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Johnson's Russia List


March 28, 2000    
This Date's Issues: 4203  4204   4205


Johnson's Russia List
28 March 2000

[Note from David Johnson:
1. Moscow Times: Charles Digges, Russia's Election: It's A Jungle Out There.
2. Reuters: Seven regional governors re-elected in Russia.
3. Moscow Tribune: Stanislav Menshikov, PUTIN'S ECONOMIC LOCOMOTIVES. They May Work If He Tames Neoliberals.
4. Toronto Sun: Matthew Fisher, New czar faces a daunting job.
Can Vladimir Putin stop Russia's slide into the abyss? Can anyone?

5. AFP: "A murderer is in power": Chechen refugees.
6. Moscow Times: Yabloko, Communists Cry Foul in Elections.
7. OSCE Preliminary Report on election.
8. Winner`s Team.
9. BUSINESS WEEK ONLINE: Paul Starobin and Sabrina Tavernise, President Putin: Friend of Business, Foe of Democracy?
10. Ira Straus: Federal vs "vertical" recentralization - the blind alley in Putin's rhetoric.]


Moscow Times
March 27, 2000 
Russia's Election: It's A Jungle Out There 
By Charles Digges
Staff Writer

Yes, it's a political jungle out there. But it took one young woman a trip to 
the Moscow Zoo to realize just how thick and twisted are the psychological 

"These mandrill monkeys look just like [acting President Vladimir] Putin to 
me, just the way he did in a dream I had the other night," said 22-year-old 
Sonya Ostrovskaya as she stood, slightly stunned, with her 1-year-old and 
hordes of noisy children in the primate house. 

"In the dream, these monkeys - the mandrills - who looked just like Putin in 
a wig and with a dark face - were running up a hill at me," she recounted. "I 
remember thinking the African garb they were wearing could have something to 
do with the Chechen war. Then, one that I suppose was the chief, Putin, came 
up to me. I can't really tell in all decency what he did next." 

Whatever it was, it did not earn the acting president Ostrovskaya's vote. On 
Sunday she checked "against all" on the ballot before heading to the zoo. 

Some might think a trip to the zoo would be a way to get away from politics. 
Not so, thanks to The Moscow Times, which aimed for the lighter side of 
politics by asking zoo visitors Sunday if any of the animals reminded them of 
any of the candidates. Putin as the front-runner was clearly on many minds. 

One woman, a 24-year-old mother with a toddler in tow, said she saw the man 
of the hour in the face of the zoo's horses. 

"Putin has a long nose, like a horse," she said. "He is obedient, he can take 
orders and is easily led around. He is well-groomed, young and - which makes 
him almost the best candidate - a little bit dumb." 

Despite this almost perfect political profile, she said she had voted 
"against all," and had hoped that looking at animals with her son would get 
the election out of her mind. 

"This conversation hasn't helped," she added, as she led her son away. 

The conversation did, however, attract the ire of Nikolai Premen, a pensioner 
who interrupted it. 

"It's heresy for you all to be talking this way and comparing government 
figures to animals," he said, waving a fist while his grandson tugged at his 
coattail. "Your government is higher than animals - you should show some 

Premen was cut off and heckled by an 18-year-old draft dodger - "just off for 
a day at the zoo" with his kids - who refused to give his name. 

"A bloody war in Chechnya is being conducted by something other than 
animals?" he said. "A Duma that has more fist-fights than debates is not a 
bunch of farm animals? Wake up, old man, these animals would be better for 

A few cages down, a group of teenage girls picked up the spirit and were 
comparing an orangutan to former Prime Minister Yevgeny Primakov. 

"With a pair of glasses that would be him," said one. "Cool." 

The orangutan, who had been lolling on his back, tossed his legs in the air 
and over his head, revealing a pink, hairless and wart-covered posterior. The 
girls shrieked. 

"It's Zyuganov," offered Georgy Lardinadze, an assistant zoo keeper. "I'd 
recognize that face anywhere." 

Lardinadze, 49 and a bird-specialist at the zoo, said Communist leader 
Gennady Zyuganov's features could also be recalled in the face of a condor, 
which has a wart between its eyes. 

In the petting zoo, a lonely goat with a long beard stood and bayed as the 
snow fell. An old man who had stopped in front of his cage saw the days of 
perestroika in his call. 

"This goat is like Alexander Solzhenitsyn, always shouting the truth but 
never being heard," said the man, who identified himself only as Grigory 

Perhaps the one animal of the day that was lucky enough to escape any 
political associations was the zoo's new giraffe - a gift from the St. 
Petersburg zoo - whose languorous inspections of the crowd won everyone over. 

"You cannot - you must not - suggest that this giraffe looks like a 
politician," said a film student, who said he was working on a documentary 
film of the animal and declined to give his name. 

"He is innocent and must not be sullied like that." 


Seven regional governors re-elected in Russia
By Maria Eismont

MOSCOW, March 27 (Reuters) - Seven Russian regional governors were swept back 
into office in local elections held alongside Sunday's presidential poll, 
according to official results published on Monday. 

Partial results issued by the Central Election Commission -- after 80 percent 
of the vote was counted -- showed that all seven governors standing for 
re-election had won easily. 

Their winning margins ranged from 57 percent for Nikolai Volkov, the head of 
Jewish autonomous region on the Chinese border, to 91 percent for Alexander 
Filippenkov, the governor of the Sibeiran Khanty-Mansiisk autonomous region. 

Vladimir Putin won outright victory in Sunday's presidential poll. 

During the nine post-Soviet years governors of Russia's 89 regions have 
boosted their influence in the provinces and even challenged some federal 
government authorities. 

Putin, who has vowed to restore order in Russia, says good relations with the 
governors is paramount for an effective central government. 

Many political analysts say he will find it difficult to fight the powerful 
regional bosses, most of whom have managed to consolidate political forces in 
their provinces and hold a strong grip over their economies. 

Apart from the gubernatorial polls, by-elections for the State Duma lower 
house of parliament were also held in several regions. 

In the Far Eastern port of Vladivostok, Viktor Cherepkov, former mayor and a 
bitter opponent of nationalist regional governor Yevgeny Nazdratenko, had a 
strong lead. 


"MOSCOW TRIBUNE", 28 March 2000
They May Work If He Tames Neoliberals 
By Stanislav Menshikov (

Vladimir Putin's presidential term opens in a relatively favourable
economic environment. After eight years of depression, growth has
miraculously re-started. Most of it is so far largely spontaneous and not
due to special stimuli from the government. Drastic devaluation and high
world fuel prices have helped. More importantly, domestic manufacturing is
regaining competitive power in the internal market. Taxes are pouring into
the exchequer and, despite continuing large flight of capital and the
cordon sanitaire imposed by the IMF, foreign currency reserves are rising
and the rouble shows surprising stability. There is more interest from
foreign investors.

The new president has generally been reluctant to dwell in detail about
prospective economic policy. His brief statements, as well as those of his
senior advisers, have been in many ways contradictory and confusing. This
is worrisome because it could indicate undue dependence on well financed
advice that is driven either by narrow self-interest or ideology or sheer
incompetence. In such circumstances, choosing a correct course is difficult
and spoiling economic recovery is easy.

However, Putin does not look like a man who is about to delegate matters to
an "economic tsar", sit back, enjoy high life and dismiss prime-ministers
when things go wrong. From what we see so far, he has his own strong ideas
about the economy and also the political will to have them implemented.
Some of his recent statements point to what could be in store.

To start with, he is not satisfied with slow or moderate growth and wants
it to be fast, "as in China", specifically 7-8, better still 10 per cent a
year. After eight years of negative or zero growth, achieving such a goal
would need a genuine revolution in means of economic governance.
Industrially developed market economies do not normally growth that fast
simply on the basis of free competition and government non-intervention.
Their usual average rate per year is 3, maximum 4 per cent. Faster growth
in such economies leads to overheating, inflation and periodic recessions.
Exceptions are where governments lead the way.

Apparently, Mr. Putin wants more government intervention, as well.
Specifically, he has called for programs to develop low-rent public housing
and for income policies to help expand the consumer sector. He made it
clear that he will oppose any efforts at belt-tightening that would hurt
those who are most in need of social protection. This is contrary to Mr.
Gref's call for "keeping within the real budget" and a clear indication
that he favours supporting aggregate demand rather than the monetarist
concept of balanced budgets and restrictive fiscal policies. So far, so

Putin also believes that Russia's military industrial complex is a priority
sector that "can help out of all problems". He even went into the unusual
practice of specifying that sector's "ten priorities", including
improvement of state orders, expediting innovations, modernising equipment,
better use of foreign currency revenues, etc. What he really means is not
so much expanding armaments production and thus using "bastard
Keynesianism" (pump-priming) to promote general economic growth but rather
a drastic restructuring of the military industrial potential into an
internationally competitive sector which could also supply a growing
economy with first-rate producer equipment and technology. 

A third "locomotive" is seen in protection of domestic industries,
particularly consumer goods and machinery. Putin believes that super-large
machine-building plants set up during the Soviet period should not be
broken up because that would reduce their competitive power. These and
other features will presumably be part of a four-year economic plan to be
adopted in a month or two. The plan would also include details about
proposed tax reduction and other details.

Summing up, one could say that Putin has in mind, at least for the
medium-term, a system of indicative planning to supplement the workings of
the market mechanism. In his understanding, fast structural changes will
not be the result of the famous "invisible hand" but rather of concerted
action guided by the central government.

Assuming that he is serious, how realistic is this approach? First, it
depends on the ability of the government to create a favourable climate for
investment, to drastically reduce capital flight and induce oligarchs and
businesses in general to use their gross profits for productive investment
inside the country. This needs either consensus with the oligarchs or
discipline imposed on them by force. Is the president prepared to impose
that discipline? From Mr. Berezovsky's latest statements, it seems he is
not worried.

Second, the new Putin approach will meet opposition from right-wing
neoliberals who dislike indicative planning and strong government
intervention as a matter of principle. Mr. Yavlinsky has already called
Putin a communist in disguise, and he will probably keep up such rhetoric.
Messrs. Kiriyenko and Chubais have so far supported Putin politically but
will undoubtedly work against his policies in the Duma and inside the
government if he lets them in.

In other words, Putin will have a tough battle on his hands. Will he be
able to tame his two uncertain allies - the "radical reformers" and the
oligarchs? It would be a wonder if he succeeds.


Toronto Sun
March 27, 2000 
New czar faces a daunting job
Can Vladimir Putin stop Russia's slide into the abyss? Can anyone?
Sun's Columnist at Large

MOSCOW -- Vladimir Putin may become the czar of all the Russias as votes in 
yesterday's presidential elections are tabulated overnight. 

Or, if the former spy gets less than half the ballots cast yesterday, he may 
have to wait three weeks to be confirmed in a second ballot as Russia's next 

These are technical points. Putin has had the job of unelected president for 
three months now. He has used this time, and the formidable powers and 
perquisites of the Kremlin, to establish his supremacy over much better known 
rivals who, whatever their shortcomings, have put themselves forward several 
times for elected office. 

How Putin intends to rule is the subject of intense, uninformed speculation 
today. The only one of the Russias where the retired junior KGB operative 
from the former Soviet colony of East Germany has a track record is the 
unhappy southern republic of Chechnya. It has been there, over the dead 
bodies of many Chechen rebels and young Russian soldiers this winter, that 
Putin established his credentials with Russian voters as a patriot. 

The prospect of a retired secret policeman with little other experience as 
head of state should be unsettling to anyone even slightly familiar with 
Soviet history. But Russians are deeply ambivalent about the KGB. Almost 
every family was touched by purges carried out in Stalin's name and the 
abuses of state power practised by the KGB every day during the Khrushchev, 
Brezhnev and Gorbachev eras. Yet many Russians take perverse pleasure in 
Putin's associations with the secret police. 

Russia has little to be proud of vis-a-vis the rest of the world lately, but 
the KGB and its predecessors are widely regarded as organizations which 
function smoothly and, strange as this may seem to outsiders, have their 
heart in the right place. 

Whenever Putin actually sheds the title of acting president bestowed upon 
him by his unpredictable patron, Boris Yeltsin, he faces a daunting job. 
Corruption - by friends of the Kremlin, petty bureaucrats and street cops - 
permeates every corner of Russian life. 

Economy improving 

The Russian economy appears to be doing slightly better these past few 
months, but this is almost entirely due to the pathetic value of the ruble 
and a big rise in oil prices engineered by OPEC. Most factories produce 
absolutely nothing. As they are rusted and rotten and chronically starved for 
investment, this dire situation will not change any time soon. 

Most official statistics are useless although those which chart a huge drop 
in public health standards and in longevity are a fair guide as to how awful 
the situation is. The work force is dispirited and chronically unemployed or 

Many of the best and brightest - and not just the top hockey and tennis 
players, ballerinas and computer whizzes - have left for the West. Many of 
those they left behind continue to plot their own escapes. 

Moscow remains an island of relative prosperity, but this veneer long ago 
began to wear thin. The Metro may still look lovely and work brilliantly, but 
most Muscovites are engaged in a daily struggle to make ends meet. Beggars 
are as ubiquitous as Mercedes-Benz sedans with dark windows and drivers and 
shop assistants with loathsome manners. 

Ruinous state 

To leave Moscow is to step off a cliff. The hinterlands are in a ruinous 
state. Environmental disasters loom everywhere. Passenger planes fall from 
the sky. Alcoholism is as endemic as bitterness. Sexually transmitted 
diseases are rampant. Antibiotics are scarce. Doctors have to be bribed to do 

Local robber barons can be worse than the murderous crooks who have 
gleefully plundered Moscow. The Soviet infrastructure, which was never much 
good, is disintegrating. Army conscripts scavenge for food and sell their 
weapons or anything else the military has of value that can be taken away. 

Families with a combined income of $100 a month consider themselves 
fortunate while so-called New Russians armed with guns and wads of greenbacks 
as thick as bricks salt away billions of dollars outside the country. 

Yet almost every Russian remains convinced his nation is great and should be 
accorded the international respect and veneration all great countries are 
due. Or so they say. 

If Russians really believed this there would be no need to blindly trust a 
complete unknown such as Vladimir Putin with the presidency. His dramatic 
emergence as the potential saviour of Russia is an act of desperation. 

Russians understand they are almost out of last chances. 


"A murderer is in power": Chechen refugees

SEVERNY CAMP, Russia, March 27 (AFP) - 
"A murderer is in power" Chechen refugees muttered angrily as Vladimir Putin 
triumphed in Russia's presidential elections Monday, as they braced for more 
bombs and massacres but no end to the war.

For them, there was no voting either in the Severny camp, where displaced 
Chechens are crowded into train carriages, or the nearby Sputnik tent city in 
the valley below.

"There weren't any ballot boxes, before or even during the poll, and no one 
came to ask us to go and vote, although we all registered on dozens of 
lists," said a camp official, Sultan Tambulatov. "They don't need us."

Out of three camps in neighbouring Ingushetia near the border with war-torn 
Chechnya, only Karabulak had a polling station set up in a tent for Sunday's 
vote. "For the cameras," refugees snorted.

Dismissing the election as undemocratic, the Chechens who fled here from 
Russian bombing expressed little surprise at Putin's first-round triumph with 
nearly 53 percent of the vote.

"He launched the war for the electoral campaign. He is killing Chechens, and 
the Russians support him for that. We expect only blood and murder," said 
Ruslan Dadayev, 32.

A virtual political unknown when he was appointed as prime minister last 
August, Putin has seen his popularity soar on the strength of Russian 
victories in Chechnya over the past six months.

All Chechens interviewed said they believed the hawkish Russian leader had no 
reason to end "his war" or to enter into peace talks with the elected Chechen 
President Aslan Maskhadov, who Moscow no longer recognizes.

"He's a murderer and he is in power. What on earth can we expect from him, 
you know yourself," cried out Lydia Satuyeva, 40.

Kremlin last week once again ruled out any negotiations with Chechen 
"bandits," even though the day before Putin had appeared to offer an olive 
branch, suggesting he was prepared to launch some form of talks.

"They are destroying towns, killing civilians in the villages. It's not an 
anti-terrorist operation. It's genocide," charged Apti Ibragimov, 45.

"Putin has got his target and he won't let go. He wants a Chechnya without 
Chechens," he added.

In the run-up to the election, Putin said once the war was over, he could 
introduce direct presidential rule for two years, promising to restore the 
economy and make a normal life possible in the shattered republic.

But the future is not something Chechens can imagine. Their memories of 
smouldering houses and the pain of loved ones dying before their eyes are too 

"Look how I live," sobbed Liuba Dzhabadova, showing her only worldly 
possession, an old bag where she stuffed a few things before fleeing her home

"What am I do to, go back to Grozny where everything is destroyed? Where can 
I live there and what could I eat? Even here (at the camp) they don't help 
us. I expect nothing from Putin, he's given us only bombs."


Moscow Times
March 27, 2000 
Yabloko, Communists Cry Foul in Elections 

International observers who watched voting across the country said late 
Sunday no serious fraud or violations in election procedures had been 
uncovered so far. 

But campaign staffers for liberal Yabloko leader Grigory Yavlinsky and 
Communist candidate Gennady Zyuganov cried foul Sunday night, saying they had 
evidence of blatant violations in several regions. 

Eduard Bruner, who heads an Organization for Security and Cooperation in 
Europe observer mission of about 300 people, said the elections had been 
"well and correctly organized." 

But he added that a final evaluation could only be made "after all the 
information and analyses had been received from international observers 
located throughout Russia's regions," Interfax reported. 

Bjorn von der Esch, who heads the observer mission from the Council of 
Europe's parliamentary assembly, told Russian news agencies Sunday night the 
elections were "absolutely legitimate" and had been conducted to 
international standards "openly and peacefully." 

About 1,000 international observers from organizations including the OSCE, 
the Council of Europe, the European Union and nongovernmental groups were at 
polling stations to make sure falsified votes were not stuffed into ballot 

Some observers have said they were more concerned by unbalanced media 
coverage than by procedures at polling stations. 

Both Zyuganov's and Yavlinsky's campaign staffs said they had evidence of 
widespread fraud. 

Yavlinsky's team told Interfax that election commission officials in 
Vladivostok, Far East, had refused to provide their observers with copies of 
the voting protocols, the document that tallies the results. 

In other regions, like Yakutia, Yavlinsky observers were refused entry to 
watch the vote count, Sergei Loktionov, a spokesman for the Yavlinsky 
campaign, said by telephone. 

Loktionov said their observers also had evidence of unused ballots being 
filled in by officials after polls had closed, and then counted as part of 
the official result in three polling stations in the capital of Tatarstan, 

He said they had received information about similar fraud in the Penza 
region, Irkutsk and Yamal-Nenetsk. 

Yavlinsky's campaign coordinator, Vyacheslav Igrunov, said they would examine 
the evidence Monday and decide which violations were serious enough to 
warrant legal action. 

"I think such violations will occur, especially in national republics that 
have harsh, totalitarian regimes," he said at Yabloko's head office on Novy 

Communist Party secretary Sergei Potapov claimed party officials had noted 
that 3.4 million extra ballots had been printed illegally in Tatarstan. 

Communist observers were refused entry to several Dagestani polling stations, 
while in Moscow factory workers were forced to vote for acting President 
Vladimir Putin by their superiors, Potapov said at a news conference at the 
Zyuganov headquarters Sunday night. He refused to name the factories. 

He said the Communists also questioned the results in Chechnya, where "there 
was no opportunity [for voters] to express their will freely or to vote 

Zyuganov said on NTV television he would refuse to recognize the results of 
the elections until his team had carried out their own parallel vote count. 
He said that in the 1996 presidential election, "massive violations" had been 
uncovered but nobody had been charged or punished. 

"We all know the tactics of fraud and we will fight them," he said, before 
leaving his headquarters. 


OSCE Preliminary Report
Organization for Security and Co-operation in Europe
Office for Democratic Institutions and Human Rights
27 March 2000 
International Election Observation Mission
Russian Federation - Presidential Election

MOSCOW, 27 March 2000 - The 26 March 2000 election of the President marks 
further progress for the consolidation of democratic elections in the Russian 
Federation, concludes the International Election Observation Mission (IEOM).

The Central Election Commission (CEC) administered the process professionally 
and independently. The election took place under a new law that is consistent 
with internationally recognized democratic principles. The law provides the 
framework for pluralist elections and for a significantly high level of 
transparency in all phases of the electoral process. However, during the 
campaign some concerns emerged.

The IEOM is a joint effort of the Organization for Security and Co-operation 
in Europe (OSCE) Office for Democratic Institutions and Human Rights (ODIHR), 
the OSCE Parliamentary Assembly (PA), and the Parliamentary Assembly of the 
Council of Europe (PACE). Ms. Helle Degn, President of the OSCE/PA and OSCE 
Chairperson-in-Office's Special Representative for the presidential election, 
leads the OSCE Election Observation Mission. Ambassador Edouard Brunner leads 
the OSCE/ODIHR long-term observers. Mr. Björn von der Esch leads the PACE 

On election day, 11 candidates were on the ballot. However, the popularity of 
the acting President and the results during the 1999 State Duma election 
limited the field of candidates. Notwithstanding the CEC effort to enforce 
the law vigorously, candidates, campaign organizations and supporters 
circumvented the law in some cases. Additionally, volunteer campaign 
activities of State and regional administration officials on leave of absence 
raise concerns.

While the media in the Russian Federation remain pluralistic and diverse, 
independent media have come under increasing pressure. Moreover, as during 
the State Duma election, important segments of the media, both 
State-controlled and private, failed to provide impartial information about 
the election campaign and candidates.

The CEC decided to conduct the presidential elections in 12 of Chechnya's 15 
districts and prepared all technical requirements. However, standard 
conditions for elections do not exist there. In particular, election campaign 
activities did not take place, the population had limited access to the 
media, they had limited freedom of movement, and the potential for 
intimidation and fear could not be ruled out. On election day, the IEOM did 
not observe the proceedings in Chechnya or the neighboring regions, though 
the CEC invited observers.

On election day, the 69% reported turnout was a confirmation of continued 
voter confidence in the electoral process. The polling in over 93,000 
precincts was administered in accordance with the law. Observers rated their 
performance very high across the country. The performance of commissions 
during the counting of votes was rated lower as cumbersome procedural 
requirements were circumvented in order to expedite the process. The 
irregularities noted in the polling and the vote count did not appear to have 
an impact on the outcome of the election.

With less than a decade of democratic development in the Russian Federation, 
political parties and an environment for constructive political debate have 
yet to mature. Viewed in this context, the 26 March 2000 presidential 
election, while in general meeting the country's commitments as an OSCE 
participating State and as a member of the Council of Europe, revealed some 
weaknesses. Chief among these are pressure on the media and the decline of 
credible pluralism.

The International Election Observation Mission wishes to express appreciation 
to the Presidential Administration, the Ministry of Foreign Affairs, the 
State Duma, and the Central Election Commission of the Russian Federation for 
their assistance and cooperation during the course of the observation.

The International Election Observation Mission issued a statement of 
preliminary findings and conclusions before the final certification of the 
election results and before a complete analysis of the IEOM's findings.

The preliminary statement is based on the findings of the OSCE/ODIHR Election 
Observation Mission established on 8 February 2000 in Moscow and 12 regions 
throughout the Russian Federation. Their findings include the pre-election 
preparations, the election campaign, and the media. The statement is also 
based on the election-day findings of the International Election Observation 
Mission's more than 380 short-term observers from 32 participating States, 
including more than 75 parliamentarians from the OSCE Parliamentary Assembly 
and the Parliamentary Assembly of the Council of Europe, who visited some 
1,700 polling stations across the country.


March 27, 2000
Winner`s Team

Some of them are already known both in Russia and in the world. Others 
remain just as enigmatic as their patron. Gazeta.Ru gives you a list of names 
and positions of the people most closely associated with Russia`s freshly 
elected President. 

Aleksey Kudrin – First Deputy Minister of Finance. After Putin`s 
victory he can become First Deputy Premier, at least. The two worked closely 
while with St.Petersburg City Council, and both moved to Moscow. 
Dmitry Kozak – Head of Government Staff, aged 41. Graduated in law 
from Leningrad University. Former advisor to Leningrad Chief Attorney. 1990 
moved to Legal Department of the City Council. 1996 resigned along with Putin 
after Anatoly Sobchak’s defeat, only to return to office under Yakovlev. 
Falling out with the new mayor, practiced as a private lawyer. After becoming 
premier, Putin gave Kozak one of his first phonecalls, which Kozak took as a 
“recruitment”, in his own words, and promised “to serve until the elections, 
whatever happens”, although stressing that he does not strive for power. If 
offered to head Putin’s administration, vows to try and refuse. 
Igor Sechin – Deputy Head of Presidential Administration. Philologist. 
Worked as military interpreter in several countries. Never parted with his 
boss since 1991, when Putin appointed him head of his staff. Sat in Putin’s 
St.Petersburg office for 5 years. When Putin moved to Moscow to become deputy 
to Borodin, he took loyal Sechin along. After Putin became premier Sechin 
turned his chief secretary, then deputy head of government staff. Viktor 
Cherkesov – First Deputy Director of the Federal Security Service. One of the 
few people whom Putin trusts (although those who know the latter well have a 
joke that his main principle is not to trust anyone). Cherkesov and Putin 
were mates at the Law Faculty of the Leningrad Univercity, and both joined 
the Security Service. 1998 Cherkesov moved to Moscow and ran for the post of 
FSS Director, but lost it to Patrushev, and their relations are still tense. 
During Putin’s presidency is likely to go up and could head one of the “power 
structures”. Known to colleagues as a very tough and ambitious character. 
Democrates accused him of harassing dissidents, but the accusations were not 
proved. On the eve of the elections he was sent from FSS to the Center of 
Strategic Studies which works for Putin. 
Leonid Reyman – Minister of Communication. An acquaintance of Putin’s 
since the early 90s. Although regarded as Stepashin’s man in the government, 
he accompanies Putin in his travels. Allegedly has better grasp of state 
affairs than some deputy premiers. Could end up deputy or first deputy 
Nikolay Patrushev – Director of FSS, aged 49. Joined Leningrad 
regional KGB in 1974. 1992-4 Karelia’s Security Minister and local FSS chief, 
then moved to Lubianka. After Putin resigned as head of the President’s Chief 
Control Department in 1998, he recommended Patrushev for the post. When Putin 
became Director of FSS, he brought Patrushev back as his deputy. Patrushev 
acted as FSS chief during Putin’s absence and finally succeeded him in 
office. Small wonder he is known as Putin’s man in the Lubianka. 
Sergey Ivanov – Secretary of the Security Council. Same birthplace and 
age as Putin. Both studied at Leningrad Univercity (although Ivanov was with 
the Philology Faculty), both joined the KGB and the intelligence service. 
Ivanov worked for KGB since 1976 and had a spell in Sweden and Kenya. After 
Putin headed the FSS, Ivanov was made his deputy in August 1998. As premier, 
Putin persuaded Yeltsin to appoint Ivanov head of the Security Council. 
Ivanov has at his disposal the Kremlin study where only Kokoshin and Putin 
himself were allowed to work. Colleagues say he was not carried away by his 
meteoric rise and describe him as an even-tempered and intelligent man who 
never forgets old friends (he has been in touch with many of them for 20 or 
25 years, regardless of their current posts and usefulness to himself). 
Yury Shevchenko – Minister of Health. An old and good acquaintance of 
Putin’s, Shevchenko helped Sobchak to flee to France, having diagnosed a 
heart attack, which he still claims to be true. Potential deputy premier for 
the social sphere. 
Dmitry Medvedev – Deputy Head of Presidential Administration, aged 34. 
Another law graduate, Leningrad U. Moved to Moscow on Putin’s request. Could 
head Putin’s elections staff instead of Chubais or Berezovsky. 
Vladimir Kozhin – Manager of President’s Affairs, aged 40. Graduated 
from Leningrad Electrotechnical Institute, then worked for regional Komsomol 
committee and headed the joint Soviet-Polish venture Azimut International. 
Since 1993 he directed the St.Petersburg Joint Ventures Association, when he 
met Putin. In 1994 Kozhin headed the North-Western regional center of the 
Federal Currency and Export Control Service (CEC), while Putin supervised the 
currency flow as deputy governor. They worked together for over 2 years. As a 
result, one of Putin’s first steps as premier was to bring Kozhin to 
St.Petersburg as head of CEC in September 1999. Kozhin’s position in the 
security service is unknown, although experts say CEC is controlled by it, 
and those who work there usually have shoulder straps. 
German Gref – First Deputy Minister of State Property, head of Putin’s 
Center of Strategic Studies. Moved from St.Petersburg to Moscow in 1998, as 
one of the most promising members of the team. He is in charge of devising 
Russia’s development strategy for the next decade. 
Viktor Ivanov – Deputy Head of Presidential Administration, aged 40. 
Formerly headed the Economic Security Service of the FSS in St.Petersburg. As 
FSS director, Putin invited him to Moscow, and Ivanov became head of internal 
security department, then deputy director. Succeeded another secret service 
man, Makarov (allegedly a Berezovsky supporter), as Voloshin’s deputy. He has 
control over hundreds of high-ranking government officials. Putin is said to 
value this Kremlin post very highly. 
Yury Zaostrovsky – Deputy Director of FSS. A Muscovite, aged 44. Like 
his father, an intelligence man, he quit the service after August 1991, took 
up business and became deputy head of Tveruniversalbank. Brought back to 
government service by Putin, and when the latter moved to Lubianka became 
head of its Economic Security Department. 
Aleksandr Abramov – Deputy Head of Presidential Administration. Former 
vice president of Alfa-Bank, and a leader of the influential group rivaling 
the St.Petersburg party. Besides, there are others in Putin’s outer circle: 
Nikolay Bobrovsky – Deputy Head of Premier’s Secretariat. Attended 
Krasnoznamenny Institute along with Putin. 
Taymuraz Bolloyev – director of Baltica Brewing Co., whose great 
success has to do with Putin’s influence. Both also like wrestling. 
Sergey Golov – Deputy Head of Foreign Department in the Department of 
Presidential Affairs. Another of Putin’s secret service colleagues. 
Valery Golubev – head of Tourism Committee of the St.Petersburg City 
Council. Also a secret service man who served with Putin and was invited by 
him to Smolny. 
Vladimir Yakovlev – head of Culture Committee of the St.Petersburg 
City Council. Namesake of Mayor Yakovlev. 
Sergey Chemezov – head of Promexport. Worked with Putin for FSS. 
Sergey Alekseyev – director of Lenexpo exhibition center, the biggest 
in St.Petersburg. 
Igor Spassky – director of a defense project institute in 
St.Petersburg, academician. 
Nikolay Khrameshkin – director of Leningrad Impex. 
Vladimir Shamakhov – head of the North-Western Department of the State 
Customs Committee, an old acquaintance of Putin’s. During the latter’s visit 
to St.Petersburg the two had a long meeting, taken by some as a portentous 
sign for Mr Vanin, current head of the Customs Committee. 


March 27, 2000
[for personal use only]
President Putin: Friend of Business, Foe of Democracy?
His tax-reform plans have investors cheering, but the former spy's past 
worries some
By Paul Starobin and Sabrina Tavernise in Moscow

Can Vladimir V. Putin, the newly elected Russian President, save a fragile 
democracy beset by organized crime, government corruption, and no clear, 
evenly applied economic rules? Russians can only hope. "I want to see an end 
to this mess," said Moscow resident Sergei Ryabtsov, 21, as the elections 
took place on Mar. 26. With 96% of the vote counted, Putin led Communist 
Party leader Gennady Zuganov, 53% to 29%.

The business community, including foreign investors, likewise cheered the 
results. They, too, are hopeful that Putin, 47, will provide strong, vigorous 
leadership, so notably absent in the tenure of his frequently ailing 
predecessor, Boris Yeltsin. "We're all so tired by the economic chaos over 
the last eight years," says Bill Browder, manager of the $450 million 
Hermitage Fund in Moscow. The Russian stock market was up 4% in midday 

Although Putin has not yet named a Prime Minister -- and can't by law until 
after his inauguration the first week of May -- his program is already 
beginning to take shape. One of the first challenges he'll tackle is Russia's 
archaic tax system. The government plans to cut overall taxes on businesses 
by 20%. Putin's Finance Ministry plans to submit legislation to the Duma that 
would slash payroll taxes and expand allowable business deductions, such as 
advertising expenses, as sought by foreign investors.

SENDING A MESSAGE. Then there's the vexing question of the oligarchs. A small 
number of business titans control enormous pools of capital, and they often 
seem to be a law unto themselves. Since Yeltsin tapped Putin as Acting 
President at the end of last year, Putin has repeatedly said in his 
administration the oligarchs will be treated like everyone else. His first 
target may be Boris Berezovsky, the controversial magnate who has used his 
stake in ORT, Russia's state-owned television station, as a political power 
base. Some influential Putin supporters are encouraging him to fire ORT's 
management as a signal to Berezovsky that he should stop meddling in politics.

Berezovsky, never subtle, is resisting. In a preelection interview with the 
Russian daily Vedomosti, he said Putin's promise to strip the oligarchs of 
political power was admirable rhetoric "for the voters" but unrealizable. "It 
will never happen," he declared. However, Vladmir O. Potanin, a big Putin 
backer with enormous holdings in Russian banks, oil, and metals companies, 
says he'll keep his nose out of Kremlin decision-making. "If we believe in 
Putin, we should let him set the rules for everyone," Potanin told Business 
Week Online in an interview four days before the election.

No less challenging is Putin's bid to bring Russia's unruly regions under 
control. Large patches of the country are now under the control of governors 
who act like feudal barons, ignoring orders from Moscow and forging 
alliances, often corrupt, with local business leaders. Putin has started to 
name his own presidential representatives to the regions, replacing lackeys 
who've fallen under the sway of governors.

Some of his advisers are encouraging him to go further by ending the direct 
popular election of governors and appointing his own team. Putin also plans 
to make federal courts less dependent on the regions by providing full 
federal funding for the legal system. Courts now receive much of their funds 
from regional administrations.

TOUGH ON CRIME. Yet as much as Russia needs order, Putin's plans and own 
comments have inspired concern among liberal political activists, Russian 
journalists, and others that he is indifferent to -- or even disdainful of -- 
democracy. An ex-KGB agent who previously headed its successor agency, the 
Federal Security Service, Putin has described the Soviet Union as having 
collapsed from internal "laxness." He is now enlarging the role of the 
security police -- which he says can help combat crime. But this has critics 
fearing a return to the insidious spy culture of the Soviet period.

Meanwhile, Putin has refused to permit an outside investigation of widespread 
charges of human-rights violations in Russia's campaign to subdue the 
breakaway republic of Chechnya. He has branded journalists who have reported 
critically on the Russian military operation as enemies of the state. 

Western governments, including the U.S., are wary of Putin's authoritarian 
tendencies. But for now, such concerns are outweighed by the belief that 
Russia's disorder poses a greater threat to the world. Look for Russia to get 
its long-sought deal with the Paris Club group of creditor governments on 
reduction of its $40 billion in Soviet debt. The West is crossing its fingers 
that Russia's chaotic moment has found its master.


From: (Ira Straus)
Date: Sun, 26 Mar 2000
Subject: Federal vs "vertical" recentralization - the blind alley in Putin's

Vladimir Putin may well end up carrying out a traditional pyramid form of 
recentralization, rather than the modern federal form. Modern federation 
would serve Russia much better for the future, but it requires more elaborate 
thinking. Much of Putin's rhetoric of a "vertical" executive hierarchy 
suggests a reversion to the pyramid model. Indeed, when he talks about 
centralization being a part of the Russian genetic code, he betrays a 
propensity to primitivity and over-simplification in this sphere.

Hierarchical language is appropriate to a pre-modern pyramid idea of 
authority, in which central power farms out its authority and enforcement to 
local and intermediate bosses. The emphasis on the "vertical" element in the 
hierarchy goes further; it is reminiscent of the totalitarian secret police 
attempt at streamlining the pyramid and enhancing the linear-vertical element 
in it. This was done in the 20th century in the hope of keeping the middle 
powers in line, restraining the corruption inherent in a pyramid-farming 
system of power, and preventing the pyramid from taking its natural path of 
sagging in the middle and slackening at the base; but it came at a high cost. 
The vertical-hierarchy language also shows a lack of appreciation for the 
integration of the executive authority with the legislative authority at each 
level of government; an integration which is the basis for the deep 
integration of executive authority with society, and thus for the 
effectiveness of executive authority.

The executive-pyramid form of recentralization would be a bad mistake. It 
would be the shortest path out of the pot back into the frying pan (and this 
time it would be a frying pan without the enthusiastic ideology that used to 
give the system its modicum of legitimacy and staying power). Ten years ago 
Russia made the exact opposite leap. The poor fish seems to be leaping back 
and forth from one nightmare to the other, unable to stay or survive in 
either place, but also unable to see any other place to leap.

The West could contribute to preventing this mistake, by underlining the 
point that federalism is a third option, not to be confused with 
decentralization. Modern federation has been first of all about building a 
strong efficient union (as in the Federalist Papers and the Federalist Party, 
or for that matter, the preamble of the Constitution), not about 
decentralization; although it fashions its union in a form that respects 
local and provincial state structures in their legitimate roles. It provides 
a much more efficient and sustainable model for central power and a more 
viable alternative to disintegration than the old pyramid model. 
Disintegrative decentralization belongs to the categories of feudalism and 
classical confederalism, not modern federalism.

Daniel Elazar, dean of federalism studies in the West, has formulated this as 
follows: decentralization and centralization are opposite sides of the wrong 
coin; the federalist coin is a matrix model, distributing authoritative 
competences to the different levels of government and society. Elazar 
deserves some credit for saying this, since it flies in the face of some 
decentralist-confederalist prejudices of his own. He calls the federalism 
path "non-centralization"; a nice term, although it too may not be precise, 
since it is also "non-decentralization", and a considerable strengthening of 
central structures and of centripetal integrative forces is in reality 

Executive structures, including above all the military and the law, do indeed 
have their vertical/pyramid-style hierarchies in modern federations. However, 
these are separate functionally specific hierarchies. They are not 
general-purpose executive hierarchies that rule diffusely over the local 
chief executives or bosses, as would be done in a traditional pyramid; 
although they are available in reserve to do so during a temporary local 
state of emergency, as Yavlinsky is proposing for Chechnya, or as was done 
sometimes in radical Reconstruction after 1865 in the South of the U.S.

Unfortunately, instead of preaching this complex understanding of modern 
federalism, Westerners have too often equated federalism with 
decentralization, with the practical result of identifying federalism with 
the chaotic decay of central authority that Russians have been experiencing. 
This has encouraged Russians to go on believing in the old false dichotomy -- 
either feudal-federal decentralization-disintegration, or else autocratic 
vertical-pyramid centralization. 

I want to give credit to some Western advice, which has been properly 
directed toward building up the central Russian state capabilities for the 
appropriate Federal functions. However, too much of Western rhetoric and 
advice has been directed simply at tearing down centralization. This is where 
the main impression has been made. It coincides with the easy assumption on 
the part of Russians that the interest of the West is in a weak decentralized 
or broken-up Russia. Which in turn encourages Russians to place themselves 

There are also a number of Russians who understand what federalism is, and 
some of the Russian discussion on how to improve their federalism has been 
sound. However, this cannot make much of a dent as long as the vast bulk of 
the public rhetoric and political debate -- reinforced by the actual power 
struggle, by the behavior of regional power centers, by the tit-for-tat on 
both sides, and by Western rhetoric as well -- centers around the crudest 
old-style centralist-decentralist dichotomy.

I do not want to give the impression that correcting this assumption would by 
itself eliminate the struggle for power. Federations are always built through 
struggle for power as well as through deliberation on the common good. But a 
sound conception of the common good is a big help! "Everyone knows", or at 
least every cynic thinks he knows, that the struggle for power is the only 
thing that is going on, and that the choices are between general 
recentralization and general decentralization. Gross existential struggles 
for power always favor the most primitive rhetoric about what is at issue. 
However, the actual shape of the outcome depends on the degree of 
sophistication of the ideas that people have had in their minds about the 
forms of centralization and decentralization. This affects the entire future 
structure and viability of the society.

The mainstream of modern sociology, represented by Talcott Parsons, is built 
on the distinction between specific-univeralistic authority of modern 
society, with its rule of law and its functionally specific bureaucracies, 
and the diffusive-particularistic authority of traditional society, with its 
personal status and general-purpose bosses. Bernard Yoh (Yoh Shing-tsu) 
contrasted the 3-D pyramid model, the attempted 1-D linear-progressive 
reduction of the pyramid, and the fractal-dimensional form of modern society 
(with its mutual-contract branchings off, with a number of independent 
corporate pyramids that relate contracturally, and with a common authority 
which continues to use pyramids but for limited functions). But these models 
are far outside of the range of public debate today, and are intended for the 
clarification of academic and elite discourse. Yoh, in keeping with the 
Chinese instinct for pictographs, at least had the virtue of inventing a 
language-imagery that is publicly comprehensible and so might some day get 
spread more widely. Meanwhile, what can reasonably be hoped for on the public 
political level is something more modest; e.g., that the distinction between 
a strong federal central authority and a general-purpose centralization of 
society is something that could be understood by society and by political 

A conception of federation instead of vertical executive hierarchy would not 
eliminate the struggle for power in Russia between Center and regions. Nor 
would it eliminate all of Putin's efforts at vertical executive 
centralization as tactics within that struggle. However, it would change the 
goal and some of the rhetoric of the struggle, and it would probably change 
some of the immediate tactics as well. It would make it harder to proceed 
with eliminating local and regional elections. Conversely, it would enable 
regional governors to align themselves with a goal of retaining autonomy in 
their proper sphere and integrating with their society below for carrying out 
their proper functions, rather than with a goal of serving as general-purpose 
appointed regional satraps of the Center.

Ideas have consequences, as does the lack of adequate ideas. The West might 
still be able to correct its part in the oversimplifications and outright 
mistakes that are prevalent in the ideas on central power in Russia. In this 
way it could avoid contributing to far worse practical mistakes.


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