April 2, 2000    
This Date's Issues: 4218 • 4219 • 4220

Johnson's Russia List
#4220
2 April 2000
davidjohnson@erols.com

[Note from David Johnson:
1. The Independent: Helen Womack, Putin told: curb 'odious oligarch' 
2. Esther Dyson: Economic policy.
3. Washington Post: Jim Hoagland, Racing The Clock.
4. Marko Beljac: "The Russian Mind" 
5. Los Angeles Times: Robyn Dixon, After Election, Russians Souring 
on Chechen War.
6. Newsday: Michael Slackman, An Ecological Disaster. War leaves 
Chechnya with polluted soil, water.
7. The Russia Journal editorial: Show your teeth.
8. Los Angeles Times: Raymond Garthoff, Putin's Unformed Policies 
Promise Measured Change.
9. New York Times: Celestin Bohlen, Putin's Team Hammers Out a Plan 
for Russia's Economy.]

******

#1
The Independent (UK)
2 April 2000
[for personal use only]
Putin told: curb 'odious oligarch' 
By Helen Womack, in Moscow 

No sooner was Vladimir Putin elected last week than speculation arose as to 
how the new Russian President might treat the man demonised as the "modern 
Rasputin" and "the most odious oligarch": Boris Berezovsky. One possibility 
seemed to be that if Mr Putin began changing the system of crony capitalism 
that flourished under Boris Yeltsin, he might allow the media mogul to go 
into exile abroad. 

The day after the election, Mr Berezovsky, owner of Kommersant newspaper and 
an influential shareholder at ORT, the first television channel, appeared at 
Moscow's luxurious Baltschug-Kempinksi Hotel for an interview with the BBC. 
Since then, he has kept a very low profile. He was absent from the State 
Duma, where he is a deputy with immunity from prosecution. "He is on a 
business trip outside Moscow," was all that his secretary would say. 

Speaking to the BBC, Mr Berezovsky welcomed Mr Putin's election, predicting 
that it would be good for Russians and foreign investors alike. As for his 
own plans, the tycoon said that he did not intend to "run" from his country. 

However, he was quoted as saying in an interview with Interfax news agency: 
"In response to Putin's proposal on giving up ORT, I asked for the 
possibility for myself, as an oligarch, to be able to leave the country 
peacefully. Putin was not against my departure from Russia." On the subject 
of the fate of the crony capitalists, the daily Izvestia quoted a senior 
official in the Kremlin administration as saying: "We will send the most 
annoying gentlemen for indefinite leave to some island." 

Those who suspect that Mr Putin, far from being the avenging policeman, is 
interested only in a cosmetic clean-up of the corruption bequeathed by his 
patron, Mr Yeltsin, believe he might make scapegoats of minor figures. 
Alternatively, he might give meaningless "punishments" to major figures such 
as Mr Berezovsky. 

If Mr Berezovsky does go abroad, his exile could be part of an elaborate 
game. For it is interesting that one of the newspapers that has given most 
prominence to calls for Mr Putin to curb Mr Berezovsky is in fact owned by Mr 
Berezovsky. Writing in Nezavisimaya Gazeta, the political scientist and 
former presidential aide Andranik Migranyan urged Mr Putin to increase state 
control over ORT while he was still in a strong position following his 
election victory. 

Obshaya Gazeta commented: "It might be natural to begin restoring order with 
the liquidation of some odious oligarchs of the Berezovsky type. The people 
would adore him [Putin] ... the élite [the bureaucracy] would be glad to get 
rid of an ambitious parvenu with whom everybody is bored." 

It will be from the make-up of the new cabinet, expected after Mr Putin's 
inauguration in May, that we will see which, if any, oligarchs are still in, 
and what power they retain. 

******

#2
From: edyson@edventure.com (Esther Dyson)
Subject: Economic policy
Date: Sun, 2 Apr 2000 

David - 

I would love to hear some informed commentary about economics textbooks, or
the treatment of economic policy in any context.

******

#3
Washington Post
2 April 2000
[for personal use only]
Racing The Clock
By Jim Hoagland

Out of different perspectives and needs, the White House and the Kremlin have 
reached rough agreement on a calendar and an agenda for the Clinton-Putin 
era, an overly elaborate label for one of history's most momentous blind 
dates.

The 10 months they will share as elected leaders of the world's two most 
militarily powerful nations provide scant time for Bill Clinton and Vladimir 
Putin to become acquainted, test each other and decide if their interests and 
national goals coincide or compete. Their careers intersect as U.S.-Russian 
relations are in a trough, but not in a crisis. The fading sun of the 
American political universe and the Kremlin nova might make small talk, let 
Putin assess Al Gore and George W. Bush as prospective mates and say farewell 
politely on the doorstep.

But neither history nor Clinton's restless ambition will let that happen. He 
and Putin will race the clock and attempt to thrash out big decisions on arms 
control, the Balkans and the aftermath of the Chechen war as this year winds 
down. Their agreements, or disputes, will reach far into a Clintonless future.

That is particularly true on containing nuclear arsenals. Clinton faces the 
prospect of leaving office without a major arms control agreement to his 
credit. But he still hopes to agree with Putin on a framework for a START III 
accord to slash future U.S. and Russian nuclear warhead totals.

A START III framework and an understanding that Washington and Moscow will 
pursue serious negotiations on modifying the Anti-Ballistic Missile (ABM) 
treaty of 1972 would be the main "deliverables" at a Clinton-Putin summit 
this summer in Moscow or Europe, U.S. and Russian officials have agreed, 
according to diplomatic cables.

Putin's aides have promised he will soon push for Duma ratification of the 
long-stalled START II treaty as prelude to the summit. He appears to have the 
votes to succeed.

But there is still room for considerable mischief in Moscow or Washington by 
those who oppose the rush to negotiating glory in Clinton's final days. The 
Duma could put the administration in a difficult spot by making Russia's 
adherence to START II contingent on U.S. Senate ratification of other 
strategic accords, including a technical ABM protocol that Senate Republicans 
have vowed to defeat.

In the run-up to his electoral victory on March 26, Putin kept his strategic 
options open. He instructed his officials not to shut the door on eventual 
agreement with Clinton to modify the ABM treaty, despite strong opposition 
from Russia's generals. But he also made it clear that he would not agree to 
ABM changes as the price for a bilateral summit.

Putin's most trusted national security aide, Sergei Ivanov, told U.S. 
officials in recent meetings in Washington and Moscow that Russia 
increasingly understands the U.S. fear of missile attack from North Korea. 
Changing the ABM treaty to allow greater scope for national missile defense 
is a subject worth Clinton and Putin discussing, Ivanov heavily implied.

But Russian officials have also made clear that Putin's preference is for 
Clinton to defer the decision on a missile defense system, which the Russians 
hope eventually will fade away. If talks break down with Clinton or his 
successor, Putin could settle for reaping a propaganda harvest in Europe, 
which is wary of U.S. national missile defense plans and of American 
unilateralism.

Leon Fuerth, Vice President Al Gore's national security aide, traveled to 
Moscow in mid-March to advance summit planning and to tell the Russians that 
they should not wait for a better deal from Gore; they should settle with 
Clinton rather than gamble on what the future holds.

Clinton's national security adviser, Sandy Berger, will visit Moscow later 
this spring to nail down the summit if an April 26-29 visit to the United 
States by Russian Foreign Minister Igor Ivanov is productive. Clinton and 
Putin will also meet during international summits of the Group of Eight, the 
United Nations and the Asia Pacific economic forum this year.

Putin's electoral victory has brought no immediate change to Russian 
diplomacy. At a meeting of the six-nation Contact Group on the Balkans last 
week, Russia again demanded that the Western powers publicly rule out 
Kosovo's independence from Serbia, now and forever more. The demand was 
refused. And when Clinton raised Chechnya in his congratulatory phone call to 
Putin, the Russian leader was unresponsive.

Seven years of mutually inconsistent diplomacy and unsteady leadership form 
the backdrop of Clinton's brief twilight encounter with Putin. For better or 
worse, this American president shows again that he is determined not to stand 
still in his final days. 

******

#4
Date: Sun, 02 Apr 2000 
From: Marko Beljac <markob@ozemail.com.au>
Subject: "The Russian Mind".

I thought I might offer some observations on recent comments made by other
subscribers on the Russian affairs email list.

There have appeared a number of commentaries on this list that purport to
explain
Russia's current problems on the state of "the Russian mind" molded by
centuries
of Russian history.

The argument usually goes like this: Russia is experiencing many economic
difficulties and has yet to firmly establish democratic norms because Russians
have for so long
(a) Had everything provided for them without much sense of individual
responsibility
(b) Lived under non democratic regimes and therefore do not understand
democracy.

These arguments quite frankly are absurd and border on the racist- if only
Russians were more like us decent up standing Western folk then they would
have a
better country with a better economy. The same, I suppose, would apply to what
Churchill would have referred to as the "niggers" or "savages" of the
developing
world. The problem with the Russian's, so the logic of the argument goes,
is their
"Russianess".

Notice the paradigmatic shift in Russophobic rhetoric. During the cold war we
heard how it was the communist system that was responsible for Russia's flaws,
from its supposedly "grand design" to "dominate the world" to its inability to
provide a comfortable living to its citizens. Now with the end of communism
and
the demise of the USSR the problem is "the Russian mind" exemplified by
Vladimir
Putin and his call for "law and order". "Dictatorship of the law"? Sounds
like...
"the rule of law" does it not?

Lets call a spade a spade here... the old cold warriors are dressing up their
Russophobia in new doctrinal garb, except for those like Brezezinski and
Kissinger
whose Russophobia was always along ethnic rather than ideological lines. The
problem with Russia for the cold warriors was not and is not either
communism per
se or "the Russian mind" but Russia's power. There have appeared many supposed
concerns in the West about Putin and how he has used the power of the
Kremlin, the
state media and the Oligarchs to win the election. The concern here is not
with
Putin's abuse of power per se for nobody in the West expressed much
reservations
when Yeltsin shelled the White House, rammed through a constitution giving the
Kremlin great powers or abused the power of the Kremlin, the state media or
the
Oligarchs to win in 1996. Much the same can be said about the supposed
"concerns"
on Chechnya. One may consider perhaps Turkey's massive assault on the Kurds
and
widespread abuses of the human rights of the Kurds throughout Turkey.
Turkey is of
course a member of NATO. Here rather than Clinton expressing "concerns" about
Turkey's assault on the Kurds the US and the supposedly "ethical" UK
instead send
more and more weapons to enable the Turks to finish off their "legitimate"
(read
US backed) "war on terrorism", including invading Northern Iraq. The EU,
now that
the Turks have largely finished the job, have welcomed Turkey as a candidate
member whilst condemning Russia on Chechnya.

To be sure the cold warriors began to turn on Yeltsin but not because of these
actions which they supported, even argued were necessary, but because Russia
finally abandoned its romanticism with the West and began to adopt a more
assertive foreign policy more in tune with Russian national interests
rather than
one subservient to the West. However this new direction in Russian policy
has its
foundations in Western bellicosity and its inherent, in some quarters,
Russophobia. As Strobe Talbott wrote in "At the Highest Levels" Gorbachev
agreed
to a re-unified Germany joining NATO on the clear understanding that NATO
would
not expand. NATO has expanded both in terms of geographical spread and
mission,
now encompassing "out of area" operations. Thus Russia's more assertive
foreign
and security policies owes a lot to this double cross and to Russia's
humiliation
at Rambouillet and Kosovo. This reminds one of the beginnings of the cold
war when
Stalin began to aggressively move on the governments of E.Europe in 1947-48
after
the US moves in forming NATO and unifying Western Germany, so soon after the
Germans butchered millions of Russians in the war. One must also take a
careful
look at the concerns raised about the Oligarchs in the West. To be sure the
Oligarchs are fraudsters, but this is not unusual even in the West. >From
recent
history one recalls the BCCI scandal, the Savings and Loans scandals, the Junk
Bond and down sizing mania of the 1980s, Iraq gate etc etc. Cold warrior
rhetoric
heavily critical of the Oligarch's is pretty much a recent phenomena that has
reached fever pitch not as a result of their plunder of Russia's wealth but
as a
result of their undermining of Western economic institutions such as Banks
etc...
In short their power worries the cold warriors of the West not their
conduct in
Russia per se... actually the wealth of Russia is something the West would
have
rather plundered under the rubric of "the free market" which for the
powerful West
is a theoretical curiosity, something reserved for "the niggers" and "the
savages". The West has its mighty Oligarchs also who mightily influence the
democratic process, Rupert Murdoch for one readily comes to mind.

Speaking of Oligarchs what to make of George Soros and his absurd analysis
about
"the Open Society" and his displeasure at the election of Vladimir Putin?
It is
easy for a multi billionaire to offer lofty ruminations but for the people of
Russia whose primary concern is to live in greater security and comfort
such lofty
thoughts provide cold comfort. Besides as someone who has profited
massively from
the "all power to the markets" gospel, one that is eroding the power of
liberal
democratic institutions, Soros himself is an oligarch doing much to
undermine "the
Open Society". How can one explain such blatant hypocrisies and the so called
"intellectual" analyses backing them up?... perhaps an excursion into "the
Western
mind" might help.

******

#5
Los Angeles Times
April 2, 2000
[for personal use only]
After Election, Russians Souring on Chechen War 
By ROBYN DIXON, Times Staff Writer

MOSCOW--The list of names pinned on the wall at the Perm offices of the 
Interior Ministry was sliced with lines in three bright colors. For people 
waiting for news of servicemen ambushed in Chechnya, a yellow line through a 
name meant good news: only an injury. 
A green line meant terrible suspense: missing in action. A blue line 
meant someone's son or brother, husband or friend was dead. 
In solemn tribute to the 32 elite Interior Ministry police based in the 
city of Perm whose bodies were found Saturday in Chechnya, each of Russia's 
national television networks displayed the names of the 23 who had been 
identified. 
On the state-owned networks, such a grim honor roll would have been 
unthinkable just a week earlier--before Russia's presidential election--when 
the media here were strongly backing Vladimir V. Putin's campaign for 
president. 
But with the election past, the grief expressed on the state networks 
Saturday was more bitter than it was for 84 elite airborne troops from Pskov 
who were buried just over two weeks ago. 
An outspoken newsman on state-run ORT, Sergei Dorenko, described the 
officers responsible for leaving the Perm OMON forces exposed to a rebel 
ambush as "murderers." 
Amid such anguished recriminations concerning Russia's latest military 
fiasco, public support for the war in Chechnya could drain away rapidly, 
although Putin has made clear his determination to push on. 
As guerrilla fighting continues in the forested, mountainous districts 
in the south of the separatist republic, more Russian casualties seem 
inevitable. And for Putin, the prospects are stark: continued strong pressure 
from the West to make peace and, within Russia, increasing horror about the 
war as well. 
Putin, however, appeared to have misjudged the mournful public mood 
Saturday. Wearing dark glasses and a ski suit, he was shown on the 
independent NTV network taking a day off from work, skiing breezily down a 
gentle slope in the Ural Mountains and jumping onto a poma lift. 
"None of the Russian leaders, including the president, has paid tribute 
to the OMON servicemen who died in Chechnya," said military analyst Alexander 
I. Zhilin, a retired colonel. "Today, half of the country is in tears and in 
mourning. And Putin is skiing in the Urals, celebrating April Fools' Day, 
smiling and giving autographs. 
"This is his real attitude toward the country, his people and those 
servicemen who die in Chechnya. Now that the election campaign is over and he 
has been elected, he does not want to think about Chechnya. 
"The grass and green foliage will be out soon," Zhilin continued, "which 
will make it incomparably easier for rebel forces to move around and attack 
Russian troops unexpectedly. All this will only result in higher losses and 
more confusion. 
"The campaign in Chechnya ought to be finished as quickly as possible. 
Procrastination on the war erodes the morale of the armed forces, lowers 
their combat readiness and also encourages the enemy to resort to new, 
unexpected ways of waging the war." 
Russian ground troops entered Chechnya in late September, weeks after 
Chechen rebels bent on creating a Muslim state invaded the adjacent republic 
of Dagestan. Since then, more than 2,000 Russian soldiers have been killed in 
the fighting, according to official figures, along with an untold number of 
civilians. 
In recent weeks, Russian military leaders have claimed to have the upper 
hand, but fierce fighting was reported in the region of the ambush even as 
the bodies of the victims were being recovered. 
In a telephone interview Saturday from the Perm OMON base, Alexei, a 
sergeant on duty who would give only his first name, said: "I feel nothing 
but pain and bitterness. I personally knew all of them. They were brilliant 
guys; reliable, honest and brave. It is such a terrible tragedy that they 
died." 
The sergeant said most of the victims were experienced professionals who 
had served in the 1994-96 war in Chechnya, which made their deaths seem even 
more shocking. 
"Our phone lines are running red-hot. Relatives are calling in to check 
on their sons and husbands. The first thing we have to do now is to calm the 
parents of those who are alive and soothe the pain of the parents whose sons 
died," he said. 
The number of dead could go higher, as 10 members of the 49-strong 
column remained unaccounted for Saturday. Only a handful survived the attack. 
The Perm troops, who were traveling in a column near Vedeno in 
southeastern Chechnya, were ambushed by rebels Wednesday, and a 100-man force 
sent to rescue them had to retreat. One serviceman in the rescue column was 
killed; 14 were wounded, two critically. 
On Saturday, military analysts, the media and friends of the dead were 
all searching for an explanation of why the men had to die in a virtual 
repeat of an ambush in which about 20 OMON troops from Sergiyev Posad were 
killed last month. 
The newspaper Kommersant Daily ran a scathing commentary: "It is high 
time that the generals themselves admitted that the matter at hand is . . . 
real guerrilla warfare. It has its own strategy that cannot be grasped with 
the help of ordinary military logic. But so far the [military] keeps 
repeating the same old mistakes." 
Alexei, the sergeant at the Perm base, said, "We thought that after the 
similar incident with the Sergiyev Posad OMON, proper conclusions would be 
drawn and it would teach those responsible for sending troops out in convoys 
a good lesson." 
The governor of the Perm region, Gennady Igumnov, speaking on RTR 
television, said the area was in a state of shock and grief. He said people 
were entitled to demand that servicemen not die because of someone's 
stupidity. 
"There is one wounded serviceman who has survived in this blood bath," 
said the unit's acting commander in Perm, Valery Kazantsev, speaking on NTV. 
"And when he is able to talk, we will possibly learn from him how it all 
happened. And then we will try to figure out who is to blame for what has 
happened." 
It took three days to find and recover most of the bodies of those 
killed in Wednesday's ambush because of the rugged terrain, mines and 
continued rebel attacks. 
The Russian side reported that some of the bodies were booby-trapped 
with mines. 
More bad news came Saturday as Russian forces found a body that might be 
that of Maj. Gen. Gennady Shpigun, kidnapped in Chechnya a year ago. Forensic 
experts were examining the remains. 
And the news service Agence France-Presse reported that Chechen 
spokesman Movladi Udugov had quoted rebel leader Shamil Basayev as 
threatening to shoot nine Russian POWs unless Russia exchanges them for a 
colonel accused of raping and strangling an 18-year-old Chechen woman. 
Alexei V. Kuznetsov of The Times' Moscow Bureau contributed to this 
report. 

*******

#6
Newsday
2 April 2000
[for personal use only]
An Ecological Disaster
War leaves Chechnya with polluted soil, water
By Michael Slackman. RUSSIA CORRESPONDENT

Mozdok, Russia - The sky covering the flat northern plains of Chechnya is 
pierced by billowing columns of thick, acrid smoke and the bright orange glow 
of flames raging below. Large patches of earth are smeared black and gray. 

Chechnya is oil country, a small ethnic republic in the Caucasus mountains, 
with crude reserves of its own and a pipeline running across its territory. 
For decades, oil was the mainstay of the economy, first enriching the 
Soviets, then independence-minded rebels and now whoever can get their hands 
on it. 

But two wars and years of lawlessness have turned this region's main economic 
blessing into a nightmare. Even if Russia figures out how to secure its grip 
over the people of Chechnya, it is unsure what it is going to do with whole 
swathes of the region that are dangerously contaminated. There is an 
estimated 4 million tons of dumped oil under the ground. So much petroleum 
waste has been dumped here, officials say, there is a permanent sheen on the 
Terek River. 

Eighty percent of the fish in some areas are too contaminated to eat, the 
water too polluted to drink. The situation is getting worse by the day. 

"It is an ecological disaster," said Col. Yuri Lavrokin, commander of the 
Russian army's Ecological Safety Department unit assigned to Chechnya. 

As Russian forces continue to battle rebels in the southern mountains, Moscow 
has already begun trying to assess the ecological climate in the north. The 
final analysis has long-term implications for Chechnya and the region. One 
factor, for example, in determining whether to try rebuilding the devastated 
capital, Grozny, will be the extent of the contamination. There is also 
concern that the pollution will spread into the Caspian Sea, where it could 
cut into the already dwindling population of valuable caviar- producing 
sturgeon. 

Chechnya's environmental problems began in Soviet times, when the 
government-owned refineries in Grozny processed millions of tons of oil a 
year, most of it shipped through the tiny republic from other oil- producing 
regions, like Azerbaijan. Millions of tons of waste product were 
unceremoniously dumped in the ground and, according to some experts, sit 
beneath the city in large pools, just below the surface. 

But the pollution problem began to spread into the countryside right after 
the collapse of the Soviet Union, when Chechnya's pirate oil industry was 
born. 

Thieves stole huge quantities of oil from reserves at the refineries in 
Grozny and tapped into the oil pipeline running from Azerbaijan, which is no 
longer being used. It is estimated that 9 million tons of oil were being 
processed in Chechnya by 1992, only 3 million of which was brought up from 
wells. 

But from an environmental perspective, the problem was not the theft of the 
oil - it was how it was being processed. All along the countryside, 15,000 
mini-refineries were built. To extract gasoline from crude is a relatively 
simple process that involves heating the oil until it separates into layers. 
In sophisticated commercial refineries, as much as 90 percent of the oil is 
used. 

In these mini-refineries no more than 50 percent was used - and the rest, 
again, dumped onto the ground. 

During the first war with Russia, black market refineries were encouraged by 
the first post-Soviet leader, Dzhokhar Dudayev. When he was killed by Russian 
forces, his successor, Aslan Maskhadov, tried to stop the illegal practice 
because it was taking money away from his efforts to build a government. But, 
as with his efforts to control the rest of Chechnya, he failed. 

During this period, Russian officials inadvertently not only promoted the 
destruction of the Chechen environment, but also helped provide the rebels 
with funds that were used to buy weapons for their war against Russia. 
Russian officials in neighboring communities often sold their own, legitimate 
fuel reserves to commercial businesses at market prices. They then bought the 
bootleg, low-cost fuel from Chechnya, earning a profit. Chechen fuel has been 
found as far north as Moscow and as far east as Vladivostock, on the Sea of 
Japan. 

Today, many of these mini-refineries are in flames, blown up either by 
advancing Russian forces or retreating Chechen guerrillas. Lavrokin says 
these burning plants present the greatest environmental threat as they bleed 
oil into the ground and smoke into the air. Nothing is being done to 
extinguish the fires. 

And some of the plants continue to operate. On the streets of Gudermes, 
Chechnya's second largest city, individuals sell gasoline, packaged in large 
glass jars, at roadside stands. With no economy to speak of and virtually no 
jobs, residents of Chechnya are more concerned with earning money to eat than 
with the region's long-term environmental problems. But Lavrokin of the 
ecological unit said, "Russia is worried . . . What we have here, we call 
ecological terrorism." 

*******

#7
The Russia Journal
April 3-9, 2000
Editorial: Show your teeth

Russia's president-elect, Vladimir Putin, has finally received the 
endorsement of the people. Now it is time for him to show his teeth – and
not 
the ones he has been displaying in Chechnya. 

The Chechen affair will soon start biting Russia's politicians and generals. 
Putin will have to ensure that some sense of discipline is instilled among 
the officer corps - and that the generals be called to account for the 
widespread destruction, human-rights abuses and loss of young Russian 
soldiers' lives through negligence and sheer incompetence.

But it is the taming of white-collar criminals and a corrupt bureaucracy that 
will be the real litmus test of Putin's skill and resolve.

In comparison to the opposition he will encounter from an assault on the 
interests of these apparatchiks, the Chechen campaign will - without 
understating the brutality there - look like a walk in the park.

The greatest threats to Russia's future economic prosperity and security, and 
indeed its survival, come from within the ranks of the governing bureaucracy, 
one filled with the small cliques that have largely run the country's 
businesses the past few decades.

At the same time, the communist-nationalist threat should not be 
underestimated either. Putin successfully harnessed nationalist sentiment 
with his campaign in Chechnya and subsequent defiance of international 
condemnation of the conflict. But while doing so, he has also promised 
support for Russia's monolithic military-industrial complex - an utterly 
inefficient group of enterprises.

There is no better way of committing economic suicide than funneling money 
into the black hole of the military-industrial complex. But having sown the 
seeds of optimism among these state enterprises, restraining their 
expectations may not be easy. The Communist lobby in the Duma will fight 
every inch of the way for these and other economic monopolies - enterprises 
more corrupt than those pillaged by the oligarchs - to receive more money.

But the most crucial issue as Putin forms his Cabinet will be defining 
government policy toward the oligarchs. This requires more than simply saying 
the right words. 

Although Putin told the Russian people not to expect any miracles, no sleight 
of hand can cover up inaction or compliance by his government toward the 
oligarchs.

If legal processes are to be started for the renationalization of assets, 
snatched under the scandalous "loans-for-shares" schemes or simply 
misappropriated through criminal and fraudulent actions, they must be started 
now. 

If senior bureaucrats are to be sacked or imprisoned for participation or 
compliance in capital flight, that too must be done now. 

If the size of government is to be cut, as it must be, the process must be 
enacted immediately.

Sooner or later, any honest government in Russia will have to stand up to the 
robber barons. Anything less than total war on this group will effectively 
mean a sellout of the public trust and another great injustice to the Russian 
people.

Putin gives all indications of being a man of action. But it is time for him 
to take urgent measures. 

He needs people of substance in his Cabinet, people with a sense of 
responsibility toward the country. This means not shying away from 
controversy, and a preparedness to embrace such liberal politicians as his 
nemesis during the campaign, Grigory Yavlinsky. 

As master of the house, Putin must ensure that the top rung of government is 
free from corruption and that it abides by the same rules it expects the 
population to follow. 

A government of bureaucrats is not a solution. 

It is time Putin showed he is a man of resolve and that he means business on 
the most critical issue - the economic front. 

One thing is for certain: The world will be watching the composition of 
Putin's team over the next 30 days.

*******

#8
Los Angeles Times
2 April 2000
[for personal use only]
Putin's Unformed Policies Promise Measured Change 
By RAYMOND GARTHOFF
Raymond Garthoff, Retired Senior Fellow at the Brookings Institute, Served as 
Ambassador to Bulgaria. His Books Include "The Great Transition: 
American-soviet Relations and the End of the Cold War"

WASHINGTON--Boris N. Yeltsin's Russia has now passed from the scene. 
What will distinguish Russia under Vladimir V. Putin? The first thing to be 
said is, no one knows, not even Putin, to a great degree. Some of his 
aspirations and characteristics do, however, provide important clues. He will 
seek to introduce more stable, predictable and orderly government, policies 
and society. To Russians and the West, that would be a step forward from 
Yeltsin's capricious course. 
One risk is that Putin may place so high a premium on order and policy 
execution that some democratic processes will be curtailed. Putin is not, 
however, inclined toward dictatorial rule, nor will he seek a reversion to 
the Soviet system. It is difficult to assess the influence of his background 
as a KGB officer, but it is not all negative, and indications are that he is 
not an ideological die-hard, but a pragmatist. 
Putin's priority must be to establish stability, viability and 
prosperity in Russia. There are also important foreign-policy matters that 
require his prompt attention. These internal and external developments affect 
one another. Yet, most central and most challenging is the reconstitution of 
internal order and impetus to internal development. 
Putin takes office riding the wave of a moderately resurgent economy. 
The state of the economy and, above all, the state of people's expectations 
for the future have been at least as important in Putin's electoral triumph 
as the relatively successful war in Chechnya and other indications of a 
renewal of national pride. But the favorable economic wave is largely due to 
oil-export earnings, caused by the rise in world market prices that is likely 
to recede. The relative success in Chechnya has by no means ended all 
conflict there and has had severe economic and humanitarian consequences in 
the region. 
The Russian electorate's positive expectations, Putin's largely unformed 
policy inclinations and the still intractable internal economic problems are 
the most important elements of the challenge Putin faces. 
In economic and social policy, Putin will probably crack down on the 
worst of the prevalent corruption and excessive influence of oligarchs who 
survived the crash of 1998. But it is not clear he will change the system 
that spawned them. He will not attempt to roll back privatization. Yet, it is 
doubtful he will persevere with the difficult, but necessary, process of 
reforming the economic structure. 
Most of Putin's national rivals prudently left the field before the 
electoral battle began. They saw the time was not right and supported his 
candidacy. This is also true of many regional leaders. The Duma elected in 
December is dominated by shifting centrist political groups that will not 
challenge Putin, but not necessarily follow him, either. He has no real 
political party. Much will depend on his political skills, as well as shifts 
in the economy and public opinion. 
What can we expect from Putin's foreign policy? He will, as he should, 
pursue Russian national interests. Yet, he will not, by choice, pursue an 
anti-Western policy, nor will he seek to reestablish hegemony over former 
Soviet republics. There will, however, be some frictions when Russian 
national interests conflict with other countries', including the U.S. 
Putin will seek Western investment and trade, and his policies may be 
more consistent than Yeltsin's. He will want continuing assistance from 
international financial institutions and on debt rescheduling, but not at the 
price of abdicating his oversight of the Russian economic policy. Nor will he 
be swayed by U.S. and other Western pleas--still less by threats--over 
human-rights issues such as those rising from the relentless military 
campaign in Chechnya. 
Russia's need for hard currency will continue to stimulate efforts to 
sell military equipment and some dual-purpose technologies to parties the 
United States does not wish it to. For example, in pursuing policies directed 
against nuclear proliferation, Russia, in some cases, weighs the risks of 
providing arms or technologies differently from the United States. One 
recurrent example is the sale of nuclear reactors to Iran. Another is the 
sale of advanced conventional air and naval systems to China. In the past, 
the U.S. objected to Russia's sale of space boosters to India. There is much 
room, and need, for U.S.-Russian talks on such matters. 
One significant area of growing U.S.-Russian friction arises from the 
U.S. role in the exploitation and transportation of the oil and gas in the 
Caspian Basin. This is particularly sensitive to Russians, not only because 
of its economic significance, but also because the basin was part of the 
Russian, then Soviet, empire and still retains many ties to Russia. Turkey, 
Iran and various international companies are also involved, but Washington 
has adopted an active role. Vigorous U.S. diplomatic maneuvering, often with 
an ill-concealed anti-Russian element, has provoked Moscow's concern and 
resentment. This is heightened when accompanied by such things as a U.S. 
military presence through the North Atlantic Treaty Organization's 
Partnership for Peace training programs. Putin will seek to protect Russian 
interests in the region, preferably cooperatively with the U.S., but, if 
necessary, competitively. 
It remains to be seen whether the Russian role in the 
Caucasus-Caspian-Central Asia region will rest on economic, diplomatic or 
covert political means. Putin's inclinations, yet unclear, will be important, 
as will the Russian response to indigenous developments in the countries of 
the region. Russia's brutal suppression in Chechnya does not prefigure any 
resort to military means beyond the Russian Federation. Moscow has not laid 
claim to any land beyond its borders and has not responded to pleas from 
breakaway regimes in Georgia, Abkhazia and Southern Ossetia or Moldova. 
On the other hand, there are grounds for suspicion that Russia covertly 
assisted the Abkhazian campaign to drive the Georgians out of Abkhazia in 
1992-93. This may not have been Russia's only covert intervention in the 
area, though the extent of such interference has been exaggerated. Putin's 
KGB background is probably irrelevant to future decisions on such matters, 
but his desire to see a continuing Russian role in the area may not be. 
Putin is not likely to challenge the current arrangements for security 
in Europe, though there is potential for friction over the continuing NATO 
and U.N. involvement in Kosovo. Russian ties to NATO are being restored but 
remain minimal. Further steps toward enlargement of NATO to the east remain 
another potential area of friction. In particular, Russia would strongly 
object to any move to incorporate the Baltic states or Ukraine. Putin's 
suggestion that perhaps at some time Russia would enter NATO if it evolved 
into more of a political body, while intriguing, is not on the agenda for the 
foreseeable future. Yet, ways should be sought to encourage and enable Russia 
to become more integrated with the evolving European security system. 
Concerns that Russia may seek to build an anti-U.S./NATO alliance with 
China, India, Iran and Iraq are not realistic. Speculations rest on a 
misreading of Russian relations both with the West and with China and the 
other putative partners. Russian-Chinese relations are better than they have 
been for decades, but neither wants an alliance directed against the United 
States. Russia also seeks good relations with India and Iran, but not an 
anti-Western alliance--nor do they. 
Putin is likely to obtain Duma ratification for the long-stalled START 
II, the U.S.-Russian strategic-arms-reduction treaty, and to negotiate a 
START III. The main problem will be Russian insistence that START II and III 
reductions be tied to U.S. adherence to the ABM Treaty; and a U.S. decision 
to deploy even a modest missile-defense system would require either amendment 
of the ABM Treaty or U.S. withdrawal. A major challenge to both governments 
is whether agreement can be reached on such changes. 
A summer or early fall summit meeting of Putin and President Bill 
Clinton would serve the interests of both. It should be possible after Duma 
ratification of START II, particularly if they are able to agree on elements 
of a START III and, more problematic, an understanding on the ABM Treaty. 
Russian foreign-policy problems, like its domestic problems, are more 
long-term than immediate. But Russia must balance its long-term security 
requirements against its current modest opportunities and limited 
resources--political, economic and military. Putin cannot change that 
situation, but he can recognize it and steer a course accordingly. 
Yeltsin understood that Russia must integrate with the West. He realized 
Moscow had no choice but to accept the eastward enlargement of NATO, despite 
concern it could marginalize Russia. NATO's offensive against Yugoslavia over 
Kosovo, without U.N. authorization, was also a problem for Russia. Putin must 
determine how to balance Russia's continuing need to be accepted by the West 
with its other security needs, notably the preservation of the Russian 
Federation and its internal security by suppressing the rebellion in 
Chechnya. 
Putin, like Yeltsin, accepts the demise of the former Soviet Union but 
also sees continuing Russian security, political, economic and other 
interests in the countries of the "near abroad." For eight years, Yeltsin 
tried to build the Commonwealth of Independent States into a close alliance 
under Russian leadership but could not do so. Putin may be more realistic and 
rely on bilateral or limited multilateral groupings that see a common 
interest in close cooperation in specific areas. 
The Putin era will certainly be different from the Yeltsin era, but it 
is far too early to judge differences in direction and result. We should 
suspend judgment until we see more, but Washington should not suspend its 
engagement and efforts to influence Putin's decisions in ways beneficial to 
U.S. interests, as well as to Russia's. We should not expect him to pursue 
courses of action simply because we want him to. But if we recognize common 
interests and seek to resolve differences, we can make relations with Putin's 
Russia mutually productive. 

********

#9
New York Times
April 2, 2000
[for personal use only]
Putin's Team Hammers Out a Plan for Russia's Economy
By CELESTINE BOHLEN

MOSCOW, April 1 -- The victory of Vladimir V. Putin in last Sunday's 
presidential elections has focused attention on an opulent Moscow building 
known as Aleksandr House, where a team of liberal-minded economists and other 
experts has been quietly drafting Mr. Putin's blueprint for Russia. 

German O. Gref, head of the Center for Strategic Research and master of 
Aleksandr House, confidently predicted this week that by late May Mr. Putin 
will be ready to release "a breakthrough scenario envisaging the most radical 
reforms," from an overhaul of Russia's cumbersome tax code to a streamlining 
of its infamous bureaucracies. 

With the exception of tax reform, the contents of the program are still vague 
and, on critical issues like land reform, still under debate. But the 
Aleksandr House team -- which includes some of Russia's best-known pro-market 
reformers -- has already firmly established itself as the beachhead of 
liberal economics in the coming Putin administration. 

Now, as Mr. Putin prepares to assume his new mandate at inauguration 
ceremonies scheduled for early May, the question is how Mr. Gref and his 
ambitious plan will survive in the battle over access and influence in the 
Putin Kremlin, which is being watched as keenly in the United States as in 
Russia itself. 

The stakes in the next round of Byzantine intrigue and infighting -- a 
regular feature of former President Boris N. Yeltsin's rule -- are unusually 
high. 

"There is a struggle going on over the strategy for Russia," noted Boris 
Nemtsov, once one of the Kremlin's young reformers and now a leader of the 
Union of Right Forces, which has broadly backed Mr. Putin. "Either it will be 
crony capitalism with tycoons, corruption, underground deals and social 
polarization, or it will be a Western-style economy." 

At a news conference this week, Mr. Gref made clear that he has Mr. Putin's 
ear, and his backing. He said that Mr. Putin, offered three scenarios for 
growth targets, picked the most ambitious one. "This means we will really 
have our work cut out for us," Mr. Gref said. 

Perhaps most significant, Mr. Putin this week included Mr. Gref in a small 
inner cabinet that has been charged with overseeing the transition and, in 
Mr. Gref's words, with ensuring that government practice does not stray from 
the Aleksandr House team's policies. Other members of the working group 
include First Deputy Prime Minister Mikhail Kasyanov, Minister of Finance 
Aleksei Kudrin and Aleksandr Voloshin, the Kremlin chief of staff, who is the 
most visible holdover from Mr. Yeltsin's inner circle. 

Furthermore, Mr. Gref noted, the working group had been empowered to amend 
government legislation, now pending in Parliament, that contradicts the 
center's policies -- a veiled reference to bills on state registration of 
foreign trade transactions and capital flight that seemed to fly in the face 
of the center's deregulatory bent. 

"Gref is building pressure on his rivals by assuring that the president and 
the future cabinet will need only the center's program," the daily newspaper 
Segodnya commented. 

At his news conference this week, Mr. Gref said: "There is no alternative 
program. There may be different positions on different issues, and if they 
are well grounded, they will be presented to the president." 

At age 35, Mr. Gref is the latest fresh face to become the standard bearer 
for Russian reform. He is a lawyer with a faint Van Dyke beard, a 
church-going Lutheran of German descent who, like his patron, Mr. Putin, has 
a background in St. Petersburg city government, where he once headed an 
experiment in housing reform. 

Since last December, when the center was created by Mr. Putin, then the prime 
minister, Mr. Gref has been coordinating the collection of opinions on the 
full spectrum of Russia's unfinished agenda. His brief career spans reform of 
the military and bank restructuring, strengthening the courts and shrinking 
one of the world's largest and most corrupt bureaucracies. 

In interviews and meetings and in an open letter to the voters written for 
Mr. Putin during the election campaign, Mr. Gref has elaborated on Mr. 
Putin's commitment to a strong and efficient government, property rights, 
openness and the rule of law -- all elements needed to turn Russia's twisted 
economy into a level playing field suitable for desperately needed 
investment. 

The goal, Mr. Gref said this week, is to make the Russian economy "manageable 
and market-oriented." At this point, he said, it has "stagnated in a 
semireformed state. Our task is to take it to normal market conditions." 

But it is not surprising that his efforts have already run into resistance. 
Boris A. Berezovsky, the financier and media tycoon who boasts of his 
influence over the tiny group that held sway in the Yeltsin Kremlin, recently 
poured scorn on the Aleksandr House team, dismissing their efforts as 
"unprofessional" and their ideas as "naïve." 

Most experts see the battle shaping up in the Kremlin as a repeat of an old 
rivalry between Mr. Berezovsky and Anatoly B. Chubais, another Kremlin 
insider with the credentials of a reformer who now heads Russia's national 
electric utility company. Another group reportedly vying for influence is 
headed by Pyotr Aven, a former minister who is now president of Alfa-Bank. 

But the real issue is whether Mr. Putin, who owes his popularity to his image 
as a tough, uncompromising former K.G.B. agent, will be able to prove his 
independence from all of these competing clans, and steer Russia on to a more 
predictable course. 

An even greater challenge, many say, will be to override an entrenched 
bureaucracy that has long experience in defeating the best of plans. For 
this, they say Mr. Putin, when he moves, will have to strike fast and hard, 
or risk being overwhelmed by vested interests at all levels of government. 

Many foreign business leaders say the appointment of Mr. Gref or members of 
his teams to the new government would be a good start. "Gref is strongly 
committed to liberal economics," said Glenn Waller, director of the Petroleum 
Advisory Forum, a Moscow-based lobbying group representing foreign oil and 
gas companies. "If Gref or anyone associated with him were to take a senior 
position in the government, it would be a clear signal that Putin wants to 
pursue reform." 

Besides Mr. Gref, the Aleksandr House team includes such reform economists as 
Yevgeny Yasin, considered the captain of the reform team; Aleksei Ulukayev, a 
deputy at the economics institute headed by Yegor T. Gaidar, Mr. Yeltsin's 
first, reform-oriented prime minister; Oleg Vyugin, a former deputy finance 
minister and an analyst at Troika Dialog, a Moscow investment firm, and 
Andrei Illarionov, a liberal economist who was a strong critic of Mr. 
Yeltsin's early reform governments and is now thought to be in line for a 
post as Mr. Putin's chief economic adviser. 

A crucial ally of the Gref team is the finance minister, Mr. Kudrin, a 
longtime associate of Mr. Putin from St. Petersburg who helped bring the 
future president into the Yeltsin administration in 1996. 

"There are a limited number of people in Russia who can advise the government 
on macroeconomic policy," said Vladimir Mau, another deputy at Mr. Gaidar's 
institute who is also advising the Aleksandr House team. "The same people 
keep coming back, in different proportions, but they are the same people." 

During the last three months, Mr. Putin has conducted his own economic 
seminars, as he toured the country ahead of the March 26 elections. Meeting 
with foreign investors on March 13, he impressed many of them with his 
advanced preparation, and his attention to detail, said Mr. Waller and other 
businessmen present at the meeting. 

But so far, his commitment to economic reform has remained largely 
rhetorical, apparently in anticipation of the actual Gref program. He has 
frequently repeated the broad principles of free-market reforms, although 
during the campaign, he uttered occasional populist comments that veered 
toward blunt protectionism. 

Of all the reforms now under discussion, only changes to Russia's awkward and 
antiquated tax code have already been drafted, in preparation for a debate in 
the Parliament later this spring. The new code, which would reduce tax rates, 
and shift from revenue-based levies to profit-based levies, must be adopted 
by July 1, if it is to be implemented next year. 

Mr. Gref said he did not expect any political opposition to the changes in 
taxation, one of the few issues on the reformers' agenda that also has the 
support of Russia's Communist Party. He said opposition was likely in the 
Parliament on other elements of the program, but he added, with calm 
understatement, "I don't think there will be an atmosphere of sharp 
confrontation." 

******