Center for Defense Information
Research Topics
CDI Library
What's New
CDI Library > Johnson's Russia List

Johnson's Russia List


March 15, 2000    
This Date's Issues: 4169 4170


Johnson's Russia List
15 March 2000

[Note from David Johnson:
2. RFE/RL: Michael Lelyveld, Official Echoes U.S. Plea For Closer Relations. (Brent Scowcroft)
3. Boston Globe: Charles Radin, Chechnya tactics rapped. Ex-premier urges antiterror strategies. (Stepashin)
4. Financial Times (UK): High entry costs inhibit infant industry's expansion: THE INTERNET IN RUSSIA by Andrew Jack in Moscow: Even the most optimistic estimates, prepared by Rocit, an industry research body, suggest that only about 5m people are using the internet in the country.
6. Ira Straus: Re JRL 4168 Filipov on "freedom fighters"
7. Peter Heinlein: Re Robert Bruce Ware and Ira Strauss in JRL 4169.
8. Nezavisimaya Gazeta: Lidiya Andrusenko, TEN YEARS OF PRESIDENCY. The Time Political Rivalry Began.
9. Krasnaya Zvezda: ALEXEI ARBATOV: "WE WILL HAVE TO FIGHT FOR PEACE YET". (Interview with Alexei ARBATOV, deputy chairman of the Duma defence committee)
10. Reuters: Mortgage Fund Launched For Middle Class Russians.
11. The Times (UK): Paul McCann, Who wants to be a president?
12. AFP: Putin Berates Staff Over Chechen Fund Payout Failure.]


Profil, No. 7
[translation from RIA Novosti fo personal use only]

By 2115, Russia's population will decrease by 5%. 
According to the forecast of the acting chairman of the Russian 
state committee for statistics Vladimir Sokolin, in 2015 the 
population of the country will be no more than 138 million. 
Considering that on January 1, 1999 Russia's population was 
about 145.5 million, over 15 years the number of Russian 
citizens will decrease by 7.5 million.
"Regrettably, the causes lie in the way of life which we 
created for man in the past, in the colossal demographic 
tragedy the Russian people experienced in the 20th century", 
says Vladimir Sokolin. "This is the first world war, the civil 
war, the hunger of 1932, the second world war..." The reforms 
which have been effected in the last few years and as a result 
of which the population of Russia has markedly decreased could 
be added to the above factors. Thus, according to the data 
provided by the state committee for statistics, over the past 
eight years the population of our country has decreased by 2.8 
million, or by almost 2%. Say, in 1999, 1.2 million children 
were born in Russia and 2.1 million people died. As a result, 
last year the natural decrease of the population (the excess of 
the number of those who died over the number of those who were 
born) reached 0.9 million against 0.7 million in 1999. This is 
the most impressive index of the reduction of Russia's 
population since 1992. Regrettably, at present, there are no 
grounds at all to think that the results of 2000 will be more 


Russia: Official Echoes U.S. Plea For Closer Relations
By Michael Lelyveld

A top former U.S. security official has urged closer ties between the United 
States and Russia through the creation of a new group within the Organization 
for Security and Cooperation in Europe. RFE/RL correspondent Michael Lelyveld 

Boston, 14 March 2000 (RFE/RL) -- Brent Scowcroft, the national security 
adviser in the administration of former U.S. President George Bush, told a 
weekend gathering of scholars at Harvard University that new efforts are 
needed to overcome what he characterized as a loss of direction in 
U.S.-Russian relations.

In his keynote address to the conference on Friday, Scowcroft said the United 
States and its allies had started with a conscious policy of engaging Russia 
after the fall of the Berlin Wall rather than emphasizing its weakness. But, 
Scowcroft said, the United States "gradually began to ignore the Russians, 
except when we wanted something from them."

He cited examples including the current U.S. initiative that seeks to modify 
the Anti-Ballistic Missile Treaty to allow for development of a national 
missile defense system.

But Scowcroft suggested that the attitude began long before with the decision 
to expand NATO in spite of strong objections from Russia. He recommended a 
freeze on further NATO expansion, to be balanced by greater efforts to bring 
new members into the European Union instead. He also urged "the construction 
of a broader security architecture" to include Russia.

Scowcroft said the new structure could be "a directorate within OSCE -- a 
directorate composed of the United States, Russia, a member from the EU and a 
member representing the neutrals in Europe." Its mission would be "to look at 
the problems, the issues of security in the great Atlantic community as a 
whole, not as a part of a defensive alliance."

The three-day conference entitled "Ten Years after the Fall of the Wall" 
brought together 10 separate schools and programs at Harvard to analyze 
events in Eastern Europe and the former Soviet Union. Topics covered a broad 
range of issues from German reunification to investment and arms control.

A Saturday panel on economic reform led by Harvard economist Jeffrey Sachs 
produced a spirited discussion of the relative successes in Eastern Europe 
and more limited progress in Russia and other countries of the region.

Janos Kornai, a Harvard economist, said that privatization in the region had 
essentially followed two paths. The first was a strategy of "organic 
development," stressing the sale of state-owned property for "genuine" prices 
without "giveaways." Kornai said the second approach was "accelerated 
privatization," which assumed that elimination of state ownership was the 
most important task. These programs included sales at giveaway prices and 
voucher privatization.

Kornai argued that the first theory based on more gradual sales of state 
property at genuine prices had proven more successful. He pointed to 
Hungary's higher growth in productivity since 1989 compared with the Czech 
Republic, which relied on voucher privatization. The pattern of faster 
privatization but slower growth also appeared to hold true in the case of 
Russia, he said.

Sachs, a former consultant to the governments of Poland and Russia, argued 
that faster privatization was driven by the need to take irreversible steps 
for political reasons.

"This was Central Europe trying to escape from the Soviet domination," said 
Sachs. "It wasn't just economic calculation." The rush to privatize later 
turned out to be unnecessary, but no one could have known that at the time, 
he said.

The greatest tragedy for Russia, according to Sachs, was the giveaway of 
shares in energy giants like Gazprom and Lukoil to insiders. The government 
could have raised $50 billion or more on Gazprom alone by bringing in 
international investors, he said.

But Andrei Kozyrev, the former foreign minister of Russia, questioned whether 
future governments could have been trusted to use the profits from oil 
companies wisely if they had remained in state hands.

"What is better monopoly or oligopoly? Isn't oligopoly already (a) step 
forward from the monopoly?" Kozyrev asked. In the past, the Soviet government 
used Russia's energy resources to fund its arms race with the United States 
and repress individual freedoms, said Kozyrev. There is at least hope that 
Russia's oligarchs will invest some of their riches in their own country, he 

On Sunday, Kozyrev appeared to echo Scowcroft's call for a new grouping to 
deal with the changed nature of the U.S.-Russian relationship since the 
collapse of the Soviet Union.

"In this decade, there is not a single new institution created to address 
this tremendous change in the world," said Kozyrev. Old institutions have 
simply not been up to the task, he said. 


Boston Globe
15 March 2000
[for personal use only]
Chechnya tactics rapped 
Ex-premier urges antiterror strategies
By Charles A. Radin, Globe Staff

Former Russian Prime Minister Sergei Stepashin said yesterday that Moscow 
should put aside its massive military operations in Chechnya in favor of 
Israeli-style antiterrorist strategies.

The same day Russia mourned 84 of its paratroopers killed in fighting in 
Chechnya, Stepashin said that the conventional use of force that leveled the 
Chechen capital of Grozny and the Argun Gorge village of Komsomolskoye was 
working against the long-term resolution of the problem.

''The operations should continue in that heads of terrorist groups should 
either be liquidated or captured,'' said Stepashin, who preceded Vladimir 
Putin as prime minister. But he added: ''We must delineate people who 
suffered from the bandits from the bandits themselves.''

If this is not done, the conflict could become insoluble, to the sorrow of 
Russians and Chechens alike, Stepashin said in an interview before a speech 
at Harvard's Kennedy School of Government.

Russians tried to suppress Chechen separatists three times in the 20th 
century, once after the Communist revolution, once after World War II, and 
once in the 1990s. Relations between the two peoples also were uneasy during 
czarist times.

At present, most of the potential leaders have fled Chechnya and are 
reluctant to return because of fear of Russian troops and security forces.

''Over 500,000 Chechens have left their region ... due to what is going on 
there,'' Stepashin said. ''These are the better-trained, better-educated 
people, people who ran their own businesses.'' Unless they return, there is 
little hope either for peace or reconstruction, he said.

It is particularly important for acting Russian president Putin, who has 
defined his leadership by his hard-line stand on Chechnya, to shift from 
general military sweeps of the region to targeted efforts, Stepashin said.

In the 1990s, ''Russians were nonchalant about Chechnya, they were ready to 
let it split off,'' Stepashin said, ''but now people will say, `come on, we 
have to finish them off.'''

Though they differ on Chechnya strategy, Stepashin said in his speech that he 
and Putin agree on steps to take to combat the rampant corruption that is 
hobbling attempts to modernize and revitalize the Russian economy.

If Putin rolls to a landslide victory as president on March 26, he may be 
free of the political debts that impeded former president Boris N. Yeltsin's 
administration after the 1996 election, Stepashin said.

Stepashin, who is chairman of the corruption commission of Russia's 
parliament, said Putin has embraced a national anticorruption plan the 
commission submitted three weeks ago.

However, Marshall Goldman, professor of Russian economics at Wellesley 
College, said corruption is unlikely to be eradicated.

''These people are very powerful and will be around a long time,'' Goldman 
said. ''It is an important signal if Putin says, `We have to try to do this,' 
but it is hard to see how he can succeed.''


Financial Times (UK)
15 March 2000
[for personal use only]
High entry costs inhibit infant industry's expansion: THE INTERNET IN
RUSSIA by Andrew Jack in Moscow: Even the most optimistic estimates,
prepared by Rocit, an industry research body, suggest that only about 5m
people are using the internet in the country

There could hardly be a more appropriate location for the office of Andrei
Kotov, one of his country's web pioneers of and a self-confessed "social
worker" for Russia's fledgling but fast-growing internet industry. 

In the heart of Moscow, in the building of an obscure division of the
former Soviet's "medium-sized machine tools ministry" - a pseudonym for the
nuclear weapons sector - he sits in a specially insulated room that used to
house a giant computer. 

But the tables have sharply turned - and not simply in the reduction of
space required for ever-more powerful computers. In the decade since the
collapse of the Soviet Union, the internet has turned into the antithesis
of everything the totalitarian state attempted to construct: an anarchic
model which resists interference from above and from centrally-planned
control, promotes communication between all levels of society - and is
increasingly profit-oriented. 

Even Vladimir Putin used the internet to announce his outline election
programme, just after being made acting president following the surprise
resignation of Boris Yeltsin at the end of last year. 

He has since created an election site ahead of voting on March 26, in both
Russian and English. 

Moscow might seem a long way from Silicon Valley or the growing "internet
bubbles" of London or Paris, yet it, too, has its equivalent of "First
Tuesday" - the Moscow Internet Exchange, at which potential funders and
project developers meet once a month to network and match-make. In March,
the Russian capital also hosts the latest in a series of internet trade

While Moscow and a handful of other cities, such as St Petersburg and
Ekaterinberg, have dominated the market so far, there are some other
pockets of internet growth and talent which may seem surprising to outsiders. 

Consider the city of Novosibirsk, the capital of Siberia located half way
across the Russian Federation, for example. Its historic concentration of
scientists, many the products of Akademgorodok, an academic campus which
was purpose-built at the time of Nikita Krushchov in the late 1950s, has
created a high density of computer engineers. 

Many of the local universities' more entrepreneurial graduates have left
the region or even the country in search of work, but an important pool
remains locally. The Dusseldorf-based software company, Novolabs, has even
practically relocated its main office to Novosibirsk. 

An estimated several hundred other local programmers operate from home,
serving clients around the world by e-mail. 

Across the country, there are some 400 internet service providers. And Mr
Zotov argues that there is huge capacity in the infrastructure now, which
already allows for high quality, high speed services. The latest figures
suggest that there are up to 40,000 sites. 

Overall, however, there is little doubt that the industry remains in its
infancy in Russia. Even the most optimistic estimates prepared by Rocit, an
industry research body, suggest that only about five million people use the
internet in the country. More conservative commentators argue that a
meaningful figure is less than half that level. 

That reflects, above all, the high entry-costs, with even cloned and
counterfeit computers proving beyond the means of most ordinary Russians.
Low average incomes also provide a formidable barrier for swiftly
generating any significant sales from electronic commerce, or even taking
out subscriptions to service providers. 

Even so, there is a huge appetite for access to information for a country
the vast majority of whose citizens were until recently so systematically
deprived of it. And there is a strong propensity to use computers, in a
country in which science was so revered for such a long period in its
education system. 

Given the huge distances and the logistical difficulties of face-to-face
contact, the internet offers a powerful alternative to physical travel. And
while the English language - and notably US sites - dominate among users,
the Russian language offers potential, not only because of the number of
native speakers in the former Soviet Union, but also because of the
millions of others on higher incomes who have emigrated, and are based in
Israel, the US and elsewhere. 

The low cost of well-trained programmers is also a tempting consideration
for foreign companies interested in the sector, and starting to suffer from
severe labour shortages among qualified personnel, such as Jorg Resche,
founder of Novolabs. Even if he does caution that modest Russian salaries
have so far had to be offset against the higher costs of tight Western
management supervision. 

There are some areas of software development where Russian programmers may
also prove far more advanced than their Western compatriots. Mr Resche
highlights the field of artificial intelligence, for example, which was
highly developed as a research specialism in Soviet times. 

For investors, Russian internet companies have other advantages. 

The academic and background and frequent western orientation of their
founders, their low-profile, lack of assets and absence of short-term cash
flow means that they have not usually proved targets for criminals, nor the
domain of preference for some of the more aggressive local executives who
have short-changed foreign shareholders over the last few years. 

The internet boom has certainly been slow in coming to Russia. Delayed by
the financial crisis in August 1998, it was only last year that a handful
of web entrepreneurs, including Mr Zotov, found backers. But in the last
few months, that has changed considerably. 

Peter Kirkow, an analyst with ICE Securities in London, has closely
followed the growth of the sector. Before he could close several deals
recently, however, a number of projects that he had identified over the
last few months were snapped up by competitors. 

It looks like the beginning of an internet bubble, he warns. Suddenly, many
of the leading international banks, as well as Russian-based ones such as
United Financial Group, and a range of venture capitalists, are building
specialist funds. Private investors, and telecoms companies, have been
among those making acquisitions. 

There are specific on-going fears in Russia about the extent of computer
hacking and its threat to the security of electronic payment systems; and
about periodic calls for tighter attempts to introduce government
regulation. And there worries about legislation which now forces internet
service providers to provide, at their own cost, the FSB - the successor
body to the KGB - with a means to access all electronic mail. 

But these concerns have so far done little to dampen rising interest. 


March 14, 2000

Russia's acting President Vladimir Putin faced a rare call Tuesday to
answer delicate questions about his past when an anti-corruption election
rival challenged him to a television debate. 

Former chief prosecutor Yury Skuratov, who is basing his campaign for the
March 26 elections on his anti-corruption drive, said he had searching
questions to put to Putin concerning his previous incarnations as deputy
mayor of Saint Petersburg and head of Russia's Federal Security Service

"If such a debate could take place I would ask him a whole range of
questions," Skuratov told journalists, noting that "unfortunately he will
not take part in television debates. 

"I get the impression that he can just read out prepared texts for the
cameras, but he cannot take part in discussions and answer unexpected
questions," the former prosecutor said. 

Skuratov said Putin should explain his involvement in a series of
questionable export-import 'barter deals' that he oversaw while holding
high office in Saint Petersburg in the early 1990s. 

He also demanded an explanation as to why Putin as FSB chief got involved
in a criminal case launched against Skuratov last year that resulted in his
suspension as prosecutor general. 

Skuratov maintains the case, predicated on a video that showed him
cavorting with two prostitutes, was bogus and aimed at stifling his
corruption probes that led up to the walls of the Kremlin itself. 

Such challenges to the frontrunner have been rare in a tepid election
campaign in which Putin has established such a strong lead over his rivals
that he has refrained from campaign activity and television debates. 

Analysts believe the only vague threats to Putin's Kremlin bid come from
voter turnout, which must top 50 percent to make the election valid. 

"The threat exists" of a high abstention level, admitted Dmitry Medvedev, a
member of Putin's campaign team. "We would be happy if Putin won on the
first round (but) a second round would not be considered a defeat," he added. 

The other 11 candidates have been forced to spoil for second place in the
hope that Putin garners less than 50 percent in the first round, which
would result in a run-off on April 16. 

But Putin won even more support Tuesday when a leading Russian liberal
party threw its weight behind his candidacy - despite the fact that it has
a presidential contender among its own ranks. 

The Union of Right Forces overlooked Samara region governor Konstantin
Titov in favour of the interim Kremlin chief. 

"There were people who supported Konstantin Titov, but all the same the
majority of the faction and its coordinating council voted today to support
Putin," said faction leader Sergei Kiriyenko in remarks broadcast on NTV

"We think that the victory must happen in the first round otherwise we will
artificially inflate the authority of (Communist leader Gennady) Zyuganov,"
said Kiriyenko, a former prime minister. 

Zyuganov trails far behind Putin according to latest opinion polls that
give the acting president 59 percent of voting intentions to 22 percent for
the Communist chief. Liberal Grigory Yavlinsky is given four percent, with
the other nine candidates not even at the races. 

Skuratov sought to give his campaign a shot in the arm by publishing a book
about his ouster as prosecutor and vowing to blow the whistle on Russia's
mafia chiefs by publishing a who's who of the country's most corrupt figures. 

"I wrote my book to show the extent of corruption which threatens Russia,"
Skuratov said. "Corruption has penetrated the walls of the Kremlin. It
exists within the presidential entourage." 

Skuratov said his list would detail all those already punished for
corruption in Russia, as well as those under investigation and those who
have thus far escaped justice altogether. 


From: (Ira Straus)
Date: Wed, 15 Mar 2000
Subject: Re JRL 4168 Filipov on "freedom fighters"

It seems to me that David Filipov scores a few easy points against Nick Petro 
but is mostly talking past the point. He devotes his commentary to denying 
that the Chechen rebels "are usually described as freedom fighters", by 
documenting at length that the phrase "freedom fighters" is not much used by 
the Western media in this connection. However, Petro hadn't put the phrase in 
quotation marks. He used it descriptive.

The grammatical implications of this distinction are basic. The meaning of 
Petro's comment, without any extra pair of quotation marks, is that the 
rebels are usually described in a way that amounts substantively to treating 
them as freedom fighters. It is irrelevant whether the phrase "freedom 
fighters" is used in news reports. Actually it'd be extremely surprising if 
that phrase were used. It's the usual practice of some politicians to 
describe warriors on their side as "freedom fighters", but it's very unusual 
for reporters to be using this phrase. In any case, it would have been more 
interesting if Filipov had looked into the substantive point about how the 
fighters are pictured, rather than going to such lengths to investigate the 
use of the phrase "freedom fighters". He might well have concluded that the 
substantive point was on balance true.

It reminds me of the jibe about the role of media ombudsmen: they are there 
to head off any real criticism of the media.

The strength of sentiment shown in the Western media is something that hasn't 
been lost on Russians. They have come to realize that the political 
correctness of the media can too easily lend itself to a herd spirit, ganging 
up on anyone who is fingered as a bad guy. They readily pick up on the 
underlying identification against Russia in this war; it is tangible in the 
very way in which Western reports are framed. They can see that the routine 
language is accusatory toward Russia and is often extreme. They can also see 
how the debate is framed on the editorial pages - the constant attacks on the 
Western governments for not coming down harder on Russia, the defensive 
statements by Western officials that they are indeed coming down hard on 
Russia. They can see some journalists rallying others to a "correct" 
position, and labelling it a "repetition of Russian propaganda" when an 
occasional writer breaks ranks. They can see the use of epithets like 
"appeaser" or "coward" for anyone who is not hardline enough (like the recent 
attacks on Tony Blair, Clinton, and others for saying nice things about Putin 
and not punishing Russia over Chechnya). If most Westerners do not notice any 
of this, it is only because they are standing so deeply inside a monolithic 
consensus that they are unaware of the possibility of standing outside it or 
even of viewing it critically.

These are phenomena that have serious implications and deserve an analysis in 
their own right. Unfortunately it seems that we'll have to wait for Mr. 
Filipov to get to that another time. :)


From: "Peter Heinlein" <>
Subject: Re: Robert Bruce Ware and Ira Strauss in JRL 4169
Date: Wed, 15 Mar 2000 

(Peter Heinlein VOA Moscow bureau chief. These views are those of the
author, and are not those of VOA or any other organization.)

PLEASE. Mr. Ware and Mr. Strauss. Stop trying to blame the media for the
damage done to relations between Moscow and the West by Russia's inhuman
behavior in Chechnya. Yes, as you point out, western journalists have
claimed that Russia has grossly manipulated its own media, and attempted to
manipulate the foreign media as well. Can that be seriously argued? And
yes, western journalists have focused to a great extent on the brutality
of Russian troops. Brutality, it seems, is too kind a word for the things
we have seen and heard.

So, as you ask, has anyone gotten the full story? Of course not. And we
may never get it, unless the international community demands an impartial
investigation; something that, unfortunately, is unlikely to happen. But
the little we know has mostly come courtesy of the very journalists and
human rights investigators they so roundly criticize. The problem with
many of the arguments put forward by Mr.Ware and Mr. Strauss is that they
are based largely on hearsay, the legitimacy of which is open to question. 

Kidnapping for ransom, they say. Yes, unquestionably kidnappings have
occurred. But kidnapping has been used as a weapon by both sides in this
war. It has been used to discredit Chechens, though we'll never know how
many kidnappings were actually done by gangs of Chechen rebel fighters,
and how many were done by anti-rebel (read pro-Russian) groups to keep
alive the belief, already widespread in Russia, that Chechens are a bandit
people. Yes, the hostage taking drove all international organizations out
of Chechnya by the end of 1997, but as with so many unsolved crimes that
happen in Russia, one must ask "Who benefited from that?" 

It is naive, bordering on foolish, to blindly assume that the rebels were
responsible for all the events that so badly damaged their reputation,
resulted in their isolation, and eventually led to Russia's invasion of
Chechnya last September. And yet Mr. Ware and Mr. Strauss use these events
to argue that western journalists are wrong to focus on the atrocities
committed by Russian forces against the civilian population of Chechnya.

Mr. Ware and Mr. Strauss also cite the invasion of Dagestan to support
their conclusions. This "invasion" has become part of the conventional
wisdom about why the war started. It should be remembered, however, that
we still only have one side of the story about the invasion, the Russian
government version. And it is beyond doubt that Russia has blatantly
massaged the truth to justify its actions in Chechnya. Again, ask "Who
benefited by the invasion?" And ask yourselves "Could Shamil Basayev, who
may be many things but is not stupid, really believe that he could somehow
invade Dagestan and take it away from Russia. Surely he, who grew up only
5 miles away from the Dagestan border, knows about the mixture of 30 or
more ethnic groups in the region that makes Ware and Strauss's
generalizations about Dagestanis laughable. 

The most ridiculous generalization, however, is that "If Russia does not
succeed in imposing law and order in Chechnya, people living near Chechnya
will be tortured and murdered once again. That's how the people of the
region see it". The "people of the region", do not think as a bloc.
There are many differing opinions, not all of them pro-Russian. And many
people there believe that whether or not Russia succeeds in imposing law
and order in Chechnya in the short term, there is going to be a lot of
blood shed in the region for a long time to come. 

One last point. Mr. Ware and Mr. Strauss seem to question the
credibility, or at least the impartiality, of international human rights
groups which have done a remarkable job of documenting Russian atrocities.
As one who has seen first hand the horrors inflicted on Chechen civilians,
I would suggest these investigators have only touched the tip of a
monstrous iceberg. Mr. Ware and Mr. Stauss accuse western journalists of
failing to provide the broad context of the war, and ignoring the Russian
"frame of reference". They seem to blame the media for creating, or at
least aggravating tensions between Moscow and the West. They should look


Nezavisimaya Gazeta
March 15, 2000
The Time Political Rivalry Began

March 15th is a special date of the event-studded calendar 
of Russia's recent history. Ten years ago, Presidency was 
introduced in what used to be the Soviet Union on March 15.
For a country in which undivided authority was always the 
principle of power it was the only way to pursue Mikhail 
Gorbachev's reforms and preserve the very essence of the state 
at the same time. At least, the architects of his perestroika 
hoped for this when they agreed to get the sixth clause of the 
Soviet Constitution on the leading role of the communist party 
abrogated. They could not but understand that the CPSU was the 
pivot of the existing system without which a powerful state 
could collapse like a house of cards, on the one hand. But 
there was no stopping a wide and powerful democratic movement 
and the party they headed had to make concessions to save its 
face, on the other.
Democratization of society declared by Gorbachev changed 
his own status as the head of state: the CPSU central committee 
general secretary voluntarily declined all party duties and 
became the President of the USSR. But our institute of 
presidency had nothing in common with the democratic structure 
of power which existed in the developed countries. It was 
contemplated that the power of the CPSU would be gradually 
transformed into the power of Soviets. But that was, in fact, 
the case of six of one and half a dozen of the other, because 
all central and local bodies of power were headed by reliable 
and tested party functionaries. So, having declared the need to 
introduce the presidency at the February plenum of the CPSU 
central committee, Gorbachev trusted the elaboration of this 
idea to the presidium of the USSR Supreme Soviet, which he also 
headed. Gorbachev's comrade and close friend, Anatoly Lukyanov, 
who was the first deputy chairman of the Supreme Soviet, headed 
the commission which was to prepare proposals for the 
institution of the presidency. As an experienced lawyer, 
Lukyanov could not but know that the President of a country is 
elected by popular vote. In addition to observing the generally 
recognized procedure of elections, this variant of universal 
secret ballot could ensure Gorbachev, the President, absolute 
legitimacy and truly strong positions. According to our 
information, precisely Lukyanov tried to talk Gorbachev out of 
the idea to hold national elections, persuading him that he was 
no longer very popular in the country and could lose to 
"rebellious trouble-maker" Yeltsin (about whose popularity 
rating there was also some ground to doubt at that time). 
Gorbachev flinched, as he was frightened, especially because 
Lukyanov persuaded him that the Supreme Soviet could very well 
be passed for the "college of electors" in the presidential 
election, though the amended Soviet Constitution stipulated 
universal secret ballot.
Lukyanov might have been preparing the post of the head of 
state for himself, because after the presidential election he 
would become the chairman of the Supreme Soviet (and all power 
was to be transferred to the Soviets). In that case the post of 
the President automatically became rather ornamental. Gorbachev 
realised that in a short while, when the "parade of 
sovereignties" and inter-ethnic conflicts began in the country.
The President could only adopt documents qualifying separatist 
decisions as illegitimate and declare that he had nothing to do 
with such developments, but he was unable to influence them.
Having become the President of the USSR, Gorbachev was actually 
unable to get any serious decision adopted.
Yeltsin did not repeat Gorbachev's mistake. There is no 
ground to say that he was more oriented to the assertion of his 
personal authority than Gorbachev. But at that time he did not 
have such a "reliable friend" as Lukyanov behind his back.
Yeltsin, who was the chairman of the Supreme Soviet of the 
RSFSR, agreed to hold national presidential elections and won 
by netting 57% of the vote. Having become the legitimate head 
of state and making the Russian model of state construction 
look more like the generally recognized democratic model based 
on the presidency, Yeltsin declared a struggle against 
communists (which won him additional popularity rating) and 
against the Soviets. Presidency helped him to proclaim Russia a 
sovereign republic within the USSR but did not save him from 
the "headache" Gorbachev had - separatist sentiments of local 
authorities in constituent territories of the Russian 
Federation. On June 12, 1991, when Yeltsin was elected 
President of Russia, Tatarstan elected its own President - 
Mintimer Shaimiyev. As the time went, Yeltsin, who was afraid 
that the Federation might disintegrate like the Soviet Union, 
had to offer "local presidents" to take as much sovereignty as 
they needed. At the same time, he did his utmost to strengthen 
his own presidential powers. In our country, local democratic 
power always proves to be stronger than federal and gradually 
turns into the omnipotent rule by local lords. Yeltsin was 
unable to fight local separatism but he won a real victory in a 
clash with the Supreme Soviet which had been growing stronger 
than the Kremlin. He was forgiven this because he was the 
President elected by the nation.
We will have new presidential elections on March 26. If 
communists come to power (which is rather improbable), we will 
have to forget about the institute of Presidency, unless 
Gennady Zyuganov gives up the main slogan with which the KPRF 
he heads is going to the election: "No to the Presidency in 
Russia!". It goes without saying that the structure of power 
built on the principles of collegial leadership by the party's 
political buro is much closer to communists. As in the past, 
the General Secretary would rely on party discipline and the 
KPRF top functionaries would head parliament. To achieve this, 
however, they will have to change the structure of local power 
by turning all local presidents either into the heads of 
regional legislatures or leaders of grass-roots party 
organisations. If Vladimir Putin wins, Yeltsin's Constitution, 
which already gives the President almost unlimited authority, 
will not be enough for him. Hence the discussion of the idea to 
extend the term of the Presidency and to nominate the heads of 
the constituent territories of the Federation, which was 
triggered by a letter from three Russian governors. The desire 
to consolidate any state authority is probably prompted by 
Russian mentality, regardless of the model of state 


Krasnaya Zvezda
March 10, 2000
[translation from RIA Novosti for personal use only]
Alexei ARBATOV, deputy chairman of the Duma defence 
committee, interviewed by Vitaly DENISOV of Krasnaya Zvezda 

Question: You were on the inter-faction group of deputies 
who returned from Chechnya a few days ago. What are your 
impressions? And what will you tell the Duma Council?
Answer: I was most impressed by two things. Both concern 
differences between the first and the second Chechen campaigns.
The first is that the army is better organised and armed and is 
fighting better now. 
But the most important thing is the morale, which proved 
to be much higher and stronger than I expected. The units of 
the armed forces are not just combat-ready and able to fight, 
but want and can win. I inspected the situation in the Joint 
Group of Forces and can tell you confidently that the success 
of the federal forces was predetermined by the clever use of 
troops and equipment, a reliable collaboration of army units 
with the troops of the Interior Ministry and other 
law-enforcement agencies, and good logistics.
On the other hand, I expected the local population, sick 
and tired of the fighters' arbitrary actions, lawlessness and 
their own helplessness, would be more loyal to the federal 
forces, which are actually fighting to liberate them. I thought 
the people would be more loyal even despite the losses and 
inevitable adversities which the peaceful population suffers in 
conditions of war. Regrettably, this is not true for Chechnya. 
There are virtually no contacts vital for the gradual 
transition from war to peace. Of course, there is a measure of 
collaboration in the commandants' offices and administrations 
restored in the liberated regions. But the general masses are 
openly antagonistic. 
This is a serious problem, because the successful 
completion of the military operation provides for the 
unconditional restoration of genuine sovereignty of Russia, law 
and order, and economic and social stability. This cannot be 
assured without the desire and the good will of the Chechen 
population. Regrettably, there is neither the desire, nor the 
good will. And we are still very far away from comprehensive, 
guaranteed peace in the republic.

Question: The active phase of the counter-terrorist 
operation is nearly over. Maybe tomorrow we will have to 
determine the political status of Chechnya and its 
administrative structure. What do you think of this?
Answer: The main thing is to avoid a repetition of the 
1995-96 mistakes, which would entail the same result. We have 
no right to step on the same rake twice.
I think we should introduce the state of emergency in 
Chechnya. We can no longer operate without it, because the 
legal basis of all actions of the federal centre is very 
"weak." The state of emergency is necessary also because there 
are no firm guarantees of the non-resumption of hostilities, 
for example, in early summer. 
To minimise the possibility of separatists launching a 
guerrilla war, we should enact a whole package of measures that 
would regulate the limitation of some civil rights and freedoms 
(such as the right to the freedom of movement, mass meetings, 
etc.) and provide legal backing to the checking of passports, 
searches of residential premises, arrests and detainments. 
All this is possible only in conditions of the state of 
emergency. Of course, we need a new law [on the state of 
emergency] that would meet modern demands, but for the present 
it would be enough to approve requisite amendments to the 
existing law. 
The state of emergency should be introduced not only in 
Chechnya, but also in the adjacent territories of other 
federation members. It would not be done to create a buffer 
zone, but to ensure the safety of people living in these 
So far, the administrative borders are too transparent, as 
proved by the "transit" of journalist Andrei Babitsky from 
Chechnya to Dagestan in the boot of a car. Likewise, terrorist 
Khattab and several hundreds of kilograms of hexogen can be 
delivered to any settlement in the region. 
Next, there must be no playing with local self-governments.
Much time will pass before we understand who is really 
respected by the local population and who we can trust in 
Chechnya today.
Until then, power must be held by the military commandants and 
the Russian administration of cities and regions. Their tasks 
should include: the timely payment of pensions and wages to the 
public sector staff and pensioners, the safety of 
communications, minimum restoration work necessary for ensuring 
the normal life of the people, and the struggle with the 
residues of terrorism and rebel activities. 
They should not seek the liking of the local population.
They must only ensure law and order in their territory, which 
will soon ensure us at least the neutrality of common people. 
In a few years, after we stabilise the situation, we will 
be able to start creating local bodies of power, which would 
gradually take over the powers of the provisional 
administrations. Next we could ponder the possibility of 
elections at all levels and comprehensive restoration of the 
republican economy.

Question: And the political status?
Answer: The political status is clear: Chechnya is a 
constituent member of the Russian Federation. And all our 
actions must be based on this precept. It would be naive to 
think that we will resolve all problems by declaring this. It 
will take years to undermine the foundation of separatism, to 
make the people see the advantages of life in integral Russia, 
ruled not by the Shariat laws, but by the constitution, which 
says everyone is equal before it. 

Question: Did you discuss the possibility of permanently 
deploying federal troops in Chechnya during your trip?
Answer: The question has been settled. A motorised 
division of the Defence Ministry and a brigade of the Interior 
Troops of the Interior Ministry will be deployed in the 
republic. But the question is, Will this be enough? And how 
should these troops be organised so as not to become hostage of 
the situation and the object of endless provocations and 
attacks by bandits? Certainly, the military specialists have 
the final say in this matter.
These troops should be made up of contract servicemen, 
possible those who fought in the first and/or the second 
Chechen campaigns. And their remuneration should correspond to 
the conditions of their service. They should get a 50% addition 
to their wages and the so-called "fighting" money. Their status 
should be sealed in a law stipulating guarantees to them as 
participants in the clearing up of the consequences of an armed 

Question: What should we do with the external border, in 
particular the 80 km-long border with Georgia?
Answer: We should use the experience accumulated by the 
Federal Frontier Forces in, say, Mountain Badakhshan, where 
Russian border guards are successfully protecting a similar 
stretch of the Tajik border. I think we can, and must, cover 
this part of the border in the south of Chechnya. 
But this is not all. I think the Russian border guards 
should also protect the administrative border of Chechnya along 
its perimeter. This does not mean that we are treating the 
republic as a foreign state. We must speedily approve a law on 
rebel territories, which would seal the right of the state to 
use its frontier troops for the protection of adjacent 
republics, territories and regions from the forays of 
terrorists and separatists. 


Mortgage Fund Launched For Middle Class Russians

MOSCOW, Mar 15, 2000 -- (Reuters) A U.S. investment fund which aims to help 
establish a stable Russian middle class announced a groundbreaking $100 
million home mortgage program on Tuesday.

DeltaCredit, the mortgage lending arm of the U.S. Russia Investment Fund, 
aims to lend $100 million to local banks this year for on-lending to average 
Russian home buyers. It has lent $1.5 million so far, bankers told a news 

"This is really the key to building a middle class in Russia," said James 
Cook, a senior vice-president. "It is also a way to bring about stability, to 
get money straight into the hands of average Russians."

Russia's Soviet past left no tradition of mortgages, despite the more recent 
mass privatization of apartments. Mortgage plans have been further hampered 
by spotty laws, investors unwilling to provide funding and fallout from the 
1998 financial collapse which busted banks as well as impoverishing citizens.

But the investment fund, backed by the U.S. Congress to help build a Russian 
market economy and drawing funds from the U.S. Treasury, says the mortgage 
market will be huge and the time is right for Russians to buy.

The crisis-hit real estate market is finally rising.


"For Moscow alone we estimate the potential market is $5 billion," Cook said. 
He hopes more foreign funding will follow, and there are already a few local 

Bankers said average borrowers will muster a family income of about $1,000 
per month, many times Russia's average monthly income but well within reach 
of many in Moscow and St Petersburg, the focus of the program.

Dollar loans of up to $150,000 will be offered for up to 10 years, an 
extremely long horizon in Russia's topsy turvy financial climate, at interest 
rates of 11-15 percent per year.

Borrowers will be saddled with currency risk of borrowing dollars and limited 
to monthly payments of 40 percent of family income to guard against another 
ruble disaster.

Russians are already extremely wealthy in property terms, thanks to 
privatization which lets any Russian claim his apartment for a few dollars, 
putting average Russians ahead of citizens of many emerging market economies, 
Cook said.

He expected by spring to launch a program to make it easier to trade up 
apartments so that Russians would not have to sell one apartment before 
buying the next.

The middle class is being contacted by foreign financiers as never before.

Foreign banks traditionally working with businesses have begun taking retail 
accounts from households, aiming at the estimated $50 billion in savings by 
ruble and bank-wary Russians hidden in jam jars and under mattresses.

Mortgages could also entice Russians to bring untaxed earnings into the 

To buy an apartment with cash, one attracts the interest of tax authorities, 
while payments on a loan are much less noticeable and then the government 
offers tax breaks for home buyers.

Next year Delta hopes to roll out ruble loans and in about two years turn 
mortgages into securities, as in the United States, thus at one stroke 
offering a savings bond of sorts in a market short on investments and freeing 
up cash for new lending.


The Times (UK)
15 March 2000
[for personal use only]
Who wants to be a president?

WHILE Americans face months of television debates between George W. Bush and 
Al Gore, the Russians have pitted four presidential hopefuls against each 
other on Who Wants to be a Millionaire. 

The politicians will be seen on Saturday, a week before the country goes to 
the polls, fielding general knowledge questions from Dimitry Debrov, Russia's 
Chris Tarrant, in a one-off episode from which all winnings will go to 

Of the four presidential candidates who took part in the programme, which was 
recorded two days ago, the highest-scoring was Evgeny Savostianov, 
secretary-general of the Souz Truda party. 

Despite answering a string of tough questions correctly, including one on the 
English author G. K. Chesterton, he stumbled on one relating to his own 
country. After using up two lifelines, he incorrectly answered the 
250,000-rouble question: asked whether loyalty, nobility, magnanimity or 
honesty was symbolised by the colour red in the pre-revolution Russian flag, 
he replied loyalty. The correct answer was magnanimity. But he still raised 
32,000 roubles (1,000) for charity. 

Ella Pamfilova, chairman of the Healthy Russia party, was asked which 
chemical element was named after the Scandinavian term for "bad spirit". The 
correct answer was cobalt, but she replied tungsten. She also won 32,000 

Most impressive was Stanislav Govoruklin, of the People's Patriotic Party, 
who correctly named Paul Gauguin as the subject of a Somerset Maugham book. 
But both he and Umar Dzhabrailove, an independent candidate from Chechnya, 
won just 1,000 roubles. 

Russia's acting President, Vladimir Putin, the favourite to win in the real 
poll, was unable to appear because he was meeting Tony Blair when the 
programme was recorded. 


Putin Berates Staff Over Chechen Fund Payout Failure

MOSCOW, Mar 15, 2000 -- (Agence France Presse) Acting President Vladimir 
Putin on Wednesday berated officials over the failure to pay out millions of 
dollars in aid to Chechnya designed to ensure farmers can plant crops this 

Putin summoned top officials to the Kremlin for a brain-storming session on 
how to rebuild the breakaway republic, devastated by two wars in the past six 

Restoring local administration, constitutional order and the social services 
infrastructure was "the most urgent task today," Putin said in comments 
broadcast by state-run ORT television.

And he continued: "Despite the decision to allocate 342 million rubles ($12 
million) for planting seeds this spring, the money has not yet arrived.

"There's a document for my report (on Chechnya) which says money has already 
arrived in Mozdok," in the neighboring republic of Ingushetia, he said. 
"What's it doing there, why isn't it in Chechnya?"

With two weeks to go to polling day, Moscow has been anxious to proclaim the 
end of the war, the successful prosecution of which has catapulted Putin to 
the top of opinion ratings and into the Kremlin.

With his economics and energy ministers attending the round table alongside 
security chiefs, Putin urged a frank debate about how to rebuild a republic 
devastated by two wars with Russia in three years.

"All the resources which exist in Chechnya must be mobilized to revive the 
republic," Putin said, ITAR-TASS reported.


Web page for CDI Russia Weekly:

Return to CDI's Home Page  I  Return to CDI's Library