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Johnson's Russia List


May 30, 2000    
This Date's Issues: 4334


Johnson's Russia List
30 May 2000

[Note from David Johnson:
1. Moscow Times: Le Monde Says Putin Linked To Crime.
2. The Globe and Mail (Canada): Geoffrey York, Piqued Putin cancels satirical TV show.
3. Washington Post: Vassily Aksyonov, Russia as the Bad Guy Again.
6. Reuters: Russian presidential aide says economy may slow.(Illarionov)
7. RFE/RL: Michael Lelyveld, Harvard Experts Assess Putin.
8. Boston Globe: David Filipov, Russia's hope for swift win dims with time. (Chechnya)
9. Reuters: OECD says Russia outperforming, reforms needed.
10. Financial Times (UK) editorial: Meeting Mr Putin.
11. The Independent on Sunday (UK): Patrick Cockburn on Vice President Gore and Russia.
13. Itar-Tass: Putin, Primakov Call for Consensus in Society. 
14. Komsomolskaya Pravda: Who Will Pay for the Reform?]


Moscow Times
May 30, 2000 
Le Monde Says Putin Linked To Crime 

The French daily Le Monde reported last week that President Vladimir Putin 
and Economic Strategy Minister German Gref were involvedwith a German real 
estate development company whose co-founder was arrested earlier this month 
on charges of money laundering and ties with organized crime. 

In an article published Thursday called "Mr. Putin's Name Appears in 
Liechtenstein Money-Laundering Case," the newspaper said that until March of 
this year Putin and Gref had a vague "adviser" status with the St. 
Petersburg-based Immobilien und Beteiligugngs AG, or SPAG - a German company 
that was founded in 1992 in collaboration with St. Petersburg's City Hall and 
had subsidiaries in the "northern capital." 

One of SPAG's founders and shareholders, Rudolf Ritter, was arrested May 13 
in Liechtenstein's capita,l Vaduz, on charges of money laundering and ties 
with organized crime. According to Le Monde, last year's report by the German 
secret service BND said that Russian criminal groups had transferred money to 
SPAG through a Romanian bank for purchase of real estate in Russia. 

A Russian translation of the article appeared Friday on the web site and was re-printed Saturday in Kommersant newspaper without any 
editorial comments. 

The French newspaper mentions one Vladimir Smirnov, who runs SPAG's St. 
Petersburg subsidiaries Znamenskaya and Inform-Future, and describes him as 
Putin's friend. 

In response to Le Monde's inquiry, the presidential administration denied 
that Putin had ever worked for SPAG. "The president has never worked there as 
a consultant," the newspaper quoted the presidential press service as saying. 
"He has never received any salary there." 

However, Markus Rese, the director of SPAG, was quoted by Le Monde as saying 
that both Putin and Gref had unpaid advisor status with the company until 
March. "It was ... some kind of a patronage," he said. 

"Nothing makes it possible today to assess Putin's exact role in the German 
company," Le Monde said. 

In 1994, when Putin was St. Petersburg's deputy mayor in charge of foreign 
investment, Znamenskaya was contracted to build a shopping complex in the 
city center, the newspaper said, and the company boasted that it was the only 
foreign company working in major real estate development projects in the 

The French daily also said that, through another business, Smirnov is 
connected with Vladimir Kumarin, described as the leader of St. Petersburg's 
powerful Tambov criminal gang. 

The presidential press servicesaid on Monday that it had no comment on the 
article in Le Monde. 


The Globe and Mail (Canada)
May 30, 2000
Piqued Putin cancels satirical TV show
Moscow Bureau

Moscow -- Just three weeks after becoming Russia's president, Vladimir Putin 
has taken his vengeance on one of his most annoying enemies: a giant rubber 

Bowing to Kremlin pressure, the NTV television channel has agreed to censor 
its broadcasts of a scathingly satirical puppet show that ridicules Russia's 
ruling elite.

The channel has announced that it will temporarily withdraw the Putin puppet 
from the weekly show.

The move is aimed at placating the powerful Kremlin officials who repeatedly 
complain of the show's irreverent portrait of Mr. Putin.

The satirical program, called Kukly, is the most popular television 
entertainment program in Russia today. It has built a huge audience by 
hilariously skewering the arrogance and errors of Kremlin insiders and 
leading politicians.

High-ranking officials have grumbled about the puppet show for years, but 
former president Boris Yeltsin, a frequent target of the show himself, always 
refused to allow it to be persecuted.

In 1995, Russia's prosecutor-general launched a criminal investigation 
against Kukly for "insulting" the president. But most politicians rallied to 
support the program, and the prosecutor was fired in disgrace.

Today, however, the political environment is radically different. Unlike his 
predecessor, Mr. Putin has never been a defender of the media. He has accused 
some journalists of being "traitors." Russian media outlets are under intense 
pressure to support the Kremlin. 
Several outlets, including NTV, have been caught in a crackdown.

NTV is the only independent television channel with a national audience. It 
is also the only channel that refuses to follow the Kremlin's official line 
on the war in Chechnya and other issues.

Its parent company, Media-MOST, was the target of a raid on May 11 by heavily 
armed police commandos wearing masks. The channel described the raid as an 
attempt to intimidate it into obedience.

The raid was apparently part of a larger campaign to crack down on disloyal 
media outlets.

One reporter at the muckraking, corruption-fighting newspaper Novaya Gazeta 
was savagely beaten with a hammer in a mysterious attack this month. The 
Russian Press Ministry issued stern warnings to two newspapers, including 
Novaya Gazeta, for publishing interviews with Chechnya's rebel president, an 
offence that could lead to the revoking of their publishing licences. The 
biggest state-controlled channel has portrayed NTV's owner, Vladimir 
Gusinsky, as an Israeli secret agent. And two prominent investigative 
journalists, Andrei Babitsky and Alexander Khinshtein, have been persecuted 
by the Russian police.

For months, Mr. Putin's aides and cabinet ministers have expressed their 
displeasure at Kukly's disrespectful portrait of their boss. In private 
conversations with NTV producers, Kremlin officials warned that Mr. Putin was 
irritated by the show and hinted strongly that the program should be more 

Earlier this year, a group of Mr. Putin's supporters called for criminal 
charges to be filed against Kukly for "insulting the President." Senior 
police officials warned that NTV could face "unpleasantness" if it refused to 
restrain the show.

Many politicians were infuriated by a pre-election satire in which Russia's 
politicians were portrayed as prostitutes in a brothel, with Mr. Putin 
choosing among them.

This week, the Kremlin's pressure campaign finally seemed to succeed.

"In order not to fan the flames, if someone high up is so worried about a 
rubber puppet of the President . . . we have decided to try an experiment: We 
will try one program without the Putin puppet," NTV anchorman Yevgeny 
Kiselyov announced Sunday night.

He said the Kremlin had made it clear that the removal of the Putin puppet 
was a necessary condition for a reconciliation between NTV and the Russian 

"The Kremlin doesn't want to destroy NTV, it only wants to make it submit to 
the Kremlin's official line," said Andrei Ryabov, a political analyst at the 
Moscow Carnegie Centre.

"They were very dissatisfied with Kukly's interpretation of Putin's political 
activities. This show is more damaging to Putin's reputation than any 
criticism from the Communists or other politicians."

The government's new Press Ministry is "trying to restrict and correct the 
media," Mr. Ryabov added. "It's a real threat to the free press in Russia."

While agreeing to remove the Putin puppet from the weekly program on Sunday 
night, NTV tried to defy the Kremlin by mocking the President without 
actually showing his image.

It portrayed him as an invisible God, striking terror with bolts of lightning 
and claps of thunder. His top aide, portrayed as Moses, refers to "the voice 
of the master whose name I may not mention." The regional governors, 
portrayed as Israelites wandering in the desert, prostrate themselves 
fearfully and promise to obey their master.

In an interview yesterday, a Kukly staff member said the show is planning to 
feature the Putin puppet next week in a sketch based on the scheduled summit 
meeting between Mr. Putin and U.S. President Bill Clinton. But other NTV 
spokesmen said they were uncertain whether the Putin puppet will return.


Washington Post
May 30, 2000
[for personal use only]
Russia as the Bad Guy Again
By Vassily P. Aksyonov
The writer is a novelist who left the Soviet Union in 1980 and now teaches 
Russian literature at George Mason University.

We need to find an answer to the increasingly anti-Western outlook in 
Russia--the new, democratic and supposedly Western-oriented Russia. It cannot 
be explained by the activities of extremist groups (left and right). It comes 
from more profound sources. 

After the overthrow of the Soviet regime in August 1991, many Russians, 
without knowing a thing about the West, rushed to it with open arms, in a 
state of euphoria and expectation. That seems a long time ago. Last summer I 
watched on a Moscow TV channel a program on space exploration, and the lunar 
expeditions in particular. It turned out, according to this program, that the 
Americans never even landed on the moon. All those frames of Armstrong and 
Aldrin hopscotching in their spacesuits over the lunar surface were simply a 
Hollywood production done with the sole purpose of humiliating Russia.

And so here we are, back to the old, stinking sort of disinformation 
concocted by Brezhnev's KGB. It's almost as if a new Iron Curtain were being 
constructed from the rusty detritus of the old one.

As I say, we need to find an answer, but right now I'd like to focus on 
another part of the picture: the curtain-builders on this side--the side I 
now inhabit. To be honest, the West is responding to the new Russian 
xenophobia in a way that disturbs me.

In the Western mass media, Russia is pictured today as a land of spiteful 
dolts--innate enemies of civilization and democracy. It seems never to occur 
to anyone in this hemisphere that Russia managed to get rid of 
totalitarianism by its own efforts, unlike some other countries, which had to 
be bombed to ashes before they became decent members of the liberal 

During my long residency in the United States I have been fortunate enough to 
know many intelligent and strong Americans who dedicated their careers and 
their lives to the struggle against aggressive Soviet totalitarianism. They 
always stressed, during the Cold War, that they did not consider themselves 
enemies of the Russian people--the narod--who were the principal victims of 
the Communist tyranny.

Yet today many of them sound like confirmed Russophobes. What has caused this 
change? The major factor, it seems clear to me, is the so-called "second 
Chechen war," still being waged in one form or another. I can't help being 
shocked at how biased and monochromatic the Western coverage of this drama 
has been.

Many of my friends here, especially those who remember Soviet times, have a 
feeling that behind Russia's Chechen campaign stands a sort of agitprop 
apparatus issuing guidelines for the supposedly independent organs of mass 
information. Thus one cannot trust anything coming from Russian sources. On 
the other hand, just about everything produced by Chechen sources is to be 
believed. Thus people in the West willingly accept any cheap lie, any foolish 
bravado, any dirty provocation produced by Chechen agents.

At the beginning of the current conflict, I happened to be invited to a 
Washington dinner party, at which I soon became aware that in virtually all 
discussions of the atrocious apartment bombings in Moscow, it was assumed 
that "Putin's people," rather than Chechen terrorists, were the perpetrators. 
When I finally remarked that it might just as credibly be said that American 
agents, rather than Osama bin Laden's thugs, had blown up our embassies in 
Kenya and Tanzania, my fellow guests exchanged glances and shrugged.

Even in the depths of the Cold War, the Soviet Union had many defenders in 
the West--people who saw it as the "cradle of socialism" or some such thing. 
Why is it that this particular war waged by a democratic Russia--a conflict 
that I would argue is the nation's first just war in modern times--meets such 
unanimous condemnation? Could it be a response to Russia's resistance to the 
Kosovo operation? Or is it just that Russia didn't live up to the West's 
expectations in Chechnya and lose?

They say in the United States that a Russian combat success in Chechnya would 
lead to military dictatorship and a new threat to the Atlantic alliance. Does 
it never occur to anyone that the breakup of Russia would create a horrifying 
meltdown of European stability?

And finally, why, amid all the talk of "genocide," have Western media not 
mentioned the atrocities against Russians living peacefully in Chechnya? Last 
summer I traveled over the North Caucasus and heard blood-curdling stories 
told by Russian refugees from Grozny. They had been visited in broad daylight 
by thugs, armed to the teeth, who made it clear they wanted the Russians' 
apartments. When the intruders encountered resistance, they used their 
knives; blood was streaming down the staircases, I was told, but the police 
seemed to be not at all interested.

There are several million Russians, Cossacks and other Slavs who have lived 
for ages in the North Caucasus. Moscow cannot leave them to the mercy of 
would-be "ethnic cleansers." In a way, the current action is a rescue 
operation, a thoroughly legitimate one that also must be used to save the 
majority of the Chechen people. They, too, are victims of the "separatist 
rebels," whose primary goal actually seems to be power and money-grabbing.

It is time to end the stereotyping and prejudice, before all hope is lost for 
an open dialogue between Russia and the West and another circle of mutual 
animosity begins its devastating motion.



Moscow, 29th May: The average life expectancy in Russia is now a little more 
than 67 years, according to information from the Russian State Statistics 
Committee obtained by Interfax. 

Statistics have it that the average life expectancy for men in Russia is 61 
years and 4 months and for women 72 years and 11 months. 

However, in 1987 the average life expectancy in Russia was 70 years and 1.5 
months (64 years and 11 months for men and 74 years and 7 months for women). 

Those were the best figures for Russia from 1961 until the present. The worst 
figures were registered in 1994, when men lived on average only 57 years and 
7 months and women 71 years and two months (the average life expectancy being 
less than 64 years). 

According to statistics, only 76.2 per cent of Russian men and 91.3 per cent 
of Russian women reach the age of 50, 68.9 per cent of Russian men and 88.3 
per cent of Russian women live to the age of 55 and 59.9 per cent of men and 
83.9 per cent of women reach the age of 60. 


Text of report by Russian Ekho Moskvy radio on 29th May 

[Presenter] A phased increase in the age of retirement could begin in Russia 
in a few years' time, or by 2003 to be precise. At the end of it, both men 
and women will retire at 65. This means that men will become pensioners five 
years later than at present and women will have to wait another 10 years. 

This is one of the central planks of a programme submitted to the government 
by the Centre for Strategic Developments, which is headed by German Gref. 
Analysts at the centre point to alarming figures from the State Statistics 
Committee - in 1998 there were 711 welfare dependants for every 1,000 
able-bodied people in Russia. 

The State Statistics Committee also reported today that the average life 
expectancy in this country is no more than 67. So if the retirement age 
reform goes ahead, men won't live to see their pensions at all because their 
average lifespan at present is 61 and a half. Women live longer, to nearly 73 
years of age. 

A former labour and welfare minister, Sergey Kalashnikov, believes that 
raising the age of retirement may not be very popular but is absolutely 

[Kalashnikov] The pensions we pay now are so miserly that they actually 
reduce life expectancy. So I think that it's inevitable that the age of 
retirement will be raised to bring it in line with the rest of Europe. I just 
hope that life expectancy will increase in the meantime. If we take loss of 
ability to work as a criterion for receiving a pension, then our people tend 
to retire earlier on health grounds. There is another side to the argument - 
mortality does not depend on whether you're working or retired. Yet that's 
the reason why the idea of raising the age of retirement has been rejected 
many times. 

[Presenter] Kalashnikov hopes that the reform will be preceded by a serious 


Russian presidential aide says economy may slow

MOSCOW, May 30 (Reuters) - Russian economic growth, boosted by high export 
revenues and the 1998 rouble devaluation, may slow down and even halt if 
budget spending is not cut, Russian presidential aide Andrei Illarionov said 
on Tuesday. 

Illarionov, Vladimir Putin's economic adviser and Russia's envoy to the Group 
of Seven industrialised countries, said industrial output growth slowed in 
April in month-on-month terms. 

He said gross domestic product grew by an impressive 7.8 percent in the first 
quarter of 2000 but was expected to lose some steam in the second quarter. 

``If these negative trends prevail, economic growth may considerably slow 
down in the nearest future, or even halt,'' Illarionov told a news 
conference. ``There is a threat of renewed economic decline.'' 

Illarionov still hoped GDP growth in 2000 would reach the forecast level of 
four to five percent after 3.2 percent in 1999. 

The government should reduce taxes and cut budget spending to 20 percent of 
GDP from the current 38 percent to provide for rapid economic growth, or at 
least to 30 percent to achieve sustainable growth, Illarionov said. 

These measures would leave more money in the private sector of the economy, 
which in turn should boost production, he said. 

Illarionov also said the government should finalise its long-awaited economic 
programme by the end of June. 

Russia should agree a new cooperation programme with the International 
Monetary Fund in early or mid-July, he added. 

The IMF put on hold a $4.5 billion loan programme to Russia last year, saying 
the government failed to implement agreed structural reforms. 


Russia: Harvard Experts Assess Putin
By Michael Lelyveld

The performance of Russia's new president, Vladimir Putin, has been given a 
mixed report card by Harvard University experts. Professors Richard Pipes and 
Marshall Goldman agree he has taken some promising steps, but they are 
sharply critical of his methods in enforcing the rule of law. NCA 
Correspondent Michael Lelyveld explains their views in this report. 

Boston, 26 May 2000 (RFE/RL) -- Russian President Vladimir Putin's first 
steps in office have received broadly similar ratings from leading analysts 
at Harvard University, but there were sharp differences among some experts 
over his efforts to increase authority and respect for the law.

Speaking at a Harvard seminar this week, U.S. and Russian experts gave their 
report cards on Putin as president and acting president over the past five 

Leonid Gozman, chief strategist for the Union of Right Forces during the 1999 
campaign for the State Duma, split his evaluation of Putin into what he 
called "good news" and "bad news." Gozman, who now serves as chief adviser to 
Anatoly Chubais, the chairman of Unified Electrical Systems, noted that Putin 
has named an impressive list of reformers to his economic team, calling the 
appointments "good news."

In particular, Gozman cited economist Aleksei Kudrin as deputy prime 
minister, German Gref as minister for economic development, and economic 
adviser Andrei Illarionov. Gozman praised proposals to lower Russia's income 
tax rate to 13 percent as a sign that Putin will push for sweeping change.

He also hailed Putin's plans to crack down on corruption, saying, "There is a 
very high level of anxiety among oligarchs. They are very nervous now." But 
Gozman added, "The bad news is they're not nervous enough."

Also on the negative side of Putin's report card, Gozman pointed to former 
KGB officials that Putin has brought into government. He was particularly 
critical of the raid on Media-MOST headquarters in Moscow earlier this month. 
Gozman had harsh words for the government's intimidation of journalists and 
limits on press freedom. "It's very bad news. It's very dangerous," he said.

Gozman sees the major factor of Putin's presidency as his enormous 
popularity, which has created what he called "fantastic opportunities."

Gozman said, "He can improve democracy, and he can destroy democracy. He can 
improve the market economy, and he can go back to the socialist economy."

Two of America's top experts on Russia agreed on the choices that are open to 
Putin, but they noted many troubling signs.

Marshall Goldman, associate director of Harvard's Davis Center for Russian 
Studies, said, "I'm still ending up with a bad report card here, and great 

While Goldman agreed that Putin had promoted some liberal economists, he 
voiced disappointment with the naming of Mikhail Kasyanov as prime minister 
because of his reported links to Russian banks and his dislike for reform 
economists like Gref.

Goldman said Putin has also showed signs of being too close Russia's 
oligarchs. Putin did nothing to stop the creation of an aluminum monopoly. He 
has also ruled out the renationalization of companies that do not pay tax 
arrears or debts, Goldman said.

But the biggest differences came over Putin's efforts to establish a rule of 
law. Gozman supported measures to rein in Russia's governors, for example, 
and to strip them of immunity by restructuring the Federation Council of 
parliament. Gozman said, "Everybody in Russia understands that it's necessary 
to rebuild the state."

The American experts were far more troubled by Putin's drive to centralize 

Richard Pipes, a Harvard history professor and author of many books on 
Russia, focused on the different concepts of law in Russia and the West. In 
the West, Pipes said, law is seen as above both governments and its citizens. 
But Pipes said that Putin appears to regard law only as "an instrument of 

Pipes said, "There is a great deal of evidence that neither Putin nor the 
people around him understand what law is." In Russia, the government enforces 
the law but it is not restrained by the law, he said.

Goldman also pointed to Putin's attempt to control Russia's governors, saying 
that the effort may be needed to establish respect for the law, but the 
methods are troubling because they imply that elections can be overruled.

Goldman said that Putin had missed an opportunity to strengthen Russia's 
democratic institutions from the very start of his rise to the presidency by 
refusing to campaign, relying instead on the popularity of the war in 


Boston Globe
May 30, 2000
[for personal use only]
Russia's hope for swift win dims with time 
By David Filipov

TANGI-CHU, Russia - ''If anything moves, shoot it.''

From his foxhole on a steep bluff overlooking this war-racked village in 
southern Chechnya, Russian Private Vladimir Khokhlokov aimed his antitank 
weapon at the dense greenery of the foothills and repeated his orders as he 
waited tensely for the enemy to come.

But it is hard to see anything move in this lush forest. That is the first of 
many problems for Khokhlokov and his unit, 30 Russian soldiers up here on the 
front lines, facing the forbidding Caucasus mountains to the south, where 
separatist Islamic militants have split into small, mobile groups that launch 
deadly, guerrilla-style attacks. 

No one in Khokhlokov's unit knows when the rebels will come, or from which 
direction, or even who will come - Chechens, Arab mercenaries, or even 
Taliban fighters from bases in Afghanistan, against which Russia has 
threatened to launch preventive strikes. All the Russians know is that they 
will come. And so they wait, and worry.

''Until now, we have been the hunters and they have been the prey, but now 
things could turn the other way around,'' said Lieutenant Colonel Alexander 
Likhachev, who is stationed at a sprawling and well-protected military base 
dug into the plains north of Tangi-chu, four miles behind Khokhlokov's 
front-line position.

The Russian Army has captured much of Chechnya from the militants, and some 
commanders even declared victory following the fall of the separatists' last 
major strongholds in February. But the military is struggling to finish off 
the rebels, and the campaign is starting to look like a bloody stalemate.

Likhachev's base has multiple artillery batteries that launch massive strikes 
at the first sign of trouble. The troops here have sophisticated listening 
devices and optical equipment to help detect movement in the foothills. But 
this impressive force is unable to completely protect Russian troops in the 
mountains from rebel ambush. The Russian military said six paratroopers were 
killed yesterday in fighting throughout the region. Last week, 10 Russian 
servicemen were killed and 83 were wounded. The week before, 51 died.

Still, neither the Kremlin nor the Russian public has shown any sign of 
weakening resolve to restore Moscow's control over Chechnya, despite the 
mounting death toll. In Russia, people see television news footage from 
southern Lebanon, where jubiliant Hezbollah and Amal militia celebrate the 
withdrawal of Israeli troops. That reminds many Russians of 1996, when the 
Chechens launched a surprise offensive that forced federal troops to withdraw 
in defeat after two years of fighting.

The Russians do not want to let that happen again. That is why even though 
the Russians have lost more than 2,000 men in Chechnya since fighting renewed 
here in October, exceeding the official losses in the 1994-1996 war, no one 
on the Russian side is talking about peace negotiations or withdrawal.

Russian commanders still talk about the eight-month campaign in Chechnya as a 
well-planned success. By sending out special commando units into 
rebel-controlled areas in the mountains to pursue guerrilla groups, Colonel 
General Valery Manilov said, Russian special forces have killed several 
leading rebel commanders in the past week, including Abu Mosayev, chief of 
security for Chechen President Aslan Maskhadov.

But Russian fighting men on the ground, who several months ago spoke 
hopefully of a quick victory, now say they realize they are here for the long 

''This war is going to go on forever,'' said Private Vladimir Kostin, on 
lookout duty at the front of an impressive labyrinth of trenches. Last fall, 
the military was signing volunteer soldiers like Kostin to three-month 
contracts; Kostin recently extended his hitch by a year.

''And I'll be here longer than that,'' he spat. If he is lucky, that is. Five 
of his friends have been killed in the fighting.

Russian troops say the past week has seen some of the heaviest fighting since 
February. In the ruined capital, Grozny, devastated by the Russian assault, 
more corpses are dug up every day from makeshift graves; most of the 1,200 
bodies recovered so far were civilians. 

Civilians are returning to Grozny. So is the fighting.

''We never know who is shooting or at whom,'' said a paramilitary police 
officer manning a checkpoint in central Grozny. He did not want his name used 
or his picture taken out of fear of reprisals by Chechens against his family 
in central Russia. ''When we come out in the morning, the whole place is 
mined and we have to call in the bomb squad.''

The Russian forays into the mountains have also brought heavy casualties. The 
latest ambush, which killed 19 Russian servicemen in the neighboring Russian 
region of Ingushetia on May 11, was reportedly carried out by units loyal to 
the Arab-born rebel commander known as Khattab.

Russian security officials say Khattab is connected to the Islamic terrorist 
network controlled by Osama bin Laden, whom the United States has blamed for 
bombing attacks on US embassies in Kenya and Tanzania in 1998.

It was Khattab, and the senior Chechen commander Shamil Basayev, whose 
incursion last summer into another Russian region, Dagestan, prompted Moscow 
to send troops into Chechnya. Yesterday, the Russian military reported that 
it had repelled an attempt by a large rebel force to try to cross into 
Dagestan again.

But that success has been overshadowed by other problems with Russia's 
mission in Chechnya. Even after eight months, the army still has trouble 
distinguishing civilians from the separatist militants it has vowed to 

''Let's say we're walking down the street and we meet a Chechen,'' said 
Lieutenant Colonel Valery Chinovaryan. ''Is he a rebel who has buried his gun 
somewhere and who will attack us tonight? Or is he a farmer who wants a 
peaceful and prosperous Chechnya? We have no way of knowing.''

Take Tangi-chu. The Russians rarely go into the town, but when they do, to 
conduct sweeps for rebel fighters, soldiers find only women, elderly, and 
children - and men's dirty shoes.

''We're always wondering when the owners of the shoes will come back, and 
what they'll do,'' said one paramilitary officer.

Rather than take chances, many Russian officers shoot first, and ask 
questions later.

''If I get the order to fire at rebel fighters, I'm going to shoot, and never 
mind who might be in the house next door,'' was the way Likhachev put it. 
''My first concern is the safety of my soldiers.''

This approach, some Chechen civilians say, has led to numerous crimes against 
innocent victims. According to the New York-based Human Rights Watch, the 
whole village of Tangi-chu was surrounded by Russian forces for three months, 
cut off from water or electricity, while the military made sure there were no 
rebel fighters here. 

Four witnesses who spoke to Human Rights Watch said young men were stripped 
naked and beaten in public, dragged off, and held prisoner in ditches until 
their families paid a ransom. These allegations, if true, highlight the 
ambivalent nature of Russia's campaign: It was precisely this kind of 
hostage-taking for ransom by Chechen gangs that Moscow said its soldiers were 
put in Chechnya to prevent.

It was in Tangi-chu, in March, that a Russian colonel raped and murdered Heda 
Kungayeva, an 18-year-old Chechen girl, the one war crime the military has 
admitted. Even though the colonel's guilt was proclaimed on national 
television by the Russian chief of the general staff, the army now insists 
that the colonel is innocent.

As a result, Chechens express little trust in the military or the Russian 
government's representative office in Grozny.

To solve this problem, Moscow has been looking for a Russian loyalist Chechen 
leader who can help it run the republic, but has not yet found anyone who has 
the trust or popularity of a majority of Chechens. The Kremlin had placed 
hopes on Bislan Gantamirov, a convicted embezzler it let out of jail to help 
conquer Grozny. But the military later decided it could not trust 
Gantamirov's 2,500-member militia enough to fight alongside it.

For all the difficulties of their mission, Russian officers express little 
doubt about the need to clear Chechnya of rebel fighters.

But once they are out of earshot of their commanders, some Russian soldiers 
tell a story of frustration and fear in dealing with Chechens.

''We are friendly with them by day, then at night they kill us. It is 
terrible, and I'm tired of it,'' said Mikhail Larin, a noncommissioned 
officer who was returning to his Siberian homeland after three months at war. 
''Even the Chechen women, even the loyalists, they come up to us and say, 
`We're going to drive you out.' If they wanted to, that's what they'd do.''


OECD says Russia outperforming, reforms needed
By Peter Henderson

MOSCOW, May 30 (Reuters) - Russia's economic recovery has proved more 
impressive than expected, despite the need for reform, the OECD said on 
Tuesday, substantially raising its growth forecasts in its half-yearly 

Real gross domestic product growth should rise this year to the highest since 
the Soviet Union's fall, 4.0 percent after 3.2 percent in 1999, slowing to 
3.0 percent in 2001, the Paris-based Organisation for Economic Cooperation 
and Development forecast. 

Consumer inflation would be steady this year and next at 20 percent, slowing 
from 36.7 percent last year. 

``The general outlook for the Russian economy now appears more favourable 
than in the recent past. The new momentum in industrial output should 
contribute to another year of at least moderate GDP growth while incomes, 
domestic demand and investment should also continue a gradual recovery,'' it 

With a strong trade surplus and political stability under a new president, 
Vladimir Putin, now was the time for reforms which would be the basis of 
long-term growth, it added. 

The effect of Russia's exchange rate crisis on the Baltic States also 
appeared near an end, the OECD said, adding it saw European Union growth 
leading them to orient trade away from Russia. 

The picture in south eastern Europe was mixed. Slovak Republic economic 
growth was seen rising to 2.0 percent this year and 3.0 percent next from a 
1.9 percent GDP rise in 1999. 

But Slovaks faced fiscal pressure this year and next and needed political 
commitment for reforms, it said.. 

The picture of health for Russia sharply contrasted with anaemic growth 
forecasts -- 1.0 percent this year and next -- made six months ago, but the 
OECD raised familiar warning flags. 

Regions were suffering as the healthy federal budget took a bigger slice of 
the pie and barter between the regions and taxpayers still flourished, 
limiting officials' ability to govern. 

Nationally economic imbalances such as repressed energy and transportation 
prices, which have distorted the economy since Soviet days, needed to be 
addressed and appeared to partly answer for the unexpectedly strong 
industrial growth, it warned. 

Recent industrial strength has generally been attributed to high prices for 
energy exports and the sheltering effect from export competition of a weak 
rouble, which has spurred local firms to produce for the domestic market. 

The trade surplus has also boomed, though the OECD said the central bank, 
which has furiously been buying foreign currency and printing roubles to do 
so, could spur inflation by not allowing the rouble to appreciate. 

``A stronger current account could have the effect of pushing money supply 
and inflation somewhat beyond official targets,'' it said. 


Financial Times (UK)
May 30, 2000
Meeting Mr Putin

Vladimir Putin wooed and won the Russian electorate when he was elected 
president two months ago. This week he is seeking to do the same with his 
most important foreign partners, the US and the European Union. But even if 
all obviously want to demonstrate that their relations are off to a good 
start, they must not duck the problems that have still to be resolved. Mr 
Putin could prove to be a prickly partner to deal with, even if he is more 
predictable than Boris Yeltsin, his predecessor. 

The Russian leader is certainly showing growing self-confidence in exercising 
the sweeping powers of his office. He has moved swiftly to consolidate his 
position, both with respect to the Russian Duma and the powerful regional 
governors. He is clearly determined to transform his disparate Unity movement 
into a new party of power, although it seems rather like the old Communist 
party in style, if not substance. His appointment of seven regional 
"viceroys" is intended to curb the governors. 

On economic reform, he has yet to spell out a clear strategy. As an efficient 
bureaucrat rather than a politician, he is inclined to consult all opinions 
before reaching a decision. While he is pressing ahead with a simplified tax 
code, which is an improvement, he is making less headway in introducing clear 
rules of property ownership. Both are essential to promote urgently needed 
investment. On the downside, his re-appointment of Mikhail Kasyanov as prime 
minister, and of Alexander Voloshin as presidential chief of staff, is less 
reassuring. Both are closely associated with the Yeltsin "family". Mr Putin 
clearly does not feel strong enough to challenge those interests, even if he 
wanted to. 

When he met EU leaders yesterday he stressed that Europe was Russia's "top 
priority", because of its location, culture and economic relationship. No 
doubt when he meets Bill Clinton at the weekend, he will stress the special 
ties between the two nuclear powers, even if Russia can no longer claim 
superpower status. 

But he has problems on both fronts. The Europeans have been particularly 
critical of human rights violations in Chechnya, while the American plans for 
a national missile defence system are anathema to Moscow. 

The EU and US must seek to present a united message to Mr Putin. Economic 
reform, underpinned by an independent judiciary, has a long way to go. 
Enforceable laws are essential to curb the powers of the financial oligarchs, 
whose influence is a major disincentive to foreign investment. Human rights 
violations are not acceptable inside Russia's borders, any more than they are 
outside. Democracy and a market economy are two sides of the same coin. That 
is what Mr Putin needs to understand. 


The Independent on Sunday (UK)
28 May 2000
[for personal use only]
From Patrick Cockburn in Moscow
re Vice President Gore and Russia

Early in the US presidential campaign Vice President Al Gore’s bid to 
follow President Clinton into the White House was almost capsized by 
allegations that he had turned a blind eye to corruption in Russia despite 
frequent contact with Russian leaders.
The Vice President was vulnerable because between 1993 and 1998 he 
had taken a leading role in formulating US policy towards Russia as 
chairman of a joint commission on relations between the countries which 
he chaired with former Russian prime minister Victor Chernomyrdin.
Mr Gore had boosted the commission as evidence that he was a serious 
international statesman and more than a decorative figure in the Clinton 
White House. The claim blew up in his face last year when critics asked 
why, if he knew so much about Russia, he only leaned from the 
newspapers about the scandal over the laundering of $10 billion in 
Russian money through the Bank of New York.
Criticism of the Vice President over the Chernomyrdin-Gore 
Commission missed the real target sources in Moscow have told the 
Independent on Sunday. He was telling the truth when he said he knew a 
great deal Russia. He could not publicly explain, however, that his 
knowledge stemmed from the extraordinary relationship between his 
father, Senator Al Gore Sr, and Armand Hammer, the American 
multi-millionaire, who, after meeting Lenin, became the Soviet Union’s 
first foreign investor in 1921. Hammer also served, according to secret 
Soviet documents since released, as the conduit for laundering money to 
Soviet intelligence operations and Communist parties abroad. 
“The American press missed the point over the Gore-Chernomyrdin 
scandal,” said a diplomat in Moscow last week. “Gore had access to the 
Soviet and then the Russian leadership long before he met Chernomyrdin 
because of his father’s links to Hammer and Hammer’s high level 
contacts in the Soviet Union.”
The Vice President is often presented as a wooden and somewhat 
simple-minded clone of Mr Clinton. In fact his political background is far 
more interesting and complex. His political career developed out of that 
of his father Senator Al Gore Sr of Tennessee, who left the Senate in 
1971 to become head of the coal division of Hammer’s oil company 
Occidental Petroleum. He earned a salary of $500,000 a year.
The link between Hammer and Al Gore Sr was intimate and went back 
many years to when he was a Congressman from Tennessee. Hammer 
once said, according to a US source, that he had Gore in his “back 
pocket.” As early as 1950, according to Edward Jay Epstein’s superb 
biography of Hammer (Dossier: The Secret History of Armand Hammer, 
Random House, New York, 1996) he made Congressman Gore his 
partner in a profitable cattle-breeding business. 
Hammer needed political protection. J Edgar Hoover, even before he 
became head of the FBI, had been tracking him as a possible Soviet 
agent. For once Hoover was right, though this only became clear in 1996 
when the Russian government released secret archives to Mr Epstein. In 
Congress Al Gore Sr helped keep the FBI off Hammer’s back.
Hammer, who died in 1990, was notorious for advancing his business 
interests by the systematic bribery of politicians and government officials. 
He won an important oil concession for Occidental in Libya in 1967 by 
paying a larger bribe than anybody else. Senator Gore Sr stood beside 
him on the podium at the oilfield opening ceremony the following year. 
Al Gore Jr, as freshman Senator for Tennessee, inherited his father’s 
connection with Hammer and Occidental. In 1981, Hammer was his guest 
at the inauguration of President Reagan, just as he had been the guest of 
his father at five previous presidential inaugurations. The link with 
Occidental was not broken by Hammer’s death. As recently as 1996 the 
Vice President reportedly played an important role in the privatising of 
the Elk Hills naval petroleum reserve in California which was later 
bought by Occidental for $3.5 billion.
Unnoticed in the furore over the Vice President’s association with 
Occidental in the US was the degree to which he had also benefited from 
Hammer’s and Occidental’s connections, before 1990, in Moscow. The 
two potential scandals now threatening his presidential ambitions – his 
relationship with Russian leaders and an overclose relationship with 
Occidental – both originate in his family’s involvement in the business 
activities of Armand Hammer in the Soviet Union and the US.
Hammer left Moscow in 1929. The Soviet Union no longer needed him 
as a showcase successful foreign capitalist – Lenin’s motive for giving 
him the concession to an asbestos mine in the Urals – or to secretly fund 
its agents and sympathisers abroad. He had briefly owned a profitable 
pencil factory, but ultimately lost money in the young Soviet Union. His 
one remaining concession was to act as agent for selling art treasures now 
owned by the Soviet state. Even this was not quite what it seemed. His 
first attempted sale was of a supposedly lost Rembrandt painting called 
The Circumcision of Christ, which turned out to be a recent fake. 
Hammer returned to Moscow in 1961. Senator Gore Sr arranged 
semi-official sponsorship of his trip by the US Commerce Department. 
He met with Nikita Khrushchev, then Soviet leader, but it was ten years 
later that he really began to do serious business once again in the Soviet 
Union. His method of cultivating the Soviet hierarchy differed little from 
his approach to political leaders in the US. In Moscow he became a friend 
of Yakaterina Furtseva, the well-connected Minister of Culture, who soon 
after began to build a luxurious holiday home for herself. She died in 
Moscow in 1974 after coming under investigation for corruption. A 
former associate of Hammer later testified in the US that she was paid a 
bribe of $100,000. During the same period Hammer also arranged for 
$54,000 in laundered hundred dollar bills to be paid to the Nixon White 
House to help finance the Watergate cover-up.
Despite the corruption of officials the Soviet Union got more than its 
moneys worth from Hammer. He genuinely wanted to be seen as an 
architect of detente. Before he died, aged ninety-two, he poured 
enormous sums from Occidental’s coffers into hopelessly uneconomic 
projects in the Soviet Union. A vast and ugly trade centre, built by 
Hammer, still rises beside the Moskva river in central Moscow.
Not surprisingly Soviet and later Russian leaders – often the same 
people – favour Vice President Gore for the presidency as an associate of 
their favourite capitalist. Andrei Kortunov, president of the Moscow 
Science Foundation, and an expert on relations with the US, says: “The 
traditional establishment likes the Gore family.” On meeting Al Gore Jr 
in Washington as early as 1985 he recalls being struck by the Senator’s 
knowledge of the Soviet Union.
Ironically, Vice President Gore was right in saying he knows a lot 
about Russia, but he is hardly likely publicize the reason why. 


Nezavisimaya Gazeta
May 30, 2000
[translation from RIA Novosti for personal use only]
Konstantin KOSACHEV, deputy chairman of the Duma committee 
on international affairs and deputy head of the OVR faction 

Now that barely a few days are left before the arrival of 
President Clinton in Moscow, the US administration, the 
parliament and above all the Pentagon are preparing for the 
discussion of the pivot issue of bilateral relations today. 
They want to convince the Russians to amend the 1972 ABM Treaty 
so that it would allow the deployment of an NMD system in the 
Whom does the US superpower fear so much as to want to 
deploy this system? Washington says it needs an NMD system to 
protect the nation from some "evil" (or even worse) states, 
clearly meaning North Korea, Iran, Iraq, Libya and some other 
countries. The accompanying maps provided by the CIA show the 
estimated range of missiles of these "rogue" states in the year 
2005. According to American forecasts, missiles launched from 
Iraq (although it can hardly create them owing to unabating UN 
control) will be able to reach Paris, Berlin or Warsaw. Not 
long ago Der Spiegel published a picture of a circle with a 
radius of 4,000km, covering broad expanses in Europe. It is 
allegedly the range of the Israeli Jericho-2 missile. I wonder, 
though, who supplies missile technologies to Israel, if not its 
Anyway, the above means that even if there is a threat of 
a missile attack from the evil states, the first to fear should 
be the European allies (for geographical reasons), rather than 
the USA. The idea of "the new threat" can hardly explain the 
deployment of 100 interceptor missiles in Alaska at the first 
NMD stage (this is why the Americans want to "modernise" the 
ABM Treaty so badly). Why? Because of long distances and the 
insufficient standards of research and technological progress 
in North Korea or Iraq. 
Well, it is for the Pentagon strategists to think on their 
arguments in favour of the NMD system. While we should analyse 
the consequences of its potential deployment (which amounts to 
unilateral US withdrawal from the ABM Treaty) and suggest an 
alternative action plan.
It is apparent that the deployment of the NMD system in 
the USA would do irreparable damage to the reduction of 
strategic offensive forces and the regimes of non-proliferation 
of mass destruction weapons, missiles and missile technology. 
States that have, or are working on, missile technology and 
mass destruction weapons will not tolerate the depreciation of 
their potential and the expensive efforts to create it. 
To prove the point, I offer you the opinion of Americans.
According to world news agencies, the CIA is finishing a secret 
report for the White House, in which it warns that the creation 
of an NMD system in the USA would inevitably launch a race for 
nuclear-missile weapons. The CIA believes that China will mount 
MIRVed warheads on its missiles, while India will build up its 
nuclear-missile potential, thus provoking Pakistan into doing 
the same. North Korea, Iran, Iraq and Syria will step up the 
work on their nuclear programmes. 
In other words, if the ABM Treaty is violated, this will 
blow up the entire system of strategic stability in the world.
Who knows how the circle with the well-known states in the 
centre will expand if Article 9 of the ABM Treaty does not tie 
anyone's hands? In short, it is easy to see where we will end 
if certain states live by the might-is-right principle and 
unashamedly pull the nuclear blanket to themselves. 
We must not overlook the fact that many West European 
countries, which are being drawn into the new missile defence 
system (above all Britain and Denmark, and possibly Norway and 
some other countries) will actually become US hostages. The 
thing is - if we proceed from the pessimistic American scenario 
- that missiles launched from the "instability region" will fly 
in particular over Northern Europe. Will the potential 
aggressors overcome the ABM shield by increasing the number of 
missiles, or by delivering pre-emptive strikes at the ABM 
systems in the countries that their missiles should overfly? 
There is still some time left to remedy the situation. The 
wisest decision for the departing Clinton administration would 
be to carry on dialogue with Russia, rather than ignore its 
legitimate interests. As for preparations for the June 3-5 
summit in Moscow, the only acceptable variant for both sides 
would be to reaffirm their position of loyalty to the ABM 
Treaty and nuclear disarmament. 


Putin, Primakov Call for Consensus in Society. .

MOSCOW, May 29 (Itar-Tass) - President Vladimir Putin and the leader of the 
Fatherland-All Russia (OVR) faction in the Duma, Yevgeny Primakov, called for 
consensus in society. 

In the course of the meeting on Monday, Putin noted that he intended to lean 
on public opinion in his work. 

Putin and Primakov discussed draft laws submitted by the government to the 
State Duma, the presidential press service told Itar-Tass. 

Primakov said all these draft laws aimed at strengthening government. At the 
same time, he noted that they would amended and he hoped that they would be 
studied most carefully at all levels of government. 


Russia Today press summaries
Komsomolskaya Pravda
May 29, 2000
Who Will Pay for the Reform?

The first big action of the new government will be the change of several 
major taxes. Kosmom analyzed how the news will tell on people's incomes and 

The sages in government have calculated that they will be able to cut the tax 
burden on enterprises by two per cent of the Gross Domestic Product. This is 
huge money on the country scale. However, nothing will change for ordinary 
workers, neither in big state enterprises nor in small private companies. The 
former will continue to pay 13 per cent income tax from their wages, while 
the latter will only pay taxes from a smaller part of their incomes and get 
the rest in "black cash".

The tax reform seems to be very beneficial for people with high revenues (50 
thousand rubles a year and more), who currently must pay income taxes at a 
high rate. But, as the Minister for Economic Development German Gref 
explained the other day: "The State should not engage in any kind of 
hypocrisy". In reality, only 0.1 per cent of present-day taxpayers pay income 
taxes at the highest rate of thirty per cent. The majority of affluent people 
have learnt to hide their incomes. This is why the government wants to impose 
a single thirteen per cent rate – it hopes that, with this rate, many 
entrepreneurs will disclose their incomes and pay more to the state treasury.

The tax reform will touch some other categories of people. The military and 
militia, who are tax-exempt now, will lose this privilege. A piece of good 
news is that citizens' spending on education will become tax-exempt.

Russian enterprises will benefit from the reform more than individuals. The 
tax on turnover, as well as road and housing levies will be cancelled, and 
medical and social levies reduced. If all clauses of the proposed tax reforms 
pass, enterprises will save 200 billion rubles in taxes in 2001. This money 
may be spent for renovation of enterprises, which will eventually make all 
Russians richer.



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