerbaijan and Turkmenistan. 
Although Turkmen oil passes through Azerbaijan by rail, the two countries 
have feuded over the ownership of a Caspian oilfield. Turkmenistan's vital 
interest is in exporting its huge reserves of gas. Disagreement between the 
two countries may become bitter and deep. Turkey has so far found it 
difficult to bring the rival neighbors together by appealing to 
commonalities. As the region's largest energy buyer and western outlet, 
Ankara has found it hard to balance its interests in a way that will please 
both Turkmenistan and Azerbaijan.

So far, Turkey has not pressured Azerbaijan to ease its claims to the 
trans-Caspian pipeline. Its geographical closeness to Azerbaijan means that 
it may ultimately rely on Baku as a major source of gas. In the same way, 
Azerbaijan will depend on Turkey as its outlet for oil.

But Turkmenistan has so far been unable to develop similar interlocking 
interests with its neighbors. The latest dispute with Azerbaijan is likely to 
delay development of such ties. Instead, Ashgabat has tried to reach out in 
other directions.

Last month, it began talks with Gazprom on increasing gas exports to Russia. 
Over the weekend, Turkmen Foreign Minister Boris Shikhmuradov visited 
Pakistan in an effort to restart a long-delayed project to pipe gas through 
Afghanistan.

But it is unclear whether these attempts to export in other directions will 
prove to be an effective substitute for cooperation in the Caspian region. 
Azerbaijan seems to have calculated its moves carefully, so that neighbors 
like Georgia and Turkey will find its interests difficult to ignore.

By contrast, Turkmenistan remains isolated and disengaged with its neighbors. 
Its strategy may now be more dependent on Russia and less successful. 
Skipping next month's meeting in Baku is unlikely to help.

*******

#11
Russian military admits new losses in Chechnya
By Ron Popeski

MOSCOW, March 8 (Reuters) - Russia's military said on Wednesday it wanted to 
wrap up its campaign against Chechen separatists before the onset of spring, 
but acknowledged fresh losses in fierce mountain fighting. 

Acting President Vladimir Putin sent gift sets of cosmetics to female troops 
in Chechnya to mark International Women's Day, a major holiday in Russia. 

Putin's big lead in opinion polls ahead of the March 26 presidential election 
is largely built on his tough vow to defeat Chechen rebels once and for all. 

Colonel Gennady Alyokhin, head of the military's press centre in the region, 
spoke of unspecified new military setbacks in remarks to RTR state 
television. 

``Unfortunately we have suffered losses, but they are insignificant compared 
to those of the (Chechen) fighters,'' he told RTR. ``The fighters have about 
10, 15 times as many.'' He gave no further details about the extent of 
Russian losses. 

He said the rebels had been beaten back from positions inside Komsomolskoye, 
25 kms (15 miles) south of the Chechen capital Grozny, and a ``special 
operation'' to eliminate them was being supported by artillery strikes and 
attack helicopters. 

Alyokhin said that battles were concentrated at the two ends of the Argun 
gorge leading into Chechnya's mountains -- Komsomolskoye village in the west 
and the twin settlements of Ulus-Kert and Selmentausen in the east. 

Alyokhin told Itar-Tass news agency it was vital to complete Russia's 
military operations before the appearance of spring foliage in the mountains 
where most of the fighting has raged. 

``The so-called 'greening' can seriously complicate the hunt for bandits 
hiding in mountainous and forested regions in Chechnya's south,'' Tass quoted 
him as saying. 

Russian forces have suffered setbacks in the past week as the campaign, 
dubbed an ``anti-terrorist operation,'' drags into its sixth month. Twenty 
riot police died in an ambush on the outskirts of Grozny and 31 paratroops 
were reported killed in fierce fighting around villages in the Argun gorge. 

RAIDS REPORTED IN GROZNY 

Tass said rebels were staging periodic raids into Grozny, hitting checkpoints 
and military sites. It also quoted military officials as saying a rebel 
commander and 21 men had been captured outside the regional capital. 

A separatist internet site, kavkaz.org, reported continuous fighting in the 
Argun gorge and said 500 Russian soldiers had died in last weekend's 
fighting. It also said rebels had destroyed military checkpoints during an 
overnight incursion on Tuesday into Chechnya's second city, Gudermes. 

The clashes were occurring in areas long ago brought under the control of 
Russian troops. The military last month captured Grozny, which was all but 
razed by weeks of fighting, and said the last rebel mountain stronghold fell 
to them a week ago. 

Commanders deny suggestions that the rebels will be able to revert to 
guerrilla tactics used to advantage in the 1994-96 war which culminated in a 
Russian withdrawal from the region. 

The Council of Europe, a body overseeing human rights, has said it is 
planning to send the latest in a series of fact-finding missions to the North 
Caucasus at the weekend. 

Western leaders say Russia has the right to fight terrorism, but accuse 
Moscow of using excessive force in the mainly Moslem Chechnya region. 

U.S. Secretary of State Madeleine Albright denied that the Clinton 
administration has been soft on the issue. In an opinion piece in the 
Washington Post, she described the war as ``massively destructive.'' 

******

#12
Russia Today press summaries
Segodnya
March 7, 2000
Putin's Campaign Headquarters: In Search of Enemies
NUMBER ONE CANDIDATES' HEADQUARTERS DECLARES COLD WAR ON THE MEDIA
Summary

On Saturday, Vladimir Putin’s campaign press service made a statement 
addressed to the media which contained phrases such as "provocation", 
"fabrication of events", "speculations" and "rocking the boat of civil 
harmony and consent in the country". All these formulations had a Soviet-era 
flavor, the conclusion being absolutely similar to that of the witch-hunting 
era: "The press service will detect all facts of lies with respect to Acting 
President Putin and reserves itself the right to use all means necessary for 
a "asymmetrical response to provocations".

Thus, Putin's headquarters has declared war on the media, while candidate 
Putin spoke in favor of freedom of speech and even entering NATO.

It seems that the officers at Putin's headquarters simply fear being fired. 
They apparently don’t have much work to do in view of Putin’s apparent 
advantage over the other candidates. Thus, a question arises: what is his 
campaign headquarters really needed for if the advantage is so great? They 
must look for "slanderers and provocateurs" simply to justify their own 
existence.

In their statement, Putin's headquarters quoted one phrase from a "Segodnya" 
publication which said: "One warning has already been given to candidate 
Putin ". This phrase was called "provocative", while it was in actuality mere 
truth.

********

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