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Johnson's Russia List


May 12, 2000    
This Date's Issues: 4295  4296

Johnson's Russia List
12 May 2000

[Note from David Johnson:
1. Moscow Times: Brian Humphreys, Commandos Raid Media-MOST.
2. AP: Putin Moves To Rein in Provinces.
3. Russia Formulates a Hybrid Economy.
5. Al Osterheld: Russia's demographic crisis.
7. Russians Choose Order Above Freedom.
8. Richard Pipes, What Do We Know about Vladimir Putin? 
9. Reuters: Russia's Audit Chamber to crack down on corruption.
10. Reuters: Russian reform plan aims to open up economy.
11. Interfax: Kasyanov Biographical Data Detailed.
12. New PM Lacks Political Clout For Radical Reform.
13. Interfax: Zyuganov Says 'Putin has Not Spelled out his Politics'


Moscow Times
May 12, 2000 
Commandos Raid Media-MOST 
By Brian Humphreys
Staff Writer

Masked commandos raided the offices Thursday of Media-MOST, the country's 
largest independent media holding, whose flagship NTV television station and 
Segodnya newspaper have been critical of the Kremlin. 

The Federal Security Service and Prosecutor General's Office, whose agents 
took part in the raid, denied it was a political action and said 
investigators searched several buildings for evidence relating to a criminal 
investigation opened last month against employees of Media-MOST's security 

At a news conference attended by most of the Moscow press corps, Media-MOST 
condemned the raids as a heavy-handed attempt to pressure the company into 
toning down its coverage. 

"The real reasons for the raids are clear," said Igor Malashenko, deputy 
chair of the Media-MOST board of directors. "This is an act of intimidation 
and an attempt to interfere with the publication of materials on corruption 
in the highest levels of power." 

He speculated that the raid may have been initiated by officials who were 
angered by critical coverage of the Chechen war or the subject of reports 
about alleged government corruption, naming a particular FSB general, Yury 
Zaostrovtsev, who was the subject of a recent Segodnya article. 

Malashenko said he also suspected that Alexander Voloshin, the acting Kremlin 
chief of staff, may have played a role. But he hedged on whether he thought 
President Vladimir Putin had approved the raid and urged him to make his 
position clear. 

"The president was the first to say that he answers for what goes on in this 
country," Malashenko said. "Therefore, President Putin is of course 
responsible for what is going on now, although this does not mean that he 
gave the go-ahead for the raids." 

News reports said the offices of Vladimir Gusinsky, owner of Media-MOST, were 
also searched. Gusinsky, who was on a business trip in Israel, hustled back 
to Moscow on his private jet. 

"It is obvious that what is happening is a factor of political pressure," 
Gusinsky said at a Moscow airport. He said officials in the Kremlin and 
security services were angered by some of NTV's programs, particularly the 
satirical show "Kukly." 

"It is insulting that a few days after a new president of Russia took office, 
a president with whom many people in Russia link a rebirth of the country, it 
seems as if everything is going backward," Gusinsky said. 

The raids began simultaneously at 9:30 a.m., Media-MOST officials said. About 
20 commandos arrived at the media holding's headquarters in three minibuses. 
They were accompanied by an equal number plainclothes investigators. Raids 
also were carried out at other Media-MOST offices in Moscow. 

Alexander Zdanovich, the FSB spokesman, said investigators had seized an 
eavesdropping device, along with evidence that it had been used to listen in 
on personal conversations of Media-MOST's own journalists. "It is this 
illegal activity that should be the focus of attention," he said in an 
interview on state-owned ORT television. 

ORT said the information gathered illegally was being used both for security 
and journalistic purposes. 

"If revenge had been the motive, the searches would have been carried out 
against Segodnya and NTV," Zdanovich said. "Nothing of the sort took place. 
Nobody is talking about pressuring journalists. Tomorrow, people will be able 
to read Segodnya and watch NTV, which will comment on events as they choose 

Tax police commandos, dressed in green camouflage uniforms, were posted 
outside the Media-MOST offices. A tax police spokesman, who asked not to be 
identified, confirmed his organization's participation, although he said none 
of the alleged legal violations by Media-MOST were tax-related. 

The Prosecutor General's Office took responsibility for initiating the raids. 

Mikhail Berger, the editor of Segodnya, said the raid was an attempt to scare 
journalists. "It demonstrates that indeed our society is under the control of 
people with submachine guns in their hands," he said, Reuters reported. 

NTV news broadcasts reminded viewers that this was not the first time masked 
commandos had raided the station's parent company. During the previous 
operation, which took place in 1994 on the eve of the first Chechen war, 
troops loyal to then-presidential bodyguard Alexander Korzhakov forced 
Media-MOST employees to lie outside face down in the snow while they searched 
the company headquarters. 

This was widely seen as a signal to Media-MOST to avoid criticizing the 
conduct of the Chechen war. 

Leading liberal politicians joined Media-MOST officials in condemning 
Thursday's raids as an act of political intimidation. 

"It's impossible not to get the impression that this is a settling of 
personal scores, and a means of exerting direct pressure [on Media-MOST] with 
the goal of limiting the freedom of speech," said Grigory Yavlinsky, the 
leader of the State Duma's liberal Yabloko faction, in remarks broadcast on 

Yury Martyshin, investigator for especially serious cases with the Prosecutor 
General's Office, said the raids had been carried out to seize documents and 
other evidence against a group of security agents employed by Media-MOST who 
are suspected of using illegal eavesdropping equipment to listen in on the 
holding's business rivals. 

"A media outlet and the structures having a relationship to it, such as the 
security department, are not one and the same thing. So in this case, the 
investigation does not have any relation to the media outlet whatsoever," 
Martyshin said on ORT and RTR, both state-owned stations. 

Analysts and former Kremlin officials said the raids may well have been the 
individual initiative of a federal official with a score to settle with 
Media-MOST, rather than a Kremlin-orchestrated crackdown on independent 

"Somebody is doing Putin a bad service," said former Finance Minister Boris 
Fyodorov at a press conference dedicated to the promotion of his new book. 
"If Putin really wanted to annihilate Most-MOST it would be much better for 
him to go by the book. All he would have to do is to make sure all the loans 
to the company were called in at the same time and Gusinsky would be forced 
to sell his empire." 

Besides NTV and Segodnya, the holding's media outlets include the Ekho Moskvy 
radio station, the Itogi weekly news magazine, which is published in 
cooperation with Newsweek, the THT television network and several major 
regional media outlets. 

Media-MOST is heavily in debt. The company is currently negotiating with 
Gazprom the repayment of $211.6 million. Gazprom officials said they were 
willing to take Media-MOST to court if a settlement is not reached by the end 
of May. Media-MOST has suggested that Gazprom was being pressured by the 
Kremlin to call in the debt. 

Political analysts said the local business environment is such that almost 
any given company can become the target of a criminal investigation, making 
it easier for the authorities to mask politically-motivated crackdowns with 
legal justifications. 

"Formally, this action might have a perfectly acceptable legal 
justification," said Yury Korgunyuk, an analyst with the INDEM research 
center in Moscow. 

"But even if Media-MOST is completely guilty, it is still a blow to the free 
press. NTV is one of the last bastions of an independent press. It is 
impossible that any case brought against it for any reason will not 
immediately take on political significance." 


Putin Moves To Rein in Provinces
May 11, 2000

MOSCOW (AP) - In his first major policy initiative, President Vladimir Putin 
on Thursday launched a crackdown on the powers of regional governments as he 
moved to assert control over Russia's unruly provinces. 

Putin has made reclaiming Moscow's control over the provinces one of his top 
policies after years of growing autonomy. The new president claims that 
strong central control is essential to avoid the breakup of the country. 

But some opponents say the ex-KGB officer wants to restore Soviet-style 
central control. Liberal critics claim that Putin is not committed to 
democracy and could reverse the country's newly won rights. 

In what will be seen as a related development, masked police commandos armed 
with machine guns raided the Moscow offices Thursday of a prominent media 
group that has been critical of Putin. Officials of the Media-MOST company 
claimed the raid was designed to stop criticism of the government and 
discourage journalists from probing alleged Kremlin corruption. 

Former Soviet President Mikhail Gorbachev criticized the raid as a 
``provocation against the independent media,'' while ultranationalist 
Vladimir Zhirinovsky welcomed it as a sign of the secret services taking 

``The KGB has come to power, and Russia needs it,'' Zhirinovsky said. 
``Searches and arrests will happen almost on a daily basis.'' 

Putin, who was sworn in as president on Sunday, ordered the republics of 
Bashkortostan and Ingushetia and the far eastern Amur region to rescind their 
legislation that contradicted or defied federal laws. 

Unlike former president Boris Yeltsin, who once offered all 89 Russian 
provinces as much independence as they wanted, Putin has promised to tighten 
Moscow's control over the regions. Since the Soviet collapse in 1991, the 
provinces have elected their own governors. 

Oil-rich Bashkortostan, lying just west of the Ural Mountains, has been among 
several relatively prosperous regions that have pushed for broad autonomy 
from Moscow, including control over their own finances and taxation. The 
central government wants a greater share of taxes from the provinces. 

Bashkortostan had asserted its right to establish diplomatic relations with 
foreign countries. In Thursday's decree, Putin ordered the region's leaders 
to drop any move to establish diplomatic ties and other controversial 

Some poorer regions have protested against privileges given to the richer 
regions, warning they could eventually ruin the Russian federation. Putin 
backs the argument, saying that stronger federal control is needed to revive 
the economy and ensure equal rights to all citizens. 

Some Russians are likely to welcome the crackdown by Moscow because some of 
the governors are authoritarian and have undermined the democratic system 
that brought them to power. 

Like many other regional leaders, Bashkortostan's President Murtaza Rakhimov 
rules with an iron hand, showing little tolerance for opposition or 
independent media. In the run-up to last December's parliamentary elections, 
he cut off local transmissions of national TV networks for critical reports. 

While Putin was working to reassert the Kremlin's control, police raided the 
Moscow offices of Media-MOST, a media empire headed by Vladimir Gusinsky, who 
is critical of the government. 

``It's very annoying to see a return to the past with secret services, masks 
and witch hunting just days after the new president's inauguration,'' 
Gusinsky said. 

The group's NTV network speculated that the search may have been triggered by 
a recent article in its sister newspaper, Segodnya, about alleged wrongdoing 
in the Federal Security Service (FSB), the KGB's main successor. 

FSB chief spokesman Alexander Zdanovich denied any political motivation, 
saying it was connected to alleged banking irregularities and violations of 
privacy laws. 


Global Intelligence Update 
Russia Formulates a Hybrid Economy
12 May 2000


Over the past week the Kremlin has announced a series of impending
privatizations across the Russian oil industry, including a 4 percent share
in Russia’s largest oil firm, Lukoil. On the surface, it seems that Russia
under President Vladimir Putin is moving boldly in the direction of Western
style economic reforms, but this is a misconception. While Putin’s economic
reform plans indeed call for liberalizing and reducing central control over
large sections of the Russian economy, the petroleum industry will
experience a different type of reform. Market forces will be allowed to
play a greater role in Russia’s petroleum industry, but Moscow will
maintain firm central control. Paradoxically, Russia’s move to “privatize”
conceals steps toward nationalization, steps that will create a hybrid


Market analysts are hailing Russia’s new oil industry privatization scheme
as a Western oriented reform. The privatization plans should raise $0.9
billion to $1.4 billion for the federal government ­ more than triple last
year’s total ­ and include sales of stakes in Russia’s largest oil firm,
Lukoil. But this is not the pro-market action many Western observers
believe. Moscow is not giving up control. Foreign investors will be allowed
to invest cash and technology in Russia’s petroleum infrastructure,
increasing its viability and productivity. But Moscow will maintain a
chokehold on the political decisions of which company will export what oil
to what market. 

For example, Moscow plans to sell the entirety of its 85 percent stake in
the small oil firm Onako. But the Russian oil firms that have expressed an
interest in purchasing it ­ Lukoil, Yukos and Sibneft ­ are partially
government owned. Onako’s most valuable holding is a refinery on the border
with Kazakstan ­ far too strategically valuable to be allowed into foreign

Other privatizations, while allowing the possibility of foreign ownership,
are not nearly as comprehensive as the Onako sale. Russia plans to
privatize 19.68 percent of Slavneft, and 25 percent of Rosneft ­ both oil
firms. The sales still leave the government with majority control. These
partial privatizations will bring in needed capital and perhaps even some
new technology, but Moscow has no intention of giving up its grasp on its
lucrative petroleum sector. In fact, decisions regarding the rumored
privatizations of Russia’s single largest company ­ and source of tax
income ­ Gazprom, have been delayed until next year, according to State
Property Minister Farit Gazizullin. 

In fact, rather than relaxing its grip on the petroleum industry, Russia is
consolidating the industry under a firmer hand. All of Russia’s oil must
reach Russia’s oil pipeline network before it can be exported. Putin
recently transferred the power from the oil companies to the Fuel and
Energy Ministry to coordinate exports on these pipelines. This grants the
federal government direct control over the amount of oil each firm can
export; thus the government controls the income of each firm. Once
completed, the Fuel and Energy Ministry can easily funnel foreign investors
to the handful of firms it dominates. 

This is part of a coordinated effort to lock down control of the energy
sector. On May 11 the Russian Tax Ministry initiated proceedings against 27
smaller Russian oil firms for tax arrears. If the Tax Ministry ­ which is
cooperating with the Fuel and Energy Ministry ­ gets its way, those firms
will lose the ability to export until the back taxes are paid. 

But Russia’s oil companies ­ especially those with no foreign connections ­
are cash-poor. Most of the boom from the recent high oil prices has flowed
directly into the Kremlin’s coffers as export taxes. Many of these smaller
firms will be unable to come up with approximately $125 million they
collectively owe the government. Like Onako, they will be snapped up by the
larger oil concerns bound by an increasingly tight government leash. This
manipulation of tax policy and export quotas casts the government in a
gate-keeping role. Market forces and investors handle the industry’s
day-to-day operation, but Moscow keeps the hammer poised. 

This wave of privatization and nationalization is coming at an opportune
time for Russia. Kazak Prime Minsiter Kasymzhomart Tokayev announced May 10
that his country located a new oil field in the Caspian, reported Reuters.
This east Kashagan field could hold as many as 30 billion barrels of oil ­
by far the largest discovery of the post-Soviet period. Currently, almost
all Kazak oil is transported through Russia. Once the massive export
pipeline from Tengiz, Kazakstan, to Novorossiysk, Russia, is completed next
year ­ a pipeline that Russian interests dominate ­ this trend will be
further entrenched. 

Beyond the oil industry, the Russian government will have a more
market-oriented approach ­ but not totally. Privatizations will sweep
through most of the 30,000 state-run companies as the government partially
withdraws from the economy, but there is little danger of them ever being
fully privatized. According to Igor Shuvalov, head of the Federal Property
Fund that oversees privatization efforts, “We propose selling small
packages of shares in those companies while keeping control in the state’s
hands …,” reported the Moscow Times. However, Russia has no such plans to
relinquish its grip on the oil industry. 

Source: 'Kommersant', Moscow, in Russian 10 May 00 

Shortly before the Victory Parade yesterday [9th May] Vladimir Putin unveiled 
a memorial plaque bearing the names of the statesmen and military leaders who 
have been awarded the Order of Victory. 

The memorial plaque measures 2 metres by 3 metres and weighs 2.5 tonnes. The 
plaque is cast in bronze and embellished with gilt and embossed work. It is 
the work of the sculptor Zurab Tsereteli, president of the Russian Academy of 

The plaque's primary interest lies not in its artistic merit but in the 
implications of the list of names commemorated. The list is headed by 
Generalissimo Iosif Vissarionovich Stalin. Together with the commemorative 
coin issued by the Central Bank to mark the 55th anniversary of Victory, 
Tsereteli's plaque forms a sort of series of Stalin mementoes linked to 
Victory Day. By and large, this is understandable. The two leitmotivs of this 
year's Victory celebrations are victory as a national tradition and the tough 
centralized leadership that established this national tradition. The image of 
precise, outwardly modest, impersonal leadership has become the new hallmark 
of the celebrations, replacing the tearful sincerity that was becoming 
established in Yeltsin's times. Stalin symbolizes this image to a certain 

The subtlety of Tsereteli's work lies, perhaps, in its impeccable 
stylization: The plaque is surprisingly well matched not only to the strictly 
official style of the Palace of Congresses but also to the strictly official 
image of the president who unveiled it. It is amazing how life has changed 
the sculptor. There are no flourishes or ornamentation. Mind you, the style 
is unimportant. Tsereteli has managed to see to it that the new president too 
has received his own two tonnes of artistic metalwork. 


Date: Wed, 10 May 2000 
From: Al Osterheld <>
Subject: Russia's demographic crisis

Articles about the looming population crisis in Russia are now
appearing at a regular rate, but many of these articles miss the
central cause of the problem. The recent article on the Russian
health care system from the Financial Times is typical of many
of these articles.

The population of Russia will not plummet because poor health
care and bad habits (read excessive drinking) causes the life
expectancy to decline. If the life expectancy drops by a
couple years and that is sustained for decades, the population
will decline by a few percent and then stabilize. In any case,
life expectancy rates have actually been rising in Russia since

Ignoring net immigration, you don't have to be a demographer to
realize that a stable population roughly requires that each
female born eventually gives birth to two babies, on average.
Russia had a replacement fertility rate at the end of the 1980's,
but the current fertility rate is something like 1.2-1.3 babies
per woman. At that fertility rate, the native population will
shrink quickly and continuously. The only way to stop that
sustained contraction of the population is to dramatically raise
the fertility rate, or to promote immigration. Indeed, the net
inflow of immigrants partially masked Russia's demographic crisis
for much of the 1990's. That net immigration has now declined,
and the problem has been more clearly exposed. In any case, I
suspect that most of the ethnic Russians living in the other
former Soviet who wish to immigrate to Russia have already done
so, and that Russia doesn't want to stabilize its population with
an influx of non-ethnically Russian immigrants.

Russia's demographic history makes it difficult to understand the
statistics, which are often presented as the total number of
births vs the total number of deaths, or as the per capita
mortality rate. During WWII, birth rates dropped by about 60% in
Russia during a period centered around 1945. This caused a
secondary dip in the birthrate when these war-era babies were
moving through the child-bearing years. This dip was broader and
more shallow than during WWII, and it was centered around 1970.
As this age group grew up and entered the child bearing years,
it would naturally produce another dip beginning around 1988 and
centered around 1995.

Even if the fertility rate had not changed, these bumps and peaks
in the birth rate would have caused a steady decline in the total
number of births per year during the early to mid 1990's, and a
steady increase in the total number of deaths (because the
population was aging and a baby boom was entering years of higher
mortality). Similarly, the per capita mortality rate could rise
even though the age specific mortality rates were dropping. So,
these statistics mix together the present day consequences of
past history--which would produce oscillations in the population
around a stable value--and the real manifestations of the current
demographic problem.

The only statistic that matters for the long term stability of
Russia's native population is the fertility rate, and Russia's
current fertility rate is an unambiguous harbinger of a looming
catastrophe. The first key to solving a problem is to identify
the cause. Teaching adults to drink and smoke less, and to
exercise more isn't going to solve that problem, because most
people die after they've left the childbearing years. Nor will
changes in the adult health care system help very much, although
improvements in female reproductive health and infant mortality
rates would be steps in the right direction. The only approach
that will really help is to create an economic system in which
couples can afford to raise children, and then to encourage them
to do so. But that solution isn't going be enacted any time soon.

The future of Russia is not dying, it is unborn.



Orthodox service in tsar's church follows Putin's inauguration
from Communications Service of the Department of External Church Relations of 
the Moscow patriarchate, 10 May 2000 

A thanksgiving prayer service on the occasion of the assumption of office by 
the new president of the Russian federation was performed on 7 May in the 
cathedral of the Annunciation in the Kremlin by the most holy patriarch of 
Moscow and all-Rus, Alexis II. Russian president V.V. Putin arrived at the 
cathedral immediately after the completion of the official inauguration 

At the end of the service the primate of the Russian Orthodox church blessed 
V.V. Putin and his wife with an icon of the faithful prince Saint Alexander 
Nevsky and addressed a hortatory sermon to the president which is reproduced 
below. At the conclusion of the meeting the most holy patriarch gave to the 
head of state mosaic icons of the Savior and St. Nicholas for the Savior and 
Nicholas gates of the Moscow Kremlin. 


7 May 2000 

Esteemed Vladimir Vladimirovich 
Dear fellow countrymen 

Russia has gotten a new head of state who received convincing support in the 
elections. The majority of the nation voted for the supremacy of authority, 
for a thoughtful and responsible style of leadership, for legality, order and 
concern for people, for a strong country, reasonably open to the surrounding 
world. This is precisely the direction you, Vladimir Vladimirovich, have 
maintained in the past months while acting president of Russia. 

Now you have taken upon yourself the entire burden of supreme state 
authority. On this most important day I ask you, I ask you in the name of 
the pastors and flock of the Russian church, I ask in the name of all for 
whom the spiritual heritage of the country is dear: remember the great 
responsibility of the ruler to the people, history, and God, in whose hands 
are the fates of all humanity. 

The holy church calls citizens to honor state leaders and to submit to them. 
"The powers that be have been established by God," writes the apostle Paul. 
"The governor is God's servant for your good. If you do evil, be afraid, for 
he does not bear the sword in vain; he is God's servant, his agent for the 
punishment of the evildoer" (Rm 13. 1,4). Moreover these words of holy 
scripture at the same time remind us: every deed which the ruler does must 
correspond with the higher truth and justice and with the eternal moral law 
given by God. Government service requires great sacrifice. In the words of 
Moscow prelate Filaret: "The governor must . . . stand for justice, order, 
and for the welfare of others and not for himself." 

In the past century our nation endured countless sufferings. Today things 
also are hard for it. But in the new century and new millennium into which 
the country has entered under the leadership of a new president, the sons and 
daughters of Russia deserve a better fate. Thus I call you, Vladimir 
Vladimirovich, be completely and persistently concerned for the welfare of 
the people, not only their material but also their spiritual welfare. This 
nation hopes in you and believes in you. Justify its trust. I assure you 
that the Russian Orthodox church will steadfastly help the secular power in 
actions that are directed toward the rebirth of the fatherland. I permit 
myself to express my confidence that this is the intention of the believers 
of all the traditional religions and confessions. 

Like never before, Russia today needs the restoration of the spiritual powers 
of the nation and a rebirth of its commitment to genuine moral values. I am 
convinced that without this we will not be helped by money, nor industrial or 
military might, nor various political and economic remedies. Vladimir 
Vladimirovich, help us to disclose the soul of the nation which, I believe, 
has up to now been striving for truth, peace, love, and beauty. 

May the Lord bless you, bringing with the upcoming difficult tasks the glory 
of the fatherland and the welfare of the people living in it. May he 
strengthen your associates and coworkers. May he bestow upon our motherland, 
great Russia, harmony, prosperity, and blessing. (tr. by PDS) 

Agence France Presse, 8 May 2000 

MOSCOW -- Alexis II, Patriarch of all the Russias, presented Vladimir Putin 
Sunday with an icon of Russia's national hero, Alexander Nevsky, saying he 
hoped the saint would be the new president's special protector. 

Putin and his predecessor Boris Yeltsin and their wives attended a special 
Orthodox church service for the new head of state conducted at the Kremlin's 
Cathedral of the Annunciation by Patriarch Alexis, Itar-Tass news agency 

In 1242 Alexander Nevsky became a national hero when he defeated the invading 
Teutonic Knights. 

Speaking of the presidential election, Patriarch Alexis said during the 
service most Russians had voted for "a responsible style of government which 
is concerned with the fate of the population, and is for a strong country 
reasonably open to the world." 


May 10, 2000
Russians Choose Order Above Freedom
By Aleksandr Kornilov , staff writer 

According to the results of a poll conducted by the Public Opinion Fund 
(FOM), in the first days of May Vladimir Putin’s rating once again reached a 
record high: 67% of respondents said they fully trusted him. The results 
suggest that the attitude of 12% of Russians towards their new president has 
improved, while the attitude of only 3% has worsened. 
According to poll results provided by FOM, 19% of Russians are 
indifferent to their new president and only 6% have no respect for him. Thus, 
at the end of April and in early May, Putin has broken the record for 
preserving the people’s confidence as both the Head of the State and the Head 
of the Government. Vladimir Putin has been acting as both for the past four 
months, and there appear to be no immediate reasons for his rating to 

The All-Russian Center for Public Opinion Studies (or VTsIOM) has 
provided the following figures: at the end of April 77% respondents approved 
of Putin’s actions as acting president and the prime minister. According to 
VTsIOM’s statistics, this is a repetition of the record broken at the end of 
January (when Grozny was seized). After a slight decline, the Center’s 
specialists noted a significant growth in Putin’s rating during the past 
month: the number of respondents who approve of his actions (or inaction) has 
grown by 9%. 

The number of those who disapprove of V.Putin has decreased from 23% 
to 15%. Naturally, there are paradoxes. According to VTsIOM, 44% of 
respondents approved of the government’s actions, while 42% disapproved. That 
means that about a third of respondents assume that Putin ­ the prime 
minister ­ has done an excellent job, whereas his ministers, including the 
future head of the cabinet Mikhail Kasyanov, to put it mildly, do not do 
their best… 

Even more interesting are the answers to the question, posed by VTsIOM 
concerning the people’s expectations for Putin’s political course. Although 
V.Putin has been ruling the state for 4 months already, both common citizens 
and political analysts are sure that his course will be clarified any minute 
now. One must admit that namely ‘the expectations’ explain the Head of the 
State’s unprecedented ratings. Each positive respondent is sure that the new 
president will choose the only ‘correct’ way, i.e. correct according to his 
or her own point of view. 62% of Russians expect Putin to establish closer 
contacts with the West, to secure Russia’s integration into European and 
world structures, and at the same time 65% are sure that he will promote the 
economic and military growth to counterbalance the West. 

47% expect Putin to decrease state control of the economy and market 
mechanisms development, and the same number, 47% are counting on the 
re-nationalization of key industries. 75% hope certain measures will be taken 
to safeguard Russian producers of consumer goods, and 58% expect western 
companies to be attracted to Russia. 

So, in spite of the fact that he has been holding the reigns of state 
for five months already, for the Russian public Putin is still a flexible 
figure, which anyone can model to suite their expectations. 

However, the most significant result of the past few months is the 
increase of the number of those who consider order to be the top priority in 
contemporary Russia even if it demands some violations of democratic 
principles and restrictions of personal freedoms. An unprecedented 81% said 
they would be willing to forego certain freedoms in favor of order, compared 
to 74% in February and 71% in February 1998. The number of those who support 
democratic ideas has been steadily decreasing. In April 2000 there were only 
9% of them, whereas a year ago there were 14%. 

In other words popular support for any presidential moves to “put 
things in order”, no matter how cruel the means employed, is steadily 


May 11-18, 2000
What Do We Know about Vladimir Putin?
by Richard Pipes 
Richard Pipes is Research Professor of History at Harvard University. In 
1981-82 he served as Director of East European and Soviet Affairs in the 
National Security Council. He is a contributing editor of

I believe there is no precedent in history of an unknown politician without a 
program being elected to the post of head of state: Vladimir Putin's election 
in Russia must be the first. Which only goes to confirm the aphorism of the 
writer, Dmitry Merezhkovsky, that what is impossible is possible in Russia.
Putin's contradictory words 

Obviously, it is of some importance to form an opinion of Putin’s mind and 
personality, but that is not easy because he presents different and 
contradictory images.

In December 1999, Putin published an essay called “Russia at the Turn of the 
Millennium” on the Internet. It was a closely reasoned program analysis of 
Russia’s outstanding problems and a reasonable program of solutions. Nothing 
Putin has said or done since its publication indicates that he authored this 

In his public pronouncements, especially those addressed to domestic 
audiences, Putin often employs violent language, with occasional resort to 
criminal vocabulary: This holds especially true of his pronouncements on 
Chechnya and the Chechens. He has expressed doubts that Russia is ready for 
democracy and has taken some steps that indicate he intends to limit free 
speech by traditional police methods.

Now we have a fresh bit of evidence in a new book, First Person, which 
contains the transcript of his interviews with three Russian journalists 
published earlier this month by the Public Affairs Press of New York. It is 
not the “astonishingly frank portrait” touted by the publisher for many 
subjects are passed over in silence or gone over lightly. Thus we learn 
little of Putin’s long association with the KGB or his relations with his 
predecessor Boris Yelstin, to whom he owes his meteoric political career. 
Still, the book throws some light on Russia’s enigmatic new chief executive 
both by what it says and fails to say.

Poverty of ideas

The first striking feature of these interviews is that Putin seems to be 
devoid of ideas: He is mainly driven by perceptions and feelings. In talking 
to his interviewers, not once in the 200 pages does he mention a book that 
has influenced his thinking, which is startling since Russians are known as 
voracious readers. In contrast to the December essay, he appears to have no 
clear notion what Russia needs except to be strong and united. 

Putin seems to be a stranger to moral considerations in politics: When asked 
whether on joining the KGB he took into account the suffering that this 
organization and its predecessors had inflicted on his country, he answered 
blandly: “To be honest, I didn’t think about it at all. Not one bit.” 

The Russian president compensates for his poverty of ideas with a steely, 
unemotional, down-to-earth temperament. He readily resorts to violence when 
crossed, recounting with pride incidents in his life when he employed judo, 
his favorite sport, to dispose of bullies. His hatred of the Chechens borders 
on the irrational: He blames them for wanting to destroy Russia, an attitude 
that is palpable nonsense. But then he admits to being “a pure and utterly 
successful product of Soviet patriotic education.” He is sorry that the 
Soviet Union collapsed but accepts it as a fact: there can be no return to 
the past. 

A man of action, Putin regrets that his term of office is only four years, 
because it may not give him enough time to achieve all that needs to be done, 
yet it is far from evident what it is that he wants to do. Asked about his 
top priorities, he replies evasively: “We must clearly and accurately 
determine our goals -- not just speak about them in passing. These goals must 
become comprehensible and accessible to every person.” 

He has almost nothing to say about Russia’s economic problems except that 
Communism had failed and that property rights must be assured. Politically, 
he stresses time and again the need for a strong state, which involves, among 
other things, reestablishing control over the provinces. But all this is 

A stress on pragmatism

Russians seem to be tired of ideas and ideologies, and they hail their new 
president as a strong and action-oriented leader. He is a consummate 
pragmatist for whom whatever works is good: He rejects Communism not because 
it was an evil doctrine that cost tens of millions of lives, but because it 
failed. Whether activism lacking a clear objective is a good thing is open to 
question because it can so easily turn into action for action’s sake. Putin’s 
outlook reminds one of the saying attributed to Yogi Berra: “When you come to 
a crossroads, take it.” 


Russia's Audit Chamber to crack down on corruption

MOSCOW, May 11 (Reuters) - Russia's Audit Chamber, the state watchdog over 
budget spending, will join forces with law-enforcement organisations to fight 
corruption and other economic crimes, the new head said on Thursday. 

The Audit Chamber has few teeth to allow it to carry out its mission of 
uncovering corruption. 

Sergei Stepashin, the former prime minister appointed last month to the post 
by then-acting President Vladimir Putin, told reporters he would join with 
law enforcement agencies empowered to carry out criminal investigations. 

``I plan to sign agreements with Interior Ministry and Federal Security 
Service (FSB). This will allow us to bring to a logical completion our 
activities which could lead to criminal investigations,'' Stepashin said. 

Stepashin, also a former Interior Minister and FSB head, said a previous lack 
of coordination between the chamber and agencies had led to the failure of 
many anti-corruption cases. 

Once their efforts are brought together, the Audit Chamber, FSB and Interior 
Ministry would fight more efficiently against economic crimes. 

The Audit Chamber in five years conducted 3,500 checks and sent 600 to the 
Prosecutor General's Office, Stepashin said. 


Russian reform plan aims to open up economy
By Julie Tolkacheva

MOSCOW, May 11 (Reuters) - A leading Russian newspaper published on Thursday 
what is said were priorities of the eagerly awaited reform programme written 
for President Vladimir Putin. 

Main elements of the 10-year plan aim to boost the economy by stabilising the 
banking system, shoring up judicial independence, making it easier for 
businesses to operate and boosting gas sector competition, Sevodnya newspaper 

Sevodnya said it had obtained the final draft of the government-allied 
Strategic Research Centre's plan, although an official at the centre told 
Reuters the published material was only part of a month-old version. 

The programme penned by liberal economists has been long in coming, though 
Acting Prime Minister Mikhail Kasyanov said on Wednesday the government might 
change it partially or heavily. 


The new plan calls for quickly tackling bank and tax reform, aiming to pass 
the second part of the tax code by August. 

``This is an important political gesture for entrepreneurs who are waiting 
for the president to make a significant step which will testify to his 
interest in the development of business,'' a commentary in the plan said. 

A zero-deficit 2001 budget, to be sent to parliament in the third quarter, 
would be based on the new Tax Code, though plan commentary said governors 
might oppose plans to stop equally sharing revenues between the centre and 

Steadying the banking system, still weak nearly two years since the 1998 
rouble devaluation, is also a top priority. 

The programme in Sevodya said the government should provide for stronger 
checks of banks in the second quarter of 2000 and should also shut down 
problem banks. But it did not say what organ should make the checks. 

Analysts, bankers and the International Monetary Fund have all criticised the 
central bank and the government for being too slow in restructuring the 

The plan also calls for new training and independence for judges, as well as 
stripping them of posts for life, which appeals to Putin's promise of fair 
play for business. 

It says starting new businesses should be made easier. 


The plan includes measures aimed at developing the gas market, increasing 
competition there and attracting investment. It would also boost state 
control over Gazprom and make the company's finances more transparent. 

But it said the steps were likely to be opposed by Gazprom, which accounts 
for a quarter of budget revenues, though the goals are likely to win favour 
with the IMF, Russia's main lender which is waiting for reform measures. 

The plan calls for opening up access to Gazprom's high capacity lines and 
making pricing more transparent in the fourth quarter of this year. 

Oil companies, which often burn off gas, will then be able to export it. 

Debtors would also face trouble as national power grid UES EESR.RTS as well 
as Gazprom would be allowed to limit supplies to those paid for in cash. Many 
'strategic' users cannot be cut off now, while non-payment and barter are 


Kasyanov Biographical Data Detailed 

MOSCOW. May 10 (Interfax) -- Russian President 
Vladimir Putin submitted 
Mikhail Kasyanov's nomination for prime minister to the lower house of 
parliament, the State Duma, on Wednesday, the presidential press service 
has announced. 
"I am submitting the nomination of Mikhail Kasyanov for prime 
minister to 
the State Duma for confirmation in accordance with Article 83 of the 
Constitution of the Russian Federation," says Putin's letter to State 
Duma Chairman Gennady Seleznyov. 
Kasyanov was born on December 8, 1957 in Solntsevo, Moscow region. In 
he graduated from the Moscow Automobile and Road Construction Institute 
as a trained construction engineer. 
After serving in the army he worked at the USSR State Committee for 
Construction's industrial transport research institute. 
In 1981-1990 Kasyanov worked at the USSR State Planning Committee 
first as 
an engineer, and subsequently as a senior economist, chief expert and 
chief. In 1990 he was appointed chief of the section for foreign economic 
relations at the Russian State Committee for Economics. 
In 1991-1993 Kasyanov worked at the Economics Ministry in various 
important posts. 
In 1993 he became the head of the Finance Ministry's foreign debt 
department, in 1995 deputy finance minister, then first deputy finance 
minister and in May 1999 finance minister. 
In January, Kasyanov was appointed first deputy prime minister. Since 
January 26 he has also headed the council of ministers of the Union of 
Russia and Belarus. 


May 11, 2000
New PM Lacks Political Clout For Radical Reform
Pyotr Ivanov, staff writer

The Duma will definitely approve the appointment of Mikhail Kasyanov as 
Prime Minister, so now begins the speculation as to what steps the new 
government plans to take. Kasyanov himself is stressing the importance of a 
favourable investment climate and legislative reforms. 
Over the last 6 months Mikhail Kasiyanov has gave the public an 
indication of the measures that he might make in order to achieve the goals 
set by Vladimir Putin. One can also speak with some certainty about the 
ideology of Kasyanov’s government. On the whole he intends to avoid radical 
changes to economic policy and to limit himself to half measures to give an 
impression of active work. The proclaimed radical changes will either never 
be implemented or President Putin will have to assume personal responsibility 
for them. 
So, what particular instruments does Prime Minister Mikhail Kasyanov 
have at his dispoal? Firstly he has won a reputation for successfully 
negotiating with Russia’s creditor countries, even though some economists 
including Evgeny Yasin and Alexander Shokhin believe that he just follows the 
creditors’ instructions. Recent talks between Kasyanov and the London Club 
suggest that this may well be the case. As Gazeta.Ru previously noted, the 
outcome of these talks was the partial writing off of interest on Soviet-era 
debts to commercial banks, while the amount of annual payments was not 
decreased. Following talks with The Ukraine on its debts to Russia had a 
similar outcome; The Ukrainians will pay of the debts to Russia on terms more 
or less of their own choosing. 
In the autumn Mikhail Kasyanov will have another chance to distinguish 
himself at talks with the Paris Club of Creditors. Presently the ‘Parisians’ 
are laying down even stricter conditions than the ‘Londoners’. 
Another of Kasyanov’s instruments is a liberal monetary policy 
currently being implemented by the head of the Central Bank Victor 
Gerashenko. For the time being this policy appears to be benefiting the 
Russian economy and will most probably be pursued in the future. However if 
the country reaches the point when industry will no longer require ruble 
subsidies, Kasyanov will have to find a way to make producers pay their 
Here the list of efficient instruments practically ends and the big 
question remains as to whether they are enough to attract foreign capital 
into Russia. First we should remind our readers that, contrary to the 
optimistic forecasts following Boris Yeltsin’s resignation, neither the stock 
market, nor the Russian economy enjoyed any investment or capital inflow of 
any kind, except for speculative money. On Wednesday Russian shares actually 
we went down when the public learned that Putin is proposing Kasyanov as the 
new Prime Minister. 
Despite the talks with the IMF, creditors, investors, politicians, 
despite Kasyanov’s claims of grandiose economic triumphs, according to 
Mikhail, in the (a 7-8% rise compared with the crash figures of last year, 
when the country had still not recovered following the devaluation of the 
ruble), the Russian stock market is presently on the same level as it was at 
the beginning of the year and foreign investors are eyeing Russia’s economic 
recovery with sceptical caution. 
The reality is that basically we are not experiencing a recovery and, 
as the analysts explain, all the so-called achievements are due to 
devaluation and high world prices for raw materials. 
However, Mikhail Kasyanov still has a few cards up his sleeve, which 
could help him achieve his goals (if indeed these are industrial growth and 
investment). First of all, he could begin restructuring the natural 
monopolies. Using mighty organizations such as the Ministry of Transport, 
Gazprom and Russian Unified Energy Systems any Prime Minister could achieve 
at least a short-term economic rise, for instance by subsidizing other 
sectors of the economy using the natural monopolies’ resources to lower 
tariffs for various services. The Prime Minister might also attempt to pass a 
‘capital amnesty’ law to encourage Russian businessmen to bring back at least 
some of the capital they keep abroad. Finally, the head of the cabinet might 
try to change foreign trade policy by introducing new and unified import 
duties on foreign goods. 
All these measures, however, require changes in the present 
legislation. Whether the Duma will approve the new laws or not, depends 
mostly on President Putin, not Prime Minister Kasyanov, leaving the latter 
too little space for maneuver. Kasyanov will not have enough political weight 
to conduct serious reforms an but, in reality, Kasyanov needs them but 
little. According to the official statistics the present economic policy 
appears to be satisfactory, so why radically change it? It is much easier to 
indulge in redecorating the existing economic structures and let the 
president and his milieu worry about introducing reforms. 


Zyuganov Says 'Putin has Not Spelled out his Politics' 

MOSCOW. May 10 (Interfax) - The Communist 
Party does not see why it should cease to oppose the Russian authorities, 
party leader Gennady Zyuganov told Interfax on Wednesday. 
"There will be no normal cooperation until the president and his team 
work for the country and all its citizens rather than for a bunch of 
oligarchs," he said. 
At present, there is an obvious danger of President Vladimir Putin 
following in the footsteps of Russia's first President Boris Yeltsin, 
Zyuganov said. 
Zyuganov said he was surprised that Yeltsin "stood guard on Putin on 
the country's main square and received the Victory Day parade jointly 
with the president." "This is an outrage against those who marched on Red 
Square and the nation as a whole," he said. 
He said another cause of concern is that "Putin has not spelled out 
his politics, nor does he have a strong team of his own." 
A thorough reading of the concept of the country's development 
"drafted by the old team now under Gref's umbrella" amounts "to an 
absolutely liberal version that would be lethal to the country," Zyuganov 
said. Society should reject that concept, he said. 
The materialization of the concept would result in "space, aircraft 
building and all the engineering industries crashing" the way electronics 
did before them, Zyuganov said. The Communist Party, and in particular 
its leaders Seleznyov and Zyuganov, cannot support what the presidential 
team has offered, he said. 
The president has not yet made his concept of a national policy 
known, Zyuganov said. 
Still, Zyuganov said he pins hopes on Vladimir Putin, who is young 
and has worked in agencies that are aware of the situation in the world 
as well as inside the country. 


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