April 14, 2000    
This Date's Issues: 4247 • 4248 • 4249

Johnson's Russia List
#4248
14 April 2000
davidjohnson@erols.com

[Note from David Johnson:
1. Interfax: RUSSIA PROPOSES "MORE RADICAL" REDUCTION OF WARHEADS - FOREIGN MINISTRY SOURCE.
2. Intefax: RUSSIA'S SAVINGS BANK REVEALS PRIVATE DEPOSITS' VOLUME.
3. Bloomberg: IMF Says Russia Committed to Reform, Lending Likely.
4. Bloomberg: IMF's Martin Gilman on Russian Economy, Needed Reforms.
5. Reuters: Putin shows authority over Chechnya, energy row.
6. The Independent (UK): Patrick Cockburn, Russians braced for Chechens' spring offensive in Chechen hills.
7. International Herald Tribune: David Russell-Johnston,
Human Rights for the Chechens, Too.
8. The Economist (UK): Russia's Strange Optimism.
9. Moscow Times: Robert Coalson, Putin Won't Pull NTV Plug.
10. Robert Coalson: re: Tom Graham/4244.
11. Segodnya: "Live by your means" is the most stupid idea.
Interview with Viktor IVANTER, Director of the National Economy 
Forecasting Institute.
12. Andrei Liakhov: Berezovsky - the time is up?
13. BBC MONITORING: PUTIN'S TRIP TO BRITAIN SIGNALS SHIFT IN RUSSIA'S EUROPEAN POLICY - NEWSPAPER.
14. Itar-Tass: 1839 Federal Troops Killed, 5266 Wounded in Chechnya-Manilov. 
15. Interfax: Russia Said To Consider PR Agency.] 

*******

#1
RUSSIA PROPOSES "MORE RADICAL" REDUCTION OF WARHEADS - FOREIGN MINISTRY SOURCE
Interfax

Moscow, 13th April: Moscow is proposing to Washington a more radical - almost 
by 50 per cent - reduction of nuclear warheads within the framework of the 
planned START-III Treaty. 

Diplomatic sources in Moscow told Interfax today that the Russian Federation 
had put forward an initiative to reduce the number of warheads on each side 
to 1,500 instead of the 2,000-2,5000 envisaged within the framework of the 
future START-III Treaty. 

The sources especially noted that the Russian side is proposing to the 
American side such a radical reduction in warheads "on condition that the ABM 
Treaty of 1972 is preserved together with the ban envisaged by it on 
developing a strategic antimissile defence of the country's territory". 

"Without that there will be no reductions, even within the framework of 
START-II," the experts stressed. 

The START-II Treaty envisages a reduction in nuclear warheads on each side to 
3,000-3,500... 

*******

#2
RUSSIA'S SAVINGS BANK REVEALS PRIVATE DEPOSITS' VOLUME
Interfax 

Moscow, 12th April: Private accounts at Russia's Sberbank [Savings Bank] made 
up more than R260bn on 1st April, the deputy chairman of the bank's board, 
Gennadiy Melikyan, told the press on Wednesday [12th April]. 

Melikyan said that rouble deposits total R202bn and foreign currency deposits 
almost 2bn dollars. Sberbank maintains 252m personal accounts. Roughly 40 per 
cent of the personal savings are on time deposits for pensioners, he noted. 

*******

#3
IMF Says Russia Committed to Reform, Lending Likely

Washington, April 13 (Bloomberg)
-- The International Monetary Fund expects to resume lending to 
Russia soon because the country's new government is in a better position to 
achieve economic reforms than at any time since the collapse of the Soviet 
Union, acting IMF chief Stanley Fischer said. 

Newly elected President Vladimir Putin has the will and the strength to carry 
out the reforms the IMF wants to see before revisiting a loan program that 
has been stalled since September, Fischer said. 

``I hope we can renew our support to Russia soon,'' said Fischer, who met 
with Putin during a visit to Russia last week. 

Fischer said he didn't know what exactly that support would be. ``In my 
discussions with the president, it seemed like what he wanted to do is what 
we want to support,'' he said. 

The fund stopped lending to Russia in September because of a range of 
concerns, including member states' opposition to Russia's war against Muslim 
rebels in Chechnya, allegations that previous loans were improperly diverted, 
and the government's failure to pass key legislation on bankruptcies, bank 
restructuring and taxes. 

7 Billion Due 

Russia has said it needs some IMF financing this year to help cover $7 
billion in foreign debt payments due. Formal loan talks probably won't start 
until after Putin's inauguration in May. 

``This is the first time I've been to Russia in 10 years that I've seen a 
consensus on what needs to be done, and a political setting in which it seems 
the president has the political will to put it through,'' Fischer told a 
press conference for the joint World Bank and IMF meetings in Washington. 

The Russian government today approved sweeping changes to the tax code, the 
first piece of Putin's economic program and a key reform sought by foreign 
and domestic businesses. 

If adopted by parliament, the 100 pages of amendments will expand tax 
authorities' powers, including allowing inspectors to be posted at companies 
with tax arrears. The proposal also includes revisions to the rules on tax 
residency and sources of taxable income, and taxation of offshore businesses. 

Russia wants to simplify its tax system and lower taxes to encourage 
compliance, reduce the burden on small and medium-sized companies, and make 
the country more attractive to investors. 

World Bank Role 

Over the next year, the World Bank's role in Russia should eclipse that of 
the IMF, Fischer said. Lending needs to support new banking rules and other 
regulatory changes, he said. 

``Each of us (in the World Bank and IMF) has a very positive view of the 
presidency of Vladimir Putin,'' World Bank President James Wolfensohn said 
yesterday. ``We are all hoping that Putin will come in and attack the 
structural problems.'' 

Incoming IMF chief Horst Koehler has signaled a willingness to rebuild ties 
to Russia. In a December trip to Moscow as president of the European Bank for 
Reconstruction and Development, he pledged to boost lending to Russian 
industry. Koehler will take up the top IMF post in May with Fischer as his 
deputy. 

The Russian government says it needs at least $1.5 billion from the IMF this 
year. The 2000 budget anticipates about $5.9 billion in foreign loans, 
including about $4.5 billion from the IMF and the World Bank. 

******

#4
IMF's Martin Gilman on Russian Economy, Needed Reforms: Comment

Moscow, April 13 (Bloomberg)
-- The following are comments by Martin Gilman, the International 
Monetary Fund's resident representative in Russia, on Russia's economy, the 
IMF's ``wish list'' for the country and other topics in a speech delivered at 
Moscow University. 

On growth and stability: 

``Sustained growth and further fiscal consolidation that is needed to 
maintain macroeconomic stability will require acceleration of structural 
reforms to spur investment activity and strengthen exports as well as the 
need for comprehensive tax and expenditure reforms. 

``The goal of many of the needed structural reforms is to improve the 
investment climate, primarily for Russian investors, who are the key to what 
will happen, but also for foreign investors. The large amount of Russian 
capital that has flown abroad will begin to return to Russia only when the 
investment climate changes, and as it comes back, and investment picks up, so 
too will growth.'' 

On the IMF's ``wish list,'' provided at bottom of report: 

``In putting this wish list forward, it cannot be overlooked that many of the 
proposed measures have already been a part of Russian government programs in 
the past; they have just not been implemented. 

``The poor record reflects, fundamentally, a failure to overcome fierce 
resistance from vested interests in the face of a weak government consensus. 
This weak government consensus is not an inevitable result of Russia's 
economic transformation as some would have it. In some other transition 
economies it has not been the case. It has to do with the role of the state 
in Russia.'' 

On pace of reforms: 

``We, along with many others, have not anticipated how difficult and 
protracted the process of reforming the state would be after 70 years of the 
Soviet regime, and in fact, how dependent the economic transformation would 
be on the renewal of the state apparatus. Unless there is a clear 
understanding about the role of the state, it will not be possible to 
(encourage) proper functions and Russia will risk being mired in this 
economic no-man's land between a centrally planned system which no longer 
exists and a fully functioning market economy. This will put reform at risk 
and lead to greater frustration. 

On new administration, new beginning: 

``The start of a new administration in Russia, working with a relatively new 
Duma, presents a rare opportunity for a second beginning. 

``The question now is whether it will be possible for Russia to develop its 
own economic program, which is worked out by the Russians, and effectively 
supported in the government, in the Duma, in the Kremlin, and explained to 
the society as a whole so that it will have, as we say, full ownership by 
Russia.'' 

The IMF's `wish list.' 
Industrial restructuring 
Improving the business climate 
Improving corporate governance 
Rule of law 
Elimination of nonpayments and barter 
Reform of the banking system 
Tax reforms 
Expenditure reform 
Civil service reforms 
Strengthen social safety net 
Land reform 
Housing 

******

#5
Putin shows authority over Chechnya, energy row
By Patrick Lannin

MOSCOW, April 13 (Reuters) - Vladimir Putin, increasingly imposing his 
authority since being elected president in March, cracked down on bosses of 
two huge state-owned companies on Thursday and rejected Western allegations 
of abuses in Chechnya. 

The 47-year-old former KGB spy also headed for victory in parliament as 
deputies were expected to ratify a long-delayed nuclear arms cut treaty with 
the United States on Friday. 

Approval of the START-2 treaty had become bogged down as the previous 
Communist-dominated State Duma lower house of parliament opposed it and 
former President Boris Yeltsin. 

The new parliament, elected in December, is far more pro-government. However, 
Putin's key ministers spent several hours persuading deputies to approve the 
pact, which will slash nuclear arsenals. 

As his ministers nudged parliament along the road to ratification, Putin 
hosted talks between the two bosses of Russia's mammoth electricity and gas 
companies. 

Putin was forced to head off the row between electricity firm Unified Energy 
System (UES) EESR.RTS and Gazprom, the world's largest gas company. 

He seemed to get the desired results as the heads of the companies, Anatoly 
Chubais of UES and Gazprom's Rem Vyakhirev, said they had gone most of the 
way to solving the spat. 

Gazprom had threatened to slash supplies to UES and demanded that it start 
paying for its gas in cash. Chubais in turn said he would have to cut 
electricity to 11 towns and cities. 

But Chubais, well known as an architect of many of Russia's post-Soviet 
stop-go reforms, was optimistic. 

``On the most pressing problems of today and of the second quarter there is 
on the whole a base understanding, there is an understanding of how we will 
solve the current problems,'' Russian news agencies quoted Chubais as saying. 

The row highlighted again the chronic problem of non-payments in Russia's 
post-Soviet economy, where companies pay for products in both cash and in 
barter goods. 

The International Monetary Fund has repeatedly urged Russia to solve the 
problem, which leads to companies being starved of cash and unable to pay 
debts. 

PUTIN DEFENDS CHECHNYA POLICY 

One of the most pressing foreign policy problems for Putin has been 
persistent Western criticism of the offensive against rebels in the North 
Caucasus region of Chechnya. 

The war has killed many civilians and turned around 200,000 people into 
refugees. 

However, Putin again rejected Western allegations of widespread rights abuses 
and issued a tough statement to defend Moscow's actions. 

``One of the priorities of Russian policy is restoring order and respect for 
human rights on the territory of the (Chechen) republic,'' Putin said in the 
statement as another Western delegation held talks on Chechnya in Moscow. 

The delegation of the Organisation for Security and Cooperation in Europe 
(OSCE), led by Austrian Foreign Minister Benita Ferrero-Waldner, was due to 
travel to the North Caucasus later on Thursday to assess the humanitarian 
situation there. 

``The regime of Dzhokar Dudayev (Chechnya's late president) and Aslan 
Maskhadov, having usurped power in this part of the Russian Federation, 
created on Chechen territory a criminal- terrorist enclave where lawlessness 
and suppression of human rights were allowed to rule unchecked,'' the 
statement said. 

******

#6
The Independent (UK)
14 April 2000
[for personal use only)
Russians braced for Chechens' spring offensive in Chechen hills 
By Patrick Cockburn in Itum-Kalye, Chechnya 

In the Russian artillery base of Itum-Kalye, perched high in the mountains of 
southern Chechnya, Russian officers said yesterday that they feared a spring 
offensive by Chechen guerrillas attempting to regain the ground they lost in 
fighting over the winter. 

"I expect the bandits will attack in the spring when the snow melts in the 
high mountain passes," said Major Sergei Nikolaevitch, of the 721 Artillery 
Division, as he pointed towards the peaks and ravines that mark Chechnya's 
border with Georgia. 

The giant guns at Itum-Kalye command the Argun Gorge, the key to southern 
Chechnya, its steep sides covered with trees just coming into leaf. Here the 
rebels fought from village to village to stop the Russian army advancing 
south after it captured Grozny, the Chechen capital, at the end of February. 

The villages along the Argun river, which flows through the gorge, have paid 
a heavy price. Viewed from a Russian helicopter flying at 500 feet, every 
roof looked as if it had been torn apart by explosions, with the white 
roofing timbers exposed. Shells had smashed farmhouses. All the farm animals, 
apart from a few cattle, have disappeared. 

In his tent at Itum-Kalye, Major Alexander Vinogradov, a veteran from St 
Petersburg who has spent 16 years in the Russian army and its Soviet 
predecessor, said he was confident for the moment that the heavy fighting was 
over. He said: "The rebels have broken up into groups of 10 to 15 men. It is 
the only way to survive in the mountains until spring." 

He said that in recent days his men had clashed with guerrillas only when 
they launched mopping up operations. 

In the lower slopes of the mountains spring has arrived. In the wrecked 
villages apple trees are covered with white blossom. The first light green 
leaves are appearing on the trees and are beginning to give the rebels cover 
from artillery observers and air attacks. 

During the last Chechen war in 1994-96 it was in spring that the guerrillas 
began their counter-attack. Shamil Basay-ev, the rebel leader whose foot was 
blown off by a mine in a retreat from Grozny, has even given a date for the 
counter-offensive, saying it will begin on 15 April. 

It may not be so easy. The officers at Itum-Kalye, who say they have 2,000 
men in their garrison and are building a camp to hold 1,000 more, do not 
believe the guerrillas can penetrate Russian defences. 

Pointing to his massive self-propelled 155mm guns, Major Vinogradov said: "We 
are very accurate. The rebels give a reward of $500 to $1,000 to anybody who 
kills an artilleryman, so we do not wear our epaulettes which identify who we 
are." 

This is probably fantasy. There is no evidence that Chechen fighters get any 
rewards for dead Russians. But there is no doubt, according to guerrillas who 
have fled to neighbouring Ingushetia and Georgia, that Russian firepower has 
inflicted heavy casualties in the past two months. 

At the same time the Russian army, for all its immensesuperiority, has not 
succeeded in wiping out the guerrillas. Instead it has suffered heavy losses 
in several ambushes. In recent weeks rebels have killed 85 paratroops and 43 
special forces troops. 

Major Vinogradov said he did not know about these ambushes. "Nothing like 
that has happened in our division, thank God," he said. 

Despite occupying a position in the heart of Chechnya it is clear that the 
officers commanding the Russian base at Itum-Kalye have little contact with 
ordinary Chechens and still less with Chechen fighters. 

"We only see them when we go on mopping up operations and then they flee into 
the mountains where we can't catch them," said one officer, who did not want 
his namepublished. 

But he spoke of the war as being a necessary campaign against a great Islamic 
conspiracy to subvert all the republics of the Caucasus and threaten southern 
Russia. 

********

#7
International Herald Tribune
April 14, 2000
[for personal use only]
Human Rights for the Chechens, Too
By David Russell-Johnston
Lord Russell-Johnston is president of the Parliamentary Assembly of the 
Council of Europe. He contributed this comment to the International Herald 
Tribune.

STRASBOURG - Human rights are not abstract. Their violations even less so. In 
Chechnya, since the beginning of the hostilities, the civilian population has 
suffered from the disproportionate and indiscriminate use of force by Russian 
troops. Grozny, a city of the size of Edinburgh, has been reduced to rubble. 
There is evidence of torture, rape and murder.
Certainly, the Chechen fighters have been responsible for many, often most 
brutal human rights violations themselves. The absence of any unequivocal 
condemnation of such abuses and of effective action to prevent them in future 
casts serious doubt on whether the Chechen leadership can be considered as a 
serious interlocutor in the search for a political solution. I wrote a letter 
with a warning along these lines to President Aslan Maskhadov last week.

Yet Russia is a civilized European state, a member of the Council of Europe, 
and as such expected and obliged to abide by higher standards of conduct. No 
acts of its adversary, brutal as they may be, can serve as a justification 
for its own violations of the rules it has committed itself to respect.

The Russian leadership, from President-elect Vladimir Putin to the government 
ministers and the members of the State Duma, are expected and obliged to act 
in line with, and to inspire attitudes in the Russian public that are in line 
with, the values of the Council of Europe. Russia gave its word to do so when 
it asked to join. Last week the Parliamentary Assembly demonstrated that it 
expected these promises to be met.

It is true, the assembly has little power other than words, but they are 
words spoken with the authority of the more than 800 million Europeans it 
represents.

It is with this authority that we insisted, in November and December and 
January and now in April, through the texts adopted but also personally in my 
meeting with Mr. Putin in Moscow, that Russia must respect human rights, 
ensure that the alleged abuses are investigated in a transparent manner, and 
make a genuine commitment to a peaceful solution to the conflict.

If they fail to achieve demonstrable and accelerated progress in this regard 
in the immediate future, the governments of the Council of Europe would be 
expected to suspend Russia's membership. Member states were also asked to 
lodge an interstate complaint at the European Court of Human Rights, for 
Russia's alleged violations of the European Convention on Human Rights.

In the meantime, the assembly voted to deprive our Russian colleagues of 
their voting rights, because they have defended their government position 
consistently and therefore share responsibility for it.

The decision was difficult and painful but inevitable. It came after months 
and months of patient persuasion, with understanding for Russia's 
difficulties and the reasons for its actions but insisting that it must 
respect human rights. But engagement and dialogue, to be meaningful, require 
a genuine will to achieve real progress on both sides. Sadly, at the end, we 
had very little evidence of that.

The reactions of the Russian politicians are unfortunate and unwise. They are 
prompted by the negative stance in Russian public opinion, for which they are 
largely responsible themselves. The people of Russia should understand, and 
they will, that the greatness of their country cannot be found in the might 
of its fist, nor in the loudness of its ''no'' to those expressing concern, 
but in its capacity to provide security, stability and prosperity to all its 
citizens.

The assembly's vote did not bring an end to the Council of Europe's relations 
with Russia. A change in the political attitude could quickly change the 
situation on the ground.

The Council of Europe was set up to defend human rights, democracy and the 
rule of law. This is a mandate that leaves very little room for realpolitik. 
When our legally binding standards are not respected, we have no choice but 
to act.

*******

#8
The Economist (UK)
April 15-21, 2000
[for personal use only]
Russia's Strange Optimism
The eternal hopes of spring 
MOSCOW 
President-elect Vladimir Putin is telling the world why he is optimistic 
about Russia, though wariness towards his new regime is still in order 

THERE is an adage that Russia is never as strong, or as weak, as it appears. 
Indeed, the Kremlin’s new occupants may be repeating it to themselves under 
their breath as they try to keep within reasonable limits the surge of 
exuberance that often takes hold of Moscow’s ruling class in spring. 

President-elect Vladimir Putin and his lieutenants have several reasons to be 
tempted into euphoria, and several reasons to be cautious. 

First, the economy. Especially if they are not examined too closely, Russia’s 
financial statistics continue to look better than the wildest optimist could 
have predicted at the time of Moscow’s financial crash in August 1998. 
Although it is widely agreed that a windfall from rising oil revenues has 
simply masked a continuing failure to make any serious structural reforms, a 
number of indicators—industrial production, budget revenues and 
foreign-exchange reserves—still look rosy, even as crude-oil prices tumble 
from their peak. 

Mikhail Kasyanov, the deputy prime minister responsible for the economy, 
gloated to a group of American businessmen this week that in the first 
quarter of this year the government had achieved a budget surplus of 4% of 
GDP. On shakier ground, he argued that because the new government, at least 
in the short term, was awash with revenue, it would be less reliant on the 
patronage of politically-minded tycoons. 

The same mood of defiant optimism is discernible in Russia’s view of the 
world, even though the government was stung when the parliamentary assembly 
of the Council of Europe voted last week to suspend Russian participation 
unless it behaved better in Chechnya. There was quiet chortling in the 
Kremlin this week as the German government squirmed with embarrassment over a 
revelation that its intelligence chief had paid a friendly visit to the 
Russian side of the Chechen war front. 

Meanwhile, American visitors to Moscow have been complimented by their 
Russian hosts for the “understanding” their country has shown for Russia’s 
policy in Chechnya: such a welcome change from the pesky moralising of West 
Europeans. Russian spokesmen also cite as a sign of fresh confidence the 
apparent readiness of parliament, after seven years’ prevarication, to heed 
the Kremlin’s wishes and ratify the Start-2 agreement to slash the nuclear 
arsenals of America and Russia. 

Whatever impression Mr Putin makes in western countries—such as Britain, 
where he is due on April 16th—there is still some scepticism at home about 
his ability to impose his authority on rival centres of power in Russia, 
including regional barons and the “oligarchs”, as the political tycoons are 
known. Putin-watchers are trying to work out which of the two forces that 
propelled this obscure, middle-ranking intelligence officer to supreme power 
will have more clout: the armed services or the financial, media and 
raw-materials empire of the arch -oligarch, Boris Berezovsky. 

It is almost a year since Yevgeny Primakov, the former prime minister, fell 
from power after he blessed an investigation into the financial dealings at 
Aeroflot, the airline Mr Berezovsky controls. There were rumours in Moscow 
this week that this probe had started again—and there was mystery over Mr 
Berezovsky’s whereabouts. 

In any event, Mr Putin has in recent days suffered a blow to his domestic 
credibility: the withdrawal of his nominee, Valentina Matviyenko, from next 
month’s contest for the governorship of St Petersburg. The city’s current 
boss, Vladimir Yakovlev, humiliated Mr Putin in 1996 by trouncing his mentor, 
Anatoly Sobchak. 

For Mr Putin, building up his own authority and keeping rivals in check is 
not just a matter of point-scoring or personal satisfaction. It is almost a 
prerequisite for his political survival—and for his ability to promote 
Russia’s economic recovery. However good the numbers now look, the economy 
will badly need investment over the next few years, as Soviet-era industrial 
plant and infrastructure rust away. But little cash will come unless the 
division of political and judicial power between Moscow and the regions is 
better defined. 

Already, the deadly effects of squabbling between Russia’s over-mighty barons 
and the fragility of the economic upturn have been shown up by a row between 
two of the country’s most powerful economic companies: the electricity-grid 
operator, Unified Energy Systems (UES), run by Anatoly Chubais, and Gazprom, 
the gas monopoly. Gazprom sharply cut supplies to UES this month, pleading 
that it could not fulfil its lucrative export contracts while keeping demand 
satisfied at home; Mr Chubais would simply have to rely on costlier energy, 
such as coal and oil, to keep the power on. The row, at least provisionally 
settled by a Kremlin compromise this week, highlighted one of the economy’s 
most serious worries—the risk of power cuts. Even in the giddy atmosphere of 
Russia’s spring, that sort of battle is serious enough to dampen anyone’s 
euphoria. 

*******

#9
Moscow Times
April 14, 2000 
MEDIA WATCH: Putin Won't Pull NTV Plug 
By Robert Coalson 

Ever since Vladimir Putin came to power in January, the country has been 
dying to know the answer to one question: Will he close down NTV? Here it is: 
No. After all, why should he, when mere speculation on the matter gets him 
virtually all the same benefits without any of the scandalous drawbacks? 

Fuel was added to the fire of speculation earlier this month when oligarch 
Pyotr Aven claimed that Putin recently asked him whether the government 
should continue allowing nonstate television channels to operate. This claim, 
which has not been denied by the Kremlin, and other gestures of this sort 
highlight the extremely tenuous position of nonstate media here and certainly 
must have a chilling effect on editorial practices throughout the country. 

It is, of course, no secret that the Kremlin is dissatisfied with NTV's 
coverage of the campaign in Chechnya. That dissatisfaction has been expressed 
repeatedly by myriad military and Kremlin spokespeople and has led to the 
station's exclusion from military-run press jaunts in the war zone. Most 
daunting was the Feb. 15 statement of Gazprom chairman Rem Vyakhirev that "I 
do not consider the position of the NTV leadership on the Chechnya problem 
entirely correct." Gazprom owns at least 30 percent of NTV, and, in turn, the 
government owns 38 percent of Gazprom. 

Since Vyakhirev's statements, tensions between Gazprom and NTV's parent 
company, Media-MOST, have periodically flared up, most recently over 
Gazprom's apparent efforts to recall a $211.6 million credit. 

These and other attempts to pressure NTV have led to the sad spectacle of 
Yevgeny Kiselyov, the station's general director and anchor of the "Itogi" 
news program, pleading on air repeatedly for Putin to maintain press freedom 
in Russia and to treat state and nonstate media even-handedly. By doing so, 
of course, Kiselyov is confirming what Aven, Putin and almost everyone else 
in Russia already know: The extent of freedom of the press in Russia is 
exactly what the Kremlin says it is and no more. 

This unfortunate truth is a legacy of former President Boris Yeltsin. It will 
be recalled that Yeltsin took great pride in periodically announcing that he, 
personally, was the guarantor of freedom of speech and civil liberties in 
Russia. I always marveled at how Russian society and the world community 
applauded those statements, which seemed to me to be nothing more than a 
pretty way of confirming that the state in Russia determines the limits of 
liberty. While it is obvious that Yeltsin, to his credit, "allowed" more 
freedom of speech here than any of his predecessors, he never questioned his 
presumed right to allow such freedom. Now he has passed that daunting power 
on to his successor. 

Another clear example of this power came this week when Radio Liberty, in 
violation of several Press Ministry directives against giving publicity to 
"terrorists," conducted a live interview with Chechen President Aslan 
Maskhadov. According to anonymous sources in the Press Ministry quoted by 
Kommersant on Tuesday, the ministry would have taken "significantly more 
serious" actions against Radio Liberty if the station were registered as a 
Russian mass media outlet. However, according to the same sources, because of 
"imperfections in Russian legislation," the ministry "can only exert moral 
pressure" on the station. 

It is easy to grasp the implications of such statements for anyone who 
happens to own or work for a mass media outlet that is registered in Russia f 
especially when they are coupled, as they were in this Kommersant article, 
with references to the "unpleasant residue of the Babitsky affair." 

So, will Putin close down NTV? My answer is, why should he? Why should the 
Kremlin declare an open war on the nonstate press in Russia when it can much 
more easily win a covert one? While the Press Ministry, the FSB, the 
Anti-Monopoly Ministry, the Tax Inspectorate and a hundred other state organs 
tighten the screws behind the scenes, Putin himself can continue the Yeltsin 
tradition of bold declarations of his personal guarantee of civil liberties 
for Russian citizens. 

And he will be able to point to the existence of nonstate media outlets like 
NTV to demonstrate his commitment. For the purposes of authoritarian rulers 
who want to maintain a respectable facade, a weak, even friendly opposition 
is far more useful than no opposition at all. 

Robert Coalson is a program director for the National Press Institute. The 
views expressed here are not necessarily those of NPI. 

*******

#10
Date: Thu, 13 Apr 2000 
From: Robert Coalson <rcoalson@snpi.org.ru> 
Subject: re:Tom Graham 4244

David:

I couldn't help but marvel at Mr. Graham's assertion (qualified as it
is) that Putin's "election probably met minimal standards for being
declared democratic
and free and fair." I was even more surprised when he himself writes
just a few sentences later that "[m]ore troublesome is the near total
absence in Russia
of accountability to the public, the bedrock of democracy." It
staggers the mind to figure how a country can conduct "minimally"
democratic elections without processing the "bedrock" of democracy.

Graham notes that the Kremlin won the election (as the Kremlin always
does in Russia!) through it's "cynical use of its near monopoly of the
media last
fall to destroy Putin's rivals with half-truths and fabrications."

I don't know why people in the West are unwilling to face facts.
Russia does not have a viable independent media. It's citizenry is not
informed. As a result, there can be no democracy here and elections
here are barely more democratic than elections here were in Soviet
times.

Mr. Graham should well realize that an open information system and an
independent media is not a nice luxury that a society should have, but
can do without in a pinch. Freedom of access to information and
government accountability to the public are the fundamental
requirements for a democratic system and any system lacking them
cannot be called even "minimally" democratic. To quote Walter
Cronkite, "Freedom of the press is not just important to democracy; it
***is*** democracy."

best,
Rob Coalson
Robert Coalson
Business Development Service
National Press Institute
Telephone: +7 (812) 273-2851
Tel./Fax: +7 (812) 272-4672

*******

#11
April 12, 2000
Segodnya
"Live by your means" is the most stupid idea
Interview with Viktor IVANTER, Director of the National Economy Forecasting
Institute of the Russian Academy of Sciences
by Natalya Ilyina
[translation for personal use only]

Russia's economic strategy, which was commissioned by the president and is
being drafted at the Center for Strategic Projects [TsSR], is expected to be
made public in the near future. The National Economy Forecasting Institute
[INKhP] of the Russian Academy of Sciences is one of the institutions
involved in this brainstorming effort. Below is the interview with its
director, Viktor V.Ivanter, corresponding member of the Russian Academy of
Sciences.

Q: What is your forecast of our economic development for the coming years?
A: We are currently trying to estimate the consequences of specific courses
of action, or inaction, on the basis of a given inventory of resources -
material and intellectual - as well as external conditions. Our starting
point is that we deal with an economy of a special type - a depressive
economy. Not with a depression in the economy, but with an economy that is
depressive by itself. That means, in the past we were an industrial power.
Now we are gradually losing our civilian machine tool industry, then we are
losing our military-industrial complex, because they cannot exist without
each other, and so on, and so on. A few days ago at German Gref's [TsSR
chairman] we discussed the problem of food supply. It turns out [as a result
of discussion] that we ought to develop private landholding. Which means
that everyone should feed oneself by working on one's own plot of land. This
is the meaning of a depressive economy. There is no catastrophy, no one's
dying [from hunger], this is just a quiet degeneration. Such an economy has
no internal resources for transforming itself into an economy of growth. It
needs a powerful impulse, which ought to be given by the government.

Meanwhile, the question of whether we need a market economy or not is not an
issue. This choice has already been made. The issue is how this economy that
we have, a free economy but an inefficient one and based on thievery, how it
can be made efficient. Our presumption is that certain resources for growth
have been preserved, in spite of all the misbehavior that wrecked the
economy. These resources exist in the form of industrial and other
infrastructure.

How to use it? One ought to begin with investment in working assets. When
money begin to circulate in the economy, people will save. The system must
be made to work. Investments can be made only in an operating economy. We
have excess liquidity, and Gerashchenko [Central Bank chairman] is
preoccupied with protecting the currency market from this liquidity. Money
is not being invested in the economy because of an enormous crisis of
confidence. We need to convert the currently existing confidence in Putin's
personality into a confidence in government institutions. But this is a
general slogan. Speaking practically, there are huge systemic risks that had
been generated by the authorities. The government should not transfer all
these risks to the banking system, it should take some of them upon itself.
There are certain techniques that allow for these risks to be split into
parts. Under these conditions, we would expect a certain trajectory of
growth. In the first two years, it will be very high, close to 10%. The bulk
of the growth will be in manufacturing, while fuel and extractive industries
will develop at a slower pace. This would happen because industrial
capacities that are currently idle will be utilized by circulating capital.
Then, we will have a slowdown in growth to 3-4%, and after that, in about
three years, growth will stabilize at about 5-6%.

Q: What about other scenarios?
A: One could go on with present policies. Its key feature is: no incompetent
intervention in the economy. From September 1998, Primakov's and then
Putin's governments did nothing that would be outrageous.

Q: But didn't this bring us to a certain growth?
A: This is not an economic growth, but a recovery, a revitalization caused
by favorable external conditions. Besides, population sacrificed a part of
its living standard for this growth to occur. But the upswing is a signal of
a healthy outlook in the economy, it is ready for growth.

Q: And which is the most dangerous scenario?
A: The most stupid idea in town is that "we must live by our means." Imagine
you come to your wife and say: "We should spend less and live by our means."
And she replies: "We need to earn more." If we cut down our expenditures,
our living standards will decline. On a trajectory of economic recession,
social reforms cannot be effective. They are necessary, and they have been
so for a long time - a pensions reform, a health care reform - but now this
will do nothing but irritate the population. You cannot make these reforms
when there is no money. But there is one social reform that is absolutely
indispensable. This is wage reform, along market lines. I didn't invent it,
this was done by Henry Ford, who was politically unattractive but
economically efficient. He claimed that high wages are the basis for high
productivity. Of course, the question is: how to provide for these wages?
This is a difficult path, and it needs to be covered quickly and in a smart
way.

Q: Should we begin with raising wages?
A: Yes, first wages, then productivity, you won't have the one without the
other. The government already begins to set certain requirements. In the US,
they have a minimum wage law. All these details were worked out a long time
ago and are well known, one only needs a political will to implement this.

Q: But where is the guarantee that this demand will stimulate our producers
and not the flows of import?
A: Demand ought to be channeled. We are probably the only country without
consumer credit. And this is a classical mechanism: you receive credit only
to buy domestic goods. You buy import at your expense. It's not that as a
result everybody will be happy tomorrow. But we must start moving. People
respond when a clear direction is there.

Q: You participate in the work of TsSR. From the start, there have been many
doubts whether all ideas available at the center can be combined together.
To what extent is your position reflected in the final product, that is,
development strategy?
A: The work of the Center is not completed. We are in disagreement with its
dominant group, which is liberal and radical. I believe that this Center
ought to produce two projects: the radical one and the pragmatic one, that
is, ours. I am not against having Mr.Gaidar's proposal put out one more
time. I am against having it as the only one. I want the president to be
provided with clear alternatives, rather than demonstrations that everything
that is not Gaidar equals communism. I suggest to consult those people who
have succeeded. For example, [Novgorod governor] Prusak has some successes.
The response is: no, we cannot, he is politically engaged. [Sverdlovsk
governor] Rossel is no good because he was Yeltsin's fellow. Luzhkov is no
good without further explanation.

As a matter of principle, the Center cannot be a substitute for the
government. It is the government job to produce programs.

Q: Then which of the trends do you expect to prevail?
A: I hope the pragmatic one. Society is not radicalized. It aspires to a
normal, clearly understandable life. The trouble is that society already
lives by market rules, while the authorities do not. Society is prepared to
work and to receive decent compensation. Meanwhile, the bosses cannot yet
figure out that one ought to work, rather than steal.

*******

#12
Date: Thu, 13 Apr 2000 
From: "Andrei Liakhov" <liakhova@nortonrose.com> 
Subject: Berezovsky - the time is up?

The Council of Elders of Karachaevo Cherkessia has submitted a petition to
the Parliament of the Republic requesting it to withdraw deputy's mandate
from Boris Abramovitch Berezovsky. This event in itself may be insignificant
and not worthy of attention, but having in mind that the General
Procurator's Office has almost completed its Aeroflot case and more and more
rumours from "well informed sources" circulate in Moscow that GPO will apply
to the Duma for permission to lift Berezovsky's immunity this petition
acquires a completely different meaning. 
However at this stage it is very difficult to say what is exactly this move
- a warning to stay in line and keep the ambition in check, reminder of who
is the boss after a string of rather humiliating disclosures in the Press or
a genuine demarcation of the frontline.
When I was in Moscow recently I heard an outline of events which may happen
shortly and into which that small piece falls in neatly:
BAB - will end up in exile from which he will make revelations which no-one
will listen to from time to time;
Voloshin - will be stripped of power and fall into disrace;
Borodin - is likely "to suffer from a heart attack"; and
The rest of the Family - will return to complete obscurity.
Although there are small signs that this rough outline might be close to the
truth the fact of the matter is that it is completely unclear what exactly
Putin Russia will be like - an "iron democracy" or a oligarch cleptocracy
with a different oligarch line up, despite the miles of print written about
it. one thing is more or less clear - now is the time of the opening moves
in the game for power in Russia and the real Putin team is trying to make
these as low profile as possible in the best traditions of one of the
President's ex employers. 

*******

#13
BBC MONITORING
PUTIN'S TRIP TO BRITAIN SIGNALS SHIFT IN RUSSIA'S EUROPEAN POLICY - NEWSPAPER
Source: `Nezavisimaya Gazeta', Moscow, in Russian 12 Apr 00 

Vladimir Putin's decision to go to Britain on his first foreign visit since 
being elected Russian president is a signal to France and Germany, "which 
used to aspire to a special relationship with Russia but which recently have, 
to all intents and purposes, spoilt it". According to an article by Dmitriy 
Gornostayev published in the Russian newspaper 'Nezavisimaya Gazeta' on 12th 
April, the "Paris-Berlin-Moscow axis" of the Yeltsin era "is now being 
replaced in the system of foreign policy priorities by a still very slight 
yet strengthening link between Moscow and London". This link, however, does 
not amount to a "new foreign policy concept", but is part of an emerging 
system of priorities which also accords Belarus and Ukraine greater 
prominence. The following is the text of the article, entitled "Russia 
carries out revision of foreign policy priorities. Their geography has been 
defined by the route of Putin's first tour abroad, But basic principles must 
be weighed as carefully as possible". 

The choice of the route for Russian President-elect Vladimir Putin's first 
tour abroad - Minsk-London-Kiev - appears more than logical. In addition to 
defining at least the geographic priorities of the new Russian leadership in 
foreign policy, it demonstrates in the very best way the Kremlin's desire to 
proceed in relations with the outside world from positions of partnership 
exclusively on a constructive basis. Tony Blair was the first state leader in 
the West to venture, despite tough public criticism (chiefly in continental 
Europe), upon what was, to all intents and purposes, an official visit to 
Putin, who was being criticized by the majority of foreign spokesmen for the 
tough military campaign in Chechnya. 

It would have been strange if Putin had not returned Blair's kindness. But 
this is not so much a kindness to Blair as a signal to the other states in 
Europe (in this instance the United states should be considered separately 
because of its specific significance, including in the sphere of its special 
attitude to what is happening in the North Caucasus). It is, above all, a 
signal to those states which used to aspire to a special relationship with 
Russia but which recently have, to all intents and purposes, spoilt it. I am 
talking, above all, of France and Germany, where foreign policy is now 
determined by forces which it is customary to regard as being in the 
left-wing zone of the political spectrum. 

To all appearances, the Paris-Berlin-Moscow axis, in whose creation Boris 
Yeltsin took such pride and which sank into oblivion upon Yeltsin's departure 
from the international political arena, is now being replaced in the system 
of foreign policy priorities by a still very slight yet strengthening link 
between Moscow and London. 

Strictly speaking, we have so far been witnesses only to a system of 
priorities, but certainly not to a foreign policy concept, which has not yet 
been finalized. Nevertheless, certain analysts who are not quite familiar 
with the situation have already made a false start and are trying to say that 
Russia has started implementing the "new foreign policy concept" almost with 
[Foreign Minister] Igor Ivanov's trip to Luxembourg, and they have even 
nicknamed it "the three P's concept: predictability, permanence, pragmatism". 
In fact, diplomats themselves would hardly launch into such fabrications, 
since the formula "predictability, permanence, pragmatism" enshrines nothing 
concrete: it would be possible to define in this way economic policy, social 
policy and any other policy, including even demographic policy. In this sense 
the "Minsk-London-Kiev" formula seems far more concrete, although, naturally, 
a foreign policy concept is not confined to geographic priorities alone. 

Incidentally, the new foreign policy concept is certainly not a new idea; its 
active discussion now is connected with Vladimir Putin's arrival in the 
Kremlin only in terms of its timing. The Foreign Ministry and, to a lesser 
degree, the Kremlin have been working on this idea for a long time. 
Unfortunately, events in the past year in the form of a whole series of 
actions by the West, which attested to their highly radical plans for 
revising the world structure, have resulted in the need to revise certain 
principles of our foreign policy. Incidentally, the West, which expects of us 
the aforementioned "predictability, permanence and pragmatism", itself 
displays them only selectively. Predictability lost its meaning after the 
start of the NATO aggression against Yugoslavia, and the West displayed a 
healthy pragmatism or, rather, a lack of it, in the case of the Baku-Ceyhan 
pipeline by sacrificing economic advantage to impractical political schemes. 
Permanence is clearest of all in the criticism that is being made of Moscow 
in connection with the war in the North Caucasus. 

In this connection, Vladimir Putin's statement at the last Security Council 
session the day before yesterday [10th April] was very opportune: "Russia 
will bring all its international obligations into line with the national 
security concept and the concept for building the armed forces." This 
certainly does not mean that secondary roles are being allocated to the 
foreign policy concept proper. The concept simply is not ready yet. This is 
its advantage, not its disadvantage, for it is far more important in 
diplomacy than in other related spheres, like the military sphere, for 
example, to weigh up all the nuances, even the most insignificant ones at 
first sight, and to understand the importance not only of actions, but also 
of words, whether pronounced by the president or the foreign minister, or 
enshrined in the foreign policy doctrine. 

*******

#14
1839 Federal Troops Killed, 5266 Wounded in Chechnya-Manilov. 

MOSCOW, April 13 (Itar-Tass) -- First Deputy Chief of the Russian Armed 
Forces' General Staff Valery Manilov on Thursday told here a briefing that 
the federal force had lost 1,839 troops killed and 5,266 wounded since the 
anti-terrorist operation started in Chechnya. 

According to Manilov, the losses were still greater with the Dagestani 
operation preceding that in Chechnya taken into account. The general said the 
death toll had all in all reached 2,119, while 6,253 federal troops had been 
wounded. 

The past week had claimed 21 federal soldiers' lives in Chechnya, and 
disabled 82 troops, Manilov said. 

******

#15
Russia Said To Consider PR Agency 

MOSCOW. April 9 (Interfax) - In the process 
of reorganization, the Russian government is likely to be strengthened 
with an agency in charge of making the Kremlin's policies clear to the 
world, a highly- placed official involved in the formation of the new 
cabinet has told Interfax. 

The need for such an agency "became clear during the recent attack of 
the Parliamentary Assembly of the Council of Europe against Russia," the 
source said on the condition of anonymity. 

"We failed to explain to the Europeans in distinct terms the vital 
necessity of the counter-terrorist operation in the North Caucasus for 
our country and its role in the world struggle against international 
terrorism," he said. 

He also said that in the absence of such an agency, the federal 
authorities lost the information war against the rebels during the first 
campaign in the North Caucasus. "Making the same mistake twice would be 
unpardonable," the source said. 

"But information wars are not the only thing. The most important 
thing is to keep explaining to the world what our policies - domestic and 
foreign - are like," he said. 

He said that most of the world's governments have such agencies and 
that the former Soviet leadership used the Novosti Press Agency (APN) for 
this purpose. "The term 'propaganda of the state's policies' no longer 
confuses anyone," the source said. 

"The revival of such an agency would largely facilitate the work of 
the Russian Foreign Ministry, he said, adding that the formation of the 
new government also implies the redistribution of the functions of some 
of the state-controlled media. 

*******

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