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Johnson's Russia List


March 25, 2000    
This Date's Issues: 4196  4197   4198

Johnson's Russia List
25 March 2000 [my birthday!]

[Note from David Johnson:
1. Itar-Tass: Scientists Concerned about Declining Life Expectancy 
in Russia. 

2. Reuters: Gareth Jones, Russia sets out new foreign policy plans.
3. Carnegie Presidential Election Resources.
4. Keith Bush on election at CSIS in Washington on March 27.
5. ABC News Nightline: Acting President Putin Grants Interview.
6. RFE/RL: Donald Jensen, Vote Is Merely Putin Referendum.
7. The Guardian (UK): Jonathan Steele, THE RYAZAN INCIDENT: 

8. The Toronto Sun: Matthew Fisher, Russia's heir apparent.
9. Reuters: Defiant Yavlinsky eyes second spot in Russian poll.
10. Ray Thomas: Our speculators (afferisti) have sharp brains.
11. Los Angeles Times: Maura Reynolds, In the West's View, 
Putin Very Well Could Be the Businessman's Special.

12. AFP: Paper Implicates Putin In Saint Petersburg Scandal.
13. Reuters: Russia favours gradual land reform - Dep PM.]


Scientists Concerned about Declining Life Expectancy in Russia. 

MOSCOW, March 24 (Itar-Tass) - Death rate in Russia has increased by 33.4 
percent as a result of cardio-vascular and infectious diseases, accidents at 
enterprises, murders and suicides, Academician of the Russian Academy of 
Sciences Nikolai Trapeznikov said at today's meeting of the board of the 
Russian Science Ministry which discussed a draft concept of state politics in 
the area of health service and prevention of diseases for 2000-2010. 

"Growing depopulation is fraught with a two-times drop in the number of the 
indigenous population of Russia in 50-70 years' time and a sharp decline in 
the creative potential of the nation because of a growing number of 
pensioners and invalids," Trapeznikov said. 

The level of alcohol and tobacco consumption has risen, the problem of drugs 
addiction, and among youngsters in particular, has worsened. The situation 
which developed in arouses serious concern in broad medical circles and 
interested ministries and departments, Trapeznikov said. 

A new trend in the suggested concept is that it gives priority to 
strategically, socially and economically justified principles of maintaining 
and fostering health rather than its rehabilitation.As a result, the strategy 
of state politics in health service should be re-orientated to maintenance of 
initial health parameters and creating conditions which would enable to 
control the health of the population. 

Experts believe that the parameters of the health dynamics and the quality of 
life of the population should be acknowledged as the main goal of social 
reforms and the criterion of the effectiveness of work carried out by the 
authorities at a federal and regional level. 


Russia sets out new foreign policy plans
By Gareth Jones

MOSCOW, March 24 (Reuters) - Russia's advisory Security Council approved a 
new foreign policy concept on Friday that calls for stronger protection of 
Russian citizens abroad and for a more commercially-oriented diplomacy. 

Foreign Minister Igor Ivanov, speaking to reporters after the council session 
chaired by Acting President Vladimir Putin, said the doctrine reflected 
Russia's resources and needs better than a version drawn up in 1993. 

``The new concept is closer to life and to those tasks which we are trying to 
resolve within the country,'' he said in televised comments. 

Ivanov gave no details but Putin made clear the concept included looking 
after the interests of Russians living abroad, especially in the former 
Soviet republics of the Commonwealth of Independent States (CIS) and the 
three Baltic states. 

``We have to defend in a more attentive, balanced but also more active way 
the interests of our citizens...who have chosen to live permanently in other 
countries,'' Putin said. 

It is a common complaint of Russian nationalists that Russians stranded in 
the Baltic states, Ukraine, the Caucasus region and Central Asia after the 
break-up of the Soviet Union have faced varying degrees of discrimination and 

Putin, hot favourite to win Sunday's presidential poll, has said he wants to 
strengthen Moscow's ties with the 12 ex-Soviet republics which make up the 
loose Commonwealth of Independent States (CIS). The three Baltic republics -- 
Estonia, Latvia and Lithuania -- are not CIS members. 


Sergei Ivanov, secretary of the Security Council and a close ally of Putin, 
said ethnic Russians should feel ``comfortable'' in their chosen home and not 
want to rush back to the motherland. 

``We must create through our policies such conditions...that people, our 
compatriots, would want to stay put, to work normally and to live 
comfortably,'' he said. 

The concept envisages the foreign ministry taking a coordinating role in 
promoting Russia's interests abroad. It also proposes that diplomats do more 
to help promote Russian industry and commerce. 

``The role of the foreign ministry must be raised. We need actively to use 
the foreign ministry's opportunities to promote the economic interests of our 
state overseas,'' Itar-Tass news agency quoted Putin as saying. 

Foreign Minister Ivanov said Russia had the means to remain a key player in 
the international arena despite its current economic difficulties. 

``We take into account the possibilities and resources which our foreign 
policy has and, although they are to some degree temporarily constrained, 
they are enough to maintain a worthy place for Russia in the outside world,'' 
Ivanov said. 

The new foreign policy concept comes on the heels of a national security 
doctrine, adopted in January, that in effect lowered the threshold for Russia 
using nuclear arms in response to non-nuclear threats. That was followed by a 
nuts-and-bolts military doctrine which gave domestic concerns priority over 
foreign affairs. 


Date: Thu, 23 Mar 2000 
From: Liz Reisch <>
Subject: Presidential Election Resources

There are new additions to the Carnegie Endowment "Russian Elections:
1999-2000" Web page that might interest JRL subscribers.

New resources include:
--March 24 audio webcast, "Election Countdown: Two Days Until Russia
Chooses its Next President," featuring commentary by Michael McFaul and
Nikolai Petrov. The previous four segments are also available on the

--Election Bulletins from the Carnegie Moscow Center (in Russian),
edited by Michael McFaul, Nikolai Petrov, and Andrei Ryabov
Bulletin #1, "The Political Forces on the Eve of the Elections," March
15, 2000.
Bulletin #2. "The Presidential Election on March 26," March 22, 2000.

--Event Summaries: Russian Presidential Candidates and Campaign
Managers at the Carnegie Moscow Center (in English and Russian)
*Press conference with Gennady Zyuganov, leader of the Communist Party
of the Russian Federation and presidential candidate, February 28, 2000.

*Meeting of heads of foreign diplomatic missions and foreign media with
chief managers of the Vladimir Putin's electoral campaign, March 14,


Keith Bush will be discussing the Russian election
on Monday, March 27, at the Center for Strategic and
International Studies in Washington DC
1800 K St. NW
3-4:30 pm
Registration is requested by calling Jeff Thomas
at 202-775-3240 or fax 202-775-3132.


ABC News 
March 24, 2000
Putin: Ex-KGB Men in Kremlin 
Acting President Putin Grants Interview
to ABCNEWS’ Koppel 

ABCNEWS' Ted Koppel, right, talks with acting Russian President Vladimir 
Putin in Nizhni Novgorod, on March 21. Koppel is the only U.S. journalist to 
interview Putin on the eve of Russia's second-ever-democratic presidential 
election. (

NIZHNI NOVGOROD, Russia, March 21 — In the only interview 
granted to a foreign journalist before the upcoming presidential election, 
acting Russian President Vladimir Putin told ABCNEWS’ Ted Koppel that he will 
use former KGB employees in the Kremlin. What follows is a transcript of 
their conversation. 

ABCNEWS’ Ted Koppel: Even as an acting president — what you did earlier this 
week when you flew backseat in a fighter jet to Grozny was unusual — what’s 
the symbolism there?

Vladimir Putin: First of all apart from being acting president I’m commander 
in chief of armed forces in Russia, and sometimes it doesn’t hurt to look and 
see what the power of the army is. That’s first — the second thing is usually 
when I move by normal transportation I’m usually being watched by your 
Russian colleagues — that means that the information about my travels becomes 
public. This information could reach the kind of people who shouldn’t know 
this — including those who are in opposition to federal forces based today in 
Chechen territory. Moving with military transportation, like the one you 
mentioned earlier, keeps this information from the people who should not know 
about it. And finally — based on what I’ve already said, traveling by jet 
fighter was cheaper, faster and safer.

Koppel: You looked as though you enjoyed it too?

Putin: Besides all that — I do like it — that’s true.

Koppel: Was there also a symbolism for the international community, or was it 
all domestic?

Putin: I’ll tell you honestly — the last thing I think about is symbols. I do 
what I think makes most sense. And if somebody sees symbolism in that — that 
could be true as well. Because in the future — I am going to act in the way 
that makes most sense. That means I will be acting in a predictable way.

Koppel: I’ve read a number of your speeches and was delighted to discover you 
have a very active sense of humor. When you were speaking to the intelligence 
officers you said to your colleagues — it appears we have succeeded in our 
first effort to infiltrate the Kremlin. I assume you were joking?.

Putin: Of course it was a joke — though I have to say that a gathering of 
employees of intelligence agencies and former leaders of those agencies is 
not unusual even in the West. It’s not a new thing and there’s nothing 
unusual about it. Not for North America nor for western Europe.

Koppel: Do you feel comfortable surrounded by some of your old colleagues? 
Because I know you’ve brought some old colleagues from the KGB into the 

Putin: That’s true. I’ve brought some of them to the Kremlin in staff 
positions — people who I’ve known for many years — and people whom I trust. 
So that is the reason why I’ve brought them in. Not because they worked in 
the KGB and follow some specific ideology. It has nothing to do with ideology 
— it has to do with their professional qualities and personal relationships.

Koppel: Much of the wealth in this country is in the hands of a very few men, 
and almost all of the debt in this country falls on the shoulders of the 
Russian people and the Russian government — that and the issue of corruption 
— could you give me at least a sense of how you’re going to begin dealing 
with those problems.

Putin: Based on the problem you already mentioned I have brought into my 
innermost circle people from competent organizations who are untarnished and 
have no connection with corruption. This is also a response to your question 
about why I have ex-intelligence people surrounding me. As to a wider 
approach to this problem I can say this problem does exist, not only in 
Russia but in many other countries as well. We can probably agree that during 
the transformation of the economy, conditions appeared where the state 
couldn’t guarantee equal conditions for all participants in the market. 
People appeared who, due to their close relationships with politicians and 
government or to regional leaders, used this situation to get favorable terms.

Our future actions will aim to resolve several problems. First, we’ll strive 
for full guarantees for the rights of owners and investors. The right of 
ownership will be the priority in Russia. We’ll be striving for the state to 
articulate its position well within the realm of law. The state should be 
strong enough to guarantee those rights. Thirdly — which relates to the 
question you raised — we’ll do our best to put participants in the market on 
an equal footing. I hope if those basic rules are followed we will not be 
forced to talk next time about the problems of corruption in Russia.

Koppel: Mr. President — thank you very much indeed, you’re very gracious for 
taking the time. 


Russia: Analysis -- Vote Is Merely Putin Referendum
By Donald Jensen

Prague, 24 March 2000 (RFE/RL) -- Sunday's vote for the Russian presidency is 
less an open, competitive election than a referendum on acting President 
Vladimir Putin's leadership. The major question is not whether Putin will 
win, but whether he will do so in the first round. A decisive victory will 
help him consolidate power so he can move toward achieving his goals of 
reforming the economy and rebuilding the Russian state.

Public-opinion surveys give Putin more than 50 percent of the vote. This 
rating is more than twice that of his nearest rival, Communist Party leader 
Gennadi Zyuganov. Putin's large lead has taken much of the suspense out of 
the campaign and prompted concern the turnout could be less than the 50 
percent needed to make the election valid. Zyuganov, like the other 
candidates, has served largely as sparring partner.

Putin's popularity is largely based on public perceptions of his conduct of 
the Chechnya war. National television, much of which is controlled by the 
Kremlin, has presented the conflict as a success. Moreover, Putin's awkward, 
spare campaign style -- which Kremlin media handlers have tried to portray as 
a sign he means business -- has actually proved an asset and contrasts 
favorably with that of former President Boris Yeltsin. It has given Putin a 
negative charisma that has convinced voters he is far more capable than his 
predecessor of dealing with Russia's problems. 

The election is the latest step -- though not the only or most important one 
-- in a transition that began last year, when Russian elites dependent on the 
Kremlin for their political and financial viability began to explore 
presidential succession scenarios. This strategy included: naming Putin prime 
minister to give him the advantages of incumbency; the political destruction 
of former Prime Minister Yevgeny Primakov and Moscow Mayor Yuri Luzhkov -- at 
the time the leading presidential hopefuls; military action in the North 
Caucasus to galvanize public opinion; and a manipulated State Duma election 
campaign designed to ensure a pro-Kremlin majority in the parliament's lower 

The plan succeeded. As a result, Yeltsin's resignation at the end of last 
year was not a genuine transfer of power, but a way to prolong and revitalize 
the elite-dominated system that has ruled Russia for much of the past decade.

As is often noted, much about Putin's views and earlier career are unknown. 
Nevertheless, a close check of his record gives indications of the kind of 
president he would be.

Putin is well trained in the school of Yeltsin-era politics, where money, 
personality and political power are inextricably intertwined, corruption is 
in the eye of the beholder and the ends justify the means. Putin was one of a 
generation of former KGB officers who burrowed into the country's new 
political and commercial structures, in the process blurring the distinction 
between public interest and private gain, national security and democratic 

openness. He spent a period in the St. Petersburg administration, where he 
was implicated in the corruption that marred the city's commercial 
activities. He also managed an election campaign for a tainted mayor that was 
characterized by dirty tactics -- from death threats to lies about attendance 
figures during a crucial vote. 

Putin then moved to Yeltsin's presidential administration, a bloated, corrupt 
bureaucracy that managed the Kremlin's huge business empire and is under 
investigation by Swiss law enforcement officials for corruption. Putin 
recently defended Pavel Borodin, former head of the administration, from the 
charges. By contrast, Putin has been quick to brand as "traitors" and 
"criminals" those who disagree with him.

During Putin's tenure as head of the Federal Security Services, the successor 
to the KGB, that agency imprisoned activists Aleksandr Nikitin and navy 
captain Grigory Pasko for trying to bring attention to environmental damage 
caused by Russian naval vessels. Last year, when corruption allegations 
against Kremlin insiders brought by Procurator General Yuri Skuratov 
threatened Yeltsin's impeachment, it was Putin's FSB which led the campaign 
to smear Skuratov.

Putin's public statements, intentionally minimized during the campaign to 
broaden his appeal, have often been contradictory and show his lack of 
political experience. They also suggest Putin has not yet decided some key 
issues. But taken as a whole, his comments and his conduct as interim 
president suggest that while Putin is market-oriented and vaguely supportive 
of democratic values, above all he seeks to re-centralize state power at home 
and re-vitalize Russia abroad.

"Beautiful, powerful, very obedient," was how Putin characterized the SU-27 
aircraft he flew in on Monday (March 20) in a campaign stunt. That is how he 
also might describe his ideal Russian state. Putin has shown he is 
uncomfortable with political pluralism, especially when it interferes with 
attaining his objectives. Putin has also made it clear that he will not 
tolerate press criticism of the Chechen war.

A January deal between the pro-Putin Unity party and the communists 
temporarily alienated many liberal and centrists deputies and left the 
legislature largely under his control. Presidential candidate Vladimir 
Zhirinovsky -- whose supporters regard Putin favorably -- has been ruled on 
and off the ballot, apparently based on the latest Kremlin calculation of 
whether Putin needs Zhirinovsky's electorate to put him over the 50 percent 
barrier he needs to win on the first round. 

In foreign policy, there are strong continuities with the Yeltsin era. On the 
one hand, Putin seems to believe Russia's long-term security and economic 
interests lay in ties to the West. He has received credit for renewing 
contacts with NATO -- though he opposes further expansion of the alliance. 
But the thaw actually began during the waning months of the Yeltsin 
administration last summer and is moving toward the status quo that existed 
before the Kosovo war. 

Putin also supports "Start Two" treaty ratification along with adherence to 
the 1972 ABM Treaty. On the other hand, Putin has continued to cultivate 
relations with China, Iran and Iraq, so far more skillfully than Yeltsin. His 
centralizing inclinations are evident in relations with the Commonwealth of 
Independent States, where he has moved to strengthen ties with the former 
Soviet republics under the guise of "fighting terrorism." 

On economics, Putin has called for land and tax reform, support for small 
businesses, and greater foreign investment. His team of free-market 
economists will present an economic strategy for the government next month. 
At the same time, under Putin the state probably would retain its role in the 
"natural monopolies" -- such as oil and natural gas -- where it can earn 
large revenues. It is likely to remain influential, as well, in the military 
industrial complex and other areas of "strategic interest." 

Despite being all but assured of election, Putin is not yet in control of the 
forces that brought him to power. Although there has been a partial 
realignment of political forces in the Kremlin, the "Family" -- the retinue 
of family members, cronies, and courtiers which hung around Yeltsin for years 
-- is masterminding Putin's campaign. 

Evidence also suggests Putin does not yet have the full support of the power 
ministries. The FSB, for example, appears to be divided between holdovers who 
have long served in Moscow and newcomers Putin is bringing in from St. 
Petersburg. Interior Minister Vladimir Rushailo, not Putin, was reportedly 
the presidential choice of some top officers. Indeed, Putin's clumsy handling 
of RFE/RL correspondent Andrei Babitsky's detention earlier this year 
repeatedly gave the impression that the acting president was not fully in 

Putin has tried to strengthen his political base by bringing in loyalists and 
forming effective coalitions on some issues. However, his hold is far from 
secure. He was able to improve ties with NATO despite the objections of the 
military, which is more autonomous than at any time in recent years. But it 
is unclear whether the campaign in Chechnya would stop even if Putin ordered 
an end to hostilities -- at least without the acting president giving 
concessions to the military on other issues. 

Despite public promises to liquidate the business oligarchs, none of them has 
been banished from the inner circle. In fact, several moguls are financing 
Putin's campaign. Putin was unable -- or, during the election season, perhaps 
unwilling -- to stop a recent aluminum deal in Siberia which further enriched 
magnate Roman Abramovich.

With the momentum from a decisive win in the elections, Putin probably would 
move quickly to address Russia's problems and fill in the many blank spots in 
his program. For his image of competence to endure, he must bring the 
Chechnya fighting to a politically acceptable conclusion, improve the legal 
basis for economic activity, and show at least symbolic progress in attacking 
corruption. In that regard, public cooperation with foreign law-enforcement 
investigations such as the Bank of New York case will do much to establish 

his credibility. 

Should Putin continue his pressure on the press and the country's weak 
representative institutions, however, he risks damaging the most important 
gains of the Yeltsin era. As political scientist Thomas Remington has pointed 
out, the answer to a breakdown of legal order is not granting the state more 
power. Giving law-enforcement authorities broad, extra-legal powers and 
restricting civil rights usually undermines the respect for law even further. 

But a popular mandate in Russia has far less importance than in the West. The 
most important politics is that of the elites. Even when ordinary Russians 
are aroused to vote they generally lapse back quickly into passivity. 
Moreover, unlike Yeltsin's rise to power, Putin has so far shown no ability 
to mobilize the population as a way of settling inter-elite feuding. 

Thus, it is doubtful Putin will be able to govern without strong support in 
the power ministries, and among some oligarchs and regional leaders. At the 
same time, he must expand his base by packing the new government with 
loyalists. Such moves will almost inevitably threaten long-entrenched 
interests -- press reports already have suggested several business barons 
hope Putin is not elected until the second round so that he will be more 
manageable. It is how he manages these conflicts that holds the fate of his 


The Guardian (UK)
24 March 2000
[for personal use only]
By Jonathan Steele (

A new noun has crept into the English lexicon. Partly a puppet, partly a 
front man, a 'put-in' is someone installed, imposed, or enthroned in power in 
a country by undemocratic but completely legal and constitutional methods. No 
need for a palace coup, an army putsch, or a revolution in the streets. The 
appointment of Russia's new president shows that to be a 'put-in' you only 
require influential friends in the right place. 

A pseudo-democratic seal of approval will be stamped on the lucky man on 
Sunday, when those Russian voters strong enough to resist the crushing hands 
of apathy and disgust troop off to the polling booths. But the real election 
took place last August when a handful of men behind closed doors in the 
Kremlin chose a hard-nosed apparatchik, Vladimir Putin, to take over from 
Boris Yeltsin. 

Known as the 'Yeltsin family', this bunch of asset-strippers who seized 
Russia's energy and raw material monopolies when state ownership ended, were 
well aware that anyone they picked would have little chance of losing what 
pass for elections in Russia. Incumbency and control of television are the 
keys. In a society where authoritarian instincts run deep, just being 
presented as the man in charge gives you a headstart since there is no 
requirement that challengers get equal treatment on news programmes. Far from 
it, they are either ignored or pilloried with no right of reply. 

Four years ago the Kremlin clique used these cynical techniques to drag 
Yeltsin to victory after initial opinion ratings in single figures, even when 

he had a major heart attack three days before the poll. (Lying to voters, 
they denied the attack had happened.) This time the task was bound to be 
easier, provided they picked someone able to walk straight and keep sober in 

What issue should he emphasise? Reviving the collapsed economy was a 
non-starter, since Putin clearly has no expertise and most Russians are too 
disappointed to believe anyone on the economy. Tackling corruption was also a 
hard issue on which to campaign, since the Yeltsin family's whole point in 
appointing an insider was to protect themselves and their friends from 
prosecution or revenge. 

How about war? This was a better bet, since war plus media control give a man 
the chance to project a wider image as a strong leader. Chech nya was the 
obvious target. The Chechens had provided a pretext by invading Dagestan in 
August, and when several blocks of flats in Moscow and other Russian cities 
were blown up in September, popular anger against them rose. 

Does that mean the Kremlin was behind the bombings, as some Russians have 
alleged? It is hard to know. The FSB, the successor to the KGB which Putin 
briefly headed, has not yet found proof of a Chechen hand. Investigators told 
a Moscow press conference last week they still believe Chechens may have been 
behind the explosions: but of the 26 people on their list of suspects, none 
is an ethnic Chechen. 

Alexander Shagako, deputy head of the FSB investigation department, said his 
people had identified the components of the explosives used in all three 
cities, the drivers who delivered the explosives and stored them, and the 
people who chose which buildings would be attacked. But he admitted there was 
no proof that those who carried out the explosions were trained in an 
anti-Russian Islamic centre on Chechen territory. 

Doubts over a Chechen link to the bombs were heightened by an incident in 
Ryazan, south-east of Moscow, in September when residents discovered a bomb 
in their flats and suspicious men who turned out to be FSB agents. The FSB 
later said the bomb had been put there as part of a training exercise. When 
Duma MPs called for an inquiry, pro-Putin MPs blocked it. 

Much has been written about the enigma of Putin, but guessing makes little 
sense. Even if Russia were allowed a democratic poll, any winner would try to 
restore a strong state, give Russia back a sense of dignity, and improve tax 
collection. Putin too says he will do this. There is no surprise there. The 
crucial test is whether he means it, given his undistinguished career as a 
KGB agent and servant of Russia's new rich. Will he remain as crude and 
authoritarian as his behaviour suggests, with his references to critical 
journalists as 'traitors' and Chechen opponents as 'animals', and his dirty 
tricks against dissidents and, most recently, against the prosecutor who 
tried to investigate the Yeltsin family? 

After leaving the KGB, Putin owed his promotion to two men suspected of 
corruption, Anatoly Sobchak, the late mayor of St Petersburg, and Pavel 
Borodin, the head of the Kremlin's property department. Will he really be 

able to break from the kleptocrats and their political friends who have 
captured the Russian state? Will he tackle the raw material monopolies and 
ensure a reasonable share of their earnings go to the national exchequer 
rather than disappearing abroad? 

This is Russia's main problem, and it flies in the face of common sense that 
this new president will do anything serious about it. After all, it goes 
against a spy's code of honour to betray the men by whom he is 'put in'. 


The Toronto Sun
March 24, 2000 
Russia's heir apparent
Sun's Columnist at Large
MOSCOW -- There is not much to say about a presidential election campaign 
when the result seems to be preordained. 

I could report that Russia's heir apparent, Vladimir Putin, refuses to 
debate his opponents. I could say he also refuses to give speeches or publish 
campaign literature or produce advertising of any kind. 

I could write that Putin refuses to provide even the tiniest scrap of 
information about his intentions for Russia's turbid economy. I could add 
that for all that the putative favourite is so committed to democracy he is 
already considering lengthening his second term (!) in office from four years 
to seven. 

Searching for something interesting to say about Russia's unique democratic 
process, The Economist offered the opinion last week that Putin wore platform 
shoes when he met Tony Blair two weeks ago. One can only imagine what kind of 
shoes The Economist will have Putin strapping on when he meets Bill Clinton, 
who is a head taller than the British prime minister. 

If all this seems frivolous, it is because it is. The only sensible 
commentary is to express astonishment that a former junior KGB agent, whom 
99.9% of the Russian population had never heard of eight months ago, is the 
front-runner for the leadership of a country which still dreams of greatness. 

Whatever the actual tally on Sunday, for there remain doubts about the 
fairness of Russia's ballot counting process, the only question is whether it 
will also be announced that Putin has won on the first ballot or that he has 
come up with just less than half the ballots cast. This would necessitate a 
second vote in a couple of weeks against either reformer Gregori Yavlinski or 
Communist Gennadi Zyuganov. 

Having not been invited to join the acting president for a photo op in the 
back seat of a Sukhoi fighter jet in Chechnya last week, and without many 
other ways to get a measure of Russia's little big man, I trudged out into an 
early spring blizzard two afternoons ago in the centre of Moscow to look for 
what would translate into English as Little Putinkovsky Lane. Like so much of 
the capital, it was closed for repairs, but all 100 metres of Putinkovsky 
Lane, which abuts it, was jammed with cars heading toward Pushkin Square. 

A US$50,000 Toyota Land Cruiser belonging to the federal tax service pulled 
up in front of me, disgorging a middle-aged bureaucrat and a young woman with 
garish lipstick and a very unbureaucratic decolletage. The unlikely couple 
entered a notoriously pricey Chinese restaurant. 

With typical Russian humour my interpreter, Marina, joked they were either 
going there to shake the place down or spend some money they had stolen 
somewhere else. Breaking into a laugh, she wryly added that they were most 
probably there to do both - and much else besides. 

Under a banner advertising the Treasure Island Casino and a billboard 
proclaiming the virtues of an American dental clinic, a babushka shivering in 
a thin grey cloth coat accosted car drivers and demanded a few rubles. 

Stopping two men who turned out to be brothers, I asked them about their 
intentions on Sunday. The older one, an unemployed former military book 
publisher who did all the talking, said: "There is only one hope left." 

I gathered that he meant Putin. He confirmed this and said: "Who else are we 
to believe? We've had him for almost three months now and he hasn't done 
anything wrong yet." 

I gently suggested this might be because other than the war in Chechnya, the 
acting president hadn't yet done anything. 

This observation provoked silence and a shrug. 

After a few more minutes of equally unilluminating responses, Marina and I 
left the brothers in the slush and ducked into the blue-domed Church of the 
Birthday of the Holy Mother of God in Putinkha to get warm. 

Marina, who claims to be an atheist, lit a candle for herself - and for 


Defiant Yavlinsky eyes second spot in Russian poll
By Gareth Jones

MOSCOW, March 24 (Reuters) - Grigory Yavlinsky, the leading liberal candidate 
in Russia's presidential election, vowed on Friday to beat the Communists 
into third place in Sunday's poll and shrugged off a series of attacks on him 
by state television. 

In a string of last-minute interviews, Yavlinsky made clear he would not be 
intimidated by the so-called oligarchs, politically powerful businessmen whom 
some Russians see as bankrolling Acting President Vladimir Putin's election 

``My aim in these elections is to beat the Communists in the first round and 
the oligarchs in the second,'' he told the daily Komsomolskaya Pravda. 

``Russia's future is neither Communist nor bandit-controlled,'' he told the 
Moskovsky Komsomolyets paper. 

Putin remains hot favourite to win the presidential race, with Yavlinsky 
widely predicted to come a distant third behind Communist candidate Gennady 
Zyuganov with about five percent of the vote. 

But Yavlinsky appears poised to win reasonably strong support among the 
nascent middle class in European Russia's big cities, sparking fears in the 
Putin camp that this might deprive their man of outright victory in the first 


In recent days ORT public television, in which leading oligarch Boris 
Berezovksy has a big stake, has mounted a series of fierce attacks on 
Yavlinsky, accusing him of receiving money from the West, of failing to 
support the popular Chechen war and even of having plastic surgery to boost 
his appeal to voters. 

ORT said Western funding -- denied by Yavlinsky's office -- could compromise 
Russian national security in the unlikely event of a Yavlinsky victory. 

ORT, the vast nation's most influential station because it is the most widely 
broadcast, also aired footage of homosexual activists saying they would back 
Yavlinsky in an obvious bid to scare off Russia's generally 
conservative-minded voters. 

Yavlinsky's camp shrugged off the ORT coverage. 

``It shows that they (Putin's team) are afraid. They think that Yavlinksy is 
a strong challenger,'' spokeswoman Yevgeniya Dillyendorf told Reuters. 

Despite her nonchalance, ORT has in the past proved to be a formidable 
political force. 

Ahead of last December's parliamentary election, it waged a relentless smear 
campaign against an anti-Kremlin grouping led by Moscow Mayor Yuri Luzhkov 
and former prime minister Yevgeny Primakov, pushing them into third place 
behind the Communists and the brand-new Unity party created solely to back 


Yavlinsky said on Friday Putin and Zyuganov were two sides of the same coin. 

``It is psychologically easier and in practical terms more convenient for the 
Kremlin to work with the Communist opposition than with the democrats,'' 
Yavlinsky said. 

Zyuganov's Communists, the biggest party in the State Duma lower house of 
parliament, have a track record of cooperating with the Kremlin on a range of 
issues while Yavlinsky's Yabloko party has often opposed key bills including 
government budgets. 

Yavlinsky has homed in on liberal fears that Putin, a former KGB officer who 
has never contested an election and who owes his rise to power wholly to 
inside political connections, will try to reverse some of Russia's hard-won 
democratic freedoms. 

``I think Putin is dangerous for democracy,'' Yavlinsky told a news 
conference earlier this week. Putin says he will respect individual freedoms 
while rebuilding the authority of the state. 

Yavlinsky told NTV independent television on Friday that, whatever the 
outcome of Sunday's poll, he would try to rally Russia's liberal forces. 

The other main liberal group apart from Yabloko in the Duma, the Union of 
Right-Wing Forces, has stopped short of backing Yavlinsky's presidential bid 
but says it wants him, not Zyuganov, to challenge Putin in any second round. 

In an unexpected boost for Yavlinsky this week, the Kremlin's former 
astrologer, Georgy Rogozin, predicted that the Yabloko leader, not Zyuganov, 
would be runner-up to Putin. 


Date: Fri, 24 Mar 2000 
From: (Ray Thomas)
Subject: Our speculators (afferisti) have sharp brains

This title comes from an article in the Russian language fortnightly London
Courier (page 4 issue 13-16th March). The article comprises an interview
with conducted by B Shimanovski with Victor Melnikov a former rowing
champion now working in London as zampred of Russia's Central Bank
investigating the outflow of capital from Russia. 

Melnikov explains that in Russia it is easy to set up a firm for foreign
trade. All you need 300 dollars for a deposit and a passport. If you
don't want to use your own you can get hold of a passport from someone who
has died. It is then possible to move vast sums abroad. Investigation of

these firms often leads to moulding gravestones in the Baganovski cemetery.

Who are these scoundrels (gadi) who move the wealth of Russia to the
Seychelles? Melnikov asks.

Melnikov states that the Central Bank formulated two laws last November
before the Duma to make life difficult for these fly-by-night firms. But
they are still with the Duma and meanwhile the outflow of at least a billion
dollars a month continues.

The article goes on to describe three 'classic' ways of moving currency out
of Russia. One method is to undervalue exported goods. Copper, for
example, is exported as broken bricks, and the difference in value goes into
a reliable (dobrotni) offshore bank. Another method is to overstate the
quality of exports and include a penalty clause in the documentation. The
penalty payment goes into the offshore bank. The third classic method is
to set a high credit rate. Melnikov actually displayed to Shimanovski a
document from a British firm offering credit at 50% per year. Under the
guise of interest payments Russian firms can take out millions. 

Melnikov said that the central bank has already come across tens of
thousands of such suspicious contracts in its files. Melnikov summarised
what he had learned from the British government about the struggle against
serious fraud by saying that it is impressive that ways of accomplishing
financial fraud and covering the tracks have real international character.
He added that 'our speculators (afferisti) have sharp brains (cvezhie

This account by Melnikov seems valuable in relating the scale of the outflow
of capital from Russia to some of the mechanisms used. But I wonder if JRL
readers would agree that account indicates that the Russian Central Bank has
not got a clue as to how to stem the flow of capital from Russia? 

Melnikov has been sent downstream and has reported how the river has flown
round or over a series of obstacles. But Melnikov and his employers the
Central Bank take the existence of the river for granted. They do not
question the direction of the flow.

If the Central Bank does not have a clue about this, what hope is there for
Putin? It is easy to imagine that Putin will try to put more obstacles in
the path of the river, and he has declared that he aims to encourage foreign

But has Putin said anything that even shows awareness of the crucial problem
of the outward direction of the flow of liquid capital? It is easy to
imagine that Putin will finger the scoundrels and speculators, but that

would be to accuse dominant sectors of the Russian economy. 

Many of these scoundrels and speculators are doing nothing more than trying
to protect the value of their capital - an activity that is not regarded as
a crime in the West.


Los Angeles Times
March 24, 2000
[for personal use only]
In the West's View, Putin Very Well Could Be the Businessman's Special 
Russia: Foreign investors predict a boom under the autocrat and expect he'll 
impose a little law and a lot of order on the unruly but promising economic 

By MAURA REYNOLDS, Times Staff Writer

MOSCOW--Just days before Russian voters are expected to elect a dour 
autocrat as president, many Westerners share a surprising conviction: A 
little authoritarianism might be just what Russia needs. 
Of course, that's not precisely the way they--or the man likely to be 
voted president Sunday, Vladimir V. Putin--are putting it. 
"No one wants to use the word 'authoritarian' because it doesn't go over 
well," says Alan Rousso, director of the Carnegie Moscow Center think tank. 
"Instead, the language Putin is using and everyone else is using is 'strong 
state.' " 
A strong state is one that can collect taxes, enforce laws, safeguard 
nuclear stockpiles and manage the economy--all things that everyone agrees 
Russia needs. And on this score, nearly everything Putin has said and done 
since he became acting president Dec. 31 matches up with what the West wants. 
"He's sending all the right signals," says Z. Blake Marshall, executive 
vice president of the U.S.-Russia Business Council. "Looking at all the 
evidence, you can build a picture that is quite promising and suggests better 
days are ahead." 
In fact, Putin's economic agenda reads like a foreign investor's wish 
list: simplifying the tax code, legalizing land ownership, enforcing 
shareholder rights, stemming capital flight. And unlike former President 
Boris N. Yeltsin, Putin seems to have the clout with lawmakers to make those 
wishes come true. 
The other major area of direct concern to the West is nuclear safety. 
Putin has already increased contacts with U.S. officials regarding programs 
to safeguard nuclear weapons and other materials, and he has signaled support 
for progress concerning arms control. 
"Under Putin, they seem to be taking these issues as seriously or more 
seriously than ever," said a U.S. diplomat who spoke on condition of 
What no one knows, perhaps even the likely president, is whether, under 
Putin, a "strong" Russia would also be a repressive Russia. 
So far, that's what signs point to. Putin launched a violent war against 
the separatist republic of Chechnya that has killed thousands of civilians, 
and he has made little effort to investigate human rights abuses allegedly 
committed by Russian troops. He has even jailed journalists who report the 
views of Chechen leaders, seeing the writers not as presenting the other side 
but as "betraying" Russia. 
"It's already clear that his instincts aren't democratic," Rousso says. 
"He thinks that when people act in the interests of the state, their rights 
should be protected. But when they don't serve the state, their rights 
shouldn't be protected." 
And who determines the state's interests? 
"Putin, of course," Rousso says. "This shouldn't give us a tremendous 
amount of confidence." 
As a result, Putin has put Western leaders in a bind. How should they 
react if he does all the right things for them but violates the human rights 
of some Russians? 
"In terms of the bilateral relationship, he's doing many things right," 
the U.S. diplomat said. "There are groups who'd like us to make human rights 

the litmus test. But if we do that, we'll sacrifice productive programs for a 
lost cause." 
The upshot is that Western governments have high hopes for Putin but for 
the most part are expressing them quietly. 
Foreign investors, on the other hand, are practically chortling. They 
predict an economic boom and expect Putin to impose a little law and a lot of 
order on his country's promising but unruly economic system. 
"I am personally telling our clients that the time to get in is now," 
says Bruce Bean--a partner with the law firm of Clifford Chance Punder--who 
advises foreign investors. 
In the last year, Russia's economy has risen from the ashes of the 1998 
financial crisis. The country's gross domestic product grew an estimated 3% 
in 1999, a massive improvement over the nearly 5% it fell in 1998. The stock 
market--in effect comatose after the financial crisis--has roared back to 
life, tripling the Russian Trading System index in 12 months. With prices for 
oil and other natural resources high, the nation chalked up a trade surplus 
of more than $30 billion last year. 
"Russia is no longer dangerous for investors," says James Fenkner, a 
strategist with the Troika Dialog brokerage firm. "Putin is coming into a 
beautiful situation. First he inherited the presidency. Now he's inheriting 
an economic boom." 
Moreover, the change in the Kremlin is expected only to accelerate the 
"You need a new face," Fenkner says. "There was too much damage done in 
the past. And in this sense, Putin is the best face we could have, because 
he's not linked to the past." 
In this light, President Clinton's description of Putin last month seems 
uncannily on the mark: "I think that the United States can do business with 
this man." 
In Russia these days, speculation about the future tends to take off 
from two cases--China and Chile--where developing market capitalism took 
precedence over developing democracy. Even Russian liberals express more 
admiration for former Chilean dictator Gen. Augusto Pinochet's economic 
record than concern about his human rights record. 
In fact, after nine years of Yeltsin's volatile leadership, what 
Russians and Westerners appear to crave above all else is political 
"We are confident that Putin will get in, and we believe he will bring 
stability," says Chris Lacey, head of General Motors' regional division here. 
"Whether it becomes more authoritarian, the important thing is what he does 
to legislation. We all need to know what the rules of the game are. What we 
can't have is a situation where the rules are changing all the time." 
Lacey says a deal is "imminent" under which GM would invest hundreds of 
millions of dollars in a Russian auto maker. Putin wants to nearly double the 
scale of such direct foreign investment, to $5 billion, by the end of the 
"With a couple of bold moves this spring, that's possible," says 
Marshall of the U.S.-Russia Business Council. 
Could an authoritarian Putin eventually become a problem for the West? 
Marshall says that point would come if tough measures, such as jailing 

dissidents and censoring the media, started to be seen as signs of the 
state's weakness rather than its strength. 
"Authoritarianism is a problem when it compromises political stability," 
Marshall says. "Actions like that detract from predictability." 
But until that point, the West is likely to sit by quietly--albeit 
uncomfortably--if Putin delivers on his promises in the fields of national 
security and economic reform, even if he also restricts individual freedoms. 
"Let's not be naive. That may happen," the Carnegie Center's Rousso 
says. "Russia absolutely needs a stronger state than the one it has now in 
order to take on the kinds of problems Putin is talking about. The question 
is how far he is willing to take it." 


Paper Implicates Putin In Saint Petersburg Scandal

MOSCOW, Mar 24, 2000 -- (Agence France Presse) An investigative Russian 
newspaper on Thursday implicated Acting President Vladimir Putin in an 
embezzlement scandal dating back to his time as a deputy mayor of Saint 

The bi-weekly Novaya Gazeta said Putin benefited personally from some of the 
22 billion rubles (worth then roughly $4 million) siphoned from the "Trust 
20" construction firm in the mid-1990s.

Contacted by AFP, the Kremlin press service refused to comment on the 
allegations, which resurfaced three days before presidential elections which 
Putin is widely expected to win.

According to the newspaper report, Trust 20 was set up to "build, rebuild and 
repair industrial buildings, buildings and cultural sites in Russia and 

The firm, which was registered by the "Committee for External Relations" 
which Putin chaired, received 23 billion rubles in credits and cheap loans 
from the city budget.

However, only one billion rubles were spent on the intended projects in the 
city between 1993 and 1996, Novaya Gazeta said, citing an investigation by a 
finance ministry department responsible for Saint Petersburg.

Investigators said that $60,000 was spent building a dacha in the Saint 
Petersburg area for Putin. The country home was destroyed by a fire in 1997.

In November 1995, the paper alleged, Putin authorized the disbursement of 415 
million rubles (then worth $90,000) to Trust 20 to cover the reconstruction 
of a Russian Orthodox monastery in Jerusalem.

The actual work cost around $20,000, the paper said.

Putin has previously denied any wrongdoing during his term as deputy mayor of 
Russia's second city. His committee was subject to city council inquiries but 
he was never formally accused of any misdeeds.


Russia favours gradual land reform - Dep PM

MOSCOW, March 24 (Reuters) - The Russian government supports a gradual 
introduction of the right to buy and sell land, Deputy Prime Minister in 
charge of agriculture Vladimir Shcherbak said on Friday. 

``The government is for the adoption of a land code which would say that land 
can be bought and sold, but such transactions should be controlled by special 
laws,'' Shcherbak told a news briefing. 

The constitution defends the right to private land ownership, but Russia has 
yet to liberalise fully the sale and purchase of land. The issue mainly 

concerns agricultural land. 

Acting President Vladimir Putin said earlier this year he may hold a 
referendum on the issue after Sunday's presidential election. 

Shcherbak said that formally, 90 percent of all land already belonged to 
farms or individuals and not to the state. 

``But in fact they are not real landowners, as there is no land code and so 
no opportunity to buy or sell land,'' he said. 

Shcherbak did not elaborate on how the government planned to control land 
transactions, but said any controls could be eased gradually as a market 


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