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Johnson's Russia List


April 28, 2000    
This Date's Issues:  4273  4274 

Johnson's Russia List
28 April 2000

[Note from David Johnson:
1. APN: Putin`s father plans to give lectures in US.
(Gleb Pavlovsky)
2. Reuters: Putin adviser eyes Chile model for pension reforms.
3. Itar-Tass: Public Transport Fares in Moscow to Grow 10 Percent.
4. Financial Times: OBSERVER: Own man. (Mikhail Kasyanov)
5. Reuters: Mike Collett-White, No winner yet in new Caspian Great Game.
6. Christian Science Monitor: Fred Weir, Young Russians fight the draft.
7. Alexei Arbatov On New Military Doctrine: "I Was Afraid It Would Be More Tough"
8. Andrew Miller: Russian Nostalgia.
9. The Guardian (UK) obituary: Roger Pethybridge. 
Historian who explored the Russia of 'icons and cockroaches'
10. Rossiyskaya Gazeta: 'Breakthrough' in Russian-US Ties Eyed.
11. Itar-Tass: Russian Paper Officially Warned for Interviewing Maskhadov. 
12. Novaya Gazeta: Mikhail Krugov, Money Thief. The Mechanism of 
Credit Theft Is Ingeniously Simple.]


27 April, 2000
Putin`s father plans to give lectures in US

Known political technologist, Effective Politics Foundation, Or FEP, head 
Gleb Pavlovsky intends to give up his business and move to US in near future, 
APN presidential source reported.

As is known, Pavlovsky is considered President Vladimir Putin`s «farther» in 
a way in big politics. It is FEP which unexampled successful election 
strategy is attributed to. Due to this strategy Putin became second Russia`s 
president. However several experts consider Pavlovsky`s part in Putin`s 
upsurge some exaggerated.

According to the source, Gleb Pavlovsky is expected to deliver lectures in 
one of prestigious universities and to summarise and systematise his 
experience in Russian political technology. Probably, the FEP head will issue 
from his pen a book on history of the 1991-2000 political battles in Russia. 
Pavlovsky seems likely, the source thinks, to give up his office of FEP 
president but to remain a co-owner in this structure.

The APN source believes that Pavlovsky acts as a coach who did his best for 
his team to won world championship: it is impossible to achieve more success 
but it is possible to be discredited for new projects. That`s why it is the 
best way to leave right after the victory.


Putin adviser eyes Chile model for pension reforms

MOSCOW, April 27 (Reuters) - A liberal economist advising Russian 
President-elect Vladimir Putin on an economic programme on Thursday backed an 
overhaul of the ex-Soviet state's lumbering pension system and said Chile was 
a good example. 

A shake up of the pension system is one of the areas which the International 
Monetary Fund and the World Bank say Russia needs to work on as part of its 
structural reforms. 

Adviser Andrei Illarionov said his goal was to start a discussion of the 
pensions systems while the mastermind of the Chile programme, former labour 
minister Jose Pinera, said he would discuss his experience with Putin and 
other ministers. 

"Up to now the problem of pension reform has not been discussed. It is time 
to start talking about it," Illarionov told a news conference. 

Illarionov, 38, has often criticised previous governments for being slow on 
reform and has a reputation as a radical. 

He said he backed introducing reforms, including of the pension system, all 
at once. 

Pinera said his country chose to reform so that workers started paying their 
insurance contributions directly to a special account rather than to the 
government. The worker then built up pensions savings to fund retirement. 

"I will also give President Putin a copy of the pension passport which every 
Chilean worker carries in his back pocket," said Pinera. He said 94 percent 
of Chilean workers had opted to join the system after it was introduced in 

He said the reform had helped cut budget costs, cut poverty and increased 
growth. Illarionov said that Russia could adapt the Chile experience to its 
own, taking the best. 


Public Transport Fares in Moscow to Grow 10 Percent.

MOSCOW, April 27 (Itar-Tass) - Public transport fares in Moscow are expected 
to grow ten percent since May, reporters learned on Thursday at the Moscow 
Department for Transport and Communication. 

However, Moscow Mayor Yuri Luzhkov has not yet signed a corresponding 
instruction, the press secretary of the department, Olga Torchevskaya, 

It is believed that underground fares will grow from four roubles to five, 
while ground transport fare will make up three roubles instead of the two 
that passengers pay now. 


Financial Times
28 April 2000
[for personal use only]
OBSERVER: Own man 

Mikhail Kasyanov, Russia's chief debt supremo and first deputy prime 
minister, has always had something of a swagger. 

But the dapper 42-year-old economist has been strutting his stuff with extra 
vigour in recent days, as he has become firmly installed as the odds-on 
favourite to become prime minister following President Vladimir Putin's 
inauguration on May 7. 

With his booming bass voice, fluent English, and slick presentation skills, 
Kasyanov has impressed many of the western bankers who have been tempted back 
to Moscow by hopes of a new bull market. 

He is all too familiar with the habits of such creatures, thanks to his 
marathon negotiating sessions with representatives of the London Club of 
commercial creditors over the past six years. 

But Kasyanov has had a less than favourable reception in the local press, 
which isn't too keen on his ties to Russia's oligarchs. 

The former finance official is believed to have particularly close links with 
Kremlin power-broker Boris Berezovsky, and presidential administration boss 
Alexander Voloshin, both part of the group around Boris Yeltsin that 
sometimes goes by the name of the "Family". 

Kasyanov's allies say he only twitches to the sound of his master's voice. 
The question is: which master? 


ANALYSIS-No winner yet in new Caspian Great Game
By Mike Collett-White

ALMATY, April 28 (Reuters) - A gateway to the East was the prize in the 19th 
Century Great Game played out in Central Asia by Britain and Russia. Today, 
huge reserves of oil and gas are the spoils in a fierce competition between 
major powers. 

Top officials from China, Iran, Russia, Turkey and the United States outlined 
their vision for the region at a World Economic Forum in Kazakhstan this 
week, all courting eight former Soviet states around the Caspian Sea. 

They portrayed their interest in the region as one of mutual cooperation, not 
colonial expansion. 

``Those who think national interests are a throwback to Russia's imperial 
thinking are tragically mistaken,'' said Russia's Deputy Prime Minister 
Viktor Khristenko. 

And all sought to play down the political stakes, focusing instead on the 
economic benefits of opening up borders, building new export pipelines and 
rebuilding ancient trade routes. 

Iran's First Vice-President Hasan Habibi called for greater integration 
across Eurasia, allowing the newly independent states to avoid falling 
hostage to distant powers. 

``What we have witnessed in the past two or three centuries in the region is 
the prevalence of political and ulterior motives of powers outside our region 
which undermined the proper use of its resources and wealth,'' he said. 

But delegates at the summit held out little hope of any significant 
rapprochement between countries more prone to squabble over territory and 
resources than to cooperate. 

``There is a surreal gap between the words spoken at the conference and the 
realities, in terms of economic development and regional cooperation,'' said 
Alexander Lesser, a Kazakh-based lawyer specialising in metals and 


Control over the flows of oil and gas from Central Asia and the Caucasus, and 
the political clout and leverage that brings, is the main prize for the 
winners in the new game, even more than the hydrocarbons themselves. 

Russia inherited the dominant position, and continues to control virtually 
all oil and gas exported from the east of the Caspian via the sprawling 
Soviet-era pipeline network. 

But it has been weakened by economic and military decline and now faces new 

``Russia does not have the military means to do much in the Caspian because 
of its war in Chechnya, nor the economic means,'' said Olivier Roy, director 
of research at France's National Centre for Scientific Research. 

The United States continues to push plans to bypass Russia to the north and 
``rogue state'' Iran to the south by running oil and gas export routes from 
east to west to regional ally Turkey. 

Energy analysts question the economics of the projects, saying high costs and 
bickering between participating countries could yet scupper them. 

Tehran, sidelined due to U.S. economic sanctions, criticises U.S. policy, 
arguing that pipelines south across Iran are the cheapest option. 

China signed energy deals worth $9.5 billion with Kazakhstan in 1997, hoping 
to secure its growing energy needs long term. 

But the agreements, hailed as the ``deal of the century'' and including a 
planned 3,000 km (1,900 mile) pipeline running east, have made little 


Turkey's main goal as a growing net consumer of oil and gas is to secure 
multiple suppliers, and plans to import gas via new pipelines from 
Turkmenistan and Russia and oil from Azerbaijan. 

With aims so diverse among the region's eight former Soviet states and major 
powers bordering them, no clear winner may emerge from the new Great Game, 
delegates said. 

Simmering tensions between countries in the Caucasus and Central Asia and the 
limited capacity by surrounding states to assert control point to ethnic 
nationalism becoming the region's main ideological factor, Roy predicted. 

And it is not all about oil and gas. 

Russia, China and Iran view Central Asia as a transit route for religious 
extremism and international terrorism, as well as for huge volumes of opium 
and heroin from war-torn Afghanistan. 

``Today, the perils of narcotic trafficking, terrorism, conflicts and civil 
wars...seriously threaten all countries of the region,'' Iran's Habibi said. 


Christian Science Monitor
28 April 2000
Young Russians fight the draft
One potential conscript won a round with the courts this week, but the 
loopholes are closing. 
By Fred Weir

The Russian Army says Vassily Barzhenov is a draft dodger and a malingerer. 
Military officials have battled him in court for five years. Now, he is left 
with a criminal record and is no closer to his goal of serving his country by 
some means other than bearing arms. 

"If only generals could read, perhaps all this wouldn't be happening," says 
the young apartment repairman. 

He means Article 59 of the Russian Constitution, which guarantees any citizen 
the right to perform "alternative service" if conscription "goes against his 
convictions or religious faith." 

At a time when the Russian military relies heavily on conscripts to fight in 
Chechnya, Mr. Barzhenov's case and others like it are important tests of the 
independence of Russia's judicial system and the integrity of constitutional 
law. It also comes at a time when tens of thousands are evading the draft, 
and the parliament is considering passage of a law that would effectively 
send conscientious objectors to labor camps. 

Judges have repeatedly asked Barzhenov about his convictions, to which he has 
invariably replied that he is a pacifist. "I do not believe, deep in my 
heart, that problems should be solved by force," he says. "I cannot take upon 
myself the awesome responsibility of killing another human being. But I am 
genuinely ready to serve my country in any way equivalent to military 

Every court has rejected his explanation, and several judges have told him 
that his request for alternative service is an excuse to avoid his patriotic 

Still, he admits, he's fortunate. About 500 young Russian men end up in 
prison every year for rashly mentioning their constitutional right to an 
alternative when called up for obligatory military service. Barzhenov's 
father, Alexander, has in effect worked as his full-time advocate since the 
first draft notice came in the autumn of 1995. Thanks to Alexander's 
indefatigable lobbying, wheedling, and filing of appeals, the young man's 
case has remained safely lost all these years amid the uncharted byways of 
Russia's red-tape jungle. 

Standing before a grim-faced panel of judges in a Moscow courtroom on Monday, 
Barzhenov won another tiny reprieve. The judges agreed that a two-year prison 
sentence passed on him in 1997 should be cancelled since more than two years 
have since elapsed in legal wrangling. 

"I'm very happy," Barzhenov says. "But it really just takes me back to Square 
1. I'm sure a new draft notice will arrive for me any day, and I'll have to 
go through this whole cycle all over again." 

An official at the Tushino regional draft board, where Barzhenov is listed, 
refuses to give his name or comment on the case. But he insists military 
recruiters "work only according to the law. If there is a problem, it is not 
with us but with the legislation." 

The nub of the issue is that Russia's 1993 Constitution clearly defines the 
right to conscientious objector status, but successive parliaments have 
refused to pass an enabling law to create forms of alternative service. 

"The Defense Ministry and the deputies that lobby for its interests have 
managed to kill every attempt to frame such a law," says Svetlana Fomina, a 
constitutional expert at the Institute of State and Law, which is part of the 
official Academy of Sciences. "Obviously they are afraid that everyone will 
try to use such a law as a way to get out of military service," she says. 

The lack of legislation puts the courts in a bind. Yelena Mizulena, a 
constitutional lawyer and deputy chief of the Duma's legislative commission, 
says the only correct solution would be to let the boys go free until 
parliament passes the necessary law. 

"The Constitution should always take precedence," she says. "However, the 
courts in Russia are highly susceptible to official pressure, and the judge 
who will take such a decision is very rare. This is only one of many areas 
where courts simply do not dare do what they know is right. And it will 
remain like this until we achieve deep judicial reform in this country." 

Judges tend to convict about two-thirds of the young Russians who come before 
them demanding alternative service, says Sergei Sorokin, head of the 
Anti-Militarist League, an organization that supports draft dodgers. Evading 
military service is a serious offense under Russia's criminal code, 
punishable by two years or more in prison. "Right now in Moscow alone there 
are about 400 of these cases before the courts," he says. "We are not 
optimistic about the outcomes, because the official environment is getting 
much tougher." 

There are no reliable figures, but it is estimated that 40,000 or more 
Russians are presently on the lam from Army recruiters. Every year about 
250,000 young men are drafted under Russia's universal conscription laws. 

Mr. Sorokin admits that only a fraction of them come to the Anti-Militarist 
League, which urges draftees to turn themselves in and seek their right to 
alternative service through the courts. 

Greater numbers turn to groups like the Committee of Soldier's Mothers, a 
grass-roots organization that supports an underground railroad for draft 
dodgers and Army deserters, and counsels young men to avoid service by any 
means available. Among the methods they suggest are medical and disability 
certificates provided by sympathetic doctors and arranging student 
deferments. The group routinely advises married draftees to get their wives 
pregnant, because every new baby means a three-year deferment. 

But the short-term outlook for success in the courts isn't good. 
President-elect Vladimir Putin is moving to close loopholes in draft 
procedures, cut down on student deferments, and toughen penalties for 
evaders. "Putin has made it clear that he believes in peace through military 
strength, and he will have no sympathy for those who don't agree," says 

Despite all this, Barzhenov says he's optimistic. "In the past five years 
I've learned a lot, met a lot of people like myself, and I have survived. I'm 
much more confident today that justice can be obtained through Russian 


April 27, 2000
Alexei Arbatov On New Military Doctrine: "I Was Afraid It Would Be More Tough"
By Mikhail Antokhin 

The new military doctrine is more anti-West than the previous one (1993), as 
it openly talks the threat from NATO and the US. Besides, it stipulates that 
Russia may deliver a first nuclear strike. Yet, considering what we have 
suffered from NATO, this version seems to be rather moderate.I was afraid it 
would be tougher.At the same time, the 1993 doctrine maintained the 
possibility of delivering a nuclear strike first, but that was not supported 
by any practical measures, whereas now practical support will be given in 
both strategic and tactical arms. On the other hand, not all the aims can be 
achieved within the present budget's limits. In principle, nothing that our 
military doctrine promulgates can generate the West's wrath. The West, with 
its enormous edge in nuclear and conventional arms, has not yet abandoned the 
idea of the first nuclear strike". 
Alexei Arbatov told "Yabloko" intends in near future to submit in the State 
Duma a draft bill "On the status of a combat action participant". The law 
must define the legal status in question and the regulations of material 
reward: from war veterans' pensions to "combat monies" to be paid for 
participating in "hot point" warfare, as well as compensations to those 
wounded or killed in action. 

Comment: In Arbatov's opinion, the law will not require much budget spending, 
as it will just combine all existent laws and under-law regulations, whereby 
soldiers get paid for their participation in peace-making and combat action. 
Arbatov thinks that after the law is adopted, the authorities will know that 
"a military operation is not a mere fun for free"; it will be obliged to 
assess its potential and "maybe will think twice" before initiating such a 
military operation. The law, Arbatov said, called to limit the use of armed 
forces within the country's boundaries and to prevent an arbitrary use of 
military power. The law will define the criteria for the selection of those 
drafted to be sent to combat grounds; contracted soldiers and draftees will 
be eligible to equal material reward, i. e. combat actions will be more 
expensive. In late May, before the draft bill is considered by the Duma, 
Arbatov said, a working group will go to Chechnya to discuss the draft bill 
with the servicemen. The text will be published in the Internet, too.


From: "andrew miller" <>
Subject: Russian Nostalgia
Date: Thu, 27 Apr 2000 

Topic: Russian Nostalgia
Title: I'm Going to Huff and Puff and . . .

Prima is a Russian (though last time I checked it had been taken over by
American tobacco giant RJR) brand of death-dealing filterless cigarettes .
They come in a red cardboard box of twenty or so and sell for about 20
cents, penny a pop you might say.

A few months ago, a new variant of Primas, called LUX, appeared. LUX Prima
cigarettes have filters and cost a bit more.

This week, in a veritable ode to the powers of capitalism, a third new
variety of Prima, which had stood the Soviet test of time on its own for
many decades unaltered, appeared. The brand is called Prima NOSTALGIA.

Prima Nostalgia come in two different red boxes, slightly smaller than the
original Primas and sell for a bit less. One box has a picture of Lenin.
The other has a picture of Stalin.

Andrew Miller
St. Petersburg, Russia


The Guardian (UK)
28 April 2000
Roger Pethybridge 
Historian who explored the Russia of 'icons and cockroaches'
By Robert Bideleux

The distinctive feature of the later work of Russian specialist Roger 
Pethybridge, who has died aged 65 following a stroke, was that, while other 
scholars were concentrating their research on Russia's capital cities, he 
gave due attention to the provinces - to what Leon Trotsky called "the Russia 
of icons and cockroaches" Other western specialists gradually followed his 

Pethybridge was the author of A History Of Postwar Russia (1966), which was 
to remain in print for more than 30 years. His major work on Soviet "high 
politics" was A Key To Soviet Politics: The Crisis Of The Anti-Party Group, 
in 1962. It was in that year too that he edited Witnesses To The Russian 
Revolution, which heralded his shift towards the study of politics from 

Pethybridge joined what was to become the University of Wales Swansea as a 
lecturer in 1963. He became director of the new Centre for Russian and East 
European Studies in 1972 and was awarded a personal chair in politics in 

During those prolific years in Swansea his major published work included 
editing The Development Of The Communist Bloc (1965), and writing The Spread 
Of The Russian Revolution: Essays On 1917 (1972), which examined the role of 
transport and communications in disseminating the two revolutions of 1917. In 
The Social Prelude To Stalinism (1974), he dealt with the tensions between 
the Bolsheviks' large-scale theories and Russia's recalcitrant small-scale 
realities; and One Step Backwards, Two Steps Forward: Soviet Society And 
Politics Under The New Economic Policy (1990), looked at Smolensk, Tver and 
Kazakhstan in the 1920s. 

Pethybridge was born in Skipton in Yorkshire and educated at Sedbergh School. 
He learned Russian on national service (1953-55). A gifted linguist, he won 
an open scholarship to read French and German at Worcester College Oxford, 
but initially read Italian (with distinction), Russian and Spanish before 
graduating with honours in modern history in 1958. 

After an exchange course at Moscow University in 1958, he chose to go to 
Geneva as assistant to the Soviet director of the World Health Organisation 
in 1959. While in Geneva he completed a doctorate, in 1961, at the Graduate 
School of International Studies on the post-Stalin succession struggle, which 
became A Key To Soviet Politics. A Rockefeller Foundation fellowship at 
Columbia University in New York and at Harvard University followed. Then came 

In 1982-83, he held a Social Science Research Council research award when he 
was a visiting fellow at the Kennan Institute in Washington and at the 
Rockefeller Foundation Institute in Bellagio. In 1989 and 1992, he spent 
several months lecturing at the University of Otago, in Dunedin, New Zealand. 
His most influential academic work focused on the years from 1917-27. 

Pethybridge was widely travelled. He spoke of writing a book about his 
philosophy of travel. His peregrinations sometimes put him at risk - as when 
a surface-to-air missile narrowly missed his plane as it flew out of Kabul in 
1980. A lover of the fine arts, classical music and opera, he had special 
affection for the operas of Janacek. He also became seriously interested in 
mysticism and "the chain of being". 

He was fond of sauna baths and swimming, until a skiing injury in his 50s led 
to hip problems. He refused on principle to have a hip replacement performed 
privately, and the ensuing wait had a visible effect on his health. But he 
made a strong recovery and regained his youthful looks and vigour. 

His reserved and sometimes patrician demeanour masked innate modesty and 
kindness. Sensitive, a champion of those less fortunate than himself, he knew 
a wide circle of people in Swansea and around the world, and many enjoyed his 
sometimes lavish hospitality at the elegant house in which he spent his last 
17 years and where croquet on the lawn sometimes continued by candlelight. 

Soon after his elevation to an emeritus professorship last December, he was 
applauded at the university court of governors after his short but eloquent 
speech protesting against the continuing transfer of power from academic to 
executive bodies in universities. 

In 1977, he was elected to the Atheneum club. He always took pride in his 
Yorkshire and Celtic origins. Roger was single, but for many years he had 
been particularly close to Carys Kneath. 

Roger William Pethybridge, historian, born March 28 1934; died March 27 


'Breakthrough' in Russian-US Ties Eyed 

Rossiyskaya Gazeta
26 April 2000
[translation for personal use only]
Article by political observer Vladimir Lapskiy under the 
"Russia-United States" rubric: "Bill Clinton: America Will Not Forgive 

For the most part, Americans take a negligible 
interest in foreign policy, and it is difficult, sitting in front of a 
television screen in New York, to form a complete picture of the world. 
Gloom-shrouded Russia, mysterious China, the sands and jungles of Africa, 
half-naked Australian aborigines with amulets of shrunken human heads -- 
what do they care about these? The most important thing is what is 
nearby, tangible, and of concrete use. 

But in the past year the word "Russia" has begun frequently 
penetrating the Americans' consciousness. This started with Yugoslavia 
and the NATO invasion of that country or, more accurately, with the 
stormy indignation that it provoked among Russians and with the calls by 
the most hot-tempered of them to view the aggression against their Slav 
brothers as a challenge to Russia and to intervene without delay, not 
stopping at any actions, including military ones. The Russian 
nationalists and national patriots were clearly audible in America. 

Since then Russian-U.S. relations have executed a steep parabola. 
Employing old vocabulary, "Cold War" veterans on different sides of the 
Atlantic and the Pacific were trying to convince people that the 
partnership between America and Russia had proved to be a chimera of the 
first water. Both sides said that this was the price of the "thaw." 
American conservatives cursed Bill Clinton, who had "thrown to the wind 
all the benefits resulting from the U.S. victory in the 'Cold War' 
against the Soviet Union." The Christian Science Monitor wrote in this 
connection: "After the breakup of the Soviet Empire the opinion 
prevailed that the new democratic Russia would become a natural ally and 
even friend of the United States. But now we see that nothing came of 

Kosovo became a festering sore in U.S. and NATO relations with the 
new Russia. It was joined by Chechnya. The West clearly overreacted 
in its approach to the Chechen problem. Talks with the Chechens? With 
whom in Chechnya would Russia be able to hold talks? With criminals? 
About what? About untying their hands once again and allowing them to 
walk all over us? Which civilized country would allow a freebooting 
enclave on its territory? None, of course. The West essentially gave 
the Chechen gunmen moral support. 

Meanwhile, the situation was deteriorating. Moscow broke off its 
contacts with Brussels, where the NATO headquarters is based, and with 
Mons -- the headquarters of NATO's allied command. There was more to 
come. Everyone remembers the sentence that the U.S. President uttered: 
"Russia will pay dearly for what is being done now in Chechnya." 
Washington's diplomats and propagandists hastened to soften its 
frightening purport, but it was too late, as the saying goes. The pitch 
of America's relations with Russia approached a mark close to zero. A 
new term -- "cold peace" -- even appeared in the mass media. 

Oil was poured on the flames by the scandal at the Bank of New York, 
which -- although this has not yet been finally established -- was 
allegedly laundering "Russian money." Newspapers in the United States 
started making assumptions as to where the loans to Moscow from abroad 
were going: People in Russia, they said, view Western aid as an 
invitation to misappropriate money and transfer it back to private 
accounts in the West. In the eyes of Americans Russia was again turning 
if not into the "empire of evil," then at least into an empire of vice. 
Chechnya, corruption, crime, mismanagement, and the decline of moral 
foundations have become the lead topics on the air and on newspaper 
pages. I will not maintain that all these were complete lies, but when 
the mass media peddle absolute garbage this does not do any good. 

Last fall Washington seemed to have realized that continuing along 
the same lines would lead unswervingly into an impasse. The tone slowly 
began to change. At the end of November Bill Clinton said in Bulgaria 
that he understood why Russia was fighting the Chechen separatists, but 
he sympathized with the mountain republic's peaceful inhabitants. 
Almost simultaneously U.S. Secretary of State Madeleine Albright 
pronounced these sacramental words: "The West needs pragmatic relations 
with Moscow; it would be wrong to make Russia the enemy once again, as in 
the 'Cold War' times." To all appearances, what she primarily meant by 
the West was the United States, while the adjective "pragmatic" was 
meant, I believe, to suggest the idea that the time of "romantic" 
relations with Russia was over and that it was time to put everything -- 
in economics, politics, and strategy -- on a sensible, mutually 
advantageous basis. 

Volley of Historic Events

At the end of last year changes occurred in Russia's power structures: 
A new Duma was elected, the left-wingers lost their majority, the old 
president departed, and his place was taken by Acting President Vladimir 
Putin. Soon after U.S. newspapers and radio stations cited his words to 
the effect that he wanted to revive Russia and achieve economic growth by 
means of ideological, moral, and spiritual methods. They started 
speaking of possible stability in Russia and the revival of the Russians' 
sense of national awareness and dignity. 

Is it possible to maintain that a new countdown has begun in our 
relations with the United States and the West as a whole? I think so. 
America and its allies did not yet have a clear understanding of what 
awaits Russia. But, based on the acting president's first steps and the 
fresh features of Russian life, forecasts were made in the sense that our 
country was entering the "post-Yeltsin period" and that order would at 
last be instilled in it. 

Our relations with the United States and West Europe began to gather 
momentum after Vladimir Putin's win in the presidential election. 
Contacts were reestablished with NATO. At the same time, however, 
processes of directly opposite significance were happening. On the one 
hand, Europe was increasingly criticizing Russia because of Chechnya, 
sometimes taking its criticism to completely absurd lengths. On the 
other, it was sounding out the possibilities of improving relations with 

Historic events which would seem to be hard to combine occurred in 
the middle of this month. Because of Chechnya the Parliamentary 
Assembly of the Council of Europe [PACE] adopted an anti-Russian decision 
-- a recommendation to exclude Russia from the EU [as published]. At 
the same time the State Duma ratified the START II Treaty on the 
Reduction of Strategic Arms, which was signed back in 1993. Without 
waiting for his inauguration, Vladimir Putin set out for London to hold 
talks with British Premier Tony Blair. 

On the one hand, the accumulation of important positive events 
against the background of overt censure, if not to say hostility, on 
PACE's part can be ascribed to the complex and contradictory nature of 
the moment. It is said that the West has not "gotten over" the Chechen 
syndrome, and the new Russia has only just gotten its second wind. I 
certainly accept this, but I would like to single out something else. 
Russia and the West are entering a qualitatively new and now, maybe, 
irreversible stage in their relations. They, these relations, will not 
be based, as before, on emotions and heightened expectations or on the 
old democracies' rejoicing at the thought that free Russia is joining 
their ranks -- in short, on illusions and self-deception. Realism, 
mutual advantage, honesty, decency, playing according to the rules and 
not according to concepts, mutual security -- this is obviously what will 
determine them from now on. I believe, however, that the transitional 
period will not be easy, uniform, or straightforward. 

But it has already begun, and signals have been given to each other. 
Tony Blair and Vladimir Putin -- "two politicians who like each other 
very much," as British newspapers wrote about them -- had intended to 
establish strong relations and did so. This was their second brief 
meeting, the first having taken place comparatively recently in St. 
Petersburg, when, according to the British premier, the acting president 
had asked Blair to make London "a bridge between Russia and the United 
States." Tony Blair readily promised and fulfilled his promise. 

Big War Not Expected 

Soon after Vladimir Putin had a telephone conversation with Bill 
Clinton. The U.S. President is flying to Europe in early June, and they 
agreed that he will look in on Moscow. Foreign Minister Igor Ivanov 
left for Washington to prepare for the meeting between the U.S. President 
and Russian President Elect Vladimir Putin. "There will not be a 
boycott of Moscow," France's Liberation wrote. "The Chechens will pay 
dearly for this friendship between Putin and the West." For myself I 
will add: Of course, it will not be the Chechen people who will pay but 
the Chechen bandits and separatists. 

What will be discussed at the Moscow meeting? It is assumed that 
collective security will be the main topic. Under the START II Treaty 
the United States and Russia will reduce the number of nuclear warheads 
from 6,000 to roughly 3,500 in the space of seven years. Many of our 
missiles are obsolete, and it costs at least $3 billion a year to 
maintain them in combat condition. So it will be useful for us to 
partially get rid of them. They will evidently discuss further talks on 
a new reduction of warheads and on the conclusion of the START III 
Treaty. Russian-U.S. consultations on disarmament topics took place in 
Geneva last week, and the outline of the new agreement stood out 
perfectly distinctly. Under START III each side is to be left with 
2,000-2,500 nuclear warheads -- this is the Americans' proposal. The 
Russian side is prepared to go further and reduce the number of charges 
to 1,500. The final stage of the preparations to sign the agreement 
will be talks in Washington between Igor Ivanov and U.S. Secretary of 
State Madeleine Albright. 

So, the disarmament process, which is being urged on by the two 
leading nuclear powers, has once again picked up speed. It is possible 
to add to the ratification of the START Treaties, one of which has 
already been signed and the other is almost ready for signing, the report 
on U.S. national strategy over the next 25 years made by the Commission 
on National Security in the 21st Century. Its essence is that the 
United States should revise its present national security strategy, which 
provides for its readiness to wage two full-scale wars simultaneously; 
efforts must be channeled into ensuring the country's defense against 
terrorists, training servicemen to participate in peacekeeping missions, 
and seeking new ways to prevent the proliferation of weapons of mass 
destruction. In other words, not to prepare for a big war. The 
Comprehensive Nuclear Test Ban Treaty, which has just been ratified by 
the Duma, fits into this category. 

This category turns out to be long and, at first glance, reassuring. 
Sadly, there is a big "but." The Americans maintain that their Pacific 
borders are vulnerable to such "unpredictable" countries as North Korea, 
Iraq, and Iran, which they say are secretly preparing for a nuclear 
missile attack on the United States. This is why America needs a 
reliable shield: It, this proposed shield, has already been called the 
U.S. national missile defense. According to preliminary outlines, NMD 
will cost $30 billion. Under the program they will construct a missile 
base in Alaska and install 100 interceptor missiles there before 2026 for 
the defense of major U.S. cities. It is proposed to accommodate the 
first 20 by 2005. Tests of interceptor missiles are already being 
conducted. Bill Clinton will adopt the final decision on NMD at the end 
of the summer, a few months before the presidential election. 

The Entire Structure Will Collapse

There is a dispute over the program as to whether America really 
needs it. Of course, the program's supporters are backed by the 
military-industrial complex. The supporters' arguments are based, 
rather, on emotion, and they say that America must be powerful and ready 
for any intrigues by its enemies. NMD's opponents take a more realistic 
view of things: They regard the program as a waste of taxpayers' money 
and as an illusion in the security sphere. If the hypothetical enemy 
manages to build a nuclear missile, he will somehow hit upon a way to 
"outwit" the U.S. side. But not even this is most important to them. 
They say: If we decide to deploy NMD, then the United States will 
encounter tremendous difficulties in the sphere of controlling and 
reducing arms, and the entire U.S.-Russian disarmament structure built 
with such incredible difficulty will collapse. 

Of course, if the United States unilaterally withdraws from the 1972 
ABM Treaty, Russia will automatically cease to be obliged to abide by it 
too. If NMD is deployed, our country will have to think seriously about 
its own defense and revise its attitude to START II. America has its 
own national interests, and we have ours. Materially, of course, things 
are far harder now for us than for America, for we do not have spare 
billions. But if the strategic equilibrium in the world is upset, we 
firmly intend to make ourselves secure at any price. 

Another point: Who today will give guarantees that the regimes in 
Pyongyang or Baghdad will not transform themselves and become 
"predictable" in some 10 years' time? What if, God forbid, some 
"unpredictable" regime turns up near the United States, somewhere in 
South America or the Caribbean? What then? Build a new NMD in Texas 
or Florida? 

It is already clear how unproductive and ineffective this idea is 
and, most importantly, how fraught it is with a sharp reduction in the 
level of the United States' relations with Moscow and, at the same time, 
also with Beijing. U.S. diplomats warn us that the NMD issue will be 
raised at the Putin-Clinton summit and say that there is nothing to fear, 
for we will be able to find a compromise. But what if there is no 
compromise? Minister Igor Ivanov said before leaving for Washington 
that the world public must know that, if the supporters of the creation 
of the NMD system prevail in the United States, then strategic stability 
and the entire disarmament process will be destroyed overnight. 

The Peacemaker and the "Iron General" 

...So, as we see, on the one hand we have a major breakthrough in 
Russian-U.S. relations and on the other the danger that it may be 
reversed. I believe that the contradictory nature of the present moment 
has been occasioned not only by different interests, which, with 
reservations, can be taken for a constant. There is another important 
factor, which we will conventionally call the time factor. This is the 
upcoming election in the United States. Today Clinton is forced to 
"play within the electoral system of coordinates." 

Bill Clinton will undoubtedly do everything to go down in America's 
history. Both as a peacemaker -- he has even been nominated for the 
Nobel Peace Prize -- and as an iron "general," who unhesitatingly sent 
U.S. soldiers to the Near East and the Balkans and who, on the one hand, 
was able to reach agreement with "the Russians" and, on the other, knew 
how to oppose them firmly. Clinton must, however, be given his due: 
He is an experienced and farsighted politician who, despite all the 
problems that arise, says that Russia will remain the priority for the 
United States. And he adds: History will not forgive us if America 
gives it too little assistance. 

In the 21st century Russia and America, as great powers, are doomed 
to partnership and rivalry, and the forms and "acuteness" of these will 
depend on the will and wisdom of the leaders in Moscow and Washington. 


Russian Paper Officially Warned for Interviewing Maskhadov.

MOSCOW, April 28 (Itar-Tass) -- Russian Press Ministry on Thursday gave 
official warning to the editorial board of the Novaya Gazeta newspaper after 
the paper had published an interview with Chechen leader Aslan Maskhadov in 
its issue 16 of April 27-30. 

The ministry stated in the document that "in having published the interview 
the editorial board abused the freedom of information, and violated 
provisions put down in Article 4 of the Russian law On Mass Media and Article 
15 of the federal law On Struggle against Terrorism. 


Novaya Gazeta
April 24, 2000
Money Thief
The Mechanism of Credit Theft Is Ingeniously Simple 
We have to pay the debts that are beneficial only for the bureaucrats.
By Mikhail Krugov 
[Translation by Olga Kryazheva <> 
Research assistant, Center for Defense Information]

We are always told that they don’t give Russia loans. That is not true. 
Only the IMF does not give money. But besides the IMF, other financial 
institutions and Western countries every year throw about $1,5-2 billion to
bureaucrats. That is why when the government states that IMF money 
is not being stolen, it almost tells the truth. It is impossible to steal 
the credits that the government did not get.

At the same time, the government keeps absolute silence about using the 
credits from other sources, trying not to attract public attention. Only 
in the recent past the heads of our economy started to state that Russia 
can survive without external loans, just to reassure public opinions. They 
are not lying: none of the project financed by foreign credits are 
life-important. More so, the majority of such projects have one 
distinguishing feature: they permit theft. 

For seven or eight years now every time our ministers or economists are 
mentioned, their names are followed by remarks such as “qualified 
professional,” “highly skilled specialist,” or “talented economist.” In 
this regard, it is very unclear what kinds of “consulting services” our 
economists need from their foreign counterparts. Well, in 1991-1993 first 
Gaidar’s, then Chernomyrdin’s teams needed consulting. They conducted 
market reforms, but they had the same knowledge about the real market 
economy as some of the zoo visitors have about details of penguins’ 
reproduction. What kind of “consulting services” are needed for 
implementing “Management of the Environment” project? $55 million out of 
$110 million credit was provided for this specific project to the Center of 
Development and Realization of Technical Cooperation Projects. “The 
Management of the Environment” is definitely a thousand-year-old dream of 
the humankind. Should it be we who would implement this dream?

We are not talking about some high goals here. 55 is exactly half of 
110. And we are not dealing with a simple arithmetic coincidence. 
According to every law of the Russian reality and its norms, this is a 
simple theft. Consequently, about a hundred million will settle in the 
pockets of individuals related to this project, and the environment will 
remain the same, but we will be poorer. 

Even in the previous years these kind of “consulting services” were present 
in every other credit. For ten years and for millions of dollars we are 
being consulted on how to reproduce wood, use trams, produce electric 
power, maintain agriculture, manage housing, restore memorials, conduct 
various analysis and reforms, finance industries, collect taxes, protect the
poor, project budget, write laws, and manage finances. Funeral services are 
just about the only thing they don’t consult on.

It seems that in 1991 our 
democratic authorities came straight from caves and woods. And for ten 
years they studied all sides of contemporary life, although it is very 
unclear how to connect all of the above with the authorities’ self esteem 
and their ambitions of “professionalism” and “skills.” You are either a 
specialist, or uneducated. As our ministers don’t look uneducated, we 
can’t help but draw the conclusion that all these consultations are the main 
way of giving to foreign counterparts their share and stealing the rest of
the credits.

The split personality of the authorities is becoming especially noticeable
through these “intellectual products.” On one hand, they can’t 
make a single step without assistance for a couple million dollars. 
On the other, the Center for Strategic Developments drafts a dozen 
strategic programs for the next ten years absolutely for free. It is either 
an early stage of schizophrenia or an old form of corruption. Everything 
points to the later diagnosis. 

There is a paradox: being on the edge of bankruptcy, we borrow money for 
some useless things and whims. And our creditors pretend not to understand 
it and absolutely don’t care about the future of the money given to Russia. 
In reality, it is not the case. Our creditors don't just put the country into 
the deep debt, they also get revenue from this. They also put the heads of 
Russian authorities on the criminal hook. Chekist Putin does 
not notice the fraud and continues to follow the exact same policy. This 
shows the continuity of policy of the present Kremlin powers. 

I would be happy if all of the above said about consulting did not reflect 
the reality. And if this is the case, then it is easy to prove. The 
authorities just have to prove the effectiveness of at least a couple of 
these consultations and the result of the received "know how" in practice, 
and certainly in numbers, not in praises. They would find it extremely hard 
to do. The amount of money spent in ten years would have made it possible 
to transfer Australian aborigines from the primitive way of life to the 
highest stage of imperialism. But we have just entered the stage of an 
early feudalism. So it would be impossible to calculate the positive effect 
of this criminal consulting.

Complete continuity is also seen in other ways of using credits. 
Computers, programs and office equipment, projects, and printed documents… 
all of the above are easy to steal monies. So the Duma security 
committee after all had to mention that to spend more than $450 million is 
unreasonable. It also reminds that, according to the federal budget law of 
2000, the government cannot spend credit money with the exception of 
investment projects. It directly stressed the useless spending of $0.5 
billion, one third of all new, not related to IMF, loans. And it is not 
“just an accident, ” all the errors and mistakes in money spending fill the 
pockets of the bureaucrats completely. 

In its explanatory note, the government declares the decrease in taxation 
as its main goal. It includes its offers on hundreds of millions dollars of
loans, questionable even for pro-government deputies spendings. This is 
another evidence of the policy continuity, when the president says one 
thing, and bureaucrats do another. It is worth mentioning that this 
split personality looks more excusable for Yeltsin. Could he 
possibly follow everything from the Central Committee?

Who is the richest in Russia? Only oil barons are. Who is the richest among 
the oil barons? LUKOIL is. Why would the richest need a share in the 
foreign credits? It can get them itself. But if it can cover the backs of 
the Mintopenergo bureaucrats then it is obvious, and then it gets $55 
million on reconstruction of its oil-reproducing factory in Volgograd. This 
makes it easy for the oil barons.

The government stopped the procedure of giving guaranties on credits. And 
it starts giving just partial guaranties, protecting from non-commercial 
risks. Thus, it recognizes its incompetence in sphere of financing the 
economic projects. It continues to sponsor enterprises by means of external 
borrowed funds. It distributed the credits to every industrial branches: for 
production of bicycles, engines, oil products, lamps, refrigerators, 
planes, cars, fabrics, etc.

It means that the government continues to implement banking affairs on a 
large scale; it gives credits to the enterprises, but not from personal 
means, but from those it borrows on the external market. And this surreal 
business of the White House officials has just one simple 
explanation: corruption. Every single credit needs a fee for those that 
endorse money distribution. For seven months in office Putin has not noticed 
this creative entrepreneurship of his team. This also shows the 
continuity that the president follows.

Nothing has changed in the sphere of external economic charity. As last 
year, the government plans to give out $400 million in credits to 
foreign countries! This may probably make economic sense, but not for us. 
The bankrupted government is not capable of implementing the duties of 
international banker. It means that most likely these credits will not be 
paid back. Consequently, the government will receive other fees for these 
credits. Otherwise, Vneshtorgbank or Vnesheconombank would have 
distributed and be responsible for them.

Dead enterprises are also being 
financed. Last year the enterprises such as Menatep, Imperial, Inkombank, 
and Tokobank were folded during the default of the banks. Today they are 
replaced by RAO “Vysokoskorostniye Magistrali” [High Speed Railways]. It 
received $53,5 million, probably for honorable funerals. Overall, it plans 
to receive $150 million. Everybody heard about its life after death. And 
only God knows how many dead companies under the common adjective 
“various” are among the crowd of recipients. 

No less then 90% of these activities raise 
questions and doubts, primarily because the lack of consistency and 
variability do not reflect professionalism at the governmental level, which 
aims for command in the economic sphere. This program of external loans 
is like some provincial bank at best. Should the government decide whether
to give 
$100 million to some factory in Tula? Even in third world corporations 
lower level officials address questions of this scale. 

This paradox 
of governmental procedures, too, has an explanation. The greedy interests
of bureaucrats lurk behind 90% of the projects. 
As a result, we can state that, generally speaking, the state bureaucrats 
need $1,3-1,4 billion out of $1,5 billion of credits. The projects financed 
by means of this money mostly cover the process of stealing. This game of 
officials and bureaucrats will result in the theft of two-thirds of the 
credits received, $1 billion overall. And this is far from all of the price
of our White House. There is still the budget, non-budget funds, etc.

It leads us to the question: who manages this company of charity and 
corruption, Putin or Kasyanov? Or is it the White House administration? It 
looks like the heads of the government endorse the papers for the 
bureaucracy, not even trying to examine them.


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