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24 July 2000
[Note from David Johnson:
1. The Guardian (UK): Amelia Gentleman, Town where a Soviet dream
turned sour. Its scientists were the envy of the world. Now some of
the top brains are manual workers. Our three-part series on the decline
and rebirth of Russian science begins in Siberia
2. Reuters: Russia's Putin pleased with G8 summit.
3. Vremya Novostei: Tatyana Malkina, PUTIN ACCEPTED BY THE SEVEN.
4. Washington Post: Clay Chandler, Putin Makes Strong Bid For Equal
Role in G-8.
5. Los Angeles Times: Valerie Reitman, Russian President Spices Up G-8,
Earns Praise for Frank Discussion Japan: Academics at summit give him
an A, while grading the overall conference a B-minus.
6. Newsweek: Bill Powell, A Troubled Investment. Berezovsky warns of
7. Financial Times (UK): Arkady Ostrovsky, Oligarchs to seek peace
deal with Putin.
8. Los Angeles Times editorial: Too Soon to Cheer Putin.
9. Reuters: Swiss court turns down request by Russian tycoon.
10. Irish Times: Putin's apparent gains mask problems at home.
Vladimir Putin, in spite of pre-summit progress, still faces
disturbing undercurrents, writes Seamus Martin.
11. The Times (UK): Philip Webster, THE G8 SUMMIT. Putin steals
the show with call for equality.
12. Chicago Tribune: Colin McMahon, `PYRAMID POWER' IS RUSSIANS'
HOPE FOR GOOD FORTUNE.
13. Reuters: Newborn dies in Russian hospital after power cut.]
The Guardian (UK)
24 July 2000
[for personal use only]
Town where a Soviet dream turned sour
Its scientists were the envy of the world. Now some of the top brains are
manual workers. Our three-part series on the decline and rebirth of Russian
science begins in Siberia
Amelia Gentleman in Akademgorodok
Beneath the streets of Akademgorodok a maze of tunnels links key buildings so
that academics in Russia's science town never need emerge into the harsh
Siberian temperatures outside.
In winter, workers at the institute of nuclear physics make their way along
curving dimly lit walkways. The rationale of the underground system, one
scientist explained, was to prevent research time being wasted in the
rigmarole of wrapping up against the cold.
When Akademgorodok was created from nothing in 1957, its founders spent
considerable time assessing how to make life easier for the thousands of
scientists who were to abandon their comfortable lives in Moscow to labour
for the good of Russian science in bleak Siberia.
On a site 30 miles south of the polluted industrial city of Novosibirsk,
trees were planted, flats were built and spacious, well-equipped laboratories
were set up. Academics were given a concert hall and a club - the House of
Scientists - where they were to spend sober evenings together discussing
Hundreds of tonnes of sand were imported at great expense and scattered on
the stony shores of the nearby Ob sea to create the illusion of a beach on
which the scientists could relax at weekends.
For the first 30 years the town - with its 37 institutes and thousands of
researchers working together to push back the boundaries of knowledge - was a
symbol of the grandiose intellectual ambition of the Soviet regime.
Scientists were treated with deference in the USSR. Lenin began to promote
their interests immediately after the revolution, aware of their importance
in the creation of a powerful new society. In the lean years they received
Later, under Stalin, a sense of national insecurity boosted the state's
devotion to science. Most scientists escaped the repressions because they
were needed to develop the country's ability to make weapons. Even those who
were imprisoned continued to work in specially developed research camps.
"We were slaves to the totalitarian state, but we didn't mind because we were
doing interesting work and we felt that the state needed and respected us,"
said Vitaly Ginzburg, a physics professor, who worked during the 1940s to
develop the Soviet atom bomb.
Science was not a mere adjunct of Soviet life - it was at its core, the key
to transforming Russia from a backward agricultural country into an
industrialised mighty world power, equipped to defend itself against the
The government poured large measures of the budget into cultivating this
scientific base, squeezing ideological pride from internationally acclaimed -
and feared - advances: pioneering aeroplanes, and later rocket technology;
the first man in space; the first atomic power station; the hydrogen
For most of the 20th century the Soviet Union raced on, matching the
achievements of America.
Akademgorodok - meaning small town of academics - was part of that tradition.
Sophisticated space technology was developed in one institute, while down the
road mathematicians pioneered computer technology and biologists wrestled to
make Russia's crops sturdier, using new genetic engineering techniques.
But in the past 10 years it has come to symbolise the disastrous decline of
Russia's academic tradition.
It is generally accepted that there are two reasons why Russians move to
Siberia - either they are romantics or they come as prisoners. The scientists
who founded Akademgorodok in 1957 were romantics. Many who remain see
themselves as the prisoners of their own shattered project.
No one has forgotten the early optimism. Towards the end of the 50s it had
become obvious that Siberia had massive natural resources: petroleum, gas,
coal, timber, diamonds and minerals. But with the country's brainpower
concentrated in Moscow and Leningrad - now St Petersburg - there was nobody
to exploit its potential, so President Nikita Khrushchev backed a scheme to
move leading scientists and research students from western Russia to the
Just 12 years after the ravages of the second world war, the state somehow
found enough money to establish the science oasis. The scale of the project
was phenomenal. The main street, Lavrentiev Prospect, named after the town's
founder Mikhail Lavrentiev, was once listed in the Guinness Book of World
Records as "the most scientific street in the world", because of its high
concentration of institutes.
As well as undertaking research aimed at developing Russia's conventional and
nuclear military potential, scientists were encouraged to focus on pure
science, to find answers to the big questions, simply for the sake of
Today the institutes - physics, chemistry, genetics, biochemistry,
mathematics, electronics and more - all remain. A few, run by energetic
directors, have transformed themselves into profitable enterprises by winning
lucrative research contracts from western companies.
But they are a minority. As their funding dwindles, the rest have had to
abandon research projects and survive on a fraction of their former income.
Many are dusty shells, virtually abandoned by their scientists, some of whom
have been forced to turn to manual labour to supplement their miserly or
non-existent income. Meanwhile the most talented of the younger generation
have slipped abroad and students, disheartened by poor job and salary
prospects, stay away.
With a shortage of money for laboratory equipment, there is no question of
even attempting to keep up with developments in Europe and America. And with
the influx of rich communiting businessmen, many young scientists can no
longer afford the rents.
The privations suffered by scientists in this town echo the hardships of
colleagues throughout the country since the collapse of the Soviet Union. In
real terms Russian science now receives a seventh of the government funding
it did in 1990, leaving hundreds of institutions struggling to survive.
Genady Kulipanov, vice-chairman of Akademgorodok's governing body and a
professor of nuclear physics, said: "In the late 1980s I found it hard to
explain to friends in the west what the process of perestroika [rebuilding]
really meant. Now I tell them perestroika - it was destroyka. We didn't
really rebuild anything, we just destroyed a great deal.
"The government stopped funding pro jects. There were no new institutes. A
lot of the more energetic and best-qualified people left and went abroad or
went into business. The spirit of the town changed."
Scientists here remember the lean years from 1991 to 1996 with horror,
proferring graphs with drooping curves -testimony to the funding collapse and
- charts with soaring curves to demonstrate the flow of scientists abroad.
Desperate to approach the future with optimism, many of Akademgorodok's
workers are hopeful that Vladimir Putin is the man to restore the prestige of
Russian science. They interpret the new president's commitment to restoring a
powerful Russian state as an indirect pledge to boost their funding.
Mr Putin's advisers are making all the right noises - stressing the urgency
of developing Russia's scientific, technological base to revitalise the
economy. But the president does not have long to contemplate the disarray he
has inherited. Academics agree that an increase in funding must begin
immediately, before the crumbling structures of Russia's scientific base
"It is impossible to go on like this. If the process of the last 10 years
continues for another 10 years then there will be total collapse," said
Professor Vladimir Likholobov, deputy director of one of Akademgorodok's more
succesful institutes, the Institute of Catalysis.
But for men such as the founder of the town's medical institute, Professor
Vlail Kaznacheev, 75, who devoted their lives to developing the Soviet
scientific dream, the changes have come too late. Sitting in the bare lobby
of the House of Scientists Mr Kaznacheev is despairing about the events of
the last 15 years.
"Our salaries have dropped radically, but we've lost everything else too. We
used to get money for animals, laboratories, materials, equipment,
expeditions and flats," he said.
"Without expeditions and new equipment, we can't continue the research. The
process has been devastating."
Russia's Putin pleased with G8 summit
MOSCOW, July 24 (Reuters) - Russian President Vladimir Putin basked in the
success of his weekend summit with leaders of rich nations on the Japanese
island of Okinawa, saying on Monday it had boosted Moscow's international
Touring Russia's Far Eastern Kamchatka peninsula before returning to Moscow,
Putin told reporters that Russia achieved what it had expected to achieve at
``Without doubt, the results will contribute to increasing the role and place
of Russia in international affairs,'' RIA news agency quoted him as telling
``These were the results we expected,'' he said.
Russia's media have reported on the trip, Putin's debut in top-level
multilateral diplomacy, as a glowing success.
On Sunday one state television station showed pictures of Putin allowing
himself to be thrown during a Judo exhibition on the summit's sidelines -- he
holds a black belt in the sport -- and said it was ``Putin's only fall on
Putin has also enjoyed the praise of his colleagues, especially for a
briefing he gave them on his trip last week to North Korea, the first by any
Russian or Soviet leader.
German Chancellor Gerhard Schroeder said Putin's ``confident but not
exaggerated performance'' had helped bring about Russia's full integration
with the rich countries' club.
``That is for me the most prominent result of this summit,'' said Schroeder.
July 24, 2000
[translation from RIA Novosti for personal use only]
PUTIN ACCEPTED BY THE SEVEN
Tatyana MALKINA from Petropavlovsk-Kamchatsky
Vladimir Putin's visit to Pyongyang evoked exactly the
warm repercussions in the hearts of the leading world
politicians that Moscow wanted. The Russian delegation was the
super-star at the Okinawa summit. Everyone asked Putin for new
details about the forbidden country, its main "comrade" and
Putin's vision of the steps that the rest should now take. It
is apparent that the vision was so convincing that the summit
participants approved a statement on the situation in the
Korean Peninsula, which was exalted in some places, and some
members of the G8 (above all Japan) expressed readiness to join
What with the absence of clear-cut success of Clinton the
peacemaker in Camp David, Putin's peacemaking breakthrough in
Pyongyang elevated the Russian president to the rank of the
winner, as compared to the American "lame duck." The
long-planned anti-American diplomatic blitzkrieg was crowned
with success. In return for Putin's official statement on the
North Korean readiness not to launch missiles from its
territory, the G8 "surrendered" Clinton by including into the
final communique a phrase about the need to undeviatingly
comply with the ABM Treaty (in Russian wording).
And this put Clinton in a position of lone ABM maniac.
When asked if loyal allies would abandon Clinton now, Putin
"When I attend such talks, I never try to outsmart anyone, to
suggest something that would drive everyone into a deadlock,
into a complicated situation. We have a stand, and we uphold it
by advancing additional arguments. It seemed to me that the
arguments voiced this time had a positive impression on
Putin also had a few warm words for President Jacques
Chirac of France, with whom he refused to meet tete-a-tete (it
was joked in the corridors that Chirac could hope to have a
personal meeting with Putin only if he loaded the Sedov with
gold up to the waterline). Nevertheless, the two politicians
talked during general meetings and made a favourable impression
on each other.
This is what Putin said about Chirac: "Mr. Chirac is one of the
recognised leaders of world politics. He impressed me with his
encyclopaedic knowledge in the sphere of martial arts. He likes
sumo best of all. He gave me a book, and I gave him a book
about the Kremlin. France should not forget where the Kremlin
is situated. There is such a place in the world." This is how a
former secret service man dealt with a former socialist,
The Russian president found especially warm words for
Japanese Premier Mori. He thanked him wholeheartedly for the
warm welcome and congratulated him on the perfect organisation
of the summit, which would allow the country of the Rising Sun
to strengthen its positions and raise its role in the world. In
other words, Putin felt as "the big boy" in Okinawa. Judging by
the comments of the G8 leaders, they were simply stunned by his
Yeltsin frequently tried to huff and to puff before the
G8, but this usually took the form of frightening demarches or
sheer stubbornness. Putin, although he is pursuing a rather
hawkish foreign policy, somehow managed to perfectly fit into
the high style of relations between the world's giants. It was
for the first time that Russia joined, with commendable
seriousness, discussions that concern industrialised countries
now, although these problems will concern it only in the
future. I mean global spread of information, the safety of
gene-modified products and better health (which we don't have),
and the active old age programme, which sounds as a mockery in
Nevertheless, Putin discussed these problems, which are
far removed from Russia, quite easily and showed deep knowledge
of details. The only difference between him and his G8 partners
is that they put the problem of liquidating the gap in digital
technologies to the second place and the struggle against
terrorism to the last place in their final communique. But
Putin's list of vital problems begins with international
terrorism, organised crime and ethnic separatism, and ends with
the genome - and not forcefully at that.
On the whole, the individual minor drawbacks did not mar
the triumph. But then there were not many such drawbacks - the
mating and hence highly dangerous habu snakes, the heat that
made some officials with bad eyes lose sight completely because
their glasses fogged over when they stepped out of their
air-conditioned cars, and the presence among the final
documents of such atavistic papers as the "G7 statement" (mind
you, not G8) or the G7 document on actions taken to combat
abuses of the world financial system (subjects that are
unpleasant to Russia). On the other hand, German Chancellor
Schroeder suggested right at the summit that G7 be renamed G8
there and then. By the way, Germany agreed to postpone the
repayment of a part of Russian debt amounting to 8 billion DEM
Anyway, Putin's debut appearance was a success. He scored
heavily but said angrily at a press conference: "I have come
here not to improve my image, but to do my duty as top
official." But then, he succeeded in doing both. Next on the
agenda of the Russian president is the global Summit 2000 in
July 24, 2000
[for personal use only]
Putin Makes Strong Bid For Equal Role in G-8
By Clay Chandler
NAGO, Japan, July 24 (Monday) In the two years since they invited Russia
to become a full-fledged member, other leaders of the Group of Eight have
treated the president of the former superpower as something of a poor
They've barred him from purely economic discussions at their annual summits
and excluded Russian finance officials from ministerial meetings. The
clownish antics of Putin's predecessor, Boris Yeltsin, at the last two
summits in Birmingham, England, and Cologne, Germany, only cemented their
perception that Russia--notwithstanding its nuclear arsenal--lacked a
government that could be taken seriously.
But with his confident and polished performance at this weekend's summit here
in Okinawa, Russia's new president, Vladimir Putin, has begun to reverse that
image. Comments by several G-8 leaders and top officials suggest that Putin,
a 47-year-old former intelligence agent, has moved Russia closer to
acceptance as a credible global power.
"Very impressive," declared Canadian Prime Minister Jean Chretien of Putin's
mastery of the issues. Putin's comments were spontaneous and informed, said
Chretien, and it was clear that he had read his briefing papers. German
Chancellor Gerhard Schroeder declared Putin's conduct this weekend to be
nothing short of "brilliant." Officials from Germany and from Italy--host of
next year's summit, in Genoa--even suggested ending the two-tier system that
excludes Russia from some discussions.
Such warm words for Putin--who has been sharply criticized elsewhere over the
Russian military campaign in Chechnya, Kremlin attacks on the media and
efforts to centralize power in Moscow--were among the few surprises at an
otherwise carefully scripted gathering.
Putin and the other seven leaders wrapped up their discussions today with a
promise to move more quickly in forgiving foreign debts owed by 41
impoverished countries and a flurry of ambitious promises to bridge the
"digital divide" between rich and poor countries, halve the number of people
living in extreme poverty by 2015, and cut the number of AIDS cases by 25
percent over the next decade. But the leaders did little to set these
objectives in motion before departing this subtropical Pacific island,
prompting anti-poverty advocates to decry the proceedings as an elitist sham
and fueling criticism in many member countries that the annual summits have
Putin's quiet, analytical manner at the Okinawa summit accounted for part of
his appeal to the other G-8 leaders, but senior officials of member countries
said Putin demonstrated his political savvy in several specific ways.
Putin's report on his stop in North Korea en route to Okinawa and his
assessment of that country's reclusive leader, Kim Jong Il, was easily the
most interesting item on the leaders' foreign policy agenda and helped him
grab the limelight. A genuine peace overture from North Korea would transform
the security dynamics of the Pacific, and all the leaders were interested to
hear Putin's assessment of Kim's proposal to abandon his missile program in
exchange for help from other countries in launching North Korean satellites.
North Korea's strategic missile capability is one reason given by the Clinton
administration for the need to build a limited U.S. missile defense system.
Putin also seems to have impressed the other leaders by not using the summit
to demand that Russia be relieved of $42 billion in debt inherited from the
Soviet Union. Many concluded that Putin avoided the issue because he thought
raising it would undermine Russia's stature in the discussions if it had its
And it was Putin's suggestion that the leaders begin to correspond by
e-mail--even though several of them are confessed computer novices.
In his final news conference here this afternoon, Putin made clear that he
hopes Russia can become a major player at G-8 meetings. "We cannot hide our
heads in the sand like ostriches," he told reporters. "It is important for
Russia to act as an equal partner in global affairs. . . . Russia cannot be
an idle observer of international developments."
Some officials credited Putin's relations with the other seven leaders for
ensuring that Russia received favorable treatment in the final summit
communique. That document omitted passages from an earlier version that urged
Russia to repay its debts and expressed support for Russia's bid to become a
full member of the World Trade Organization. Italian Prime Minister Giuliano
Amato told reporters the references were deleted at the last minute at the
Russian leader's request. "Putin asked us not to mention a single country in
the G-8 final document, and we did that," Amato said.
After his final round of discussions with the other leaders, Putin, who holds
a black belt in judo, visited a local sports center, where he faced off
against a Japanese youth. He threw his opponent to the mat, then allowed
himself to be thrown.
Los Angeles Times
July 24, 2000
[for personal use only]
Russian President Spices Up G-8, Earns Praise for Frank Discussion
Japan: Academics at summit give him an A, while grading the overall
conference a B-minus.
By VALERIE REITMAN, Times Staff Writer
NAGO, Japan--While President Clinton made his curtain call this weekend
at his eighth and last summit of global leaders, a new star was stealing the
show: Russian President Vladimir V. Putin.
The former KGB spy, elected to the top Russian office in March,
enlivened an otherwise dull meeting teeming with vague resolutions aimed at
attacking the growing gaps in poverty, health, education and computer
literacy between rich and poor nations.
Putin added some spice, arriving on the heels of a two-day tete-a-tete
with North Korean leader Kim Jong Il, bearing fresh information about the
inscrutable nation that has only recently begun opening to the West. He told
of Kim's offer to abandon his country's missile program in exchange for help
in space exploration. German Chancellor Gerhard Schroeder reportedly called
Putin's accounts of his North Korean visit "brilliant."
The G-8 Research Group, an association of academics who attended the
conference, was so impressed with Putin that it gave Russia the top grade
among the summit participants: a solid A, compared with the B-minus they
rated the overall conference here on Japan's southern island of Okinawa.
Putin interjected some tension by trying to build support for his
challenge to U.S. missile defense system proposals. But he earned praise by
not sugarcoating the problems of his own beleaguered economy.
"He explained in frank and clear words about Russia, and he didn't try
to hide or disguise anything," French President Jacques Chirac told
Putin defied expectations by not asking for charity to relieve Russia's
burdensome $42-billion Communist-era debt, as had been expected. "Putin
decided to not accept the lowly role of beggar but was instead playing for
big-power status in lieu of a handout," said George von Furstenberg, an
economics professor at Fordham University and a member of the G-8 Research
For Putin, the conference was an opportunity to define himself after the
often erratic performances of his predecessor, Boris N. Yeltsin--and he did
so with swagger and ideas of his own.
Putin was seemingly the most adept and enthusiastic computer user among
the bunch, calling for the leaders to communicate by e-mail: Much of the
conference focused on the so-called digital divide between the rich and poor
countries. But the leaders themselves were digitally divided: Several are
said to use computers or e-mail only rarely.
Only Japanese Prime Minister Yoshiro Mori--who just began using e-mail a
few months ago--seconded Putin's e-mail motion, and it was dropped, according
to spokesmen for Japan and Germany.
The odds of Putin winning over his counterparts were stacked against him
because the Russian economy is so troubled and the country isn't even a
full-fledged member of the group known as the G-8. In fact, the members of
the "rich man's club"--the U.S., Japan, France, Britain, Germany, Italy and
Canada--met without Russia on the first day of the conference. Russian
foreign and finance ministers do not join separate meetings of the G-7
Putin said he was determined that Russia participate. "Russia doesn't
want to be and cannot be an idle observer of world development," he said. "We
intend to be integral in all structures," including the World Trade
Organization and other financial groups.
Clinton said Russia, for all practical purposes, is a full member. "But
the G-7 have to meet separately when there are creditor nation issues that
only the creditor nations can deal with. . . . It's purely a question of
financial necessity. Otherwise, Russia is fully involved."
Asked his impressions of Kim, the North Korean leader, Putin told
reporters: "He listens and hears what he is told. . . . You can talk to him,
but you have to listen to the national interests of North Korea; otherwise,
you'll never achieve positive results."
As for his reasons for meeting in North Korea, Putin said that it and
his country are neighbors with a common border. "The Russian interest is not
to have a social explosion," he said. "One must be precisely aware of the
scale and nature of the threat."
At the G-8 conference, there were kudos too for Clinton.
Said British Prime Minister Tony Blair: "Last night, all the leaders of
the G-8 spoke not just of our immense affection for President Clinton
personally, but of our real admiration for his strength and his leadership
over these past few years . . . and we're all going to miss him greatly
July 31, 2000
[for personal use only]
A Troubled Investment
Berezovsky warns of creeping ‘authoritarianism’
By Bill Powell
July 31 — Dr. Frankenstein, meet president Putin. Boris Berezovsky was one
of the men who helped put Vladimir Putin where he is today—sitting in the
Kremlin as Boris Yeltsin’s successor. Now, Berezovsky is recoiling in fear
at what he helped create.
IN THE AUTUMN of last year, the then President Yeltsin, his immediate
family and the so-called oligarchs—business cronies who, like Berezovsky,
got rich after the collapse of the Soviet Union—feared for the future.
Yeltsin’s term was running out, and a left-leaning, anti-oligarch
opposition was coalescing under former prime minister Yevgeny Primakov.
Last summer Yeltsin’s inner circle, known as “The Family,” seized on Putin,
then the largely unknown head of the Federal Security Service (a successor
to the KGB), and made him prime minister. Two months ago they helped him
win the presidency on the back of a popular war in Chechnya. For
Berezovsky, a businessman who once said that his best investment in Russia
in the 1990s was “in politics,” everything seemed to be under control.
It has not turned out that way. Last week, as Putin moved to enhance
his own power at the expense of 89 regional governors, Berezovsky moved
into open opposition. With the president evidently intent on moving ahead
with his oligarch hunt—a campaign that started with the brief arrest of
media magnate Vladimir Gusinsky and now includes investigations of the
country’s largest oil and metals companies—Berezovsky has apparently seen
enough. “Putin before the presidential elections and Putin after are two
different things,” Berezovsky said in an interview with NEWSWEEK on
Saturday. Three days earlier the businessman (he controls oil, airline and
media companies) quit his seat in the Russian Parliament. He called for a
blanket amnesty on Russia’s corrupt privatization deals in the 1990s—”We
need to close the books on this,” he told NEWSWEEK—and vowed to form an
opposition movement to fight Putin’s creeping “authoritarianism.”
It’s not clear who will join him. Few average Russians are upset by
Putin’s anti-oligarch campaign. Far from it. The palpable political
appetite for a few show trials of wealthy businessmen—whether based on real
evidence or not—may spur Putin on. There is no question, political analysts
of the Kremlin say, that a “KGB” faction is ascending that almost surely
favors a wider crackdown. If Putin’s “anti-corruption campaign” has only
just begun, Berezovsky may not like the ending of this Frankenstein tale.
With Owen Matthews and Yevgenia Albats in Moscow
Financial Times (UK)
24 July 2000
[for personal use only]
Oligarchs to seek peace deal with Putin
By Arkady Ostrovsky in Moscow
Russian business tycoons will this week seek to negotiate a peace deal with
President Vladimir Putin, urging him to rid the Kremlin of corrupt officials
A group of oligarch business leaders will present Mr Putin with proposals
drawn up by Boris Nemtsov, an MP and leader of the liberal Union of Right
Forces party, who persuaded Mr Putin to meet Russia's business elite.
Mr Nemtsov said in an interview: "The business and power should not attack or
blackmail each other, they should be partners working towards economic
recovery of Russia."
Several large Russian companies and their bosses, including Lukoil, the
country's biggest oil company and Norilsk Nickel have been targeted over the
past few weeks by tax police or the state prosecutor's office.
Mr Nemtsov said the business leaders would present a three-point declaration
to the government.
First, they would call on the Kremlin to declare a moratorium on any
investigations into the legitimacy of privatisation over the past decade and
not initiate any redistribution of former state property.
Second, the business community must undertake an obligation to play by the
rules, pay taxes and and religiously obey the law. "Five years ago this would
have been impossible. The oligarchs were fighting like mad dogs for a piece
of property. Now they have stuffed themselves and they themselves need
rules," Mr Nemtsov said.
Thirdly, the government must rid itself of corrupt bureacrats "starting with
the prosecutors' office", Mr Nemtsov said. However, the business tycoons on
their part must undertake not to use government institutions or bribe state
officials to fight their competitors.
The attacks on business tycoons by the Kremlin have so far conspiciously
bypassed two oligarchs, Roman Abramovich and Alexander Mamut, who are
considered to be part of the so-called family, a group of Kremlin insiders.
"In his election programme Mr Putin said that all oligarchs should be equally
distanced from the Kremlin. He should now act on his promise," Mr Nemtsov
Mr Putin, who is trying to withdraw power from the oligarchs and from
regional governors, is unlikely to make any firm commitments in his first
meeting with the business elite.
About 20 businessmen will meet Mr Putin on Friday. But some of the most
outspoken critics of President Putin's policies, including Vladimir Gusinsky,
a media magnate, and Boris Berezovsky, who has quit the parliament in protest
against Kremlin's attack on businessmen, will not be present. Alfa Group, a
banking and industrial conglomerate, has joined the list of large Russian
business groups that have run into trouble with the authorities.
Mikhail Fridman, head of the group, said police last month seized control of
Alfa Group's 13 per cent stake in the Slavneft oil company in connection with
a three-year old criminal investigation.
Los Angeles Times
24 July 2000
Too Soon to Cheer Putin
Russian President Vladimir V. Putin's tax commissars have stepped up
their assault against the financial "oligarchs," but it's too soon to cheer.
Tax evasion remains widespread, disrupting even the payment of government
salaries and pensions. But Putin must show fairness and respect for due
process of law, as well as firmness in dealing with lawbreakers. Tax
enforcement should be part of a broader plan to set the government and the
economy on a firm legal footing and sever the government's corrupting links
Moscow's prosecutor general's office has been especially busy this
month, raiding offices of some of the biggest business names in Russia,
jailing a few and handing out indictments. Avtovaz, the country's biggest
auto maker and linked to the richest Russian, Boris Berezovsky, has been
accused of a huge tax evasion scheme; similar charges were leveled at Vagit
Alekperov, chairman of the oil company Lukoil. Vladimir Gusinsky, the media
magnate who angered Putin by his critical coverage of the war in Chechnya,
was jailed briefly and stands accused of embezzlement. Another industrial
mogul, Vladimir Potanin, was charged with underpaying $140 million for one of
the companies in his sprawling industrial empire.
Most of the oligarchs have something in common. They bought up Russia's
most valuable assets--oil, mineral resources and more--for a pittance in the
infamous privatization campaign of the mid-1990s, then built up powerful
industrial and media conglomerates. They used their muscle to get Boris N.
Yeltsin elected president in 1996 and acquired political influence reaching
all the way to the top. Corrupt Kremlin officials were a key ingredient in
the rise of the oligarchs and were part of the "family" ruling Russia.
Although the crackdown is widely popular among the mostly impoverished,
resentful Russians, many outsiders, and some Russians themselves, see the
campaign merely as a way to replace Yeltsin's cronies with Putin's. The
president, who rose to the top from an obscure apparatchik post at the secret
service agency with the help of the "family," has offered little more than
Soviet-style rhetoric in explanation. He needs to do more.
Tax enforcement should be part of a broader plan to establish the rule
of law, something neglected in the switch to Russia's rough-and-tumble market
economy. Putin also needs to overhaul the convoluted tax code and complete
market reforms. Even the oligarchs, who are restyling themselves as
legitimate businessmen, are complaining about Russia's chaotic legal system.
Putin is seeking world-class status for Russia, hobnobbing with
American, European and Asian leaders at the G-8 summit over the weekend. To
be credible, however, he must first establish law and order at home, and for
that, he doesn't seem to have a plan. There is every reason to be skeptical.
Swiss court turns down request by Russian tycoon
By Marcel Michelson
ZURICH, July 24 (Reuters) - The Swiss High Court said on Monday it had
rejected a request by Russian business magnate and politician Boris
Berezovsky to unfreeze accounts in Switzerland blocked as part of a
wide-ranging fraud investigation.
``We have rejected the request from Mr Boris Berezovsky, made through his
lawyers, to unblock bank accounts frozen in Switzerland,'' court official
Elisabeth Zimmermann told Reuters.
Berezovksy is one of the founders of Forus, a Swiss-based company. At the
heart of the investigation are allegations that Aeroflot airline was
defrauded out of up to $600 million, partly through Forus and another
Lausanne-based company, Andava SA.
Berezovsky, one of the powerful handful of Russian business figures dubbed
the ``oligarchs,'' is often described as having been close to former Russian
President Boris Yeltsin.
Russian special investigator Nikolai Volkov is due in Switzerland on
Wednesday and will be able to peruse some 800 Swiss legal files connected
with the case. He can take some 200 of them back to Moscow immediately.
The offices of Forus Services SA and Andava SA were raided in July last year
under the personal supervision of former Swiss Attorney General Carla del
Ponte and many documents were seized.
Forus Group was created as a financial services company in 1992 by Swiss
trading firm Andre et Cie and Berezovsky. Andre no longer holds a stake.
The parent company is Forus Holding SA in Luxembourg with a paid-in capital
of $30 million. On its website (www.forus.ch), Forus Group says it has assets
in excess of $120 million and has several stakes in the Russian banking and
Forus says it has been involved in various financing operations for Aeroflot,
but it says allegations by Volkov that it was involved in defrauding the
airline are ``false and unjustified.'' Andava has also denied the
Forus said Berezovsky resigned from its board in 1996 after his nomination as
deputy of the secretary of the security council of Russia. Dealings with
Aeroflot started later.
(with additional reporting by Elif Kaban in Geneva)
July 22, 2000
Putin's apparent gains mask problems at home
Vladimir Putin, in spite of pre-summit progress, still faces disturbing
undercurrents, writes Seamus Martin
RUSSIA: President Putin has arrived at Okinawa with an impressive record of
recent achievement as the G8 summit's "new boy".
He came to Japan having achieved parliamentary approval for his plan to
centralise power in the Kremlin. He has also struck an alliance with his
Chinese counterpart, Mr Jiang Zemin, and appeared to convince the formerly
intransigent North Korean leader, Mr Kim Jong-Il, to offer a compromise on
his country's missile development programme.
But while all may look well on the surface, Mr Putin faces some disturbing
undercurrents at home and abroad. The new "alliance" with China, for example,
was accompanied by a joint statement in which the wording betrayed a feeling
of overwhelming resentment against "a certain country", a phrase generally
taken to be Chinese political shorthand for the United States.
In an economic crunch, however, China's response is likely to be pragmatic.
Its successful economy is, after all, more dependent on trade with "a certain
country" than any rediscovered emotional bond with its former ally in Moscow.
As for the North Korea deal, Mr Kim's unpredictability raises a major
question, for all Mr Putin's praise in calling him a "thoroughly modern"
It is at home, however, that most difficulties are likely to arise. In the
weeks leading up to the summit, Russia's authorities have carried out actions
against the group of leading businessmen, known as the "oligarchs", in the
style of an old-fashioned Soviet purge.
Masked tax police raided premises associated with many of the men whose
wealth gave them political influence in the Yeltsin era. Among those under
pressure in the latest moves are Mr Mikhail Fridman, of the successful Alfa
banking group; Mr Vladimir Potanin, a former deputy prime minister turned
billionaire; and Mr Anatoly Chubais, who presided over Russia's initial
Again, the main target has been Mr Vladimir Gusinsky, whose media empire
failed to support Mr Putin in the presidential elections. Mr Gusinsky,
accused of fraud, has had his Media-Most headquarters raided on several
times, has been imprisoned for a week without charge, has had his Russian
property seized, and has been threatened with the loss of his real estate
abroad. His NTV channel and daily newspaper Segodnya have, however, been able
to continue their independent lines.
The response of the oligarchs has been unusual and almost in inverse ratio to
the difficulties in which they find themselves. Most vociferous in his
criticism of Mr Putin has been Mr Boris Berezovsky, whose business empire has
suffered least so far.
In the course of the week, Mr Berezovsky has announced that he will resign
his seat in parliament to dissociate himself from what he considers as Mr
Putin's "increasingly authoritarian" rule.
In fact, Mr Berezovsky, according to insiders, heads one of the four interest
groups which wield influence in Mr Putin's Kremlin. As a member of a clique
known as "the family", with Mr Yeltsin's daughter, Ms Tatyana Dyachenko, and
others, Mr Berezovsky has lodged a number of his supporters in Mr Putin's
cabinet. A team of liberal economists and businessmen associated with Mr
Putin in St Petersburg form a second group while his former colleagues from
the KGB make up a third. The fourth set of influence-peddlers includes Mr
Chubais and others, who were strong players in the Yeltsin era but whose
power has been reduced considerably.
Mr Berezovsky's dramatic gesture in abandoning his parliamentary seat of
Karachayevo-Cherkessia, and consequently his immunity against prosecution,
has been supported by another sinister and immune oligarchcum-deputy, the
petroleum magnate, Mr Boris Abramovich, who represents the reindeer herders
of Chukotka in the Duma.
Of Mr Berezovsky's enterprises, only the almost moribund Avtovaz motor
corporation has so far been targeted by tax police. There has, however, been
a long-running, on-off investigation into his use of hard currency earned by
the national airline Aeroflot. Mr Putin might hold this gun to Mr
Berezovsky's head if the going gets tougher.
The Times (UK)
July 24, 2000
[for personal use only]
THE G8 SUMMIT
Putin steals the show with call for equality
FROM PHILIP WEBSTER IN OKINAWA
FOR most of the delegates at the G8 summit Vladimir Putin was an unknown
quantity, but all of them were fascinated by him and by the end it was clear
that the Russian leader had stolen the show.
>From the moment he arrived in Okinawa on Thursday evening for his first G8
summit, Mr Putin was the star attraction. For years Boris Yeltsin had been a
jovial if unpredictable guest at the G8 table. Beset by ill-health, he would
often keep his appearances at the annual gathering to a minimum.
Russia has been traditionally excluded from the original G7 discussion of the
state of the world economy. Mr Putin, though not attending the formal
debates, was in no mood for such distinctions, setting out from the start
that he wished to be treated as an equal and far exceeding that objective in
his contributions to the talks.
By Saturday evening Mr Putin was so confident that he even started floating
the idea that Russia should host the G8 in three years' time. He had planned
to raise the issue at the controversially lavish banquet at the Shuri Castle
on Saturday night. Yoshiro Mori, the Japanese Prime Minister, got in the way,
however, by spending an inordinate amount of time talking with Jacques Chirac
about Sumo wrestling, an apparent obsession of the French President.
Mr Putin got a mixed reception to his idea. Gerhard Schröder, the German
Chancellor, was apparently in favour. Others were definitely not. Even Tony
Blair, who has supported Mr Putin, was not so sure. "More work needs to be
done," his spokesman said.
The Russian President had been on a roll, however. "Quite honestly he dazzled
them," an official who observed Mr Putin addressing fellow leaders at their
working dinner on Friday night said. "It was supposed to cover the full range
of G8 issues but Putin dominated the evening."
Several members of the summit had arrived in Japan with misgivings about the
tough new boss at the Kremlin. M Chirac even declined the opportunity of a
tête-à-tête. Mr Putin's reputation in Chechnya, and what are considered
inadequate efforts to tackle organised crime, had gone before him. His
assessment of the Russian economy and his efforts to reform it was given to
the summit on Saturday, however, and he is said to have been impressive.
Mr Putin did not get all he wanted from the summit though. Instead of writing
off some $42 billion (£27 billion) of Russian debt the G8 will reschedule it.
Mr Putin was a victim of his own success - the Russian economy has been
improving, helped by the recent rise in the oil price.
July 23, 2000
[for personal use only]
`PYRAMID POWER' IS RUSSIANS' HOPE FOR GOOD FORTUNE
By Colin McMahon
Tribune Foreign Correspondent
KOZENKI, Russia -- Olga the carrot seller is not impressed.
Across the highway that runs from Moscow to Latvia, a giant, plastic, hollow
pyramid rises up out of an open field.
At 135 feet tall, it is imposing and intriguing or at the very least
incongruous. Cars line up in front. Dozens of people trudge up a dirt path
Olga the carrot seller sniffs. She has not visited the pyramid, even though
she lives practically in its shadow, even though people tell of the pyramid's
healing powers and of the good fortune it can bring.
"It has not helped my business, that's what I know," said Olga, who stands on
the shoulder of the highway selling carrots, potatoes and other vegetables
from her garden. "Cars slow down to look, but they do not stop to buy from
Olga Ivanova is not missing some spiritual point by looking for some concrete
benefit from the plastic pyramid. The pyramid is all about concrete
benefits--for those who visit--for Russia, for the whole world.
The pyramid near the village of Kozenki is the latest, and biggest, of 17
pyramids built in and around Russia by Alexander Golod.
Golod, 51, who runs a military industry factory, is on a crusade.
Like other believers in "pyramid power," Golod says pyramids hold and
transmit a special energy that affects not only humans but also plants,
animals, machines and even the weather.
The space around us is out of whack, Golod says, and this distortion of our
space causes natural disasters like earthquakes and tornadoes. It leads to
wars, disease and crime.
Pyramids restore harmony to our space, Golod says. Life gets better.
"This is not something mystical," said Golod, a calm, confident and, by all
outward appearances, level-headed man. "This is science."
Golod said charged rocks from his pyramids, scattered around a jail and along
Moscow streets, have lowered crime rates. He said the pyramids have kept flu
rates low and can wipe out cancer and other deadly diseases. Rocks from the
pyramids, he said, have helped stabilize the Mir space station.
It would be easy and quite probably wrong to suggest that the Russians
flocking to Golod's pyramids are searching for meaning in a post-communist
world shorn of ideology and absolutes.
Most Russians visit the pyramids out of curiosity. They seem more interested
in a diversion than dogma. They also figure that, well, it can't hurt.
At the same time, they are displaying a traditional Russian open-mindedness
to theories, ideas and philosophies that fall outside the strict rules of
science and modern medicine. Russians are superstitious. They often embrace
medical concepts that most Western doctors dismiss. Junk science has a
cherished spot in many a government institute.
So, mixed in with their doubts is a feeling, perhaps a hope, that maybe Golod
is on to something.
"A friend told me she felt something positive after visiting, so I thought we
would come and see," said Valerya Smolenenkova, 22, who just graduated from
Smolenenkova came to the Kozenki pyramid with her boyfriend. She joined 10
people who had gathered on benches or were standing on the sand floor in the
center of the pyramid. They were holding their arms out, their palms turned
up toward the point of the pyramid. A woman said they were hoping to receive
the pyramid's energy.
Smolenenkova's boyfriend stood off to the side, smirking.
"I'm not saying I really believe in all this," she said. "This is like an
excursion. It is something to do."
Other visitors showed similar ambivalence.
A construction worker said he doubted the power of the pyramid but
appreciated its design. A newlywed couple came to have their picture taken,
figuring it might become a new traditional spot for Moscow marriage photos,
like Lenin Hills or the World War II tanks at Victory Park.
Yet Golod has his believers.
A few men volunteered that the pyramid had revived their dormant sex lives. A
woman said drinking water stored in the pyramid had relieved her back pains.
"This is my second time here," said Irina, 42. "The first time I had a
terrible headache, which stopped immediately after I'd been here."
"Also my sight suddenly became a lot better," said Irina, who wears glasses.
"Of course I believe in the healing effects."
Among Golod's supporters is Georgy Grechko, a physicist and cosmonaut who
flew on three Russian space missions in the 1970s and '80s. He has a special
interest in pyramids. He doubts whether Egypt of the pharaohs was advanced
enough to build the great pyramids there. He wonders if there is not some
connection between them and space.
"Golod thinks that his pyramid will prevent wars, protect people from AIDS,
from hunger, from poor harvests," Grechko said. "I doubt it. But the fact is
that some things are going on here that can be shown and proved and that
scientists did not perceive at the beginning."
Grechko clearly likes Golod, and it is hard not to. Golod says he has spent
everything he has earned from his business on his pyramids, at least $1
million, he figures. He dresses like a worker, in worn jeans and a baseball
cap. He drives a Russian Lada in need of repair.
"Here is a person who is spending his money not on drinks, not for a
Mercedes, but on this," Grechko said. "He is a bit otherworldly, a dreamer.
It is difficult for him to live in our reality, difficult to understand what
is going on here and why. This man should get help. So, I help him."
Some Russian media suggest the pyramids are a scam. It is hard to see how.
Golod does not charge admission. He does sell snacks, drinks and souvenirs
from a few tables outside the structure, but prices are low and so, it
appears, are sales.
All items have been stored in the pyramid for at least three days. There are
rings for 75 cents. Bottled water costs 50 cents a gallon. There are sodas,
cakes and cookies, and cigarettes too. (The Apollo-Soyuz brand seems a
logical choice.) M&Ms and Tic Tacs offer pyramid power in small doses.
Naturally, there are Mars bars.
Golod's dreams reach higher than the 14 stories his latest pyramid stretches.
He wants to build a cosmic theme park on the 11-acre site he owns around the
"It will," Golod said, "be like a kind of space Disneyland."
Lastly, Golod is ready to help out other countries. He offers to repair the
ozone hole over Australia. He is ready to end "within a week" tornadoes that
threaten the U.S. yearly.
His charge for this service: $10.
Newborn dies in Russian hospital after power cut
MOSCOW, July 24 (Reuters) - A newborn baby died in the hands of frantic
doctors in a birthing hospital in Vladivostok in Russia's Far East after a
power cut caused his artificial respirator to fail, news reports said on
Power cuts are frequent in the region, which has endured pressing energy
shortages for years. But hospitals are supposed to be assured stable
Interfax news agency said the local power company, Dalenergo, had blamed
the power cut on a malfunction, saying it would never deliberately cut off
power to a hospital.
``Despite the severe situation in the energy system, we do not shut off
hospitals and birthing wards,'' it quoted company chief engineer Dmitry
Tarasov as saying.
It said doctors had struggled in vain to save the child after his life
support system stopped early on Saturday.
The hospital lacked a backup generator because of a shortage of funds, a
nurse at the birthing ward said.