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Johnson's Russia List


May 26, 2000    
This Date's Issues: 4324  4325  4326

Johnson's Russia List
26 May 2000

[Note from David Johnson:
1. Reuters: No arms breakthrough seen at Clinton-Putin summit.
3. Elena Bonner's Remarks at Andrei Sakharov Birthday Concert.
4. Moscow Times: Igor Semenenko, Illarionov: Loans No Longer Needed.
5. Reuters: FACTBOX-Russian government's planned tax reforms.
6. Itar-Tass: Russia Gvt Plans Social Tax of 7,6 Pct, Trade Unions Protest.
7. The Independent (UK): Patrick Cockburn, BLACK GOLD, BLACK DEATH: 
8. The Economist: In with the new, and not so new. So far, Vladimir 
Putin, Russia’s new president, seems a lot keener to take on weak opponents than to confront the strong.
9. Russian Car Business Baffles The Times [UK].
(re Berezovsky)
10. RFE/RL: Jeremy Bransten, Czech Journalist Takes Critical View Of Situation-Interview Part 1. (Petra Prochazkova) 
11. Mark Ames: Re: 4321-No Sex.]


No arms breakthrough seen at Clinton-Putin summit
By Deborah Charles

WASHINGTON, May 25 (Reuters) - The United States does not expect a major 
breakthrough at next week's summit with Russia on their dispute over U.S. 
plans for a missile defence system, a U.S. official said on Thursday. 

President Bill Clinton leaves on Monday on a week-long European tour -- 
likely the last of his presidency -- and will stop in Moscow for his first 
summit with Russia's new President Vladimir Putin. 

Clinton's national security adviser Sandy Berger said the meeting was meant 
to open a dialogue between Putin and Clinton on a series of important issues 
including disarmament and the U.S. plan for a missile defence system. 

``This is the first time the president will have had an opportunity to 
discuss it with President Putin,'' Berger said on Thursday in a briefing to 
discuss Clinton's May 29-June 5 trip to Portugal, Germany, Russia and 

``But I don't expect these issues will be resolved at this summit. I expect 
that there will be a good opportunity for us to explain our view of the 
problem and for President Putin to express his view of the problem,'' he 

Disagreement between the United States and Russia over the 1972 
Anti-Ballistic Missile (ABM) accord has complicated talks on cuts in nuclear 
arsenals under the START -- Strategic Arms Reduction Talks -- process. 

The United States wants to change the ABM treaty in order to deploy an 
anti-missile defence shield to defend itself from the threat of possible 
nuclear weapons from ``rogue states'' like Iran and North Korea. 

The ABM treaty, signed by former U.S. President Richard Nixon, opened the way 
for the United States and the Soviet Union to cut their nuclear arsenals by 
making sure neither deployed a defence shield that would render the other 
side's stockpile ineffective. 

Berger said Clinton will explain why the United States wants the system, 
which awaits a crucial June test on its feasibility. Based on that test and 
other factors Clinton has said he will decide later this year whether or not 
to deploy the system. 

``He will describe for President Putin what we see as a new threat,'' Berger 
said. ``I think almost everyone agrees there is over some time ... the danger 
of long-range ballistic missiles from third countries that could reach the 
United States.'' 

In addition to talks on arms control, Clinton will also urge Putin to press 
ahead with economic and political reforms in Russia and to respect democratic 
freedom. He will also raise U.S. concerns about Russia's military conflict 
against Chechnyan rebels. 

Clinton will give an interview to an independent Russian radio station in an 
effort to speak to the Russian people and express his support for the 
independent media, Berger said. 

He will also become the first U.S. president to address Russian 
parliamentarians in a speech to the Russian Duma, Berger said. 

Before heading to Russia, Clinton will travel to Portugal where he will 
participate in his 14th U.S.-European Union summit. 

Topics at the EU summit will include security issues, cooperation on 
infectious diseases, Kosovo reconstruction and a review of a range of trade 
disputes over bananas, beef hormones and an EU aircraft noise law. 

The leaders are expected to issue a statement on the Balkans and one on 
Africa and efforts to combat infectious diseases like AIDS and malaria there. 

After Portugal Clinton will travel to Berlin where he will meet German 
Chancellor Gerhard Schroeder and President Johannes Rau for bilateral talks. 

Berger said Clinton and Schroeder would likely discuss the Balkans and Russia 
ahead of Clinton's visit to Moscow. 

Clinton will receive the Charlemagne Prize in Aachen, Germany on June 2. The 
prize, which has been awarded to an American only twice before, honours 
leaders who have made major contributions to European unity and world peace. 

In Berlin Clinton will take part in a ``Third Way'' conference on centrist 
policies which will be hosted by Schroeder and will include 15 other heads of 
state from four continents. 

Participants include President Thabo Mbeki of South Africa, Israel's Prime 
Minister Ehud Barak, Argentine President Fernando de la Rua and New Zealand 
Prime Minister Helen Clark. 

Clinton will make a brief stop in Kiev after Moscow. He will discuss 
Ukraine's economy and security cooperation. Berger said Clinton will also 
discuss progress toward ultimately shutting down the nuclear reactor in 

Carnegie Endowment for International Peace
Washington DC
Russian and Eurasian Program
May 24, 2000

As the Clinton administration prepares for its June 4th - 5th meeting with
Russian President Vladimir Putin, Carnegie Senior Associates Michael
McFaul, Joseph Cirincione, Martha Olcott, and Anatol Lieven shared their
expectations for this summit. They anticipate that Clinton and Putin will
discuss -- among other issues -- arms reduction, economic reform, oil in
the Caspian region, international crime, and Chechnya.

Michael McFaul

McFaul pointed out that the Clinton administration has been clearer about
what the summit will not address than about what it will accomplish.
First, there will be no "grand bargain" on arms reduction in which, for
example, the US would agree to START III in exchange for Russian support
for the deployment of a national missile defense (NMD) system. Second, the
summit will not focus on a major Western aid package to Russia. Discussion
of the West's role in Russia's economic reform will relate mostly to
restructuring Soviet-era debts. 

For McFaul, less emphasis on arms reduction and Western aid signifies
progress in US-Russian relations. A myopic focus on arms control has
limited the Clinton administration's willingness to address the United
States' broader national security concerns, said McFaul, while the IMF's
"tranches for promises" strategy has produced few concrete results in
Without a clear arms reduction or aid agenda, McFaul argued that it is
difficult to understand what Clinton hopes to gain from the summit.
Officially, the Clinton administration claims that this is a "get-to-know
Putin" meeting. But, McFaul questioned, why does Clinton need to foster
better personal relations with Putin when Clinton's term ends in eight
months? Furthermore, the two presidents are scheduled to meet three more
times before the end of the year. It is unclear why Clinton cannot wait
until later in June to meet with Putin at the G-7 Summit in Okinawa. 

As for Putin, McFaul said that the Russian president clearly benefits from
the summit. Putin has employed an aggressive foreign policy strategy in
the last two months. He has met with the prime ministers of Britain and
Japan, twice in the case of the former. He plans to meet with all
significant heads of state except the German chancellor prior to Okinawa.
He has pushed START II and the Conventional Test Ban Treaty through the
State Duma. And now he has Clinton coming to visit him in Moscow. "They
[the Russians] don't want anything concrete out of this other than the
photo-op with the president of the United States saying 'We see you as the
legitimate leader of Russia,'" explained McFaul. 

McFaul concluded by proposing that the summit should focus on a
philosophical discussion about what it means to draw Russia into the
Western world. Russia's biggest concern, argued McFaul, should be
democracy, rather than market economic reform or arms control, for
democracy in Russia is now at risk. The summit should analyze what it
means to be an "European power," a term Putin recently used to describe the
future he wants to create in Russia. For seven years, Clinton has made
Russian integration into the West a central theme of his foreign policy
agenda. He should stick to this message now.

McFaul warned that there currently is a limited and very significant window
of opportunity in Russia. As in the first months of 1992, each minor
policy decision will have a lasting impact on Russia's future. The United
States must be careful not to squander its chance to encourage Putin to
further Russian democracy.

Joseph Cirincione

Cirincione focused on arms reductions. Originally, he explained, the
Clinton administration billed the meeting as an arms control summit.
Clinton was confident that the Russians could be persuaded to lessen their
opposition to NMD. This idea has faltered for several reasons. First, the
Clinton administration has presented Russia with a vague proposal. Rather
than a limited NMD system, the Russians view the United States' proposition
as a "never-ending system" that allows the United States to continually
renegotiate additional deployments of missile defenses. Second, the
Russians perceive that Clinton does not have the support of the Senate. "He
doesn't own the bridge he's trying to sell," said Cirincione. Finally, the
Russians have realized that a parade of former high-level foreign policy
officials and scientists have recently voiced their support for delaying
the deployment of an anti-missile system. The Russians, therefore, have
little reason to negotiate a system that may never be deployed.

Cirincione additionally elaborated on why the Russians want arms
reductions. By 2010, most of their current ICBMs will be out of service.
In 2010 Cirincione projected that the Russians will have only around 700
warheads on two or three types of missiles. They currently have an
estimated 6,000 missile warheads. 

The collapse of his Russian strategy has placed Clinton in a quandary.
Throughout his time in office, Clinton has not signed a single new arms
reduction treaty. He has essentially been implementing the treaties
negotiated by former presidents Reagan and Bush. Now George W. Bush, Jr.
has made Clinton seem even less committed to arms reduction by pledging to
unilaterally reduce the US nuclear arsenal. 

Still, Cirincione remarked that the Clinton administration has had some
successes with regard to preventing the proliferation of weapons of mass
destruction. Some of these successes -- such as initiatives to prevent
Russia's nuclear scientists from working for potential new proliferators,
agreements to dispose of excess plutonium, and limitations on the civil
reprocessing of plutonium -- will likely be part of Putin's and Clinton's
discussion in June.

Martha Olcott

Olcott analyzed potential US-Russian conflicts in Central Asia. She noted
that US Secretary of State Madeline Albright's recent tour of this region
had heightened Russian concerns about US motives. However, the most
notable aspect of Albright's trip, explained Olcott, was its lack of
substance. Albright mentioned oil, for instance, just once during the
entire trip. Most of her speeches focused on state and democracy building. 

Meanwhile, Russia's relations with its neighbor states are improving, said
Olcott. Putin has just returned from meetings with the presidents of
Turkmenistan and Uzbekistan. The Uzbeks and Russians agreed to cooperate
on shared security concerns, such as drugs and terrorism. Putin's visit to
Turkmenistan was less successful, however; he failed to secure a 30-year
contract on natural gas that would have limited Western access to
Turkmenistan's natural resources.

The biggest potential cause of US-Russian conflict in Olcott's view stems
from Russia's renewed desire to demarcate its ownership over the Caspian
Sea. This will make the development of trans-Caspian pipelines to the West
risky. Russia is additionally hindering Western investment in oil and gas
pipelines by arguing that all participating countries must agree to a
common ecological standard before proceeding with economic development. 

In contrast to oil issues, Olcott argued that Russia, its neighbors, and
the United States have many common goals related to curtailing drugs and
terrorism. Russia's neighbors are beginning to recognize that their
relationship with Russia need not necessarily be viewed as the domination
of weak states by a great power, but rather as states of varying strength
working together to achieve shared goals. New initiatives for joint
military action in the region are forming, such as Southern Shield 2000.

Olcott concluded that the summit will likely make clear to Clinton that
Putin's Russia cares much more about the Caspian region than does the
United States. The United States will have to adjust its aims in this
region accordingly.

Anatol Lieven

Lieven commented on the general attitude of Russians toward Clinton's
visit. Most ordinary Russians today, he said, exhibit a combination of
indifference and deference in their attitude to such summits. They think
that the Clinton-Putin meeting will only produce empty rhetoric, yet they
cannot help but be flattered that the president of the United States, the
sole superpower, pretends at least to treat their president as an equal. 

Compared to his colleagues, Lieven believed that the Russians may have
somewhat higher hopes concerning negotiations on the ABM and Start III at
the summit - though these hopes are probably too optimistic. He agreed
with McFaul and Cirincione that the Russians do not expect a grand bargain.
They do, however, hope to nudge the language of any joint declaration on
arms reduction in their favor. They know that Clinton is in his last year
in office and is concerned both with his historical legacy in arms control
and with supporting Al Gore in the elections. They believe that this gives
them the chance to extract some concessions. Lieven explained that many
Russians still do not fully grasp the limits the US Congress places on the

With regard to their economy, Lieven agreed with McFaul that the Russians
will focus foremost on their Paris Club debts. He added that China's
accession to the WTO will provide a context for joint language at the
summit about Russia's integration into the world economy and the need to
encourage Western investment.

Concerning Chechnya, the Russians expect some criticism from the Americans
about the conduct of the war there, but they know they the United States
has few concrete suggestions about how to resolve the conflict. Moreover,
they are confident that President Clinton will combine these criticisms
with expressions of sympathy for Russia's problems with terrorism.
Nonetheless, Lieven believed, the Chechen War will make it even more
difficult for Russia and the United States to reduce their rivalry in the
Caucasus and Central Asia and work together on shared security concerns.
One potential source of increased US-Russian tension may involve Russian
claims that Georgia is sheltering Chechen fighters. Russia will want the
United States to recognize this problem; the United States will want Russia
to respect Georgia's sovereignty and avoid carrying out military operations
on its soil. 

Lieven concluded with a response to McFaul's calls for President Clinton to
lecture Putin at the summit about Russia's integration into the West.
Lieven believes such strictures have limited relevance to the harsh
realities of politics in Russia today. Lieven remarked that a more
legitimate subject of American pressure should be Putin's abolition of the
State Committee for Environmental Protection. Not only does this help
undermine civil society in Russia, but more importantly, environmental
disasters in Russia threaten other countries including the USA. 

Summary by Jordan Gans-Morse, Junior Fellow with the Russian and Eurasian
1779 Massachusetts Avenue, NW
Washington, DC 20036
Phone 202-483-7600
Fax 202-483-1840


Date: Wed, 24 May 2000 
From: John Squier <Johns@NED.ORG> 
Subject: Elena Bonner's Remarks at Andrei Sakharov Birthday Concert

David--This came my way from the Sakharov Foundation in Moscow. It may be
of interest to JRL readers. Remarks in [brackets] are explanatory footnotes
inserted by the translator at the Sakharov Foundation.
John Squier

Translation of Elena Bonner's statement at the 
Anniversary Concert in Honor of Andrei Sakharov

It's not the first time that people who cherish the memory of Andrei
Dmitrievich come together on this day in this hall. It has become a
tradition. On the surface, it is a good tradition. But what about its
essence? Isn't this gathering becoming somewhat a formality, somewhat cold
on the inside, without joy? 

Illness is always considered a reasonable excuse to be absent. But my
absence is not only connected to my illness. It is connected to a persistent
doubt regarding the need for this gathering. A doubt about the relevance of
this evening to what is happening in our country just outside this hall. My
absence has more to do with the fact that I have nothing joyous to say,
while the bitter things have all been said. To repeat what others and myself
have already said is embarrassing. 

There was a time when we had a precise position. Despite our different
worldviews among our small circle of dissidents and human rights activists,
we did not support the government ideology and mythology. We did not accept
the government lies. We were completely free people in a completely
freedomless State. It seems, and this is a paradox, that when the Government
clothed itself with the outside attributes of democracy - elections, diverse
press, TV and radio, when the word "abroad" lost its forbidden charm, we -
to lesser and greater degrees - lost our moral imperative. We became
disoriented. We lost our ability to distinguish between them and us. Those
who supported the "Union of Right Forces" by extension supported prosecuting
the war to a victorious end (whatever that means). Others supported Putin in
pursuit of "order" (what kind is also not clear). Still others supported the
search for the " Motherland's Greatness" (what kind is not clear but the
words have a nice ring).

Once a very close friend said " I don't care what they say, Sevastopol is
still ours". And the same thing is said about Chechnya. It made me want to
howl like a lonely, hungry wolf in the winter forest. We - Memorial,
Helsinki Group, Amnesty International, Common Cause and many others try to
scream at the top of our lungs to those who cannot properly be called
members of a society, even less a civil society. And are not the following
words from 1937 really about us today?

"We live like we are not feeling the country around us, 
Our words cannot be heard 10 steps away"
[From the poetry of Osip Mandelshtam]

Well the people's electorate has chosen war along with Putin, or Putin along
with war (I don't know what comes first and what second). Together with
Putin the people forgot the old lesson, as old as the Ten Commandments, a
lesson forged in our own and others' experiences: the lesson that the
wellbeing and advancement of a country and of an individual cannot possibly
spring from war. And these voters believed (as many of us did) the myth that

in voting for a new president we voted for a strong power. Young, healthy,
an expert in karate and jujitsu - " a sailor and a carpenter" [A reference
to to Peter the Great in a poem by Alexander Pushkin ] - I mean, a pilot,
and what else? And we (if not all of us, then many of us) together with the
people's electorate are ready to overlook that the President, by starting
the war, became a hostage of the generals. And it is not he - the Supreme
Commander - who decides whether there will be peace in Russia; it is the
generals. And they march across Red Square in one column, the World War II
Veterans and the soldiers of this dirty war. Neither group of soldiers is
guilty, but they are implicated (to use the professional lexicon of the
President). Is the President also hostage to the Family? That has yet to be
revealed, but note, the President has nominated, and the Duma confirmed,
Kasyanov and Ustinov. The President is also a hostage of the FSB. The
center of Moscow is now decorated with hundreds of men armed with machine
guns, their faces as well as their consciences hidden in black masks.
Another government comes to mind that was famous for its black shirts. Now,
a different style of dress is in fashion. 

I read this letter to myself and was horrified. It should not be this way.
This is a holiday. This is a birthday. 
But I cannot write it any other way. 
Forgive me.

Elena Bonner
21 May, 2000


Moscow Times
May 26, 2000 
Illarionov: Loans No Longer Needed 
By Igor Semenenko
Staff Writer

President Vladimir Putin's chief economic adviser is giving his nation's 
economy a hard sell in Washington this week, telling U.S. officials that the 
economy could grow as much as 5 percent this year. 

The nation has already this year attracted about $9 billion dollars, Andrei 
Illarionov said in remarks reported by Prime-Tass. 

Illarionov, who is discussing the economic agenda before U.S. President Bill 
Clinton's visit to Moscow scheduled for June 3 - 5, said Russia intends to 
stop begging its partners and the International Monetary Fund for loans, 
which were not critical for the economy. 

"This implies a switch to partnership as opposed to a unilateral approach 
when Russia's economic problems are discussed," he said. 

U.S. officials have endorsed changing the pattern under which Russia's 
economic issues are usually discussed at summits, he added. 

However, despite a steady flow from government sources of news promoting 
Russia as a desirable destination for Western investors' cash, the local 
stock market has dropped about 30 percent in the last month. The fall is a 
sign that global developments are influencing investors rather than any real 
change in sentiment toward the local economy. 

The RTS Index was up 6.3 percent Thursday to 177.59 on the heels of a 
recovery in the U.S. high-tech Nasdaq index, which gained 3.35 percent to 
3,270.61 Wednesday. The dollar-denominated Moscow Times Index of 50 leading 
shares rose 7.67 percent to 137.42 on turnover of $21.59 million. 

In Mo scow, the Central Bank reported international reserves had grown by 3.4 
percent to $18.3 billion in the week through May 18, and the government moved 
Thursday to map out proposals to lower tax burden on private businesses. 

The tax reform will leave businesses with 200 billion rubles ($6.7 billion) 
of funds that could be used for investment purposes, said German Gref, the 
new economic strategy and trade minister. 

Should these plans materialize, the country could get surge in private 
investments inflows, he said. 

The Overseas Private Investment Corp., which oversees activities of U.S. 
companies abroad, said it had 125 projects worth $38.7 billion on its Russian 

OPIC president George Munoz said the agriculture and high-tech sectors, and 
oil and gas industries were deemed to be most attractive for private 
investors in Russia. 

But while the population, the vast majority of local politicians and the West 
cherish hopes that an economic miracle could be just around the corner, there 
remains some uncertainty as to what exactly the government is going to do. 

"The biggest mistake for us [the government] would be to think that we know 
for certain what path should be chosen," Prime Minister Mikhail Kasyanov told 
the State Duma last week. 

Putin has proclaimed his determination to turn the ailing economy around but 
has been circumspect on how he intends to achieve it. 

"Only on the condition that there has been economic growth in the country can 
one consider oneself a successful leader," he said Thursday at a news 
conference in Belgorod, in southern Russia. "One must do what is useful for 
the country and the people, and one may even lose one's political resources 
in the process." 

And the population appears ready to follow him with 56 percent endorsing his 
attempt to crack down on the nation's economic ills, only 19 percent opposing 
his efforts and 25 percent undecided, according to a poll conducted by the 
Public Opinion Foundation. 

While Gref's proposals are close to suggestions floated by Illarionov, it is 
unlikely that the new administration will accept any of them as gospel. 

"Most likely, the government will take an ad hoc approach and choose 
proposals from several different economic programs," said Anvar Amirov, an 
expert with the think tank Panorama. 


FACTBOX-Russian government's planned tax reforms

MOSCOW, May 25 (Reuters) - The Russian government discussed plans on Thursday 
for overhauling the country's tax system to reduce the overall burden, 
provide an extra stimulus for investment and improve low collection rates. 

The changes, touted by Prime Minister Mikhail Kasyanov as a key to sustained 
growth, will soon be considered by the State Duma, the lower house of 
parliament, which is likely to delay the start of its summer recess from June 
16 until July 7. 

The government expects the bills to be debated by the Duma as early as 
Thursday. The measures need to be approved by the summer break if the changes 
are to be included in next year's budget. 

Following are the main points of the proposed changes: 


- cut the overall taxation burden to 35-36 percent of gross domestic product 
from the current nominal 41 percent 

- reduce the total number of taxes by abolishing some small and inefficient 
taxes, while a variety of regional taxes should be replaced by five unified 
regional taxes 

- abolish turnover taxes inherited from the socialist-style economy 

- introduce a flat 13 percent income tax rate instead of the current scale 
rising to 30 percent 

- unify social payments to a single social tax, tentatively set at 7.6 

- cut tax breaks expected to cost the federal budget about 220 billion 
roubles ($7.8 billion) this year 

- expand the range of tax-deductible expenses by including medical and 
educational expenses 

- increase deductions allowed for amortisation costs 

- replace existing fixed oil excise duties imposed on oil producers with a 
flexible tax, which should be adjusted according to production levels 

- introduce a special tax regime within the framework of production sharing 

- introduce special taxes for oil producers developing low-output wells 


- raise profit tax to 35 percent from 30 percent, allocating the difference 
to local budgets 

- keep the current 20 percent basic VAT rate as it delivers about 40 percent 
of budget revenues, but cut exemptions 

- increase revenues from taxes levied for use of natural resources and from 
property taxes 

- increase excise duties on gasoline by about 500 percent, which could raise 
retail gasoline prices by 25-30 percent 

- increase excise duties on tobacco by at least 100 percent 

- change automobile tax from a flat rate for all vehicles to one based on the 
value of the car 

- introduce tax to support the environment 

($= 28.28 roubles) 


Russia Gvt Plans Social Tax of 7,6 Pct, Trade Unions Protest.

MOSCOW, May 25 (Itar-Tass) - The Russian government has suggested to put a 
single social tax on the list of federal taxes, which will substitute for 
contributions to the Social Insurance Fund and the Medical Insurance Fund, 
the government information department said in a document which was circulated 
among journalists during a session of the Russian government on Thursday. 

The social tax proposed is equivalent to 7.6 percent of an individual's 
income, including four percent charged in contributions to the Social 
Insurance Fund, 0.5 percent - to the Federal Medical Insurance Fund and 3.1 
percent - to territorial medical insurance funds. 

The government proposal has triggered protests from Russian trade unions 
which intend to stage pickets all over the country on May 31 when Duma 
deputies meet in plenary session, in order to prevent the new social tax from 
being put into effect, Chairman of the Federation of Independent Trade Unions 
Mikhail Shmakov said during an intercom conference on Thursday. 

According to Shmakov, the main threat implied is that "apart from income tax, 
each worker will have to pay a social tax estimated at 30-35 percent. Thus, 
the overall tax workers will be charged exceeds 50 percent of their earnings. 
Income tax for workers will rise from 12 to 13 percent, while for rich people 
it will drop from 35 to 13 percent," Shmakov said. 

"The state is attempting to pursue the policy of the rich being still richer, 
and the poor being worse off," Shmakov declared. 


The Independent (UK)
25 May 2000
[for personal use only]

I was offered my first tin of bootleg caviar just half an hour after my
plane landed at Astrakhan, the Russian city in the Volga delta, 60 miles
from the Caspian Sea. The glittering black eggs were packed into a
copper-coloured container the size of a soup dish with a tight-fitting lid.
It sounded like a good deal. Alexei, the vendor, was asking just 850
roubles (pounds 20) for a kilo - compared to the pounds 495 that Fortnum &
Mason would charge you for a 200g tin of Imperial Beluga. 

Everybody talks about caviar in Astrakhan - once the capital of the Tatar
nomads, until it was captured by Ivan the Terrible - but you seldom see it.
Like liquor in an American city during Prohibition it is usually kept
"under the table". But it is there, all right. 

When I asked my new friend Alexei, a genial middle-aged man on the
periphery of the caviar-smuggling business, if I could meet his supplier,
he shook his head. "Certainly not," he snapped, suddenly cautious. "He's a
retired police officer on a pension, but he still has friends in the
security services. He'd have a heart attack if I introduced you." 

He's not the only one. Indeed alarm bells are even now going off around the
world, as connoisseurs are forced to face up to the prospect of a very
top-of-the-market famine - a caviar crisis, if you like. The reason for the
crisis is the price of Russia's most famous delicacy on the streets of
towns like Astrakhan. And the stark reason why it is so cheap in these
places is because mature sturgeon - the extraordinary, other-worldly fish
with its distinctive pointed snout, which produces the caviar eggs - are
now being poached to the edge of extinction as part of a deadly Dollars
200m racket involving the security services and the infamous Russian mafia. 

The sturgeon has been one of the more surprising casualties of the break-
up of the Soviet Union in 1991. The fish lives in the Volga River and the
Caspian Sea, from which 90 per cent of the world's black caviar has for
centuries be obtained. In Soviet times fishing was strictly controlled on
the Volga and prohibited altogether in the Caspian. But with the collapse
of communism old regulations were abandoned. Three new independent states -
Kazakhstan, Turkmenistan and Azerbaijan - were created on the shores of the
sea. In other districts, such as Dagestan, which remained part of Russia,
the local political and criminal elites combined and control from Moscow
became limited, to say the least. 

Poaching sturgeon and selling the caviar was an obvious way to make money.
All the Caspian coast republics are poor even by Russian standards. Indeed,
when I told a waitress at my hotel in Astrakhan that I had been asked
pounds 20 for a kilo of caviar she was impressed, not by its cheapness, but
by the expense. "What a nightmare!" she hooted. "I don't earn that amount
of money in a month." So it's not surprising, perhaps, that within a year
of the ending of the Soviet state monopoly over the business, small boats
were setting off from the ports along the coast and in the Volga delta to
fish for sturgeon. 

The small boats are still there. But, from the start, more menacing players
were involved, particularly in the lucrative export business. These shadowy
figures make up what the Russians know as "the caviar mafia", and it is
their activities which have driven the sturgeon to the brink of extinction.
Serious money is at stake, of course. The local press estimates the caviar
mafia's yearly profits above Dollars 170m. They operate mainly in the
Caspian from well-equipped boats using large nets, particularly in the
shallow waters along its western shore, traditionally a rich feeding ground
for the fish. 

Local police have learned the hard way that it is not wise to interfere
with the mafia's activities. Lt Col Alexander Ikalov, who works for the
Astrakhan Interior Ministry's department for the combat of poaching, often
takes out his motorboat in pursuit of poachers. It's a dangerous job; that
much is clear. "Almost every boat has somebody on board with a gun or a
pistol," he told me. Then there is the story of the Russian border guards
who, a few years ago, had become over-enthusiastic in the eyes of the
poachers in stopping boats fishing illegally. The poachers response was to
blow up a house where the border guards lived with their families in the
delta town of Kaspiisk. After that, the surprise raids largely ceased. 

Galina Bogachova, the crime reporter on Volga, Astrakhan's daily newspaper,
believes the caviar mafia are now impossible to stop. "They have faster
motorboats than the border guards," she explains, "and they carry
Kalashnikovs. Arms are easy enough to buy because we are so close to the
north Caucasus [where intermittent war has been raging in Chechnya since
1994]." Even when the police do catch poachers red-handed beside one of the
thousand streams through which the Volga reaches the sea it does them
little good; after all, the fishermen who actually catch the sturgeon never
know anybody important in the mafia hierarchy. 

The exact role of the numerous Russian security forces in charge of
protecting the sturgeon is also suspect. On our way back to Astrakhan from
a trip upriver, we were stopped at a checkpoint where the policeman made a
routine search of our car to make sure we were not carrying illegally
caught caviar. But in Astrakhan itself the security forces are universally
believed to profit from smuggling the valuable commodity. A story is told
of how, a couple of years ago, border guards stopped a boat called The
Camelia for poaching. They discovered that armed members of another
"fishery protection unit" were on board, who in turn threatened to open
fire unless they were allowed to go on their way. 

Galina Bogachova believes that somewhere, possibly in Moscow, there is an
Al Capone figure who directs the caviar mafia. She admits she has no hard
evidence for this, but she points to the fact that in its upper reaches the
caviar business, particularly for export, is highly sophisticated. To move
large quantities of illegal caviar, which Russians call "black gold", out
of the country requires real documentation and official stamps. And these
can only be obtained through systematic corruption at every level of the

It's a situation which has led Dr Vladimir Ivanov, the director of
Astrakhan's Caspian Fisheries Research Institute and a man who has devoted
30 years of his life to following the fortunes of the sturgeon, to despair. 

"The poachers are taking eight to ten times more than the legal catch," he
complains. "There are fewer and fewer fish which escape their nets. I
expect real shortages to start next year." Dr Ivanov points out that the
way the poachers fish for sturgeon is very wasteful. He says that in the
Caspian, as opposed to the Volga, "For every sturgeon they catch with
caviar, they kill dozens without without caviar, which is all they are
interested in." 

The few fishermen who still fish legally for sturgeon along the banks of
the Volga agree that times are hard. To get a sense of how bad things are,
I drove to Ikryanoye, a fishing village just upriver from Astrakhan, whose
name seemed promising because it comes from the Russian word "ikra" meaning
caviar. Near the village, I met Yuri Grechko, a grizzled man with gold
teeth, who was overseeing a team of disconsolate fishermen working for a
state company. They had just returned in their boat from an abortive
fishing expedition on the Volga. 

Grechko explained that according to local legend, the village's name had
been changed to Ikryanoye in the early 18th century by Peter the Great
himself, after a local fishermen had given the tsar an enormous sturgeon -
the biggest can weigh a ton and live for 60 years - stuffed with caviar
eggs. He would not get such a present today. "We used to catch 30 tons of
sturgeon a year 15 years ago," Grechko told me. "Last year it was down to
two or three tons." 

In Astrakhan people told me that the caviar famine would begin soon, but on
the day I returned to Moscow I found that it was already upon us. Vladimir
Izmailov, the deputy chairman of the State Committee for Fisheries, had
just announced that Russia was likely to stop all exports of legally caught
caviar in 2000. "The amount of sturgeon caught in the lower Volga is very
small," he said. "Since the beginning of May the catches have been
insufficient even for supplying sturgeon to fish hatcheries to obtain spawn." 

Even bootleg caviar is, it seems, going the same way. In Leningradsky
market, just off the airport road in Moscow, there used to be a whole row
of tables where it was for sale. Now there are only two women selling
caviar - and they complain of lack of supplies, saying they are charging
double last year's price. 

One official, with criminal links, was quoted recently as saying, "Sturgeon
in the Volga will last another two years. Let us fish them in that period
and then you can write them down as an endangered species if you like." 

The sad truth is that the best we can hope for is that one day the mafia
will fish themselves out of business, and the Volga can be restocked. In
the meantime, it seems that Russians - and gourmands around the world -
will have to do without their favourite food. 


The Economist
May 27-June 2, 2000
[for personal use only]
In with the new, and not so new 
So far, Vladimir Putin, Russia’s new president, seems a lot keener to take on 
weak opponents than to confront the strong 

TOUGH talk comes cheap, and the Kremlin can afford plenty. Regional governors 
must obey federal law or risk dismissal. The company that owns NTV, Russia’s 
main independent television channel, also runs a sinister private spying 
operation. Western critics of the war in Chechnya are hypocritical meddlers. 
The Balts are nostalgic Nazis. And there will be air strikes on Afghanistan 
if it continues to back Islamic rebels—Chechens and Tajiks—in the old Soviet 

Some of these recent harsh words have been backed up by deeds. The police, 
for instance, have raided the headquarters of NTV’s owners. But other fierce 
declarations—for example, that governors’ powers will be cut—have so far been 
rhetorical. The threats against neighbouring countries may turn out to be 

But President Vladimir Putin is still shrinking from taking on opponents who 
can fight back, such as tycoons and generals. And his government now taking 
shape looks much more like a precarious balancing act than the well-honed 
tool of a decisive leader. 

Not all is bleak. Mr Putin has sacked a particularly useless energy minister, 
Viktor Kaluzhny; many western oilmen would have despaired had he stayed. The 
author of a sensible-sounding reform plan, German Gref, is to run a new, 
larger, economics ministry. Another market-minded economist, Alexei Kudrin, 
gets the finance ministry. The new prime minister, Mikhail Kasyanov, told 
parliament this week that the government wanted reform of the tax, banking 
and pension systems, a stronger, smaller, cleaner civil service and effective 

Will any of it happen? Mr Kasyanov is on past form a fixer rather than a 
reformer, and is still hazy about both timing and details. He claims not to 
have read Mr Gref’s plan, though he has taken up some of its general ideas as 
his own. Mr Kasyanov also says he is looking at a Communist-backed 
alternative, though maybe as a sop to the left. 

The government does seem likely to put tax-reform proposals to parliament 
this summer, and some tax reform seems likely, though there is a surprisingly 
strong lobby for the current, horrendous system, which nicely suits corrupt 
businesses and their tax-collector accomplices just as it penalises honest 
ones. But there is little sign of reform on the spending side; indeed, Mr 
Kasyanov seems to favour more subsidies for agriculture and more protection 
for monopolies. And there is so far not the slightest change of posture on 
Chechnya, where the war, supposedly won several months ago, bubbles bloodily 

Mr Putin has trimmed the new government, abolishing such oddities as the 
ministry responsible for the former Soviet republics, now a job for the 
foreign ministry. But the result is still a sprawling mess. Transport, for 
example, remains separate from railways. The rail system is headed by Nikolai 
Aksyonenko, who is closely identified with the pre-Putin era, through his 
friendship with Boris Berezovsky, a prominent tycoon whose influence on 
post-Communist politics in Russia has been so malign. 

People close to the Kremlin “family”, as pals of the former president, Boris 
Yeltsin, are known, still have important jobs: controlling the justice and 
interior ministries, for instance. And another even remains head of the new 
president’s office. Last week saw a striking example of Mr Putin’s 
limitations when he suddenly withdrew his nomination of Dmitry Kozak, an old 
friend from St Petersburg, for the important post of prosecutor-general. 
Russian newspapers speculate that the old guard feared Mr Kozak might have 
pursued corruption investigations against it too enthusiastically. 

The new line-up still fails to answer the big questions about President 
Putin. Will he take on the moguls of Russia’s perverted capitalism—or will he 
be their poodle? And if he were to get his way, would he run Russia any 


May 25, 2000
Russian Car Business Baffles The Times [UK}
On Wednesday The Times published an article suggesting that the tax police 
search of AvtoVAZ offices on Tuesday signaled “Mr Putin’s first direct 
challenge to Boris Berezovsky”. Gazeta.Ru contacted AvtoVAZ, whose spokesman 
dismissed the assertion as “complete nonsense.” 

Wednesday’s edition of the The Times featured an article on the search 
of AvtoVAZ offices by the tax police entitled “Tax Raid Seen As Challenge to 
Tycoon”. According to the Times’ Moscow correspondent Giles Whittell, the 
raid is no less than “Mr Putin’s direct challenge to Boris Berezovsky”. The 
paper says that Vladimir Putin is making attempts “to control the Russian 
business elite”, and the sacking of Fuel and Energy Minister Viktor 
Kaliuzhny, “considered to be Mr Berezovsky’s most valuable and pliant ally in 
the Kremlin”, is the first warning to Berezovsky. The police search is 
described as an open challenge since Boris Berezovsky “controls the financial 
arm of AvtoVAZ”. 

Gazeta.Ru asked AvtoVAZ to comment. The company’s spokesman Anatoly Zhulanov 
called the The Times article “absolute nonsense” and stressed “Berezovsky has 
been nowhere near VAZ for a long time and has nothing to do with its 
finances”. AvtoVAZ Director Vladimir Kadannikov has on several occasions 
repeated this fact. 

Berezovsky and Kadannikov had a bitter quarrel when money was being raised by 
Berezovsky’s now defunct AVVA Co financial pyramid to produce a “people’s 
car”. Mr Kadannikov did not wish his name to be linked with financial 
pyramids. But even then their co-operation was not entirely severed, and 
Berezovsky’s LogoVAZ dealers did much to help AvtoVAZ with their sales. 

The second conflict between Berezovsky and Kadannikov occurred when Mr 
Berezovsky was accumulating funds to buy a stake in the state controlled ORT 
television channel as a result of which LogoVAZ did not pay off debts to the 
Avto VAZ Lada plant in Togliatti. 

Mr Berezovsky’s final effort to make peace and join forces with Mr Kadannikov 
failed in 1997 when he tried to persuade the AvtoVAZ board to form a joint 
venture with the South Korean company Daewoo, but Avto VAZ opted to 
collaborate with Opel. 

A major share in AvtoVAZ is evidently still owned by structures under Mr 
Berezovsky’s control. But they were virtually denied any role in managing the 
plant and its finances after Nikolai Glushkov, Berezovsky’s closest supporter 
on the Avto VAZ board, left the company for Aeroflot at the beginning of last 
year. Later, Aleksandr Zibarev, a co-founder of LogoVAZ along with 
Berezovsky, had to leave the board. It appears that The Times simply confused 
AvtoVAZ with LogoVAZ. 

Anton Baranov


Chechnya: Czech Journalist Takes Critical View Of Situation-Interview Part 1
By Jeremy Bransten

Petra Prochazkova arrived in Moscow in 1992 on a three-month assignment for 
the respected Czech newspaper "Lidove Noviny." Eight years later, she remains 
based in the Russian capital and has become a veteran among foreign 
correspondents covering Russia.

In reporting from Russia, little has stood in Prochazkova's way. When former 
President Boris Yeltsin ordered tanks to fire into the Russian parliament 
building in 1993, Prochazkova was the only foreign reporter inside the 
building. She later won plaudits for her extensive coverage of wars 
throughout the former Soviet Union and especially for her work in Chechnya -- 
which remains unmatched for its depth. 

Prochazkova spoke with RFE/RL last week in a wide-ranging interview that 
touched on her reporting from Chechnya and her observations on how Russia is 
likely to develop under newly elected President Vladimir Putin. In the first 
of this two-part selection from the interview, we focus on her views of 

Prague, 25 May 2000 (RFE/RL) -- Prochazkova was asked to compare the current 
Chechen war with the previous conflict under President Yeltsin (1994-96). She 
was asked specifically to comment on the changes she has felt as a journalist 
covering the war-zone:

"The situation in the Caucasus and Chechnya -- and the change which occurred 
when Putin came to power -- precisely mirrors, although more dramatically -- 
how the political process is changing in the whole of Russia. The first war, 
which began in 1994, was of course just as horrible and caused an enormous 
loss of life but we, as journalists, could write about that war -- not just 
what we wanted but what we thought about it. We could work there freely. It 
was sometimes astonishing how the Russian leadership, which constantly made 
tragic mistakes, allowed us to write about them. At that time, Moscow was not 
waging an information war, and it left the initiative up to the Chechens."

Prochazkova noted that this time around in Chechnya, the situation is 

"This second war, in this sense, is diametrically different. If you were an 
employee of the president's office, you would applaud, because Moscow has 
succeeded in controlling the flow of information. It has succeeded in 
controlling all the information -- or practically all the information -- that 
reaches the world out of Chechnya."

Prochazkova was asked how she foresees Chechnya's future. Is an eventual 
agreement on autonomy a possibility for the republic?

"I think such a possibility exists, but most likely it won't happen in the 
near future. For the moment, the Russians can count on the total exhaustion 
of most Chechens. Basically, most people don't care who is going to rule them 
-- if it's going to be [Chechen President Aslan] Maskhadov, [Russian 
President Vladimir] Putin, Yeltsin or some China-man. They don't care. They 
want peace. They want the war to end and they are tired."

"The enthusiasm that was obvious during the first war is gone. The Chechens 
are angry at their own leaders and armed groups. They are angry at Maskhadov 
and -- most of all -- at [Chechen field commander Shamil] Basayev, [both of] 
whom they fault for being partly responsible for causing this war. I think 
that people are tired and desire only one thing -- and that is peace and 
quiet -- are relatively easy to manipulate if Moscow knows how to do it."

Prochazkova said that Moscow has begun to place ethnic Chechens who can be 
easily blackmailed or controlled in local administrative posts. She called 
that a return to a strategy often employed by the former Soviet Union in its 
erstwhile satellite states in Eastern Europe: 

"The first thing Moscow did -- and it did so very smartly and very well -- 
was to create local administrations in the areas seized by Russian forces, 
which are led by Chechens. I know many of the people in these new 
administrations and I know what kind of people they are. Most of them spent a 
large part of their lives in Moscow. They have very good contacts with Moscow 
politicians. Above all -- and here, I think the FSB (Federal Security 
Service) plays a big role -- they are people who have had or currently have 
problems with the law."

"The FSB has been using this old and proven principle that people who fear 
something -- who can be accused of something -- are forgiven for the moment, 
if they follow directions given to them. If this were true in only one case, 
I wouldn't talk about it. But I personally know of several such cases in 
Chechnya and I think that it's a way for Moscow to maintain Chechnya in what 
can be called a 'normalization process' -- through these people, who tend to 
be very rich and have influence because they are from prominent families and 
at the same time can be manipulated."

Prochazkova was then asked to evaluate the policies of Western leaders toward 
Russia, in light of events in Chechnya and the alleged mass violations of 
human rights committed by Russian forces in the breakaway republic:

"It always outrages me -- I am gradually becoming a critic of the West's 
approach to Russia -- it outrages me to see the West choose a politician and 
uncritically stop listening to anyone else. Often, this occurs because 
Western leaders don't know anyone else in that environment. But [for Western 
leaders] to come to Russia at a time when Putin was the strongest 
presidential candidate and his electoral campaign was based on a very strong 
militant war-footing in Chechnya was a mistake and is in a sense supporting 
something that can be called a crime."

She also faults Western governments for giving the Russian leadership mixed 
signals, which could be interpreted in Moscow as license to continue the 
military campaign in Chechnya.

"Suddenly, words did not match deeds. Everyone in the West was crying out 
that it was wrong to wage war against the Chechens and massacre civilians, 
but on the other hand they publicly supported him [Putin] as a presidential 
candidate. In other words, they were telling him: 'Don't worry, we'll look 
the other way, we just have to criticize you because that's what public 
opinion demands in our countries. But we want you to be president.' The 
West's first contact with Putin was based on this bad premise. He knows he 
can do what he wants as long as it doesn't pose a danger for the West and it 
only concerns human rights in Russia."

Prochazkova was asked about the political opposition within Russia and why it 
has been so passive in its response to the situation in Chechnya. She noted 
that most opposition leaders initially supported the intervention in 
Chechnya, hopeful that Putin would succeed where Yeltsin had failed. Because 
of this initial support, she said, many opposition figures now find 
themselves outmaneuvered and temporarily voiceless:

"I think the democratic opposition is in a state of collective depression. 
They have understood -- at least some of them -- that they made a mistake. 
Because of that, they are co-authors of this great national tragedy which is 
again occurring, they share responsibility for the mass violation of human 
rights which is sure to continue and they don't know what to do."

Prochazkova added that Russia's opposition leaders are constantly "fighting 
among themselves, which democrats do with relish. They have not found a 
common language or common approach toward Putin." As a result, Prochazkova 
said, they have ceased to take any fresh initiative on Chechnya, limiting 
themselves to issuing statements that have no effect. For her, "at this 
point, the [Russian] opposition is fractured -- and it's a very sad sight." 


From: "Mark Ames" <>
Subject: Re: 4321-No Sex
Date: Wed, 24 May 2000 

Casual sex is frowned upon in Russia? Tchya, right. And hedgehogs might fly
out of my butt! I'd blame Pyotr (we need morality in society) Aven for
funding the re-moralization of Russian society via this laughable poll, but
then I remembered that nearly every instance of unprotected casual sex I
engaged in here was prefaced with the dyev proclaiming, "I've never done
this before"--and believing herself. Go ask my body-lice-scars if Russians
don't have a healthy, admirably liberal attitude towards casual sex, they'll
tell ya! The funny thing is that most polls in America will reveal the
opposite lie padded in honest self-delusion: casual sex is cool and common
on every American street corner and in every tongue-pierced-happy nightclub.
Yep. And I'm a Chinese jet pilot.
Mark Ames
the eXile


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