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This Date's Issues: 4265
Johnson's Russia List
24 April 2000
[Note from David Johnson:
1. Christian Science Monitor: Fred Weir, Putin looks for a Chechnya
Russia's new president takes on war but may have trouble finding
credible Chechen leaders.
2. New York Times: Igor Ivanov, A Challenge From Russia.
3. Washington Post: Graham T. Allison and Sam Nunn, Chance for a
We must embrace Russia's new willingness to fight nuclear
4. Igor Khripunov: a brief comment re new defense doctrine.
5. Stephen Blank: nuclear doctrine.
6. Moscow Times: Jonas Bernstein, Bittersweet Memories of '97.
(re reform optimism)
7. Jonathan Mueller: RE: 4262-Taibbi/Mueller and IKEA.
8. AP/Harriman Conference in New York on Russia After Yeltsin.
9. smi.ru: Russians for Putin's Unlimited Power?
10. BBC MONITORING: RUSSIAN ECONOMIST ON MAIN POINTS OF PUTIN'S
PROGRAMME FOR RUSSIA.
11. The Boston Globe: Brian Whitmore, Russian Criminal Justice.
12. gazeta.ru: Chubais Resigned to Aluminium Monopoly.
13. Financial Times (UK): Russian energy boss lays down challenge
Anatoly Chubais says that the president-elect must show
courage and back liberalisation of the vast energy market, reports
Christian Science Monitor
24 April 2000
Putin looks for a Chechnya exit
Russia's new president takes on war but may have trouble finding credible
By Fred Weir, Special to The Christian Science Monitor
Russian President-elect Vladimir Putin is searching for a political exit from
the deepening quagmire of Chechnya. But analysts warn that the seven-month
war may have hopelessly undermined his only credible negotiating partner,
elected Chechen President Aslan Maskhadov.
Both sides have been putting out peace feelers. On Friday, Mr. Maskhadov
announced, from his hiding place somewhere in the southern mountains of
Chechnya, that he has ordered rebel forces to cease operations while he
negotiates with the Kremlin.
"The relative calm which has broken out on the front line came about because
I gave the order unilaterally to suspend military action," Maskhadov said in
an interview with the Moscow daily Kommersant. "This was part of a plan for a
peaceful settlement, proposed by me to Moscow."
Reports from Chechnya suggested fighting has indeed diminished over recent
days, despite sporadic clashes.
"We are obeying the president's orders, but if the aggressors are attacking
we are forced to defend ourselves," Shamil Basayev, a leading Chechen field
commander, was quoted saying Saturday on a rebel-run Web site,
"The rebels are licking their wounds, summoning strength and gathering the
bandit breed from all over Chechnya," the commander of Russian troops in the
North Caucasus, Gen. Gennady Troshev, told the official ITAR-Tass agency.
"The bandits are dispersed, but some of them are trying to concentrate."
On Friday, Mr. Putin told a meeting of the Kremlin Security Council that he
had sent a letter to Maskhadov a month ago, outlining his ideas for a
political solution. The message, relayed through President Ruslan Aushev of
neighboring Ingushetia, went unanswered. "Maskhadov disappeared," Putin said.
"We have had neither sight nor sound of him. We will not be involved in idle
It is extraordinary that Putin claims to have made this attempt to reach the
rebel Chechen leader even before Russia's March 26 presidential elections,
which saw him win a solid first-round mandate. Much of Putin's popularity was
based on his uncompromising conduct of the war to crush Chechnya's decade-old
Although polls continue to show almost two-thirds of Russians support the
military campaign to some extent, there is a growing feeling in Moscow that
the operation has outlived its political usefulness and could become a
serious liability for the Kremlin.
"This may sound cynical, but the war has already achieved all its main
purposes," says Alan Kasayev, a Caucasus expert with the daily Nezavisimaya
Gazeta. "A year ago Russian society was dazed, and our leadership was in
disarray. Today society is consolidated, and we have elected a strong popular
The same surveys that show the majority of Russians backing the military
operation, also reveal that half of them doubt repeated Kremlin assurances
that the war is almost over and won.
It is "sinking in that this conflict is just beginning," says Sergei
Arutyunov, a specialist on North Caucasian politics at the official Institute
of Ethnology in Moscow. "Spring has arrived in Chechnya.... The rebels will
become highly mobile.... The war is about to go into a much more intense
If the Kremlin is hoping for a political route out, the problem is where to
find reliable and credible Chechen negotiating partners. Maskhadov, elected
the republic's president with a comfortable majority in 1997, remains the
only obvious choice. Moscow is trapped by its wartime rhetoric that vilified
the Chechen president as an "illegitimate leader," a "war criminal," and
"terrorist accomplice." Maskhadov was never able to assert his authority over
Chechnya's fractious clans, and the war may have fatally weakened his
position. Russia's relentless assault, using air power and heavy weapons, has
broken up Chechnya's armed forces into small, locally based groups. That may
make for effective guerrilla warfare but, as even Maskhadov admitted in his
Kommersant interview, centralized command becomes difficult. Russian military
experts estimate Maskhadov controls no more than 500 of the 2,500 guerrillas
thought to be holed up in Chechnya's rugged southern districts.
The Chechen president has tried hard to project himself as an indispensible
element of any peace plan. He has distanced himself from Mr. Basayev and the
Arab-born warlord Khattab, the Chechen field commanders most hated by the
Russians. He has pledged to release Russian prisoners of war and declared a
"There is no alternative to Maskhadov," says Mr. Kasayev. "No one else has
even a hint of the legitimate authority ... over the whole Chechen nation
that would be required if any genuine peace process is to take place."
But the truth may turn out to be that opportunities for a negotiated
settlement were buried months ago, under the smoldering ruins of Chechnya's
capital city of Grozny. "During these months of war Maskhadov has lost his
strength and credibility," says Sergei Kazyennov, an analyst with the
pro-government Institute of National Security in Moscow. "There is no other
way but to go on fighting and show the Chechens, as many times as necessary,
that their only possible future is as part of Russia."
New York Times
April 24, 2000
A Challenge From Russia
By IGOR IVANOV
Igor Ivanov is foreign minister of Russia.
MOSCOW -- The ratification of the Start II weapons agreement and the 1997
package of antiballistic missile agreements by both houses of the Russian
parliament, followed by the passage on Friday of the Comprehensive Test Ban
Treaty by the lower house, clearly signal the course of action that, in
Moscow's opinion, should be pursued in the complicated world situation that
Strategic offensive arms have always occupied a special place in the range of
disarmament treaties created over recent decades; and they play an important
role in Russian-American relations and are of course directly linked to
The Russian leadership, military and diplomatic experts, and members of the
parliament have studied these issues for almost four years because they have
no right to make a mistake on such matters. And if Start II was not ratified
earlier, the reasons for that are known: it was put aside by parliament in
connection with the bombings in Iraq in late 1998 and then again because of
the NATO military action against Yugoslavia last year.
Having ratified the package of Start II and the ABM agreements, Russia has
done its part. The ball is now in the court of the United States. An exchange
of ratification documents for these agreements would make it possible to put
them into effect and continue the process of reducing strategic arms. And
there is another important issue: the close connection between Start II and
the 1972 Anti-Ballistic Missile Treaty, which bans the signatories from
deploying national antiballistic missile systems. The United States is
considering the creation of such a system, which would be an open violation
of the treaty.
Everyone should be aware that the collapse of the ABM treaty would have a
destructive domino effect for the existing system of disarmament agreements.
The terms on which Start I and II were agreed would change. Even from the
formal point of view, if the United States withdrew from the ABM treaty,
Russia would not be bound by its strategic arms reduction obligations. The
further question of the fate of agreements on medium- and shorter-range
missiles would arise. Finally, the development of Start III would be
disrupted. We would be back in an era of suspicion and confrontation.
I am sure that this is not a prospect to be relished by anyone, especially in
Russia or the United States.
Our countries have expended too much effort and too many resources toward
ending the cold war and confrontation.
At the same time, Russians are closely following the debate in the United
States on the dangers from missiles and possible countermeasures. The view
that prevails here -- and is reflected in the decision of the Russian
parliamentarians -- is that this threat (which, by the way, our specialists
think is at least exaggerated) should not be counteracted in a destructive
way. There are other ways that would be far more effective in terms of
international stability. For instance, the start of direct dialogue between
America and North Korea has brought a very positive reaction in the world
because it may help clarify many of the issues, including those connected
with missile challenges.
Russia proposes to the United States that we jointly develop a program that
would prevent the proliferation of missiles and missile technologies or
remove incentives for acquiring them. Another path is to continue efforts to
strengthen the control of rocket technology and to create a global control
system to prevent proliferation of missiles and missile technology. In March,
Moscow hosted an international meeting of experts on such a system, at which
representatives of 50 countries exchanged ideas on practical steps.
Russia is prepared to cooperate with America and other countries in creating
systems of nonstrategic antimissile defense that are not banned under the
1972 ABM treaty. The basis for this is provided by the Russian-American
agreements on the delimitation of strategic and nonstrategic ABM systems of
1997, which are awaiting ratification by the Congress.
And finally, further cuts of strategic weapons -- and Russia is ready to
bring the total ceiling of nuclear warheads to 1,500 under Start III,
reciprocally with the United States -- provide an additional stimulus for the
strengthening of the regimes of nonproliferation of weapons of mass
destruction and means of their delivery.
In short, the Russian side offers a constructive alternative to the
disruption of strategic stability. And we are also open to positive ideas of
the American side aimed at further cooperation in the disarmament field. The
decision of the parliament on the Start-ABM package is, in effect, our
24 April 2000
[for personal use only]
Chance for a Safer World
We must embrace Russia's new willingness to fight nuclear terrorism.
By Graham T. Allison and Sam Nunn
Graham T. Allison is director of the Belfer Center for Science and
International Affairs at Harvard's John F. Kennedy School of Government. Sam
Nunn is a former Democratic senator from Georgia.
The Russian Duma's ratification of the START II nuclear arms treaty,
following president-elect Vladimir Putin's calls for even deeper cuts in
Russia's nuclear arsenals, presents a major opportunity for the Clinton
administration to advance American national security interests. On the basis
of conversations with Russian experts and officials in Moscow, we are
confident that Putin would be receptive to a bold proposal for a joint
Russian-American initiative to prevent terrorist theft of Russian nuclear
weapons and weapons-usable nuclear materials.
In a speech at a nuclear weapons center on March 31, Putin said that his
government should work to "free the world from piles of excess weapons."
Calling for further cuts and stepped-up efforts to streamline Russia's
nuclear capabilities, he said: "Our aim is to make our nuclear weapons
complex more safe and effective."
We recently served as members of a task force that engaged 100 experts in a
review of nuclear security today--after a decade of vigorous engagement
supported by the Nunn-Lugar program and related legislation. Despite a decade
of effort, the risks of "loose nukes" are larger today than they were when
these efforts began. U.S. programs have had positive results, but declines in
Russia's economy and in the government's ability to control anything--from
money to nuclear materials--has had larger negative consequences. The good
news is that Russians are ready to engage in more joint efforts to secure
Russia's nuclear materials.
Russians' awareness of their vulnerability to terrorism has been raised
dramatically by recent experience. Last summer's attack upon Russian
territory in Dagestan by rogue warlords operating from Chechen territory; the
bombings of apartment buildings in Moscow and other cities that killed more
than 300 people; and threats by fighters in Chechnya to attack nuclear power
plants and other facilities in Russia--all have given terrorism a terrifying
face for ordinary Russians. Polls from last November find that 90 percent of
Russians surveyed fear a terrorist attack on nuclear facilities, and 86
percent fear that a nuclear weapon in the hands of a terrorist could be used
The American public also recognizes the threat. A September Wall Street
Journal-NBC News poll showed that the threat of terrorist acts on U.S. soil
ranks second among Americans' biggest fears.
Our task force identified a number of serious initiatives that can reduce
this danger. At the top of our recommendations are:
* Buy and take all the nuclear weapons material Russia is prepared to sell.
In addition to highly enriched uranium (HEU) purchases, the U.S. government
should buy all available Russian HEU, which, when blended with low-enriched
uranium, becomes proliferation resistant and commercially valuable. Under the
current agreement, less than half of Russia's HEU would be blended over the
next 20 years. Plutonium also should be purchased, but that will require more
substantial public subsidies since it currently has no commercial use.
* Remove potential bomb material from the most vulnerable sites in Russia.
Caches of highly enriched uranium and plutonium, sufficient for making dozens
of bombs, still can be found at many facilities across Russia. As part of a
renewed "buy and secure" campaign, potential bomb material should be
consolidated in central, more secure storage facilities.
* Accelerate the blending down of highly enriched uranium. The United States
should provide the capital investment and financial incentives for Russia to
blend down all excess HEU in the next four years. For an investment of
approximately $500 million, we could get all of the excess Russian HEU
blended to nonweapons-usable forms within Putin's first term.
These deals should be accompanied by Russia's agreement not to produce
additional nuclear materials. Also, given Europe's proximity to Russia and
Japan's experience as a target of terrorism, our allies should share the
costs. July's G-8 summit in Okinawa provides a setting in which these deals
could be done.
Mutual concern about terrorism and a new, energetic leader in Moscow who
seems to be willing to address his nation's nuclear reality present a rare
opportunity for sharply reducing dangers to Americans, Russians and the world.
From: "Igor Khripunov" <firstname.lastname@example.org>
Subject: a brief comment [re new defense doctrine]
Date: Sun, 23 Apr 2000
Numerous comment in the Western media about Russia's new defense doctrine
may warrent a clarification.The no-first use of nuclear weapons was dropped
by the 1993 defense doctrine.This principle was declared in early 1980s
but it was mostly a propaganda gimmick. The new draft defense doctrine was
developed in 1998 and 1999 but its publication was delayed by the bombing
of former Yugoslavia.MOD decided in April 1999 that the text needed changes
to reflect the "new harsh reality". The changes were suggested mostly by
the General Staff and made the text really tough.The draft was published
in October 1999 for "public discussion". In January 2000,the national
security doctrine was adopted which again authorised the first use of
nuclear weapons under specified conditions. In this respect it was largely
similar to the NATO Declaration of April 1999. It was understood,however,
that Russia' nuclear threshold was somewhat lower because gaps and
weaknesses in the coventional derrence.My impression is that in the period
after the draft defense doctrine was considered at a Security Council
meeting in January 2000, Putin insisted to water down most of its
confrontational provisions.Some pronouncements of MOD leadership in
February tend to confirm it. Some high ranking Security Council officials
went even as far as characterizing this document as heralding a new level
of cooperation with the West. It is hard to make jugements before the
final text is published. Clearly, Putin has to deal with the hawks in the
General Staff,appease the armed forces against the background of
intensifying warfare in Chechnya and continue to stretch out an olive
branch to the West.It would make sense to evaluate the new doctrine in
terms of Putin's limited space for strategic and negotating manoeuvre.
Center for International Trade and Security
University of Georgia in Athens.
Date: Mon, 24 Apr 2000
From: "Stephen Blank" <BlankS@awc.carlisle.army.mil>
Subject: nuclear doctrine
Marko Beljac is in error in JRL 4264 (23 April) when he states that Russian
nuclear doctrine applies only to Russia itself and perhaps to Belarus.
Countless Russian articles and statements going back to 1997 when Yuri
Baturin started the work on a new doctrine to replace the 1993 doctrine make
it clear that Russia has unilaterally extended deterrence to the rest of the
CIS . This was probably the case in 1993 as well. INasmuch as in practice
Russia has not fortified its frontiers with the CIS Russia's actual military
boundaries are those of the CIS with those governmetns' members and given
the staunch oppostioin to any foreign military presence in the CIS it is
hardly surprising that in practice the Russian military thinks of the CIS as
being in strategic terms Russian, especially as there are many Russian bases
and formatinos throughout those states.
April 22, 2000
PARTY LINES: Bittersweet Memories of '97
By Jonas Bernstein
Special to The Moscow Times
This week's warm weather, combined with the renewed optimism in the air,
reminded me of sitting in a local watering-hole one day during the summer of
1997, listening to a top Western fund manager waxing poetic about Russia's
future. He pointed to Deputy Prime Minister Boris Nemtsov as economic
reform's greatest hope. Nemtsov, he stated, would build Western confidence,
which would in turn stimulate foreign investment, which would help the
country survive until real economic growth began. Then, he predicted, the
young reformer would be able to ride the rising economic wave into the
presidency in 2000 f or even earlier, depending on the health of President
This was the mood in 1997, when Euromoney magazine named Anatoly Chubais
"Finance Minister of the Year," and the country's gross domestic product was
reported to finally be in the black f growing 0.4 percent, according to the
State Statistics Committee.
True, the credibility of both these claims would subsequently be battered
somewhat. In June 1998, just a few months after the State Statistics
Committee issued its cheery report on the previous year's GDP, its entire
leadership was arrested for faking economic data in order to lower the tax
bills of certain "commercial structures" (in return for "commissions"). And
in August 1998, only 11 months after Chubais was crowned the world's greatest
finance minister (the Finance Ministry, said Euromoney, had acquired a "new
dynamism" under Chubais), the ruble lost 66 percent of its value in three
Well, never mind. As they say, hope dies last. Indeed, Euromoney was back at
it this week, this time naming Mikhail Kasyanov, the first deputy prime
minister who doubles as finance minister, the best finance minister in
Central and Eastern Europe. Kasyanov (whose moniker in some Russian
journalistic circles is Misha, followed by a certain percentage) is widely
believed to be the front-runner in the race to become President-elect
Vladimir Putin's next prime minister.
The irrepressible Chubais was also back at it this week. The electricity
chief was in London as one of the participants in an international forum
called "Russia 2000: New Realities-New Possibilities." Among other things,
Chubais declared that the August 1998 crisis had "exerted a positive
influence on Russia's economy" (this, at least, is how Itar-Tass reported
On one level, Chubais's claim may be true, given import substitution and
other factors. It's not clear, however, that the millions of Russians who as
a result of the ruble crash and debt default saw their bank savings wiped out
and/or their real incomes cut by a third would agree with his assessment.
Chubais's comment was a little like a doctor looking back on a near-fatal
illness that he had failed to diagnose and saying that it had provided a good
opportunity to lose weight.
Judging by the news reports, the London forum included moments bordering on
the surreal, like the speech by Pyotr Aven, the Alfa Group founder and a
leading oligarch. Aven, who admitted in 1994 that millionaires in Russia were
"appointed," condemned the Russian mentality, the state bureaucracy's
tradition of lying and the country's lack of reverence for contracts or
understanding of private property. Pointing to fellow oligarch Mikhail
Khodorkosvky, Aven complained they spent half their energy trying to protect
what they had. It was a performance that called to mind Johnny Caspar, a
character in the film "Miller's Crossing," complaining about how one of his
partners f Bernie Bernbaum, a.k.a. "the Shmatte" f lacks "ethics."
Meanwhile, kudos should go to yesteryear's great reform hope, Nemtsov.
According to the newspaper Vedomosti, he was the only participant in the
London conference to point out the 360-kilogram gorilla that has lumbered on
stage during this latest round of reform enthusiasm but which everyone is
pretending not to see f Russian Aluminum, the country's newest monopoly.
Nemtsov criticized Putin for failing to head off the "conspiracy" between
Siberian Aluminum's Oleg Deripaska and Sibneft's Roman Abramovich, who
recently merged their aluminum holdings to form the new metals giant.
Despite the large and growing gap between Putin's promises to level the
economic playing field and reality, the economy may be able to maintain the
dynamism Putin insists it is exhibiting (the president-elect claimed this
week that GDP grew 8 percent during the first three months of the year).
One can be forgiven, however, for remembering 1997 with a strong sense of
Date: Mon, 24 Apr 2000
From: "(RIA) Mueller, Jonathan D" <email@example.com>
Subject: RE: 4262-Taibbi/Mueller and IKEA
Thank you for publishing my comment on the IKEA press review. I have
received several kind comments from other readers agreeing with me. It is a
pleasure to get such a positive response.
I am also flattered that Matt Taibi would fill about ten times as much space
responding to me as I took up in my original comment. It seems, though,
that I was not clear, as he has devoted considerable effort to responding to
points that I did not intend to make. I would like to set the record
straight here (in no particualr order):
* I did not mean to see any affirmation of Putin's reform credentials
in the IKEA case. As far as I know he has no connection with it. I meant
to contrast the statements about Putin's reform credentials coming from
western government and IFI leaders with IKEA's actions, which I believe are
significant whatever their motives.
* To my knowledge IKEA never used the word 'bribery'. They merely
said they couldn't reach a lease agreement with the city. It is we, the
commentators, observers, and readers of JRL, who saw bribery rejected. We
don't know anything about IKEA's negotiations with the city. They may have
considered paying but found the price too high. They may not. They are not
Sunday school teachers; they are in Moscow to make money. But if they
conclude the best way to make money is without the mayor's blessing then
others might, too.
* Moscow is not Anytown, USA. When IKEA opened in Warsaw, it
immedaitely attracted nouveau riche Poles with its combination of value,
selection, and service, all previously unavailable there. IKEA is perhaps
relatively a later entrant to the Moscow market, but there is still lots of
room for them to raise the standard of service and competitiveness in
retailing. Also, contrary to Taibi's inuendo about IKEA's suburban
warehouses, their first store in Warsaw was in the center, and it appears
that their first choice in Moscow was a more central location.
* Regarding the level of attention to this story, if Taibbi feels so
strongly about it why does he not also pillory the Independent and Patrick
Cockburn (or you, David, for re-printing the Independent story)?
* I cannot comment on the quality of the New York Times story as I
have not read it, only the Cockburn/Independent story. It may be as flawed
as Taibbi says, I just cannot say.
* Finally, and perhaps most importantly, Russian views on the
Memorial/overpass issue. There may well be many Russians who oppose the
overpass; since Taibbi is in Moscow he would know better than I. However,
from the Cockburn story it is clear that the Russians are divided, with the
oblast, on whose territory store, highway, and memorial stand, requiring the
overpass and the city blocking it. So lets knock off the high moral dudgeon
about Russian views on preserving the Russian heritage.
The exile press review is an entertaining piece which regularly challenges
the Moscow press corps to raise its standards. If memory serves, when you
wondered whether you should continue to publish it in JRL, I was one of
those who spoke up for keeping it. But this time I, and I believe other JRL
readers, see a point to the story which Taibbi has missed.
Date: Thu, 20 Apr 2000
From: Gordon N Bardos <firstname.lastname@example.org>
Subject: AP/Harriman Conference in New York
Your are cordially invited to:
The Seventh Annual Associated Press/Harriman Institute Conference
"Russia After Yeltsin"
Friday, May 5th, 2000
Kellogg Conference Center
International Affairs Building
9:00-9:30--Registration and Coffee
9:30--9:45--Welcome and Introductory Remarks: Catherine Nepomnyashchy,
Associate Director, Harriman Institute, Amb. William Luers,
President and Chairman, United Nation Association of the US, Chairman of
the National Advisory Council of the Harriman Institute;
Thomas Kent, Deputy Managing Editor, Associated Press
9:45-11:45--Panel I: Russia's Changing Political Scene
Chair: Amb. Jack Matlock, Institute for Advanced Studies, Princeton, NJ,
and former US Ambassador to the USSR
Panelists: Stephen Cohen, New York University
Alexander Motyl, Rutgers University
Kathryn Stoner-Weiss, Princeton University
12-1:45--Luncheon and Keynote Address: Thomas Graham, Carnegie Endowment
for International Peace
2-3:45: Panel II: The Future of Economic Reform: Progress or Stagnation?
Chair: Allen Sinai, President and Chief Global Economist, Primark Decision
Panelists: Rose Brady, Business Week
Padma Desai, Harriman Institute
Richard Ericson, Harriman Institute
4-5:45--Panel III: Western Media Coverage of Russia
Chair: Thomas Kent, Associated Press
Panelists: Jim Heintz, Associated Press Moscow Bureau
David Johnson, Center for Defense Information, and Editor, Johnson's
Serge Schmemann, Deputy Foreign Editor, The New York Times
The registration fee for the conference is $85. For more information or to
register, please contact Gordon N. Bardos at 212-854-8487, or by email at
April 24, 2000
Russians for Putin's Unlimited Power?
The number of those who advocate limiting the President's power is gradually
reduced, according to "Ekho Moskvy" radio. The tendency was evident after
Vladimir Putin's victory in the elections, concludes the "Public Opinion
Fund" on the basis of the polls taken. Thus, in particular, 70 percent of
those asked in October last year opposed an amendment granting the president
the right to oust the cabinet without reference to the Federal Assembly,
whereas in April this year there were just 54 percent. However, Russians are
expressly against an augmentation of the President's power. Besides, 65
percent Russian are against the prolongation of the presidential term in
power from the current 4 years to 7 years.
Comment: A belief in a powerful leader is a traditional one in Russia.
Especially when the country is a big mess. In this sense, it is symptomatic
that ahead of the elections even the monarchists who saw in him a prototype
of a new czar backed Putin. Worth noticing, too, are the tendencies marked by
the POF ahead of the inauguration. In principle, it is quite enough for the
president-elect that the public opinion at this moment clings to the idea of
augmenting his powers. When the powers are in hand, the public opinion - on
how long a president can stay in power - may become dispensable.
RUSSIAN ECONOMIST ON MAIN POINTS OF PUTIN'S PROGRAMME FOR RUSSIA
Text of report by Russia TV on 23rd April
[Nikolay Svanidze, presenter] Correspondent Aleksandr Parkanskiy reports from
a special dacha near Moscow where [head of the Centre for Strategic Studies]
German Gref's team is shaping the future economic policy.
[Correspondent] The information made available to the press suggests that
several dozens or maybe hundreds of experts and specialists are working on
this economic programme. But this doesn't happen in real life. After all,
this work is usually done by a close-knit group of people where one, two or
three people outline general strategy and general technical tasks on which
many experts subsequently work. Who are the real authors of the economic
programme that is being currently developed? Who is determining its strategy?
[Aleksey Ulyukayev, head of a sector at the Centre for Strategic Studies]
>From the point of view of technology, there are three layers of work. We have
counted that there are about 200 experts taking part in reviewing and
preparing material. There are working groups in the ministries and
departments with which we are keeping in touch. There are, it seems, about 14
working groups, which include about 40-50 representatives of ministries and
departments. Finally, there is a close-knit group of people indeed. I can
tell you that yours truly as well as Oleg Vyugin, (? Mikhail Dmitriyev,
Sergey Sinelnikov, Arkadiy Dvakovich) and a number of other highly skilled
specialists who can develop fundamental principles of an economic programme
are working under German Gref's guidance.
As regards priorities - I will speak only about the economic part of it,
naturally - they include strong and consistent economic growth which would
resolve the problem of strengthening our national independence, preserving
our culture and raising our prosperity. In very crude terms, our task is to
build yet another Russia within these 10 years, that is to actually double
its gross domestic product and keep the annual average growth at about 6 per
cent which will give us this doubling in 10 years. And the population's
income will grow even somewhat faster and will increase approximately 2.2
times in these years.
[Q] How large a part will the state play in the economy?
[A] We believe that the state is an inefficient owner. The state is an
inefficient organizer of demand and a poor entrepreneur. On the whole, the
state's direct role in the economy should diminish, except in the industries
where the state has great responsibility which are, first of all,
infrastructure as well as a range of institutions linked with social
guarantees, education, health care and so on. On the other hand, the state
should raise its profile sharply in monitoring and controlling functions,
guarantees for business deals, credits, contracts and the observance of law.
The law and the right to apply it is the sacred duty of the state, and here
we must feel that the state has muscles.
[Q] What about ownership of land?
[A] You see, of course there are opponents of the selling and buying of land.
People can be opponents of winter with equal success. For instance, I may
dislike snow, therefore I will oppose snow. It's already a fact. There is a
market of plots of land but it's illegal. And an illegal market means that
prices there have nothing to do with supply and demand. We must legalize
normal deals, we must allow rural producers to finance their land legally by
obtaining funds for developing its production. Therefore this is absolutely
[Q] You said that you are counting on 6-per cent annual growth and that the
population's income will grow even faster. What will be the average income of
an average Russian in 10 years?
[A] As I have already said, the real income per person will more than double,
and the national currency exchange rate to the dollar is likely to become a
bit more stable. The purchasing power of an average family in dollars will
increase 2.5 or three times, perhaps. Whereas now it amounts to about 100-120
dollars for an average Russian family, by the end of this period we expect it
to reach the level of 250-300 dollars.
[Q] Thank you.
The Boston Globe
18 April 2000
[for personal use only]
Russian Criminal Justice
By Brian Whitmore (email@example.com)
MOSCOW - In Moscow City Courtroom No. 329, two teenage defendants sat
glumly in a little red cage.
They were on trial for the grisly murder of an elderly woman. After their
arrest, police had beaten both young men until they confessed. The
detectives wrapped one young man's head in cellophane and savagely flogged
him with a truncheon.
This is criminal justice, Russian-style. You have the right to remain
silent - but using it could land you in the hospital. Police, under pressure
to fulfill monthly arrest quotas, routinely use torture to gather evidence.
Prosecutors win convictions at near-perfect rates. A trial is usually a
formality, a guilty verdict a foregone conclusion.
But these defendants were luckier than most. Judge Sergei Pashin was
hearing their case. Innocent or guilty, they at least stood a chance of
receiving a fair trial.
Pashin quizzed the accused, Andrei Mazayev and Pavel Sabadash, about the
police beatings. He offered them an opportunity to retract their
confessions, but neither did. Later, in his chambers, Pashin said he would
throw out the confessions anyway, but conceded that even without them, the
case against the two was strong.
Pashin, 37, has spent his career trying to turn Russia's courts into
something more than a rubber stamp for prosecutors. His one-man quest,
partially inspired by a visit to a Boston courtroom eight years ago, has
earned him the hostility of his colleagues, and almost cost him his job.
Russia's judicial system remains mostly unchanged since Soviet times,
when crime rates were low and it was assumed that the state never made
mistakes. But over the past decade, crime has mushroomed and police and
prosecutors have come under pressure to show results.
President-elect Vladimir V. Putin has promised a ``dictatorship of law''
for Russia. But whether the emphasis will be on ``dictatorship'' or on
``law'' depends largely on what happens to the country's courts.
After a decade of fighting unsuccessfully for change, Pashin himself is
skeptical. Against stiff resistance, he has, pushed for jury trials, fought
for independence for the courts and tried to prevent prosecutors from
dictating judges' decisions.
``In the confines of our judicial system it is nearly impossible to
accomplish anything,'' Pashin said in an interview in his chambers last
week. ``With the police and prosecutors, everything is possible - torture,
falsification of evidence, misconduct, pressure on judges.''
A recent report by the New York-based Human Rights Watch found widespread
evidence that Russian police regularly use electroshock, asphyxiation, and
sustained beatings to extract confessions. An independent judiciary might be
able to confront such practices, but Russia's courts are dependent on local
authorities, who want to appear tough on crime.
The cage in every Russian courtroom, where defendants sit during their
trials, is indicative of the ``guilty until proven innocent'' mentality.
``Our courts are simply agents of punishment. Prosecutors regularly
pressure judges into reaching guilty verdicts,'' said Rustem Maksudov of the
Moscow-based Center for Judicial Reform.
Russian judges are appointed for life terms by the president. Their
salaries, about $130 a month, come from the federal budget. Local
authorities, however, dole out benefits like housing and healthcare, which
judges rely on to make ends meet.
Pashin said prosecutors and other officials often call judges and impress
upon them the importance of making ``the right decision'' - and the
consequences of making the wrong one. The best he can do under the
circumstances, he said, is to make his own courtroom as fair and just as
He routinely throws out confessions obtained by torture and meticulously
reviews evidence for signs of falsification. As a result, in a country where
prosecutors boast a 99.65 percent conviction rate, Pashin acquits about one
out of every ten defendants who walk into his courtroom.
``Pashin is the only real judge in Russia,'' said Maksudov. ``In terms of
professionalism and independence, I don't know of anyone else like him.''
Infuriated by Pashin's perceived leniency, prosecutors got him thrown off
the bench in 1998. He sued to get his job back and, after an outcry in the
media, was reinstated.
With his short blonde hair, pinstriped shirt, and dark tie, Pashin hardly
looks like a radical. But in a country that is burdened by rampant crime and
fond of doling out draconian punishments, his ideas are considered
Former President Boris Yeltsin appointed Pashin a judge in 1996, when he
was an adviser to the Kremlin on legal reform.
It was a trip to the US District Court in Boston in 1992 that helped
inspire Pashin's desire for change. There, he watched a criminal trial
presided over by William Young, now the court's chief judge.
What Pashin saw in Young's courtroom made a deep impression.
``It was clear that the court was honest, interested only in finding the
truth. Judge Young was just brilliant. He was obviously in love with the
law,'' Pashin said.
Young was also impressed by Pashin, whom he described as ``professional,
personable and filled with intelligent and perceptive questions.''
Young said Pashin was particularly interested in how jury trials work.
Tsarist Russia used jury trials, but Communist authorities, calling the
practice a remnant of ``bourgeois justice,'' abandoned them.
Today, Russia's post-Soviet constitution guarantees the right to trial by
jury. But fierce opposition from prosecutors has meant that jury trials are
rare. Just nine of Russia's 89 regions use them.
Of the 600 or so cases heard by juries each year, about 20 percent result
``In a jury trial the prosecutor must prove his case. He can't be certain
in advance that he will win. Juries have more respect for honest procedure
and individual rights,'' Pashin said.
Prosecutors, accustomed to being the arbiters of guilt and innocence,
``Juries are an archaic institution from the 19th century. They tend to
make their decisions based on emotion,'' said Yury Sinelshchikov, a Moscow
In a bid to educate the public on the issue, Pashin recently teamed up
with privately-owned NTV television on a program called ``Court is In
Session.'' The show gives convicted criminals a chance at televised jury
trials, with real judges and prosecutors. The verdicts, however, have no
In the show's premiere, Pashin presided over the ``trial'' Maxim
Shamarin. In 1995, a judge convicted Shamarin of double murder. The jury,
however, found the prosecution's evidence flimsy, and it acquitted him.
But it won't help Shamarin, who has spent the last five years in prison.
April 24, 2000
Chubais Resigned to Aluminium Monopoly
By Leonid Sborov
Anatoly Chubais is opposed to the creation of ‘Russian Aluminium’. One of
the founders of the newly formed concern is Oleg Deripaska, an old ally of
Chubais. The Berezovsky-Abramovich group opposing Chubais is growing
significantly stronger. However Chubais still controls the financial
instruments that could help him to restore parity.
As we reported a few weeks ago, the new owners of Bratsk and Krasnoyarsk
smelters and a number of several major enterprises of aluminium industry
Roman Abramovich and Boris Berezovsky joined forces to implement a joint
project with the president of Siberian Aluminium Group Oleg Deripaska.
Together they announced the foundation of a new company, ‘Russian Aluminium’,
in effect a monopoly of the Russian aluminium industry.
Hitherto, Oleg Deripaska had been considered a member of Chubais’
political clan and consequently an irreconcilable rival of the
Berezovsky-Abramovich alliance. Both tycoons [Chubais and Deripaska] shared
not only common political views, but also businesses. On the basis of
Sayano-Shushenskaya Power Station and Sayansk smelting works Chubais and
Deripaska founded the energy-metallurgical producer Sayany. However after
Deripaska’s decision to join forces with Chubais’ enemies, further
cooperation between the two became doubtful.
On Monday Chubais eventually announced his position. When asked in an
interview with the Financial Times how he felt about the creation of Russian
Aluminium, Chubais said: “The fact is that they [Berezovsky and Abramovich]
say the merger does not violate the anti-monopoly law, however, this does not
mean that the decision was right, it means that the anti-monopoly legislation
is poor.” Chubais’ claims the merger would allow three Russian oligarchs to
control over 75% of gross metal yields: “We have never seen anything like it
before. It is an unprecedented concentration of capital and mass media in the
hands of a small group of people.”
However, in order to smooth the impression of an attack upon Deripaska
and his new friends, Chubais admitted that the creation of a new concern
would increase the competitiveness of Russia on the world market.
Our correspondent contacted Anatoly Chubais’ spokesman Andrei
Trapeznikov for comment. Mr. Trapeznikov also asserted that there has been no
cooling of relations between his boss and Deripaska due to the latter’s
cooperation with Berezovsky. “Chubais and Deripaska first of and foremost are
connected through business. Smelters are the largest consumers of energy, and
the first thing we are interested in is the situation with payments. In this
context Chubais is genuinely preoccupied with the fact that such a powerful
monopoly has emerged in the aluminium industry.”
According to Trapeznikov, Chubais is worried because he is not sure
whether the smelters –members of the new concern – would pay on time for the
energy they use. And he has reason to be concerned. Almost all smelters owe
huge amounts to RAO UEA. An example of (non) payment disputes was the court
case between KrAZ (Krasnoyarsk smelter) and Krasnoyarskenergo (a local
subsidiary of RAO UES) concerning tariffs. In the end the court ordered the
smelter to pay over 3 billion rubles to the energy supplier. It turns out
that KRAZ does not have the necessary funds to pay, thus RAO UES might
initiate a bankruptcy case and, in doing so, influence the new owners of the
The question remains as to whether Chubais will be able to give a
purely economic twist to this struggle. It was no accident that in his FT
interview he mentioned the negative consequences of concentrating not only
industrial capital, but also the media in the hands of a single oligarch. If
properly controlled, the newspapers and TV in Russia can effectively ruin a
businessman’s reputation or cause the downfall of a government official.
Chubais knows this better than anyone else.
Financial Times (UK)
24 April 2000
[for personal use only]
Russian energy boss lays down challenge to Putin: Anatoly
Chubais says that the president-elect must show courage and back
liberalisation of the vast energy market, reports Arkady Ostrovsky
Anatoly Chubais, chief executive of Unified Energy Systems (UES), Russia's
electricity monopoly, says he is hoping to win the support of Vladimir Putin,
the president-elect, for ambitious steps to liberalise the country's vast
The reforms would require a change in Russian legislation and could have a
long-lasting impact on the domestic economy, which grew strongly in the first
quarter of 2000. They would also represent an important test of the economic
policies of Mr Putin's new government. "I would not have suggested such a
programme one or two years ago, but now I think it is realistic," Mr Chubais
said in an interview in London. Mr Chubais said he was also hoping to gain
support from foreign shareholders who own 33 per cent of UES, which employs
almost 700,000 people.
At the centre of his plan is the liberalisation of the power generation,
distribution and sales networks, which would be demerged from the energy grid
and partially sold to investors.
"That does not mean we'll sell our stock in power generation completely, but
it means that we plan to attract additional investments into the power
plants, which could lead to the diminishing of our share (in power
generation) from the current level of 85-90 per cent to 30-35 per cent.
"The grid is the low risk and low profit natural monopoly and should be
preserved, but power generation, sales and distribution of energy should be
taken out of total state control."
He said only that way would Russia get the funds to modernise power plants.
Mr Chubais said UES was hoping to attract Dollars 30bn-Dollars 60bn
(ś19bn-ś38bn) in investment to its power plants over the next 10 years.
"There is no comparable restructuring anywhere in the world. But everything
we do in Russia is unprecedented." Mr Chubais said he expected most of the
money to come from foreign investors. "Mr Putin very well understands the
importance of attracting foreign investments to Russia."
The chief executive said UES was working on a comprehensive restructuring
programme, which included developing proposals for legislative changes that
would be submitted to the government by the end of June. "If the government
and the Duma approve our programme, we could start restructuring in the
spring of next year."
However, Mr Chubais' programme is likely to meet fierce opposition from the
Communist party, which has about one fifth of the seats in parliament, as
well as from some of the Russian regional governors.
UES also needs to solve some of the more immediate problems concerning its
debts and the reduction in fuel supplies before pressing on with the
Mr Chubais expressed some trepidation over the recent creation of Russia's
largest aluminium concern, Russia Aluminium, which would give three Russian
"oligarchs" control over more than 75 per cent of domestic production.
"We have never seen anything like this before," he said. "This is an
unprecedented concentration of capital and media interests in the hands of a
small group of affiliated people."
Mr Chubais said while this could boost Russia's competitiveness in the
international market, it could also lead to a considerable political force
inside the country. "The fact that this merger does not contradict the
anti-monopoly rule, as they say, shows not that the decision is right, but
that the anti-monopoly legislation is too weak."
Gazprom 'set to reduce supplies'
Gazprom, Russia's gas monopoly, is expected further to reduce supplies to
Russian domestic consumers as a result of diminishing gas reserves, according
to Anatoly Chubais, head of the country's UES electricity utility.
Mr Chubais said Gazprom's chairman, Rem Vyakhirev, had acknowledged the
shortfall in domestic gas supplies in 2000 would reach 11bn cubic metres,
rising to 36.6bn cu m in 2001 and peaking at 67bn cu m in 2003. Some regions
were threatened with power cuts this month after a dispute between UES and
Gazprom over gas supplies.
"Gazprom's old fields are exhausted while its new fields are not going to be
operational until 2002," said Mr Chubais. "But having the same volume of
exports, it had to cut production domestically."
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