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Johnson's Russia List


June 23, 2000    
This Date's Issues: 4383  4384

Johnson's Russia List
23 June 2000

[Note from David Johnson:

  IMPORTANT: This is the last JRL (probably) until I return from Moscow
on July 3. I and my wife Lisa Cannon will be staying at the Moscow
Marriott Grand Hotel June 24-July 3. A meeting of JRL recipients is
planned in Moscow. Nicholas Pilugin of the Moscow Expat Site
( is arranging for this on Wednesday June 28 7-8pm
at Doug & Marty's Boar House (formerly Chesterfield's) 26 Zemlyanoi Val
(Garden Ring across from Metro Kurskaya). Nicholas can be reached
at  Perhaps I will see you there.

  1. Vremya Novosti: RUSSIANS FEAR A THIRD WORLD WAR. (poll)
  2. Reuters: Most Russian reforms to happen in next 18 mths-Tass. (Gref)
  3. AP: Putin Trying To Curb Provinces.
  4. Amy Knight: Hahn comments/4382.
  5. The Economist (UK) editorial: Putin à la Pinochet?
  6. Moscow Times: Yulia Latynina, Gusinsky Arrest: Business as Usual.
  7. Jamestown Foundation Monitor: POLL: ONE IN FOUR MUSCOVITES "SATISFIED" WITH GUSINSKY'S ARREST. (and other polling data)
  8. Business Week: Paul Starobin, Let's Face It: Putin Is a Threat to Democracy.
  9. The Electric Telegraph (UK): Marcus Warren, Putin's KGB friends take control from Yeltsin men.
  10. Reuters: NATO chief says look at Russian ideas.
  12. Business Week letter: In Defense of Putin's Efforts to Build a True Nation State.
  13. Edward Lozansky: Joint US - Russian Statement on Missile Defense.


Vremya Novosti
June 22, 2000
[translation from RIA Novosti for personal use only]

     Shortly before the 59th anniversary of the start of the
Great Patriotic War (1941-1945), Russian sociologists
discovered that their compatriots have misgivings of the times
of the Cold War. Judging by the returns of the public opinion
poll held by the Public Opinion Foundation, more than a third
of Russians fear a new war. A real global war, not a regional
         Thinking of Russia, I fear above all...
     (1) a war, a threat from other countries        -  36%;
     (2) danger from the authorities                 -  18%;
     (3) an economic decline                         -  12%;
     (4) global dangers                              -  11%;
     (5) the country's disintegration, interethnic
         conflicts                                   -  10%;
     (6) hunger, poverty, a further decline in
         living standards and the quality of life    -   6%;
     (7) crime                                       -   4%;
     (8) spiritual crisis                            -   1%;
     (9) No answer, an answer not to the point       -  15%.

Most Russian reforms to happen in next 18 mths-Tass
MOSCOW, June 23 (Reuters) - Most of the Russian government's reform plans are
contained in an 18-month economic programme to be considered next week,
Itar-Tass news agency quoted a senior government official as saying on

``The heaviest burden of reforms planned by the government falls in the next
year and a half,'' Minister for Economic Development and Trade German Gref
was quoted as telling a government commission.

He said Russia had to take advantage of current high international commodity
prices to implement the reforms.

However, Gref said the programme, which the cabinet will consider on June 28,
did not recommend immediate action. ``It is a document which describes the
priorities and direction of the Russian government's movement towards market
reforms,'' he said.

The daily newspaper Vedomosti published what it called the main ideas of the
18-month plan:

- financially separate transport and distribution facilities within natural
gas monopoly Gazprom

- separate transportation and sales functions within gas distribution

- stimulate independent electricity producers to join a united electricity
wholesale market

- cut significantly the number of consumers who cannot be switched off from
electricity supplies for non-payment of debts

- stimulate competition in railways and allow foreign companies to work in
the sector

- eliminate gradually the system whereby cheap passenger rail fares are
subsidised by expensive cargo shipments

- eliminate the possibility of nationalisation and increase stability of
property rights

- adopt amendments to laws to create markets for land and buildings

- improve bankruptcy procedures

- eliminate tax privileges

- work out a predictable macroeconomic policy to stimulate growth

- set up basic legislation to provide for a favourable investment and
business climate

- reduce gradually government interference in business

- increase the efficiency of state regulations

- simplify business licensing and registration

- lift administrative curbs on movements of goods, capital and labour

- cut the number of regulatory organisations, above all for small businesses

- introduce international accounting standards

- introduce obligatory transparency for companies' activities

- move gradually to non-tariff regulation of foreign trade

- develop a long-term mortgage system


Putin Trying To Curb Provinces
June 23, 2000
MOSCOW (AP) - President Vladimir Putin's plan to rein in Russia's unruly
provinces got a big push toward final approval with the lower house of
parliament overwhelmingly passing it on Friday at a key legislative session.

Putin, who was elected president in March, insists the measure is necessary
to strengthen federal control over Russia's regions in order to fix the
ailing economy and keep Russia from breaking up.

The State Duma, or lower house, approved the bill on the second of three
readings by a vote of 302 to 86 - more than the 300 votes needed to override
a possible veto by hostile regional officials in the upper chamber.

The second reading is the stage when bills are amended and take most of their
final shape. A third-reading vote could come as early as Friday night.

Putin's bill would strip governors and the heads of regional legislatures of
their seats in the upper house of parliament, the Federation Council, and
replace them with appointed legislators. Losing their seats would also
deprive governors of legislative immunity from prosecution.

Regional officials have challenged the plan and proposed a series of
amendments to water it down. The Duma on Friday introduced minor changes but
kept the bill's main provisions intact.

Governors have overcome their initial reluctance to defy Putin and have
spoken out increasingly against the plan. Other parts of the plan not voted
on Friday would allow the president to dismiss elected governors and dissolve
local legislatures whose policies violate federal law.

Earlier Friday, Federation Council speaker Yegor Stroyev cautioned the Duma
against hasty passage of the bill, saying it could lead to deadlock among the
branches of government. He warned lawmakers that Putin's reform would give
the president too much power.

The Communists have also come out against the plan, but their no-votes in the
Duma weren't enough to deprive the bill of a veto-proof majority.

Business tycoon Boris Berezovsky, a Duma member, has tried to rally
opposition to Putin's plan, saying it would push Russia toward authoritarian

``The president's idea to strengthen the government is absolutely correct,
but he has taken a wrong direction,'' Berezovsky said before the vote. ``It's
wrong to try to weaken the governors.''

Ultranationalist Vladimir Zhirinovsky lashed out at the Communists, saying
that they fear that their governors will lose their jobs.

``If their legislative immunity is revoked, all Communist governors would go
to prison,'' he told reporters.

Supporters of Putin's plan point out that some regions have been reluctant to
share revenues with Moscow and have passed local laws that violate federal
ones. Putin has said that one-fifth of local laws violate the federal


From: (Amy Knight)
Date: Thu, 22 Jun 2000
Subject: Hahn comments/4382

Mr. Hahn could not have been listening very carefully to the lecture I gave
at Harvard.  He says that I claimed Gorbachev was the mastermind of all the
details of the Tbilisi, Vilnius violence, as well as the August coup and that
my sole source of information was Kriuchkov's memoirs, Lichnoe delo.  In fact
I don't believe I had even managed to get a hold of the memoirs when I gave
that lecture.  My contentions about Gorbachev, which I had advanced much
earlier in Problems of Communism and my book Spies without Cloaks, were based
on a multitude of sources--including the Ponomarev Commission Report and a
large number of first-hand accounts that appeared in the media.  Since then
even more sources have emerged, in particular archival documents--all of
which I have used in the article to be published in the Westview book.  To
say that I only rely on Kriuchkov's memoirs is simply not true.  I would add,
however, that there is no reason to dismiss his memoirs as unreliable and
then go on to accept the recollections of Gorbachev and Shevardnadze as the
truth.  All of the former Soviet officials have a strong reason to present
their version of events.  This means that scholars should of course consult
them, but should always use them in conjunction with other sources, which I
make a practice of doing.  I might add that Gordon Hahn appears to have
missed my recent reply to Archie Brown on JRL.  I cite Shevardnadze's
memoirs, which are very clear in saying that Gorbachev did NOT order him to
fly to Tbilisi.  He told Shevardnadze to call the authorities in Tbilisi to
see if it was necessary for him to go, and Shevardnadze was told that
everything was under control.  This, according to Shev, is why he did not fly
to Tbilisi right away.
  I have never said that Gorbachev was "the mastermind of all the details in
the cases of regime violence or coercion."  On the contrary, Gorbachev was a
master at giving the necessary signals and then stepping back and letting
others take the responsibility! 


The Economist (UK)
June 24-30, 2000
[for personal use only]
Putin à la Pinochet?
Maybe that’s not how Russia’s new leader sees himself. But don’t let him
think he’ll win western approval if it is
THREE months after Vladimir Putin won Russia’s presidency, some ugly things
have been happening in his benighted country. The new man, a former KGB
officer, has been cracking his whip. He has sounded belligerent towards
several of Russia’s former vassal states on its rim, and shows little sign
of softening towards Chechnya, the rebel republic devastated at his
command. He has told the leaders of the outlying regions within Russia that
they must step back into the Kremlin’s line—or else. And he has frightened
the press by resorting to the bullying of media groups and journalists
critical of the new regime. Most notably, the owner of the only independent
nationwide television station, Vladimir Gusinsky, was arrested earlier this
month, and freed without charge a few days later, amid flimsy-sounding
allegations of embezzlement. Virtually the entire country presumed that Mr
Putin, who breezily denied foreknowledge of the arrest, simply wanted to
silence the voice of opposition.

Yet, despite all this, it is still possible to paint a less bleak picture.
After eight years with the wayward Boris Yeltsin fitfully in charge,
Russians—it can be argued—need an energetic, clear-minded leader to restore
to their country some direction, discipline and pride. Unlike his
predecessor, Mr Putin has a co-operative parliament that broadly backs a
coalition government in which economic reformers seem to have been given
their head. Already, for instance, a bold law has been enacted to reduce
income tax to 13% across the board, in the hope of bringing millions of
tax-dodgers back into the revenue net. And Mr Putin’s approach to
foreigners may also be reaping rewards: stalled arms-cutting deals with
America are again being struck. Once again, western leaders are giving a
new Russian tsar the benefit of doubt.

If those good things come with nasty addenda, such as an upsurge of
authoritarian intolerance at home and a crescendo of snarls abroad, that—so
the Putin-boosters argue—is the price to be paid for reviving a humiliated
and pauperised Russia. In the long run, it will be better for the world if
the country becomes prosperous and confident, however roughly that is
achieved. Only then, say those who see the merit of Putin á la Pinochet,
might Russia become something it has never been—a law-based and liberal

But there is the rub. Can Russia become prosperous without first
entrenching a proper legal system to underpin a genuine free market?
Besides, it is still unclear how, or indeed whether, Mr Putin intends to
fulfil his promise to bring to book the influential tycoons who have
gobbled up so much of the state’s wealth. Ideally, an independent
judiciary, without the say-so of the president, would simply set about
prosecuting all cases of corruption, starting with the most blatant.

Unfortunately, even if Mr Putin were sincere in his wish to clean up, he
would probably not at this early stage in his presidency have the power to
do so—without recourse to strong-arm methods that are themselves illegal.
The arrest of Mr Gusinsky, no angel despite his courage as chief upholder
of a free press, reeks of despotism. But if, for instance, the
Putin-prompted prosecutors were instead to take on Boris Berezovsky, widely
seen as the most malign and powerful of the plutocrats, the action might
reasonably be regarded as just as politically inspired. So far, the taming
of the oligarchs appears to be all about power-play and very little about

Still on probation
It is early days. In the three months since the election, Mr Putin has
moved cautiously, apart from the rash attack on Mr Gusinsky, which may turn
out to have been his first big mistake. Whatever his critics’ suspicions,
and his defenders’ hopes, it is still unclear whether the new president is
an autocrat or a democrat, his own man or the servant of others. In
particular, it is unclear whether he is keen to collude with the tycoons,
several of whom helped him to power, or to cut them down. At present, his
emerging team is a rum mix of economic reformers, former KGB people and

In any event, outsiders probably have little influence at present. If it
becomes clear that Mr Putin’s desire to bring strong government to his
people means trashing their rights, then Russia’s expulsion from the
Council of Europe is inevitable. He should certainly not be allowed to
believe that the West would merely wink at greater authoritarianism. On the
other hand, a concerted effort to encourage the judiciary to uphold the
rule of law impartially should be warmly welcomed. Meanwhile, no government
money from the West should go to Mr Putin’s Russia. A better home for
western cash can be found among the more hopeful countries on Russia’s rim.
Things may change, but, for the time being at least, Mr Putin remains on


Moscow Times
June 23, 2000
INSIDE RUSSIA: Gusinsky Arrest: Business as Usual
By Yulia Latynina

To the amazement of most people in this country, last week's arrest of
Media-MOST head Vladimir Gusinsky surpassed all that had come before it in
terms of shock value. The only worse thing that has happened in recent memory
appears to be the national soccer team's abject failure to make the European
Championship finals.

But the difference between what happened to Gusinsky and what happens in the
world of business in Russia every week is merely the difference between a
rape conducted at night, in a ditch near a fence, and a rape carried out in
broad daylight. The second is just more noticeable. The shocked public stops
in its tracks and looks on aghast.

Let's take a look at a couple of examples. This past fall, the Zhivilo
brothers had their business, the Metallurgical Investment Company, or MIKOM,
taken away from them. This was an enormous metallurgical empire, which
included the Kuznetsk Metallurgical Combine, the Novokuznetsk Aluminum Plant
and various coal mines.

The new managers of the bankrupted plants were representatives of the
Siberian Aluminum group. The Kemerovo region's Governor Aman Tuleyev took an
active part in the division of this property; he stated publicly that the
Zhivilo brothers were bad managers and last December sent in a police team to
the Kuznetsk steel mill to oust the steel mill's external manager.

As is known, Siberian Aluminum enjoys a good relationship with the Kremlin.
And soon after Siberian Aluminum began managing the plants, Tuleyev received
fresh federal budget funds for his administration.

There's yet another pretty story, involving the oil company Sidanko.
Sidanko's most important asset f production company Chernogorneft f was taken
away from it despite the best efforts of the world's second-largest oil
company, BP Amoco. Chernogorneft and other oil-extracting subsidiaries were
declared bankrupt. When BP Amoco understood what was happening, it was ready
to pay a second time for the company and buy up debts to creditors for a
nominal fee. But that didn't happen. Several debt-holders, operating against
all the standard rules of market economics, preferred to sell the company,
not to the party with more money, but to the one that enjoyed a better
relationship with the local authorities, the Tyumen Oil Company, or TNK.
Former Fuel and Energy Minister Viktor Kalyuzhny had gone to bat on TNK's
behalf against BP Amoco on several occasions.

These are only two flagrant examples in which companies went under as the
result of pressure from aggressors who were not so civilized. And these
companies had earnings equal to or greater than Gusinsky's. Lately,
everywhere conflicts have erupted regarding property, the struggles have been
waged by using the organs of law and order, which cost less and work more
effectively than bandity.

But back to Gusinsky.

I understand all the talk about freedom of expression. And Media-MOST is
being strangled for reasons other than the reasons that Sidanko was ripped to
shreds. But now the public asks, "Why wasn't the Kremlin afraid to touch
Gusinsky?" And those in the Kremlin truly can't understand this amazement.
Because, technically, there is nothing new that happened in the Gusinsky
affair: not the arrest, the search nor the pressure on his partners.

There is a concept in physics involving the isotropy of space, meaning that
the properties of space have the same values when measured along axes in all
directions. Our society is also isotropic. In other words, in a nation where
a police lieutenant sends kiosk owners to prison, a president can surely
throw Gusinskys in jail. You can't have a sausage that's rotten at one end
and fresh at the other. And you can't have a situation in which BP Amoco can
be swindled f but Gusinsky goes scot-free.

Yulia Latynina writes for Segodnya.


Jamestown Foundation Monitor
June 23, 2000

All-Russian Center for the Study of Public Option (VTsIOM) has released a
poll reflecting the views of Muscovites toward the arrest and jailing of
Media-Most chief Vladimir Gusinsky. The poll was taken on June 21 among
approximately 500 adult residents of the Russian capital.

Asked whether they had heard about Gusinsky's arrest and, if so, to
describe their feelings toward it, 25 percent of the respondents said
"satisfaction" characterized their feelings, 20 percent answered
"bewilderment," 8 percent said "indignation," 7 percent said "alarm" and 2
percent said "fear." Thirty-two percent of those polled said Gusinsky's
arrest aroused "no emotions" at all, 3 percent said they had not heard
about it, and another 3 percent said the question was hard to answer. Among
the 25 percent who reacted to Gusinsky's arrest with "satisfaction," 66
percent said their answer was a statement against the "oligarchs," 21
percent said it was a statement against privatization, 7 percent said it
was a statement against Jews, 6 percent said it reflected their "malicious
satisfaction" over "squabbling at the top," and 1 percent said it was a
statement against "the democrats" and the mass media. Asked what they
thought was the goal behind Gusinsky's arrest, 23 percent of those polled
said they thought it was part of the fight against "the criminal business"
of Gusinsky and his team; 18 percent said they thought it was an attempt to
intimidate journalists, NTV (Media-Most's TV station) and the opposition,
and to weaken Gusinsky's media empire; 12 percent said they thought it was
an attempt to impose order in the country and "deal with" the oligarchs; 11
percent said they thought it was an attempt to investigate Gusinsky's
financial abuses and privatization affairs; another 11 percent said they
thought it was an attempt to "get even" with Gusinsky for supporting Moscow
Mayor Yuri Luzhkov, former Prime Minister Yevgeny Primakov and the
Fatherland-All Russia movement and for refusing to cut deals with the
authorities; 8 percent said they thought it was an attempt to put NTV and
Gusinsky's media empire under the authorities' control; another 8 percent
said they thought it was an attempt to ruin Gusinsky's business reputation
or his business; 2 percent said they thought it was an attempt to prevent
Gusinsky from leaving the country.

Asked whether they thought the Prosecutor General's Office took the
initiative to arrest Gusinsky on its own or whether "other forces" were
behind the arrest, 27 percent said that the Prosecutor General's Office did
it on its own, 24 percent said President Vladimir Putin was behind it, 18
percent suggested that unspecified "other forces" were behind it, 11
percent said that Kremlin chief of staff Aleksandr Voloshin and the
presidential administration were behind it, 9 percent said that Boris
Berezovsky was behind it, 8 percent said that the "Family" and/or former
President Boris Yeltsin's inner circle were behind it. Asked whether they
thought Gusinsky had been involved in any "financial machinations," 83
percent answered yes, 6 percent answered no. Fifty-seven percent said they
thought Gusinsky's arrest had a political "underlying cause," 18 percent
said it did not. Asked why they thought Gusinsky had been released from
Butyrka prison, 31 percent said it was a result of pressure from public
opinion and the media, 25 percent said it was because of the arrest's
"social resonance" in the West, 15 percent said it was because Putin viewed
Gusinsky's arrest negatively, 13 percent said it was because the
"intimidation" attempt had been successfully completed and thus the tycoon
could be released, 6 percent said it was because jailing Gusinsky had been
excessive, 5 percent said it was because the authorities had gained some
sort of information or concession from Gusinsky, 4 percent said it was
because Gusinsky's arrest had been groundless.

Asked how the case against Gusinsky might develop, 50 percent predicted
that the investigation would last a long time, 23 percent predicted that it
would soon be dropped for lack of evidence, 8 percent predicted that it
would soon be taken to court. Asked whether they thought the law
enforcement agencies might soon target financial abuses by other oligarchs,
such as Boris Berezovsky, 29 percent said yes, 43 percent said no. Asked
whether they thought Putin knew about plans for Gusinsky's arrest in
advance, 71 percent answered yes, 14 percent said no. Forty-one percent of
those polled said Putin had shown "weakness and helplessness" in the
Gusinsky affair, 25 percent said he had shown "strength and decisiveness."
Given another set of qualities to choose from, 49 percent of those polled
said that Putin had demonstrated "hypocrisy" and a propensity toward
"intrigues" in the Gusinsky affair, 18 percent said that he had shown
"honesty and decency" (Russian agencies, June 22)

Whatever else, the VTsIOM poll clearly shows that Putin's reputation among
Muscovites has suffered as a result of the Gusinsky affair. On the other
hand, the real surprise may be that a quarter of Muscovites declared
themselves "satisfied" by Gusinsky's arrest, given the Russian capital is
one of the most liberal regions of the country, providing the bulk of the
readership and viewership for Media-Most's outlets, and is run by a
long-time ally of Gusinsky, Moscow Mayor Yuri Luzhkov. Indeed, there is
little doubt that pollsters would find a much higher level of support for
both Gusinsky's arrest and Putin's perceived hostility to the oligarchs in
almost any other Russian region.


Business Week
July 3, 2000
[for personal use only]
Commentary: Let's Face It: Putin Is a Threat to Democracy
By Paul Starobin 
Starobin is Moscow bureau chief.     

An unfriendly media baron is detained without charges for three nights in a
Czarist-era Moscow jail. Popularly elected governors are told they might be
fired. Former KGB officers are put in charge of new administrative districts.
   The pattern in Vladimir Putin's Russia is depressingly familiar. By
punishing his enemies and trying to intimidate everyone else, Putin is
seeking to establish himself as a soft dictator, if not a boot-heeled Stalin.
There should be no more illusions: Putin's regime is a threat to liberal
government and liberal political values.
   Putin was elected President three months ago. But the election itself was
a farce. The real pivot of power came at the end of last year, when an ailing
Boris Yeltsin abruptly resigned and installed then-Prime Minister Putin as
acting President. Aided by a propaganda campaign launched by state-controlled
media, the unknown Putin, a former KGB agent, easily bested a feeble slate of
candidates. He offered no political program other than support for Russia's
war to subdue the breakaway republic of Chechnya.
LONGTIME SPY. Belatedly awakened to Putin's authoritarian streak by the
recent arrest of media lord Vladimir A. Gusinsky, a Kremlin critic, the West
still doesn't quite get it. Putin's goal is not simply to muzzle the press.
It is nothing less than to consolidate all organs of political power and
potential opposition into the hands of the Kremlin. His chief ally is the
secret-service community in which he spent his career.
   By decree, he already has divided Russia into seven large administrative
districts, five led by police or military officials, including a pair of
ex-KGBers. He has also established the Kremlin-backed Unity Party as the
party of power in Russia. The goal is to recruit local political elites,
governors included, into Unity's ranks. This initiative threatens to stifle
the development of genuine political parties in Russia.
   This has not yet turned into a cult of personality. But poking fun at the
President is frowned upon. What drives the Kremlin nuts about Gusinsky is
that his NTV television network features a weekly political satire, Kukly,
that turns the political elite, Putin included, into bumbling, conniving
puppets. Irreverence, of course, can be a devastating enemy of authoritarian
rule. The new political fault line is simple: Either you're with the Kremlin
or against it.
   That message is now clear to Russia's business titans. In a rare show of
unity, 17 of them came together to draft a letter protesting Gusinsky's
arrest as anti-democratic. Even oligarch Boris A. Berezovsky, who didn't sign
the letter and who has tight connections to Kremlin aides, seems to be
concerned. Asked if he feared an arrest or a crackdown on his business
interests, he told Business Week: ``I'm always worried.''
   Preoccupied with consolidating his power at home, Putin is not seeking a
new cold war confrontation with the West. Indeed, on the economic-policy
front, he is adopting liberal policies on such issues as tax reform. So now
is the time for the West to exert what leverage it has over Russia. And it
does have some. Putin wants foreign investment. After an outcry from the U.S.
and other quarters, the President belatedly criticized Gusinsky's arrest as
``excessive'' and the media magnate was then let out of jail. It couldn't
have hurt that Robert Strauss, a former U.S. ambassador to Russia, canceled
his visit to Moscow with American executives to explore investment
opportunities. Such pressure may not in the end thwart Putin, but at least
the West won't be complicit in the construction of his autocratic edifice.
   Putin seems to believe that the Russian people want to be led by a
post-millennium czar. ``Russia was founded as a super-centralized state from
the very start,'' he declared before his March election. ``This is inherent
in its genetic code, traditions, and people's mentality.'' True, most
ordinary Russians believe that what they want doesn't matter. There is no
tradition of grassroots political activism in Russia, and today's citizens
widely feel disenfranchised. But it's time now for voices to be raised.


The Electric Telegraph (UK)
23 June 2000
[for personal use only]
Putin's KGB friends take control from Yeltsin men
By Marcus Warren in Moscow

A POWERFUL group of President Putin's old friends from the KGB are emerging
as a dominant force in the Kremlin, usurping the establishment the Russian
leader inherited from the Yeltsin era.

With Mr Putin looking benignly on, the intelligence veterans appear about to
mount an assault on the status quo far more radical than most believed
possible on his election this spring. Near contemporaries of Mr Putin from
his time as a KGB officer in Leningrad, the group enjoy close personal links
to the president and are rapidly gaining influence at the expense of other
clans competing for his ear.

The rise and rise of Sergei Ivanov, head of the Security Council, and figures
such as Nikolai Patrushev, head of the FSB, the KGB's successor, and Viktor
Cherkessov, Mr Putin's representative in north-west Russia, is alarming their
rivals. Even a powerbroker as entrenched as the businessman Boris Berezovsky
has intensified his criticism of Mr Putin, saying: "Freedom and dictatorship
cannot exist in the same head. Sooner or later it ends up exploding."

Mr Berezovsky leads "the family", the tightly knit group of advisers to Boris
Yeltsin which ran the Kremlin on the sick president's behalf. It picked Mr
Putin as his successor but its influence may now be on the wane.

Yevgenia Albats wrote in the Moscow Times yesterday: "Putin, weak and
inconsistent as he has seemed up to now, is being torn apart by the two
loyalties he inherited: first to the corporation, the brotherhood, the KGB
which made him a man; second to "the family" which made him president." The
KGB veterans, close to Mr Putin in age and temperament, look and sound alike
- well turned out, quietly spoken, grey-looking forty-somethings.

Through its hold on the law enforcement agencies, the secretive clique of
ex-KGB officers is believed to have engineered last week's arrest of Vladimir
Gusinsky, the media magnate. The authorities have now fired another warning
shot in their war against Russia's "oligarchs" - a challenge by the
prosecutor's office disputing the privatisation of one of the country's
industrial giants.

Moscow prosecutors have filed a suit disputing the 1997 sale of state shares
in Norilsk Nickel, the giant metals company based far beyond the Arctic
Circle and responsible for almost half the world's supply of the mineral

Coming a week after Mr Gusinsky's arrest, the legal move appeared to signal
the beginning of a major offensive against Russia's tycoons, with the target
this time being Vladimir Potanin, head of the Interros group. In the Nineties
Mr Potanin devised the "loans-for-shares" scheme which granted a group of
Russian businessmen fabulous wealth in return for political support for Boris

Norilsk Nickel, with exports worth £1.6 billion last year, 20 per cent of the
world nickel market and more than 40 per cent of its palladium market, was
one of the most valuable prizes in the unprecedented sell-off of state
property. Businessmen in the country's lucrative oil sector fear they may be
next to come under attack.

While few prominent Russians dare blame Mr Putin's ex-KGB circle by name,
they drop not-so-subtle hints about the background of their tormentors. Mr
Gusinsky, in his first public appearance since his release last Friday, said:
"The authorities would like to control everything: oil and the money behind
it. These oligarchs are out of the ordinary. The sort of authorities
beginning to emerge in Russia don't want and don't like out of the ordinary
people. And I shouldn't have to tell you what I mean."

Appearing on the same television programme on Tuesday night, the liberal
leader, Grigory Yavlinsky, sounded the alarm at what he called "the first
signs of a police state". The Kremlin believed that it could solve the
country's problems by imposing authoritarian rule, he complained. He said:
"Anyone who is moving in a different direction, who says what he shouldn't
say, will be punished." A belief in the benefits of authoritarianism is
popular in the KGB circle around Mr Putin.

Pride in their previous careers and affection for the old Soviet Union do not
translate into support for restoring communism but a strong Russia instead.
They do, however, prefer to manipulate events from the shadows and distrust
the media, tending to equate criticism in the press with "subversion".


NATO chief says look at Russian ideas
By Jonathan Wright
WASHINGTON, June 22 (Reuters) - NATO Secretary-General George Robertson said
on Thursday it would be wise to look at Russia's missile defence proposals in
case they contain ``the kernel of something different or something new.''

Robertson, visiting Washington for talks with the Clinton administration and
members of Congress, told reporters that in the absence of details from
Russia he was keeping an open mind on whether Moscow wanted only to divide
the Western alliance.

The German government and a foreign policy adviser to U.S. Republican
presidential candidate George W. Bush have also said they do not reject the
Russian proposal, which respond to U.S. plans for a national defence against
incoming missiles.

The Clinton administration has said the proposals do not deal with the threat
that countries such as North Korea and Iran might pose to the United States
in a few years.

NATO expects to hear more details from Russia at a meeting of the NATO-Russia
permanent joint council in Brussels next Wednesday, Robertson told defence
reporters over breakfast.

``We're not at a stage of saying it looks like a good idea or that we're
going to dismiss it because it's a ploy. We're still in the discovery phase.
After that we'll make an assessment of what its value is,'' he said.

``It seems to me to be wise to examine it and to see whether it is just
wedge-driving or whether it actually has inside it the kernel of something
different or something new,'' he added.

U.S. commentators have tended to see the Russian proposal, for a system to
intercept missiles soon after launch, as a device to undermine the more
extensive U.S. system, which would try to hit missiles as they soar through

But some U.S. critics of the Clinton administration say they prefer a system
similar to the one outlined by Russia.

Robertson, who met Russian Defence Minister Igor Sergeyev in Brussels on June
9, said the Russians had given only the briefest of details about their

``It has only been outlined in the sketchiest possible form, both publicly
and indeed in the discussions with NATO. The Russians have not supplied us
with enough information at this stage in order to allow us to make a
judgment,'' he added.

He also appeared to disagree with Sergeyev on whether the Russian proposal
would violate the Anti-Ballistic Missile Treaty which Washington and Moscow
signed in 1972.

Sergeyev said in Brussels there would be no need to amend the treaty in order
to create an effective defence against attack by what Washington used to call
rogue states.

But Robertson said, ``We would like to know the answers to some pretty
serious questions about what it is they (the Russians) mean, what
implications (it would have) for the ABM treaty, which it would appear to

U.S. Defence Secretary William Cohen restated the Clinton administration
point of view in Brussels, saying the ``boost-phase'' system which Moscow
appeared to be proposing would not protect the American people.

A senior Pentagon official said on Tuesday: ``The theatre missile defence
approach that the Russians have been talking about clearly does not have the
capability of defending against the long-range capability against the United

But Pentagon spokesman Ken Bacon said on Thursday the United States agreed
with Robertson that the West ought to consider ``some of the suggestions made
by the Russians.''

``When Secretary Cohen was in Moscow, he said that we were anxious to ...
talk to them both about their boost-phase intercept ideas as well as their
theatre missile defence ideas for protecting Europe,'' he added.

Those interested in the Russian proposals say they do at least imply a
recognition of a new threat from smaller countries which are trying to
develop ballistic missiles.

The Bush adviser, former under secretary of state Robert Zoellick, said on
Wednesday, ``Intellectually that's a big shift (by Russia), and for people to
ignore it strikes me as having blinders on... It was a terrible mistake for
the administration to basically slap it down.''

Robertson said, ``What is interesting is that they (the Russians) are not
denying that there might be a threat. By bringing forward a suggestion, they
seem to be implying that they agree that there is a threat.''

Asked how last week's summit between the leaders of North and South Korea
might affect assessments of the threat, he said it was too early to tell
where Korea was going.

``Most people in Europe concluded that you shouldn't make up your mind solely
on the basis of one meeting by world leaders, however remarkable that meeting
and reconciliation appears to be. We've got to wait and see,'' he said.


Rossiiskaya Gazeta - Biznes v Rossii
June 17, 2000
[translation from RIA Novosti for personal use only]
     The world's population is increasing with every passing
minute, not day: last October it passed the 6-billion mark and
a hundred years it will reach 10-11 billion. Russia is among
those few countries where the trend is different.
     According to the State Statistics Committee, in early 1992
Russia's permanent population was 148.7 million people, and in
early 2000 - 145.5 million.
     The population's decrease is observed in the majority of
regions: in January 2000 there were three deaths per one birth
10 regions, and in the Pskov region - 4 deaths per one birth.
According to the last year's data, natural increase of the
population was registered in 16 regions, and in the first
of this year - only in 11 regions. Demographers say that for the
natural reproduction of the population the birth rate per one
woman should be 2.14-2.15, but in this country it has already
dropped to 1.17. This means that the majority of families have
only one child.
     The main causes of deaths are cardio-vascular diseases,
accidents, food poisoning and traumas. Among the able-bodied
population unnatural causes of deaths prevail. Road accidents
kill twice as many people in this country as in Europe. The
number of deaths from alcohol abuse has increased by has 3.5
times over the past five years. Specialists differ as to the
reasons for a high mortality rate among the Russian population.
For instance, Igor Gundarov, chief of the laboratory of the
research centre of preventive medicine, believes that "alcohol
abuse, smoking and the unfavourable ecological situation are
still not substantial factors behind a sharp surge in the
mortality rate." Having analysed statistical data and public
moods over the past 100 years, the centre's specialists came to
the conclusion that people's troubled psychological state is a
decisive factor in this respect (the feeling of being unwanted,
hopelessness, the loss of the meaning of life, etc.). In their
opinion, even health depends on one's satisfaction with life (up
to 80 percent).
     The centre's studies give rise to many debates, and they
equally interest people. According to Vladimir Sokolin, chairman
of the State Statistics Committee, back in 1971 the USSR Central
Statistics Department made a forecast for the next 30 years in
which it warned that from the second half of the 1990s there
would be a steady decrease of the population in Russia. Note
at that time nobody could even think about the disintegration of
the USSR and the present reforms.
     Ten years later the country's leadership was presented with
the new data on the demographic situation, and with another
warning to the same effect. This means that there are some
objective demographic laws which do not depend neither on the
country's leaders nor on serious socio-economic changes.

Business Week
July 3, 2000
In Defense of Putin's Efforts to Build a True Nation State (int'l edition)

In my decades-long dealings with Russia, I have seen firsthand many
difficulties. I have also seen the difficulties that the post-Soviet
government itself has encountered (``Putin's power play,'' European Business,
June 5).
   I am no fan of the continuing inefficacy and at times criminal behavior of
the Russian marketplace, but I must at least partially come to the defense of
President Vladimir Putin in his struggle for power. Although I do not know
the true details of the means being used in his attempt at a resumption of
national power, I can commend the goals, in as much as they assert
nation-state responsibility.
   Imagine the reaction and outcome in the U.S. if Montana were to decide to
suspend the transfer of taxes to the federal government and enter into a
treaty of its own making with North Korea. Russia is faced with the dynamic
equivalent of this very thing.
   The U.S. should demand from Russia international standards of
responsibility (read Chechyna), but it should also clearly express its
support for adherence to the Russian constitution by freely subscribed
members of the Russian federation.
   The U.S. also has a constitution, and it is considered to be a rather
important document. Grant the Russians the same.

   Brian Kelley
   Mullheim, Germany


From: (Edward Lozansky)
Date: Thu, 22 Jun 2000
Subject: Joint US - Russian Statement on Missile Defense

Dear David,

Please post the following US - Russian statement on Ballistic Missile Defense
issued today in Washington, D.C. on the eve June 25 - 26 meeting in Moscow
suggested by Secretary Cohen. Thank you.

US, Russian Lawmakers Suggest Joint Missile Defense

Future consultations ripe for dialogue on development cooperation

WASHINGTON, DC - Today members of both the U.S. Congress and Russian Duma
suggested a joint effort between the American and Russian governments to
develop and deploy a strategic missile defense system. 

In an effort spearheaded by the Free Congress Foundation and the American
University in Moscow to engage members of both lawmaking bodies in joint
missile defense discussions, the most recent fruit of their efforts was the
receipt of statements from Duma Vice Speaker Boris Nemtsov and Rep. Curt
Weldon (R-PA) supporting cooperation between the two nations on missile

Nemtsov heads the Union of Right Forces, recently merged with the Yabloko
Party; the two parties have been the leading pro-democracy and pro-western
political groups in Russia.  Weldon is the Chairman of the House Armed
Services Committee's Research and Development Subcommittee and also heads
the Congress-Duma Study Group, an interparliamentary exchange program.

The statements come as the U.S. and Russia hold pre-scheduled defense
consultations in Moscow June 25-26, providing the opportunity for the two
nations to continue discussions on potential missile defense collaboration.

Other efforts by the Free Congress Foundation and the American University of
Moscow to increase cooperation between the U.S. and Russia include:

*   a panel discussion June 9 about the prospects of the United States
and Russia jointly developing a missile defense system.  The participants
included Sergei Rogov, Director of USA-Canada Institute of the Russian
Academy of Sciences; Gen. Victor Yesin, Head of the Military Department of
the National Security Council; Gen. Vladimir Dvorkin, Head of the Strategic
Missile Defense Institute; Adm. Nikolai Konarev, Russian Navy Staff, and
Rep. Curt Weldon (R-PA).

*   an opinion piece published June 2 by The Washington Times
co-authored by Free Congress Foundation President Paul M. Weyrich and
American University of Moscow President Edward Lozansky on joint
U.S.-Russian missile defense.

*   a panel discussion May 2 between members of the U.S. Congress and
the Russian Duma regarding the two nations' missile defense, intercultural
and business opportunities.


Vice Speaker Boris Nemtsov
"Russian democrats, who fought against the communist totalitarian system for
freedom and democracy, who started market economic reforms, and who recently
united in the Union of the Right Forces, are deeply committed in the values
which put western countries together: liberty, free market, human rights,
and democracy," said Russian Duma Vice Speaker Boris Nemtsov.  "Our
representatives in the Parliament and in the Government are doing their best
to carry into effect those fundamentals."

"Jealousy and distrust towards the western countries are still strong within
influential political forces in Russia," warned Nemtsov.  "It could
seriously complicate our mutual relationship.  Russian society, due to its
communist past, hasn't reached yet the national consensus about the basic
fundamentals to which we are committed.  Hence we believe that cooperation
between Russian and American scientists and politicians would not only
ensure the workability of the new defense system, but it also would improve
mutual trust between the two countries, which itself makes the world safer."

Rep. Curt Weldon (R-PA)
"I welcome the Clinton-Gore Administration's reversal on cooperating jointly
with Russia on missile defense for our two countries," stated Congressman
Curt Weldon.  "Unfortunately, one can't help but wonder how much further
along the process would be if President Clinton had embraced this approach
seven years ago."

"Many in Congress have been advocating cooperation with Russia for several
years now, but have been ignored by the Clinton-Gore Administration," said
Weldon.  "Indeed, the President has undermined our efforts.  When he took
office in 1993, President Clinton abruptly cancelled the Ross-Mamedov talks
- discussions begun by Presidents George Bush and Boris Yeltsin on
cooperative missile defense between the United States and Russia.  And it
was President Clinton who cancelled the RAMOS program, a joint-cooperative
missile early warning system designed to help build confidence between our
two countries.  So while I am optimistic about the potential for a new era
in U.S.-Russian relations, I remain skeptical as to whether the Clinton-Gore
Administration is truly committed to this approach."

Free Congress Foundation President Paul M. Weyrich
"While the United States should never have to ask another nation if it can
protect American citizens from nuclear attack, it would be wise to invite
the only other nuclear superpower to join us in developing a missile defense
system," said Free Congress Foundation President Paul M. Weyrich.  "Both the
U.S. and Russia face the same threats from rogue nations.  Our two nations
would do well to work collectively to protect our peoples from these

American University of Moscow President Edward Lozansky
"In 1991 when Communism collapsed, the United States had a unique historic
opportunity to make Russia a strategic ally," said American University of
Moscow President Edward Lozansky. "Unfortunately, the leadership of both
countries made a series of tragic mistakes which prevented this from
happening.  Now the idea of U.S.-Russian joint ballistic missile defense
allows us once again to try building our strategic partnership.  I believe
that we should try to draw into this discussion not only governments but
people, and most of all scientists in both countries, to discuss the
feasibility and implementation of this idea.

# # #
Edward D. Lozansky
President, Russia House & Kontinent, USA
1800 Connecticut Avenue, NW Washington, DC 20009
Tel. 202-986-6010, Fax 202-667-4244; E-mail: &
Moscow office: 44 Bolshaya Nikitskaya Street, Moscow, Russia
Tel. (095) 290-3459, Fax (095)-291-1595;  E-mail: 

Source: `Segodnya', Moscow, in Russian 22 Jun

Commander-in-Chief of the Russian Strategic Missile Troops Vladimir
Yakovlev announced the essence of previously secret "asymmetrical measures"
in response to US desire to deploy a national antimissile defence system.
Such response would include the possibility of Russia withdrawing from the
treaty on the elimination of intermediate-range and shorter range missiles
[INF], Yakovlev said. The following is the text of report by the Russian
newspaper 'Segodnya' on 22nd June. Subheadings have been inserted

Russia took a step closer to a nuclear missile war yesterday. After
congratulating graduates at the Peter the Great Missile Academy Vladimir
Yakovlev, commander-in-chief of the [Russian] Strategic Missile Troops,
unexpectedly announced the essence of the hitherto secret "asymmetrical
measures" in response to the US desire to deploy a national antimissile
defence system.

First, it is intended to increase the number of nuclear warheads on ICBM's
(the Topol missile system was initially designed to carry a MIRVed
warhead). As a result of which the commander in chief believes that US
missile defence, "which even now is a myth, will become even more of a myth".

Missile chief on possibility of withdrawing from INF Treaty

Second, and this is what is sensational, Vladimir Yakovlev did not rule out
Russia's withdrawing from the Treaty on the Elimination of
Intermediate-Range and Shorter-Range Missiles [INF] in response to the
United States' withdrawal from the 1972 ABM [Anti-Ballistic Missile]
Treaty. This class of missile cannot reach America (they have a range of
5,500 km), but they do "cover" the European area as far as the Atlantic

In the event of the repudiation of the INF Treaty Europe once again falls
hostage to a clash between the nuclear superpowers. According to its
strategic security concept, the United States is planning to site a
100,000-strong grouping on the continent of Europe with command and control
posts and the relevant infrastructure and all this, as commander-in-chief
Yakovlev hinted, is an extremely worthy target for Russian missiles.

Technical aspect of withdrawing from NTF Treaty

At the same time the commander-in-chief did stress that his statement is no
spur of the moment thing: "This question has been studied for a long time -
all the requisite scientific, economic, military, and technical feasibility
studies have been prepared." Yakovlev noted, specifically, that "Russia
does have the technological capability to create a group of
intermediate-and shorter-range missiles; they are very simple since they
fit into the framework for the production of those delivery vehicles
currently in existence," hence their "production will be far cheaper".

Gen Vladimir Dvorkin, chief of the Russian Federation Defence Ministry's No
4 Central Scientific Research Institute, set out the essence of this
technical operation in greater detail. An ordinary Topol is shortened by
one stage, producing as a result a Pioner "triple-warhead"
intermediate-range missile, which can reach any capital in Europe in a
matter of minutes. The snag is that a US Pershing-2 from central Europe can
also reach Moscow in seven to eight minutes (not everyone in the Kremlin
will be able to rush to the bunker) and the United States, if Russia
withdraws from the INF Treaty, does in fact have far greater financial and
industrial potential to promptly restore its group of intermediate-and
shorter-range missiles in Europe (440 of them were destroyed in accordance
with the treaty).

Political aspect of withdrawing from INT Treaty

The political aspect of the question remains in addition to the
military-technical aspect. Moscow previously suggested that the whole
system of strategic accords would inevitably collapse in the wake of the
1972 ABM Treaty, but the specific issue of the INF Treaty was not raised at
either presidential or expert level. The president said something else: He
invited the United States and Europe in turn to create a unified
antimissile defence system (according to certain reports, he is also
prepared to discuss this subject in China). Western experts had not had
time to analyse these initiatives before the commander-in-chief of the
Strategic Missile Troops came up with his "asymmetrical response." However,
according to certain reports, Yakovlev was given the floor deliberately -
to "frighten" the United States once and for all. Although such a subtle
move clearly did not fit in with the Russian-US consultations on
antimissile defence taking place in Oslo at the same time. The horror is
that the United States could indeed take fright. And then Russia would
automatically return to that period of the Brezhnev era when all the
general secretary's foreign policy contacts were accompanied by the
following resounding appeal from Foreign Ministry head Andrey Gromyko: "Get
the Pershings out of Europe!"


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