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CDI Library > Johnson's Russia List

Johnson's Russia List
 

 

June 13, 2000    
This Date's Issues: 4364  4365

Johnson's Russia List
#4365
13 June 2000
davidjohnson@erols.com


[Note from David Johnson:
1. Reuters: Elaine Monaghan, INTERVIEW-US says missile-defense gap with Russia closes. (Strobe Talbott)
2. Itar-Tass: Russia Proposes Political Shield to Avert Missile Threats.
3. Itar-Tass: Russia-US Missile Warning Center to Be in Place in 2001.
4. BBC MONITORING: MOSCOW'S ABM CENTRE SAID TO BE THE ONLY ONE IN EUROPE.
5. BBC MONITORING: PRESIDENT PUTIN ON THE IDEA THAT MAKES RUSSIA GREAT.
6. Itar-Tass: ORT to Show Film about Chechnya Hostage-Taking on Tuesday.
7. Stratfor.com: Ending the War Once and For All: Putin Takes Control of Chechnya.
8. Washington Times: James Morrison, Chechen gets support.
9. BBC MONITORING: RUSSIA EXTENDING ITS "INTIMIDATING GESTURES" STRATEGY TO FOREIGN POLICY - PAPER. (Izvestiya)
10. Bloomberg: Russia Shifts Caspian Policy to Back Oil, Gas Exploration Plans.
11. St. Petersburg Times: Galina Stolyarova, Judges, Journalists Enjoy Frank Exchange of Views.
12. Moscow Times: Igor Semenenko, Minimum Wage Law Hikes Expenses.
13. Dow Jones Newswires: Russians Living Below Poverty Line Slightly Less In 1Q.
14. Itar-Tass: Putin, Energy Boss Discuss Investment in Power Engineering. (Chubais)
15. St. Petersburg Times: Anna Shcherbakova, Nation's Banks Not So Easily Forgiven for Crisis.
16. Itar-Tass: Concern Over Environmental Protection in Russia.


*******


#1
INTERVIEW-US says missile-defense gap with Russia closes
By Elaine Monaghan

WASHINGTON, June 12 (Reuters) - Russia and the United States have come closer 
to a mutual understanding of post-Cold War realities after last week's Moscow 
summit between their presidents, a senior U.S. official said on Monday. 


Deputy Secretary of State Strobe Talbott, who took notes at the June 3 and 4 
meetings between Presidents Bill Clinton and Vladimir Putin, told Reuters in 
an interview they helped ease a sense of confrontation over U.S. plans for a 
missile defence system. 


``The two presidents were able to agree on a number of what we call 
principles of strategic stability that may make it possible to resolve this 
issue in a way that serves both countries' interests in the period ahead,'' 
Talbott said. 


The U.S. proposals for a National Missile Defence (NMD) system, a shift away 
from mutual deterrence towards a defensive system which would require changes 
to the 1972 Anti-Ballistic Missile treaty, was one of the key issues at the 
summit. 


Russia has warned this could undermine the whole panoply of arms agreements 
that have helped keep the peace for decades. 


Talbott said Putin had shown a willingness to listen on the NMD issue, which 
was reflected in the 16-point ``statement on principles of strategic 
stability'' the two leaders signed at their meeting. 


``A lot of experts were predicting that the Russians were simply going to 
stonewall on this and we were going to get absolutely nowhere,'' he said. 


``That is not the case. The Russians have argued their position forcefully, 
but they have also listened carefully to ours,'' he added. 


COMING TOGETHER 


``There's unquestionably some coming together on the level of a broad 
understanding of what's going on in the world,'' said Talbott, who has led 
U.S. efforts to persuade Russia to accept ABM changes to allow NMD to go 
ahead over the last year. 


``The summit, in that sense, defused the argumentative and confrontational 
nature of this debate which is a good thing for both countries but that still 
leaves a great deal of work to be done on the practical level,'' he added. 


U.S. officials in Moscow said Putin had made a major concession in accepting 
there was a real threat, as the United States argues, from North Korea and 
other states which are developing long-range missiles. 


In the Moscow ``statement'' both leaders reaffirmed their commitment to the 
ABM as a ``cornerstone of strategic stability'' 


But Putin also appeared to accept that it could be amended in light of the 
new threat which, the statement said, represented ``a potentially significant 
change in the strategic situation and international security environment.'' 


Point 8 said the leaders ``recall the existing provision of the ABM Treaty to 
consider possible changes in the strategic situation that have a bearing on 
the provisions of the Treaty, and, as appropriate, to consider possible 
proposals for further increasing the viability of the Treaty.'' 


Talbott said the statement was ``a framework for us to explore in the months 
to come whether we might make more progress on both strategic offence and 
strategic defence.'' 


The next chance for top-level consultations on these issues, after lower 
level negotiations at ministerial level, would be at next month's summit of 
the Group of Eight in Okinawa, Japan, where Clinton and Putin will again 
meet. 


Clinton has said he will decide later this year whether to go ahead with a 
system which could cost $60 billion dollars and place 100 interceptors in 
Alaska to protect all of America from a limited missile attack. 


TREATY CANNOT BE FROZEN 


Talbott said: ``The world really has changed since 1972 and the ABM treaty, 
if it's going to have utility and survive for years and decades into the 
future, has to be relevant to the future. It can't be frozen in aspic in its 
1972 version.'' 


He said he believed ``that there was in the principles document a recognition 
of those realities at a high level.'' 


He added: ``That does not mean the Russians have accepted or are going to 
accept the specific concrete measures that we are proposing with regard to 
how we address the problem -- the North Korean missile threat in particular. 


``But I do think it is progress to have a somewhat broader and deeper common 
ground at the level of concept and theory.'' 


Russia has proposed an alternative response to the threat, jointly developing 
shorter range defensive missiles that could be based in Russia and would not 
violate the ABM treaty and stepping up diplomatic moves to head off any 
attacks. 


Putin is due to visit North Korea next month, and Washington hopes he will 
use that visit to pressure the Stalinist state to further rein in its missile 
programmes and open up more to the world. 


U.S. officials said there had been high-level contact on Russia's links with 
North Korea, which was a close Soviet ally and is now engaged in a 
broad-ranging diplomatic offensive to emerge from its isolationist shell. 


Secretary of State Madeleine Albright had been in touch with Russian Foreign 
Minister Igor Ivanov before and after Ivanov's visit in February, they said. 


*******


#2
Russia Proposes Political Shield to Avert Missile Threats. .


MOSCOW, June 13 (Itar-Tass) - Instead of the United States deploying national 
missile defenses, Russia proposes to create jointly with the United States 
and other countries a "political umbrella" to avert missile threats. This was 
suggested on Tuesday by Russian Defence Minister Igor Sergeyev who conducted 
negotiations with US Defence Secretary William Cohen. 


Russia believes that it is impossible to modernise the 1972 Anti-Ballistic 
Missile Treaty without its infringement, Sergeyev said. Meanwhile, creating 
by joint efforts a "political umbrella" to avert missile threats will be a 
more effective and less costly way of averting such threats as a national ABM 
system. The minister also said that "the political umbrella should be based 
on mutual arrangements and commitments". 


In the opinion of the Russian Defence Ministry the United States withdrawal 
from the ABM Treaty would mean the beginning of a fresh arms race under which 
the principle of strategic stability will be upset. "This will continue 
forever as the competition between armour and shells in classical armaments," 
Sergeyev added. 


*******


#3
Russia-US Missile Warning Center to Be in Place in 2001. .


MOSCOW, June 13 (Itar-Tass) - The Russian-American missile launch warning 
center will start working at full capacity in 2001, the commander of Russian 
Strategic Troops, Vladimir akovlev, told reporters on Tuesday. 


The center will be located in Podlipki, a city near Moscow. Yakovlev said 
"work on setting up the center is already going - groups of programme 
specialists are being formed, the software is being worked up". 


Three lines of the center's operation will be exchange of information about 
launches of intercontinental ballistic missiles, rapid task-solving in 
unclear situations and formation of a database on launches of missiles and 
booster rockets. 


Yakovlev said the "talk is in particular about interaction in case of errors 
in work of systems of the Missile Attack Warning System and unsanctioned 
missile launches". 


He said the center would help the "development of Russian-Ameircan dialogue 
from the perspective of a right understanding of existing and predicted 
dangers". 


In prospect, "other members of the nuclear club can join in this process on 
the condition of dialogue development and effective work of the center, as 
there should be full openness and understanding here", Yakovlev said. 


*******


#4
BBC MONITORING
MOSCOW'S ABM CENTRE SAID TO BE THE ONLY ONE IN EUROPE
Source: Russia TV, Moscow, in Russian 1600 gmt 11 Jun 00 


Russian TV channel's "Zerkalo" programme on 11th June claimed that Russia's 
ABM system was the only one of its kind in Europe. The programme showed the 
premises of the Moscow ABM centre and suggested it could detect ballistic 
targets better than the American ABM system. The report was sceptical of the 
possibility of Russian-European cooperation on ABM and ruled out the idea of 
"joint duty" altogether. The following is the text of the report. Subheadings 
inserted editorially. 


[Presenter] The ABM Treaty was at the centre of attention at the Russian-US 
summit. Even last week in Rome, President Putin once again raised this 
problem by proposing to Italy and effectively to the whole of Western Europe 
the construction of a joint ABM. There are many questions here. From whom 
will this antiballistic defence system protect us? Is it technically 
possible? And is it practicable in terms of cost? In other words, is Vladimir 
Putin's proposal realistic or is it an effective political move? In a few 
minutes, we will have the opportunity to put these questions to Russia's 
specialist number one [commander-in-chief of the Strategic Missile Troops 
Yakovlev - processed separately]. And now here is a video report by Aleksandr 
Sladkov about some special features of the antiballistic defence system in 
Moscow. 


Processes at Moscow's ABM centre 


[Correspondent] Who protects Moscow from possible strikes by ballistic 
missiles equipped with nuclear warheads. Today [11th June] we will answer 
these questions because we are conducting our reportage from the territory of 
one of the ABM centres - the Russian capital's ABM centre. Let us begin. 


The main thing in this fantastic structure is the eye [shown]. We will have 
the opportunity to look at it from inside the building. 


[Unidentified voice off screen over video of a soldier going down in a 
bar-lined lift] There are over 2,000 rooms here. On arrival, during the first 
year of work, one must have a good guide to find one's way around and not to 
get lost. 


[Correspondent] In 1996, as an experiment, the Americans launched from aboard 
a shuttle several iron spheres - 5 cm in diameter. This station detected all 
of them, while the USA detected none. Here is our first site of interest: 
these boxes filled with wires are designed to detect whether there is any 
threat to Moscow. Aircraft or air balloons are not counted - they will be 
detected by airdefence. This site is designed to detect missiles. [Addressing 
a man in uniform] It is here that decisions are taken as to what is within 
the station's zone of responsibility. 


[Valentin Lyamkevich, captioned as departmental head] Yes, the equipment in 
this room identifies what has come into the catchment area, and whether the 
target is genuine or not. 


[Correspondent] The process is being controlled by a woman who looks like an 
accountant. It is just that she is dressed in uniform. 


[Sergey Kirichenko, captioned as deputy head in charge of an installation] 
When the system is live and set up to detect ballistic missiles, there is 
virtually no role for human intervention. 


[Correspondent] Amazing! It turns out that people do not control anything 
here. They simply monitor breakdowns in the equipment. 


[Kirichenko] A machine - not a man - decides whether something is a ballistic 
missile, and whether it is necessary to take some countermeasures. 


[Correspondent] And here is the view of the eye from the inside. One of its 
components is now being automatically replaced. The process is also 
controlled by a woman in uniform. Any broken equipment is not sent off 
anywhere for repairs. Everything is ready here for a nuclear war. 


[Anatoliy Shilov, departmental head, over video of unidentified equipment] 
Yes, this is set up here specially to maintain the life of the installation 
and its further functioning. 


[Correspondent] You can see on this electronic display how Moscow's ABM 
system functions. [Addressing an officer standing next to a flashing 
electronic display] If any bolt comes off anywhere you can see this right 
away on the display. 


[Sergey Churbakov, deputy company commander] Yes, these indicators will show 
what is wrong. 


[Correspondent] You can also diagnose breakdowns by listening for a special 
noise quality. Sometimes, local humorists translate this noise from the 
computer language into some kind of song. 


[Churbakov] We may want to play the song "The Vikings". It will be fun for 
the officers. 


ABM in Russia, Europe and USA 


[Correspondent] Naturally, only the best officers come here to work. They are 
trained for five years at a college, and then they spend a further five years 
learning here. Their average salary is R1,500. Many have children and wives 
who stay at home. Yet, in Moscow's non-military firms such highly-skilled 
programmers can earn the same amount - but in dollars. 


[Man who is also captioned as Churbakov, probably by mistake] This means that 
some officers come and tell us that they have decided to leave the ranks of 
the armed forces in order to be able to provide for themselves and their 
families. 


[Correspondent] So, only fanatics stay. 


[Voice coming on the radio, off screen, over video of an officer seated at a 
what appears to be a control panel] Comrade colonel, scheduled work has been 
completed and the equipment is in order. It is ready to receive live 
operational signals. 


[Aleksandr Gritsan, company commander] Europe has no such systems, and this 
one is the only system which can function and which can fulfil tasks put to 
it. 


[Correspondent] In America? 


[Gritsan] The US system, which is similar to ours, has been mothballed. But 
unlike ours, it works in a somewhat different way. 


[Correspondent] Regarding US-European cooperation on ABM, the military say 
that the West can say nothing fundamentally new to the Russian programmers, 
not in the strategic field. We can jointly defend ourselves only from 
tactical missiles. In this respect, we have a military and scientific parity, 
but only as regards the exchange of information, on things such as the 
distribution of targets in the air: say, France can be asked to knock down 
one missile, Germany - another, while we will work on a third one. But joint 
work at such sites is out of the question. 


[Gritsan] I believe no joint duty is possible. 


[Correspondent] Why? 


[Gritsan] We can guarantee the combat readiness of our own resources. 


*******


#5
BBC MONITORING
PRESIDENT PUTIN ON THE IDEA THAT MAKES RUSSIA GREAT
Source: NTV International, Moscow in Russian 1500 gmt 12 Jun 00 


[Presenter] Today is a state holiday, the day that the declaration of 
Russia's sovereignty was adopted. The declaration was adopted on 12th June 
1990 by the RSFSR Congress of Deputies. There was talk of both history and 
contemporary problems at a festive reception in the Kremlin today. Here, with 
the details, is Vitaliy Trubetskoy: 


[Correspondent] Culture should not be governed but supported: this was the 
slogan with which Vladimir Putin began his holiday working day. His support 
for Russian culture included material support today when he bestowed state 
prizes on outstanding cultural figures. Each box contained about R250,000. 
The recipients were pleased. Almost every other one of them took the 
microphone to voice their thanks. The most striking was the speech by film 
director Nikita Mikhalkov. 


[Nikita Mikhalkov, chairman of the Russian Union of Cinematographers] Your 
Excellency, Mr. President, ladies and gentlemen, dear friends! I am 
completely convinced that the idea that is growing in the country today - and 
there can be no great state without an idea and Russia is a great state - 
will sooner or later become universal, a force for unification, construction 
and spirituality. 


[Correspondent] Vladimir Putin developed this notion from the author of "The 
Barber of Siberia" in a creative manner. 


[Putin] I've been called a variety of things - comrade, Mr. and today Nikita 
Sergeyevich has called me "Your Excellency". Nikita Sergeyevich is right in 
what he said, I think. He said that without an idea there can be no great 
state and even went on to say that we are a great state. I want to continue 
this and say that if this is the case - and it undoubtedly is - then there is 
an idea. There can't not be if we are a great state. With your help, we must 
all simply become aware of what that idea is... 


*******


#6
Ort to Show Film about Chechnya Hostage-Taking on Tue.


MOSCOW, June 13 (Itar-Tass) - A film about hostage-taking in Chechnya will be 
shown on Russia's ORT on Tuesday night, the Russian president's aide Sergei 
Yastrzhembsky said at a news briefing. 


He said the film, which is based on a "unique volume of documentary 
materials", is a narrative of hostage trade in Chechnya. 


Yastrzhembsky said President Vladimir Putin "spoke highly" on the film after 
watching it on Monday. Putin met film-makers whose leader is ORT commentator 
Alexander Lyubimov. The film will be shown after Vremya news programme. 


Yastrzhembsky said the film "will undoubtedly give a rich food for thinking 
to those who are handle the Chechen theme". 


*******


#7
Stratfor.com
June 13, 2000
Ending the War Once and For All: Putin Takes Control of Chechnya


In a move that suggests imminent offensive military action, Russian
President Vladimir Putin claimed direct executive control of the breakaway
Chechen republic on June 9. Putin, who rose to power in part on the
popularity of the Chechen campaign, again needs to direct his attention to
the festering southern republic. 


Two critical obstacles have delayed an overdue Russian military victory in
Chechnya: external support for the Chechens and a mostly reactionary
military strategy. 


Putin’s assumption of personal responsibility for the outcome in Chechnya,
at a time when such a move was unnecessary, foreshadows a Russian tactical
change. Putin will have to be pro-active, re-launching another final,
aggressive offensive, most likely paired with a crackdown on countries
supplying the rebels with arms. 


After Putin’s presidential victory at the end of March, the Russian
military high command halted offensive action in Chechnya, allowing only
“mopping up” operations necessary to support the Kremlin’s assertion that
it had already won back Chechnya. What had been an aggressive offensive had
shrunk to a stagnant, reactionary operation. 


More than eight months into the conflict, approximately 90,000 Russian
troops have yet to recover control of the territory from what is now
estimated to be less than 5,000 Chechen and mercenary fighters. Russia
claims to control the region, but cannot protect even its own bases. 


The rebels have repeatedly ambushed Russian convoys and instigated fighting
from within Russian-controlled towns. Recently, the Chechens have employed
a new tactic ­ suicide bombing. In the past week, militants have twice
caught federal forces off guard by driving car bombs straight into Russian
bases in Chechnya, killing as many as six soldiers. 


Russia’s field commanders in Chechnya realize that without adopting a more
aggressive strategy they will never win the war. Russian Col. Gen. Gennady
Troshev last week called for the politicians who began the war to end it;
however, he remains opposed to negotiations with the Chechens. Two days
later, Putin issued the decree establishing direct, day-to-day presidential
authority over both the civil and military administration of the region. 


While the Russian military has an overwhelming numeric advantage, several
other factors give the rebels the upper hand. First, spring weather in the
Caucasus provides leafy cover ideal for guerrilla maneuvers. The foliage
also cuts down on effective air strike and reconnaissance capability, and
rainfall makes the ground too muddy for Russian vehicles to travel through
quickly. 


Second, the current Russian military strategy, or lack thereof, has
rendered the troops easy targets for rebel attack. Since federal forces are
doing little more than garrisoning, the rebels can pick the time and place
for their attacks. Third, the rebels continue to receive help from sources
outside of Chechnya ­ and therefore outside of Russian control, at least
for now. 


Putin cannot prevent the advent of spring in the Caucasus, but he can try
to cut off foreign aid to the rebels and launch a new offensive. The rebels
are receiving arms, funds and reinforcements from two sources: comrades
stationed throughout the Caucasus who sneak supplies over Chechnya’s
borders and sympathetic Islamic militants in Afghanistan. 


Moscow, threatened by the porous border, has tried repeatedly to gain
complete control over the boundary between Chechnya and Georgia. Tbilisi
refuses to allow Russian troops to guard the border from within Georgia,
but has otherwise grudgingly cooperated ­ but not enough for Moscow. 


On June 6 director of the Russian Federal Border Guard Konstantin Totsky
paid a working visit to Tbilisi to “reinforce” the border, reported
ITAR-Tass. Also, according to an Agence France Presse article, the Kremlin
plans to lay anti-personnel landmines along the Georgian border. 


Another source of supply for the rebels, Afghanistan, is about to become a
target of Russian antagonism. Mercenaries, with their money and arms,
bolster the Chechen forces, as evidenced by the participation of
Jordanian-born rebel leader Khattab. Recently, reports out of Moscow have
claimed that Afghan mercenaries in eastern Chechnya are ready to attack.
This belief helps explain talk out of Moscow that Russia plans to launch an
attack against Afghanistan. 


Such an operation could significantly help Russia in Chechnya, without much
cost to Russia. If, for instance, Russia launched strikes against
Afghanistan ­ home to many Islamic mercenaries ­ it could lure foreign
mercenaries, money and arms away from Chechnya and back to Afghanistan,
probably without suffering any real international reproof. 


Regardless of the actual method, Putin is poised to initiate the first
pro-active Russian stance in Chechnya in months. Expect to see Moscow
creating chaos in Afghanistan, jostling for more control of the Georgian
border and resuming an offensive in Chechnya. 


*******


#8
Washington Times
13 June 2000
Embassy Row
By James Morrison


Chechen gets support 


The self-styled foreign minister of Chechnya returns to Washington today 
with hopes for a high-level meeting at the State Department boosted by a 
Senate resolution that criticized Secretary of State Madeleine K. Albright 
for refusing to see him.
Ilyas Akhmadov, who was here last week for meetings with members of 
Congress, is in the United States to get Washington's support for a peace 
plan proposed by the breakaway Russian republic. He was in New York yesterday.
The State Department said it has offered to meet Mr. Akhmadov outside 
the building to avoid the impression that the United States is granting 
official recognition to Chechnya.
Mrs. Albright is in Syria today for the funeral of President Hafez 
Assad. Mr. Akhmadov says he can wait for "several weeks" if necessary to see 
her.
The Clinton administration has called on Russia to end its military 
offensive in Chechnya but continues to view the republic as part of the 
Russian Federation.
Senate Foreign Relations Committee Chairman Jesse Helms, who met with 
Mr. Akhmadov last week, introduced a resolution on Friday that calls on Mrs. 
Albright to meet the Chechen representative, who asked for an appointment two 
weeks ago. The resolution passed on a unanimous voice vote.
"I find it incredible that Mr. Akhmadov's requests for a meeting with 
Secretary of State Albright and other senior U.S. government officials have 
been flatly rejected," the North Carolina Republican said after his 
resolution was adopted.
"This is an outrage. The United States should be working to facilitate 
peace in Chechnya, not to encourage the Kremlin to further its brutal 
campaign against the Chechen people."
The resolution urges Mrs. Albright to listen to Mr. Akhmadov's 
"proposals to initiate a cease-fire in the war in Chechnya and to facilitate 
the provision of humanitarian assistance to the victims of this tragic 
conflict."
The resolution also denounces Russia for the "indiscriminate use of 
force" that has "caused the deaths of innocent civilians and the displacement 
of well over 250,000 residents of Chechnya."
Russian Ambassador Yury V. Ushakov could not be reached for comment 
because the Russian Embassy was closed yesterday for its national holiday.
The State Department has also declined to discuss the Senate resolution.
Spokesman Philip Reeker last week told reporters the department had 
offered to meet with Mr. Akhmadov at some other location. The Chechen desk 
officer met him in January at a Washington hotel.
"We seek out a wide variety of viewpoints [on Chechnya]," Mr. Reeker 
said. "But I have to say we don't recognize him as a foreign minister. He is 
a private citizen of the Russian Federation."


********


#9
BBC MONITORING
RUSSIA EXTENDING ITS "INTIMIDATING GESTURES" STRATEGY TO FOREIGN POLICY -
PAPER
Source: 'Izvestiya', Moscow, in Russian 10 Jun 00 


The Kremlin is extending into its foreign policy the "intimidating gestures" 
strategy which has so far been the hallmark of its domestic policy, according 
to the Russian newspaper 'Izvestiya'. Hence President Vladimir Putin's 
proposal for a joint Russian-European-US antimissile defence system, which 
added to the Americans' anxiety and set them "on a collision course with the 
Europeans", and Putin's decision to fly to the G8 summit in Okinawa "via 
China and North Korea". The following is the text of an article published in 
the newspaper on 10th June: 


With the latest initiatives, Russia's foreign policy trend is beginning to 
take shape, so it seems. Putin's sensational statement to the effect that, 
generally speaking, we would not mind joining NATO was its initial element. 
Then there was the US president's visit to Moscow, prior to which Russia had 
come out with the initiative on creating a joint antimissile "umbrella" with 
the Americans. And when the Americans made nervous statements along the lines 
that, well, it would take a long time and the system's compatibility was 
questionable, Moscow replied: everything is compatible if there is a will. 


Then there was Europe. On arrival in Italy Putin proposed that the Europeans 
join in and create a unified antimissile defence system for the United 
States, Europe and Russia. Not only did he add to the Americans' anxiety, but 
he also set them on a collision course with the Europeans who, on the one 
hand, recognize the need for the US forces to be present on the European 
continent but, on the other, regard this as a burden. 


Russia has clearly (at least outwardly) adopted the tactic according to which 
"there are no strategic adversaries and there are no strategic allies" and 
restored the original meaning to the principle "anyone who is not against us 
is with us". A period of waiting for a response to the Russian initiatives 
from Europe and the United States will now follow. In the meantime, Russia 
will make a series of "intimidating" visits: the Russian president, for 
example, will fly to Okinawa (Japan) via China and North Korea. At that time 
the American-European world will be pondering in an agonized manner: are the 
Russians seriously going to make potentially dangerous states their allies? 


Then there will be a visit to the "millennium summit" in New York. It is 
noteworthy that Cuba, whose leader was among the first to extend an 
invitation for Putin to visit his country, is precisely on the course of his 
itinerary. Why not accept that invitation precisely ahead of the summit? 


The foreign policy principles resorted to by our country's leadership are 
beginning to resemble its domestic policy pattern: a few sharp and 
intimidating gestures, then a pause and wait for the reaction, followed by a 
sequence of actions depending on the emerging alignment of forces. 


The world's silence with regard to Moscow's initiatives is freeing its hands. 
There is a logical response to possible accusations such as "Russia is 
talking to the wrong states" or "it is choosing the wrong allies": "didn't we 
offer this to you first? You turned us down." On the one hand, this partly 
frees Russia from the need to account for each of its steps in the direction 
opposite to the Western world and, on the other hand, encourages the Western 
partners themselves to be more active in seeking better relations with 
Russia. And this is precisely what Russia is after. 


As a matter of fact, the presidential administration has extended the 
political strategy already tested inside Russia to its foreign policy. Even 
nuances match here: the visit to Okinawa is being prepared in such a way that 
one gets the impression that the Kremlin is deliberately delaying the very 
process of talks with Tokyo. The point is that symbols and dates are much too 
important for the Japanese, whose mentality Europeans find alien: Japan is 
eager, at any price, to conclude a peace treaty with Russia by the end of 
2000 and to incorporate in it, no matter how vaguely, a little entry on the 
status of the Kuril Islands. By the autumn, Japanese diplomacy will be in a 
state close to shock and will then be ready for any concessions. At the same 
time the Kremlin is unequivocally offering itself not just to Japan, but also 
to the United States as an instrument for putting pressure on North Korea. In 
fact, whereas Pyongyang now resembles the USSR of the Caribbean crisis period 
(the missiles are few in number and poor in quality), in a couple of years' 
time North Korea will constitute a real threat to Japan. Yet the United 
States is reluctant to provide its former strategic partner in the Pacific 
with the most up-to-date weapons (the CIA is preparing reports in real 
earnest on a possible conflict between the United States and Japan in the 
event that the latter's economic and strategic difficulties grow). It is 
precisely then that "the diplomacy of big proposals" will come in handy. And 
the United States will by that time also have ceased telling the European 
NATO countries that Russia has no weapons to contribute to a new system. 


*******


#10
Russia Shifts Caspian Policy to Back Oil, Gas Exploration Plans


Baku, Azerbaijan, June 13 (Bloomberg)
-- Russia protested in 1994 when OAO Lukoil Holding, the 
nation's No. 1 oil producer, invested in an Azerbaijani project to explore in 
the Caspian Sea. The government said the move contradicted national policy. 


Six years later, with the world's largest producers, including Exxon Mobil 
Corp., Royal Dutch/Shell Group and BP Amoco Plc, competing for the Caspian's 
vast oil reserves, Russia has changed its approach. President Vladimir Putin 
is actively encouraging companies to explore in the region and promoting 
pipelines to carry oil and gas to market through Russia. 


In the past week, Lukoil announced $500 million of investments in new 
projects in Azerbaijan, part of a total $2.4 billion it plans to spend in the 
region to tap about 1 billion tons of oil reserves, equivalent to Russia's 
total crude output for three years. OAO Gazprom, Russia's natural gas 
monopoly, and oil companies AO Yukos Oil Co, AO Slavneft and RAO Rosneft also 
plan to explore in the Caspian region. 


``The region is very attractive for Russian oil companies as it has reserves 
and highly productive wells,'' said Vladimir Nosov, analyst at Fleming UCB 
brokerage. ``With the political support and these high oil prices Russia's 
companies can make statements about expansion and look for new projects.'' 


In the past, Russia had demanded companies delay exploration in the Caspian 
until countries that border the sea, including Azerbaijan, Kazakhstan, 
Turkmenistan and Iran, agree to resolve the political status of the Caspian 
Sea. Lukoil's decision in 1994 to secure a 10 percent stake in the Azerbaijan 
International Operating Co. to explore the first international offshore 
project in the former Soviet republic, reinforced the government's concern 
that the sea was being divided into national sectors. 


Compromise Proposal 


The Russian government softened its pressure on the nation's oil producers 
and proposed the Caspian states split the seabed into national sectors, while 
keep water resources for common use. This encourages the nation's companies 
to increase their interests in offshore exploration projects, said Lukoil 
Vice President Vitali Lesnichy. 


Russia's protests couldn't stop companies worldwide from securing projects in 
the region. Azerbaijan alone has signed 19 production-sharing agreements that 
call for investments of $60 billion in exploration over 25 years. 


Within weeks of Putin's inauguration as president in early May, he called a 
meeting of the nation's security council to review and revise the 
government's strategy in the Caspian. He then toured Uzbekistan and 
Turkmenistan and appointed Viktor Kalyuzhny, a 30- year old veteran and 
former energy minister, as deputy foreign minister in charge of Caspian 
policy. 


Russia's policy in the Caspian region has been changing in the past years,'' 
and should more strongly reflect (national) interests,'' said Andrei Urnov, 
director of the Caspian group at the Russian ministry of foreign affairs. At 
the same time, ``Russia does not want to dominate in the region.'' 


Russian, U.S. Plans 


Russia's new approach comes as the U.S. promotes a plan to export Azerbaijan 
oil to Turkey and then further to the Western Europe bypassing Russia's 
existing pipelines. The U.S. also backs the Trans-Caspian Gas Pipeline 
projects to deliver gas from Turkmenistan under the Caspian sea to Turkey, 
which will compete with Gazprom's plans to supply gas to the fast-growing 
market. 


Lukoil is leading Russian companies into the Caspian, though others are 
stepping up plans as well. Slavneft paid a visit to Azerbaijan and 
participated in an oil exhibition in the capital of Baku last week. The 
company is negotiating its first offshore project with Azerbaijani 
authorities and may announce plans to create a joint venture with the State 
Oil Co. of Azerbaijan this summer. 


Slavneft ``sees this cooperation as very attractive and expresses a 
commitment to invest in joint projects with Azerbaijan at as much as $120 
million per year,'' Slavneft President Mikhail Gutseriev said. 


Russian oil producers also are looking for opportunities to explore in 
Kazakhstan and Iran. 


Lukoil is seeking exploration licenses for new deposits offshore Kazakhstan 
at the Caspian Sea. Both Lukoil and Slavneft are in talks with the Iranian 
government on potential exploration and production projects in this country. 


At the same time Gazprom has already secured a stake at the South Pars gas 
project and is bidding for an expansion of its production area at the Iranian 
field. 


*******


#11
St. Petersburg Times
June 13, 2000
Judges, Journalists Enjoy Frank Exchange of Views 
By Galina Stolyarova
STAFF WRITER


In an attempt to lessen the aura of mutual distrust that characterizes the 
relationship between the media and the judiciary, representatives from both 
sides convened for an international conference over the weekend, and 
discovered some striking differences of opinion concerning the reporting of 
legal matters.


But apart from the expected airing of grievances, those present at the 
conference - organized by the human rights organization Citizens' Watch, the 
Leningrad District Military Court, and the U.S.-based Center for Human Rights 
and Humanitarian Law - were also keen to find more effective ways for judges 
and journalists to cooperate.


Research carried out recently by the Glasnost Defense Foundation (available 
at www.internews.ru/books/massmedia) showed that the vast majority of 
journalists questioned held the view that the legal system was corrupt, 
bureaucratic and unprincipled.


For their part, said Vera Yefremova of the Glasnost Foundation, 50 percent of 
judges consider journalists to be poorly educated sensation-seekers, fond of 
churning out articles with no basis in fact.


"Perhaps only one in 10 judges regards journalists as decent people," said 
Yefremova on Saturday.


Yefremova, who is also a psychology expert and researcher with the Prosecutor 
General's Office, said that this mutual hostility stems from a gap in how the 
two professions regard the job of reporting.


Nearly 40 percent of judges believe that the mass media should not just 
inform but also educate the population, as compared to only 8 percent of 
journalists who share the opinion, she said.


Tamara Morshchakova, vice-president of the Constitutional Court, said in an 
interview that both the courts and the media "are trying to serve society. 
... Each misunderstands what the other side is [trying to do], what its true 
interests are."


"What both sides should always remember is that a judicial solution is the 
most human way of resolving conflict, and thus should only be supported," 
Morshchakova said.


Leonid Nikitinsky, a writer for the weekly Moskovskiye Novosti who also heads 
the Legal Information Agency watchdog group, was less conciliatory. "A court 
[case] is like a beacon for a reporter, something worth covering. It is 
pointless preaching to a reporter. One should try and show them where they 
are making mistakes, but trying to instruct them will get you nowhere."


Vladimir Poludnyakov, chairman of the St. Petersburg City Court, responded by 
saying that most coverage of court and legal cases was slipshod and ignorant. 
"Journalists can't use the right terminology, [and] they confuse things like 
the Civil Code and the Criminal Code," he said. "The majority of stories 
[concerning legal matters] is one-sided."


This, according to the journalists, is precisely because judges are 
notoriously tight-lipped on the cases over which they are presiding. "How can 
a journalist write a balanced story if the judge won't talk to him?" said 
Pavel Netupsky, head of the legal affairs department with the local weekly 
Delovaya Panorama.


In regard to the openness and transparency of the country's legal system, 
many of the journalists at the conference stressed the need for the text of 
court verdicts to be made readily available on the Internet.


Aside from the obvious convenience, said the journalists, the judges' level 
of legal literacy would then be evident.


"A copy of the judge's ruling would be enough [to see] the grounds, 
motivation and reasoning behind a decision," said Netupsky.


Independent media analyst Ellen Hume, who came to St. Petersburg from Prague 
to participate in the conference, agreed. "If the courts' rulings aren't 
available via the Internet, which is normal international practice, then 
these institutions will soon face the problem of losing the public's trust," 
she said.


*******


#12
Moscow Times
June 13, 2000 
Minimum Wage Law Hikes Expenses 
By Igor Semenenko
Staff Writer


The State Duma's decision to raise the minimum monthly wage to $7 starting 
from January and to $10 from July next year will bloat federal budget 
expenditures by 60 billion rubles ($2.1 billion) and could cost regional 
governors three times as much. 


The law raised the minimum wage from 83.49 to 132 rubles ($2.94 to $4.65) 
starting from July this year, 200 rubles starting from January and 300 rubles 
beginning July 2001. 


The decision will directly affect 700,000 public servants who are paid the 
official minimum wage. 


The raise will cost the federal budget some 48.5 billion rubles, Duma 
officials said, and some 11.5 billion rubles will be required in addition to 
make onetime social security payments. 


In addition, about three-quarters of public servants and social security 
beneficiaries are on the payroll of the regional governors, so regional 
authorities will have to dish out some 150 billion to 180 billion rubles to 
meet all payments due. 


"This is a first step aimed at making the minimum wage perform its original 
function of a labor-market regulator," said Alexander Leonov, deputy head of 
the Duma labor committee. 


"A lot of private businesses pay minimum wage to their employees and the rest 
goes through gray schemes, so they will have to make additional income tax 
payments when this minimum goes up," Leonov said. 


The Federation Council voted Wednesday to pass the minimum wage law following 
the Duma's approval in the third reading. 


However, even when the minimum wage is raised to 300 rubles next year, this 
amount will be no more than a quarter of the official subsistence level. 


The subsistence level was set at 1,137.66 rubles in the first quarter of the 
year in a decree signed by Prime Minister Mikhail Kasyanov this month. 


The minimum wage law approved by the Federation Council also removes the use 
of the minimum wage as an index for duties, fines and social benefits. 


The figure for calculating these payments will be raised only to a "basic 
sum" - a euphemism introduced in the new law - of 100 rubles beginning 
January next year. 


"Amendments will be required to all laws that set payments on the basis of 
the minimum wage," Leonov said. "The amendments should replace the words 
'minimum wage' with 'basic sum.'" 


Economists had severely criticized the government for its use of the minimum 
wage for purposes other than the regulation of demand on the labor market. 


Duties and fines will increase by about a quarter from last year's level of 2 
billion rubles, some 40 percent of which went to the federal authorities and 
the remaining 60 percent to the regional governors, but numerous tax 
exemptions are likely to offset this positive effect. 


For example, sellers of real estate or automobiles do not have to pay income 
tax on an equivalent of 5,000 minimum wages, and individuals selling 
securities do not pay income tax if the amount of sales does not exceed an 
equivalent of 1,000 minimum wages, said Maria Sokolova, tax partner with 
Ernst & Young. 


"Exemptions will outweigh increases in payroll taxes and fines," said an 
official at the Finance Ministry who asked not to be identified. 


She said that growth in fines based on the minimum wage would increase budget 
revenues by at most 500 million rubles after the law is enacted. 


n Lawmakers in the Vologda region, located about 300 kilometers north of 
Moscow, have approved a law that raises the minimum wage from July to 80 
percent of the region's subsistence level, which is estimated to be 980 
rubles. 


By the end of the year, the minimum wage will be brought in line with the 
subsistence level. 


There are 154,000 people receiving the minimum wage in the region. 


******


#13
Dow Jones Newswires
June 13, 2000 
Russians Living Below Poverty Line Slightly Less In 1Q
By Paivi Munter 


MOSCOW -- The number of Russians living below the official poverty line fell 
slightly to 41.2% of the population in the first quarter of 2000, compared 
with the previous year, the state statistics committee said Tuesday.


The committee said 59.9 million Russians, or 41.2% of the population, lived 
below the poverty line, compared with 63.8 million, or 43.6% in the first 
quarter of 1999.


The subsistence minimum is officially set at 1,137.66 rubles ($1=RUB28.43) a 
month, or less than $500 a year. Federal law defines the subsistence minimum 
as the estimated cost for one person of a minimum menu of foods, essential 
manufactured goods and services and mandatory payments such as gas and 
electricity fees.


The decrease in the number of people living below the subsistence level is 
likely to be the result of the government increasing wages and pensions ahead 
of the December parliamentary and March presidential elections, said Natalia 
Orlova, senior economist at Moscow-based Alfa Bank.


Poverty, however, remains a serious problem in Russia, Orlova said.


"These figures confirm that weak domestic demand is seriously hampering 
economic growth," Orlova said.


*******


#14
Putin, Energy Boss Discuss Investment in Power Engineering. .


MOSCOW, June 13 (Itar-Tass) - A high-ranking energy industry official said on 
Tuesday that no fresh investment in Russia's power engineering would be made 
until next spring or summer. 


Head of Unified Energy Systems (UES) Anatoly Chubais met President Vladimir 
Putin in the Kremlin to discuss problems facing the energy-producing branch. 


"We had a detailed conversation on the situation in power engineering as a 
whole and long-terms tasks of development in this field," Chubais told 
reporters. 


They also discussed ways to attract investment and put in motion new 
equipment, so that Russia not suffer energy failure in five or six years, 
Chubais said. 


Asked about a rise in energy tariffs, he said: "Price liberalisation on the 
energy market leads to price drops in the long run." 


However, drastic changes are needed, and a relevant concept has been 
submitted to UES's board of directors, he said. Later, it will undergo a 
through discussion to take into consideration all amendments. 


Actually, Chubais held two meetings with Putin on Tuesday. The first one was 
in the morning, but the problems it addressed were so important that they 
continued discussion after the president met U.S. Defence Secretary William 
Cohen. 


******


#15
St. Petersburg Times
June 13, 2000
Nation's Banks Not So Easily Forgiven for Crisis 
By Anna Shcherbakova


RUSSIA'S banks are still alive, if only just - that was one of the basic 
messages to come out of the International Banking Congress hosted in St. 
Petersburg last week, as over 400 financial institutions gathered for a 
meeting that claimed to be defining the challenges ahead in this new century.


But another of the fundamental themes underpinning the congress was less 
welcome to the financial ear: The country's banks are as weak and vulnerable 
as the rest of the economy. "A decrease in the number of banks will 
strengthen and stabilize the financial system," announced Central Bank 
officials at a press conference during the congress - before going on to say 
that banks, no matter what their size, would not undergo any interference, 
which disappointed the journalists present who had been hoping for something 
more exciting. Nonetheless, while small banks may be constantly talking about 
their problems, one should remember that there is a number of their much 
bigger brothers who are under external management or facing bankruptcy 
lawsuits.


Furthermore, it takes huge resources to be able to build a financial 
institution capable of operating nationwide - as state-owned Sberbank does - 
and none of the players currently operating can even think of such grandeur. 
It is perhaps a good thing that some of the former banking behemoths are 
losing their prominence in the economy and transforming themselves into 
institutions that do nothing more offensive than serve businesses. But that 
doesn't disguise the fact that they are still short of money; and even if the 
economy was to boom overnight, and the doors to the nation's banks were to be 
battered down by hordes of people just desperate to deposit fistfuls of cash, 
it wouldn't change anything in the short term.


Money from abroad, and lots of it, might help the situation, but no one at 
the congress seemed to be under any illusions that salvation was going to 
come from this quarter anytime soon, considering the number of foreign 
institutions that got burned with the August 1998 meltdown. More than once 
last week, I heard the sentiment expressed that the generation of bankers who 
were conned by the Russian [GKO market] will have to retire before foreigners 
will change their attitude toward Russia.


>From a more personal standpoint, the banks were not the only bringers of grim 
tidings at the congress. At the opening press conference, one could hear a 
great many intelligent, relevant and to-the-point questions being asked, and 
it was heartening to discover just how many people were familiar with the 
bankruptcy cases of the biggest, Moscow-based banks.


That, I soon learned, was because they were business journalists from Moscow. 
My recent efforts to find and recruit a journalist for the Vedomosti office 
in St. Petersburg have so far proven fruitless. The best and most 
knowledgeable journalists in this city have quit the profession for press 
office and public relations jobs at - you guessed it - local banks. Those who 
have stayed on reporting seem either bent on PR work of a different sort, or 
unable to fathom the intricacies of the subject.


Perhaps it is not too much to hope that the stronger and more logical our 
financial system becomes, the easier it will be for business writers to 
navigate what are now treacherous waters.


******


#16
Concern Over Environmental Protection in Russia. 


MOSCOW, June 13 (Itar-Tass) - Ecologists in Russia are concerned over the 
situation connected with changes in the structure of state management in the 
area of environmental protection and use of natural resources. This situation 
will be discussed at the All-Russian extraordinary conference on 
environmental protection under way in Moscow. 


The Russian state committee for ecology and the Russian committee for 
forestry were eliminated on May 17, 2000, and their functions were entrusted 
to the Ministry of Natural Resources. Ecologists believe that instead of the 
necessary strengthening of the controlling and regulating functions of the 
state in ensuring quality of the environment these functions may be 
dangerously eroded. 


Minister of Natural Resources Boris Yatskevich believes society's attitude to 
ecology will not slacken while the transfer of functions of the committees to 
the ministry will enhance the status of nature conservation services. 


******
------- 

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