October 24, 2000    
This Date's Issues: 4597 • 4598  • 

Johnson's Russia List
#4598
24 October 2000
davidjohnson@erols.com


[Note from David Johnson:
1. Interfax: Capital flight from Russia resumes.
2. Bloomberg: Russian GDP May Expand as Much as 7% in 2nd Half.
3. Reuters: Karl Emerick Hanuska, The waters of Russia's Karelia hold 
their allure.
4. AP: Yuri Bagrov, Chechen Refugees Despair.
5. Kommersant: Prosecutors Concluded Peace With Oligarchs.
6. Peter Ekman: School surveys.
7. Moscow Times: Kevin O'Flynn, Death Industry Alive and Well in 
Russia.
8. SKATE's Capital Markets Russia: Peter J. Lavelle, Walking a Mile 
for a Russian CAMEL. (re banks)
9. Washington Times: Arnold Beichman, Russia's recurring plight.
10. Financial Times (UK): Business enters murky world of virtual 
murder: Russians are settling disputes by framing rivals for killings 
when the 'victims' are not actually dead, writes Charles Clover.
11. Itar-Tass: Kremlin aide says there is no threat of censorship.
12. BBC Monitoring: NTV, Ecological situation in Vladivostok bay 
disastrous.
13. Wall Street Journal Europe: Jonas Bernstein, Diaries of Modern 
Day Russian Czar.
14. AFP: Russia calls for re-think of Middle East peacemaking.
15. The Electric Telegraph (UK): Marcus Warren, Mir to splash down 
after 15 years.]

*******


#1
Capital flight from Russia resumes 
Interfax 


Moscow, 24th October: Capital flight from Russia this year has increased in
comparison with last year, Economic Development and Trade Minister German
Gref announced in Moscow on Tuesday [24th October]. 


The level of capital flight from Russia is currently comparable to that of
1998, Gref said. The continuing capital flight is "one of the negative
factors in Russia's economy and an indication of its poor health", he said. 


*******


#2
Russian GDP May Expand as Much as 7% in 2nd Half

Montreal, Oct. 23 (Bloomberg)
-- Russia's economy may expand as much as 7 percent in the 
second half, about the same pace as in the first, as high world commodities 
prices bolster the oil, gas and metals industries, the finance minister said. 


Gross domestic product, which grew 7.5 percent in the first half, will expand 
6.5 percent to 7 percent in the second half, Finance Minister Alexei Kudrin 
said while attending a conference in Montreal. Industrial production may grow 
by 10 percent this year compared with 9.1 percent last year, he said. 


The government estimates GDP will grow 5.5 percent this year after record 3.2 
percent growth last year. The economy, driven by oil, gas and metals 
companies that account for about half of all exports as well as domestic 
producers benefiting from a weaker ruble, is expanding without accelerating 
inflation. 


``Since 1999, the Russian economy has improved,'' Kudrin said during a 
conference on global capital markets. ``This growth has been accompanied by a 
rise in real salaries and a drop in inflation to 1.5 percent per month, twice 
lower than in 1999.'' 


Russia expects ``positive results'' from negotiations with the International 
Monetary Fund and government creditors later this year, Kudrin said. In 
November, Russia may ask for the IMF for a new standby loan program for 18 to 
24 months. 


The government expects talks to begin in December with the Paris Club of 
government creditors, he said. Russia is seeking an agreement to reschedule 
billions of dollars in Soviet-era debt. 


Kudrin also said the government is preparing legislation to combat money 
laundering, which it will show to a task force set up by the Organization for 
Economic Cooperation and Development before presenting the draft to 
parliament before the end of the year. Kudrin said he couldn't provide 
specific details about the proposal. 


``Our first priority is to adopt a good economic policy, then we will adopt a 
law against the laundering of dirty money and we also want to reinforce the 
role of the central bank in controlling some transactions,'' he said. 


Kudrin, also a deputy prime minister, estimates Russia loses the equivalent 
of 5 percent of GDP through the conversion of rubles into dollars or the 
outflow of capital from the country. 


*******


#3
The waters of Russia's Karelia hold their allure
By Karl Emerick Hanuska

LAKE ONEGA, Russia, Oct 24 (Reuters) - Crossing Russia's vast Lake Onega on a 
stormy autumn day, the steely grey sky is the only thing which seems still. 


"Just fix your eyes on something far off in the distance. That will calm your 
stomach," an elderly woman advises a queasy tourist as the hydrofoil packaged 
with passengers bound for the island of Kizhi lurches from wave to wave. 


Glancing back at as Karelia region's capital city Petrozavodsk fades from 
sight and at the dark waves rolling ahead, one cannot help but be taken with 
the enormity of Europe's second-largest lake long enough to forget about 
nausea for a few moments. 


WATER EVERYWHERE 


Water is the defining characteristic of this vast region, which spreads 
hundreds of kilometres (miles) along the Finnish border and is host to more 
than 60,000 lakes and 27,000 rivers. 


A full quarter of its 40,000 square km (15,000 square miles) is covered by 
water. 


"The water is the most important thing to people here," said a little bearded 
man named Viktor, taking a long drag on a cigarette before crushing it out 
under a red rubber boot. 


"We depend on the water for the fish we eat and the ships that sail into our 
ports. The land is where we build homes and grow a few vegetables, but out on 
the water is where we live." 


Fair with blue eyes, he identified himself as a Karel -- an ancient people 
who now account for about seven percent of the region's population of about 
800,000. 


But he added: "After the last century all any of us really are now is Soviet, 
though some people are trying to revive the old languages and the old ways." 


In addition to Onega, the region boasts the even more massive Lake Ladoga 
further to the west on its southern border. 


Covering 18,000 sq km (6,950 square miles) and reaching depths of up to 225 
metres (738 feet), it separates Karelia from the Leningrad region and alone 
holds more water than all of Finland. 


>From Onega's northern shores the Belamor Canal stretches through lush and 
pristine forests to the White Sea. 


The canal, with its 19 locks, was built on the orders of Soviet dictator 
Josef Stalin in just 20 months, primarily with convict labour, claiming up to 
250,000 lives. 


But water is not all that this region is known for. There are rich forests 
spreading over more than half of Karelia's territory which have earned it the 
title "the lungs of Europe." 


When Kizhi finally comes into sight, materialising through the mist like a 
northern Avalon, sea sickness is quickly forgotten as people clamber onto the 
deck to admire the simple cottages and villagers along the shore. 


Tractors, power lines and baseball caps seem like anachronisms against the 
majestic forests, wooden homes and ruins of churches dotting the horizon. 


The wooden architecture has won Karelia fame, especially Kizhi's 
centuries-old churches which replaced the pagan temples that stood before 
them. 


The most spectacular is the Church of the Transfiguration, a 300-year-old 
cathedral built entirely of wood and soaring nearly 40 metres (131 feet) 
above the waters which lap at the shore just a stone's throw from its 
foundations. 


Karelian legend tells of the master builder Nestor, who on finishing 
construction of the church cast his axe into Lake Onega with the vow: "There 
has not been and nowhere will there ever be another church like this." 


The church is said to have been built without nails, but the pretty guide 
does away with that myth. 


"Of course they used nails when they built the church. Maybe the masters 
didn't need them, but it was expensive and no one wanted to risk its collapse 
in a wind storm," she said. 


A RESTLESS HISTORY 


Despite being so far removed from the rest of the world, Karelia has had a 
restless history. 


Russians, Swedes, Germans and Finns all fought over it in the three centuries 
since Peter the Great built a foundry and a factory on Onega's shores to 
manufacture cannons and guns from the region's rich ore deposits. 


Poles, Lithuanians and Vikings came looking for a route to the White Sea and 
Finns still bristle about a patch of Karelia seized by the Soviet Union 
during its war with Finland. 


Thousands of the years earlier, Finno-Hungarian and northern Slavic tribes, 
including the Karels and Veps, fished the region's waters and built homes 
among its splendid pine and birch forests. 


Their descendants now live along these shores, where archaeologists from time 
to time discover crude writing that was hammered into stone as long as 6,000 
years ago. 


"It is not hard to understand why so many people want a piece of it," said 
Andrei, a St Petersburg high school teacher as he snapped pictures of 
Karelia's countryside. 


"Look at how beautiful and low the sky is. You could practically reach up and 
tear off a chunk." 


******


#4
Chechen Refugees Despair
October 24, 2000
By YURI BAGROV

KARABULAK, Russia (AP) - In their straw-and-clay hut, Nozhayev Khovash and 
his family are the envy of their neighbors in the teeming Soglasiye camp for 
Chechen refugees. 


When the others crowd into their tents for the night, sleeping with up to two 
dozen others, Khovash, his wife and two infants retreat into their own 
private space. And while the wind whistles through the holes where the tents 
have rotted through, the autumn chill can't penetrate the hut's thick walls. 


``Even when we run out of wood, the place stays warm for 2 1/2 hours,'' 
Khovash boasted. 


But even if the hut is a source of pride, it's also a sign of despair. Tens 
of thousands of Chechen residents are bracing for their second grim winter in 
refugee camps in the republic of Ingushetia. The situation is high on the 
agenda for U.N. High Commissioner for Refugees Sadako Ogata, who is meeting 
with top Russian officials this week in Moscow. 


The refugees complain that as the Chechen war drags on, they're receiving 
less help than ever. 


``We sold our last warm clothes for almost nothing, to get some food, and our 
only hope of surviving the winter is to get some humanitarian aid,'' said 
Laysa Akhmadova, Khovash's cousin, who is living in a tent with 10 other 
family members from the Chechen capital of Grozny. 


Ingushetia, a poor, mostly Muslim republic neighboring Chechnya, has borne 
the brunt of the latest refugee exodus. Some 141,000 Chechen refugees are 
officially registered there, down from a peak of 301,000 earlier this year, 
and about 20,000 more are not on official rolls. 


Tens of thousands more refugees are in the republic, including people who 
lost their homes in the 1992 war between Ingushetia and neighboring North 
Ossetia and the previous Chechen war, in 1994-96. More than 181,000 displaced 
people are living in Chechnya itself, according to the Russian Ministry of 
Nationalities and Migration. 


Some of the refugees are living in private homes, while others are living in 
hastily erected encampments of threadbare tents and frigid railroad cars. As 
men wander around the camps, looking for news from home, women bundled in 
parkas and woolen scarves cluster around campfires, stirring thin soup and 
toasting sunflower seeds to sell. There is almost no work to be had. 


``Moscow officials came here last year and made a public promise to pay 
compensation to refugees and to cover the costs of their stay here. But up to 
now they haven't done a thing,'' said Magomed Gereyev, chief of Ingushetia's 
migration service. 


According to Ingush officials, the federal government owes more than $17.9 
million to the Ingush government for food, electricity, gas and water 
provided to the camps. That debt has led to days-long interruptions of food 
deliveries and on-again, off-again power supplies to the camps. 


``Our electricity was turned back on only two days ago, after two weeks' 
absence,'' said Akhmadova's brother Adam, a former truck driver. ``Even when 
the gas is on, it's so weak that it takes four hours to bring the kettle to a 
boil.'' 


All 14 members of the extended family crowd into the tent for their meals: 
sweetened tea in the morning, macaroni and tinned beef stew for lunch, and 
macaroni or potatoes with cheese for dinner. 


As temperatures drop and food supplies dwindle, increasing numbers of 
refugees are getting sick. Sixteen people in the camp have been diagnosed 
with tuberculosis, and several children have hepatitis, said the camp doctor, 
Natalia Gulkina. 


Both the refugees and the government are looking to the United Nations and 
other international organizations to help them through the winter. Last week, 
Ingush authorities started erecting a U.N.-funded camp on the Ingush-Chechen 
border, which is to house up to 12,000 refugees who have up to now been 
living with families or in railroad cars, said Vera Soboleva, Moscow press 
officer for the U.N. refugee agency. 


******


#5
Russia Today press summaries
Kommersant
October 23, 2000
Prosecutors Concluded Peace With Oligarchs
Summary


Russian "Oligarchs" may sleep easy now.


During Friday's meeting with the State Duma, Deputy Prosecutor General Yury 
Biryukov stated that there are no serious claims against privatization deals.


It was the communist Aleksander Kruglikov who invited Biryukov to speak. They 
were expecting the unmasking of criminal privatization deals from this 
meeting. The beginning was rather promising for Communists. He gave examples 
of excellent work of law enforcement bodies in cases of "Rosgosstrakh", 
"Russkoye Video", "Astoria" Hotel and "Captain Izmailov" icebreaker. In all 
these case, the General Prosecutors' office achieved annulment of "illegal 
state property sale deals". But Communists wanted other examples. They were 
asking about the Norilsk Nickel, about the Tyumen oil company (TNK), about 
Svyazinvest and other huge companies.


However, the Prosecutor has disappointed them saying that the criminal 
lawsuit on the Norilsk Nickel (owned by Interros industrial financial groups) 
has been terminated due to the general amnesty that the Duma itself declared 
last year. The situation with TNK is similar – he said. In general, 
Prosecutors do not speak about nationalization of private companies any 
longer. Additional payments for the state packages of stock may be retrieved 
only by Court judgements – they say.


*******


#6
From: "Peter D. Ekman" <pdek@co.ru>
Subject: School surveys
Date: Tue, 24 Oct 2000


Sumitra Rajagopalan in the Montreal Gazette (JRL 4597), in passing mentions
that "surveys conducted among Russian 
schoolchildren rank science and technology-related professions as being the 
least prestigious - below racketeering and prostitution."
I've never seen any such surveys and I doubt that they exist, or if
they do exist, they must have been performed in a completely unscientific
manner. I have seen them mentioned several times - always in passing,
without any details or references. If anyone has any real information on
such surveys, please send it to pdek@co.ru.
So why does this factoid keep on popping up? I'd guess that it
is just another bit of urban folklore, like the stories of alligators in the
sewers. It summarizes much of what's happening in Russia and is so
memorable that it "ought to be true." I sincerely doubt that it is.


******


#7
Moscow Times
October 24, 2000 
Death Industry Alive and Well in Russia 
By Kevin O'Flynn
Staff Writer


Death can be a lot easier in Russia these days f if not for the departed, 
then at least for their relatives. 


In Soviet times, the system left it to bereaved family members to do 
everything for themselves, from cleaning the body to arranging it in the 
coffin. The municipal companies that controlled funeral services were so 
unreliable that relatives often had to go to the cemetery on the morning of 
the funeral to make sure that the grave had even been dug. 


"There's usually a feeling of fear when you go near a cemetery," said Tatyana 
Dukova, trade missions secretary for Siberian Fair, the company that for the 
last eight years has organized the Novosibirsk funeral business fair f one of 
only four such trade shows in the world. 


The fear, she explained, has less to do with death and dying than it does 
with the nightmarish complications of laying someone to eternal rest in 
Russia. 


But in recent years, the burial business has seen marked improvements, with 
both private and state companies offering complete death-to-grave services. 


"We had to start all over again with the culture," said Olga Rakitskaya, vice 
president of Siberian Fair, which organized last week's Necropol 2000, a 
funeral-business trade show at the All-Russia Exhibition Center, or VVTs. "It 
gets better year by year," she said. 


According to Siberian Fair, companies f which now do everything from cleaning 
the body to elaborate embalming work f have finally seized on the opportunity 
available in Russia's big cities. 


Simple customer-friendly improvements include cemeteries that offer free 
shuttles to and from the metro on holidays, or rent out cheap spades and 
drinking cups for relatives wanting to plant flowers or leave a drink for the 
dearly departed. Competition is intense, with some companies even selling 
headstones from stalls on the street. 


At VVTs last week, shiny new coffins made from a dozen different types of 
wood lay piled near gravestones of all shapes and sizes. Gorilla-sized 
wreaths loomed over passing customers nearby, as a gloomy group of 
undertakers, embalmers, tombstone engravers and wreath-makers all displayed 
their wares. More than 100 companies offered their services, with visitors 
coming from all over the country to examine the goods. 


Outside, curious passers-by peered into an ambulance-like vehicle fitted out 
to accommodate up to four corpses at a time. Next to it stood a large black 
van with curtained windows and enough room to comfortably seat 16 mourners 
and a coffin. 


At the stand belonging to Ritual, the Moscow-based municipal burial service, 
Yury Kononykhin stood and watched over the products he uses in his daily 
work. A trained surgeon, he has never once operated on a live person. His job 
with Ritual is to make the dead more beautiful f a key task in Russia, where 
Orthodox tradition includes open-casket rites. 


"The dead aren't very beautiful," Kononykhin said. "You need to make them 
beautiful." 


Calling for "the book," Kononykhin showed some examples of his type of work, 
with "before" photographs of mutilated accident victims displayed alongside 
their pale, almost wax-like "after" versions. 


Pulling out a piece of plastic, Kononykhin demonstrated a simple aesthetic 
trick used on corpses. When a person dies, he explained, their eyes sink 
inward. By inserting a small curved disc under the eyelid, the full look of a 
healthy eye is retained. Little flaps in the plastic also keep the eyelids 
from popping open and giving unsuspecting relatives an unpleasant, 
glassy-eyed look. 


Kononykhin performs embalming work in addition to beautification. Holding a 
large syringe with a long needle, he explains the injection procedure needed 
to keep a body fresh. 


"Three days, a hundred days, a hundred years or a thousand, like Vladimir 
Ilyich," Kononykhin said, the syringe shaking in his hand as he laughed. 


Rakitskaya said the competition between private and state firms was to thank 
for the improved standards in the burial business. Although some places still 
lag behind f St. Petersburg, for example, is dominated by a graveyard 
monopoly and allegations of mafia involvement, and small towns still suffer 
from a lack of competition f many at the exhibit were optimistic that overall 
burial trends are improving. 


"Russia is getting close to the European traditions of burial," Rakitskaya 
said. 


*****


#8
From: "Peter Lavelle" <plavelle@metropol.ru>
Subject: Walking a Mile for a Russian CAMEL. 
Date: Tue, 24 Oct 2000


SKATE's Capital Markets Russia, Peter J. Lavelle. Walking a Mile for a
Russian CAMEL. 


Without a doubt Russia's banking system is the weakest link in this
country's seemingly recovering, though still, whimsical economy. Is the
quality of a country's banking system a true and fair reflection of the
said subject's economic (even political) health? Should it be? If Putin's
administration were valued as a bank, what would a banking supervisory
authority worthy of the name find? What kind of investment-credit risk
would it assign? How attractive would Putin's Russia be as a result? The
verdict just might minimize some of the "feel good" rhetoric often reported
in both the domestic and foreign press about Putin's Russia. 


The most common banking valuation technique is referred to as CAMEL. This
term is banking mnemonic for the five principle areas: Capital, Assets,
Management, Earnings and Liquidity. Instead of using these terms in a
strictly banking sense, I apply them as political imperatives directed as
objectives and challenges necessary to enhance Russia's current regime.
Said differently, what does Russia need to be to become a good investment
in the broadest sense? 


I believe a country's relative political risk can be measured in terms of a
bank's financial health. This is as it should be in the case of Russia.
The most rigorous standards should by applied to the world's only other
aspiring nuclear superpower - out of fear and just consideration. Judging
by official pronouncements, Russia demands no less. By doing so, the
macroeconomic picture many seem to consider bordering on recovery takes on
a different meaning and should beg for at least a modest re-valuation of
the Mr. Putin and his rule to date. If Putin's Russia were a bank what
might we conclude? What is Putin's CAMEL? 


Capital. Does Putin's government have the means to meet the needs of the
Russian population and the ability to honor agreements to "other creditors"
such with foreign countries under current "capital conditions"? The
political will appears to be there at least terms of rhetoric. Without a
concerted effort to limit and finally end government corruption, the
Putin's ability to deliver the goods will remain a mere shadow of its
claimed aims. Public support appears to be still in place. However,
eroding the independence of the media will made public opinion superfluous,
it will also make it very difficult to determine. This not only
depreciates the government's capital; it also undercut the assets of civil
society. 


Assets. What is the value and quality of the president's current asset
base? In political terms, it would appear to be more than satisfactory.
He has a tamed State Duma, oligarchs cowed, regional governors falling into
line and independent bending toward government demands. But this is not
reforming power relations in Russia; it is merely a strategy to control
other power centers. This is a short-term advantage for the regime.
Unnecessarily short-circuiting legitimate interest articulation beyond the
center seriously undermines the very purpose of centralizing power. Driven
to the extreme, the regime will understand less and less about itself and
society - clearly an echo of a failed past. 
Management. Putin's management style is still difficult to discern - who
is calling the shots still open to interpretation. The Media Most Tale and
its antagonist Lesin leave many wondering if the tail is waging the dog.
His reaction to the loss of the Kursk adds to this view. Holding Mr. Pope
for trial borders on paranoia. A managed image is no substitute for an
imagined management. Putin is still has a problem with "the vision thing". 


Earnings. This probably the most difficult area to assess. How does one
define profit in political terms? In this area, I believe earnings should
be defined as ability to achieve a profit (as in earning) based on the
Management of Capital adequacy and Asset quality. To my mind, profit is
what should keep Russia's political elite and polity moving forward. Russia
profits from having the oligarchs be no more than a monied elite. However,
profit should not be defined as merely a government functioning better than
the Yelstin regime. In doing this, Putin's reign is grossly overestimated,
no matter how welcomed it is compared to the Yelstin years. 


Liquidity. The president's room for maneuver is less than it may seem - the
liquidity of his mandate is low. Liquidity in financial terms means the
extent of which an organization's assets are liquid, enabling it to pay its
debts when they fall due and also to move into new investment
opportunities. For all of the regime's rhetoric about recreating a great
Russia, the average Russian will remain focused on the country's standard
of living. This issue will remain the litmus test of popular consent.
Putin is faced with a daunting task. 


So what is Russia's rating? Does Putin's dominion over Russia deserve
support and an injection of political support from home and aboard?
Putin's Russia is still a very risky proposition - in every sense. It is
myopic to assess this country in macroeconomic terms only. This not only
overestimates the President's political performance; it also exaggerates
the benefit of advantageous raw material prices for political gain, it may
also be a substitute for complacency during this most important period to
move forward. 


In the final analysis, a good bank and an accountable and effective
government have one thing in common: trust. I am not a Putin naysayer.
Far from it, I am a cautious observer of post-communist emerging markets
and polities. Putin is still Russia's best hope in this new century and
new chapter of Russia's most recent revolution. Why is it that (hubris)
hope in the west is more powerful than reality when considering the
post-communist world? Let's use our best and most trusted tools to
evaluate what we claim is in everybody's best interests, especially for the
average Russian. More times than not, walking that extra mile for a CAMEL
is worth it. 
Peter J. Lavelle
Head of Research 
IFC Metropol
Moscow, Russia
plavelle@metropol.ru


*******


#9
Washington Times
October 24, 2000
Russia's recurring plight
By Arnold Beichman
Arnold Beichman, a research fellow at the Hoover Institution, is a Washington 
Times columnist.


A recent issue of the London Observer published an interview with the 
great-granddaughter of Fyodor Dostoyevsky. Tatyana Dostoyevskaya, 63, is her 
name and she lives in the kind of late 19th century poverty her ancestor, one 
of the greatest novelists of our time, described so piercingly in "Crime and 
Punishment."
Mrs. Dostoyevskaya's abode is a second-floor hovel in a St. Petersburg 
suburb where she lives with an unemployed son and grandson on a monthly 
pension equivalent to $31.15. She is one of six direct descendants of 
Dostoyevsky. The other three are her brother, a free-lance taxi driver, his 
son and grandson.
As I read the interview, I recalled Dosteyevsky's great novel, "The 
Brothers Karamazov," in which the Grand Inquisitor tells Jesus imprisoned in 
a cell:
"But let me tell Thee that now, today, people are more persuaded than 
ever that they have perfect freedom, yet they have brought their freedom to 
us and laid it humbly at our feet. . . . In the end, they will lay their 
freedom at our feet, and say to us, 'Make us your slaves, but feed us.' They 
will understand themselves, at last, that freedom and bread enough for all 
are inconceivable together."
And that 19th century message in the days of the czar is what the 
leaders of the 2lst century Russian Federation by their actions are telling 
the Russian people: You can have democracy or you can have bread but you 
can't have both. And it appears the Russian people are getting the message 
loud and clear.
Yet how can it be that Russia has a Third World economy and little 
prospect of any near-term improvement? This is a country with so much still 
untapped mineral wealth and natural resources, inhabited by a highly literate 
population and achieving elites in the arts and sciences, a country freed at 
long last from the incubus of central planning and a crushing dictatorship.
Not often discussed is the future of the Russian population. Professor 
Murray Feshbach of Georgetown University has written in The Washington Post: 
"If demography is destiny, then the destiny of Russia for the next 50 years 
is appalling."
In midyear 1990, the population of Russia was 148.3 million. Today the 
U.N. estimate is 146.4 million. By 2015, Mr. Feshbach expects the population 
will be between 131 million and 138.4 million. Present statistics and 
projections on fertility rates could see a Russian population of 80 million 
by 2050.
Looting of the economy under Boris Yeltsin and now under Vladimir Putin 
seems to be unstoppable. Former Prime Minister Yevgeny Primakov said 
corruption "threatens the country's very existence." In a country without a 
true rule of law and respect for contracts, corruption becomes endemic. 
Ignored is Dostoyevsky's warning: "Neither man nor nation can survive without 
a sublime idea."
The question that haunts the air is this: If all this is known, why is 
nothing being done to stop a decade of rot? Putting it more bluntly, is 
nothing being done because of a deliberate decision to demonstrate to the 
beleaguered Russian people two propositions: (1) the end of communism never 
meant the beginning of plenty; (2) everybody was better off under Communist 
Party rule because people were at least paid on time and they received their 
pensions regularly. If the Russian people had no freedom, at least they had 
bread.
In one of the last scenes of "The Brothers Karamazov," occurs this 
fearsome passage:
"Our fatal troika dashes on in her headlong flight perhaps to 
destruction, and in all Russia for long past men have stretched out imploring 
hands and called a halt to its furious reckless course. And if other nations 
stand aside from that troika it may be not from respect, as the poet would 
fain believe, but simply from horror. And well it is that they stand aside, 
but maybe they will cease one day to do so and will form a firm wall 
confronting the hurrying apparition and will check the frenzied rush of our 
lawlessness, for the sake of their own safety, enlightenment and 
civilization."


******


#10
Financial Times (UK)
24 October 2000
Business enters murky world of virtual murder: Russians are settling
disputes by framing rivals for killings when the 'victims' are not actually
dead, writes Charles Clover 


In the bad old days of early Russian capitalism, business disputes were
often settled with the help of car bombs and snipers' bullets. But lately,
Russia's business world appears to be settling on a new, more civilised
version of the contract killing: no need to actually "zamachit" (rub out)
your opponent. Better to frame him for rubbing you out instead. 


A case study in this pioneering new tactic was on display earlier this
month in Moscow, when Anatoly Bykov, known to associates as "Byk" or "The
Bull", was hauled into custody and charged with ordering a grisly double
murder. 


But last Thursday, prosecutors downgraded the charge from murder to
conspiracy to murder after it emerged that the victims, including an
alleged gangland figure known as Pavel Struganov ("Pasha the strobe
light"), were still alive, despite the earlier appearance of their supposed
corpses on the TV news. 


Sergei Lapin, deputy prosecutor for north-west Moscow, explained the
bizarre twist of events late last week. Indeed the murder had been faked
and the arrest of Mr Bykov on the conspiracy charges had been carried out
"in a well-planned operation". 


But what type of operation, planned by whom, remains uncertain. 


The criminal case against Mr Bykov appears to be closely linked to his
unwillingness to sell his 28 per cent stake in the Krasnoyarsk aluminium
smelter, the world's second largest. 


Mr Bykov has already spent more than three months in prison this year in
Krasnoyarsk, after being extradited from Hungary to face a murder
conspiracy charge in a case where the victim really is dead. He was
released from jail in August, just long enough to say he doesn't intend to
sell his shares. Now he's back inside. Last week, Mr Bykov told Genrikh
Padva, his lawyer: "Until I sell my shares in Krasnoyarsk Aluminum, I will
not be left in peace." 


My Bykov is not alone. Also in August, a very similar murder case was
launched against Mikhail and Yuri Zhivilo, owners of the Novokuznetsk
aluminium smelter, which makes 10 per cent of Russia's aluminium. They were
implicated in a plot to assassinate the governor of Kemerovo region, Aman
Tuleev, who is also still alive. 


What Mr Bykov and Mssrs Zhivilo have in common is that they own something
which is coveted by Russian Aluminium, the giant created from the merger of
Russia's aluminium assets, which over the past year has been snapping up
stakes in smelters, aluminium refineries, and hydroelectric dams across
Siberia. Once it has consolidated it will be the second largest aluminium
company in the world, after Pittsburgh-based Alcoa, capable of producing
some 2.7m tons of aluminium per year. But first it needs Mr Bykov's
blocking share in the Krasnoyarsk smelter, and the Novokuznetsk plant. 


Russian Aluminium denies involvement in the cases brought against Mr Bykov
and Mssrs Zhivilo. 


Mr Bykov is himself not unfamiliar with the sometimes violent world of
Russia's aluminium industry. As a former chairman of the board of the
Krasnoyarsk smelter, he was one of the main participants in the conflict
over control of east Siberia's lucrative smelters in the mid 1990s, in
which dozens of businessmen and crime figures were murdered. 


But while he has managed to beat most of the charges against him so far, it
looks as though Mr Bykov has had enough. Associates say he is tired of
aluminium and interested in the media. 


******


#11
Russia: Kremlin aide says there is no threat of censorship 
ITAR-TASS 


Moscow, 23rd October: Presidential aide Sergey Yastrzhembskiy has said that
neither the doctrine of information security drafted by the Russian
Security Council and approved by the president, nor related comments
contain anything that would indicate imminent censorship in Russia. 


Speaking at the all-Russia conference "Russian Media: Market and
Information Security" in Moscow on Monday [23rd October], Yastrzhembskiy
stressed that some forces were using this doctrine in order to launch new
attacks on executive authorities. 


Asked whether the incumbent president's attitude towards the mass media was
different from that of Boris Yeltsin, Yastrzhembskiy said he did not see
"any radical difference". 


He noted that Putin spared no time to meet the press. As an example, he
cited Putin's recent interview with the magazine 'Paris Match', which took
three hours of his time instead of an hour and a half as was originally
planned. 


"The example of work was more than democratic. There has been no movement
in the opposite direction," he said. 


Speaking about Chechnya, Yastrzhembskiy admitted that Russia lost the
information war during the first Chechen campaign. However, now the
situation is more favourable. 


He said that Chechen President Aslan Maskhadov has no clear-cut information
policy. He is short of people and funds. 


The aide stressed that a radio-relaying station to be commissioned by the
end of November in Chechnya would transmit Russia's two major TV channels
to the republic. 


Radio Free Chechnya has been broadcasting in the Chechen language for
several months, but the problem is that there are no TV sets, radio
receivers and electricity in the republic. 


******


#12
BBC Monitoring
Ecological situation in Vladivostok bay disastrous 
Source: NTV International, Moscow, in Russian 1000 gmt 24 Oct 00 


[Andrey Norkin, presenter] Because of the indifference shown by the
authorities the ecological situation in the Vladivostok bay has become so
bad that groups of volunteers have decided to resolve the problem. To grasp
the scale of the tasks they are facing you should be aware of the fact that
Vladivostok doesn't have sewage-purification facilities and all sewage is
discharged directly into the sea. Yevgeniya Sayapina reports. 


[Correspondent over video of divers and sea bottom littered with metal
debris] These divers descend to the bottom of the Amur bay next to
Vladivostok almost daily, and each time they bring back heaps of rubbish.
They bring up metal parts, car wheels, bottles and boxes that have been
accumulating on the sea bottom for years. Nobody cared to clean it. The
divers working in Vladivostok's coastal zone say they can't see this
underwater rubbish tip any more and have decided to clean it themselves. 


[Dmitriy Serkov, diver] There is a layer of machine oil on the bottom,
everything is littered densely with metal and stuff. 


[Correspondent] There are four divers against tons of rubbish. At this
pace, it will take many years to clear it. But people are more wary of
another problem, against which they are absolutely powerless. Vladivostok
is the only town in Russia without sewage-purification facilities. It
discharges 500,000 sq. m of sewage in its bays every day... 


Scientists are saying that over decades the marine environment has
completely changed and is now carrying out an unusual function of a filter. 


[Boris Preobrazhenskiy, doctor of geological sciences] It's not an ordinary
sea basin any longer but rather a gigantic purification system for
Vladivostok. 


[Correspondent] In the absence of purification facilities the problem can't
be solved by merely collecting rubbish from the sea bottom. Both ecologists
and divers understand this. Every day new toxic discharges are being added
to Vladivostok's bays poisoning the last remaining fish. 


*****


#13
Wall Street Journal Europe
October 20, 2000 
Diaries of Modern Day Russian Czar
By Jonas Bernstein
Mr. Bernstein is a senior analyst with the Jamestown Foundation, a
Washington-based think-tank.


Though he does not use the word, it is obvious from the very opening of
"Midnight Diaries," Boris Yeltsin's just-released memoirs, that what
Russia's first president was planning for New Year's Eve 1999 was not so
much a resignation as an abdication. "I was putting all the force of my
political will into this act," he writes, noting that he planned to keep
the decision secret until the last minute. "Therefore any leak, any advance
talk, any forecasts or proposals would put the impact of the decision in
jeopardy."


A bit further on, Mr. Yeltsin describes recording his farewell and taking
the finished videocassette from the cameraman. "A little black box," he
writes. "Here it is! The most important document! Probably more important
than any decree or letter to the Duma. Here I announce my decision to the
people." Mr. Yeltsin hands the tape to Valentin Yumashev, his former chief
of staff and ghost-writer, who will accompany it in a convoy of official
cars and police escorts to the state television studio for broadcasting.
"This is exactly how the tape should be taken to Ostankino, to the
television center -- under guard," Mr. Yeltsin writes. The rest is history.


Even the most megalomaniacal of Western leaders would not admit -- at least
in writing -- to having had such thoughts, for fear of violating elementary
democratic etiquette. But beyond the overblown sense of self-importance
that permeates Czar Boris's abdication scene, it is by no means clear that
Mr. Yeltsin's decision to step down six months prior to the end of his
second term -- which moved the presidential elections forward by three
months and thus put the Kremlin's massive "administrative resources" at the
disposal of his hand-picked successor, Vladimir Putin -- served to
strengthen democracy in Russia.


To be fair, there are moments in "Midnight Diaries" in which Boris Yeltsin
evinces self-doubt. When he is considering clemency appeals from prisoners
accused of capital crimes, for example, or when he revisits Soviet KGB
chief Yury Andropov's 1975 order to raze the Ipatyev House in
Yekaterinburg, where Czar Nicholas II and his family were murdered. Mr.
Yeltsin, who in 1975 was still first secretary of the Communist Party of
Sverdlovsk, was responsible for carrying out Andropov's order. "At that
time, in the mid-1970s, I took this decision rather calmly," he writes. "I
viewed it in my role as the top city official. Why question it? I didn't
need any extra headaches . . . If I had ignored the directive, I would have
been fired, not to mention the other unpleasant consequences. And the new
person in my place would have carried out the order anyway. But to this day
the splinter remains. Any mention of the execution is like a stab in my
heart."


However when it comes to the decisions that concern real present-day
political power, Mr. Yeltsin evinces few hang ups. He has no doubt, for
example, that he chose the right successor. The former head of state writes
that his feelings about Vladimir Putin, which border on adulation, go back
to early 1997, when Mr. Putin was working in the presidential
administration as a first deputy to Mr. Yumashev, who at that time was Mr.
Yeltsin's chief of staff. Mr. Yeltsin says that he was "shocked" by Mr.
Putin's "lightening reactions" and the calm and natural way Mr. Putin
fielded his questions. "It made me feel that this young man was ready for
absolutely anything in life, that he would respond to any challenge with
clarity and precision," he writes.


Later, after Mr. Yeltsin appointed Mr. Putin director of the Federal
Security Service, or FSB, the head of state was impressed by the fact that
the new security chief "took a very firm political position" and "did not
allow himself to be manipulated in political games." "I was amazed by his
solid moral code," Yeltsin writes.


Mr. Yeltsin also describes how he deliberated in May 1999 over whether to
pick Sergei Stepashin, who was then interior minister, or Vladimir Putin,
to replace Yevgeny Primakov as prime minister. Mr. Stepashin, he writes,
was "soft" and enjoyed "theatrical gestures" and liked "to pose a bit." Mr.
Putin, on the other hand, "had the will and the resolve." While Mr. Yeltsin
picked Mr. Stepashin, it was only to serve as a temporary "decoy" until Mr.
Putin's hour arrived -- three months later, as it turned out.


In the interim, Mr. Putin laid flowers at the grave of Yuri Andropov -- the
man who had ordered Mr. Yeltsin to destroy Ipatyev House, and done things
far worse -- to mark the Soviet KGB head's 85th birthday. Did the President
Yeltsin see this act as further evidence of Mr. Putin's "firm political
position"? Did it affect Mr. Yeltsin's assessment of Mr. Putin's moral
code? There is no way to know for sure: The flowers-for-Andropov episode,
alas, did not make it into "Midnight Diaries."


"Midnight Diaries" should put to rest the view, put forward in recent
months by some defenders of Clinton administration policy toward Russia,
that the Yeltsin and Putin periods are separate and distinct and that
support of the former had nothing to do with the rise of the latter. And in
case anyone missed the message, Mr. Yeltsin, in an interview with Ogonyok
magazine timed to coincide with this month's release of "A Presidential
Marathon," the Russian-language version of "Midnight Diaries," reiterated
his support for Mr. Putin. "I searched for such a politician for a very
long time, throughout all the final years of my presidency," Mr. Yeltsin
said, calling his successor "a young, energetic, powerful politician who
has proven in deed his devotion to democracy and market reforms and
simultaneously to state-patriotic traditions."


Meanwhile, anyone who reads "Midnight Diaries" in hope of finding Mr.
Yeltsin in the act of giving Vladimir Putin guidance on democracy will come
away disappointed. In one of the final chapters, Mr. Yeltsin describes how
he met with Mr. Putin, Defense Minister Igor Sergeyev and Interior Minister
Vladimir Rushailo several times during the first few months after leaving
office to discuss the war in Chechnya. But we have no record of him
discussing with his successor the travails of Radio Liberty correspondent
Andrei Babitsky, who was detained in Chechnya throughout this same period.
(In the same chapter about his life immediately after leaving office, Mr.
Yeltsin writes about his meeting with Bill Clinton. The U.S. president,
according to Mr. Yeltsin, called Mr. Putin "a good, powerful leader.")


A reading of "Midnight Diaries" also makes it quite clear that the
Media-MOST group's problems with the authorities began not with Mr. Putin's
presidency, as is now commonly assumed, but during a battle with Mr.
Yeltsin and his inner circle that erupted in the summer of 1999, well
before Mr. Putin was even appointed prime minister.


Mr. Yeltsin writes how he was "shocked" during that summer to see "Itogi,"
a program on Media-MOST's NTV television channel, present a "chart of the
presidential family," connecting Tatyana Dyachenko, his daughter and
adviser, Alexander Voloshin, his chief of staff, and Mr. Yumashev to
various corruption allegations. Mr. Yeltsin describes the broadcast as a
stab in the back by erstwhile allies and claims that Media-MOST chief
Vladimir Gusinsky and his deputy, Igor Malashenko, tried to blackmail the
Kremlin, promising to end media "pressure" if Mr. Voloshin, an ally of Mr.
Gusinsky nemesis Boris Berezovsky, was fired.


Mr. Yeltsin defends Mr. Voloshin, saying his chief of staff was simply
asking Media-MOST pay off its debts to the state. The battle escalated, and
by July 1999, Mr. Gusinsky's outlets were airing leaked information from
the Swiss investigations into the Aeroflot and Mabetex cases, involving
allegations of embezzlement, bribe-taking and money laundering by leading
Kremlin insiders. The Kremlin responded by sending tax police to Seven
Days, Mr. Gusinsky' publishing house.


Boris Yeltsin, however, does not discuss the battle with Media-MOST in
detail in "Midnight Diaries," more or less limiting himself to calling Mr.
Gusinsky and Media-MOST traitors and accusing them of collusion with
political enemies like former Prime Minister Yevgeny Primakov and Moscow
Mayor Yury Luzhkov. At the same time, there is little detailed discussion
in the book of corruption charges such as those involved in the Mabetex and
Aeroflot cases, not to mention a host of other allegations made against
top-level government officials during Yeltsin's two terms in office.


All in all, "Midnight Diaries" is self-serving political propaganda that
simply lacks credibility. The fact that Boris Yeltsin rode into power
nearly a decade ago on a wave of popular disgust with the privileges of the
Soviet Communist Party nomenklatura makes this book that much more bitterly
ironic and sadder to read.


******


#14
Russia calls for re-think of Middle East peacemaking


MOSCOW, Oct 23 (AFP) - 
Russian Foreign Minister Igor Ivanov called Monday for a new approach to 
Middle East peacemaking, saying the European Union and possibly other nations 
should be involved in forging Israeli-Arab agreements.


Negotiations should be "carried out in a different manner", Ivanov told a 
news conference after Israel called a "timeout" in the peace process at the 
weekend and Arab leaders threatened to cut ties with the Jewish state.


"It is essential to create conditions to allow negotiations to resume but 
they must not restart as a formality," he said.


"The international community must think about the framework for future 
negotiations," he said.


Russia, the European Union and "perhaps other states" should play an 
important role in trying to find a solution to the crisis, Ivanov said.


Russia, which along with the United States is a co-sponsor of the Middle East 
peace process, is a traditional Arab ally but has lost influence in the 
region over the years, leaving Washington in the premier peacemaking role.


In an interview broadcast Sunday, the foreign minister had said that UN 
resolutions calling on Israel to return land seized in the 1967 war should be 
strictly upheld.


In return, Israel should be able to expect guarantess of security from its 
Arab neighbors, he added.


Ivanov underscored the importance of the Arab summit held Saturday in Cairo, 
noting that "such a gathering has not taken place for 10 years."


Ivanov has said that Russia was not invited to the US-led Sharm el-Sheikh 
summit, aimed at ending the recent Israeli-Palestinian clashes.


"I do not believe Russia could have changed anything much at Sharm 
el-Sheikh", said Ivanov, adding that everything that could have been 
achieved, had been.


The foreign minister denied that Russia was being alienated from the peace 
process, adding that Russian President Vladimir Putin was in constant contact 
with both Israeli Prime Minister Ehud Barak and Palestinian leader Yasser 
Arafat.


"Russia holds a very unique position in the peace process because we have 
very good relations with the Arab states and have enjoyed a breakthrough in 
relations with Israel over the past few years, so it would be very difficult 
to alienate Russia from the region," said Ivanov.


He added that Moscow was finalising details for a Russian resolution to the 
Middle East fighting.


******


#15
The Electric Telegraph (UK)
24 October 2000
Mir to splash down after 15 years
by Marcus Warren in Moscow


THE troubled Mir space station will splash down in the Pacific next 
February, a Russian minister announced yesterday.


The statement appeared to end years of uncertainty over the timing of its 
demise. By naming a date, Ilya Klebanov, the deputy Prime Minister, dashed 
the hopes of several would-be "space tourists" planning to fly on the ageing 
vessel, among them James Cameron, director of the film Titanic.


MirCorp, a joint venture led by foreign investors which has exclusive rights 
to sell rides on the spacecraft, appealed to the Russian government for more 
time to raise finance to save Mir. Mr Klebanov's decision, while not final, 
is the most authoritative sign so far that, after almost 15 years in orbit, 
Mir's days are numbered.


For Russia's space programme Mir has always been a source of pride, the 
longest serving spacecraft in history and proof that Moscow can compete with, 
and even out-perform, the United States. Launched in 1986, Mir is a survivor 
of an era when the Soviet Union was still a superpower.


The vessel's reputation in the West has been tainted by a series of dramas, 
including collisions during docking, a fire, computer crashes and a commander 
with a heart condition. Technical problems earned it the nickname "Starship 
Lada". It was also notorious for problems with waste disposal which left the 
cramped interior strewn with rubbish.


Russia's top space technicians and the country's space agency have both 
refused to pass the death sentence on Mir, shifting responsibility for its 
fate on to the cabinet. The need to scrap the craft has been recognised for 
more than two years. But patriotism and the hope that foreign investors could 
be found to keep it in orbit granted it a stay of execution, despite a 
worsening financial crisis.


A chronic funding shortage has deprived the "permanently manned spacecraft" 
of a crew for months and now forces the government to take a difficult choice 
of how to bring it to earth safely. Sending a manned flight to make the final 
preparations for its descent, the most reliable method of ensuring Mir would 
land on target in the southern Pacific, would cost an unbudgeted £14.8 
million.


A cheaper method, using fuel ferried to the craft on a cargo ship launched on 
Saturday, would cut the chance of an accurate splashdown to one in five, the 
Interfax news agency reported. Putting up the money to guarantee a safe 
landing is likely to prove less of a draw to western investors than sending 
paying guests for bed and board on the vessel.


One would-be guest, Dennis Tito, a former rocket scientist turned billionaire 
financier, was in training at Space City outside Moscow this summer, hoping 
for a chance to realise a dream of journeying into space. The NBC television 
network had announced plans to send the winner of a game show into orbit.
*****