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Johnson's Russia List


May 19, 2000    
This Date's Issues: 4311  4312

Johnson's Russia List
May 19, 2000

[Note from David Johnson:
  2. Reuters: Putin names new Kremlin envoys to Russia's regions.
  3. Bloomberg: Russia's Gref on Economic Program Proposal for Putin.
  5. Berezovsky’s Candidate Appointed General Prosecutor.
  6. Moscow Times: Catherine Belton, All Clans Get Posts In Putin Cabinet.
  7. Dale Herspring: Putin's Regional Decree.
  9. Sarah C. Carey: new report on legislation.
  10. Ira Straus: Putin - an Executive Vertical, Latin American style?
  11. Reuters: EBRD keen to rekindle Russian investment flame.
  12. APN: How Putin was brought to power. (Views of Russian political analysts)]



Moscow, 18th May: More than half of Russia's population (65.3 per cent)
watch TV news broadcasts every day, according to the poll conducted by the
ROMIR [Russian Public Opinion and Market Research Institute] independent
research centre.

A mere 6.1 per cent of the respondents do not watch news on television at
all. Watching news once a week are 2.6 per cent, 5.4 per cent pay their
attention to the news twice a week, 6.7 per cent three days a week, 4.9 per
cent four days a week, 5.4 per cent five days a week and 3.2 per cent six

As for the daily newspapers, they are less popular among the Russians: 39.9
per cent of the respondents do not read them at all, 14 per cent read them
once a week, 12.3 per cent twice, 11.9 per cent three days a week, 4.7 per
cent four days a week and 3.1 per cent five days a week, 13.2 per cent of
the Russians read newspapers every day.

The polled were 2,000 people all over Russia.


Putin names new Kremlin envoys to Russia's regions
May 18, 2000
MOSCOW (Reuters) - Russian President Vladimir Putin Thursday named his new
hand-picked representatives for seven vast regions as he seeks to reassert
Moscow's control over the world's largest nation.

The appointments include a leading liberal politician, a high-ranking
official of the Federal Security Service (FSB), a successor body to the
Soviet-era KGB, and a general who has led the war against rebels in
breakaway Chechnya.

The powers of the new envoys have not been precisely defined, although most
politicians see the move as evidence of Putin's attempts to have more
direct control over the regions.

This view was confirmed Wednesday when Putin used his first address to the
nation since his May 7 inauguration to map out other plans to clamp down on
powerful regional bosses.

He said he would seek powers to sack the heads of Russia's 89 regions and
end their right to automatic seats in parliament's upper house, the
Federation Council.

His proposals would amount to the most profound changes to Russia's power
structure since former President Boris Yeltsin rewrote the constitution in
1993 after using tanks to quell a parliamentary rebellion.

Yeltsin failed in countless attempts to impose his authority over the
regional bosses, many of whom have considerable control over taxes, police,
mass media and natural resources.

Among the envoys named were former Prime Minister Sergei Kiriyenko, who
will be representative to the Volga district, while FSB first deputy
director Viktor Cherkesov heads the northwest region.

General Viktor Kazantsev was appointed representative to the North Caucasus
region, which includes Chechnya, where Kazantsev until recently was head of
a Russian offensive against rebels.

The representative to the Siberian region was named as Leonid Drachevsky,
head of the Ministry for the Commonwealth of Independent States, while
First Deputy Interior Minister Pyotr Latyshev was named envoy to the Urals

Georgy Poltavchenko was named to the central region, which includes Moscow,
moving from envoy to the Leningrad region around St Petersburg under the
previous system, while Konstantin Pulikovsky, a commander in the 1994-96
Chechen war, was named to the Far East, which includes the port of


Russia's Gref on Economic Program Proposal for Putin: Comment
Moscow, May 18 (Bloomberg) -- The following are comments by German Gref,
director of the Russian government's Center for Strategic Research, on a
proposed economic program. The comments were made in an interview with the
Vedomosti daily.

``The group which is supervising the work on the document, includes
Alexander Voloshin, Mikhail Kasyanov, Alexei Kudrin and Dmitri Kozak (and
plans) to prepare three formats of the program. The first 15-page document
contains a platform of the strategy. The second, more detailed document of
40 to 50 pages will include three parts: modernization of the economy,
social politics and reform of power.

``These two documents will be directed to the presidential administration.
And a special, separate 300-page document containing the social and
economic program will go to the government and will be ratified only after
the new cabinet introduces all necessary improvements.

``Apart from the program our center is working on a large number of other
documents, such as the presidential budget message, his message to the
upper chamber and a block of tax law projects.

``We are not putting any foreign model in the basis of the Russian economic
reform. It is absolutely impossible. We can's use either the Chilean, nor
Malaysian, nor post-war German models. None of these countries had such a
closed nor militarized economy like Russia did.

``The first experience of liberal reforms in Russia showed that the
introduction of market instruments does not automatically give positive
results. We should take into consideration particular features of the
Russian economy. We can't use the experience of tax or customs regulation
of industrially developed countries. For that we need huge investments into
administrative infrastructure, development of legislation and education of
chief accountants. We need to change the public psychology. Our program is
based on Russia's reality."



     MOSCOW. May 18 (Interfax) - Three versions of a development program
for Russia being drafted by the Center for Strategic Development will be
submitted to  President Vladimir  Putin and the government at the end of
this week, the head of the think-tank said.
     The first document is a 15-page strategy statement, Gref said in an
interview with the daily Vedomosti. The more detailed second document of
40-50 pages  has three sections, on modernization of the economy, social
policy and government reform. The third is a 300-page plus socioeconomic
program of action especially for the government, he said.
     The  documents   that  will  be  submitted  to  the  president  and
government differ  from versions of the program published earlier in the
press, Gref  said. He  said the  three formats  of the  program  have  a
different technological  essence. One  of  these  consists  of  all  the
measures for  implementing the  development strategy  for the  next four
years, he said.
     Four years  is the period for which reliable forecasts can be made,
Gref said.  "A strategy  remains a strategy, but it is as close to earth
as possible," he said.
     Gref also  said there  was no  rivalry between  his center  and the
finance and  economics ministries.  The center  works closely with these
ministries, he said.
     Gref said  there was  unlikely to  be an alternative to the program
being drafted  by his center. "There are no resources today for creating
a program that is really alternative," he said.


May 18, 2000
Berezovsky’s Candidate Appointed General Prosecutor
Ekaterina Obolenskaya, Alexander Kornilov 
Vladimir Ustinov has been appointed General Prosecutor of Russia regardless
of Putin’s preferences. However Gazeta.Ru’s has been informed that Dmitry
Kozak was the President Putin’s choice for the post and all necessary papers
had been prepared in his name. But the situation changed drastically after
two visitors entered Putin’s office at 16:00.
   The rumors circulating Moscow that Putin had decided to appoint Dmitry
Kozak General Prosecutor have proved to be true. Kozak is a member of Putin’s
St.Petersburg team, a professional lawyer and was recently appointed Chief of
Government Staff. The necessary documents had been prepared by the
presidential administration well in advance and signed by Putin at 15:00 on
May 16th so that the Council of Federation could receive the statement
representation the same day, before the discussion of the General
Prosecutor’s appointment in the upper house. The senators waited for the
statement until 23:00.
   The senators waited in vain: the document was delivered by a courier
on May 17th, after 9:00. A statement of representation usually includes an
introduction of the candidate, followed by the explanation of the choice and
a short curriculum vita. The document delivered to the Council of Federation
was a short letter that contained a proposal to confirm Vladimir Ustinov as
Prosecutor General and did not even bear any of the stamps or seals,
stipulated for the procedure.
    The letter had not even been registered with the presidential
correspondence department, which is unthinkable! What happened to the
document and to Vladimir Putin?
    According to information provided to Gazeta.Ru by two independent
sources, an hour  after Putin signed the letter of representation for Kozak
(Kozak had been informed of Putin’s decision and was already being
congratulated on his appointment), Alexander Voloshin entered Putin’s office.
    Some sources report that he was accompanied by Boris Berezovsky. The
meeting lasted around an hour and a half and only the three of them know the
details of the discussion though perhaps the  Chief of the Security
Department and the Federal Agency for Governmental Communication and
Information (FAPSI) were later informed.
    As a result of the discussion, the procedure of submitting the
candidate for the post of General Prosecutor to the Council of Federation was
interrupted until the morning of May 17th.
    Our sources assert that Voloshin Berezovsky in fact forced Ustinov’s
candidacy upon the President. If this is true, it means that Putin is not so
independent and can be coerced into making decisions that are crucial for the
    Nobody knows and probably never will know what arguments the Chief of
the Presidential Administration used to persuade Putin to change his
decision. Some politicians and regional leaders were extremely disappointed
with the decision. Many of them are aware not only of the fact that all
papers for Kozak’s appointment had been signed but also of the fact that the
acting Chief of the of Presidential Administration Voloshin, had in fact
appointed Ustinov General Prosecutor.
    Evidence indicating that Putin can be influenced by Berezovsky’s team
may not have   caused such a deep concern were not for Voloshin and
Berezovsky winning two brilliant administrative victories in one day. They
managed to appoint ‘their’ General Prosecutor (Media Most must be especially
pleased) and ‘their’ head of the government Kasyanov.
    The Kasyanov-Berezovsky alliance is no secret. But the affaire has not
put Vladimir Putin in a weaker position. Due to Voloshin’s clever strategy,
the President had at first made the Senators confirm ‘his’ General
Prosecutor, only to give them a slap in the face. This could lead to grave
consequences for them. The matter concerns the President’s package of
legislative initiatives the concerning the centralization of federal rule, to
be more exact, a limitation of the regional leaders’ powers.
    So far neither Putin’s St.Petersburgers nor Berezovsky’s team has yet
won the battle to gain predominance in the new administration. Each party
made a concession to the opponent, and thus both sides gained some
advantages. Ustinov and Kasyanov serve as guarantee of immunity for the
‘family’, while Putin  and his team, having reduced the regional leaders’
powers, have increased the presidency’s authority.  
     Nobody knows how long this game between two Kremlin teams ­ the new
one and the old one - will last.


Moscow Times
May 19, 2000
All Clans Get Posts In Putin Cabinet
By Catherine Belton
Staff Writer

President Vladimir Putin on Thursday tapped an old ally from St. Petersburg,
Alexei Kudrin, as deputy prime minister and finance minister in a new Cabinet
that retains many faces from the Yeltsin regime and keeps the system of
checks and balances between powerful financial clans alive and kicking.

The makeup of the new Cabinet was announced Thursday evening after Putin held
a final airport meeting with Prime Minister Mikhail Kasyanov before flying
for an official visit to Uzbekistan.

"This is certainly not a team of like-thinkers," said Yevgeny Volk, a
political analyst at the Heritage Foundation. "Instead it's very strongly
influenced by different interest groups. Putin is using the same balancing
tactics as [Boris] Yeltsin did, where the president is the supreme arbiter
between fighting factions."

Kudrin has a reputation as a liberal in favor of keeping a tight hand on
government purse strings, despite his role in the notoriously spendthrift
administration of St. Petersburg Mayor Anatoly Sobchak. Putin and Kudrin
worked closely in the mid-1990s as deputy mayors in Sobchak's government.

During those years, Kudrin also developed a close relationship with Anatoly
Chubais - the controversial architect of the state's privatization program
who has moved on to head national power grid operator Unified Energy Systems.

Kudrin, 39, has kept a low profile since being appointed a deputy finance
minister last year - despite effectively running the ministry after Kasyanov
became acting prime minister when Putin was elevated to acting president on
Dec. 31.

Also winning promotion were new Tax Minister Gennady Bukayev and German Gref
- head of a presidential think tank working on a sweeping, liberal economic
blueprint - who moved up from deputy property minister to take the post of
minister for economic strategy and trade. While Gref is another Chubais ally,
Bukayev was hand-picked last year by Moscow Mayor Yury Luzhkov as the
capital's tax chief.

During his time in that role, he declared an interest in seeing income
statements from every man, woman and child in the city, introducing a so-far
voluntary individual tax number that he had hoped would become mandatory.

Bukayev's predecessor, Alexander Pochinok, was transferred to the post of
labor minister in the government shake-up.

Putin's moves to tap officials close to Luzhkov and Chubais - even as he
retained many of the old ministers with ties to tycoon Boris Berezovsky -
showed that the new president was not powerful enough to ignore the
entrenched clan system, analysts said.

"Putin is trying to keep the balance between the country's influential
forces," said Volk.

"He gave the Finance Ministry to Kudrin who is a clear Chubais man and
Pochinok has been removed to appease Luzhkov," he said. The reappointment of
Interior Minister Vladimir Rushailo and Kasyanov's nomination as prime
minister was a clear nod to the interests of tycoons Berezovsky and Roman
Abramovich, he added.

Railways Minister Nikolai Aksyonenko, another Berezovsky ally, also retained
his post.

However, despite a report Thursday by Kommersant that Aksyonenko protÎgÎ
Viktor Kalyuzhny had been reappointed as fuel and energy minister, there was
no official word on whether or not he had kept his old job.

Kalyuzhny has drawn criticism for being too close to many of the leading
players in the oil industry, especially Sibneft and Tyumen Oil Co.

Economic observers said Thursday that Kudrin's appointment had been expected,
but was nevertheless a good sign for the economy.

"Kudrin definitely has the credentials to serve well in a Putin government.
He is a technocrat with a strong personal loyalty to Putin and who
understands Russia's economic problems well," said Roland Nash, an economist
at investment bank Renaissance Capital.

The promotions for Kudrin and Gref ensure that the Gref center's program of
liberal economic reform will get a hearing, but little else is certain,
analysts said.

"Gref's appointment is very good news - it provides his program with a plug
into the government and raises its chances of being adopted," said Nash. "But
that doesn't erase doubts over whether it will be implemented."

Kasyanov has himself said in recent days that he might tone down certain
elements of the Gref plan. In a speech to the Duma on Wednesday he said that
he had "yet to read" the plan. Kommersant reported Saturday that Kasyanov was
looking to dust off an old plan written by Communist Yury Maslyukov.

Volk said it was unclear how much influence Gref would have in the new
ministry, and warned that Kasyanov would retain "all the levers of

"Relations in the new government will not be simple. Kasyanov has already
made clear he's not delighted by Gref's plan," he said. "The divisions in the
new government mean Putin has not shored up his power and has been unable to
fend off the interests of the oligarchs."

The fuel and energy minister was one of the few posts left unfilled in a
Cabinet reshuffle that Kasyanov said would cut the number of ministries from
34 to 30.

Russian news agencies reported late Thursday that four ministries - science
and technology, economics, trade and CIS - had been abolished. Five state
committees were also eliminated, as well as three federal services and the
federal road agency.

Kasyanov said there would be five deputy prime ministers, but no first deputy
prime ministers - a move commentators had also foreseen as a step by the new
head of government to make sure he stayed the undisputed head of the Cabinet.

Apart from Kudrin, three other deputy prime ministers were named, all of them
reappointed from the old Cabinet - Valentina Matviyenko, Viktor Khristenko
and Ilya Klebanov, also seen as one of Putin's St. Petersburg allies. It was
unclear Thursday what their portfolios would be. Meanwhile, a fifth deputy
prime minister - to take charge of agriculture - had yet to be named, Prime-
Tass reported.

Earlier on Thursday, Putin retained all four heads of the so-called power
ministries - Interior Minister Rushailo, Defense Minister Igor Sergeyev,
Foreign Minister Igor Ivanov and Emergency Situations Minister Sergei Shoigu.
The president directly appoints those ministers, while the other ministries
are technically prime ministerial appointees. Federal Security Service chief
Nikolai Patrushev also kept his job.


Date: Thu, 18 May 2000
From: (Dale Herspring)
Subject: Putin's Regional Decree

I am not a constituional expert and so I feel a bit of trepidation in
commenting on Putin's effort to change the relationship between
the periphery and the center.  Furthermore, I take my friend Jerry
Hough's comments about the dangers involved in such a decree
seriously.  Having said that, I must ask myself what alternative
does Putin have?  I tend to look at things from the vantage point of
the military, and to be honest I certainly don't like what I see when
it comes to national stability. 

Unlike some of my colleagues, I do not think that a break-up of
Russia is in our interest.  Like most, I wish for a democratic,
pluralistic, stable Russia.  The question, however, is how to get
from here to there.  I don't have an answer.  And I must disagree
slightly with Jerry Hough (assuming I understood his point
correctly) in that I don't think it is the business of the US
Government (nor of US academics -- after all it was some of our
economists who helped get the country into the mess it is) to tell
the Russians how to run things. 

Clearly Putin's effort to reign in the regional governors could be part
of an effort to establish dictatorial control over the country and it
could be a sign of bad things to come.  On the other hand, it could
also be part of an "attack of rationality" a recognition that if Russia
is to be a country, there must be stronger central control (which
may not necessarily mean a return to Gosplan and all that entails).

Since there is not much we can do about Putin's actions vis-a-vis
the regions, I suggest that we sit back and wait.  Those who fear
Putin wants to be a dictator will see this as a bad sign, while those
who believe he wants to create a viable democratic system will see
it as a positive sign.  For my own part, I am agnostic except that I
think he has no alternative if he hopes to get control of the chaos
that is Russia at present.


BBC Monitoring
Source: NTV, Moscow, in Russian 0430 gmt 18 May 00

[0345] [Presenter] Tonight the head of the Centre for Strategic Studies
German Gref is meeting the Communist faction in the State Duma. Gref is
supervising work on a government's economic programme. The guest of our
studio in Red Square is State Duma deputy from the Communist Party and
Party central committee ideology secretary Aleksandr Kravets. Hello,
Aleksandr Alekseyevich.

[Kravets] Good morning.

[Omitted: known background]

[Q] Is there anything in the programmes you have seen that coincides with
the views of the Communists?

[A][ In general, the Communist party has always said that Russia needs a
very strong central government. We find this in the programme, but no more.
I would like to draw your attention to the fact that the remaining part of
the programme, especially that related to economics and social sphere, is
disastrous for Russia. We should examine views, approaches, principles and
methods of resolving issues.

[Q] Do you think a compromise is possible?

[A] I think that if we take the core of the programme, a compromise is
unlikely. I believe the country's leadership is aware of that. Yesterday
[17th May] during the discussion of the programme, [Russian Prime Minister
Mikhail] Kasyanov effectively started rejecting some of the approaches
mentioned in Gref's programme.

[Q] I have just quoted `The New York Times' [refers to article which claims
that Putin aims to weaken regional power]. Do you think that what it writes
about is true?

[A] `The New York Times' is probably right. I think that the Americans are
better-informed about the Russian leadership's plans and moods than Russian
citizens or even deputies.

[Q] Another question. Do you think it is possible that a Communist may
appear in the new cabinet of ministers?

[A] If the government decides to put into practice the programme proposed
by Gref's Centre, this would go against the interests of Russia, its nation
and thus the Communist party. The answer is obvious.

[Q] Judging by the fact that the attitude of Kasyanov as prime minister is
changing - [changes tack]. Have the Communists been aksed to join the

[A] As far as I know, there have been no official invitations.

[Q] What about unofficial invitations?

[A] Contacts and consultations go on all the time. This is natural in
modern Russia. I can only say this again: so far I have no information
about official invitations.

[Q] My last question. What is you attitude to the president's initiative
[on regional government and the Federation Council] put forward yesterday?
Will the Communists support it?

[A] There is one thing that puts us on guard. This thesis was mentioned in
Gref's programme, or concept. I would like to stress one thing. The idea of
strengthening the power of the state in Russia is similar to other tactics:
what is strengthened is precisely the branch and the tendency in public
affairs which has caused Russia many problems.

In recent years the state has supported the people and the country like the
rope supports a hanged man. In our case they are tightening the noose. I
think that if the Federation Council consists of governors' representatives
but not elected deputies, this creates new problems.

Another surreptitious thing. It looks like the governors are being given a
free hand over local self-government, something they have been dreaming of.
We are witnessing a certain compromise. On the one hand, concessions are
being made by governors to the Kremlin. And, on the other hand, the
governors are being given control over structures which bear the main
responsibility for the processes in the regions.

[Q] Do you think that the Communist faction will vote against these drafts?

[A] No doubt about it. We can see - [changes tack]. Excuse me I meant
something different. We should examine everything thoroughly and study the
way it works. The Duma may amend the proposals put forward by the
president. Anyway, there is hope that the president and the parliament will
be seeking compromise. I hope there will be no attempt to use force trying
to push through bills which could have several interpretations or could
have dubious consequences for everyone involved, including the state

[Q] Thank you very much.


Date: Thu, 18 May 2000
From: "Sarah C. Carey" <>
Subject: new report

Dear David,

Squire, Sanders & Dempsey has prepared a 29 page report on the rules
governing the movement of legislation through the Russian Federation
parliament.  For lobbyists, students of the parliamentary process and others
it is one of the most comprehensive discussions of the subject I have seen.
Anyone interested in receiving a copy should send us a note giving mailing
address and including a check for $35 (to cover costs).  Thanks for getting
this notice out.


Date: Thu, 18 May 2000
From: (Ira Straus)
Subject: Putin - an Executive Vertical, Latin American style?

Putin - an Executive Vertical, Latin American style?
by Ira Straus

Russia needs to recentralize in order to function as a cohesive federal
state. However, a non-federal, pyramid-style recentralization could be even
worse than the chaotic decentralization that has been experienced.

In Putin’s May 17 address (JRL 4310), he packages his proposal for the "unity
of the executive vertical" as a "constitutional principle", coupling it with
the phrase "the separation of powers". This has a hopeful ring. It sounds
like it could mean the modern principle of the separation of the Federal
level of government from the lower levels -- its autonomous coherence, and
its vertical control over its own local agents for Federal business. And this
is indeed one of the aspects of Putin’s proposals.

But there is another, primordial aspect to his "executive vertical". It
consists of giving Moscow a power for "dismissal of heads of regions and
dissolution of legislative assemblies which adopt legislative acts in
contravention of the federal laws" -- and a power for governors in turn to
dismiss mayors and other executives below them.

In keeping with his habit of making a virtue out of what is at least arguably
an emergency necessity, Putin justifies the latter power as logically
consistent with the former: "And finally, the third proposal, which to my
mind follows logically from the second one. If the head of a territory can be
dismissed by the country's president under certain circumstances, he should
have a similar right in regard to authorities subordinate to him. Today, this
is not just a right thing to do, but simply necessary in order to restore the
functional vertical structure of executive power in the country."

In these three sentences, we see how the prerogatives of Power, which were
first extended on arguable grounds of necessity, are next claimed as Rights,
and then extended further in scope by logical deduction from the Rights of
Power. There is no logical time limit to these Rights of Power; rights are by
nature eternal. In happier times, the Rights of Man have been extended,
sometimes overextended, by logical deduction. Now it is the Rights of Power.

Putin justifies this in the name of consistency. It recalls the saying that
'a foolish consistency is the hobgoblin of narrow minds.'

The kind of "executive vertical" in which the central powers can dismiss the
local ones rooted in a traditional pyramid conception of power. It has
nothing in common with the separation of powers. Gernuine federalism is
described, not as an "executive vertical," but as a "vertical separation of
powers" between geographical levels of government, complementing the
"horizontal separation of powers" that exists within a single level of
government. The separated vertical powers in a federation are functionally
coordinate and are mutually supportive or subsidizing (subsidiarity), but
they are carried out in most cases autonomously or by cooperation of the two
levels rather than by subordination of the one to the other. It is only in
army and militia affairs that an ultimate authority of the Center to
establish vertical control in emergency situations is requisite.

Ironically, Putin does talk about separation of powers, but in order to
exclude regional governors from participating directly in making Federal law.
Instead they will send their representatives. This may be a good or bad idea,
but his principled argument for it is overdone. What Putin is proposing would
not even bring the Federation Council up to the point of the model of the
U.S. Senate from 1789 to the late 1800s, when both Senators were chosen by
the state legislature. Whether it will really help with recentralization is
an open question; he himself admits the changed Federation Council might
become more unruly because more constantly present. The most serious
justification for it is to deprive the governors of immunity from arrest.

An argument might be nevertheless made for all of Putin's actions, as
emergency measures to rein in governors and establish that they will
henceforth be subject to the law. But in that case, they should be put
forward solely as temporary measures and not presented as a matter of
principle. One of the worst mistakes in politics is to turn emergency
measures or political expedients into enduring principles or constituent
structures of government. Putin already showed his temptation to make this
mistake in his elevation of all kinds of practical compromises and haphazard
prejudices to the status of "the Russian idea" in his earlier programme. Now
he is exacerbating it by claims of "right" and deductive logic.

In some other respects, fortunately, Putin avoids a "foolish consistency". He
decides to retain election of governors by the people instead of appointing
them vertically. But this creates a new contradiction: it makes it
illegitimate to dismiss them by political decision from above. Ruslan Aushev,
president of Ingushetia, was perfectly logical in his criticism on this
point: "The Ingush constitution clearly states in which case the republic's 
president can be dismissed, and there is no need to create some new laws.
These laws would demonstrate a mistrust in a people who had elected their 
president. No one has the right to dismiss a president who was elected by the

The right of political dismissal from above is inconsistent with election
from below. It can work only as an emergency measure. Or else as a
transitional step toward cancelling the right of election from below.

In federations, anyone can be arrested for violating the law, including a
governor. But governors cannot be dismissed from political office by the
political leaders on the Federal level above them. That would make a mockery
of federalism.

Such a mockery was in fact experienced in Latin America in most of its
history. Most Latin American countries have long had formally federal
structures of government, but their constitutions traditionally provided for
the central government to dismiss regional governors in case of a national
emergency. When the central government would change hands, the new party in
power in the Center would proceed to proclaim an emergency and dismiss all
the regional governors of the opposite party.

This sapped the regional government of their autonomous vigor. It made for
overcentralization. It kept all levels of the state dependent on what
happened politically at the Center. It added to the instability of political
life in Latin America. The whole state and society would suffer convulsions
from changes in the Center. It made feudal patronage the main game in
politics, rather than federal democracy. It added to corruption rather than
overcoming it. Intermediate levels had no choice but to concentrate on
playing double games between powers above and power centers and privileged
groups below. "Latin American-style" in politics became a synonym for
corruption and coups d'etat.

Putin runs all these risks with his "executive vertical". From vertical it is
a short step to vertigo. When there is a lack of autonomous substance in the
state and society, there is loneliness at the top. Totalitarian verticals
were always unsteady, constantly in a state of emergency. When they loosened
up, they always tended to bulge out into feudal pyramids -- steadier, more
humane, and more visibly corrupt. They always felt tempted to turn back to
their KGBs to cut away the bulges and restore the purity of the vertical.

Putin’s plan, unlike the old Latin American practices, would not even require
a declaration of a state of emergency in order to dismiss a governor. It
would, to be sure, formally require a legal cause not a political cause --
that the governor in question has violated the law. However, laws get
violated regularly in Russia, especially in political life, so a legal
pretext will be available for use at any time, at the whim of the central
authorities. Russian laws also contradict one another all over the place;
Putin says in the same speech that 20 per cent of regional legislation
violates Federal law. (Yegor Stroev also gives that figure, by the way.) It's
an alarming situation, but overcoming it by a blanket right of dismissal by
the political authorities is a dangerous expedient. Judicial methods of
control would have much more reliable results. The only possible meritorious
argument for the political method would be one of emergency expediency --
that the judicial one isn't adequate under present conditions. Such an
argument would be much less damaging than the one that makes a virtue of
necessity. But the claim of necessity should also not pass without question.

Why not just charge a governor in court for breaking the law, or in extremis,
arrest a governor? And use other methods of influence in the interim,
including Putin's various other new measures for strengthening the autonomy
of the courts and of Federal agents? This is how it is done in every real
federation. Then it is up to the court system to decide whether to convict
the governor and whether to deprive him/her of the political office. In
Russia, to be sure, this would require reform of the Federation Council, in
order to deprive governors of their immunity from arrest; but such reform is
already being proposed by Putin in the same speech. Why, then, the need for a
further authority to dismiss governors, as if they were mere Federal

It would seem that this flows from an exaggerated idealization of the idea of
an "executive vertical". Putin's plan looks like a step toward restoring some
portions of the "supercentralized state" that he said was "fixed in Russia's
genetic code, in its traditions, and in the  people's mentality" (in his
pre-election book, "Conversations with Vladimir Putin").

This suggests that he may fail to understand some newer realities of running
a modern state, one that don't go back a thousand years. Traditional methods
of centralization are not just oppressive, they are extremely inefficient in
the modern world. And they are counterproductive from the standpoint of the
goals of a strong state, a stable state, rule of law, and overcoming of

The new realities are not to be found in the "genetic codes" of any society
from ages immemorial. They have had to be learned by every society. All that
can be said by way of differentiation is that some societies have had
traditional and situational advantages for learning them. The societies that
have succeeded in the modern world are the ones that have learned them.

Temporarily, Putin's measures may produce some improvement, in overcoming the
present chaos and corruption and the disintegrative feudal decentralization.
However, unless they are quickly followed by a turn to a more legitimate
modernized form of federalism, they will lead only back into a new form of
the morass. Regrettably, his logic and rhetoric make it less likely that that
subsequent turn will be taken in time.

How much different it would all seem, if his speech had read something like
this: "Regrettably, we cannot get in one step or by direct motion to where we
are going. We need a modern federal democratic centralized state, but we have
in many respects still a feudal state with its mix of overcentralization and
chaotic decentralization. Along the way to the modern democratic state, most
European societies went through a period of absolutist centralizing monarchy
before becoming parliamentary and sometimes federal regimes. Under the
parliamentary regimes, the state became decentralized again in some respects,
but not in others, and the society became more centralized in practice. We
cannot repeat the exact same sequence here today. We are certainly not going
to try to repeat a centuries-long stage of absolute monarchy. We have to move
faster in order to be a part of the modern world. But what we are going to do
is to go through a stage of recentralization. This is a strict necessity. We
are not going to make a virtue of it, because we have to be ready to move
beyond it. If anyone would be our model, it would be Hamilton with his
creation of a nationwide common market and a common government out of a
far-flung unwieldy confederacy of states, not Louis XIV or Robespierre. We
will avoid the disaster of a Yugoslavian model of local patronage-states
built on the wreckage of the break-up of centralized socialist property. We
will preserve the basic elements of democratic federalism that we do already
have in place -- freedom of the press and free elections to all levels of
government -- so that we will be in a position to move toward a more normal
federal relation between the levels of government as our society settles down
into the mould of a unified society."

But he didn't say anything like this.

New vistas of tyranny are inevitably opened up by the steps of
recentralization, coupled with attacks on the media, that Putin is taking. As
he rounds the present turn in the road, he does it with a logic of a Right of
central pyramid power on his lips. In this way, he makes himself more likely
to perceive an open road to further consolidation of central pyramid forms,
less likely to perceive the alternative of a further turn in the road toward
a modern federal state.


INTERVIEW-EBRD keen to rekindle Russian investment flame
By Brian Love
PARIS, May 18 (Reuters) - The ``president-elect'' of the EBRD hopes Russia's
recent changes at the top will permit the bank to finish what it began after
the fall of the Berlin Wall, the free-market transformation of post-Communist
eastern Europe.

``The desirable scenario is a return of investment flows to Russia,'' Jean
Lemierre, who is to be confirmed this weekend as the new president of the
European Bank for Reconstruction and Development, told Reuters in an

The London-based bank faced two or three main challenges in the years ahead,
the Frenchman said:

-- rekindling the investment flame in Russia after a halt in the wake of the
August 1998 economic meltdown

-- completing the already advanced opening of central and eastern European
economies like Poland and Hungary among others queuing up to join western
neighbours in the European Union.

-- sorting out a long-running conflict with Ukraine over its demand for aid
in return for shutting down its Chernobyl nuclear power installations, still
operational after the 1986 accident.


``One thing is clear at this stage. The EBRD will be 10 years old next year
and we can reasonably say 10 years is the age of maturity,'' Lemierre said.

The EBRD pulled through Russia's economic collapse in August 1998 better than
many other investors, proving it had the expertise needed to renew stalled
investment ties, he said.

Debt restructuring negotiations would also take place with foreign creditor
nations as promised, he added.

It is no surprise that Lemierre sees Russia as a priority, since he was
deeply involved in deliberations of the Group of Eight economic powers after
the crash of the rouble and the domestic debt default by Russia in 1998.

He is anxiously awaiting an economic strategy from Vladimir Putin since he
took over from Boris Yeltsin as president.

Putin's new prime minister, Mikhail Kasyanov, whose previous job was on debt
negotiation with foreign creditor states, knows Lemierre well and the
Frenchman sees him as a moderniser.

If Moscow meets expectations, the EBRD is ready to get to work, with the
focus on specific projects and experts on the terrain rather than holed up in
London, he said.

``All the studies on aid to Russia in the past show that a macro-economic
approach is obviously necessary, but that more emphasis is needed on a
micro-economic front, on creation of companies and bank restructuring.''


Lemierre, 49, will quit his job as French Treasury Director and look quickly
for a replacement in his role as head of the euro zone's Economic and
Financial Committee so that he can settle in at the London-based EBRD around
the end of June.

To a large extent, he said, EBRD strategy for the years to come has been
mapped out by his predecessor, Germany's Horst Koehler, who has left to head
the International Monetary Fund.

As for the future in a region where other institutions like the European
Investment Bank and the World Bank are involved as well, Lemierre sees no
reason for merging heavyweight long-term reform agencies with the EBRD, which
has a role more akin to that of a hardnosed banks investing in grassroots

By way of illustration, he pointed out that the EIB already existed when the
need to create the EBRD dawned on governments, and that the EIB did not have
a mandate to invest in Russia.

To those who see overlaps, he says the question is not valid and the EBRD
mission begun in 1990 ``has many years to run,'' even if he accepts a time
will come when it can say its job is done.

Ukraine, however, remains a blackspot for the EBRD. The bank is in charge of
seeing that Ukraine closes down the Chernobyl nuclear plants but the
government is holding out in talks over the aid it gets in return.

All Lemierre would say was that the talks were ``long'' and remained a
``formidable challenge.''

Lemierre is due to attend the EBRD's annual meeting in Latvia, on May 20-22,
where his nomination by the EU -- the bank's largest shareholder -- should be
confirmed by the other shareholders.


17 May, 2000
How Putin was brought to power
On the eve of the May 7 inauguration of second Russian President Vladimir
Putin Agency of Political News asked the experts: «What do you think, how
Putin was brought to power? Whom and what does he owe his post to?» Known
Russian political analysts Maxim DIANOV, Igor KLYAMKIN, Andrei RYABOV, Alexei
CHESNAKOV answer the question.

APN editors
Being wise with doing nothing

Maxim DIANOV, Director General of Regional Problems Institute: It is
impossible to conduct an election campaign for 2-3 months. Long before the
presidential campaign one should catch or create a public motivation and put
a candidate into accordance with it. The Putin`s team has managed to. Before
the latest Chechen war people confined their aspirations to one subject ­
stability. It was Primakov who answered the purpose. It was replaced by a
«safe life» concept after several terrorist acts took place in Russian
cities. They managed to connect Putin`s name with this concept and make him a
public opinion mouthpiece. He undertook responsibility for Chechen
hostilities and became a person to guarantee and personify security.

A further reason of the election campaign to be successful was sound
conservatism the Putin`s election headquarter evinced. They never introduced
unnecessary innovations but did their best to retain what they reached.

They demonstrated that it was Putin whom country`s future depends on. Putin
visited hospitals, farms, and other establishments. Especially because the
governor campaigns had showed these efforts were fruitful.

Patriotic and even nationalistic sentiments were one more point to be guided
by. They hurt the Communists in this way. But there was no special work
carried out: it was necessary that Zyuganov with his minimal chances to be
elected should have participated in the second round if it had taken place.

The team involved in the election campaign has invented nothing new but it
has done a good work. It had everything necessary: carte blanche in any mass
media except NTV television. The First Television Channel which is easy of
access for 80 percent of population in the country was totally at their

The situation when the candidates are under unequal conditions is widely
considered an «administrative resource» but, in fact, it is «dirty
technologies». Putin would have won under unequal conditions also but the
second round had been necessary.

House-serf Russia`s language

Igor KLYAMKIN, Director of Sociological Analysis Institute: First, let`s
discuss what hindered Putin from coming to power. His own activity as a
public politician didn’t not bring him to power. When he began to conduct the
presidential campaign on his own his rating dropped. Second, one shouldn`t
exaggerate a part of election technologies. Towards the beginning of the
presidential campaign Putin has been already popularized.

It is interesting why those facts that Putin was not a public politician, he
was from the Yeltsin`s «family» and had no economic program did not appear to
have rubbed off on the voting.

It is impossible to answer all the questions but it is possible to advance
several hypotheses. The economic programs present only promises. But a demand
for economic populism and promises has been exhausted. Politicians acting
according this scheme had no chances.

What was in demand above all? The «order» was in a popular demand, the order
in a broad sense and a local sense of the word ­ the order in Chechnya. A
young and healthy man was in demand against a background of old and invalid

Primakov`s failure was indicative in this respect ­ as a matter of fact, it
was not Primakov who was old but Yeltsin. Old persons would be sometimes in
demand: Reigan, De Goll, Adenauer. However health and energy were in demand
in Russia at the moment.

A further important factor: what would have happened to Putin but for
Chechnya. If any other person had acted like that he would have been a
success. It was not a person to win but a function. I should say, hostilities
in Chechnya were the major reason of Putin to win.

One more thing ­ novelty in opposition to Yeltsin`s disorder ­ was in demand.
But taking that into account it is impossible to answer the question why a
person close to the «family» became president.

The question is that the society was tired and there was no need to begin
everything from the very beginning. However curious it might seem, Putin was
expected to be a person who would eliminate all the outrages which took place
under Yeltsin and at the same time would lead the country along the same path
without drastic changes.

Putin is the first leader after Stalin to represent not urban Russia. Even
Yeltsin belonged to rural Russia`s «revolutionary leaders». Putin speaks a
foreign language, dresses tastefully, speaks Russian fluently.

On the other side, it is a house-serf Russia. «Mochit` v sortire» (with a
pledge to hunt down Chechen separatists even in their outhouses and mochit`,
or «waste» them, acting President Putin opened the latest war in Chechnya)
presents rural house-serf Russia`s language. His reckless stylistics
corresponds to the habitat. The urban Russia has found its leader.

Furthermore, the «mochit` v sortire» which sent his rating up is kept within
our way of thinking, it is our willingness to come under somebody’s strong
influence and illegal decision. His mere language which ignores the basic
rules of grammar demonstrates readiness to play without rules.

The present situation is good for Putin as president. Everybody expect
problem-solving but not a miracle of him. Due to it he has around a year at
his disposal.

Novelty effect

Andrei RYABOV, a member of the scientific council/Moscow Carnegie Center: A
change in paradigm and change in social demand brought Putin to power. A
young, brave, resolved person surfaced against a background of boring, feeble
political elite.

The last fall was Putin`s hour of triumph and he took advantage of it. It is
his personal achievement.

Public opinion is a further factor. It is irrational in our country, the
Russians believe in miracle. Any society in any country would have liked to
know what policy was expected to be pursuing by a new president. It came to
nobody`s mind in our country.

Political technologies played a certain part too but not in the presidential
racing when a key purpose was to keep the rating as it was but not to
increase it. However last fall it was political technologies which removed
Putin`s competitors and spread certain emotional sentiments in the society.

Gleb Pavlovsky, Tatyana Koshkaryova, Rustam Narzikulov, «political killers»
(such as Mikhail Leontyev and Sergei Dorenko) and, at last, Dzhakhan Pollyeva
and Igor Shabdurasulov as well as other participants of the Tatyana
Dyachenko`s «tea office» contributed a lot in Putin`s image.

It`s essential their influence appears to have retained and discredited
Putin. They can not understand the election campaign has been over and
proceed with urging him to visit milkmaids and submariners and to make bright
allegations and do striking deeds. As a matter of fact it`s just the thing
they know how to do. But the image of an active resolved president has been
created and it`s time to tackle social and economic problems and everyday
state affairs.

No concept at all

Alexei CHESNAKOV, Director of Political Situation Fund: Sound realisation of
circumstances and coincidence of several initial conditions have brought
Putin to power.

He had very important resources on hand: the administrative instrument which
he could use at no allowance and his image moulded from his personal strains:
a strong person plus «people like us». The lack of intelligible ideology
contributed to his reputation. Any ideological program cuts down the
electorate. But it was very important for Putin to claim he is president of
the majority.

Sound political technologies were used. It was essential they managed not to
«overfeed» the audience with Putin. However one should not overestimate the
part of political technologists. Their allegedly outstanding contribution is
a myth in a way.

Gleb Pavlovsky is one of the authors of this myth. His part is great and
interesting. But his methods make us remember baron Munhauzen. It happens to
Pavlovsky all the time that he finds himself «involved» in any important
political event. In what way? When he forecasts there will be no clouds in
the sky several sceptics do not believe in. But people always happen to
appear who will look out through the window and say: why, the weather is fine.




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