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Johnson's Russia List


April 23, 2000    
This Date's Issues: 4263  4264

Johnson's Russia List
April 23, 2000

[Note from David Johnson:
1. AFP: Putin takes ambiguous step towards Chechen leader: 
Russian press.
3. The Russia Journal: Andrei Piontkovsky, Apocalypse Now.
(re Chechnya)
4. Moscow Times: Maria Rozhkova and Antony Robinson, Alfa’s Aven Criticizes Lack of Local Ethics.
5. The Russia Journal editorial: The bear is nobody's fool.
(re IKEA controversy)
6. The Observer (UK): Amelia Gentleman, KGB returns to stalk Russians.                                      The persecution of a reporter raises fears that Putin is 
reviving the bad old ways of the security service. (re Babitsky)
7. International Herald Tribune: Charles Krauthammer.
Beware, Clinton Will Give Away the Store to Putin. (re ABM)
8. Impending Russia-Japan Deal To Help Float Moscow Budget.
9. Ira Straus: Does Putin think of the U.S. as "the enemy"?
10. Reuters: Chernobyl kills and cripples 14 years after blast.]


Putin takes ambiguous step towards Chechen leader: Russian press

MOSCOW, April 22 (AFP) - 
Ingush President Ruslan Auchev begged Russian and Chechen leaders Saturday to 
come to the negotiating table, as Russia's press reported that Moscow had 
taken a first step toward peace talks with the breakaway republic.

"A certain number of questions must be addressed with the legally elected 
president of Chechnya, Aslan Maskhadov," Auchev said, the Interfax news 
agency reported.

"He (Maskhadov) is the only one with whom the Chechen problem can be 
resolved, since there is no one else on the Chechen side who has the legal 
and moral right to represent Chechnya in negotiations," the Ingush president 

Auchev met Saturday with the European Union's "troika" of three ambassadors 
to discuss the upcoming EU-Russia summit, set for May 17 in Moscow.

The Russian republic of Ingushetia borders Chechnya in the north Caucasus 

The Russian press reported Saturday that President-elect Vladimir Putin has 
taken a first step towards negotiations with Maskhadov, but the move remains 

Maskhadov said Friday he had sent Moscow a proposal for a peace settlement. 
Putin later confirmed he had received the offer a month ago, but added that 
he had sent it back with modifications and had not heard anything since.

"Vladimir Putin has absolutely not clarified the situation, leaving the way 
open for both opponents and partisans of negotiations with the Chechen 
leader," the Nezavisimaya Gazeta said.

Putin "has given Maskhadov a chance" the daily said, although it added that 
"negotiations with the Chechen president remain unlikely."

Izvestia said Putin would probably take a decision in the next few days. "The 
situation has reached a critical point: either Maskhadov has to be arrested, 
or allowed to sit at the table for talks."

Another daily, Segodnya, took a harsher line, arguing that Maskhadov was 
"politically dead".

But Segodnya hinted that Maskhadov's lack of political power could allow for 
peace talks to take place, with Auchev as an intermediary.

"Putin will not get bogged down in chat," declared Kommersant, adding that 
the Russian leader has previously labelled Maskhadov as "politically 
impotent" and a "criminal".

"Moscow wants to negotiate with Maskhadov while pursuing its antiterrorist 
operation and offering it a spot in the federal camp," the daily added, 
noting that Maskhadov is unlikely to accept such terms.

Many leaders in Moscow are sceptical over whether Maskhadov has control over 
the Chechen warlords, held responsible for causing the Chechen war by 
invading Dagestan in August 1999 as part of an Islamic offensive.


Text of report by Russian Ekho Moskvy radio on 22nd April 

[Presenter] The Yabloko association has almost reached the point of setting
up a single democratic coalition in Russia. The central council of this
political organization today decided to support the initiative to set up a
broad democratic coalition. Our correspondent Ilya Arkhipov has returned
from the sitting of the central council [of Yabloko] in Otradnoye near

[Correspondent] It has been decided that all Yabloko's regional
organizations will work towards establishing a coalition. As [Yabloko
leader] Grigoriy Yavlinskiy put it, recommendations on joint work with
other democratic forces will be sent to the grass roots organizations. It
is noteworthy that, although Yabloko leader Grigoriy Yavlinskiy urged all
who share liberal-democratic values to join the coalition, he singled out
the Union of Right Forces. Yavlinskiy also stressed that Yabloko did not
lay claims to the role of leader of the coalition and was prepared to take
part in it on a par with other members. 

[Yavlinskiy] We are discussing with the Union of Right Forces ways to set
up a general democratic conference. For example, the leader of the Union of
Right Forces can chair the conference during the first three months and
then the Yabloko leader can chair it during the next three months. We
believe that an end should be put to our disagreements. 

[Correspondent] The gubernatorial election in St Petersburg will be the
first trial for those resuming attempts to set up a single democratic
force. Incidentally, Yavlinskiy's stance on the issue is somewhat unclear.
On the one hand, he says it has been decided to support Igor Artemyev, a
Yabloko member, as a candidate. On the other hand, Yavlinskiy is confident
that the democratic forces will nominate a single candidate to run in the
election in St Petersburg and that work is still to be done to select such
a candidate. It is probably implied that Artemyev will be such a candidate.
However, it is not yet clear whether or not the Union of Right Forces will
agree to this. 

[Presenter] According to Grigoriy Yavlinskiy, no effort should be spared to
ensure that the election is held in a decent manner and that the people of
St Petersburg manage their city independently. According to Yavlinskiy, the
democratic coalition is capable of ensuring that its single candidate
enters the second round of the election. 


The Russia Journal
April 24-30, 2000

First of all, a quote from Nevasimaya Gazeta, which has consistently
provided ardent support both for President-elect Vladimir Putin and the
military operations in Chechnya: 

"The bloodbath in Komsomolsk went on for three days. Every form of
firepower imaginable pounded the village. Artillery of every caliber, tank
cannons, volley fire weapons – all blasted away non-stop. Surface to
surface missiles were used, while helicopters and bombers dropped their
lethal load around the clock."

"Some basements were full of a tangled mess of bodies. In some cases,
corpses had to be collected in pieces. Many had had their ears chopped off."

"A stench hangs over the cemetery. Parents, wives and relatives come from
all over the republic, looking for the missing. A mother, recognizing her
son by a birthmark on his shoulder, embraces his corpse which has just a
bloodied mass instead of a face. Strangely enough, there is no sound of
crying at the cemetery. There is an oppressive quiet, though a crowd of
several hundred people is always present. Four rows of graves already
stretch out over 100 meters." (NG April 13, 2000.)

"Strangely enough, there is no sound of crying at the cemetery." Remember
these words. A Russian officer wrote something similar after a round of
"cleansing," perhaps of that very same village, 150 years ago:

"The old men gathered in the square and, squatting, discussed their
situation. No one spoke of hatred toward the Russians. What all the
Chechens, from young to old, felt was something stronger than hatred. It
was not hatred they felt, it was denial that these Russian dogs could even
be human. Their repulsion, disgust and incomprehension before the absurd
cruelty that these creatures displayed was so intense that the desire to
exterminate them, like the desire to exterminate rats, venimous spiders or
wolves was as natural as the instinct of self-preservation." (Leo Tolstoy,
Khadji Murat, chapter 17)

"No one spoke of hatred toward the Russians," – this short sentence
prophesied all the Russian-Chechen wars of the next 150 years, but we
didn’t take heed.

"There is no sound of crying at the cemetery. There is an oppressive
quiet." Again we don’t hear this quiet. We will never be able to subjugate
a people whose women do not cry at such cemeteries as this one. Not even if
we convince ourselves that this people is no good. The most we can do is
kill all "male Chechens over the age of 10."

We are told that Chechnya itself is not the issue here, that thanks to the
military action in Chechnya, Russia is rising from its knees, recovering
from its Weimar complex, restoring its grandeur and finally, setting itself
the proud and audacious goal of catching up with Portugal in the coming 15

We have always built our shining Utopias – St. Petersburg, the White Sea
canal – on layers of corpses. Our own corpses. And with every such
"modernizing project," Russia has sunk deeper into the rut of history.

This time, we have decided to build our radiant, liberal Lisbon on a more
solid foundation – on a tangle of others’ bodies in basements in
Komsomolsk, Grozny and dozens of other Chechen towns and villages. This, it
seems, is what the "enlightened patriotism" that egg-head toadies like to
discuss these days is all about.

Portugal can sleep in peace. This is not the way to rise from one’s knees.
It is the way to lose all ability to walk upright – and for good this time. 

(Andrei Piontkovsky is director of the Center for Strategic Research.)


Moscow Times
22 April 2000
Alfa’s Aven Criticizes Lack of Local Ethics
By Maria Rozhkova and Antony Robinson 

LONDON — Alfa Bank president Pyotr Aven shocked foreign businessmen by
talking openly at an investment conference on Russia about the hazards of
investing in his home country.

Aven spoke of the so-called "soft rights" that allow bureaucrats to
interpret the law as they see fit. The banker labeled this as a major
source of government corruption. 

He also blamed the mentality of the Russian people for many of the
country’s problems. Russians do not consider a contract to be a binding
agreement and the country has no tradition of speaking the truth, he said.

Calling on Yukos president Mikhail Khodorkovsky to back him up, Aven
painted a grim picture of the difficulties that Russia’s tycoons have in
holding on to the enormous wealth they have accumulated. 

There is no concept of property in Russia, Aven said. "We have to guard our
property, and we spend 50 percent of our efforts just to hold onto it."

Aven and Khodorkovsky were among the business figures that snapped up
valuable state properties through the infamous "loans-for-shares" program —
a series of rigged privatization auctions held from 1995 to 1996 that many
criticized as being equivalent to giving away enterprises such as oil major

On Thursday in London, Aven said Russia’s most pressing need was not tax
reform, or a liberal economic program, rather it was a need for moral

President-elect Vladimir Putin should and does feel a sense of moral mission. 

"This is more important than whether or not he has an economic program,"
Aven said.

Putin was the object of much praise throughout the conference. 

On Wednesday, State Duma Deputy and former Prime Minister Viktor
Chernomyrdin called him a continuing force for reform. On Thursday, Unified
Energy Systems chief Anatoly Chubais called the nation’s new leader "a
normal and intelligent contemporary president."

Only Duma Deputy Boris Nemtsov dared to publicly criticize the
president-elect, for not stopping Oleg Deripaska and Roman Abramovich from
monopolizing Russia’s aluminum industry. 

Representatives of the tycoons said Monday they would be combining their
holdings to create Russian Aluminum, an $8.5 billion behemoth that would
control some 70 percent of the nation’s aluminum industry.

Deripaska missed his scheduled appearance at the forum, depriving delegates
of the chance to quiz him about the aluminum industry’s future. 

Chubais said the most complicated challenge facing Russia was to determine
the role of government in all of the changes taking place. 

The government needs to be consolidated to free it from the influence of
certain groups, allowing it to perform its legal functions rather than
attempting to control economic activity, he said.

Chubais warned of dangers in Russia’s relationship with international
financial organizations. Negotiations for Western loans should be conducted
in a manner that wouldn’t isolate Russia from the international financial

Nearly all of the forum’s speakers emphasized the need for foreign
investment and Western aid. 

Khodorkovsky called the period following the March presidential elections a
unique opportunity for the country and the economy. However, he warned that
things could become significantly worse in 2000 for Russia’s debt-ridden
economy if that opportunity is missed.

"To avoid a crisis, we have to quickly develop a strategy and attract
money," Khodorkovsky said.


The Russia Journal
April 24-30, 2000
The bear is nobody's fool

An unseemly controversy has erupted over a major foreign investment project
in Russia and the greatest devil of them all, corruption in Moscow.

When one of the world's largest retail furniture chains comes to Russia
with almost $100 million to invest, it is good news. Indeed, when such an
investment comes, bureaucrats should be bending over backwards to smooth
its path. 

In this instance, the retailer in question, Swedish furniture chain IKEA,
has opened a megastore at the Khimki village on the outskirts of Moscow. 

IKEA supplies some very fine merchandise, and its business has broken the
back of decades-old European and U.S. monopolies. The chain's products are
modern and aesthetically pleasing, and U.S. shopping malls are having
trouble coping with weekend parking because of middle-class consumer demand
for IKEA products.

And now this retailer, one of the largest investors in post-crisis Russia,
is up against Russian bureaucracy. 

Dealing with Russian departments, their inspectors, greedy clerks and
apparatchiks can be a nightmare for anyone. But IKEA, thanks to its good
negotiation skills and excellent timing (Russia is in desperate need of
direct investment), has gotten good deals on everything – from one-sided
labor contracts and cheap land to special customs privileges. 

IKEA is here to trade, import, wholesale, retail and then repatriate its
profits – all without guaranteeing any investment into Russian industry.
And, given that the salaries of IKEA's Russian staff (a close-kept company
secret) are no doubt a fraction of what it pays its Swedish employees in
Moscow, all in all, the company has enjoyed a pretty good deal.

But now, IKEA has gone a bit too far. 

Even though the IKEA PR blitz would have us believe otherwise, the issue at
stake is an access overpass the chain would like to build for its Khimki
store – an overpass the Moscow city objects to on the grounds that it might
defile an adjacent World War II memorial. This particular memorial –
comprising three huge metal tank traps – marks the place on the outskirts
of Moscow where the Russians halted the advance of German troops.

Initially, it appeared the problem had been caused by overzealous public
relations managers trying to snowball Tverskaya 13, the headquarters of
Moscow ruler Yury Luzhkov. First came stories in the Moscow Times doing
IKEA’s bidding. The newspaper was generously rewarded with a full-page
advertisement, a good deal of money for a cash-strapped paper struggling
for survival. But finally, the real shocker, a half-page story in the New
York Times pushing the IKEA barrow – as Matt Taibbi, editor of Moscow's
alternative newspaper, the eXile, pointed out recently.

The "advertorials" or "infommercials" in the Moscow Times were shameful but
perhaps understandable. It received a full-page advertisement from IKEA,
and times are tough in the Russian market at the moment.

But the article in the New York Times was lazy and lightweight journalism
at its best. At its worst, the newspaper has managed to show a lack of
historical sensitivity and clumsiness. This is one of the best newspapers
in the world, one that prides itself on its intellectual honesty and, more
importantly, its accuracy. 

The most disgraceful aspect of the New York Times report was its arrogant
ignorance. There was a good story to be told by anyone with a little
knowledge of Russia – a good old-fashioned story about a country's dignity
outweighing its desperate need for money. This dispute between IKEA and
Moscow has nothing to do with bureaucracy and corruption; it has everything
to do with respect for Russia's pride and its people's sacrifice.

The press campaign, paid for by the company, would have us believe the
dispute about the overpass is actually between Khimki and the Moscow
government, hinting that Tverskaya 13, incensed at not getting IKEA's
business, is now throwing up obstacles to stop the company succeeding.

A closer investigation of the matter reveals that is utter nonsense.

Swedish furniture retailers might not know what the three ugly rusted tank
traps standing at the edge of Moscow are all about. Nor might they
understand why, 55 years after the end of the Great Patriotic War, scores
of Russian newlyweds drive directly from marriage bureaus and churches to
this place to lay flowers and have their photos taken. 

It is not for the scenic backdrop. 

It is a mark of respect to men who strapped hand-grenades to themselves and
jumped under German tanks so that Moscow might be saved. It is a mark of
respect to 27 million men and women who gave their lives so that these
young couples might have a homeland.

IKEA chiefs should learn that there are some things Russians will not give
up – even for cheap furniture. They should learn there are some compromises
a Russian bureaucrat will not make – even for free trips to Stockholm. 

Luzhkov, for all his flaws, is a capable manager and loves Sweden. It is no
secret at Tverskaya 13 that any Swedish business has the personal blessing
of the master. But he well understands that there are limits to everything.
IKEA, for its part, should understand that there is no reason for it not to
build its overpass a bit further down the road.

The war was the defining moment for Russia in the 20th century. If it did
not win that war, then the country, and perhaps Europe as we know it today,
would have ceased to exist. That it did win is testament to the courage and
extraordinary sacrifices of its people – sacrifices that will never be

Today, Russia is struggling and desperately needs foreign investment. But
Westerners should have enough sensitivity to understand that a country
shouldn't be asked to sell its soul to get it.

And the newspapers that define attitudes and respect for a nation’s
heritage should stop acting like prostitutes with "pay-per-say" articles.


The Observer (UK)
23 April 2000
[for personal use only]
KGB returns to stalk Russians 
The persecution of a reporter raises fears that Putin is reviving the bad old 
ways of the security service 
Amelia Gentleman, Moscow 

When Russian war correspondent Andrei Babitsky was released after six weeks 
of beatings, incarceration and mental torture in Chechnya, he hoped he might 
be allowed to get on with his life. 

His arrest by the military as he reported from the Chechen capital, Grozny, 
his spell in Chechnya's most brutal detention centre, the sinister prisoner 
swap orchestrated by Russian troops that ostensibly saw him handed to the 
enemy, his harrowing departure from the region, locked in the boot of a car - 
all took a heavy toll on his health and he retreated to hospital to recover. 

But almost two months later he has revealed that he continues to be 
persecuted by the Russian government - still caught up in the jaws of what he 
sees as a continuing campaign by the FSB (the reformed KGB) to silence him. 

Charged with the relatively trivial offence of carrying forged documents - a 
fake passport he says those who arrested him forced on him - Babitsky remains 
under close investigation. A second prosecutor has been assigned to his case 
and the prosecution team has been granted a two-month extension to its work. 

Babitsky, who was arrested in Grozny after filing highly critical reports on 
Russia's campaign, has been prevented from returning to report on the war. 
His right to travel abroad has been withdrawn, he remains deprived of a 
passport and needs to obtain permission just to visit his weekend cottage 20 
miles from Moscow. At the end of the month he is to undergo psychiatric and 
psychological tests to establish the extent to which he can be held 
responsible for his actions. 

'I'm not a legal expert, but the whole situation strikes me as extremely 
strange,' he said. 'I'm in no doubt about my mental state. There's no logic 
to the investigation.' 

An investigative reporter based in Moscow claims to have evidence that the 
Interior Ministry procured the passport at the heart of the case from the 
Moscow passport office - explaining that it was required 'for service needs' 
- and used the document to frame the reporter. The Ministry has denied the 

Babitsky's mysterious disappearance at the height of the Chechen war 
unsettled Russia for several weeks, but amid the upheaval of presidential 
elections the country has virtually forgotten about him. This is an amnesia, 
he says, officials at the highest level are keen to cultivate. Colleagues at 
several Russian media outlets have told him 'friendly high-level pressure' 
has been exerted on their editors to discourage them from reporting on his 

As President Vladimir Putin develops his strategy for reforming Russia's 
security services, Babitsky's declarations that he has been the victim of a 
bungled silencing attempt by the FSB have been an unwelcome distraction. 

Babitsky's version of events is doubly damning to the government because it 
hints at both the lengths to which Putin's FSB was prepared to go to achieve 
its aims and the incompetence with which it set about the task. 

He argues that, when Russian soldiers were shown on national television 
handing him to Chechen rebels in exchange for imprisoned Russian soldiers (in 
a piece of footage filmed and released by the security services), he was in 
fact handed over to pro-Moscow Chechen forces, in the pay of the FSB. But 
with international outrage about his disappearance mounting, the plot to 
'neutralise' him backfired and he was released. 

Still wan and drawn after his experiences, he sees himself as the victim of 
the new culture of strong (if not always entirely efficient) security service 
activity that has come to Russia with the arrival of Putin - once a KGB spy 
and the former head of the FSB. 

But the long-term role the FSB is set to play in Putin's new Russia continues 
to perplex analysts. In this intermediate period between the election of the 
new President and his official inauguration next month - when he will be 
forced to indicate his true intentions by his choice of Cabinet appointments 
- speculation about the power he plans to give Russia's security services has 
become feverish. 

In an alarmist piece in the Moscow Times last week, Konstantin 
Preobrazhensky, a disaffected former KGB lieutenant-colonel, declared: 'The 
KGB is being resurrected in Russia. After Vladimir Putin's election, fear has 
taken hold... democracy in Russia is threatened today. Once again the KGB is 
coming to power.' 

Babitsky's own view is more circumspect. 'Democratic freedoms for Putin are 
synonymous with chaos. The role of the FSB has already strengthened under his 
control and I think it will become stronger still. What happened to me would 
not have occurred under Boris Yeltsin's regime,' he said. 

Signals from the Kremlin continue to be contradictory. As Putin fills up his 
diary with meetings with European heads of state, he is determined to 
emphasise his democratic leanings. But an assessment of his past and his 
actions since coming to power paint a different picture. 

Putin's own precocious enthusiasm to join the KGB at a tender age is 
well-documented and he pursued his ambitions singlemindedly. Since his 
appointment last year he has repeatedly and loyally praised the work of the 
KGB without stopping to qualify his comments with any recognition of the 
cruelties of its past repressions. He has also honoured Yury Andropov, former 
KGB head and Soviet President, restoring a monument to him on the walls of 
the FSB building - torn down with the 1991 reforms. He has spoken on several 
occasions of the need to 'consolidate' the power of the secret services. 

In recent months there has been widespread speculation over the role of the 
security services in the bombing campaign that started the Chechen war. 
Meanwhile, Putin has promoted a handful of former KGB colleagues to senior 
roles in the government - a move which KGB veterans hail as a welcome sign 
that his priorities are in order. 

General Valery Velichko, president of the State Security Veterans' 
Association, believes Putin will re-create a strong unified force from the 
underfunded, demoralised, divided bodies. 'Putin understands that the 
resurrection of Russia is impossible without the resurrection of the security 

Babitsky agrees - with less enthusiasm. 'I hold Putin responsible for what 
happened to me. The FSB is part of his culture. He believes that the use of 
force can resolve most problems.' 


International Herald Tribune
April 22, 2000
[for personal use only]
Beware, Clinton Will Give Away the Store to Putin
By Charles Krauthammer The Washington Post

WASHINGTON - While the United States is fighting over a 6-year-old boy in 
Florida, the big geopolitical news is buried on Page 20. President Bill 
Clinton has quietly added Russia to a planned European trip. On June 4, he 
will go to Moscow to meet with Vladimir Putin. This is no mere ''how do you 
do.'' Frantic negotiations are going on for an immense arms control agreement 
- the so-called Grand Compromise - in time for Mr. Clinton to leave a legacy.
Why is this big news? Because the deal Mr. Clinton is angling for would both 
decimate America's offensive nuclear deterrent and cripple any future 
president's ability to build an effective missile defense. It promises to be 
the worst arms control agreement in American history. 

The story is this. The Russians, going back to Gorbachev's days, do not want 
the United States to build a missile defense. They do not have the technology 
to build one. The United States does. 

Why does America care what Russia thinks? Russia's hold on the United States 
is the Anti-Ballistic Missile treaty, which essentially prohibits building 
defensive weapons. But the ABM treaty was signed in 1972 with the now defunct 
Soviet Union. Quite arguably, it is legally dead. Inarguably, it is logically 

It was intended to prevent an arms race in a radically bipolar world. The 
world is not bipolar today. And there is no arms race. Yet the treaty 
prevents the United States from building adequate defenses against the likes 
of Iran, Iraq and North Korea. For 20 years, Democrats resisted the idea of 
building a missile defense. They ridiculed it as Reagan's folly. But the 
left's almost theological resistance to defending America from missile attack 
has begun to weaken. Why, even The New York Times now admits that the ABM 
treaty ''was premised on a clash between the two superpowers. The likely 
emergence of smaller, less-predictable nuclear-armed nations over the next 
few years creates a different equation.'' 

But what to build? Mr. Clinton is considering a single plan: a battery of 
fixed, land-based ABMs in Alaska. It is the worst possible choice. Fixed 
missiles are expensive, because the whole infrastructure has to be built from 
scratch, and limited, because from Alaska there are parts of the United 
States they could not defend. 

A far more effective and versatile way to go is by sea, placing ABMs on Aegis 
cruisers. The United States already has the cruisers. No need for huge 
infrastructure expenses. The ships are movable and thus less subject to 
preemptive attack. Best of all, they can be sent to defend any vulnerable 
part of America or, for that matter, the world (e.g., Taiwan, Israel, South 
Korea, Japan). 

Why Alaska? Alaska is the choice of people still deeply skeptical about 
missile defenses, still grudging about validating Mr. Reagan's idea. The 
administration figures that Alaska is just enough to get the Democrats off 
the hook on the issue of defending America - and that the Russians will see 
an Alaska defense as so weak that they might agree to allow it by mildly 
amending the ABM treaty. 

In return for those mild amendments, Mr. Clinton is preparing to forfeit the 
store to Mr. Putin. He would: (1) Sign a START-3 treaty that would radically 
cut America's nuclear weapons force - to the point where it would lose much 
of the redundancy that today makes it invulnerable. 

Why? To get corresponding Russian cuts? The Russians are not building new 
missiles anyway. They do not have the money. With or without these treaties, 
they are not going to squander their scarce military resources on overkill. 

(2) Strengthen the obsolete ABM treaty to prevent precisely the kind of 
layered defense America needs, such as the Aegis option, and, in the future, 
space-based defenses to shoot down missiles as they leave the launching pad. 
As Senator Joseph Biden, a Delaware Democrat, explained, Mr. Clinton's plan 
is to ''get the limited system locked down in a deal with Putin'' in order to 
prevent Republicans from pushing forward with a broader, full-scale national 
missile defense. 

Such is the Grand Compromise. The United States gets the costly, limited 
Alaska plan. It cuts its nuclear deterrent to the bone. And it gets 
restrictions on building defenses that will make it impossible in the future 
to adequately defend America or its allies. 

Why, then, is the United States doing it? Because Mr. Clinton gets a lavish 
signing ceremony in Moscow and a run at a Nobel peace prize. ''The Clinton 
administration does not want to be the first in several decades not to have 
signed a significant arms control agreement with Moscow,'' says Thomas Graham 
Jr., a former diplomat and Clinton administration official. In other words, 
arms control for the sake of arms control. It has come to that. 


April 21, 2000
Impending Russia-Japan Deal To Help Float Moscow Budget

Despite bragging about Russia’s “huge growth” in the first quarter and
Russia’s current budget surplus, Russian President-elect Vladimir Putin
warned the Russian government on April 19 to adopt “a more rigorous budget
policy” in light of lower world oil prices. A number of one-shot measures
and the windfall of high oil prices in the first quarter will allow Putin
to fully fund Russia’s 2000 budget, but this alone will not help Russia
develop economically. In 2001 Russia will face the same litany of
unaddressed problems. 

Following World War II, Japan and Russia never signed a formal peace deal.
They are now on the verge of doing so. If signed, such a deal will likely
return the disputed Kuril Islands to Japan, but at the cost of a hefty loan
from Japan. Such a loan, despite Finance Minister Mikhail Kasyanov’s
insistence that foreign loans are not necessary, would help fill a glaring
$4.5 billion hole in the 2000 budget created by IMF and World Bank loans
that never materialized. While a Japanese loan would likely not reach $4.5
billion, it will almost certainly be at least $1.5 billion – the amount
that Japan agreed to in 1998 merely to continue talks on a return of the

Despite tightening credit terms for Russia internationally, debt
forgiveness is in the air. In February the London Club, an organization of
600 banks that lent money to the Soviet Union, agreed to reduce Russia’s
debt from $32 to $21.3 billion and extend payments over a longer period.
The Paris Club is expected to adopt similar plan later this year. Such debt
reduction would take a healthy bite out of Russia’s 2000 debt payments of
$10.2 billion. The debt will still be huge, but slightly more manageable. 

Restructuring of Russia’s energy and aluminum will provide revenues from an
expanded tax base. Gazprom, Russia’s single largest source of tax revenue,
has been severely hobbled by government intervention, particularly with
regard to Moscow’s insistence that Gazprom provide Russia’s electricity
provider, Unified Energy Systems (UES) with free gas. But last week Gazprom
hammered out a deal with UES that will raise prices for Russian consumers
by 15-20 percent. This will have the effect of freeing up more gas for
export – a far more profitable prospect than supplying subsidized gas to
Russians. No doubt Gazprom’s foreign investors have noticed this switch of
priorities. The deal with UES, higher rates and more foreign investment
will all help Gazprom expand its export network. More exports means more
cash and more cash means more taxes for the Kremlin. 

The official merger of Siberian Aluminum and Sibneft on April 17 created a
new holding company, Russian Aluminum. The new $8.5 billion giant will
control three-quarters of Russia's aluminum production and substantial
portions of the Ukrainian aluminum industry as well. While Russian Aluminum
will enjoy a near-monopoly in Russia, it will also discover the downside of
being a monopoly in Russia. It will be like Gazprom – a target for
nationalization and the tax man. 

Speaking of the tax man, on April 19 Putin signed a law that increased the
ability of the tax police from being able to investigate two articles of
the criminal code to 20. In theory this should increase the tax police’s
ability to investigate corruption. Greater expansions of power are
certainly needed, but these expansions alone do not address the underlying
corruption of the Russian bureaucracy. It is a step in the right direction. 

The methods Putin will use to balance this year’s budget will work, but
they are largely one-time items. The loan from Japan is just that – a loan.
Despite the fact that the loan is from Japan, a lender that tends to offer
loans to borrowers that don’t repay them, to Russia, a borrower that
doesn’t like to repay loans, Russia does not need more debt. Even with
substantial debt write offs, Russia will still owe well over $100 billion
at the end of the year. Russia will not make it a policy to sell islands to
other countries as a method of raising revenue – it simply doesn’t have
enough islands. Furthermore, Putin is currently the very model of Russian
nationalism; repeatedly parceling out chunks of Russia for income is a sure
to turn that nationalism against him. 

Putin may be able to garner foreign investment for Gazprom this year to
help with sorely needed repairs. But after Putin’s nationalization plans
begin Gazprom will only be able to get cash for joint projects such as the
Blue Stream line to Turkey being built with Italy’s ENI. There is simply no
foreign interest in – or foreign money for – developing a Russian
distribution network for a market that won’t pay world prices. Gazprom and
Russian Aluminum may be made into stronger institutions that can better
serve Moscow’s political interests, but once the oligarchs are purged – and
nationalization begins – Putin will only be able to dream dreams of foreign
investment. It will all fade away. 

Beyond the budget wrangling, Russia’s economy is not performing as well as
it seems. Russia, to use Putin’s recently appointed economic advisor Andrei
Illarionov’s words, “shall get nowhere in the long-term if it sits on the
oil needle.” Energy exports currently account for 58 percent of all Russian
exports according to ITAR-TASS – over three times the dependence of OPEC
member Indonesia. Petroleum industries do little to develop other sectors
of the economy and price fluctuations make oil as much a curse as a gift.
As long as Russia’s economy – and budget – are hooked on oil, it will never
be able to achieve stable economic growth. 

Putin has trumpeted that Russia’s GDP grew by 6 percent in the first
quarter – almost all of this can be chalked up to a tripling of oil prices.
Russia reported that this year its GDP will grow by 3.0 percent, or about
$7.2 billion. But now that the price of oil has plummeted from $34 to $22 a
barrel, overall Russian revenues will drop by about $1.2 billion a month –
or $10.8 for the last three quarters of this year. Once the growth in oil
sales is removed from the equation, Russia’s economy is at best holding

Part of this is a structural issue. Since the August 1998 financial crisis,
Russia has worked to substitute imports with locally produced goods. This
has improved Russia’s trade balance and granted it a seemingly impressive
11.9 percent growth in industrial production in the first quarter. But it
did little to encourage long term growth or efficiency in Russian industry.
Since Russia did not concentrate on products it produces well and focused
instead a broad range of goods to substitute for imports, it is now much
more difficult for Russian industry to compete internationally. Russia
produces small amounts of a lot of things that no one outside of Russia
wants. As long as Russia does not want to globalize, it can stagger along.
But if it wants substantial foreign investment or export markets, it will
need to start from scratch – its existing industry simply cannot compete. A
functional budget will in and of itself do nothing to solve this problem. 

None of Putin’s new steps address the underlying problems in the Russian
system: corruption, lack of transparency, warped legal structure, outdated
technology, crumbling infrastructure, demographic decline and government
meddling. When 2001 rolls around Putin will have the same problems to
address, but fewer tools with which to treat Russia’s sickly economy. If
Putin is serious in rooting out the oligarchs, their holdings must come
under national control. By definition this will mean delaying reforms. 

But one of Putin’s actions will have a long lasting effect: his
strengthening of the tax police. Putin’s experience in the intelligence
services – and past inter-agency cooperation within Russia – indicates that
a more empowered tax authority and a strengthened intelligence service will
become de facto partners in Russian society. 

Using a series of quick fixes, Putin has successfully established a
baseline from which he can salvage the Russian budget. He has not solved
Russia’s economic problems. He has merely bought himself another eight
months. Considering the depth of Russia’s problems, gaining this reprieve
this is no small feat, but the real work – and pain – is yet to come. 


Date: Fri, 21 Apr 2000
From: (Ira Straus)
Subject: Does Putin think of the U.S. as "the enemy"?

"Enemy" is the term Putin used for the U.S. in his speech to the Duma on 
START-2, April 14, 2000. Does this reflect on Putin himself, or on the 
posture of Mutual Assured Destruction (MAD) that he was talking about? 
Probably the latter; but this only adds to the significance of the fact that 
he used the term.

"What will Russia get from this ratification in the future and from the 
implementation of START-2?" he asked. His answer: financial relief, and 
"Preserving deterrence potential. The ratification of START-2 will allow 
Russia to retain its deterrence capability. If START-2 is not ratified, by 
the year 2010 the US will have 15 times more warheads to be delivered to the 
enemy's targets [my emphasis] in retaliation than Russia. What will happen if 
we do not ratify it? Russia will lag behind the US 15 times." 

To be sure, Putin does not say precisely that it is the U.S. that is the 
enemy; just that the U.S. would have 15 times more warheads to deliver to 
some undefined "enemy" than Russia would. But why, then does he say that this 
situation would threaten Russia’s deterrent capability? It could do so only 
on the assumption that the U.S. is the "enemy" in question.

The use of the word "enemy" is psychologically significant. The significance 
is not, however, in Putin’s personal psychology, but in the public psychology 
of nuclear deterrence -- its inherent logic, its psycho-logy and socio-logy. 

Putin had no choice but to justify START-2 in terms of maintaining mutual 
nuclear deterrence between Russia and America: that was the main basis on 
which START was negotiated. This necessarily meant the U.S. was occupying the 
position of Russia’s "enemy" under START-2: deterrence by threat of nuclear 
annihilation is not a partnership relation. 

As long as the U.S. and Russia are engaged in mutual deterrence by the threat 
of mutual annihilation, they are still enemies on this level. And this is the 
most profound level of the state security structure. As long as this 
enemy-relation is the basic rationale of the most fundamental work of state 
security, it creates its own mentality. The logic and mentality of the 
enemy-relation inevitably spills over to infect the entire range of state 
institutions involved in security affairs, and thence works its way into the 
state political agencies and into the entire society. Willy-nilly it revives 
habits of enemy-relations with the U.S. in a wide range of areas. By osmosis 
it renews the enemy-mentality in places where this mentality makes no sense 
logically. It undermines all the good intentions of building a new 
relationship of peace and partnership.

Of course, the same is true on the U.S. side. The planners, builders, 
controllers and maintainers of U.S. nuclear forces are all working primarily 
against Russia as "the enemy", whether or not they are as frank as Putin in 
saying so. And the same is true, inescapably, of the START negotiators who 
are haggling over the balance with Russia.

This is a terrible, insidious, ever-present threat to U.S.-Russia relations. 
It has already done tremendous damage to the relationship since 1991.

The only way to get out of this terrible situation is not through START or 
arms reductions, but through forming a combined force that would be aimed 
only at the other potential threats not at one another. A related option is 
to form a combined joint anti-missile defense force. 

START, even if carried to more drastic reductions under START-3, does not get 
us out of the enemy-relation. It actually emphasizes the enemy-mentality in 
its own way and brings it to the forefront of the discussion. Arms control 
measures serve to reduce the scale of the mutual nuclear threat, which is 
certainly commendable, but they aim also at preserving the stability and 
balance of the mutual threat. As such, they perpetuate the enemy relation. 
They perpetuate the practice of each country doing its rock-bottom strategic 
thinking and planning in terms of mutual enmity. Only if arms control reached 
the level of 100% disarmament might it finally change this situation. 

De-alerting of Russian and American nuclear forces -- lengthening their alert 
status from minutes to hours or days, e.g. by separating the warheads from 
the missiles -- would be an in-between measure. It would provide far more 
stability and assurance against accidental war than reductions could do 
alone. It would go much farther than the cosmetic "de-targeting" that has 
been done since 1991. It would reduce the extent to which the forces are 
actively thought of in terms of deterring the other. But it would still not 
eliminate that mutual deterrence as the basis for determining the size and 
ultimate purpose of the forces.

A joint Russian-American nuclear force, by contrast, would operate entirely 
outside of the logic of mutual deterrence. It would be aimed at deterring 
third parties, not at maintaining a balance of separate forces for deterring 
one another. In doing the nuclear planning for the joint force, the focus 
would be on the real potential future dangers from the outside, not the old 
danger from one another. As a result, it would finally become a reality, not 
just rhetoric, that the nuclear planning of the two sides would no longer be 
directed primarily against one another. Jointly-controlled forces could not 
be used against one another offensively, so there would be no need for either 
side to deter against them. They might be rigged, however, for joint 
deterrence for an interim period. This would not be the same as mutual 
deterrence by separate forces operating on their separate plans, but jointly 
operated deterrence of attack by either side, providing a wide band of forces 
for security for both sides without a comparable band of offensive threat to 
one another. This wide band of mutual confidence would reduce the need to 
worry about the mutual balance.

Such a joint force would probably develop only gradually. For example, Russia 
could find it advantageous to invest the forces it can no longer afford to 
maintain alone into a joint force, where they would be under joint control 
and maintenance. Or surplus weapons from START could be invested into the 
joint force. For financial reasons, Russia is calling for START-3 to make 
deeper cuts than American wants; the excess missiles desired by America
be put in the joint force, where they would no longer threaten the balance 
sought by Russia but would still provided the deterrence sought by America 
vis-a-vis third powers. 

Once the joint force was formed in these ways, both sides would see its 
advantages compared to separate forces: (1) the Russian and American missiles 
in the joint force would no longer be a threat to America and Russia, 
respectively, yet (2) they would still provide deterrent protection against 
third powers, (3) they would share the financial burdens for this deterrent 
protection instead of each country running the full expense alone, and (4) 
instead of standing in a precarious balance against one another in a relation 
of mutual threat, they would form a wide band of forces providing mutual 
reassurance without threat. Given these advantages, both sides might come to 
find it convenient to invest more and more of their forces into the joint 
force. Gradually the joint force would grow; the two separate forces might 
eventually be phased out in favor of it, at which point mutual deterrence 
would have finally ended altogether.

Jointly deployed missile defenses and an integrated air defense system could 
serve similar functions. They would the focus of nuclear planning away from 
mutual threats to the real potential external threats, upgrade joint defense 
vis-a-vis third powers, and provide another band of security forces that are 
mutually reassuring rather than mutually threatening.

Until something this far-reaching is done, the enemy-relationship will remain 
intact as a huge iceberg beneath the surface, sapping all efforts at a more 
constructive relationship. 

Mutual reductions in forces are still just detente, integration is entente. 
Detente or "reduction in tensions" was a part of the cold war relationship: a 
mild phase of the cold war, but a phase of cold war nevertheles. Detente is a 
never-ending process; it never ends tensions, it just tries to keep reducing 
them while perpetuating their basic structure - and keeps running the 
constant unending risk of getting undermined by the logic of the very 
tensions it perpetuates. It already got undermined in just this way in the 

What is needed to end the enemy relationship is integration of forces, not 
just mutual reductions of forces while maintaining a carefully calibrated 
balance for mutual destruction. Until thinking on nuclear weapons makes the 
leap from cold war detente to the fundamentally new potentialities of the new 
era, all other relationships for the new era will remain at risk.

Ira Straus
U.S. Coordinator
Committee on Eastern Europe and Russia in NATO



Chernobyl kills and cripples 14 years after blast
April 21, 2000
By Olena Horodetska

KIEV (Reuters) - Fourteen years after the world's worst nuclear disaster, the 
Chernobyl power plant is still killing people, Ukraine's Health Ministry said 

Some 3.5 million people, more than a third of them children, have fallen ill 
as a result of the contamination while the incidence of some cancers is 10 
times the national average. 

``The health of people affected by the Chernobyl accident is getting worse 
and worse every year,'' Deputy Health Minister Olha Bobyleva told a news 
conference. ``We are very disturbed by these data.'' 

Chernobyl's number four reactor exploded in the early hours of April 26, 
1986, spreading a poisonous radioactive cloud over much of Ukraine, Russia, 
Belarus and parts of Western Europe. 

Soviet officials, who initially tried to hush up the tragedy, acknowledged in 
the end that the accident had killed 31 people and affected thousands more. 


But the real scale of the catastrophe, which displaced hundreds of thousands 
of people and turned bustling villages and towns into ghost towns populated 
only by stray dogs and crows, has turned out to be far greater than once 

Official data show that the health of some 3.5 million people, including 1.26 
million children, was affected in this impoverished nation of 50 million. 

Children and also emergency workers sent in to clean up the contaminated 
areas are among the worst affected. 

The death rate among those living in contaminated areas is 18.28 percent per 
1,000, compared to a national average of 14.8 percent. 

Bobyleva said high radiation had led to an outbreak of diseases of the 
nervous, blood and respiratory systems. She said the number of these diseases 
among children affected by the accident was 17 percent higher than the 
national average. 

The rate of thyroid cancer remains 10 times higher than normal among 
Ukrainian children. The ministry reported 1,400 cases of thyroid cancer 
between 1986 and 2000, while no cases were registered between 1981 and 1985. 

Bobyleva said the ministry was particularly worried by an increase in deaths 
of emergency workers, popularly called ``liquidators,'' most of whom are 
still under 50. The death rate in the group is double the national average. 

She said the consumption of radioactive food produced in the country's most 
contaminated northern and central regions of Kiev, Chernihiv, Zhytomyr, 
Cherkassy and Rivne posed another danger for public health. 

A lack of cash and other economic problems have further complicated the 
situation. Cash-strapped Ukraine has spent $1.4 billion to date to fight the 
consequences of the accident. 

Ukraine has promised it will close Chernobyl's last operational reactor by 
the end of this year. 


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