September 26, 2000    
This Date's Issues: 4538• 4539  •4540 

Johnson's Russia List
#4540
26 September 2000
davidjohnson@erols.com


[Note from David Johnson:
1. Reuters: FACTBOX-Russian central bank 2001 policy draft.
2. Wall Street Journal: U.S. to File Suit Against Harvard Over 
Russia Foreign-Aid Program.
3. Bloomberg: Putin Vows Not to Interfere in Media Most Dispute, 
Agency Says.
4. Interfax: GORBACHEV ACCEPTS PUTIN'S ASSURANCES ON PRESS FREEDOM.
5. Moscow Times: Anna Raff, Middle Class Is Back and Growing.
6. Peter D. Ekman: $300 million. (re Gazprom and Media-Most)
7. Boston Globe: David Filipov, Even meager aid wanes for Chechen 
refugees.
8. San Jose Mercury News: Coit D. Blacker and James M. Goldgeier,
Russia report seeks blunders, ignores progress.
9. Interfax: WHOEVER WINS IN YUGOSLAVIA, RUSSIA WILL NOT LOSE 
ANYTHING.
10. Nezavisimaya Gazeta: Bynna Zakatnova, THE LEFT OPPOSITION PREPARED 
TO LOOK FOR ALLIES BOTH IN THE MASSES AND IN THE KREMLIN.
11. The Independent (UK): Patrick Cockburn, Islamic warriors strike 
at Russia's flanks. Soaring peaks and deserted valleys of three central 
Asian states provide perfect terrain for well-armed guerrillas.
12. Reuters: Russia, Armenia mull Karabakh, sign friendship pact.] 


******


#1
FACTBOX-Russian central bank 2001 policy draft

MOSCOW, Sept 26 (Reuters) - The Russian central bank forecasts further
economic growth in 2001 but says reforms are required to sustain growth
ahead of a likely global downturn, a newspaper said on Tuesday. 


Following are the outlines of the central bank's 2001 monetary and credit
policy, published by the local business daily Kommersant. The central bank
has declined to comment. 


MACROECONOMIC TARGETS FOR 2001 


* CPI 12-14 pct vs 18-20 pct in 2000 


* GDP growth 4.0-5.0 pct vs 5.5-6.0 pct for 2000 


* money supply (M2) growth of 27-34 pct 


GENERAL ECONOMIC GUIDELINES 


* economic growth will slow slightly, reflecting an expected downturn of
the global economy and decline of international energy prices 


* trade surplus will shrink compared to 2000, but remain higher than in
1994-1998 


* current account surplus will contract compared to 2000, but will be much
higher than in 1994-1998 


* foreign capital inflows will increase, mainly in the form of foreign
direct investment. Portfolio investment is likely to rise, too 


* companies' capital expenditures will rise, funded mainly by companies'
own operations 


* national foreign exchange reserves will grow steadily 


* the central bank will smooth rouble volatility and the rouble will rise
in real terms, because hard currency supply will exceed demand 


* demand for roubles will grow as well as the money supply, which will
expand in line with the rise in foreign reserves 


NECESSARY MEASURES TO MAINTAIN ECONOMIC GROWTH 


* rouble will continue to float 


* the government should implement structural reforms, including of natural
monopolies, taxes, energy and telecoms pricing, and customs tariffs 


* state debt burden should be decreased through a Paris Club agreement, in
part. The government should borrow abroad only to refinance previous
foreign debts. 


* a balanced budget should be adopted 


* consumer spending should be encouraged 


* the central bank should maintain an interest rate policy aimed at
encouraging borrowing 


* rouble liquidity should be controlled by market instruments. Money supply
should be made more liquid. 


* monetary and credit policy should be tightened if need be to reach an
inflation target 


******


#2
Wall Street Journal
September 26, 2000
[for personal use only]
U.S. to File Suit Against Harvard Over Russia Foreign-Aid Program
By CARLA ANNE ROBBINS, GARY FIELDS and STEVE LIESMAN 
Staff Reporters of THE WALL STREET JOURNAL


The Justice Department is preparing to seek $120 million in damages from
Harvard University, a top Harvard economics professor and a former Harvard
legal expert who directed the U.S. government's flagship foreign-aid
program in Russia, U.S. officials said.
The civil suit, which could be filed in federal district court in Boston as
early as Tuesday, is expected to allege that the defendants falsely
certified that Harvard and its employees were providing impartial, unbiased
advice when they advised the Russian government on establishing transparent
and fair capital markets.


Instead, the suit is expected to allege, Prof. Andrei Shleifer and Harvard
project manager Jonathan Hay as well as Mr. Shleifer's wife, Nancy
Zimmerman, and Mr. Hay's now-wife, Elizabeth Hebert, used the
Harvard-managed U.S. foreign-aid program, inside information, influence and
resources to promote their own personal investments in Russia's nascent
capital markets.


Eventual Settlement Possible


Harvard Vice President and General Counsel Anne Taylor said, "Harvard takes
its ethical and contractual obligations extremely seriously and views this
matter as an important one. There is no suggestion that Harvard
institutionally knew about, participated in, or profited from the alleged
private conduct of these individuals."


While she called the amount of damages being sought "disproportionate," Ms.
Taylor didn't rule out an eventual settlement with the U.S. government. "If
they're going to sue us, our hope would be once the complaint is filed to
take the opportunity to learn more about the case through discovery and
then revisit with the government the possibility of some mediated resolution."


Lawyers for Mr. Shleifer and Ms. Zimmerman declined to comment. An attorney
for Mr. Hay didn't return phone calls. Ms. Hebert couldn't be reached for
comment. All of the individuals expected to be named in the suit have
previously denied wrongdoing.


Political Echoes


The suit could also have political echoes, coming at a time when
congressional Republicans are accusing the Clinton administration -- and
specifically Vice President Al Gore, the Democratic presidential candidate
-- of mismanaging its foreign policy and foreign-aid programs in Russia.


Using the False Claims Act, the Justice Department suit will seek damages
and repayment for three times' the more than $40 million that the U.S.
Agency for International Development disbursed to Harvard to administer its
Russia program.


Between 1992 and 1997, the Harvard Institute for International Development
was awarded $57 million in contracts from U.S. AID to help Russia develop
capital markets and rewrite Soviet-era civil laws.


In May 1997, AID terminated the high-profile project -- after more than $40
million had been disbursed -- claiming that Mr. Shleifer and Mr. Hay had
used the program to promote their own business dealings.


Specifically, AID alleged that Mr. Shleifer's wife, Ms. Zimmerman, used
AID-funded staff and office resources to make hundreds of thousands of
dollars of investments in Russian bonds.


AID also claimed that Mr. Hay had bought Russian Treasury bonds despite AID
regulations that forbid employees from investing in project countries. AID
also questioned whether Ms. Hebert used U.S.-funded staff, resources and
influence to establish Russia's first mutual fund.


The defendants expected to be named in the suit include Harvard University,
Mr. Shleifer, Ms. Zimmerman, Ms. Zimmerman's investment company,
Bracebridge Capital, Mr. Hay and Ms. Hebert.


Write to Carla Anne Robbins at carla.robbins@wsj.com, Gary Fields at
gary.fields@wsj.com and Steve Liesman at steve.liesman@wsj.com


******


#3
Putin Vows Not to Interfere in Media Most Dispute, Agency Says

Moscow, Sept. 26 (Bloomberg) -- Russian President Vladimir Putin said he
won't intervene in the conflict between OAO Gazprom, the natural gas
monopoly, and Media Most, the country's largest private media group,
Interfax news agency said. 


``I consider it wrong to interfere in a conflict between two commercial
entities,'' the agency reported. Putin was speaking at a meeting in the
Kremlin with Mikhail Gorbachev, the Soviet Union's last president who is
also chairman of the Public Council of NTV, Russia's largest privately
owned television station. 


Putin said if the two sides can go to court if they can't agree. He also
said Mikhail Lesin, minister for mass media and the press, was wrong to
have signed this month a document guaranteeing the safety of Media Most
Chairman Vladimir Gusinsky, in return for the sale of Media Most to
Gazprom, the agency reported. 


Media Most alleges the president's administration is getting Gazprom -- in
which the state owns 38.3 percent -- to stifle Media Most's criticism of
the government by using the debt the media company owes Gazprom to take it
over. Gusinsky was arrested in June and charged with embezzlement. His case
was dropped a month later, Gusinsky said, after he agreed to sell the
company. 


******


#4
GORBACHEV ACCEPTS PUTIN'S ASSURANCES ON PRESS FREEDOM
Interfax 


Moscow, 26th September: Russian President Vladimir Putin confirmed his
adherence to media freedom at today's Kremlin meeting with former USSR
President Mikhail Gorbachev, chairman of the NTV Public Council.
Interviewed by Interfax, Gorbachev said that the conversation "dealt not
only with the Media-Most and NTV situation but with other issues as well". 


As Gorbachev put it, "to be frank, I was satisfied by Putin's statement
that he confirmed his position on press freedom". "Press freedom is a sine
qua non if we as a society are to resolve the problems facing us. But this
presupposes a high degree of responsibility towards society on the part of
the press. These two elements are absolutely essential," Gorbachev quoted
the Russian president as saying. 


The former USSR president noted that Putin had been "generally speaking,
surprised" at the behaviour of the press minister, Mikhail Lesin, who
signed Protocol 6 to the agreement between Media-Most and Gazprom-Media.
According to Gorbachev, the president "also said that Lesin's behaviour was
simply intolerable, that he had given instructions to PM Kasyanov and was
waiting for him to suggest something". 


Voicing his opinion on the NTV situation, Gorbachev noted that he has "no
preconceived ideas about the channel, its status or its policies". 


"Financial problems must be sorted out in accordance with established
procedure. It's up to shareholders to decide how NTV is to be. I won't
interfere in anything to do with examining and sorting out the situation or
with how to get out of it. Everything must be resolved in accordance with
the existing procedure. I have not put any pressure (on the channel) and
will not do so. Furthermore, the bottom line for me is that the channel is
independent and that's how it will stay," said Gorbachev. 


******


#5
Moscow Times
September 26, 2000 
Middle Class Is Back and Growing 
By Anna Raff
Staff Writer


Vadim Shishov wouldn't be caught dead in an Italian designer suit. 


The middle-aged manager of MVO Holding, a chain of automobile service 
centers, only buys Russian. 


"I consider myself to be a great patriot," Shishov said. "My suits are made 
by the Bolshevichka factory, and it's OK if they look a little different than 
other suits. My suits look Russian, and they make me look Russian." 


Shishov is far from alone in his patriotism, a trademark of post-crisis 
Russia's small but growing middle class, say researchers at the Comcon market 
research agency and Expert magazine who have drawn up a portrait of a middle 
class that was all but wiped out by the 1998 financial crisis 


The middle-class Russian in 2000 is 32 years old, smokes, holds a university 
degree, takes vacations abroad and can smell the difference between Christian 
Dior and Kenzo perfumes, according to the survey, released late last week. 


But he also puts in long hours on the job, suffers from headaches and is 
often exhausted. 


And while the middle class' preferences have become more refined f such as 
the Italian designer suits being out and Made in Russia wear being in f the 
general characteristics remain the same, researchers said. 


"The concept of middle class defines the American psychology and is beginning 
to influence ours," said Yelena Koneva, general director of Comcon. 


The monthly income of middle-class Russian families falls in the range of 
$500 to $1,500 per person, according to the study. 


Unlike most industrialized nations, the middle class comprises less than 10 
percent of the population, Comcon officials said. Before the crisis, about 15 
percent of the population was middle-class. 


In contrast, about 64 percent of the U.S. population falls into the generally 
accepted middle-class income of $15,000 to $75,000 a year, according to 
Comcon. 


The size of Russia's middle class remains far from stable and continues to be 
vulnerable to shifts in the economy, Koneva said. 


The middle class accounts for 4 million people, or 7 percent, of the 
population between the ages of 18 and 50, the survey found. That group is 
considered the working-age population. 


Moscow has the highest concentration of middle class, with about 20 percent 
of the population. 


And in contrast to the middle class in other cities, Muscovites consider 
themselves to be "more spiritual and heartfelt," mainly because they have 
enough money to spend time exploring their inner selves, said Alexander 
Novikov, qualitative research director at Comcon. 


The study was conducted over the summer with researchers questioning a random 
sample of 1,000 middle-class respondents in Moscow, St. Petersburg and nine 
other cities with populations over 1 million. An additional 120 in-depth 
interviews were carried out in these cities. 


Respondents were selected on the basis of six traits, including income per 
family member, age, professional status and education. 


According to the Comcon study, the middle class is patriotic about more than 
just Russian-made goods. Almost half f 43 percent f of the respondents said 
they wouldn't leave the country under any circumstances, and 64 percent hold 
an optimistic view of Russia's future. 


One-fifth said they wanted to immigrate. 


Such an outlook was also confirmed by a 1999 survey of the middle class. The 
study, funded by the Friedrich Ebert Foundation, focused on opinions and 
attitudes. 


The Comcon/Expert study, which looks at consumer behavior, came to many of 
the same conclusions as the Ebert Foundation study: a favoring of the market 
economy, little nostalgia for the former socialist system and an indifference 
to the law. 


An overwhelming 62 percent of the respondents said they thought that 
following the law was not a necessary behavior trait in modern Russia. 


"What was interesting is that a majority of respondents spent 1 1/2 to two 
times more than what they said they earned," said Comcon researcher Pyotr 
Zalessky. 


The government hopes to bring such tax evaders out into the open with a flat 
13 percent income tax next year. The upper tax rate f into which all 
middle-class people fall f is now 30 percent. 


Some middle-class Muscovites interviewed said they felt ashamed that their 
segment of the population is so small. 


"The middle class should consist of teachers, lawyers and doctors who get 
paid by Russia or by Russians," said Ella Levdanskaya, a freelance translator 
who reluctantly conceded to falling into Comcon's definition of middle class. 
"Now, they are suffering. That is the tragedy." 


Levdanskaya said she worries that the foreign firms that she and her friends 
work for might abruptly pull out of the country, leaving their middle-class 
employees scrambling to make ends meet. 


"It's not a very stable situation," she said. 


******


#6
From: "Peter D. Ekman" <pdek@co.ru>
Subject: $300 million
Date: Tue, 26 Sep 2000 


Dear David,
I'd like to draw your attention to what I think is the most important
Russian financial story of the year, "We Told Kokh He Significantly Overpaid,"
in Monday's Vedomosti (p.b1), reprinted in English in Tuesday's Moscow Times
(p. IX, Business Profile) as "Auditors Question...".
In it Gazprom's financial advisors lay out the financials for Gazprom's
bid for Media-Most, and conclude that Gazprom's bid was significantly too
high.
By my reading of the numbers, the bid was too high by the full $300 million
of actual cash to be transferred. In retrospect, this should have been
obvious -
Gazprom can take over Media-Most for nothing via a bankruptcy court.
Why pay any money, much less $300 million?
If anybody has any solid information on why Kokh would want to
overpay $300 million, despite the advice of his advisors, please contact
me directly at pdek@co.ru.


******


#7
Boston Globe
September 26, 2000
Even meager aid wanes for Chechen refugees 
By David Filipov


KARABULAK, Russia - A small spot on the bare wooden floor of a tent passes 
for home for Selima Dzhebayeva and her five small children. That's all the 
room there is, because 46 people have to sleep in a space no larger than an 
average American living room.


The canvas over their heads, like most tents in the refugee camps across the 
border from war-ravaged Chechnya, is threadbare and torn. With cold weather 
on the way, this is no place to spend the winter. But when Dzhebayeva asked 
for a new tent, camp authorities told her to go home to Chechnya instead.


By cutting back on aid for the refugees and repairs to the camps in 
Ingushetia, the Russians have been encouraging many to return, the refugees 
say.


But no place in Chechnya is completely safe from nightly raids and bomb 
attacks by separatist rebels, or from the Russians' retaliatory 
house-to-house searches, which Chechens say often end in extortion, 
detention, and torture of civilians.


And Dzhebayeva has no place to go: She lost her house in the Chechen capital 
of Grozny to the war, and possibly her husband, who disappeared in March. Bad 
as things are in the camp, she is not about to risk what she still has - her 
children - by taking them back to the conflict zone.


This is the dilemma faced by an estimated 170,000 people, mostly women and 
children, who are eking out a frustrating and often humiliating existence in 
the makeshift shelters in Ingushetia, the tiny and impoverished region west 
of Chechnya that has taken in most of the refugees from a year of fighting.


Their hardship is all but ignored in the rest of Russia, which recently 
marked several grim anniversaries of events that provided a groundswell of 
support for Moscow's military campaign in Chechnya: the apartment bombings in 
Moscow and other cities that killed more than 300 people, and two bloody 
incursions by Chechen-led fighters into Dagestan, the region east of 
Chechnya. Authorities attributed the blasts to Chechen rebels, though to this 
day no one has been convicted of setting off the explosions.


Russia does not keep track of civilian casualties in Chechnya, but official 
casualty figures for its own troops - last week 19 died and 90 were wounded - 
reflect the level of violence. And the rebels' terrorist-style attacks often 
claim civilian victims, such as a woman and her infant daughter killed by a 
truck bomb at a market in Grozny last week.


Avoiding the violence is made even more difficult by the abundance of land 
mines scattered around the outskirts of villages, said Rabu Azdayeva, who 
works for a relief agency that is trying to help clear the mines. Often, she 
said, the Russian military clears fields for farmers to plow, only to have 
civilians detonate mines they missed or new ones placed by rebels. Two weeks 
ago, she said, 10 civilians in a southern town were killed in mine blasts.


Mines are not the only danger. There is also Russian artillery, a constant 
rumble that can be heard loud and clear in the camps. Refugees complain that 
villagers foraging for firewood and food in wooded areas in the southern 
foothills are often mistaken for rebel forces by Russian troops manning 
artillery positions in the plains south of Grozny.


''Basically, day and night shells flew overhead,'' said Buvaisar Akhmadov, 
who returned with his family to Chechnya in May, believing his town was safe. 
''Sometimes they fell and blew up near our house. When four villagers were 
killed, we decided it was better to live in Ingushetia, even if it is not 
comfortable.''


''Not comfortable'' is how Akhmadov describes a place known as The Dead End 
Railroad, a refugee camp in Karabulak fashioned out of a passenger train. 
More than 5,400 people lived in trains like this one last year, often without 
heat or electricity. Ingush officials are determined to find them someplace 
else to stay this year.


But there's no room at the farm where 2,000 refugees are sharing stables with 
cattle and horses. The United Nations Office of High Commissioner for 
Refugees has proposed building a new camp, but it would be able to 
accommodate only 12,000 people. Valery Kuksa, who is in charge of the camps 
in Ingushetia, said the region can safely take in only 25,000 of the 140,000 
registered refugees (the actual number is believed to be closer to 170,000) 
this winter. The government wants the rest to return to Chechnya by Oct. 1, 
he told reporters in August. But Kuksa acknowledged that ''few will go.''


Many Chechens who had returned home earlier this year are doubling back to 
Ingushetia, said Ali Sediyev of the Russian-Chechen Friendship Society, which 
provides assistance to the refugees. Sediyev said the administration of 
Ingushetia, strapped for funds and hoping to persuade refugees to go home, 
stopped serving free food at the camps for six weeks over the summer. It also 
has stopped registering new arrivals as refugees.


''But people are not staying here because of free food,'' he said. ''There is 
nowhere for them to go.''


None of the villages wrecked by the fighting have been rebuilt. There is no 
work; few businesses or farms are operating. Even Chechens who have something 
to return to have a problem getting there; refugees say Russian troops 
manning checkpoints routinely extort bribes to let them through. Earlier this 
month, Russian troops detained, beat, and extorted $600 from Ruslan Musayev, 
an ethnic Chechen who works as an Associated Press reporter. When the troops 
figured out who he was, they let him go.


But it does not always end that way. Nearly every refugee has a relative, 
friend, or loved one who has been detained by Russian troops, who say they 
are checking for rebel fighters and set everyone else free. But Chechens say 
the men are set free only when their relatives pay ransom.


Pro-Moscow Chechen politicians have begun to speak out against the actions of 
Russian troops, warning of new uprisings.


''If these aliens in ski masks, these werewolves in uniform, do not stop 
torturing the Chechen people, the people will start defending themselves,'' 
said Aslanbek Aslakhanov, Chechnya's representative to the Russian 
Parliament, at a hearing Thursday.


A senior Russian officer, Colonel General Valery Manilov, acknowledged that 
some troops have overstepped their bounds and vowed that mistreatment of 
civilians would be prosecuted.


But too often, Chechens say, it ends the way it did for Dzhebayeva's husband, 
Magomed, 47, who was arrested on March 10. For five months Dzhebayeva has 
tried to find him, or even find out where he is being held. No one has been 
able to tell her.


Chechens say men '' disappear'' this way all the time. Even high-profile 
politicians simply vanish into thin air. Rebel leaders say that the speaker 
of the separatists' parliament, Ruslan Alikhadzhiyev, died in a Moscow jail 
this month after being tortured. The Russians admit that they arrested 
Alikhadzhiyev in May. Though they deny having any information about his 
death, they also say they have no idea where he is.


''There are so many women looking for their men,'' Dzhebayeva said.


At that moment, a passenger jet roared overhead on its way to a nearby 
airport. Her youngest daughter burst into tears.


''Another echo of war,'' someone in the tent said. ''All the children here 
are afraid of planes.''


******


#8
San Jose Mercury News 
September 24, 2000
Russia report seeks blunders, ignores progress
BY COIT D. BLACKER AND JAMES M. GOLDGEIER
Coit D. Blacker and James M. Goldgeier teach at Stanford University and 
George Washington University, respectively. During the first Clinton 
administration, they served in the Russian, Ukrainian and Eurasian Affairs 
Directorate of the National Security Council. 


In March, the speaker of the House of Representatives, Dennis Hastert, 
R-Ill., asked 12 Republican colleagues to serve on an advisory group to 
evaluate America's Russia policy. Rep. Christopher Cox, R-Newport Beach, led 
the group, which just released what purports to be an objective accounting of 
Clinton administration policy ``failures'' regarding Russia.


If this is an ``objective'' report, give us subjectivity any day. House 
Democrats were not even invited to the group's meetings, much less asked to 
contribute to the report. Given both its partisan origins and its publication 
in the midst of the presidential campaign, the report sheds more heat than 
light on this critically important foreign-policy issue.


In its effort to tie all the problems in Russia to Vice President Al Gore, 
the Cox report makes the preposterous claim that President Clinton handed off 
America's Russia policy to three high-level officials -- Gore, 
then-Ambassador at Large Strobe Talbott and then-Treasury Under Secretary 
Larry Summers -- and paid little attention to an area of fundamental concern 
to the United States.


The truth is that the president entered office in 1993 well understanding 
that in the aftermath of the Soviet Union's collapse, the chance to encourage 
the development of a prosperous and democratic Russia constituted the 
opportunity of a lifetime. The president, and at his direction, the vice 
president, the secretaries of state and defense, Talbott, Summers and others, 
worked hard to engage Russia.


The most serious charge levied by the Cox report is that the United States in 
effect compelled the International Monetary Fund (IMF) to provide billions of 
dollars in ``unconditional'' loans to the Russian government. But contrary to 
the report's claim, the IMF loans were always conditioned on Russia's 
undertaking certain kinds of reforms and meeting certain explicit 
``targets,'' which is why disbursements were often held up and why there has 
been no new lending since 1998.


Three vital areas 


The Clinton administration's Russia policy has focused on three key areas: 
reducing the nuclear danger to the United States; encouraging the development 
of Russian democracy at all levels; and working to promote the institutions 
of a free market.


There have been plenty of bumps in the road, and Russia today remains very 
much a work in progress. But to allege that U.S. policy has ``failed'' 
because Russian democracy falls short of some imagined ideal and the economy 
has yet to recover is to trivialize the very real gains that have been made 
over the course of the past decade.


When the Soviet Union broke apart, many Russia experts in the West assumed 
that the country's first democratic elections would be its last, and that 
Moscow would never accept the sovereignty and independence of the other 
former Soviet states. Since 1993, the Russians have gone to the polls five 
times to choose their leaders in contested elections. Russia's relations with 
the other new independent states range from good to fair, but to date Moscow 
has resisted the temptation to resolve differences with its now-independent 
neighbors through force.


The creation of a true market economy and real property rights in Russia has 
been slow and halting, but every major political force in the country -- 
including the Communists -- now accepts the basic tenets of the market.


Most important for the United States, the American people are safer and more 
secure because of this administration's Russia policy. Because of our 
cooperation with leaders in Russia, Ukraine, Kazakhstan and Belarus, we face 
5,000 fewer nuclear warheads and almost 500 fewer missiles than we did a 
decade ago. Of the four nuclear-armed countries that emerged from the 
wreckage of the Soviet Union, today only one -- the Russian federation -- 
still has nuclear weapons. 


And fears that thousands of Soviet-era nuclear scientists might sell their 
wares to the highest bidder have gone unrealized with the help of initiatives 
to convert weapons plants to civilian production.


Much of the credit for the progress we and the Russians have made in dealing 
with the complex nuclear legacy of the Soviet Union goes to Vice President Al 
Gore, who co-chaired (with the Russian prime minister) the U.S.-Russia 
Binational Commission.


The Cox report alleges that the vice president's strong leadership of the 
commission proves that Clinton didn't care about foreign policy. Along the 
way, the report also denounces the binational commission for failing to 
prevent Russia's brutal assault on Chechnya and for ignoring the spread of 
corruption among the country's rich and powerful.


Back in 1993, the president asked the vice president to co-chair the 
binational commission not because he was running away from Russia policy, but 
because he was determined to deepen and broaden the new relationship with 
Russia. And by reducing trade barriers to U.S. goods, promoting cooperation 
to stem the spread of infectious disease, and forging an agreement to end the 
production of plutonium for use in nuclear weapons, the binational commission 
has had a positive and lasting impact on the lives of ordinary Americans.


Is the Cox report suggesting that it would have been better to limit the vice 
president's foreign-policy activities to attending funerals?


There is no question that Russia's tragic assault on Chechnya is inexcusable, 
and corruption remains a huge stumbling block to Russia's economic recovery. 
That is why the president and vice president have repeatedly taken the 
Russians to task for their conduct of the war in Chechnya and why they have 
also pressed the leadership to combat the corrosive effects of corruption.


That these problems endure is a reflection of the fact that Russia is an 
independent country and not a colony of the United States. We can and do seek 
to influence Russian behavior in myriad ways, but in the end it is the 
Russians themselves who must bear responsibility for their actions -- be they 
actions we support or actions we oppose.


Not perfect


We would be the last to claim that every move the Clinton-Gore team made 
regarding Russia was the right one. In foreign policy, outcomes are always 
mixed. Moreover, strategies that produced results at the beginning of the 
decade may no longer be appropriate today. With the change in administration 
in both Russia and the United States this year, now is the right time to have 
an open discussion about the new agenda in U.S.-Russian relations.


This is why the Cox report is such a disappointment. Rather than a 
bipartisan, forward-looking assessment of the lessons learned in U.S.-Russian 
relations, the report seeks to score political points by portraying the 
administration's efforts as colossal blunders. The record suggests otherwise.


The Cox report is little more than a polemic, designed to cast doubt on 
Gore's prospective stewardship of U.S. foreign policy. What we need at this 
vital juncture in U.S.-Russian relations is an informed, dispassionate and 
objective accounting of where we have been and where we should be headed in 
the conduct of this key bilateral relationship. That report has yet to be 
written.


******


#9
WHOEVER WINS IN YUGOSLAVIA, RUSSIA WILL NOT LOSE ANYTHING
By Interfax analysts Igor Denisov and Alexander Kruglov


MOSCOW. Sept 25 (Interfax) - No matter who becomes Yugoslavia's
next president, Slobodan Milosevic or Vojislav Kostunica, it is clear
that the Kremlin will hardly repeat the Primakov U-turn, when the former
Russian prime minister turned his airplane around over the Atlantic,
canceling his visit to Washington in anger over NATO's plans to launch
an operation against Belgrade.
But it would be wrong to say that the presidential elections in the
"fraternal Slavic state" have left Moscow indifferent. There are reasons
for this - economic, political and military. The fact that one of the
presidential candidates is believed to be a war criminal in the West and
that the International Tribunal for former Yugoslavia is prepared to
arrest him adds savour to the situation.
In the West Milosevic, the former leader of the Yugoslav Communists
converted into Socialists, is considered to be one of the main
instigators of the four Balkan wars fought in recent decades.
Moscow's attitude to Milosevic is rather controversial.
Conditionally speaking, only yesterday the State Duma and the Kremlin
viewed him as Russia's only ally in the Balkans. The consequences of
this are well-known: Russia nearly found itself in self-isolation,
suspended contacts with NATO and spoiled its relations with the West in
protest against NATO's operation in Kosovo.
But back at that time Moscow was well aware what sort of person
Milosevic was and what the end result of his policy might be like.
Russian envoys, prior to the NATO operation, confidentially warned
Milosevic that Moscow would not fully rupture relations with the West
for his sake and that the year 1914 would never repeat itself.
Obviously, those signals were not clear enough and were interpreted by
Belgrade in its own way.
As before, Moscow considers the NATO operation to be an act of
aggression, but following a "didactic pause" it is unfreezing its
contacts with the Alliance and is curbing relations with Milosevic.
Official contacts were reduced to the minimum last year.
There was one episode, though, which cost Russia rather dearly. In
the spring, Moscow was visited by Yugoslav Defense Minister Dragolub
Ojdanic, who the International Tribunal had entered on the list of war
criminals. As a result, Russian Foreign Minister Igor Ivanov had to
state publicly that the episode was due to a lack of coordination
between various agencies.
At a session of the Russia-NATO Permanent Council in Florence,
Ivanov made it understood that those guilty would be brought to account
and that Russia would fulfil its commitments on the U.N. Security
Council resolutions.
Against the background of general cooling in official contacts,
Russia has invigorated contacts with the Serb opposition, whose envoys
have become frequent guests in Moscow, among them Milosevic's rival in
the presidential elections, Kostunica.
It is therefore not surprising that Moscow has assumed an extremely
cautious position, avoiding statements that might be interpreted in
Yugoslavia as an attempt to influence the outcome of the presidential
race.
"The citizens of Yugoslavia and the main political forces have
demonstrated high political responsibility, aware of the importance of
the current period in the life of the country," Ivanov said on Monday.
Importantly, the Russian Foreign Ministry's initial decision was not to
comment on the Yugoslav elections at all, the more so since run-off
elections will most probably be held.
Moscow's restrained position is even more obvious against the
position of the West, which, as always in recent years, has taken an
irreconcilably rigorous stance and is almost celebrating the Yugoslav
leader's defeat. British Foreign Secretary Robin Cook hastened to state
on Monday that Milosevic had suffered a defeat and must free his people
from prison.
The West seems to be hurrying events and is engaged in wishful
thinking. Run-off elections that are likely to be held will decide
everything. And even though the opposition argues that they will build
support for Kostunica and bring him to victory, it would be wrong to
discard such a veteran politician as Milosevic, who has a powerful
administrative resource.
It is clear that Moscow's playing footsie with Milosevic has not
brought any other dividends than the heart-breaking empty talk about
Slavic brotherhood, and, according to Interfax sources, will not bring
any if Milosevic saves his post. Small wonder. The West will not change
its attitude to Milosevic and will not reverse the international
sanctions.
As for Kostunica, he set forth his credo in an interview with
Interfax shortly before the elections. "Relations with Russia have
always been of special importance for Yugoslavia and for the people
living in it," he said.
Kostunica, the opposition candidate, spoke in favor of establishing
permanent diplomatic relations with Moscow and said that Yugoslavia's
foreign policy must be based "on its own forces and on consultations
with Russia when this is politically expedient for both countries" -
undoubtedly, a promising statement.
In short, Moscow's cautious position guarantees Russia, as a
minimum, normal relations with Belgrade in any situation.
If Milosevic wins, Moscow's policy will obviously change very
little and Russia will remain a kind of mediator between the West and
Belgrade.
If Kostunica becomes president, external pressure will obviously
weaken but a foundation for normal relations with Yugoslavia will remain
available.
So, whatever the outcome of the presidential elections in
Yugoslavia, Russia will not lose anything, unlike the West, which stops
at nothing in dealing with Yugoslavia - a position which has the
opposite effect and is only playing into the hands of Milosevic.


******


#10
Nezavisimaya Gazeta
September 26, 2000
[translation from RIA Novosti for personal use only]
THE LEFT OPPOSITION PREPARED TO LOOK FOR ALLIES BOTH IN 
THE MASSES AND IN THE KREMLIN
Bynna ZAKATNOVA

Changes in the Communist Party were awaited way back in 
April. The communists' repeated defeat in the presidential 
elections in March was bound to lead to a re-groping of 
political forces inside the party. Judging by the past congress 
of the People's Patriotic Union of Russia (PPUR), the Communist 
Party is out to make another attempt to form a united Left 
front.
The leaders of the Communist Party worked on the idea of 
creating a People's Patriotic Union of Russia way back in 1996, 
when their positions in the State Duma and the country as whole 
were much stronger. The PPUR was to rally round itself those 
sympathizing with the Left, but rejecting the communists' tough 
program. As a result, a rather amorphous coalition emerged with 
indefinite flanks and tasks, which united several minor 
parties, state-patriotic movements and youth, veterans' and 
artistic unions. Derzhava, Russia's Agrarian Party and 
Spiritual Heritage were seen as the union's main driving force. 
As an opposition coalition, the PPUR proved to be absolutely 
useless both for its participants and founders - the 
communists. In September 1999 all active work, including in 
regions, was stopped. Only in June 2000 an active struggle 
suddenly unfolded over the PPUR. The founding fathers won it: 
Zyuganov retained the post of the chairman, whereas Alexei 
Podberyozkin, Aman Tuleyev and Mikhail Lapshin (but not the 
movements led by them), who "betrayed the interests of the 
Communist Party" were expelled from the union. At the same 
time, it was decided to radically restructure the PPUR. 
Now the renewed People's Patriotic Union is turning from 
the movement-sattelite of the consolidated Left opposition 
into the Communist Party's Right wing. With its help, the 
party's financial problems could also be solved. The new 
chairman of the executive committee, Gennady Semigin may lead 
the Russian Union of Industrialists and Entrepreneurs (RUIE) 
into the movement.
Among RUIE members there are quite a few regional entrepreneurs 
whose finances do not allow them yet to independently 
participate in oligarchic gamble but whose positions already 
require political protectionism. Indicatively, the new leaders 
are not very much interested in the problem of "taking power." 
Instead, they prefer to concentrate on the real affairs of the 
party in opposition. From the ideological point of view, too, 
the PPUR's new set of priorities has nothing to do with the 
Left-radical trend in the communist movement, although the 
union's concept has synthesized in general outline all popular 
political ideas: of technogenic catastrophes, reduced VAT and 
import duties, an onslaught on regional power, as well as a 
traditional set of critical statements concerning the 
government's "anti-popular" course. 
The PPUR has no clear-cut program yet. So far, it has only 
drafted a general plan for the next two years. Instead, it has 
ambitions: the union's leaders are planning to change the 
movement's statute in order to give it the right to 
independently participate in elections at all levels. At the 
same time, Semigin denies the intention to turn the coalition 
into a party, although the PPUR would like very much to take 
part in administration:
possibly, the movement will suggest that the current Cabinet of 
Ministers create a collegium from among PPUR members with the 
right of consultative voice. There are grounds to believe that 
some ministers will agree. 
Now the PPUR leaders are mainly concerned about renewing 
the staff of the leading bodies and changing the movement's 
organizational structure. The key role is still played by the 
congress, then the coordinating council (to include the leaders 
of political associations) and the standing executive committee 
and government of the People's Patriotic Union of Russia. The 
movement's structure is to be made more compact, so, the 
coordinating council will include only 25 members enjoying 
equal rights instead of 150 (formally the PPUR incorporates 30 
organizations). Interestingly, leader of the new 
Left-democratic movement "Russia" Gennady Seleznev has been 
included only in the movement's coordinating council. This 
means that despite the speaker's assurances of his loyalty to 
the interests of the Communist Party, the central committee 
still has some doubts.
Anyway, both movements are going to claim one and the same 
electorate, their staff is more than 50% the same, so, the 
conflict between Seleznev and the Communist Party may be 
considered settled. 
On September 25, the PPUR leaders, Zyuganov and Semigin, 
met with Vladimir Putin. It looks like on the eve of the 
formation of a bi- or tripartisan political system, the Kremlin 
wants to scrutinize better the new representatives of the 
opposition.
Since the president knows Zyuganov well enough, this meeting 
was actually Semigin's introduction to the head of executive 
power.

*****


#11
The Independent (UK)
26 September 2000
Islamic warriors strike at Russia's flanks 
Soaring peaks and deserted valleys of three central Asian states provide
perfect terrain for well-armed guerrillas 
By Patrick Cockburn in Tashkent, Uzbekistan 


"WE LOST five men dead from my unit when Islamic guerrillas ambushed us a
few weeks ago," said an officer in the Uzbeki army who had just returned
from fighting in the high mountains on the border of Uzbekistan and
Tajikistan. 


He said the Islamic fighters had fought bravely when cornered, some
shouting "Allah Akbar [God is Great]" before blowing themselves up with
their own grenades. But he was bitter about what he regarded as the craven
behaviour of the Uzbeki police and border guards. "Two policemen shot
themselves in the legs with their own pistols to keep out of the fighting,"
said the officer, adding contemptuously: "As if we could not tell the
difference between a bullet fired at point blank range and a real battle
wound!" 


The fighting in the mountains north of the town of Termez on the Amu Darya
river was one of several clashes that erupted in Uzbekistan last month when
guerrillas from the Islamic Movement of Uzbekistan (IMU) tried to set up
bases in remote border regions. 


This is not difficult to do. The soaring peaks and deserted valleys where
the borders of three Central Asian states - Uzbekistan, Kyrgyzstan and
Tajikistan - meet is perfect terrain for guerrillas. The frontier itself
writhes backwards and forwards like a demented snake, allowing Islamic
fighters easy access to safe havens outside Uzbekistan. One IMU unit
shocked the government by appearing in a resort district 50 miles
north-east of Tashkent, where many of the local elite have holiday villas. 


The Uzbeki officer, met by chance in Tashkent and who did not want his name
published, admitted the fighting in the mountains had been hard. But he was
confident the 50,000-strong Uzbeki army would hold its own in the flat
plains of the heavily populated Fergana valley, where it can use its armour
against the guerrillas. 


In theory the IMU's guerrillas, numbering between 1,000 and 1,500, should
pose no threat. The Uzbeki President, Islam Karimov, rules his 24 million
people with an iron hand and can rely on well-organised and brutal security
forces, which have in the past responded to any signs of opposition with
mass arrests. Officially the country's prison population is 63,000 but
human rights organisations say it may be as high as 200,000. One diplomat
in Tashkent said: "Often they arrest all the male relatives of a suspect,
plant drugs on them and give them long sentences." 


The guerrillas seem intent for the moment on establishing bases in remote
mountainous regions inside Uzbekistan or just across the border in
Kyrgyzstan and Tajikistan. They are well equipped, with the latest sniper
rifles, night-vision equipment and grenade launchers and generally move in
groups of 10 to 15 men, only fighting when they are detected. 


The guerrillas may be small in number but they have certain advantages.
They are led by Juma Namangani, an Uzbek who fled to Tajikistan in 1992
from the Fergana valley, a region long regarded as something of an Islamic
stronghold. He gained military experience fighting alongside the Islamic
opposition in the Tajik civil war, which ended in 1997. His present
headquarters is at Tavildara in central Tajikistan in an area over which
the Tajik government has little authority. 


President Karimov and his secular government are keen to portray Mr
Namangani as a cat's-paw of an Islamic fundamentalist conspiracy, linked to
radicals in Afghanistan and Chechnya. The US says he has ties to Osama Bin
Laden, the Saudi Arabian fundamentalist who is America's bete noire in the
region, and has recently added the IMU to its list of foreign terrorist
organisations. 


The IMU does have some support from the Taliban in Afghanistan where Tahir
Yueldashev, the organisation's spiritual leader, is a frequent visitor. It
also has money, which its enemies say comes from the heroin trade. Some
sources in Tashkent deny this and say the IMU can still draw on the Dollars
3m-Dollars 5m ransom it received for releasing four Japanese geologists it
took hostage last year. 


"The IMU is a strange mixture," says one local observer. "Only about 20 per
cent of them are really religious. Another 50 per cent are Uzbeks forced
out of the country by persecution and 30 per cent are criminals on the run.
But all have good weapons and they can fight." 


So far Mr Namangani has won no important military successes in his bid to
destabilise President Karimov, but these are early days. His first
incursions began in 1999. Some of the most serious fighting has been in
southern Kyrgyzstan, which guerrillas have to cross to reach the Fergana
valley. 


But President Karimov has two reasons to feel nervous. The guerrillas may
manage to tap into the deep social discontent among Uzbeks, who have seen a
shattering decline in their standard of living since the collapse of the
Soviet Union in 1991. At least half the population is out of work, and the
rewards for those in employment are low: a well-qualified engineer in work
earns pounds 15 a month, and many factory workers have not been paid for
six months. 


Russia is also keen to increase its influence in Uzbekistan by offering it
protection against Islamic fundamentalism. President Karimov said yesterday
that the widespread publicity given to the IMU attacks in the Russian media
"had one goal: to suggest to the public that Russian troops should come
here or Russian bases should be created here". 


Mr Namangani and his bands of guerrillas seem unlikely to bring down
President Karimov. Uzbeki culture is still very secular, and the Islamic
fighters may struggle to infiltrate the cities and towns of the plain. But
the Uzbeki army is equally unlikely to eliminate the fighters in their
mountain hideouts. Uzbekistan is facing a long war. 


*******


#12
Russia, Armenia mull Karabakh, sign friendship pact


MOSCOW, Sept 26 (Reuters) - The presidents of Russia and fellow former
Soviet state Armenia discussed on Tuesday how to settle the 12-year-old
Nagorno-Karabakh conflict and signed a new friendship treaty. 


Armenia's ties with Moscow have been among the best of the 14 other
ex-Soviet states and the new pact, dubbed a declaration of joint
cooperation in the 21st century, was aimed at cementing this relationship. 


Russian President Vladimir Putin was quoted by Russian news agencies as
saying he welcomed talks held between Armenia and Azerbaijan over Karabakh
last year and hoped for more dialogue. 


But he said Russia did not have the power to impose a solution. Armenian
President Robert Kocharyan said he wanted Moscow's involvement in the peace
process. 


``Finding a solution, and, most importantly, making it work will need the
support of Russia,'' he said. 


Azerbaijan and Armenia have been at loggerheads since Karabakh's ethnic
Armenian majority broke away from Azerbaijan's administrative rule in the
dying days of the Soviet Union. Some 35,000 people died in the resultant
war before a 1994 ceasefire. 


The region runs itself as an independent state but is recognised by no one. 


Kocharyan and Azeri leader Haydar Aliyev held several rounds of talks last
year but the process was brought to an end in the turmoil caused by the
assassination in parliament of Armenia's prime minister and other key
figures in October 1999. 


``We want this difficult conflict to be solved for the good of the nations
of both states,'' Putin said. 


Kocharyan and Putin hailed the agreement they signed as a further step on
the road to good relations. Russia and Armenia, both sharing a Christian
tradition, have historically had good ties. 


``For Armenia, Russia is not only a strong northern neighbour but a country
with which there is a spiritual connection,'' Kocharyan said. 


*******