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Johnson's Russia List


October 2, 2000    
This Date's Issues: 4552 4553


Johnson's Russia List
2 October 2000

[Note from David Johnson:
Opinion of recipients is divided on the utility of capsule
summaries in the Subject line but that information is clearly
valuable to many people so I will continue providing it.
To clarify: 4550 was misnumbered as 4549 and there was a 4551
although some recipients may not have received it.
1. AFP: Russians stun themselves with golden Olympic run.
2. Washington Post editorial: Image and Reality in Russia.
4. AFP: Putin Visit To Set Indo-Russian Ties On New Footing.
5. Reuters: Putin Ready to Host Talks on Yugoslav Impasse.
6. The Electric Telegraph (UK): Guy Chazan, Creative coup knocks 
Bolshoi Ballet out of step.

8. The Globe and Mail (Canada): Geoffrey York, It's the truth: 
Nude news heat up Moscow TV.

9. Vremya Novostei: Vera Kuznetsova, GOVERNMENT CHOOSES BUSINESS 

10. Financial Times (UK): High-tech designer who prefers a low 
profile: Essential Guide to Anatoly Karachinsky. Russia's answer to 
Bill Gates owes his riches to a genuine enthusiasm for computers, 
rather than the ruthlessness shown by some of his peers, says Arkady 



Russians stun themselves with golden Olympic run

MOSCOW, Oct 2 (AFP) - 
The Cold War era sporting empire was supposed to have fallen apart by now.

Yet on Monday the Russians, second only to the heavily favored and eternal 
rival US team at the Sydney Olympic Games, were swelling with pride and a 
revitalized sense of patriotism.

After a weak start that had many shaking their heads in resignation, their 
team stormed back and, somewhat surprised, Russians agreed that not all was 

Russia, they found, is still a sporting power to be reckoned with.

"Russia confirmed its status as a great sporting power," the Sevodnya daily 
crowed in a banner headline.

"These delicate girls proved that Russia is a great power -- at least in the 
field of sports," it added under a photograph of six ecstatic artistic 
gymnasts showing off their gold medals.

The world is stunned, intoned the liberal daily, that the economically 
impaired nation that emerged from the ruins of the Soviet empire managed to 
somehow prepare athletes who almost beat the US team to the top spot.

"At the finish, Russia's patriotism came through," Moskovsky Komsomolets 

Russia finished the Olympics with 32 gold medals, six more than at the 1996 
Atlanta Games that some thought would see the last strong showing by a team 
whose athletes were largely trained by the Soviet machine.

In Sydney, the Russian team won only nine medals fewer than the United 
States. It was four gold medals ahead of China, another strong favorite, and 
had twice as many golds as home darlings and swimming giants Australia.

"Our experts had predicted some 30-35 golds, but no one quite knew for sure. 
The outcome was indeed impressive," Alexander Ratner, the official spokesman 
for the Russian Olympic Committee, said by telephone from Australia.

The results could have been even better.

After disappointing showings, several of the early competitors complained 
that they had taken the 30-hour flight to Australia only two days before the 
Games opened, and were almost sleepwalking through their performances.

It was unclear whether the last-minute arrival was due to a lack of funds, 
and the Olympic committee made no comment on that decision.

But with the Games over, newspapers and sociologists commented that the 
Russian psyche had changed after the final gold was won.

"We will catch the Americans next time," the Izvestia daily promised next to 
a photo of star gold medal winning gymnast Svetlana Khorkina sticking out her 
tongue, showing off that the Russians can still do it.

Some still wanted even more.

"Between the future and the past -- in the Olympics the Russians outran 
China, but failed to catch the Americans," the Vremya Novostei paper said.

Some Russian sociologists meanwhile said that even the government -- after a 
series of disasters that included the Kursk nuclear submarine tragedy -- 
stood to profit, if only briefly, from the wave of patriotic fervour as the 
nation embraced its athletes.

"For the people, (the Games) are a world war, even if they should not be," 
said Yury Levada, a senior Russian sociologist with the VTsIOM polling agency.

"It has been so since the first time the Soviet team joined the Olympics" in 
1952 at the Helsinki Games.

Yet he expressed doubt that its effects would last long.

"This could of course help the government, but I don't think it will do so 
too much."


Washington Post
October 2, 2000
Image and Reality in Russia

RUSSIAN PRESIDENT Vladimir Putin tends to his international image with skill. 
He dines with American media heavyweights in New York City and professes his 
commitment to a free press. He lunches with former dissident Natan Sharansky 
in the Kremlin and insists on his love of human rights. For a pathetically 
small price--a bit of attention--he co-opts Mikhail Gorbachev, who in turn 
says nice things about the young Russian president to foreign media. All this 
impresses Western leaders. Meanwhile, Mr. Putin is in the process of 
destroying the independent media in Russia. If he succeeds, democratization 
will be severely set back. 

On a small scale, you can see Mr. Putin at work in the case of Andrei 
Babitsky, who is scheduled to go on trial in southern Russia today. Mr. 
Babitsky is a reporter for Radio Free Europe/Radio Liberty who reported 
honestly on brutal Russian behavior in Chechnya. Russian security forces 
arrested him for this affront and then arranged for him to be kidnapped by 
Chechen criminals. President Putin pretended to know nothing about this until 
international pressure became a liability, at which point Mr. Babitsky was 
freed. But the bullying did not stop. Mr. Putin's administration is 
prosecuting the reporter for carrying false documents--documents forced on 
him by his kidnappers.

Mr. Putin's assault on Media-Most is potentially more serious. The company 
owns NTV, the only Russian television network not controlled by the 
government. It also owns a radio station and publishes a daily newspaper and, 
in partnership with The Washington Post Co.'s Newsweek, a weekly magazine. 
Its survival now is threatened by a commercial dispute with the giant natural 
gas company, Gazprom, that lent it money.

As in the Babitsky case, Mr. Putin pretends not to be involved in this 
dispute. But the Kremlin owns a large piece of Gazprom and effectively 
controls the firm. Mr. Putin's administration set the stage for the dispute 
by throwing Media-Most's owner into prison for three days. After this 
KGB-style intimidation, the owner, Vladimir Gusinsky, was pressured--by a 
member of Mr. Putin's cabinet acting in close consultation with the 
Kremlin--to sign an unfavorable contract. Mr. Gusinsky was promised in return 
his freedom, which President Putin apparently feels is a commodity to be 
bargained, not a fundamental right. Now, despite Mr. Putin's protest of 
noninvolvement in a commercial dispute, his prosecutor-general has opened a 
criminal fraud case against Mr. Gusinsky.

The West has little leverage over Russia. Oil prices are high, meaning that 
Russia, an oil-producing country, no longer needs Western loans. But as his 
image campaign suggests, Mr. Putin does crave acceptance in the West. Western 
leaders should welcome him as long as he respects democracy at home. If he 
does not--if he persists in undermining Russia's independent media--the G-8 
group of leading industrialized nations should return to being a G-7. A 
Potemkin democrat does not belong in the club of democracies.


September 29, 2000
[translation from RIA Novosti for personal use only]
Vitaly GOLOVACHEV, Trud political analyst 
Several days ago, the All-Russian Centre for the Study of 
Public Opinion (VTsIOM) completed another poll of the adult 
population. Among the subjects raised were the attitude to the 
President's work and to the media situation. (Figures show 
percentages of those polled).

March April June
Approve 69 77 61
Do not approve 20 15 26
Undecided 12 8 13
Aug. 18-21 Aug. 20-25 Sept. 22-25
Approve 65 60 65
Do not approve 26 30 27
Undecided 10 10 9
Throughout the entire current year Putin has been enjoying 
very high support of the Russians. Minor fluctuations in the
rating (which are normal) do not affect the general picture. In
September, for example, the number of those approving the work 
the head of state rose by 5 per cent. The same index was in the
middle of August.

Definitely yes and most likely yes 38 per cent 
Definitely no and most likely no 50 per cent 
Definitely yes and most likely yes 60 per cent 
Definitely no and most likely no 33 per cent 
As can be seen from the above figures, most people do not
fear the emergence of a dictatorship in the country, they see a
far graver threat in chaos and anarchy leading to the collapse 
the state. This danger was highlighted by 60 per cent of those
interviewed. This is why the population give such a backing to
Putin's efforts to bring law and order, strengthen the power
vertical and overcome the menace of separatism.

July September 
Benefit 38 31
Harm 27 27
Neither 25 29
About one-third of the Russians believe that greater state 
control over media would be beneficial. I do not think, 
however, that our citizens would like to have the former 
censorship system returned. Most likely, this is something 
else: all this endless public "feuding" on television screens 
and on pages of some newspapers have bored viewers and readers 
a good deal. Asked, "How do you explain the current criticism 
of Putin's steps in a number of media: is it the civilian stand 
of journalists or the interests of the owners of these 
newspapers and television channels?" half of the respondents 
replied firmly: it is the interests of the owners. 


Putin Visit To Set Indo-Russian Ties On New Footing

NEW DELHI, India, Oct 2, 2000 -- (Agence France Presse) India prepared to 
roll out the red carpet Monday for Russian President Vladimir Putin, whose 
three-day visit will see the signing of a new "strategic partnership" between 
the close Cold War allies.

Putin, the first Russian president to visit India since Boris Yeltsin in 
January 1993, was expected to arrive in New Delhi Monday evening, with an 
official welcoming ceremony scheduled for the following morning.

He will meet Foreign Minister Jaswant Singh Tuesday, before the main talks 
with Indian Prime Minister Atal Behari Vajpayee.

The strategic partnership has been hailed by both sides as a watershed 
document that will revive and redefine a bilateral relationship that has 
somewhat lost its way since the collapse of the Soviet Union.

"In some respects, the document will of course, be a successor document," 
Putin said in an interview with India Today magazine.

"But it's clear that both we and our Indian partners have to take into 
consideration the fact that the world has changed, Russia has changed, the 
balance of force in the world has changed and so have some of our priorities."

The two sides will sign a raft of bilateral accords, including several 
multi-million dollar defense contracts and a treaty on the peaceful use of 
nuclear energy.

Russia is providing the technical expertise for two nuclear reactors in the 
southern state of Tamil Nadu, with construction work scheduled to start in 

Putin will visit the Bhaba Atomic Research Center near Bombay on Thursday.

The Soviet Union was India's main arms supplier, and nuclear and military 
cooperation, which has weathered fluctuations in the relationship, took on 
extra significance in the wake of US sanctions imposed in both fields after 
India's nuclear tests in May, 1998.

Putin's visit will also seek to offer some sustenance to atrophied bilateral 
trade ties, which are currently worth only around USD 1.6 billion, compared 
to USD 5.5 billion in 1991.

Underlining the visit is the realization on both sides that there can be no 
return to the Cold War alliance, when Moscow played the role of big brother 
to New Delhi and extended a military umbrella under the 1971 Indo-Soviet 
Friendship Treaty.

New Delhi's ties with Washington are on the upswing, despite the 1998 tests, 
while Russia has been building bridges with India's arch-enemy Pakistan as it 
seeks to counterbalance U.S. dominance in the post Cold War scenario.

"With Indo-U.S. relations blossoming at a new high, Putin's visit almost 
seems like that of an old time lover snuggling over and trying to make up," 
said the Indian Express in an editorial Monday.

"The old affair was with a former superpower, the Soviet Union, and not with 
Russia which is a distant poor cousin."

The Hindustan Times was equally adamant that the balance of power in 
bilateral relations had shifted significantly.

"Nostalgia for the special relationship that once existed between New Delhi 
and Moscow would be the worst way to color Vladimir Putin's visit to India," 
the newspaper said.

"The two countries need to completely refurbish their post Cold War 

Speaking to Indian reporters in Moscow on Sunday, Putin said the strategic 
partnership was not intended to suggest a military alliance but merely 
economic and technological cooperation.

However, he said Russia and India were "natural partners and allies" who 
should pool efforts to combat international terrorism and religious extremism.

"Exchanges of information, political support and joint decision-making on any 
manifestation of extremism could effectively weaken international terrorist 
groups," he added.

Russia and India are both struggling to curb the threat of armed Islamic 
separatism in Chechnya and Kashmir respectively.

The military contracts to be signed during the visit will be for the purchase 
of Russian MiG-29K fighters, T-90 battle tanks and for the manufacture under 
license of SU-30 fighter planes in India. 


Putin Ready to Host Talks on Yugoslav Impasse
October 2, 2000

MOSCOW (Reuters) - Russian President Vladimir Putin said Monday he was
ready to host talks between Yugoslav President Slobodan Milosevic and
challenger Vojislav Kostunica to resolve Belgrade's election crisis. 

A Kremlin statement issued while Putin was flying to India referred to both
the two rivals as candidates in the second round of the Yugoslav
presidential election -- implicit recognition of the official first round

According to the official count, Kostunica fell just short of winning half
of the votes and so must contest a run-off second round. The opposition
reject the official results, say he has already won outright and plan to
boycott the runoff vote next Sunday. 

``As president of Russia, I am prepared to receive in the next few days in
Moscow both candidates who have gone through to the second round, Yugoslav
President S. Milosevic and the leader of the Democratic Opposition of
Serbia V. Kostunica, to discuss means of finding a way out of the current
situation,'' it said. 

Putin said he was acting to guard against rising tension and the threat of
``open confrontation in society fraught with unpredictable consequences''
which would jeopardize stability in the Balkans and throughout Europe. 

But Yugoslav ambassador Borislav Milosevic, brother of the Yugoslav
president, was quoted by Interfax news agency as saying there were ``no
grounds'' for Russian mediation. 

``The election procedure is set down by law,'' he said. 

Other countries, he said, had also offered to mediate, including Greece and

Borislav Milosevic said there remained a threat of unrest in Yugoslavia
``if certain forces -- the opposition and certain circles in the West --
display irresponsibility and stir up the situation.'' 

He said he could not rule out the use of force by the authorities but said
it would come ``only in an extreme instance,'' if the opposition resorted
to force. 


The Electric Telegraph (UK)
1 October 2000
Creative coup knocks Bolshoi Ballet out of step
By Guy Chazan in Moscow

THE Bolshoi Ballet, the most prestigious dance company in the world, is in 
an uproar after its management cut its repertoire, cancelled all premieres 
and asked the artistic director to resign. 

The decision to drop Alexei Fadeyechev is the latest stage of a coup started 
in August that swept away the Bolshoi's old management and ended the 
independence that the theatre had enjoyed since the end of Communism. The 
ballet has been struggling to recover from years of creative torpor, poor 
leadership and dire financial crises. Many critics said Mr Fadeyechev was 
instrumental in restoring some of the Bolshoi's lustre and recent tours of 
Britain and the United States earned rave reviews.

Mr Fadeyechev was asked to quit after speaking out against plans announced by 
the Bolshoi Theatre's new artistic director, Gennady Rozhdestvensky, the 
world-famous conductor, to drop productions central to the company's touring 
schedule. Mr Rozhdestvensky, 69, who spends most of his time conducting 
abroad, has left Russia to continue his foreign engagements, suggesting that 
anyone wanting to discuss the changes should drop him an e-mail. He will be 
away from Russia until next month, leaving the company rudderless as it 
struggles through one of the most traumatic shake-ups in its 224-year history.

The changes mean that the Bolshoi risks breaching agreements with Western 
choreographers and designers who had been invited to work at the theatre and 
with impresarios planning tours of Britain, China, Israel, Egypt and the US. 
Mr Fadeyechev said: "I tried to tell the new managers that what's going on 
will lead to a degradation of the troupe and the breakdown of all the 
theatre's plans and obligations. No one was able to give me a sensible 
response, so I had to appeal to the press."

Mr Fadeyechev is supported by some of the Bolshoi's biggest stars, among them 
Nina Ananiashvili, the prima ballerina. When reached by telephone in Texas, 
where she is touring, she said: "They are trying to destroy a company that 
has really tried to raise itself over the past two years. How can they just 
cancel all these productions? All our touring plans will collapse and we will 
look like idiots in the eyes of the whole world." The prospect of tours being 
disrupted has alarmed dancers who have come to rely heavily on their earnings 
from performances abroad. A dancer on average earns 35-55 a month working 
in Moscow but can earn that much in a day while on tour. 

Mr Fadeyechev has refused to resign but observers say his days are numbered. 
Russia's ballet critics are withering in their contempt for him and his 
former boss, Vladimir Vasiliev, who was forced out as the Bolshoi's artistic 
director in the summer coup. They said that under Mr Vasiliev's leadership 
each new Bolshoi production had been worse than the last, culminating with 
Pharaoh's Daughter. Most critics welcomed the appointment of Mr 
Rozhdestvensky. "I'm glad they are dropping all those awful productions," 
says Yaroslav Sedov, the ballet critic for Itogi, a news magazine. "It's 
better that they don't tour at all than show ballets that are flops."

A new general director, Anatoly Iksanov, has also been appointed. He is a 
tough television executive who will be in charge of completing a 150 million 
reconstruction of the theatre building. The entire ballet and opera company 
is scheduled to move into a new 275 million theatre by 2002, allowing the 
existing 144-year-old structure to close for repairs. The new stage, under 
construction for seven years, is still little more than an empty shell.

To seal the coup, a government order put the theatre under the aegis of the 
ministry of culture, cancelling the independent status it has enjoyed since 
1992. The culture minister, Mikhail Shvydkoi, says he has no intention of 
interfering in creative affairs, but Mr Fadeyechev thinks otherwise. He said: 
"The state is taking control of everything again, just like under the Soviet 
Union. It'll be just like the old days, when someone in the Politburo told us 
to put on ballets such as Lenin in October. It's just madness."


Moscow, 2nd October, ITAR-TASS correspondent Nikolay Novikov: The command
of the Strategic Rocket Troops has decided to extend the service life of
the group of RS-20 intercontinental ballistic missiles (SS-18 Satan in NATO
parlance) to 24 years. 

The decision was taken following the successful launch on 26th September of
an RS-20 that had been upgraded as part of the "Dnepr" programme, ITAR-TASS
was told today by a spokesman for the Strategic Rocket Troops general
staff. That launch took five small satellites from Italy, Saudi Arabia and
Malaysia into orbit. 

Depending on the outcome of the next RS-20 launch, the plan is to extend
the missile's service life to 25 years, the spokesman said. 

The RS-20 is the most reliable of Russia's intercontinental ballistic
missiles. It has been in service with the military for over 20 years,
during which time 159 practice launches have been carried out with just
four failures. 


The Globe and Mail (Canada)
2 October 2000
It's the truth: Nude news heat up Moscow TV

MOSCOW -- Something strange is happening on Pravda Street.

Down the block from the stodgy Communist newspaper, an irreverent gang of 
television mavericks has found a cheeky way of revealing the news -- and a 
lot more besides.

Consider their unorthodox coverage (or uncoverage) of the Sydney Olympics 
this week. The anchorwoman, a 25-year-old blonde named Svetlana Pesotskaya, 
solemnly recited the news of Russia's gold-medal results, while topless 
water-polo players and striptease gymnasts cavorted around her.

The late-night newscast is known as Golaya Pravda, or The Naked Truth.

Pravda's most famous subscriber, Vladimir Lenin, would be appalled, 
especially since the brazen show is broadcast from what was once the health 
and recreation building of the propaganda daily's printers.

But the site is now the headquarters of Moscow's fastest-growing television 
channel, M1, and The Naked Truth is its flagship show. The newscast has been 
nominated for a television award for humour. 

They say it is an elaborate metaphor for the "news pornography" of mainstream 
Russian newscasts, which are notorious for scandal-mongering and dirty-tricks 

"The idea of The Naked Truth was born during the last parliamentary 
elections, which were a real circus, a real striptease show," Ms. Pesotskaya 
explained. "Our program was just the right thing at the right time."

Usually it is Ms. Pesotskaya herself, a professionally trained actress, who 
becomes topless by the end of the newscast. Always maintaining an air of 
dignity, she earnestly reads the latest mundane Russian news bulletins from a 
Teleprompter while her clothes mysteriously fall off, item by item, until she 
is exposed in her full buxom glory.

Often she is assisted by props or assistants, depending on the theme of the 
day. Once she read the news while being slowly stripped by a Latin tango 
dancer. Another show created the mood of a Moscow kitchen with a leaking 
roof, a saucepan on the anchor desk to catch the dripping water, and a 
succession of young women stripping and hanging their blouses on a 
clothesline behind her.

The 10-minute newscast is followed by a topless weather forecast, featuring a 
rotating cast of amateur volunteers.

The show does not contain any "banal vulgarity," Ms. Pesotskaya insisted 
proudly this week as she taped the first edition of her second full season.

"Our show is popular because it's original. Almost every other Russian 
newscast was just copied from Western television. We were the first to 
introduce a non-standard approach to the news. In the other shows, the news 
readers are too serious."

As its popularity grows, The Naked Truth is becoming more ambitious. Now it 
dispatches its topless correspondents to the State Duma, the lower house of 
parliament, where they politely interview Communists and Agrarians on the 
political issues of the day.

The Duma members, pleased to have anyone listening to them, are unperturbed 
by the semi-naked journalists. The Communists sternly repeat their 
antigovernment rhetoric, ignoring the nudity of the interviewers. Other 
politicians are so anxious to appear on the newscast that they eagerly 
volunteer to do their own striptease routine.

North American concepts of political correctness do not exist in Russia, and 
Ms. Pesotskaya is glad of it. "One member of parliament even joined my 
striptease and took off his jacket, tie and shirt," she recalled.

"In my opinion, the taboos in the West are absurd. They want people to be 
robots, not human beings. In our country, politicians are more popular after 
they appear on our show."

The channel's director, Sergei Moskvin, has his own theory about why his 
newscast has such a cult following among lawmakers. "The parliament is like 
an army barracks. Each guy wants to boast how cool he is. So everyone there 
likes The Naked Truth, and when one of them appeared on the show, everyone 
else wanted to appear too."

The Naked Truth, he adds, is neither an erotic show nor a newscast, nor 
straight satire. "It's like crossing a motorcycle with a crocodile. Of course 
we are joking, but if you can understand a joke at once, it's not a good 
joke. We're mocking everything, including erotic shows. I think our show is 
one of the funniest in the world."

Mr. Moskvin dreamed up the topless newscast last year to poke fun at a friend 
who was a famous news anchorman for a competing channel. "I was so tired of 
him, I decided to mock him. I invented it as a one-time show. But my phone 
rang off the hook; everyone was asking me for videotapes of the show. I 
decided to rerun it, so that everyone could make their own copies, but the 
ratings were very high. So we decided to make it a weekly show."

The owners of M1 have never been officially identified, but there are 
unconfirmed reports the channel was recently purchased by Lukoil, the giant 
Russian oil company. Clearly the channel has a lot of money: This summer it 
moved its 150 employees into the newly renovated five-storey building on 
Pravda Street.

M1 portrays itself as the channel of irony, satire and quirky 
unpredictability. In the process, it is tapping a rich vein of Russian humour.

"For almost 80 years, people in Russia have lived under constant stress," Mr. 
Moskvin said. "Humour was the only way out. It was the only way to support 
their optimism."


Vremya Novostei
October 2, 2000
[translation from RIA Novosti for personal use only]

The Business Council's makeup is defined: it will consist 
of 24 businessmen and 2 state officials. After long disputes 
and coordinations of positions, Mikhail Kasyanov signed the 
list. He will become the Council's chairman, and Ilya Yuzhanov, 
minister for anti-monopoly policy, will be his deputy. There 
are few oligarchs on the list and not too many figures with 
political connections. The oligarchic circles are represented 
by businessmen who are politically engaged, including Pyotr 
Aven, vice-president of the Alfa-group, Mikhail Khodorkovsky 
chairman of the Yukos board, and Oleg Deripaska, head of 
Russian Aluminium and Roman Abramovich's partner in aluminium 
business, who has joined them recently.
Such figures as Vladimir Bogdanov, president of Surgutneftegaz, 
Kakha Bendukidze, general director of Uralmash, Dmitry Zimin, 
head of Vympelkom, and Timir Balloyev, general director of the 
Baltika company, are also well-known for their professional 
achievements and public activities.
Oleg Viyugin (Troika dialogue) and Anatoly Karachinsky (IBS), 
who are regarded as "dissidents" in business, have also been 
put on the Council. The government is especially proud of 
Anatoly Karachinsky, since his inclusion in the Council should 
signify pluralism and democracy shown by the government in 
selecting entrepreneurial personnel. A high-ranking official in 
the government's apparatus told to the Vremya Novostei paper 
that "Anatoly Karachinsky is a self-sufficient man, he says 
what he thinks and is not a great "diplomat." The other 15 
members of the Council are not so well known to the public or 
linked to the oligarchs. A top-ranking official from the House 
of Government explained to the Vremya Novostei correspondent 
what criteria they used when selecting businessmen for the 
Council. "We thought that it should not have major oligarchs, 
to avoid a sort of oligarchic politbureau. We chose those who 
proved their worth in the real sector. We sought to ensure 
representation of all sectors.
Note, for the first time we included representatives of 
communications and the information science." As for the 
objective need to have a representative from this or that 
sector, for instance, from the East Line air transportation 
company instead of Aeroflot, the government's representative 
said: "I don't think Mr Akulov has any problems as regards 
contacts with the authorities or access to them." On the whole, 
the government is self-contented believing that it has freed 
itself of the oligarchs. This is what they say:
"Everyone is sure of 90 percent of professional qualities of 
the Council's members. If some of them, Berezovsky and 
Gusinsky, for instance, go into politics, they do so to protect 
their business, not for the sake of politics as such." 


Financial Times (UK)
2 October 2000
INSIDE TRACK: High-tech designer who prefers a low profile: Essential Guide
to Anatoly Karachinsky PROFILE ANATOLY KARACHINSKY, IBS: Russia's answer to
Bill Gates owes his riches to a genuine enthusiasm for computers, rather
than the ruthlessness shown by some of his peers, says Arkady Ostrovsky

"Have you seen this morning's Financial Times?" asks Anatoly Karachinsky
with a wry smile. Unlike most Muscovites, who have to wait until evening to
read the international press, Mr Karachinsky, head of Information Business
Systems, Russia's largest IT group, likes to read his FT over breakfast. 

He can do this because he prints his own copies of the FT and other
newspapers direct from a satellite to his desktop printer. The idea came to
him in a hotel. "I travel a lot and always read the Russian papers on the
internet. Once I thought, 'wouldn't it be nice to read my local paper over
a cup of coffee?' " 

Last year Mr Karachinsky set up NewspaperDirect, a system that allows
newspapers from anywhere in the world to be printed on a desktop. Already
50 five-star hotels around the world offer the service - another 150 will
join by the end of the year - and Mr Karachinsky plans to extend it to
cruise operators and airlines. 

NewspaperDirect is a pet project for the man who is regarded in Russia as
the country's answer to Bill Gates - and who is about to become the
country's first high-technology dollar millionaire. Mr Karachinsky is a
rarity among Russia's millionaires in that he did not "privatise" state
assets in return for political favours, but earned his fortune through his
professional skills. 

He lives in a central Moscow apartment converted from a communal flat that
once accommodated eight families. Unlike other Russian tycoons, he eschews
bodyguards and bullet-proof cars. 

Mr Karachinsky says technology is less criminalised than other sectors in
Russia. "Gangsters were never interested in our market, first because they
never understood what we did and second because there is nothing they can
steal. All we have is intellectual property - and that is rather hard to

Born into a Jewish family in Moscow, he applied to study mathematics at
Moscow State University, but the university had unofficial quotas for Jews
and Mr Karachinsky missed out. 

Instead, he went to an institute for transport engineers. "All the Jews who
could not get into the university went there." After graduation he worked
for a pittance as a programmer at the Ministry of Railways. "We worked on
huge mainframes and I practically lived at work. I was obsessed with

Few Russians had seen a PC in 1984. "I had read everything about PCs but I
had only seen one from a distance," he says. This did not stop him and a
friend writing a book about PCs. "It was very naive, but the entire run of
75,000 copies sold out in three days." 

The year 1986 marked a turning point for Mr Karachinsky and his country.
Mikhail Gorbachev, the newly appointed general secretary of the Communist
party, launched the process of perestroika, opening up the former Soviet
Union to the world. Making contact with a foreigner was no longer an
offence, and an Austrian businessman offered him a job as a computer

"I must have been one of the first Russians to be directly employed by a
foreign company," he says. "That company simply bought me - not with money,
but by giving me a PC to use at home. It was surreal." 

But he says he became disillusioned selling computers. "It was not me, I
wanted to do something creative." The Austrian businessman offered to
create a joint venture specialising in software and computer distribution. 

"We did a lot of silly things. We bought a Dollars 200,000 (Pounds 136,000)
house in Moscow and several cars. The irony was we were writing
sophisticated programs, (whereas) our job was to shift hardware." When he
realised the biggest assets in his company were not buildings or cars, but
his brain, he set up IBS. That was in 1992. 

"It was when the first Russian 'oligarchs' were emerging," he says. But
while the oligarchs were busy fighting over the country's natural
resources, Mr Karachinsky tapped into Russia's vast intellectual resources.
"The country had a huge number of young, highly skilled people who could
not find a job - we had the luxury of choosing the best." 

In 1992, IBS won its first big contract - for Dollars 1m - from Sberbank
(Savings Bank). Mr Karachinsky and his team were asked to create an
integrated online system for the bank, which had branches in every town of
the former Soviet Union. 

They produced a state-of-the-art system, complete with ATM machines, that
was more advanced than that of many western banks. In fact, it was too
advanced for Russia's primitive banking system, which still hampers the

IBS is Russia's most diversified IT group, specialising in system
integration, computer distribution, software programming and the internet.
It employs 1,500 people - although it is recruiting 30 new staff each month. 

As well as providing IT consulting and enterprise resource planning for
Russian and multinational companies, IBS also writes software programs for
IBM and Boeing, distributes Dell-branded hardware products and has recently
started work with Commerce One, a leading US business-to-business company
that specialises in market-places, to develop electronic platforms in Russia. 

But the group's success extends well beyond the domestic market: IBS has
won an international reputation by providing value-added services to the
developed world. Next year, it plans to list on Nasdaq, with an expected
value of Dollars 250m-Dollars 600m. 

Mr Karachinsky is one of the few people in the country who understands the
complicated structure of Russia's largest companies. But the systems he
designs are incompatible with Soviet-style management. 

"Most oligarchs wanted to control the cashflows of their companies because
they were afraid they might lose (the companies) as arbitrarily as they
gained them. Now they are beginning to understand it is more profitable to
increase capitalisation and sell shares than to steal cashflows." 

"All we do is translate the structure of the companies into computer
language. If the structure itself is wrong, the system will not work." Mr
Karachinsky believes IBS can act as a catalyst in the restructuring of the
Soviet behemoths, making them more transparent and efficient. One way to do
this is to program systems so they do not function if companies break the
rules - but he admits computers alone will not prevent bosses stealing. It
is perhaps Mr Karachinsky himself, rather than his systems, who
demonstrates the simple point that you do not have to steal to become a
millionaire, even in Russia. 

Born: Moscow, 1959, to family of Moscow Jewish intelligentsia. Lives with
his wife and two children in a Moscow apartment converted from a communal
flat. Business education: He never went to a business school, but claims
his education cost Dollars 7m (4.8m). "This is how much money we have lost
because of my mistakes, and that is the best education you can get in
life." Mentor: Esther Dyson, a US internet guru with a special interest in
Russia and eastern Europe. "All of us, in the Russian high-technology
market, owe a lot to her. She did more for us than all the foreign
investors put together. She introduced a very high standard of ethics in
our market." Hobbies: Sailing and skiing. "Our 19-year old son still comes
with me and my wife to ski, because he can't find friends who can ski at
the same level." Favourite music: Russian bards. The movement of Russian
bards coincided with the student movements in Europe of the 1960s and
1970s. The Bards' club, of which Karachinsky was a member, was an informal
organisation that brought together young Russian artists who composed and
sang their own songs to the accompaniment of the acoustic guitar. "We used
to gather in small clubs in the outskirts of Moscow. But in the mid-1990s,
one of the bards came to me and said, 'how about renting the Kremlin for a
concert?'. It cost Dollars 17,000. The bard went on stage and said: 'There
was a time when the Communists held their party congresses here. Now we are
performing here, and the Communists are huddling in small clubs'." Biggest
fear: To be betrayed or disappointed by people. "I was lucky with people -
I could not have created this company without a team of close friends." 


Source: Russia TV, Moscow, in Russian 1600 gmt 1 Oct 00 

Interviewed on Sunday night's "Zerkalo" programme on Russia TV, Security
Council chief Sergey Ivanov spoke on the raising of the Kursk submarine,
the situation on the Tajik-Afghan border and the Yugoslav elections. He
said Russia would abide by its decision to try to recover the bodies of the
dead submariners, but stressed this would be an attempt whose degree of
success no-one could guarantee. On developments in and around Afghanistan,
he said he did not think the Taleban "hordes" were poised to overrun the
region - however he warned of an impending humanitarian disaster with
possibly hundreds of thousands of Afghans fleeing the fighting. On
Yugoslavia, he said Russia had no personal preferences as to who should win
the elections - Moscow just wanted to see a fair and legitimate contest.
The following are excerpts from the report by Russia TV on 1st October 

[Presenter Nikolay Svanidze] Now for some other international political
topics of the week. Specially for "Zerkalo" viewers, here is Russian
Security Council Secretary Sergey Ivanov to comment on Yugoslavia and the
prospects for the development of the situation on the Tajik-Afghan border.
But first a question about the Kursk submarine. 

Sergey Borisovich, a question about the Kursk. As far as one can say, the
final decision has been taken to raise the sub, right? 

[Ivanov] I would divide your question into two parts, if I may. A final
decision has been taken to make an attempt to evacuate the bodies of the
dead seamen. I said, to make an attempt. The point is that before the
tragedy of the Kursk similar tragedies unfortunately took place, some time
ago; and there were quite a few disasters involving submarines. Nor were
these only Soviet or Russian boats, but American and from a number of other

The only difference was that on those other submarines there were no
nuclear reactors. And as far as I know there were no successful attempts to
evacuate living or even dead seamen, apart from one case when the Americans
tried to raise one of our boats in the Pacific Ocean, where they managed to
lift only a fragment. There were no other successful attempts. 

Now that we have taken such a decision we shall carry it out - that is we
shall implement this attempt. We do not know if it will succeed or not.
No-one today can guarantee, even the Lord God, how many bodies we shall be
able to raise. 

This is a dangerous operation, a risky one. But we are counting on the fact
that given all the technologically sound calculations and of course given
the observance of all precautionary measures, such an attempt could be
successful, and at least some of the dead will be raised to the surface.
That much I can say about the raising of the bodies. 

As for the submarine itself, this problem is being worked on. I would not
care to speak of possible deadlines right now. It is absolutely clear that
it will not take place earlier than next year. One more thing is also clear
- I do not think that any objective observer will deny this - and this is
linked to our total openness as to all the technical parameters of the Kursk. 

As you know, we admitted international experts and rescuers to a similar
submarine, namely the Orel. We made available to them all the information
the international companies asked for. We shall continue to do so in
future. And there shall be no attempts on our part to engage in what is
sometimes referred as our notorious secrecy nor to cover anything up. In
the current case, the moral aspect is the priority one for us. 

[Svanidze] Right, another topic which the Security Council deals with
directly: Tajikistan. And the whole package of related issues, of course:
namely Afghanistan, the danger to the CIS from the Taleban, and the danger
for Russia. All of that together... 

[Ivanov] From the point of view of the national security of Russia, what is
taking place there, I would say, is more important than what is taking
place now in Yugoslavia. 

[Svanidze] We shall speak of Yugoslavia separately in a minute. 

[Ivanov] Yes, but I would like to stress this here. So, how can this
influence the situation in Tajikistan and generally in the CIS, including
Russia? There are two aspects of this problem too. The possibility of a
direct military threat on the part of the Taleban to Tajikistan and other
countries bordering on this region: Uzbekistan and Kyrgyzstan. You already
know - and your viewers already know - about the acts of terrorism which
have their roots in Afghanistan. According to our assessments - and I mean
here not only Russia but also our partners in the CIS - the total number of
mercenaries, including I am sorry to say servicemen from the Pakistani
army, as well as mercenaries from the Arab countries and Chechnya, their
total numbers has reached around 30,000 men. 

So in order to avert a direct military threat, our border guards,
detachments of our 201 Division, deployed in Tajikistan, are undertaking
appropriate measures to prepare for the event - should such a threat arise
- to repel this threat. Today however I do not consider, I do not see any
basis to increase or supplement our military presence in Tajikistan. 

[Svanidze] That is the position of the president? 

[Ivanov] Yes, that is the position of the president. I reported to him on
the situation, indeed not only I myself but the armed forces General Staff.
We consider that today the quantity of our servicemen already in Tajikistan
is sufficient for the time being, even though we are carefully following
the situation, and should it change then - I assure you - we shall
undertake appropriate steps. 

The second aspect - one which today seems to me to be a more realistic
threat - is the large-scale humanitarian disaster, which in its dimensions
is comparable with everything that took place in Kosovo and other major
humanitarian disasters throughout the world over the past years. 

It is entirely natural - and this is to be expected - that tens or even
hundreds of thousands of Afghans, fleeing the medieval standards and rules
imposed by the Taleban, in a bid to avoid repression and taunts, can try to
escape. This is a fully natural human desire and aspiration. And of course
they will seek refuge on the territory of Tajikistan. 

So it is this threat which we consider to be very serious. That us why we
considered this issue separately yesterday and the day before at the
meeting of Security Council secretaries from the [countries party to the]
Treaty on Collective Security. We exchanged views and came to the
conclusion that there is a need to demand - simply to demand - that
attention be drawn to this problem, the attention of the entire world
community, in particular with regard to the United Nations and its Security

It should not be ruled out that the UN Security Council at an unscheduled
meeting, an emergency session, will discuss precisely the problem unfolding
on the Tajik-Afghan border. At the same time the forces led by Ahmad Shah
Masud, as far as we know, are not just sitting around with folded arms, but
- according to my information - yesterday a rather successful counterattack
against Taleban positions began. 

[Svanidze] Another question for you, Sergey Borisovich. Here we are talking
the success of Ahmad Shah Masud, but in the meantime he has basically
suffered a defeat... 

There is moreover an official legitimate government, that of Rabbani, and
we have dealings with it. But the real distribution of power is quite
different: Rabbani is the official head of government but he does not have
real power. Real power is in the hands of the Taleban. Do we have any sort
of dealings with them? 

[Ivanov] Sadly I have to confirm the correctness of your analysis: things
really are that way. Well, we do not maintain any direct official contacts
with the Taleban. As for unofficial contacts, including by the special
representative of the Russian Federation Foreign Ministry for matters of
Afghanistan, contacts within a multilateral framework - I should like to
stress this - are being maintained. 

[Svanidze] Understood. I understand what you are saying. Is the probability
of the most negative scenario being taken into account? What if Taleban
hordes intruded on the territory of the CIS, ultimately representing a
direct danger for Russia? 

[Ivanov] Yes, it is being taken into account. It was not for nothing that I
mentioned the meeting of Security Council secretaries, allies from the
Collective Security Treaty. Work has long been carried out to create a
mechanism of collective forces of the treaty members. As I have already
said, we provide considerable aid for Tajikistan in the sense of military
equipment. We consider that the other countries of the Treaty should also
do this. And they are ready to do this, in collaboration with each other,
and with us of course. 

This aid will be stepped up - again I would like to stress this - in line
with the development of the situation. At the same time, however, I do not
think that the scenario which you mentioned: namely that Taleban hordes
will overrun Tajikistan, Uzbekistan and on to everywhere else, is realistic
in the near future... 

What we are seeing is the gradual infiltration be small groups of
terrorists - that is what they are in essence, terrorists - into
Tajikistan, Uzbekistan, and now Kyrgyzstan as well - in order to
destabilize the international political situation above all of the Central
Asian states... 

[Svanidze] Yugoslavia, Sergey Borisovich. Our position on Yugoslavia? 

[Ivanov] I would put it like this. In contrast to the position of many
states in the world - I shall not name them - states which in my view are
characterized by a kind of heightened degree of fuss - our position is
fairly composed. 

I consider that that we take into account the interests of all parties. And
the main point is as follows: Yugoslavia is experiencing a very complicated
period, possibly a turning point, in its history. It is extremely important
not to allow any kind of foreign intervention or pressure or influence on
the events taking place there. 

On the other hand, whoever should win the presidential elections in
Yugoslavia, it is important from our point of view that the future
president of Yugoslavia should be fully legitimate in the eyes of the both
the international community and the Yugoslav nation itself. 

There exists a fully defined and clearly marked legal procedure in any
elections. It is important that they should be safeguarded to the last -
and it is important that both sides should arrive at a common opinion as to
how to treat and how to evaluate the outcome of both the first and possibly
the second round of the elections. 

[Svanidze] So there is no personal preference on the part of the Russian

[Ivanov] No. 



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