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Johnson's Russia List


June 9, 2000    
This Date's Issues: 4356  43574358 4359

Johnson's Russia List
9 June 2000

[Note from David Johnson:
1. AFP: Prophet or profiteer? Soros embraces Russia again.
2. Moscow Times: Yevgenia Borisova, Kozhin Finds No Evidence on Borodin.
3. Reuters: Putin expected to win fight with governors.
4. Putin`s Rep Threatens Governors With Doomsday.
5. Mike Mckeever: new analysis of Russia's economy.
6. Martti Valkonen: Putin forbids Finnish people to talk about Karelia.
7. The Wall Street Journal Europe: Boris Fedorov, No More 'Help' for Russia, Please.
8. San Francisco Chronicle: Robert Bruce Ware, In the Eurasian Crescent Terrorism Makes Strange Bedfellows.
10. Moscow Times: Melissa Akin, Amcham: Liberal Policies Sincere, West Should Invest.
11. US Department of State's Foreign Media Reaction: U.S.-Russia Summit: 'Papering Over The Cracks In Moscow']


Prophet or profiteer? Soros embraces Russia again

MOSCOW, June 8 (AFP) - 
International financier George Soros, by announcing Thursday that he was 
ready to invest again in the Russian economy, has pronounced the all-clear at 
the scene of the financial crisis that some believe he triggered two years 

The Russian crash of August 1998, which saw a massive ruble devaluation, an 
equally massive slump in share values, the decimation of Russia's foreign 
exchange holdings and a government default on debt repayments, came just four 
days after Soros had predicted just such a crisis.

On August 13 the Hungarian-born trader-turned-philanthropist wrote to the 
Times of London warning that the meltdown in the Russian financial markets 
had "reached the terminal phase" and calling for a devaluation of the ruble.

On August 17, after a weekend break, the Russian government announced it was 
cutting the ruble-dollar link, allowing the currency to float -- in effect to 
slump -- and effectively defaulting on its foreign and domestic debt.

Such was the belief in Soros's ability to trigger, or at least anticipate, 
crises of this kind that he was forced to deny that he had deliberately 
sparked the crisis, stressing that his funds in Russia had taken a two 
billion dollar loss.

"Imagine if I had not intervened -- it would not have made any difference to 
the outcome," he said last year. Subsequent criticism was "a typical attempt 
at finding a scapegoat," he added.

But he admitted that "my public announcement of what I was advocating did 
have a negative, adverse influence."

Soros' sulphurous reputation owes much to his role in the British "black 
September" crisis of 1992 when sterling was ignominiously bundled out of the 
European exchange rate mechanism in an operation in which he is believed to 
made a personal gain of two billion dollars.

Since then he has called regularly for greater regulation of the currency 
markets and warned that leaving individual states to safeguard their own 
interests would lead inevitably to massive global meltdown. Noting that 
"markets are basically amoral," he became -- to the bemusement of his peers 
-- an insistent critic of the predations of unfettered capitalism.

"It's like he suddenly found religion late in life," one commentator said.

In truth, Soros's relationship with Russia is complex and he has already 
invested massively in its future, directly and indirectly.

Having made a huge fortune from hedge funds in the 1960s and 1970s he began, 
in the purest tradition of buccaneer capitalism, to reinvent himself as a 
benefactor of mankind, handing out hundreds of millions of dollars to the 
dissident movements of eastern Europe and subsequently to the market 
societies formed on the ruins of the Soviet bloc.

Among his initiatives was the creation of Open Society foundations, one in 
Russia, working to uphold the rule of law, protect minorities and promote the 
market economy. 

In addition to his financial investments, he has devoted some 750 million 
dollars to his foundation in Russia, mainly active in culture and education. 
He provided 428 million dollars in assistance in 1998 alone.

Soros's philanthropic empire employs more than 1,300 people, with offices in 
40 countries ranging from Guatemala to central Asia.

But he continues to inspire as much mistrust as admiration. One former US 
official stressed the speculator's many roles which, he said, make it hard to 
evaluate his advice and motivation.

"The fact that one part of him is motivated by philanthropy and another part 
by investments makes it very hard to deal with him. ... There's that duality, 
and you never know."


Moscow Times
June 9, 2000 
Kozhin Finds No Evidence on Borodin 
By Yevgenia Borisova
Staff Writer

Vladimir Kozhin, who replaced Pavel Borodin as head of the Kremlin property 
empire, said Thursday that he has found no evidence to back up the corruption 
allegations leveled against his predecessor. 

Speaking at his first news conference since his appointment in mid-January, 
Kozhin said his priority is to make the presidential property department 
transparent and accountable. 

Kozhin said he has spent four months auditing the department's properties and 
"no malicious violations have been discovered," only poor management of 
budgetary and nonbudgetary funds. 

Borodin is suspected of accepting kickbacks from Swiss construction firms in 
return for awarding contracts to build or renovate presidential property. 
Swiss prosecutors have issued a warrant for his arrest on charges of 
laundering money through Swiss banks. 

The Italian newspaper Corriere della Sera quoted a letter from Geneva 
investigating magistrate Daniel Devaud this week, alleging that Mabetex had 
paid $4 million in bribes f mostly to Borodin. Mabetex head Behgjet Pacolli 
has denied the allegations. 

Devaud accused another Swiss contractor, Mercata Trading and Engineering, of 
paying bribes worth $60 million, of which at least $25 million went to 

Bernard Bertossa, Geneva's prosecutor, said in an interview published 
Thursday in Corriere della Sera that Swiss investigators in the Mabetex and 
Bank of New York money-laundering cases have not gotten sufficient 
cooperation from their Russian counterparts. 

"We have a clear impression that behind the public talk about the readiness 
[to cooperate], there is no room for cooperation when investigations get 
close to Russia's political elite," he said. 

Kozhin outlined plans to improve management of the Kremlin's properties, 
including hotels, resorts, farms and medical institutions, which Borodin 
estimated were worth $600 million. 

Kozhin said all equipment and materials will now be bought only through 
tenders and he wants a new state agency to be created to handle the tenders. 

He said Thursday he is planning to establish a network of what he called 
Kremlyovsky shops to sell agricultural products grown on presidential farms 
and lobby for legislation to prohibit State Duma deputies from privatizing 
state apartments given to them for the time they work in parliament. 

Kozhin refused to release any figures for profits and losses for the 
properties handled by his department. Some of the 200 state companies were 
shut down "because it was hard to understand what they were doing and why 
they were created at all," he said. 

Kozhin said his department is now busy setting up properties for Putin's 
representatives in the seven new federal districts. He said the seven offices 
would cost no more than the offices for the former presidential 
representatives in the 89 regions, which will be shut. 

In his previous position, Kozhin headed the federal currency and export 
control service. He had headed the service's St. Petersburg branch at the 
time when President Vladimir Putin was working in the St. Petersburg city 
administration. When Putin came to Moscow in 1996, Borodin was one of his 
first bosses in the Kremlin. 


ANALYSIS-Putin expected to win fight with governors
By Patrick Lannin

MOSCOW (Reuters) - Russia's governors are unhappy with President Vladimir 
Putin's plans to curb their powers, but analysts said Thursday he was likely 
to come out on top. 

The governors Wednesday held highly charged debates on Putin's proposals to 
gain the right to sack them, stop them from forming the upper house of 
parliament and strip them of immunity from prosecution. 

Their debates and proposed amendments to Putin's reforms presented the 
Kremlin chief with his real taste of opposition since winning a March 26 

Analysts said Putin might accept some compromise on his plans to reform the 
way Moscow controls the regions but would still eventually gain wider powers 
to limit the influence the governors of the 89 regions have enjoyed. 

They said he had the weight of being a popular leader, unlike his predecessor 
Boris Yeltsin; Moscow controls the money on which the regions depend and 
Putin has the blessing of the more powerful State Duma, the lower house, for 
his reforms. 

``I don't sense at this point that the governors have mustered enough serious 
firepower to be able to go against a now very popular president,'' said Alain 
Rousso, director of the Moscow Carnegie Center think-tank. 

``From this vantage, Putin is holding more of the cards and I think he will 
ultimately prevail.'' 

Putin's plans involve the most radical shake-up in the way Russia is run 
since Yeltsin put down a parliamentary uprising in 1993 and rewrote the 
constitution to give the president huge powers. However, the governors, who 
now sit in the Federation Council or upper house of parliament, proposed 
amendments that would water down Putin's plans. 

Putin's officials have reacted with a bit of the carrot and stick. The carrot 
came as Putin's representative in the Duma, Alexander Kotenkov, said the 
Kremlin saw nothing in the amendments it could object to. 

But Kotenkov also wielded a stick, reiterating threatening statements that 
some governors were afraid of losing immunity from prosecution because they 
would almost immediately be arrested. 

The speaker of the upper house, Yegor Stroyev, said he had met the president 
after the debates Wednesday and Putin reacted to the senators' objections in 
a ``very attentive way.'' 


Although Putin has denied his reforms are intended as an assault on the 
governors, it is clear the idea of increasing Moscow's control over the 
regions is close to his heart. 

He has said that a strong state is part of the Russian consciousness, a 
contrast to Yeltsin's challenge to the regions to take as much autonomy as 
they could swallow. 

``He wants to limit the powers of the governors and to put them under greater 
control of the center, so that they do not pass laws that go against the 
interests of the central authorities,'' said Yevgeny Volk of the Heritage 

Some regional governors have become notorious for wielding power in an 
autocratic way, giving local laws greater precedence over federal 

The governor of St. Petersburg highlighted the power of regional leaders in a 
symbolic way recently: the ceremony for his swearing-in mimicked Putin's own 
inauguration, down to a stately walk up a marble staircase past guards 
standing at attention. 


The othey key card in Putin's hand is that his reforms have virtually the 
full support of the Duma, which has passed his proposed legislation in full 
in a first reading. 

Even if the Federation Council uses its veto power to block the laws, the 
Duma can overcome the veto if it musters a two-thirds majority, something 
most analysts believe it can do. 

It was because of this that the Federation Council decided against trying to 
reject the laws altogether and proposed amendments that would give some room 
for negotiation, analysts said. 

The parties in the Duma have already been eying the possibilities that a 
reform of the upper house would give them. 

Former Prime Minister Yevgeny Primakov said his Fatherland party had proposed 
amending the constitution to strip certain key powers from the upper house 
and give them to the lower house if Putin's reforms were instituted. 

These powers would include the right to declare war, approve sending troops 
overseas and the right to declare a state of emergency. 


June 8, 2000
Putin`s Rep Threatens Governors With Doomsday
Alexander Kornilov

The Federal Council (CF) intends to demand Vladimir Putin that he discharge
Alexander Kotenkov, the Presidential Representative in the Russian
parliament. The governors were infuriated that the Kremlin official called
some of them criminals. Kotenkov responded by quoting an extract from a
poem by Lermontov about ‘God’s assize’. 

At a recent CF session the governors assessed measures that could be taken
against Alexander Kotenkov to insure that no one else in Russia will dare
follow in his footsteps. What he did is truly terrible; he called 16
members of the regional elite ‘criminals’. Last weak he said, without
giving specific names, that the governors are afraid of Putin’s vertical
power, because it takes away their immunity and without it 16 honorable
members of the Federation Council will be instantly put behind bars. After
discussing different proposals of how to react to the unfounded
accusations, the senators decided to send an official request to the
president, demanding that Kotenkov be dismissed emphasizing, “he discredits
not only us, but you as well, respected Vladimir Vladimirovich.” 

The CF’s lawyers will compose the final version of the letter, but no one
is sure whether it will actually be sent. Prosecutor General Vladimir
Ustinov did a lot to appease the senators when on Wednesday he announced
that his subordinates have not and do not plan to investigate the affairs
of any of the governors and that he has heard nothing about the possible
imprisonment of 16 regional heads. Allegedly, the unfortunate Kotenkov made
it all up. The latter is known for his sense of humor, and answered the
seemingly just accusations that he had violated the presumption of
innocence by quoting Mikhail Lermontov’s poem ‘The Death of a Poet’: 

But, parasites of vice, There’s God assize, There is an awful court of law
that waits. You cannot reach it with the sound of gold, It knows your
thoughts beforehand and your deeds. 

Kotenkov also added that for “God’s assize the presumption of innocence
does not exist”. Furthermore, he unwisely persisted in his accusations
stating that the cases he referred to are being investigated not by the
Prosecutor’s Office, but by the Interior Ministry (MVD). And it seems this
is no joke. 

First Deputy Interior Minister Igor Zubov, speaking at a conference devoted
to fighting organized crime on Wednesday, admitted that the MVD does have
“interesting materials” concerning some high-ranking officials, including
governors and heads of ministries. And namely on May 8th some of these
names will be given to the Council of the Federation. 

Such news has electrified the atmosphere in the upper chamber and some
senators have even started discussing whom in particular will be ‘turned
in’. Nevertheless, the majority of governors feel quite secure. They really
do have nothing to fear. The immunity is still there and it can be taken
away in only in the case of direct charges of grave crimes. And most
important ­ the presumption of innocence until proved guilty is still valid
in Russia. So even if on March 8th the MVD will decide upon the disclosure
of specific names, but most probably CF members will not be among them. 

However, a huge scandal is expected for Putin is not intending to dismiss
Kotenkov and not only because it is a matter of principle. Kotenkov could
not have invented the story about the impending imprisonment of 16
governors. Such forecasts do not appear in the Kremlin simply by accident. 


Date: Wed, 07 Jun 2000 
From: mike mckeever <> 
Subject: new analysis of Russia's economy

This is to announce a new analysis of Russia's economy as compared to 34
individual economic policies.

This new analysis was completed in the Spring of this year by a native
student of Russia who presently resides in California. It is pithy,
skeptical and just plain good reading. 

A prior analysis of Russia was completed in 1996 by another student.
Comparing the two analyses shows that the overall score of Russia has
declined from a 53% in 1996 to a mere 42% today; this 42% compares with a
38% recently given to Ethiopia by a native student of that country.

You are encouraged to access this new study at:
Michael Pierce McKeever, Sr.
Economics Instructor, Vista Community College, Berkeley, CA


Date: Thu, 08 Jun 2000 
From: Martti Valkonen <>
Subject: finland

Putin forbids Finnish people to talk about Karelia
Helsinki, Martti Valkonen (June 8, 2000)

Russian president Vladimir Putin forbid the Finns to talk about Karelia
and other territories which the Soviet Union took from Finland in Winter
War 1939-40. Putin met with Finnish president Ms Tarja Halonen in
Kremlin on Wednesday.

Putin followed in his press conference the earlier Soviet style which
was heavyhanded continuous interference in Finnish affairs. Putin gave
no hints about any reforms in his thinking. He said that it would "very
dangerous" to talk about territorial issues. He warned that if Finnish
people would go on talking about lost territories the good relations
between two countries could be destroyed.

Finnish president Ms Halonen answered the same question and said that
anything may be discussed between two countries if the topics have been
included into the agenda. Ms Halonen said too that the Finns certainly
have all the rights to talk about anything including Karelia. This time
Karelian question was not included in the official agenda but in any
case the presidents had a long discussion about earlier Finnish
provinces which Soviet regime took from Finland. No new results have
been reported from these talks, but the leaders said that there are no
territorial disputes officially between the countries.

The Karelian question is one of the remaining territorial problems in
Europe after the II World War. It was in August 1939 when Hitler´s
Germany and Stalin´s Soviet Union signed the notorious
Molotov-Ribbentrop Pact and its several secret protocols in order to
draw new spheres of influence from the North to the South through
Europe. In November 1939 Stalin invaded Finland in order to take his
share of the booty. Finland lost large territories in Karelia in Winter
War but was able to keep her independence. Now Mr Putin feels that it
would not be decent for the Finns to remind the Russians of
Molotov-Ribbentrop Pact. Meanwhile earlier Finnish Karelia, Karelian
Isthmus and medieval town and castle of Viipuri (Vyborg) are being
rapidly destroyed because Russian population does not take care of their
surroundings. Especially old town in Viipuri is falling to ruins.


The Wall Street Journal Europe
June 8, 2000
[for personal use only]
No More 'Help' for Russia, Please
By Boris Fedorov, the former finance minister of Russia.

For the last 10 years, the debate about Western assistance to Russia has 
revolved, superficially, around the question "to give or not to give." 
Despite all evidence to the contrary, the answer is always "to give" because 
this is seen as helping Russia. Thus for a decade, Russia is regularly 
dispensed a drug which never cures but keeps the patient in a vegetative 
state. And the drug habit is growing.

Who are the quacks? The list of names is familiar. The Clinton Treasury, the 
G-7, Michel Camdessus' IMF. Just days ago in Moscow, President Clinton 
reiterated his support for new loans to Russia. And U.S. Vice President Al 
Gore claims that Russia is a foreign policy victory. Why? Apparently because 
the current Russian government has released the country's umpteenth economic 
plan, which is considered to be "good." Other people are naturally 
well-intended. Still others think that it is worth a billion per year to keep 
Russia quiet in military terms.

But the results are dismal. More Russians are anti-Western today than a 
decade ago. Russia is economically weaker than 10 years ago after all the 
IMF-sponsored reforms. We have more corruption and poverty than under 
communism, and too many citizens want to return to a time they see as having 
offered them a better life. The questions are, what have loans done for 
Russia, and does the country really need new loans now?

The roughly $20 billion pumped into the Russian budget over the last decade 
have, in fact, had no positive effect whatsoever. This is not surprising, 
given the black-hole nature of the Russian budget. Money, being fungible, was 
misspent and ended up in the hands of a few well-connected people and in 
Western banks. Russian citizens definitely did not benefit from this 
"assistance," judging by the pitiful state of healthcare, education, public 
security, roads and nearly every other public sector sphere.

Trade Surplus

A country rich in natural resources with a trade surplus of $4 to $5 billion 
a month (not counting capital flight of similar proportions) does not really 
need IMF money. I've heard some argue that the loans to Russia were too small 
to have made much of a difference in any case. The IMF, they claim, may have 
acted cravenly in seeking to cover its own exposed positions by throwing good 
money after bad, but the loans were at worst wasteful, not harmful. They are 

This view misses the corrosive impact that an IMF imprimatur had on 
government officials, the formulation of their economic plan and on 
international credit markets, which figured the IMF would assume a 
lender-of-last-resort function -- in other words, the moral hazard that was 
created. An economic system in which corporate assets are routinely stolen, 
investors ripped off and creditors deceived has been built with the help of 
Mr. Clinton and the IMF. This is a system that no Western politician would 
dare to advocate for his own country. Why do you impose it on us by 
underwriting it with your taxpayers' money?

We hear often these days about the booming Russian economy, cited as evidence 
of the success of Western policies toward Russia. The Clinton administration 
and IMF speak glowingly about how a new, democratically elected president has 
adopted an economic program that is much more liberal than its predecessors 
and thus deserves more support. The new Russian government, however, is 
operating under a false sense of security, which is very much encouraged by 
the favorable remarks of Mr. Clinton and other Western leaders.

On closer examination, however, the new optimism about the economy is no more 
firmly grounded than it has been in the past. Economic growth is still behind 
pre-reform levels, and in large measure is due to higher commodity prices 
rather than an increase of investment and value added in the economy. Higher 
tax revenues are also cited as a sign that wealth is expanding. But revenues 
are actually lower in dollar terms. The government also cites better budget 
discipline, but this too is illusory, since much of the drastically 
depreciated expenditure was not indexed. There are more U.S. dollars under 
the mattresses of our citizens than the overall ruble money supply of Russia.

Is the Russian economy really reformed? Is productivity higher and corruption 
lower? Are structural reforms in progress? Does anybody believe that a 
country with an annual federal budget of $25 billion dollars (less than 
America spends on its prisons) can really maintain a superpower-sized army 
and bureaucracy?

The false sense of achievement and the new prosperity comes largely from the 
effects of the 1998 ruble devaluation combined with a high oil price. It has 
very little to do with economic reform. And still Mr. Clinton is in a hurry 
to say that America will support IMF loans to Russia because the economic 
plan of the current government merits that support.

I am not saying that the Putin government's pronouncements on economic policy 
are bad. In fact, I am encouraged by much of what I hear. But I remember too 
well how past economic programs also featured liberal and enlightened reform 
plans that were later shelved in favor of the status quo.

Swept Under the Carpet

Indeed, the pattern since Mikhail Gorbachev's time is unmistakable: reform 
talk followed by loans to underwrite reforms, followed by a collapse of the 
reform plans, followed by debt restructuring, more talk of reforms, more 
loans and so on. When lack of reforms is remunerated with new loans and debt 
write-offs, when the worst abusers of the current system live nicely off the 
spoils of what is effectively thievery -- if not in legal terms since Russian 
law is inadequate -- one starts having doubts about the message we get from 
the democracies of the West. Why reform anything in Russia if another IMF 
loan shipment is on its way and past scandals can be swept under the carpet?

I personally think that Mr. Putin should be given the benefit of the doubt. 
He cannot be blamed for past failures. Many of the ideas he has voiced have 
much in them. But only he can really change the course of events, and so far 
meaningful actions have been few. We do not know the full economic plan of 
the government. The jury is still out.

Rather than repeat the mistakes of the past, my recommendations for the West 
are simple. First, do not grant Russia concessions, but rather apply the 
rules as you would to any country. Western capital should flow to the private 
sector, not to the government. Only this will help to change the country, 
create jobs and increase efficiency. Second, money should be spent where it 
brings genuine return and where it will generate the kind of good-will that 
makes reform and democracy self-sustaining.

I imagine what might have been if that $20 billion in IMF money been spent on 
providing full time education for 200,000 Russian students in the West. My 
guess is that we would be living in a different country today.


From: "Robert Bruce Ware" <>
Subject: Globalization and Terrorism in the Eurasian Crescent
Date: Wed, 7 Jun 2000 

San Francisco Chronicle
June 7, 2000
In the Eurasian Crescent Terrorism Makes Strange Bedfellows 
By Robert Bruce Ware 

A storm is brewing in Central Asia, and we Americans are literally driving
into it. 

Harvard professor, Samuel Huntington, warned that, with the end of
ideological divisions, cultural and religious cleavages would come to the
fore. He argued that the collapse of communism would reveal the fault
lines that divide the worlds great civilizations: Western, Islamic,
Orthodox-Slav, Chinese, Indian, and African. 

Huntingtons concerns are dramatically illustrated throughout the Eurasian
Crescent. The region runs from the Black Sea across the Caucasus and the
Caspian Sea, up through Kazakhstan and down through western China to
northern India. It is the land that was criss-crossed by the ancient silk
routes and by centuries of imperial warfare. It is the site where Russia,
China and India meet Islam, and it is increasingly the focus of Western
interest and American commitment. 

The interest lies in the regions rich natural resources. Western companies
such as Chevron, Amoco, UNOCAL and BP, have invested heavily in the
extraction of oil from Azerbaijan and Kazakhstan, and natural gas from
Turkmenistan. It is possible that the Kashagan oil field, recently
discovered in the Caspian Sea off Kazakhstan, may exceed the size of the
existing Caspian fields off the shores Azerbaijan. The Clinton
administration has been promoting construction, beginning as early as next
year, of a $2.4 billion, 1,080-mile pipeline from Azerbaijan across
Georgia and Turkey to the Mediterranean port of Ceyhan. US energy companies
have already invested an estimated $8 billion in the region. 

With investment comes commitment. Capitals of Crescent countries have
recently hosted a number of high level Washington officials, including CIA
chief George Tennet, the FBI director, Louis Freeh, and Secretary of State
Madeleine Albright. Since September 1997 American troops have engaged in a
series of entral Asian training missions with their counterparts from
Kasakhstan, Kyrghyzstan, and Uzbekistan. In October 1999 responsibility for
the Caspian Region and Central Asia was transferred to the US Central

Huntingtons point is that clashes occur where cultures meet, and that their
convergence has been accelerated by the rapid pace of globalization. In the
long term, globalization produces cultural homogeneity: Michael Jordan has
countless fans in Azerbaijan. But in the short term, these homogenizing
influences produce backlash. 

Globalizing tendencies throw together cultures that would otherwise have
little contact, and increasingly they do so at a pace that exceeds the
capacities of the local populations to adapt. This is especially the case
for those portions of the local population that endure the destabilizing
influences of globalization without opportunity to enjoy the benefits that
globalization brings. 

Often these trends yield fabulous financial gains for the privileged few.
Yet whole segments of local societies find themselves excluded, as they
watch the consolations of their traditional life disintegrating before
their eyes. The conservative, often puritanical, backlash that results is
an attempt to preserve the traditional culture by means of its purification. 

Precisely this trajectory is being followed by societies across the
Eurasian Crescent, with resulting ethnic and religious conflicts throughout
the region. Since most of the societies in the Crescent are Islamic, the
cultural backlash has taken the form of Islamic fundamentalism with an
aggressively political agenda. Its practitioners often are called
"Wahhabis", though many of them reject this title. Since Wahhabism began in
Saudi Arabia during the 18th century the name lends the impression of an
import. Ironically, cosmopolitanism is what its adherents seek to oppose. 

Wahhabism springs from a deep disillusionment with the prospects for
economic development, and feeds on widespread despair over the myriad
forms of moral and political decay that are rapidly overwhelming these
societies. Though it rejects secular political authorities its radical
social agenda sometimes resembles an ideological, more than a religious,
movement. Above all, it appeals to young men without financial prospects,
who seek a moral purpose for their lives. 

Toward the end of the Soviet Union, Wahhabism appeared in Tajikistan with
the organization the Islamic Revival Party (IPR). It quickly spread to the
southern Russian republic of Dagestan, and then to Chechnya. In 1992, when
the IPR attempted to seize power in Tajikstan, there followed a bloody
civil war. 

Under pressure from its neighbors, Tajikistan recently deported several
hundred members of the Islamic Movement of Uzbekistan (IMU), blamed for
terrorist activities in Uzbekistan, Kyrghyzstan, and Tajikistan. The IMU
has been granted refuge by Afghanistans fundamentalist Taliban government.
Armed by the Taliban and funded by Osama Bin Laden along with the Afghan
heroin trade, the IMU also enlisted Tajiks, Arabs, Uigurs, Chechens and
Pakistanis in its ranks. 

The presence of Chinese Uigurs in such groups raises the specter of
political Islam at the eastern end of the Crescent in Chinas Muslim
populations. Near the western end of the Crescent, Wahhabis fighting the
Russians in Chechnya draw upon a similar mix of Central Asian
nationalities, with support from Osama Bin Laden, Afghanistan, and
individuals in the Persian Gulf. On the southern edge of the Crescent there
has been conflict between Iran and Afghanistan, and between India and

Increasingly, the spread of political Islam in the Eurasian Crescent is
being opposed by a seemingly unlikely combination of states including
Russia, China, Iran, Turkey, Israel, India, Europe, and the United States.
Despite their differences in other areas, these nations are coming
together on the basis of their respective confrontations with political
Islam at various points in this region. Yet their shared concerns about
the region may also foreshadow a growing commonality of interests. 

Yet while this alliance provides a rare opportunity for cooperation among
states that often are at odds, it also raises the specter of an emergent
clash of civilizations, in which the Islamic world increasingly is drawn
into a confrontation with the others. This is a concern especially because
funds, and fighters, for political Islam in the Eurasian Crescent come
from organizations in many Muslim countries. We must avoid a situation in
which political Islam in the Crescent increasingly is opposed by
surrounding civilizations, which exploit local conflicts to service narrow
national interests. 

That is why it is important to understand the dynamics of political Islam
and the cultural tensions that produce it. Regardless of its
instabilities, globalization cannot be prevented, and the US has genuine
interests in Central Asia. But we must not overlook the tensions that our
interests engender as our influence expands through the region, and we
must measure our interests accordingly. At the same time, Islamic leaders
have a responsibility to limit the support for political Islam that
sometimes comes from their communities. With an appreciation of these
factors on the parts of all concerned, the problems of the Eurasian
Crescent may be an opportunity for the cooperation, and not the clash, of



MOSCOW. June 8 (Interfax) - The session of the coordinating council
of Russia's People's Patriotic Union (RPPU) which opened Thursday in
Moscow will decide the destiny of that organization as a broad coalition
of left-wing parties and movements.
Its formal agenda contains a summing up of the results of the
recent parliamentary and presidential elections and the strategy for the
coming regional governors' elections. But some members of the
coordinating council told Interfax on condition of anonymity that the
session will see "a frank and sharp discussion" of the Union's weakened
position and poor performance by its member-organizations at the past
Duma and presidential elections.
A member of the Union's control commission - Vladimir Bogdanov -
said in an interview with Interfax that the commission's investigation
held in late April-early May found that "the total guilt for the Union's
collapse lay with Gennady Zuganov (Communist Party leader and chairman
of the RPPU - Interfax) and Victor Zorkaltsev (leader of the Duma
Communist faction and chairman of the Union's executive committee -
Bogdanov said that, "If the present session makes an attack on the
"Russia" coalition (center-left organization being formed now -
Interfax), its organizational committee will issue a statement tonight."
Bogdanov spoke of "discontent brewing" in the Communist Party's regional
branches." He said in some regions "two alternative party committees
have sprung up."
A member of the RPPU executive committee - deputy of the State Duma
General Valentin Varennikov replied to a question by Interfax on the
Union's further prospects, "We'll sort it out. I can't say any more
Another member of the Union's executive - leader of the movement in
support of the Army Victor Ilyukhin - said the current session of its
coordinating council "will set the date for the next RPPU congress to
carry on our work."
No invitations to the session were issued to the leader of the
"Spiritual Heritage" movement Alexei Podberyozkin and chairman of
Russia's Agrarian Party Mikhail Lapshin - both of them have been sacked
from the coordinating council. Also absent is the Union's co-chairman -
Kemerovo Region's governor Aman Tuleyev - and the Kursk Region's
governor Alexander Rutskoy.
Interfax has information from its sources that July 1 is the date
for holding the Russia coalition congress, and that July 13 Gennady
Seleznyov, prospective leader of that organization, will take part in
its founding conference in St.Petersburg. July 14 a similar conference
will be held in Moscow.


Moscow Times
June 9, 2000 
Amcham: Liberal Policies Sincere, West Should Invest 
By Melissa Akin
Staff Writer

Sensing a brief window of opportunity to improve the business climate after 
President Vladimir Putin's inauguration, the American Chamber of Commerce is 
calling on the U.S. government and Western businesses to reengage Russia 
despite past disappointments. 

Putin's administration is paying lip service to the need for transparency, 
accountability and responsible business practices, said Scott Blacklin, 
president of the American Chamber of Commerce, at a news conference Thursday. 

"It has yet to be reality," Blacklin said. "But these people really 
understand this. It's not just a pokazukha for the foreigners," he added, 
using the Russian word for a Potemkin-style show. 

Blacklin said he and his colleagues at the chamber had been called in for 
consultations with Putin economic advisers German Gref and Andrei Illarionov. 

In one meeting at the Kremlin, Illarionov "asked, 'What would you like to be 
done by July?'" Blacklin said. "It was clear he had a deadline in mind where 
he could cough up some deliverables." 

Of Blacklin's laundry list f including a revised Tax Code, an International 
Accounting Standard requirement for financial institutions, finalization of 
production sharing agreements and a policy of noninterference in the Internet 
to preserve its business potential f Illarionov focused on taxes and PSAs. 

"He [Illarionov] said, 'I think we are going to see some real progress,'" 
Blacklin said. 

Blacklin said Amcham was encouraging U.S. officials and businesses to take 
advantage of "unusual productivity by the Duma," a honeymoon period in 
policy-making and unprecedented openness to foreign input. 

Blacklin said Putin's biggest challenge would be the containment of the 
oligarchy and questioned whether he was up to the task. 

"He will succeed or fail on this alone f whether he succeeds in compelling 
private power to obey Russian law. That is a process, not an event." 


US Department of State 
Foreign Media Reaction 
June 8, 2000 
U.S.-Russia Summit: 'Papering Over The Cracks In Moscow'

Last weekend's U.S.-Russia summit was closely monitored by overseas media,
despite the fact that in the view of many it lacked the import of the Cold
War meetings and the "warmth" of those held during the Yeltsin-Clinton
years. "Never have visits of U.S. presidents to Moscow been so dull and
routine," observed Moscow's reformist Izvestiya, which, nevertheless,
shared a general sense of relief--found in much of the Russian and European
press--that U.S.-Russian relations in the post-Yeltsin years would be "more
businesslike" and less based on "interpersonal" relations. Several cited as
evidence of a new, more "pragmatic" relationship, Presidents Clinton and
Putin's "agreeing to disagree" on what was seen as the "trickiest" and most
contentious issue on the table: U.S. plans for a national missile defense
(NMD). Some analysts averred that failure to find common ground on ABM had
rendered the summit "useless" and "little more than an exchange of
pleasantries." Many more argued, however, that the success of the summit
should be measured not in terms of groundbreaking arms control
accords--which had, in any event, not been expected--but by the fact that
the two leaders had stressed their "willingness to cooperate" and avoid the
risk of "confrontation" over NMD. London's conservative Times, e.g.,
concluded that "the good news out of Moscow is that both presidents
understand this danger and appear determined to avoid it." Moscow's
centrist Nezavisimaya Gazeta seconded this view, arguing that while the
"chief problem, ABM, remains unresolved...the presidents have shown that
they can do without confrontation and want to promote good relations."
Others pointed to "important," albeit "secondary," accords on plutonium
disposition and a missile detection center as further proof of the summit's
"positive" outcome. Additional highlights follow:

NEW ROUND OF CRITICISM ON NMD: The summit gave NMD opponents--hailing from
media outlets in Europe, East and South Asia and Canada--an opportunity to
lambaste once again U.S. NMD plans, and to worry anew about the "threat" to
global stability should the U.S. proceed on missile defense "without first
persuading Russia" to modify the ABM Treaty. A Belgian writer reiterated
the concern voiced by many that "the American desire for invulnerability
cannot but increase the world's insecurity and trigger a new arms spiral." 

PUTIN'S 'CLEVER COUNTERMOVE': The Russian leader's "counter-proposal" on
joint missile defense received wide media play. Some Moscow papers
dismissed it as "politics pure and simple," which the Europeans "can't be
expected to consider seriously." In other European capitals, while the
proposal was viewed skeptically by some as an obvious effort to drive a
wedge in transatlantic ties, many also expressed some sympathy for Russia's
"well founded" opposition to U.S. NMD plans. Several noted too that the
U.S. is now in the "unfortunate" position of being forced to respond to
Putin's "sleek bit of footwork." According to a Frankfurt paper, "It is not
likely that the U.S. Congress will show much understanding for Putin's
initiative. The European partners of the U.S., however, will have a
different opinion. After all, they are mostly opposed to NMD anyway."
Canada's leading Globe and Mail, for its part, urged the U.S. "to keep the
door open to the possibility of different, multilateral approaches" to
missile defense.

EDITOR: Katherine L. Starr

EDITOR'S NOTE: This survey is based on 70 reports from 28 countries, June
3-8. Editorial excerpts are grouped by region; editorials from each country
are listed from the most recent date.


RUSSIA: "What Does The U.S. Want?" 

Under this headline, nationalist opposition Sovetskaya Rossiya (6/8)
published a commentary by L.Nikolayev: "A lot of what the U.S. president
said was correct and useful. Hardly anyone in the room objected when he
wished that both countries should keep building relations of mutual respect
and cooperation. At the same time, the Clinton speech contained absolutely
unacceptable statements on Kosovo, Chechnya, NATO's role, ABM.... What
remains unclear, though, is fundamental to our relations: Does the United
States want Russia to be strong? 'Strong' means independent, implying
Russia pursuing a policy in keeping with its interests and traditions, one
that will not only not coincide with America's but will conflict with it." 

"Strategic Partnership Unlikely" 

Yuri Sigov filed from Washington for reformist Noviye Izvestiya (6/8):
"Back home, Clinton was neither scolded nor praised for his visit to Moscow
and talks with the Russian leadership. The reaction by the media,
politicians, and even his fellow Democrats was restrained and
predictable--America will cooperate with Russia, based on its interests and
desire, but being [Russia's] 'strategic partner'--as in the times of the
former Russian president--is unlikely."

"Putin As Traveling Salesman" 

Oleg Odnokolenko commented in reformist Segodnya (6/7): "Vladimir Putin,
visiting in Rome, pushed the idea of a joint ABM defense system with Europe
after suggesting it to the United States when he met with Clinton.... It
looks like a traveling salesman trying to palm off old merchandise. Given
Russia's economic condition, the Putin initiative, clearly, is politics
pure and simple. You can't expect Europe to consider it seriously." 

"Justified Move" 

Aleksei Portansky remarked on page one of reformist Vremya MN (6/7):
"Though the joint ABM idea has no chance, it seems perfectly justified as a
political move. Initiatives like that have a 'long-playing' effect, keeping
(us) from getting into a new confrontation with the West." 

"Neither Side Could Afford To Fail" 

Stanislav Menshikov in Amsterdam said in neo-communist Slovo (6/7): "Putin
needed that summit as much as Clinton did, hoping that along with other
meetings already held or planned, it will help create his image as a
politician of world caliber. Neither he nor his American counterpart could
afford to have it fail. Hence the triumphant reports. In real terms, the
results are meager. To sum up, we have just had another show to prove that
our relations (with the United States) are improving."

"Dull, Routine" 

Gayaz Alimov commented in reformist Izvestiya (6/6): "Never have visits of
U.S. presidents to Moscow been so dull and routine.... Clinton came as just
another visitor and left quietly, without a triumphant halo about him. 

"Does that mean that a new chill is setting in between the two countries?
Probably not. It is just that we are cutting down on excessive emotion in
our relations. The United States and Russia may now want to be more
businesslike and pragmatic as they deal with each other."

"Clinton's Gone; Problems Still There" 

Sergei Guly said on page one of reformist Noviye Izvestiya (6/6): "The
Russian-American summit, feared yet eagerly awaited, has ended without
breakthroughs and sensations. Clinton has gone, the problems remain. That
both sides have easily and seemingly painlessly given up that which has
been part and parcel of their diplomatic dialogue for the past decade--the
game of 'strategic partnership'--is a real surprise. It has become clear at
last that there is a growing lack of understanding between the two
countries, a fact that was muffled for a long time due to the first Russian
president having the habit of substituting interpersonal relations for
top-level bilateral contacts.... Russia is parting with America, without a
fight or tears." 

"Besides Pie, Nothing Substantive" 

Oleg Odnokolenko remarked in reformist Segodnya (6/6): "Besides the nut pie
Clinton was treated to at the Yeltsins', he got nothing substantive in
Moscow.... There is a statement on strategic stability reaffirming that the
ABM treaty remains the cornerstone.... The next U.S. president may well
decide to throw the 'cornerstone' away." 

"Token Success" 

Centrist Nezavisimaya Gazeta (6/6) front-paged a comment by Dmitry
Gornostayev: "As expected, the summit produced no epoch-making decisions.
The chief problem, ABM, remains unresolved. But the presidents have shown
that they can do without confrontation and want to promote normal
relations. The summit was not bad at all, but ABM can overshadow anything
good. That has not happened yet, but it may happen very soon, a sad
situation the latest summit did little to change.... The joint statement on
strategic stability is an instructive instance of non-binding compromise,
setting forth important principles--some of them conflicting--letting both
sides consider it their little victory, and attesting to great trust and
splendid relations. This statement basically confirms the provisions of the
1972 treaty." 

"As Successful As It Could Be" 

Yelena Ovcharenko held in reformist, youth-oriented Komsomolskaya Pravda
(6/6): "By and large, the summit was as successful as it could be, with the
participants in different phases of there political careers. Diplomats will
have to carry on, seeking mutually acceptable solutions on ABM.... The good
thing about the coming paralysis of power in the United States is that it
gives a break to the Kremlin as it plans to rev up its ties with Western
Europe, which is not happy about the NMD idea, either."

"Outcome Has Nothing To Do With Goals" 

Leonid Gankin said in reformist, business-oriented Kommersant (6/6): "The
Clinton visit...admittedly, was unproductive. However, both presidents may
be pleased with the results of the summit. It is just that those results
have nothing to do with the goals they declared." 

"Farewell Visit" 

Reformist Izvestiya (6/5) front-paged this comment by Gayaz Alimov: "This
is a farewell visit. It is good for Russia's prestige. 

"But to the United States, regrettably, we are no longer the chief partner.
For all his love for and sympathy with Russia, Clinton can't do anything
extraordinary for it during this visit. He is an outgoing president, a lame
duck.... After him, Russia may have new problems. Should Bush take over, he
would pursue a tough policy, the kind of which we faced in the 1980s." 

"Clinton Finds Himself In A Different Russia" 

Natalia Kalashnikova and Valery Sychev remarked on page one of reformist
Segodnya (6/5): "Coming over for his last visit, Clinton did not find the
Russia he had once discovered for himself and the West. Instead of seeing
his predictably unpredictable 'friend Boris,' he met with 'mysterious
Putin,' who continues the war in Chechnya, maintains nuclear ties with
Iran, winks at 'raids' against the media, speaks about joining NATO, and
suggests building a joint nuclear shield against Russia's strategic
partners, of all countries.... [Clinton's] visiting radio station Echo of
Moscow, which the Kremlin lists as part of the disloyal Media Most, would
have been unthinkable during Clinton's previous trips. It may be a sign of
support for freedom of the press in Russia, as well as a way to communicate
with the Russian public." 

"A New Era" 

Yevgeny Antonov judged on page one of reformist Vremya Novostei (6/5): "The
Clinton visit really marks a new era, though it may not be quite what was
expected by both sides.... That this summit is not big on results is only
natural. 'Strategic partnership' biting the dust." 

"Useless Summit" 

Mikhail Leontyev contended in reformist, business-oriented Vedomosti (6/5):
"The formal part aside, the Moscow summit, so it appears, is Clinton's
visit to Echo of Moscow. It may really be so, with Clinton on the way out.
Funny, Russia does not seem to care. The Washington Post, learning about
the contents of Putin's letter to the American president shortly before the
visit, was surprised to find that the Russians showed little interest in
disarmament and deterrence. Concentrating on those issues today is a
comradely gesture by the Kremlin, which considers U.S. Democrats the best
partners. Russia today can't share America's 'global responsibility,' not
even the way it did in Soviet times. Its prime concern now is the economy,
access to markets, restructured debts, investments, etc. Discussing those
things with Clinton now makes no sense. In fact, we could have done without
this summit." 

"Putin Offers Alternative To U.S. Plan" 

Vladimir Yermolin of reformist Izvestiya (6/3) commented on Vladimir
Putin's suggestion that Russia and the United States join hands to develop
an ABM defense system: "A joint ABM is an alternative to the American plan,
which, most Western leaders fear, will draw NATO's Europe into an arms race
along with the United States and Russia. It would spare politicians in the
Old and New Worlds a lot of headache in the next few decades." 

"Just An Effective Political Move" 

Oleg Odnokolenko commented on Putin's joint missile defense offer on page
one of reformist Segodnya (6/3): "The initiative is just an effective
political gesture."

"No Illusions Anymore" 

Vladimir Lapsky held in official government Rossiyskaya Gazeta (6/3): "On
the eve of the 21st century, America and Russia, now free of illusions, can
take a sober view of their relationship....

"We, on our part, realize that Russian-American relations should rest on
certain principles rather than on personal relations between our leaders.
Of course, knowing each other personally and liking each other is
important, but this is not a determining factor.... The Moscow summit will
give a strong positive impetus to Russian-American relations and enhance
international stability in general." ....


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