April 13, 2000    
This Date's Issues: 4244 • 4245 • 4246

Johnson's Russia List
#4246
13 April 2000
davidjohnson@erols.com

[Note from David Johnson:
1. Christian Science Monitor: Fred Weir, Under Western fire, Russians close ranks.                        From politicians to truck drivers, Russians 
are irked at criticism, lack of support on Chechnya campaign. 
2. The Times (UK): Gile Whittell, Train tomb of Russia's lost soldiers.
3. Itar-Tass: Duma to Ratify Start-2, Urge US to Abide by Abm Treaty. 
4. Interfax: RUSSIA'S FOREIGN DEBT SWALLOWS UP ENTIRE GDP - ANALYST.       (Sergey Rogov)
5. Financial Times (UK): Ukraine must not be abandoned: The west 
should offer financial support to ensure that economic reforms are 
sustained, says David Snelbecker.
6. Financial Times (UK) editorial: Fresh Start.
7. BBC MONITORING: NEW RUSSIAN PRESIDENTIAL ADVISER DENIES BEING EXTREMELY LIBERAL ECONOMIST. (Andrey Illarionov)
8. Interfax: RUSSIA'S PRIVATIZATION MUST BE OPEN AND TRANSPARENT - PUTIN.
9. Itar-Tass: World Bank, IMF Have "a Very Positive View" of PUTIN'S Early Days. 
10. Washington Post: Jim Hoagland, Putin's London Ally.
11. Moscow Times: Valeria Korchagina, Falling Oil Prices Arouse Crisis Fears.
12. Itogi: Dmitry Pinsker, KREMLIN RETURNS TO ONCE-MALFUNCTIONED IDEA OF BIPARTISANSHIP TO PUT AN END TO POLITICAL TURMOIL.
13. Reuters: Russia charges U.S. spy, Russian contact.]

*******

#1
Christian Science Monitor
13 April 2000
Under Western fire, Russians close ranks
>From politicians to truck drivers, Russians are irked at criticism, lack of 
support on Chechnya campaign. 
By Fred Weir, Special to The Christian Science Monitor

An early - and probably false - spring thaw bathed Moscow this week in 
unexpected sunshine and balmy breezes. But the political temperature is 
decidedly chilly as Russians react with anger, confusion, and suspicion to 
the latest Western censure over the war in Chechnya. 

"Once I thought we could learn from Europe, but now I think we don't need 
teachers like these," says Kiril Petrenko, a print-shop designer out shopping 
in a downtown market. "They are hypocrites and fools. They have no idea how 
to help us." 

The latest jolt to Russian national pride and self-esteem was twofold: Last 
week, United Nations human rights chief Mary Robinson returned from a visit 
to Chechnya complaining that the Kremlin had barred her from visiting five 
"filtration centers" - compared by human rights groups to concentration camps 
- and a community where Russian troops allegedly massacred civilians. 

While she was careful to note that both sides in the conflict had been guilty 
of human rights abuses, Ms. Robinson said she was "shocked and appalled" by 
the harrowing accounts of Chechen civilians. 

"I listened to testimony of summary executions, intimidation, looting by 
military personnel, disproportionate use of force, attacks on civilian 
convoys, rape, and other violations," she said. 

In Moscow, President-elect Vladimir Putin declined to meet with Robinson, 
while another Kremlin official denounced her allegations as "a common lie." 

Then at the end of the week, the 41-nation Council of Europe voted to strip 
Russia of its voting rights and initiate suspension proceedings because of 
"serious and documented" allegations of war crimes in the breakaway Muslim 
republic, now mainly under Russian control after a six-month campaign. 

In most countries, the activities of the council, a talking-shop on human 
rights and democracy issues with no powers beyond moral suasion, scarcely 
warrant notice. But in Russia the news hit like a bomb. 

"The council has made a colossal and historic mistake," thundered Gennady 
Seleznyov, Speaker of the State Duma, the lower house of parliament. "They 
have forgotten who they are dealing with. Russia can do very well without 
them, and we will rise up again to become a great world power." 

Vladimir Zhirinovsky, the ultranationalist demagogue who often finds just the 
right words to capture a public mood, added: "I am very bored with Europe." 

Alarmists are warning that Russia could be about to retire behind a new Iron 
Curtain, though that seems unlikely. 

In fact, both the Kremlin and European leaders have made strenuous efforts 
this week to stress the hope that business will go on as usual. But leaders 
on both sides who think they can limit the ugly public- relations fallout 
from Chechnya and just get on with the decade-old project of integrating 
Russia with the rest of the world may be badly underestimating the depth of 
Russian public disaffection with Western ways. Since NATO's war one year ago 
against fellow Slavic, Orthodox Christian Yugoslavia, the mood has turned 
from sour, to bitter, to hostile. 

A recent survey by the Boston-based Marttila Communications Group found that 
69 percent of Russians polled think the West wants their economy to collapse. 
Fully 87 percent believe the United States is taking advantage of Russia's 
current weakness to expand its global influence. Only 13 percent regarded the 
US as a friend or ally; 28 percent described it as an enemy. 

Worse, but 'let it be ours' 

The flip side of Russian paranoia is the feeling that somehow the country is 
pursuing a different, and spiritually superior national destiny. "Russia 
cannot be understood with the mind, it can only be believed in," wrote Fyodor 
Tyutchev, a 19th- century philosopher. Russians today quote him constantly, 
with avid approval. 

"Let it be worse, but let it be ours," Marshal Mikhail Kutuzov was fond of 
replying to young officers who complained about Russian technical 
backwardness. Kutuzov's armies chased the French invaders under Napoleon all 
the way back to Paris. In the 20th century, despite terrible losses, the 
Soviet Union did the same to Hitler. Many Russians insist that once again, in 
Chechnya, they are fighting for the common good despite the ingratitude and 
incomprehension of the West. 

"We are fighting for all of Europe, against terrorism and extremism," says 
Leonid Troshin, a truck driver. Russia used a series of deadly apartment 
bombings, blamed on Chechens, and incursions by Chechen fighters into 
neighboring Dagestan to justify the current war. "The West needs us to fight, 
but they want the luxury of insulting us at the same time. They should be 
helping, but they just carp about human rights," Mr. Troshin says. 

Talking at cross purposes 

More than a tough foreign-policy wrangle, Chechnya is rapidly deepening the 
historic divide between Russia and the West. "The problem is, we are talking 
at cross-purposes," says Vasily Lipitsky, deputy director of the Moscow-based 
Fund For Realism in Politics. "The Europeans want to point out that we signed 
certain human rights obligations, and that we should be making efforts to 
obey them or at least to fully and publicly account for our actions. 

"We, on the other hand, are very frustrated that the Europeans refuse to 
understand our position. We are facing the threat of national breakup and a 
wave of terrorism. We want support. In Russian culture, criticism is seen as 
siding with the enemy," Mr. Lipitsky says. 

Of a dozen shoppers questioned in a Moscow market, only one sounded even 
slightly conciliatory. 

"Even if it is necessary to fight in Chechnya, I'm sure we could be more 
careful not to harm innocent people," says Nina Razovskaya, a teenage 
student. "The Europeans are right about that. Maybe if we tried harder, 
they'd be nicer to us." 

******

#2
The Times (UK)
13 April 2000
[for personal use only]
Train tomb of Russia's lost soldiers 
FROM GILES WHITTELL IN ROSTOV-ON-DON

MOST people in Rostov have heard of it, but few know where it is and even 
fewer want to know. 

It is the train of corpses - four railway wagons in a quiet siding on a 
closed military base 600 miles south of Moscow. They contain the remains of 
nearly 300 Russian soldiers killed in action in Chechnya, not in this war but 
the last. Six years on, each rotting body remains unidentified. 

For thousands of grieving Russian parents the Rostov train has become a 
symbol of Kremlin callousness, a rusting reminder of the waste of lives that 
turned the country against the botched 1994-96 Chechen campaign. 

Elsewhere in the city, scientists in a once-secret laboratory, which rarely 
opens its doors but to which The Times has been granted access, are 
determined not to repeat the mistake this time round. With British help they 
may succeed. The scientists hope to come to Britain for more forensic 
training to help them in their task to identify the bodies. 

Back at the military base, a ragged sign under the barbed wire that rings the 
train says: "Trespassers may be shot." Behind, litter dances in the cold wind 
and soldiers with sub-machineguns stare silently at the Westerner who wants 
to take a picture. Two officers emerge. One mutters that guards in the 
watchtower will take care of me, but they walk on and no one does. 

Only the conscript guarding a nearby checkpoint has any comment. "All that's 
left in there is bones," he says. He may be right. The wagons are airtight 
and the doors shut but the refrigeration units packed up long ago. The 
bodies, put there because they were already burnt or mutilated beyond 
recognition, are said to be almost decomposed. 

They are not the only ones. Two months ago a second train was found by 
advancing Russian troops in Grozny's railway station containing 154 bodies 
from the first Chechen war. They were badly decomposed because the train's 
cooling system broke down at the height of last summer. Most are said to be 
the bodies of Chechen civilians. 

Whatever the truth, Colonel Vladimir Shcherbakov of the Russian Ministry of 
Defence's Laboratory 124 in Rostov intends to find out. He hopes to send some 
of his 23 analysts to Britain's Forensic Science Centre soon for training in 
DNA analysis. 

He works in an anonymous grey block on a dead end near the city centre, the 
only military forensic science laboratory in the North Caucasus region and 
the holding point for unidentified bodies recovered from the Chechen war 
zone. 

At the end of the last Chechen conflict, DNA analysis could only be done in 
Moscow with a three-month delay, and with no policy of taking blood samples 
from soldiers before sending them into battle, blood from a relative was 
needed to confirm any match. 

Since then, as if in preparation for the slaughter of the past seven months, 
Russian troops have begun giving "ante-mortem" samples. For the Soldiers' 
Mothers' Committees, a semi-official network that helps parents to find 
missing sons, Colonel Shcherbakov is a hero. 

Svetlana Lozhkina of the Rostov committee, the busiest in Russia said: 
"Nothing is easy. It is hard to get information on anyone. The Army is 
supposed to inform parents but as far as I can tell they don't. They just say 
information on the dead is a military secret and tell us to mind our own 
business." 

Many believe that in this war, as in the last, Russia is disguising heavy 
losses by not adding those who die of their wounds in hospital to the numbers 
of battlefield dead. Few places have seen more war wounded than Rostov's 
military hospital, but according to Mrs Lozhkina it is closed. "They won't 
let us anywhere near it," she says. 

In principle, next of kin are notified by telegram and if necessary given a 
free return train ticket to Rostov to recover their son's body. Many parents 
report proper and prompt handling of their sons' bodies. 

Lavish funerals with full military honours in some cities, two of them with 
televised appearances by President Putin, reflect a concerted bid to honour 
Russia's dead this time rather than hide them. 

Even so, Mrs Lozhkina insists that the numbers do not add up. "It's strange 
to me when they say just one or two men died in an ambush and I have dozens 
of mothers ringing me to say they've heard their sons have died," she says. 

The Moscow committee estimates that losses so far are at least double the 
official figure of 1,600, and members claim that bodies are being 
systematically hidden. 

Laboratory 124 can scarcely handle the flow of dead from this war, let alone 
identify the reeking remains in the Rostov train. For that, Colonel 
Shcherbakov says he needs further training for his staff, preferably in 
Britain. 

It is not a subject likely to come up on Presdient Putin's one-day trip to 
London next week, but the peace of mind of at least 277 families depends on 
it. 

*******

#3
Duma to Ratify Start-2, Urge US to Abide by Abm Treaty. .

MOSCOW, April 13 (Itar-Tass) -- Russia's State Duma, or the lower house of 
Russian parliament, will ratify the START-2 treaty on Friday. Specialists in 
the field of national security think the ratification will be reinforced with 
a political call on the United States not to violate the anti-ballistic 
missile treaty. 

Deputy chairman of the State Duma Committee for International Relations 
Alexander Shabanov told Itar-Tass that a large number of the KPRF deputies 
and the agrarians would vote against the ratification but would hardly be 
able to restrain the majority in the State Duma from voting in favour of the 
ratification of the treaty which would pave the way for a further major cut 
in the nuclear stocks under the following, START-3 accord. 

While getting ready for the START-2 ratification, the State Duma committees 
for international relations, defence and security held consultations with a 
wide range of specialists and preliminary discussions with the General Staff 
of the Armed Forces of Russia. No unanimity was achieved during the course of 
those meetings. 

Even the members of the State Duma Committee for Defence which is headed by 
General Andrei Nikolayev differed on plans for the START-2 ratification. 
Whereas Nikolayev held the ratification possible with certain reservations 
concerning the inadmissibility of the deployment of a national anti-ballistic 
missile system in the United States, former defence minister Igor Rodionov 
declared that the ratification will help the United States to secure its 
world domination and ensure the victory of those who retain their nuclear 
arms and can issue an ultimatum to capitulate to their enemy. 

Igor Rodionov's viewpoint is shared by another general, head of the Russian 
Defence Ministry's Central Research Institute Vladimir Dvorkin. "If there is 
a possibility to retain for Russia on the basis of the agreement the position 
of a nuclear super power equal to that of the United States, it would be 
immoral to let the opportunity slip for the sake of any political ambition, 
because nuclear parity with the United States within the framework of the 
START-2 and START-3 agreements meets the interests of Russia, whatever the 
political orientation of its governing elite," Dvorkin said. 

Another general, Vice President of the College of Military Experts of the 
Russian Federation Alexander Vladimirov told Itar- Tass, "Russia should have 
between 600 and 700 nuclear charges and delivery vehicles, which would 
suffice to contain aggressive overtures." 

The line-up of political forces in Russian society and in its mirror, the 
State Duma, suggests a positive forecast for the START-2 ratification. 
Historical responsibility for it will be taken by those who voted in favour, 
but neither will the opposition leaders be able to shun responsibility. 

******

#4
RUSSIA'S FOREIGN DEBT SWALLOWS UP ENTIRE GDP - ANALYST
Interfax 

Moscow, 11th April: Russia's foreign debt exceeds 160bn dollars, an amount
comparable to its GDP, Sergey Rogov, director of the Institute of the USA
and Canada, told a workshop on National Security in the Context of
Globalization held in Moscow on Tuesday [11th April]. 

The payment of the debt took up nearly 30 per cent of the national budget
revenue in 1998 and over 36 per cent in 1999 and may go as high as 45 per
cent in 2000, he said. Russia will not break away from the debt trap until
its budget amounts to about 100bn dollars, Rogov said. The revenue must
increase fourfold to make this possible, he said. If GDP increases by 5 per
cent to 6 per cent a year, Russia may recover the 1992 level in 2010, Rogov
said. If it grows by 10 per cent a year, Russia will catch up on France and
Britain in 2010 but will still trail behind the USA and Japan in economic
development, he said. 

In 1999 the country spent 19 per cent of its budget or about 4bn dollars,
on defence needs, Rogov said. Chechnya accounts for about a quarter of the
growth of defence spending compared with 1998, he said. The modernization
of the Russian defence hardware effectively stopped in the 'nineties, Rogov
said. Unless the army and navy are rearmed, the available Soviet weaponry
will be utterly obsolete in 2005 to 2010, he said. While Russia's fraction
in the world's defence spending is as small as 0.6 per cent, that of the
USA is 37 per cent, Rogov said. On the other hand, Russia accounts for 52
per cent while the USA, for 45 per cent of the world's nuclear arsenal, he
said. 

****** 

#5
Financial Times (UK)
13 April 2000
[for personal use only] 
COMMENT & ANALYSIS: Ukraine must not be abandoned: The west should offer
financial support to ensure that economic reforms are sustained, says David
Snelbecker.
The author works for the Harvard Institute for International Development in
Kiev, on a project funded by the US Agency for International Development.
He writes in a personal capacity. 

Rampant corruption in Ukraine and meagre success with reforms have led to
"assistance fatigue" among the Group of Seven leading industrial nations.
As a result, the west's policy toward this troubled country is dangerously
adrift. 

The geopolitical importance of Ukraine is self-evident, given its position
at the crossroads of an uncertain east and a prospering west that now
includes central European states. 

Ukraine's fate may well determine whether Europe becomes an integrated
whole with all countries developing in the same direction at their own pace
or a continent again divided - economically, ideologically and militarily.
The question, then, should not be whether to help Ukraine, but how to help
Ukraine. 

The original transition policy prescription consisted of liberalisation of
prices and trade first, then macro stabilisation and, over a longer term,
privatisation and institutionalisation - the "Washington consensus". 

In practice, reformers have paid too little attention to the prerequisites
for making stabilisation work - liberalised prices and markets, hard budget
constraints, transparency and institutional development. Ukraine, like
Russia, made a great leap sideways, as centrally planned socialism evolved
into what we might call oligarchic socialism. 

With bad economic policies and weak civil society creating widespread
corruption, it is ever harder to engage in value-creating production, for
whatever is produced soon gets taken by the taxman, the regulator or the
thief. As a result, Ukraine has become a peacetime economy with 50m highly
educated people, on the edge of the world's largest integrated market, with
average per capita incomes of less than Dollars 600. 

New ideas are needed to carve out a space for doing business legally. Tax
rates should be cut, particularly on labour and value addition. Regulators
should be better controlled so the economy is less restricted and contact
with government is more predictable. Competitive markets must be created
where prices are freely agreed and actually paid, particularly for energy. 

These are initial conditions before we worry about stabilisation, state
budget revenues and structural reforms. Policies must not only create
conditions for growth but also curtail rent-seeking opportunities for
oligarchs and bureaucrats. 

Ukraine needs not a "post-Washington consensus" but a whole new approach to
reforms. It needs a domestic "supply" of reforms, offered by a new
generation of Ukrainian institutions, and a "demand" for reforms, required
by a vibrant civil society that presses government to deliver. 

A model that we have seen work well in Ukraine is to place young
western-trained Ukrainian economists in governmental and non-governmental
organisations, mentored by foreign senior advisers, where they gradually
gain experience and integrate throughout policymaking structures. 

The role for western donors is to give top priority for bilateral
assistance to projects that develop institutional capacity in economic
policy and civil society. 

As such institutions are built, the role of the International Monetary Fund
in setting the reform agenda should be reduced to be consistent with its
capacity and mandate. Offering money conditional on reform has not worked
well in Ukraine. The IMF has its hands full tracking national bank reserves. 

The World Bank could play a more important role if it organised its work
into a more comprehensive strategy and separated its advising and lending
functions so it could advise in areas other than those in which it has
loans under development. 

The current government deserves to be supported by the west, given steps it
already has taken, such as reducing in-kind tax payment that previously
provided soft subsidies and reorganising executive-branch structures to
rationalise decision-making. 

It is noteworthy that Viktor Yushchenko, the prime minister, and Yuri
Yekhanurov, first vice-prime minister for economic reforms, achieved these
outcomes in spite of opposition, when a forthcoming referendum threatens
parliamentary democracy. It would be appropriate to offer moderate
financial assistance commensurate with these modest reforms - say, as much
from the IMF and the World Bank as is owed to these institutions this year.
Such financing could be arranged almost as an accounting exercise, without
funds passing through Ukraine's recently audited accounts. This would avert
the threat of default or possible misappropriation of the funds. 

Which path Ukraine takes will be largely determined by the citizens of
Ukraine. But the west should do what it can to help by developing a
coherent policy that neither abandons the country nor naively hands over
money in exchange for unfulfilled promises. 

******

#6
Financial Times (UK)
13 April 2000
Editorial 
Fresh Start

For years, the Russian Duma has baulked at ratifying Start-2, the Strategic
Arms Reduction Treaty, which its government signed with the US in 1993. At
last, the Russian parliament is tomorrow due to debate, and likely to
approve, the nuclear arms control pact. 

Duma ratification of Start-2, which the US Senate endorsed four years ago,
is overwhelmingly in Russia's interest. It would pave the way for the US
and Russia to reduce their nuclear arsenals to a level that even an
impoverished Russia could afford. It could politically inhibit the US from
breaking out of the Anti-Ballistic Missile (ABM) treaty in order to build
its controversial anti-missile shield. It could also boost efforts to check
the spread of nuclear arms by showing the world that the big weapons states
were again doing something to curb their arsenals. 

If this all is so, and it is, why has the Duma delayed for so long? Boris
Yeltsin, the former president, tried to get parliamentary approval, but had
appalling relations with the Duma. This has changed. Kremlin and Duma are
now more in tune. Vladimir Putin is president-elect, and can probably count
on the pro-Putin Unity party and allies to outvote Communist and
nationalist opponents of Start-2. The latter suspect any agreement that the
US Senate so rapidly ratified as bound to weaken Russia. 

In fact, Russia weakened itself through the internal break-up of the old
Soviet Union and through its own economic problems. With part of the old
Soviet nuclear production base left behind in now-independent Ukraine, and
with a defence budget now amounting to only a tenth of America's, it has
been unable to keep operational the 6,000 warheads allowed it (and the US)
under Start-1. 

Anything that lowers the warhead limits reduces Russia's disadvantage
relative to the US. Start-2 would nearly halve the Start-1 ceilings, and
Washington and Moscow have already agreed to follow it up with a Start-3
deal, aimed at cutting arsenals by a further third. This would be a level
Russia could afford. 

Nor need Russia fear being left unable to penetrate a US National Missile
Defence (NMD), which would be designed to shield the US from a few rockets
fired by a rogue state like North Korea, not several thousand Russian
missiles. Nonetheless, Moscow still objects to the NMD plan as endangering
mutual deterrence and violating the ABM treaty. So it is all the more in
its interest to re-engage the US in arms control in a way that would
increase the political embarrassment of a future US president in ditching
the ABM pact. 

******

#7
BBC MONITORING
NEW RUSSIAN PRESIDENTIAL ADVISER DENIES BEING EXTREMELY LIBERAL ECONOMIST
Text of report by Russian Public TV on 12th April 

[Presenter] Today Vladimir Putin signed his first personnel decree after
his election as president. He appointed Andrey Illarionov, a well known
economist and director of the Institute of Economic Analysis, as his
adviser. Putin's new adviser has a firm reputation as a convinced liberal.
Under [Yegor] Gaydar, Illarionov was one of the leaders of the Working
Centre for Economic Reforms and in 1993 he was an adviser to Prime Minister
[Viktor] Chernomyrdin. After a year he tendered his resignation because he
did not agree with the policy of Viktor Gerashchenko, the head of the
Central Bank. 

Illarionov stands out for defending his point of view under any
circumstances: he was nearly the only Russian economist who, long before
August 1998, was openly talking about the coming collapse of the GKO
[short-term state loan bonds] pyramid and an inevitable default. He had
called on [Sergey] Kiriyenko's government to devalue the rouble earlier. At
that time Illarionov was not listened to, but, on the other hand, he was
appointed presidential adviser today. 

Among his predecessors in this post were such personalities as Aleksandr
Livshits and Aleksandr Voloshin. Andrey Illarionov is now taking part live
in our "Vremya" programme.[Video shows him on the tarmac at Sheremetyevo
airport] 

[Q] Andrey Nikolayevich, good evening. 

[A] Good evening. 

[Q] What will you be doing and what are the first presidential decrees in
the sphere of economics we can expect soon? 

[A] Insofar as I understand, it will be a matter of giving economic advice,
of advice in the sphere of the economy. 

It would be premature now to be speaking of any specific decrees. A
government must be formed. The government will pursue an economic policy in
accordance with the president's instructions and choices. 

[Q] Could you please tell us how you evaluate the current economic
situation in Russia, taking into account also the falling oil prices. 

[A] The situation in the country's economy remains fairly favourable,
despite the fact that there has been a fairly substantial drop in oil
prices. But it is precisely this drop which perhaps could be of more
benefit than harm to our economy because during a fairly lengthy period we
have been living on income derived from the extraction and sale of natural
resources. Sooner or later we, the whole of our country, all of us, need to
learn to earn money with our hands, with our brains and not by means of our
natural resources. Therefore, possibly in the short-term, the drop in oil
prices will not be an altogether pleasant factor, but in the long-term we
will not be going anywhere if we rely on oil. 

[Q] Andrey Nikolayevich, in public opinion you have the reputation of a
liberal economist and even as an extremely liberal one. Does your
appointment mean that the president has finally chosen in favour of a free
market which will not rigorously controlled by the state? 

[A] Evidently, it is only in our country - because our assumptions, our
political and economic assumptions, are so distorted - that perfectly
sensible economic ideas are seen as extreme, as radical, whereas in actual
fact these views are perfectly normal, sensible, I would say moderate. It
seems to me that such a choice means that the country's leadership and the
president are gearing up towards pursuing a sensible economic policy. 

[Q]Thank you for taking the time - I know that literally in a few minutes
you are departing from Moscow - to reply to our questions. 

*******

#8
RUSSIA'S PRIVATIZATION MUST BE OPEN AND TRANSPARENT - PUTIN
Interfax 

Moscow, 12th April: Russian President-elect Vladimir Putin has described as
the key aspects of the country's privatization policy openness, the
transparency of projects and their conformity with international standards
understandable to all potential participants. 

Putin made this point during a Wednesday meeting with State Property
Minister Farit Gazizullin, the presidential press service has told Interfax. 

"The objectives of the government are to secure the maximum possible
financial returns on the one hand, and to put property in the hands of
truly efficient owners on the other," a press service report says. 

*******

#9
World Bank, IMF Have "a Very Positive View" of PUTIN'S Early Days. 

WASHINGTON, April 13 (Itar-Tass) -- The leadership of the World Bank and the 
International Monetary Fund have "a very positive view" of present-day 
Russia. 

World Bank President James Wolfensohn told Itar-Tass that in this respect 
there was no differences in views between himself and his colleagues in the 
International Monetary Fund. "I was with Stan Fischer yesterday, and I think 
each of us has a very positive view of the early days of acting President 
Putin," Wolfensohn said at a press conference in Washington on Wednesday in 
response to an Itar-Tass question. 

Wolfensohn said he had recently had "the opportunity to meet with Vladimir 
Putin in the last couple of months" and "all of us have confidence that 
President Putin is the man that can make" the right things happen. 

The World Bank Chief that the Russian President's economic programme which 
"all of us, including the Russian people, are waiting to see" will be sound 
and effective. 

He recalled that, according to Putin himself, the programme would "address 
the questions of structure, the issues of the legal system, the justice 
system, that it would attack head-on corruption and, of course, build the 
elements of growth in the economy. Wolfensohn said, "I think all of us have 
confidence that President Putin is the man that can make it all happen." 

Wolfensohn said Russia is "a special place, both because of its people and 
because of political weighing. So it is always likely to have some different 
aspects with other countries." 

Wolfensohn's meeting with journalists was organised ahead of the spring 
session of the managing boards of the World Bank and the International 
Monetary Fund. On Thursday, Stanley Fischer, the IMF acting Managing 
Director, is expected to hold a similar press conference upon return from 
Moscow which, according to some sources, produced the most favourable 
impression on him. 

******

#10
Washington Post
13 April 2000
[for personal use only]
Putin's London Ally
By Jim Hoagland

LONDON
Prime Minister Tony Blair is moving quickly to engage Vladimir Putin 
while other Western leaders hesitate and puzzle over the Russian 
president-elect's intentions. Blair will warmly welcome Putin here Sunday on 
his first symbolically important trip abroad since his election.

"His vision of the future is one that we would feel comfortable with," Blair 
told me at his Downing Street office on Tuesday. The prime minister voiced 
surprising praise for the still relatively untested successor of Boris 
Yeltsin. Margaret Thatcher assessed Mikhail Gorbachev in 1985 as a man the 
West could do business with. Putin emerges from Blair's word portrait as a 
man who could do business in the West.

"Putin has a very clear agenda of modernizing Russia. When he talks of a 
strong Russia, he means strength not in a threatening way but in a way that 
means the country economically and politically is capable of standing up for 
itself, which is a perfectly good aim to have," Blair said, adding 
deliberately:

"I read sometimes that people worry when he uses language about Russian 
strength. But when I use language about Britain being strong, I don't mean 
that it threatens the outside world. I mean it is a better developed country 
with a better sense of its place in the world and better able to hold its own 
economically and politically."

It is accepted here that Putin has deliberately chosen Britain, and Blair, as 
special interlocutors as he begins to feel his way in international politics. 
Putin is 47, the age Blair reaches on May 6. Both intend to be in power for 
some time to come. And their personal styles seem to mesh.

I sensed from our conversation that Blair sees some of his own discipline and 
focus in Putin, who hosted Blair in St. Petersburg this winter. The former 
KGB agent can hope to learn the ropes from the forceful and firmly entrenched 
Briton as they both prepare for the G-8 summit in Okinawa this summer and 
other international gatherings.

But the connection is geopolitical as well as personal. The fact that Britain 
has been more restrained in criticizing Russian atrocities in Chechnya than 
has France, Germany or the United States made Putin's choice of a great power 
to visit easier. So did Britain's political role of being a bridge between 
the United States and Europe.

"Putin said in St. Petersburg that one of the reasons he wanted to establish 
a stronger relationship with Britain is that he sees us in that role" of 
linking Europe and the United States and having influence in both. But Blair 
quickly turned away a question about whether he would try to mediate 
Washington and Moscow's sharp disagreement on modifying the Anti-Ballistic 
Missile (ABM) treaty of 1972:

"We will discuss these issues. What people are trying to do is manage the 
situation, to make sure that each one understands the other's point of view. 
We want to make sure everyone is on the same wavelength of dialogue and 
understanding."

At another point in the conversation Blair laid heavy emphasis on the 
importance of maintaining the ABM treaty as a cornerstone of international 
arms control and nuclear deterrence. I heard him suggest, without quite 
voicing, serious concern about the viability of Britain's own nuclear arsenal 
if the 1972 treaty is abrogated and missile defenses proliferate.

Blair said he would press Putin to allow international access to prison camps 
in Chechnya and to work for a political solution there. But while other 
European countries are pressing for political sanctions against Russia, Blair 
feels he can still reason with Putin.

"It is important that there is full access for the international bodies that 
examine and monitor human rights in Chechnya. In the end that is the only 
thing that will satisfy the outside world. I raised it in St. Petersburg and 
I will do it again."

Finally, the prime minister may hope to use this hastily arranged working 
summit on Sunday to lay the groundwork for new cooperation between the West 
and Russia in the Balkans. With NATO troops in Bosnia and Kosovo, Putin 
should be given no grounds for cozying up to Serbia's Slobodan Milosevic.

Blair's enthusiasm and fierce drive, which were vital factors in pursuing and 
winning the Kosovo war last year, touch every project he undertakes. He is 
not a half-measure man. The London welcome for Putin will therefore be warm 
and supportive. Less certain is how productive it will be. 

******

#11
Moscow Times
April 13, 2000 
Falling Oil Prices Arouse Crisis Fears 
By Valeria Korchagina
Staff Writer

Export prices for Russian crude oil have dropped below $20 per barrel this 
week - down some 25 percent on the $26 a barrel they hit in March - raising 
fears of an economic slowdown and even a fiscal crisis. 

After the several months of sky-high global oil prices had boosted Russian 
oil majors profits - and the nation's economy - Russian Urals blend export 
crude slid below $20 per barrel this week, edging down close to the $18 per 
barrel level that industry players and government officials have said is the 
lowest "safe" level for the oil industry and the economy. 

Spot prices for Urals blend slid Tuesday by $1.14 a barrel, stopping at 
$19.05. The same day, May futures for benchmark Brent crude were down $1.28 
in London to $21.30. 

First Deputy Prime Minister Mikhail Kasyanov expressed concern Tuesday, 
warning that if prices continue to drop, Russia may face problems in 
fulfilling this year's budget. The 2000 budget forecasts that Urals crude 
will average $18 per barrel for exports, similar to the average for 1999. 

Nevertheless, $19 per barrel is considered an acceptable level, as long as 
oil prices do not drop much further, Kasyanov added. 

Analysts said Wednesday that the recent slump in oil prices was not an 
ominous sign and - at least for the year - that prospects were likely to be 
bright for Russia. 

"This is a drop caused by traders lowering the short positions in 
anticipation of an increase in production [by the Organization of Petroleum 
Exporting Countries]," said Leonid Mirzoyan, an oil analyst with Regent 
European Securities. 

The oil market looked to be stabilizing Wednesday, with Brent futures 
creeping back up to $21.35 per barrel in London. 

The words of reassurance from high-ranking government officials did not seem 
to be sufficient to calm the somewhat alarmist local press. 

"Now Russia will feel how it is to live without its oil exports safety net," 
Kommersant daily wrote Wednesday. Rival business daily Vremya MN followed 
suit, in an article headlined: "The budget may not live to see autumn." 

Russia is a price-taker on the world oil market, because it is unable to 
increase output in order to compensate for lower prices. Analysts estimate 
that every $1 that the benchmark Brent crude rises above $14 brings federal 
coffers an additional $1 billion annually, and brings the Russian balance of 
trade an additional $2 billion. 

Even some of Russia's oil majors said they were alarmed by the slide. Leonid 
Fedun, vice president of LUKoil, suggested that Russia might need to devalue 
the ruble to about 30 rubles to the dollar if the drop in oil prices 
continues. 

LUKoil, Russia's biggest oil major, listed pretax profits of $1.3 billion for 
1999, which was the oil industry's best year since it emerged as a mostly 
private sector business in the wake of the collapse of the Soviet Union. 

The sharp drop in world oil prices over the first two weeks of April followed 
the decision in late March by OPEC to increase output by 1.7 million barrels 
per day. Since that decision, Brent has slumped about 30 percent from the 
10-year high reached early last month. Urals has followed a similar pattern, 
trading at an average discount to Brent of $1.50 a barrel. 

Despite the fact that most of the additional supplies have yet to reach world 
markets, prices began to fall even before the cartel's decision on March 28, 
based on the expectation of larger crude oil shipments. 

Since OPEC has decided to increase production, it has also announced a price 
band for OPEC's basket of seven crudes of $22 a barrel to $28 a barrel. 
However, by Tuesday the OPEC basket was down to $20.99. 

Russia certainly hopes that OPEC can succeed in hitting such a price range 
over the long term. Kasyanov said Tuesday that a price range of $20 to $25 a 
barrel would be suitable for Russian exports. 

OPEC has reacted promptly to the decline in prices for its oil, threatening 
Wednesday to activate an informal price mechanism, agreed on in March, that 
would allow the organization to cut its production. 

That mechanism provides for OPEC members to adjust production by 500,000 
barrels per day if the basket price stays out of the target range for more 
than 20 consecutive trading days. 

The International Energy Agency said Tuesday that world markets will actually 
be oversupplied with crude oil by about 600,000 barrels a day during the 
second quarter of this year. 

However, such a supply surplus should not damage prices seriously, said 
Mirzoyan at Regent European Securities. 

This is because the high prices over the winter period have just ended and 
left inventories low. With the driving season coming up, even the current 
surplus will not allow for reserves to build back up to 1999 levels, Mirzoyan 
said. 

This week's drop in crude prices is in fact an anomaly and the long-term 
tendency will be for prices to remain high, he added. 

Demand will again grow as next winter approaches, and in the fourth quarter 
of this year, demand is likely to exceed supply to the tune of about 2 
million barrels per day, a similar shortfall to the tight market that sent 
prices in late 1999 and early 2000 to Gulf War levels. 

The International Monetary Fund is also predicting a relatively high average 
level for crude prices. The IMF said recently that it expects crude oil 
prices this year to average $24.50 per barrel, about 35 percent up on the 
1999 average of $18.25 per barrel. 

If such predictions are borne out then the Russian economy is set for further 
growth, analysts said Wednesday. 

"This year will actually be better than 1999, which up to date has been 
considered the best [for the oil industry]," said Dmitry Avdeyev, an oil 
analyst with United Financial Group. 

Oil prices could only deteriorate over the course of the year if OPEC members 
fail to comply tightly enough with their current production agreements. 

However, OPEC's performance last year on observing production cuts suggests 
that the cartel has become capable of sticking to its promises. 

OPEC is due to meet in June to review its March decisions. However, some of 
the production group members have already issued hints that there will not be 
any further increases in production. 

*****

#12
Itogi 
No. 15. 
[translation from RIA Novosti for personal use only]
KREMLIN RETURNS TO ONCE-MALFUNCTIONED IDEA OF 
BIPARTISANSHIP TO PUT AN END TO POLITICAL TURMOIL
By Dmitry PINSKER

According to a Kremlin insider, the presidential 
administration wants "to have a stable party system comprising 
two full-fledged political organisations - one right- and the 
other left-of-centre - to dominate parliament." This shows that 
the President-elect's team is sure that sound power can only 
rest on two pillars. Inasmuch as two such parties have not come 
into being in the years of democratic transformation, Vladimir 
Putin's administration regards it as its duty to create them.
The present re-designers of the political framework claim 
that they have taken into consideration the mistakes of their 
predecessors and even revealed the most serious of their 
mistakes. To listen to them, the problem was that our society 
was much polarized five years ago and the then President 
settled on one of the poles, instead of balancing in-between 
them. Today the situation is different: even Putin's main 
rival, Gennady Zyuganov, is inclined to constructive 
cooperation with the Kremlin, and the feeling is mutual.
According to the President's advisers, the two 
system-forming parties (Conservative and Social Democratic) are 
to be the unquestionable favourites of the parliamentary 
election race in 2003. All this is at the stage of the 
blueprints as of now, because the Kremlin think-tank has only 
outlined the task in principle. Nonetheless, the fundamental 
idea is crystal clear.
The conservative party is to be created on the basis of 
Unity with the participation of what is left of Our Home Is 
Russia, or NDR, and the "healthy" wing of the Union of Right 
Forces, or SPS. In the Kremlin's interpretation "the healthy" 
are those who are pained to see the SPS rolling down into 
opposition.
When the question of the leader of the new party comes up, 
Kremlin insiders name Sergei Kiriyenko.
It must be said that all these plans and ideas cause 
surprise and even irritation in the SPS. At the Union's 
congress scheduled for May Kiriyenko and Anatoly Chubais are 
going to initiate the transformation of this election bloc into 
a full-fledged political party. SPS leaders have long since 
been talking of the need to create a political construction 
which would be no less effective than the KPRF - a smoothly 
operating machinery for conducting election campaigns at any 
level - from mayoral to presidential.
With the elections over, the threat of a split among the 
right forces has not been eliminated, because a considerable 
part of SPS members - mostly veterans of the democratic 
movement - are displeased with the actions of the SPS 
leadership in support of Putin.
By and large, the Kremlin looks forward to such a split on 
the right flank of the political spectrum. Presidential 
advisers predict that there will be no trace left of the 
election democratic coalition in a short while and Kiriyenko's 
only choice will be to join the pro-Putin conservative party.
A social democratic party should emerge as a result of the 
self-transformation of the KPRF, according to one version. 
Putin described such an option in his book "In the First 
Person":
"Communists will either change their program precepts, thereby 
becoming a large left party of a European type, or, if they are 
unable to do this, will lose their social base and will 
gradually leave the political scene. Their leaders understand 
this. I think they are getting ready for self-transformation. 
They are unable to do this today, fearing that their electorate 
will regard it as treachery. However, it is important not to 
miss the chance - when, to which degree and how much they will 
have to change about themselves." I do not think that Putin had 
a clear idea of the social base of the left forces, its strata 
and classes. Our domestic political spin doctors rarely think 
of such things, in general. This is true of not only the upper 
echelons: when the issue at hand is the construction of a party 
beginning with the "roof", who would fritter away their energy 
on such trifles as supports? In the meantime, it is rather 
difficult even for communists to give a collective portrait of 
their average voters.
Some Kremlin thinkers have added to their armoury one of 
the things Putin said the night of his election triumph. He 
expressed his intention to win over KPRF's followers to his 
side, instead of waiting till the social base of that party 
shrinks the natural way. "The policy of authorities should 
always be more balanced.
Then they will not have to fight with communists as a party but 
will have to fight for people," the President-elect said.
The proponents of this more sophisticated tactics offer to 
create a social democratic party by breaking the social 
democratic wing away from the KPRF and uniting it with other 
more moderate left forces, such as the Agrarian Party. A union 
with the Federation of Independent Trade Unions will allow the 
new left to acquire a powerful regional construction, and the 
new organisation is to be headed by Aman Tuleyev.
By and large, it really does not matter much which of the 
two options for the creation of a social democratic party on 
the basis of the KPRF will be found more promising and which 
will be rejected. There is the ground to predict that both will 
prove to be a failure.
The Kremlin is ready to reconcile itself to the new 
abortive attempt of the KPRF's self-reformation. Its agreement 
to play the role of a "system opposition" is enough for the 
presidential administration. With Boris Yeltsin gone, Kremlin 
insiders are no longer ashamed of their close relations with 
the KPRF. This was publicly demonstrated last January, when 
Gennady Seleznev was elected State Duma Speaker thanks to the 
united efforts of the new allies. It is interesting that 
communists received that precious gift actually for nothing: 
they only promised not to do what they would be unable to do 
anyway - to prevent Putin from becoming President.
A pro-Putin non-communist majority could be formed after 
the December parliamentary elections. But that seemed to be too 
much of a trouble, because in that case, it would be necessary 
to depend on some "inconvenient" factions - "capricious" 
Yabloko and principled SPS, the leaders of which would 
criticise government and presidential initiatives all the time. 
Today, after a year of political battles, the Kremlin wants 
quietness, silence, peace of mind and even some kind of 
stagnation. For this it should be able to rely on parties with 
a nearly army discipline.
The idea of bipartisanship mostly attracts the Kremlin 
insiders because there will be no more turbulent parliamentary 
debates which led to political crises, there will be no need to 
guess the outcome of each voting and it will be able to forget 
as a bad dream many-day-long consultations with nearly each and 
every deputy. All questions could be decided well in advance in 
quiet Kremlin offices. This is how the problems arising in 
connection with gubernatorial elections are already being 
decided and how things were settled in the first days of the 
work of the new Duma. If it had not been for the protest of the 
offended right, the scenario under which Seleznev has been 
elected Speaker could have been regarded as a foolproof option.
The problem is that such a mechanism is unreliable. The 
moving union with communists will inevitably break down the 
moment the government demands that parliament adopt the bills 
aimed to facilitate the fulfilment of a program of radical 
economic reforms, which German Gref's Center for Strategic 
Research is preparing. Putin says that these bills will be 
submitted for consideration by the Duma before it recesses for 
summer vacation.
The building of at least one, conservative, pillar seems 
to be rather improbable. Any attempts to revive the mechanical 
robot - Unity - will inevitably lead to a split of that 
movement into several groups and their members being drawn by 
different lobbying groupings to their side. This will be an end 
to either a common ideology or a formal party discipline.

******

#13
Russia charges U.S. spy, Russian contact

MOSCOW, April 13 (Reuters) - Russia has formally charged U.S. businessman 
Edmond Pope with spying offences which could send him to jail for up to 20 
years, a spokesman for the FSB domestic security service said on Thursday. 

The spokesman said Pope's unnamed Russian contact, seized with him last week, 
had been charged with disclosing state secrets, punishable by up to seven 
years in prison. 

Pope, 53, was detained in Moscow on April 4. He has been described by U.S. 
media as a retired U.S. Navy captain who spent much of his career working in 
naval intelligence. 

His Russian contact's name has not been revealed. 

The FSB has said he worked in a Russian agency connected with hi-tech defence 
research. 

The incident was the latest in a series of espionage scandals to erupt in 
Moscow in recent months. Some of them have promoted Cold War-style 
tit-for-tat expulsions of diplomats a decade after the fall of communism. 

******

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