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Johnson's Russia List


October 27, 2000    
This Date's Issues: 4503 4604   

Johnson's Russia List
27 October 2000

[Note from David Johnson:
1. Reuters: Carol Giacomo, ANALYSIS-Bush win could presage change 
in US-Russia ties.

2. Vremya Novostei: Yelena Bashkirova, RUSSIANS LONG FOR A STRONG HAND.

OF 2000.

4. Walter Uhler: Re: #4568, Robert Kaplan's "Who Lost Russia."
5. Thomas Graham: Let's have a Real Debate about Policy toward Russia.
6. Russia on Russia: Pavel Krasheninnikov, PRISON REFORM.
7. Moscow Times EDITORIAL: '93 Deputies Get Their Just Desserts? 
8. Reuters: Crash, Kursk note highlight Russian military woes.
9. Bloomberg: Yukos' Khodorkovsky on Internet, Electronic Commerce.
10. AP: Putin Claims Chechen War Near End.


13. Jamestown Foundation Monitor: ILLARIONOV CRITIQUES RUSSIA'S OIL 

14. AP: Congressmen Want Russia-Iran Papers.]


ANALYSIS-Bush win could presage change in US-Russia ties
By Carol Giacomo

WASHINGTON, Oct 26 (Reuters) - After nearly a decade of active cooperation 
and engagement, the United States could make a fundamental shift in its 
approach toward Russia if Republican George W. Bush wins the U.S. 
presidential race. 

The Texas governor and his advisers have outlined views which critics fear 
would turn Russia back into an enemy. But Republicans insist the Bush 
position is more realistic and would better protect U.S. interests. 

This includes an end to U.S. support for billions of dollars in aid to Russia 
from the International Monetary Fund and a greater proclivity to criticise 
and take a tougher line towards Moscow when it acts against perceived U.S. 

Bush "does think further IMF funding doesn't make sense at this point," 
Condoleezza Rice, the governor's chief foreign policy adviser, said in a 
telephone interview. 

Russia's problems are "a lack of rule of law, tax policy that makes no sense 
and corruption. All the IMF money in the world can't fix those problems and 
the absence of IMF money can't make it any worse," she said. 

In recent weeks, she and others have accused Democrat Al Gore, vice president 
for the last eight years, of "turning a blind eye" to Russian corruption and 
missing a chance to really transform Russia's economy into a free market 


"There is no reason to downgrade relations with Russia. But there needs to be 
a significant change in how we think about the relationship with Russia," 
Rice told reporters recently. 

Ariel Cohen of the Heritage Foundation said "Russia is too big and important 
to be neglected (and) I don't think that's the priority of the Bush 
administration to neglect Russia. But hopefully, if Bush wins, he will 
emphasise U.S. national security interests" in dealing with Moscow. 

One area of difference: The Republican governor has stated flatly that as 
president he would develop and deploy missile defence systems. Gore has 
endorsed missile defences, if technically feasible, but has been more willing 
to negotiate Russia's strong objections to such a system before deployment. 

Bush campaign literature asserts that building ties with Russia does not mean 
focusing U.S. aid and attention "on a corrupt and favoured elite" but in 
allying with a rising class of entrepreneurs and business people and "new 
leaders who will build a new Russian state, where power is shared." 

The campaign has sought to use the Clinton administration's Russia policy as 
a wedge in the 2000 election to undermine Gore's claims to foreign policy 
expertise and leadership during a two-decade career in government. 

Gore played a major role in U.S.-Russia policy through a commission launched 
with former Russian Prime Viktor Chernomyrdin that was intended to facilitate 

But Republicans, who accused Chernomyrdin of corruption, say Gore's view of 
Russia is too "romantic" and that the administration endorsed "reformers" in 
Russia when reform was not taking place. 

This week, the Republicans launched a major attack on Gore for a 1995 deal in 
which Russia was granted a waiver from U.S. sanctions in return for promising 
to end already contracted conventional arms sales to Iran by the end of 1999. 
Moscow missed the deadline but U.S. officials said they have no evidence any 
new post-1995 sales have been made. 

Republicans have insisted sanctions should be imposed. But the climate in 
Washington in recent years has turned against broad use of sanctions. U.S. 
officials say at the least, the 1995 deal kept Russia from making new arms 
sales to Iran. 


The U.S.-Russia relationship has for several years been affected by the 
political decline of former President Boris Yeltsin and the emergence of a 
successor, Vladimir Putin, whose commitment to democracy, free markets and 
free press, U.S. officials say, is suspect and troubling. 

Despite these concerns, Secretary of State Madeleine Albright recently warned 
Republicans not to turn Russia back into an enemy. 

While Gore undoubtedly would put his own stamp on U.S.-Russia ties -- in part 
because the leadership in Moscow has changed -- aides say his basic approach 
would remain. 

The United States and Russia "have come a long way together and while we both 
recognise that there are important impediments in the relationship, the 
United States recognises the importance of continuing our engagement," Marc 
Ginsburg, a Gore adviser told a news conference this week. 

He called Putin "untested." Washington has a large unfinished agenda with 
Moscow and Gore is not ruling out further IMF or other assistance, he said. 

Leon Aron, a Russia expert with the conservative American Enterprise 
Institute, faulted the Bush analysis of U.S.-Russia policy for stressing the 
negative, including an "obsession" with corruption, while neglecting the 

It ignores history ("Yeltsin inherited a corrupt country") and geography 
("Russia is the least corrupt of all the former Soviet states except the 
Baltics"), he said in an interview. 

The analysis also neglects the fact that in most if not all cases where there 
was a massive transfer of state property into private hands -- including 
Mexico, South Korea, Taiwan, Poland and Argentina -- corruption is an issue, 
he said. 

Furthermore, the Bush analysis sidesteps the fact that the United States, on 
national interest grounds, routinely deals with corrupt regimes, including 
NATO allies Turkey and Italy, and that three top recipients of U.S. aid -- 
Egypt, Colombia and Ukraine -- have serious corruption problems, he said. 

Aron also argued that Bush fails to acknowledge that on many of the things 
that most affect the United States, "Russia has delivered," including 
reducing nuclear weapons, withdrawing troops from eastern Europe, and backing 
America, ultimately, in major conflicts like Bosnia and Kosovo. 

Although the record is mixed, the bottom line is that "in the last 12-13 
years, Russia went from implacable enemy to, not a friend, but a country no 
longer hostile to us, and where basic democratic institutions are in place," 
Aron said. 


Vremya Novostei
October 23, 2000
[translation from RIA Novosti for personal use only]
By Yelena BASHKIROVA, president of the ROMIR group of 
Today people understand two key words - "democracy" and 
"authoritarianism" differently. If one were to speak about the 
Russians' social conscience, then about a half of them see 
democracy as something positive. Approximately as many of them, 
or perhaps a little less, do not believe in democracy. However, 
those who support democracy, see it as a certain normative 
they approve of it, but theoretically. In doing so, most of 
these people are dissatisfied with the way democracy is 
developing in Russia. This largely caused the longing for the 
so-called "strong hand." People started hoping that a strong 
personality, the father of the nation will come, who will be 
able to unite all and somehow streamline life. Putin came to 
power exactly on this wave of sentiments. His image as a 
self-confident man who knows what is to be done is still 
So, theoretically, society approves of democracy, as it 
were, however, in reality people are becoming distrustful of 
many democratic institutes and procedures, say, of elections.
According to ROMIR data, 52.4% of Russians do not believe in 
free, honest elections. A stable negative image of authorities 
has formed. Say, 75.9% of the polled think that authorities are 
absolutely corrupt at all levels. Most people are convinced 
that authorities are closed to them. 
Then who are the people that think that the country is 
heading for authoritarianism? These are by no means a 
homogeneous part of society. This group also includes 
"democrats," that is, those who are apprehensive of 
authoritarianism and naturally those who, on the contrary, do 
not need any democracy: they want a switch-over to 
totalitarianism, rather than authoritarianism.
Many "democrats" are prepared to agree to a certain 
measure of toughness on the part of authorities. However, this 
should be a measure where this toughness would correspond to a 
moderate authoritarian rule. Then authoritarianism acts as an 
alternative to a totalitarian regeneration of power and 
society. This is a kind of a positive perception of an 
authoritarian regime, because people are afraid of something 
else - they are afraid of totalitarianism. On the other hand, 
they do not believe that democratic institutes may drastically 
strengthen. This is why they choose the least of evils. Such a 
choice of society is not so much the question of morality or 
ideology as the reaction of mass conscience to the really 
shrinking range of alternatives for Russia's social 
That many people were undecided, naturally proves that 
people understand neither the processes of today's life nor 
authorities that are hopelessly remote from them. 

Do you agree that Russia is going over from democratic 
principles of government to authoritarian?

1. Rather agree ... 25.6%
2. Rather disagree... 17.7%
3, Completely agree... 8%
4. Completely disagree... 5%

5. Do not know ... 43.7%
ROMIR. A representative poll conducted among 2,000 
respondents in 115 populated areas of Russia (200 polling 
points, 40 Federation members). September 2000.



MOSCOW. Oct 26 (Interfax) - The non-return of export profits and
money transferred abroad as payment on future imports of goods and
services, which is associated with capital flight, reached $2.1 billion
during the first half of this year.
So says a report by the Economic Development Ministry concerning
Russia's social and economic development from January to September and
the expected results of the whole of 2000. This report has been
submitted to the government.
The debts for energy owed Russia by CIS countries increased by $0.6
billion over that period, the report says.
The financial accounts deficit was $9.1 billion in the first half
of this year, which means capital flight, it says.
Ministry experts also say that capital flight was manifested by the
growth of foreign assets held by Russian credit institutions. At the
start of July, their net foreign assets amounted to $7.6 billion. The
foreign assets of credit institutions increased by $2.1 billion and
their liabilities dropped by $0.3 billion.


From: (Walter Uhler)
Date: Wed, 25 Oct 2000 
Subject: Re: #4568, Robert Kaplan's "Who Lost Russia" 

Robert D. Kaplan plants himself firmly among the post-cold war 
triumphalists when he states that Richard Pipes, Zbigniew Brzezinski and 
Martin Malia, all members of Sovietology's "totalitarian school," understood 
the 1980s as Stephen F. Cohen did not.
Decades before the post-cold war scholarship of Raymond Garthoff, Archie 
Brown, Matthew Evangelista and, recently, Robert English, exposed the 
fundamental failure of this school to identify the actual forces reforming 
the Soviet Union from within, Cohen was directing his attention to the 
"friends and foes of change" inside the USSR.
The totalitarian school's refusal to recognize change "in kind" from 
within compelled them, and enabled US politicians, to credit US initiatives 
against the Soviet Union, which, we now know, had little or no impact. 
Should we be surprised when such triumphalist initiatives continue to fail in 
today's world?


Date: Thu, 26 Oct 2000 
From: Tom Graham <> 
Subject: Administration Russia Policy

Attached is a short essay on the Clinton Administration's Russia policy,
an abridged version of which appeared in the Christian Science Monitor
October 26.

Let's have a Real Debate about Policy toward Russia
By Thomas Graham
Thomas Graham, a senior associate at the Carnegie Endowment for
International Peace, was the chief political analyst at the U.S. Embassy in
Moscow 1994-1997.

Because of its undeniably partisan nature, the report of the Speaker's
Advisory Group on Russia, composed of 12 House Republicans, led by
Congressman Cox, has failed to spark a serious, sustained debate about U.S.
policy toward Russia over the past eight years. This is unfortunate we were
need such a debate about policy toward a country to debate will that will
remain critical to our own security and prosperity well into the future.

Dismissed by critics as a vehicle for attacking Vice President Al Gore
(whose role was in fact secondary to that of Deputy Secretary of State
Talbott, the chief architect of the Administration's policy), the report
ignores some very solid Administration achievements on security matters
(such as the withdrawal of Russian troops from Central Europe and the
Baltics and the return of Soviet nuclear weapons from Ukraine to Russia for
dismantling) and glosses over the Republicans' support for the
Administration's general approach back in 1993.

Nevertheless, it is clear that the Administration has badly mishandled
policy toward Russia. We need to understand what has happened that has
left us with a Russia that is less friendly, weaker, poorer, and less
democratic than it was when the Administration took office nearly eight
years ago. The Administration will deny this, but the facts speak for

In 1993, nearly three quarters of all Russians had a favorable opinion
of the United States. Today, fewer than half do. In 1993, Russia was
seeking an alliance with the United States. Today, Russian national
security documents identify the United States as a threat to Russia's
strategic interests.
By any measure, the average Russian is worse off in socio-economic terms
than he was a decade ago. The economy has collapsed by 40%. The World
Bank estimates that 45% of Russians live in poverty. The public health
system is in a shambles. Contagious diseases are making a comeback; the
country is on the verge of an HIV epidemic. Public schools are woefully
Democracy has not fared well in Russia. Even the Administration now
acknowledges that freedom of the press is under threat. A Moscow newspaper
recently published credible evidence that Mr. Putin's victory in the first
round of the presidential elections earlier this year was due to fraud.
The Department of State's own Human Rights Reports document no significant
improvement in the human rights situation since the Administration took

So what went wrong?

Surely, some of the problems are the result of factors beyond the
Administration's control. Some deterioration in U.S.-Russian relations was
inevitable as the euphoria of our common victory over Soviet communism wore
off; Russians' travel to the United States shattered their illusions about
American society; and Russia articulated its own national interests, which
naturally did not overlap fully with our own. Similarly, some of the
economic hardship and undemocratic behavior is due to the harsh legacy of
Soviet rule, which ruled out an easy transition to a market economy and an
open society. Much of the industrial decline has come from the sharp drop
in weapons productions.

But U.S. policy did matter, and it did grave damage to our standing among
Russians and to U.S.-Russian relations.
On Russia's domestic transformation, the Administration backed an economic
course - the so-called "Washington consensus" focused on macroeconomic
performance - that did not take sufficient account of Russian political
realities, including the widespread elite and popular opposition to that
course. Strangely, the Administration did not move energetically enough to
build public support in Russia for its policies, nor - what is truly
remarkable for an administration that paid such close heed to public
opinion in the United States - did it press the Russian reformers to build
a solid domestic base. Critics were generally dismissed as communists,
hard-liners, or economic illiterates. In the end, the Administration found
itself strongly backing a small unpopular group of radical reformers,
pressing ahead with their program against the wishes of the majority in the
legislature and without much public support. Not only was the economic
program not implemented, but the way in which it was pursued cast into
doubt American support for the democratization of Russia.

Along the way, the U.S. image in Russia suffered. Inexplicably, the
Administration condoned the Russian government's meeting its IMF inflation
targets in part through the simple expedient of not paying wages and
pensions. The Administration turned a blind eye to patently phony Russian
budgets, which even Russian officials now admit were simply "export
commodities" for the IMF and Western governments. Deputy Secretary Talbott
callously advised that time was on the side of reform because the older
generation would eventually die off. The Administration hyped its role in
Russia's successes before the financial collapse of 1998, but thereafter
was unwilling to accept any blame for the hardships its policies had
caused. Such behavior led Russians to question our benevolence,
intelligence, and morality.

Our image suffered further from the way the Administration dealt with
Russia on foreign policy and security matters. The Administration never
devoted the energy it should have to building rapport with a broad segment
of the Russian elites, something critical to sustaining good relations with
Russia over the long run. Rather, it decided early on it could manipulate
Yeltsin to advance our interests, by trading symbolism for substance. That
is, we would treat him like a major world leader in return for his
concessions on matters of importance for the United States, say, Bosnia or
Nato expansion. The Administration also relied on the "radical reformers"
it was supporting with infusions of IMF money to reinforce Yeltsin's
pro-American proclivities. 

While the Administration got much of what it wanted out of Yeltsin until
very late in his term, resentment built within the Russian elites, which
increasingly saw U.S. policies, such as Nato expansion, support for
multiple pipelines out of the Caspian region, or opposition to
Russian-Iranian cooperation in the nuclear field, as efforts to take
advantage of Russia's weakness. The elites also resented the disrespect
for Russia that was implicit in our increasingly overt manipulation of a
mentally and physically challenged Yeltsin. Our current problems with
President Putin are only the fruits of our neglect of the broader Russian
political establishment. 

The Clinton Administration, of course, will agree with none of the above.
>From the very beginning, it has steadfastly refused to acknowledge any
lapses in its conduct of policy toward Russia, nor has it undertaken any
systemic appraisal of its successes and failures in Russia. It is time we
did that for them.


Date: Thu, 26 Oct 2000 
From: "Peter Trenin-Straussov" <>
Subject: RUSSIA ON RUSSIA/prison reform

Dear David,

This is Peter Trenin-Straussov, from the Moscow School of Poltical Studies. I
promised to send you a piece from our journal Russia on Russia. 
Together with Edward Skidelsky, Social Market Foundation, we have chosen this
piece about Prison Reform in Russia from the third issue "Russia under Putin",
which is now in printing.

The article was taken from the Journal Russia on Russia,
pulished jointly by Moscow School of Political Studies with Social Market
The contact e-mails are (Peter Trenin-Straussov, Moscow 
School of Poltical Studies) 
or (Edward Skidelsky, Social Market

As soon as I get the copies here in Moscow I will send the issue 3 "Russia
under Putin".

All the best wishes,
Peter Trenin-Straussov

By Pavel Krasheninnikov
Pavel Krasheninnikov is chairman of the State Duma Committee on
Legislation. He is former Justice Minister of the Russian Federation.

This paper was commissioned by Russia on Russia.

A major change in penal policy is an indispensable element of judicial
reform in Russia. Leaving aside the human, financial and organisational
aspects of his problem, what is needed is the comprehensive amendment of a
whole range of legal acts, starting with the criminal, criminal-procedural
and penitentiary codes.

On 19 May 2000, the State Duma unanimously passed the first reading of a
bill pertaining to the penitentiary system. It is a comprehensive bill,
containing no fewer than 59 amendments and additions to the current law.
The main idea behind the bill is to diminish the adverse social
consequences of Russian penal policy, which are at present extremely high.
I list just a few examples.

It is appalling that the percentage of the Russian population in jail is
higher than in any other country in the world. The prison population of
Russia now stands at 1,084,000 people, more than in the whole of the USSR
in the second half of the 1980s. Almost one in every three adult Russians
either has criminal convictions himself or is closely related to someone
who has.

Pre-trial detention centres and correctional facilities are so overcrowded
that certain European organisations have described them as places of
torture. The amount of space per person is 1 square metre, instead of the 4
square metres required by law. One should also mention the growing TB
epidemic. One in every 10 prisoners is sick with tuberculosis. Nothing is
done to combat this epidemic because of medicines shortages (only 20-25 per
cent of needs are met), and because overcrowding makes it impossible to
separate the sick from the healthy.
As a result, people sick with an open form of tuberculosis are kept in the
same cells as healthy people.

Among other harms, there is the damage done to the souls of inmates exposed
for the first time to the criminal world.

Russian society has at last awoken to the terrible social consequences of
this severe punitive regime. The popular wisdom used to be that these are
inevitable by-products of the struggle against crime. Nobody ever doubted
the validity of a popular film slogan, 'a thief must be in jail'.

Up until recently, suspects were arrested arbitrarily, without hesitation
or reflection. As a result of such practices, one in four people kept in
pre-trial detention centres is released because the charges against them
have been dropped, or because other, non-custodial, forms of punishment are
applied. Most of these people needn't have been arrested at all. But our
laws are so formulated that they make it possible to arrest any offender.
So this practice does not formally violate the law, although it certainly
offends against morality.

The time that people are kept in detention without trial is unjustifiably
long (twice as long as in the Soviet period), and law courts are not
required to meet any deadlines at all. As a result, a person sometimes
spends 5 to 7 years in jail without a court sentence. More than a thousand
people have been in jail without a trial for more than three years. Under
the new bill, a suspect cannot be kept in jail without trial for more than
12 months.

It is important to note that the bill requires that the severity of the
punishment be tailored to the severity of the crime. Punishment is to be
eased with regard to people who have not committed major crimes. You will
not be able to put a person in jail for stealing a can of milk, a chicken
or a bag of potatoes. Other measures will be used with regard to this group
of people (house arrest or a written pledge not to leave town), and they
will not be kept in custody. This is also the aim of the suggestion that
those guilty of crimes of negligence, and those sentenced to up to 5 years
imprisonment, should be sent into internal exile rather than to jail. (In
Tsarist times this was a fairly successful practice.) This would spare
thousands of convicted people the experience of pre-trial detention and

A whole range of other measures have been suggested with regard to
criminals who are not dangerous, all with the aim of making punishment less
harsh and the conditions in which a person serves a sentence more humane.
For instance, one recommendation would exempt women with children aged
under 14 (and not as now under 8) from custodial punishment. Given that
this institution was introduced in the interests of underage children, one
has to be consistent. The bill will not ease punishment for serious
criminals, people who have committed murder, rape, terrorist acts and other
particularly dangerous deeds. On the contrary, punishment for such crimes
may be made even harsher. This recommendation is prompted by the growth of
serious crime in Russia. 

All in all, these provisions establish a more nuanced approach to penal
policy. Their consistent implementation would reduce the number held in
pre-trial detention centres by 130,000 to 150,000, and the prison
population by 250,000. This comes to a total of 400,000, which is roughly
the number needed to
eliminate overcrowding in Russian penitentiaries. The only alternative is
to build new prisons, something that the state cannot afford to do. One
prison costs the same amount as a large university. Suffice it to say that
in 1999, only one pre-trial detention centre and one correctional facility
were built, while the prison population increased by 46,000. So, strategies
for cutting the number of those placed in custody and sent to jail must be

Such strategies have been proposed in the adopted bill. These are humane
measures that meet international standards in combating crime and treating
criminals. Practically all international organisations, including human
rights groups, have vigorously supported the bill. We hope it will pass
successfully through the corridors of the Federal Assembly and the
presidency. It would mark a turning point in Russian penal policy.


Moscow Times
October 27, 2000 
EDITORIAL: '93 Deputies Get Their Just Desserts? 

There is no justice. At least that's the impression one gets watching the 
government and the State Duma set policies on benefits payments to 
"privileged categories" of citizens. 

For instance, on Wednesday several dozen men who helped clean up the 1986 
Chernobyl disaster gathered near Red Square to protest state moves they 
believe will reduce their benefits. Many of the men walked all the way from 
the city of Tula to fling down their medals before the Kremlin. 

Wednesday's action was just the latest in a series of protests by Chernobyl 
liquidators. Last Friday, Pyotr Lyubchenko died near Rostov-on-Don while 
taking part in a mass hunger strike by liquidators demanding increased 
medical benefits. 

Although this issue has been simmering for years, Labor and Social 
Development Minister Alexander Pochinok deserves praise for his reaction to 
the Red Square protest. He met with organizers immediately and heard out 
their concerns. He also promised to go to Tula soon to continue the dialogue. 
This kind of responsiveness by a minister is, unfortunately, rarely seen 
these days, and it offers hope that an acceptable compromise will be found. 

While the heroes of Chernobyl have been lobbying for justice, the families of 
the seamen who died in the Kursk nuclear submarine in August still await 
compensation payments promised by the state. Last week, Irina Lyachina, the 
widow of the Kursk's captain, quit the management board of the fund set up 
for the families, accusing regional authorities in Murmansk of misusing the 
funds. This week, the governor of the Murmansk region froze the fund pending 
an investigation. 

Yet against this distressing background, the Duma voted overwhelmingly 
Wednesday f just hours after the liquidators' protest f to extend benefits to 
former members of the Russian Supreme Soviet, which then-President Boris 
Yeltsin dispersed with tanks in October 1993. When Yeltsin signed the decree 
disbanding the Supreme Soviet, he offered benefits to any deputies who left 
peacefully. Those who fought received nothing. 

Now this "historical injustice" has been corrected. Communist Deputy Boris 
Kibirev told the Duma that the Supreme Soviet deputies deserve full pensions 
as well as medical and other benefits for their "positive contribution to the 
establishment of parliamentarism in Russia." 

The newspaper Segodnya noted Thursday that the estimated 6 million rubles 
that this measure will cost annually is just a fraction of the amount the 
state has saved recently by reducing benefits to the Chernobyl liquidators, 
victims of political repression and "other-less deserving categories of 

Does that sound like justice? 


ANALYSIS-Crash, Kursk note highlight Russian military woes
By Martin Nesirky

MOSCOW, Oct 26 (Reuters) - Russia's creaking armed forces took a fresh 
battering on Thursday after a 1950s-era plane crashed and news broke that as 
many as 23 sailors may have met a lingering death in darkness aboard the 
Kursk submarine. 

The Kremlin's influential Security Council meets early next month under 
President Vladimir Putin's chairmanship to discuss military reforms, 
including sweeping cuts in troop numbers. 

But defence experts told Reuters it was unlikely the Council would draw the 
necessary conclusions from the latest tragedies by investing any available 
cash in new equipment such as transport planes and dropping vestigial 
superpower ambitions. 

"The money there is does not support the military. The armed forces are 
becoming a danger to themselves," said Vadim Solovyov, a former officer who 
now edits the military weekly Nezavisimoye Voyennoye Obozreniye. 

"Even without military action or combat conditions they are suffering losses 
among those who serve." 

On Wednesday night, an Ilyushin-18 aircraft, packed with officers and their 
families returning from holidays, ploughed into a mountain in Georgia during 
a rainstorm in Adzhara region, where Russia has a military base. More than 80 
people died. 

As Russians came to terms with this latest disaster, the navy announced a 
letter had been found in the pocket of one of sailors recovered from the 
Kursk submarine. 

Those last words of a dying officer, scribbled in the darkness as he huddled 
with comrades in the aft section of the Kursk, indicated at least 23 of the 
118-man crew did not die instantly. 

It was the nightmare many had originally feared but then gratefully dismissed 
when officials said the crew had died quickly. 

"We keep bases that need communications. We continue to organise large-scale 
military exercises," said prominent defence expert Alexander Golts, referring 
to Russian bases in Georgia and the manoeuvres the Kursk was taking part in. 

"But there's nothing to back it all up. It's all done on luck. And sooner or 
later it ends in tears." 

Golts said his research showed Russia had not bought any military transport 
planes in the past 10 years. He said any extra cash allocated in the 
government's 2001 budget was unlikely to flow in this direction. 


Prime Minister Mikhail Kasyanov said on Thursday after the weekly cabinet 
meeting that extra budget funds for defence were particularly aimed at 
maintaining the military campaign in Chechnya, where more than 2,500 soldiers 
have died in action. 

Solovyov said Putin had spoken realistically about tailoring Russia's defence 
ambitions and spending to its means but that he had no indications this would 
be translated into radically new approaches at the Security Council meeting 
on reforms. 

"I don't expect anything good to come of this. I believe it will just be 
another attempt to paper over the cracks," he said. 

"We need to admit we can no longer be a great military power. Russia needs to 
move to the second level, such as Britain and France, which also have nuclear 
capability. I fear that this superpower mentality, above all in the General 
Staff, will gain the upper hand." 

Putin had to delay a planned Council session in September after unprecedented 
complaints from commanders about cuts in the 11 agencies outside the 
mainstream defence ministry forces. 

A Security Council source told Reuters the meeting was now expected in the 
first half of November. 

"The meeting will be devoted to the main guidelines for restructuring 
Russia's various military organisations," he said. "As for concrete numbers, 
we'll have to wait for the meeting." 

The independent AVN military news agency said the meeting could be as early 
as November 1 and that cuts could be as high as 600,000 men. The total for 
the 12 services under arms now is about 1.3 million, according to Western 

Beyond the cuts is a far broader -- and so far inconclusive -- debate about 
the structure of the armed forces. This pits the Chief of General Staff, 
General Anatoly Kvashnin, against veteran Defence Minister Igor Sergeyev. 

The Strategic Rocket Forces, which run Russia's land-based nuclear deterrent 
and which Sergeyev used to command, are likely to be placed under air force 
control. The relatively young and ambitious Kvashnin favours this. Sergeyev, 
already over retirement age, is less keen. 

Another possible subject for debate at the Council is the question of whether 
Sergeyev should be replaced in due course by a civilian. That may suit 
Kvashnin if the new structure then puts the General Staff firmly in charge of 
the military and leaves the minister just with defence policy. 

Golts said much depended on whether Putin had the will rather than political 
strength to confront everyone at once. 

"If you raise your voice a bit they'll be intimidated," he said. "It's pure 


Yukos' Khodorkovsky on Internet, Electronic Commerce: Comment

Moscow, Oct. 26 (Bloomberg)
-- Mikhail Khodorkovsky, chief executive of AO Yukos Oil Company, 
comments on the effect of the Internet on Russia's second-largest oil 
company. Khodorkovsky spoke at a conference on investing in technology 

On the Internet's direct effects on Yukos and the oil industry: 

``The old economy or Russia will not produce labor efficiencies just by using 
the Internet. The Internet requires a cultural transformation. 

``One example is the oil industry, which I know well. Since the energy sector 
represents 40 percent of Russian gross domestic product, it's an appropriate 

``All in all, in three years we will save about $30 million a year. The 
number looks quite impressive but $7 billion in sales in much higher, so 
(against that) it looks small. 

``Yukos expects savings on operational costs. As the company's network is 
completed, we will get $10 million per year savings in three years. 
Procurement cost reductions will save $10 million a year in two years. Also, 
in the training of personnel there will be a reduction of costs. Regular 
training will save $2 million a year in a year's time. The expected reduction 
for oil production is $5 million a year in three years. 

``We expect a decline of costs related to sales in oil fields, but that's 
possible only after the law on land use. And reduction in customer support 
costs is possible if infrastructure is developed so we can maintain permanent 
contact with customers, though we don't expect significant savings there. 

``The Internet doesn't affect oil commerce because the biggest feature is 
transportation costs, while communication costs are less. Communications 
based on the Internet won't significantly affect the economy of old-economy 
companies. It's significant for companies with less than $100 million a year 
in sales and companies with large distribution networks. The number of 
companies in that category in Russia is quite small.'' 

On the Internet's effect on Russia: 

``Still, a transformation is required in Russian society. First we need to 
educate people. The potential of the Internet, which is capable of offering 
inexpensive access to education, is significant. We need to develop a modern 
society and need modern entrepreneurs. 

``Why are there so few small businesses? There are no effective 
entrepreneurs. It's mainly due to the environment. And to establish a 
post-industrial society Russia must be integrated into the international 

``Every person needs access to databases, and the Internet makes this a 
reality. We also need people to stay in Russia. That needs democratic 
support. Access to the Internet shouldn't be limited in any way. 

``There are opportunities for Russian companies to change society. Yukos has 
many such initiatives. We are supplying 40 classrooms with computers, and 
will increase that to 120 next year. 

``We are training 850 high school teachers and increasing to 5,000 next year. 
We set up 610 workstations hooked up to the Internet and will increase that 
to 2,000 next year.'' 


Putin Claims Chechen War Near End
October 26, 2000

NAZRAN, Russia (AP) - President Vladimir Putin claimed Thursday that Russian 
forces have all but wrapped up the fight against rebels in Chechnya, despite 
daily clashes and casualties in the mountainous republic. 

``Organized resistance is now crushed ... there are no large-scale military 
actions'' in Chechnya, the ITAR-Tass news agency quoted Putin as saying. 
Putin made the comments in an interview with Russian and French journalists 

He said only four or five rebel bands remained in Chechnya, the Interfax news 
agency reported. 

Russian officials have declared victory in the year-old conflict scores of 
times, only to have the guerrilla forces rally and rout Russian troops in 

Russian artillery batteries opened fire Thursday in three regions of 
Chechnya, an official in Chechnya's pro-Moscow administration said. 

Warplanes and helicopters aided the attack, in one of the largest 
bombardments in recent weeks, the official said. The shelling was reported in 
regions of eastern and southern Chechnya, where rebel presence remains 

Also Thursday, rebels laying in wait on a road leading to the town of 
Gudermes opened fire on a Russian military vehicle, killing one soldier, the 
official said. 

In his interview Thursday, Putin insisted that the previous, deeply unpopular 
1994-96 Chechnya war and the current conflict, which began under his 
leadership a year ago, had different aims. 

``Whereas during the so-called first Chechen war one could talk about 
Russia's imperial ambitions and attempts to curb the territories it controls, 
last summer, as you know, everything was different,'' Interfax quoted Putin 
as saying. 

He reiterated arguments that troops were sent to Chechnya this time because 
it had become a base for terrorists and an Islamic movement harmful to 
Russia's interests. 

Russian forces moved into Chechnya after rebels based there attacked the 
neighboring region of Dagestan, and after a series of deadly apartment 
bombings in Russia blamed on the rebels. 



MOSCOW. Oct 26 (Interfax) - Arsenty Myandin, the leading designer
of the engine of the high-speed torpedo Shkval, said while testifying as
a witness at the Moscow city court during the trial of Edmond Pope that
the information on the torpedo engine supplied to the U.S. by Pope is
not secret, Pope's defense lawyer Pavel Astakhov told reporters during a
break between court hearings.
The criminal case against Pope on charges of spying for the United
States is based on the argument that Pope supplied secret information
about the torpedo to the U.S., he said.
Professor Myandin is the author of the report that Pope handed over
to a laboratory at Pennsylvania University, he added.
Myandin testified that he has been using the diagrams and formulas
presented in the report in his lectures to students for 15 years.
He also argued that this information has to do with a laboratory
model of the torpedo, not a concrete torpedo, Astakhov said, noting that
in Myandin's opinion, it is impossible to build an operating torpedo on
the basis of mere parameters.
Myandin also said in court that during a preliminary investigation,
the materials supplied to the U.S. by Pope were examined by people "who
are not experts on this subject."
According to Astakhov, the commission of experts was led by
Professor Logvinovich, who is expected to testify in court as a witness
Myandin also said, Astakhov went on, that Logvinovich specializes
in missile aerodynamics and is not an expert in engines. Therefore, the
defense will probably request a repeat examination of the materials
supplied to Pennsylvania University by Pope, he said.
Myandin's words "added nervousness to the trial, as they are
ruining the cornerstone of the prosecution's argument," Astakhov said.



MOSCOW. Oct 26 (Interfax) - Russian presidential human rights envoy
to Chechnya Vladimir Kalamanov said in a Thursday interview with
Interfax that he is surprised and disappointed at the latest report from
the international organization Human Rights Watch (HRW) on the situation
in the republic.
Kalamanov assessed this document as "a crisis of genre" that
contains no more than the "repetition of information made public as long
as eight or nine months ago."
The envoy said he is also surprised at the attempt to replay the
issue of human rights violations at the Chernokozovo detention center
with examples dating back to January-March.
Kalamanov noted that in the course of the amnestying and release of
over 300 people from custody, the officials of his bureau had questioned
each detainee as to whether his or her rights were violated at the
detention center and proposed that corresponding statements be taken
down anonymously. "However, there were no such statements," he said.
"The report is characterized in general by such legal illiteracy
and tendentiousness that one wants to wash his hands after reading it,"
Kalamanov said.
The envoy noted that unlike the bureau he is in charge of, which
has eleven branches throughout the war-torn republic, the HRW is not
actually working in Chechnya, but rather circulating complaints dating
back several months ago and gathered chiefly in Ingushetia.
As for the charges against unidentified Russian officials alleged
to have taken bribes of from $75 to $5,000 for the release of arrested
individuals, these are absolutely "unsubstantiated and unproven," he
Commenting on a HRW appeal to the European Court of Human Rights,
Kalamanov described it as "making use of human fates for political ends,
which has nothing to do with the advocacy of human rights."


Jamestown Foundation Monitor
October 26, 2000

development and trade minister, predicted this week that Russia's gross 
domestic product would rise by 6.8-7 percent this year, but acknowledged 
that the growth was largely contingent on such factors as high world oil 
prices. If structural reform of Russia's economy is not carried out, Gref 
warned, further economic growth will be impossible (Moscow Times, October 25).

Likewise, Andrei Illarionov, President Vladimir Putin's economic adviser, 
warned in an interview this week that it was dangerous to base economic 
policy on an US$21-per-barrel price for oil, as did the authors of Russia's 
draft budget for 2000, given that world oil prices were bound to drop. 
Illarionov said the budget should be based on much more cautious 
projections, including a US$10-per-barrel oil price. As for the issue of 
structural reforms, Illarionov noted that Russia's tax burden, which 
amounted to approximately 30 percent of GDP during each of the last two 
years, will come out to 37-38 percent of GDP this year. The presidential 
adviser, who believes that a country's economic growth rate is inversely 
proportional to its tax burden and the level of government interference in 
its economy, said that the "optimal" tax burden for a country like Russia 
is 15-17 percent, as in Hong Kong. According to Illarionov, the tax burden 
in China is even lower than in Hong Kong--around 13 percent. Illarionov, 
who has argued in the past that genuine liberal economic reforms were never 
carried out in Russia, said in his interview that Russia ranks ninety-third 
out of 123 countries in terms of its level of economic freedom (Izvestia, 
October 25). In a separate interview this week, Illarionov said that 
economic reform in Russia had been "modest," and that the movement in many 
areas was "backward rather than forward" (Russian agencies, October 24).

In an interview published last week, Illarionov said that one of Russia's 
main misfortunes--its "tragedy," in fact--is its natural resource wealth. 
"We have too many reserves, and this is largely why there is such a 
staggering shortage of rational policy and rational politicians, good 
economists, businessmen and journalists," Illarionov said. "I would say 
that these two groups of resources are in inverse proportion to one 
another." He added that Russia's real revival would only occur with a 
"considerable, long-lasting and irreversible fall" in natural resource 
prices, the "rent" from which is "corroding the Russian authorities and 
society as a whole." Illarionov also repeated his call for Russia to end 
borrowing from international financial organizations (Vremya novostei, 
October 19). Illarionov's views concerning Russia's borrowing from the IMF 
and other world lending institutions clearly puts him at odds with such 
officials as Kudrin and Gref.


Congressmen Want Russia-Iran Papers
October 26, 2000

WASHINGTON (AP) - The debate over an alleged secret deal on Russian arms 
sales advanced on Capitol Hill Thursday, with Republicans in both chambers 
calling for release of the agreement. 

``We should demand it,'' Sen. Christopher Bond of Missouri said on the Senate 
floor. ``We should subpoena it.'' 

His comments came in a 10-minute speech questioning the foreign policy 
experience of Vice President Al Gore, who signed the 1995 agreement. 

On the House side, Rep. Benjamin A. Gilman of New York said his International 
Relations Committee wants all documents that might shed light on the deal. 

``We want all the documents ... and don't have any as yet,'' said Gilman 
while leaving a closed-door briefing on the agreement between Gore and 
then-Prime Minister Viktor Chernomyrdin. 

Democrats charged again that the allegations are an example of Republican 
pre-election politicking. 

The head of the House International Relations Committee at the time, former 
Rep. Lee Hamilton, D-Ind., said the deal was not kept a secret. 

At issue is a 1995 agreement under which Russia pledged not to enter into any 
new contracts to sell Iran conventional weapons, but was allowed to continue 
with delivery on existing contracts until 1999. 

In return, the United States agreed not to sanction Russia under a 1992 
nonproliferation law co-sponsored by Gore and Arizona Republican Sen. John 
McCain that bans weapons sales to Iran and other states that are viewed as 
sponsors of terrorism. 

Republicans have charged that Congress was not told of the deal and that 
Russia should have been subject to sanctions on the sales, which they say 
included a submarine, fighter planes and torpedoes. 

``We want to know why sanctions were not enforced,'' Gilman said. ``We are 
just beginning to dig into this.'' 

The senior Democratic member of the committee, Rep. Sam Gejdenson of 
Connecticut, dismissed the issue as an attack on Gore just before the 
election - as has the Gore campaign. 

Gejdenson said the agreement with Russia was ``clearly in America's best 

``I think this is clearly about the election and not about policy,'' he said. 

The private briefing for House committee members followed an open hearing 
Wednesday before the Senate Foreign Relations Committee, at which the State 
Department's deputy assistant secretary for nonproliferation, John P. Barker, 
said there was no secret agreement. 

While specific documents remain classified, he said, the gist of it was 
announced publicly in 1995 and Congress was briefed. 

``A partisan brawl that drags legitimately classified material into the 
newspapers as photo insets can only benefit Iran,'' he said in a prepared 
text entered into the record but not read aloud at Wednesday's hearing. 

State Department officials also said the weapons sold did not fall in the 
category of those that would trigger sanctions under the 1992 law. 

After that hearing, senators went into a closed session. They said afterward 
that administration officials refused in the session to allow them to see 
either the agreement or a list of weapons Russia was allowed to sell. 

Meanwhile, Hamilton said Thursday he and his staff were briefed on the 
agreement four times while he was chairman of the House committee. 

``Politicizing this issue in the midst of the presidential campaign does not 
enhance America's national security,'' he said. 

``It threatens to undermine our nation's efforts to prevent further sales of 
advanced arms by Russia to Iran.'' 

Earlier in the week, 11 former top U.S. officials, including four former 
Republican secretaries of state, issued a statement saying they were ``deeply 
disturbed'' by the agreement. 

On the Net: 
House Committee on International Relations: 


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