November 9, 2000    

This Date's Issues:  4628  4629  

Johnson's Russia List
#4629
9 November 2000
davidjohnson@erols.com

[Note from David Johnson:
1. Reuters: Russian security chief makes unexpected splash. (Sergei Ivanov)
2. Trud: HOW RUSSIANS SEE THE OCTOBER REVOLUTION. (poll)
3. Moscow Times: Gregory Feifer, Putin's Mask of Reform.
4. strana.ru: Strategy of reforms in Russia has been on the whole correct, says IMF report.
5. Stefan Korshak: Re: Traynor/Ukraine/4626.
6. The Guardian (UK) letters: Russia talks over Ukraine in war of words.
7. AP: Trial Opens in 1994 Russian Killing. (Dmitry Kholodov) 
8. RIA: Russia's chief rabbi says number of Jewish communities growing.
9. Bloomberg: Russia Mending Relations With IMF Now That It Doesn't Need Cash.
10. The Electronic Telegraph (UK): Marcus Warren, Living in the shadow of Putin's Russia. (Estonia)
11. Carnegie Endowment for International Peace: The Changing Nature of Ethnic Politics under President Putin. (Presentation of Emil Pain)
12. Interfax: GORBACHEV THINKS REPUBLICANS' POLICY TOWARDS RUSSIA WILL BE "PRAGMATIC"
13. Interfax: MAIN ISSUES IN RUSSIAN-U.S. RELATIONS WILL REMAIN UNCHANGED -CHERNOMYRDIN.
14. The Independent (UK): The true story of this half-charming man. (Steve Crawshaw on Yeltsin's book)]

******

#1
Russian security chief makes unexpected splash
By Martin Nesirky

MOSCOW, Nov 9 (Reuters) - For a man who hates the limelight, ex-spy Sergei 
Ivanov is becoming almost uncomfortably visible. 

In the past week alone there have been three full- or double-page interviews 
in Russian newspapers about his life, his ties to President Vladimir Putin 
and his work as secretary of the Kremlin's Security Council. 

"I really don't like pomp, unnecessary attributes and accentuated attention," 
he told Thursday's edition of the daily newspaper Izvestia. "Perhaps it's my 
profession." 

Ivanov worked for foreign intelligence for two decades -- including on 
assignment in Western Europe and Africa -- until August 1998 when he became 
deputy head of the FSB domestic security service. A year ago, he became 
Security Council chief. 

What intrigues security analysts is whether the unusual publicity means 
Ivanov is about to move further up or is engaged in damage limitation after 
the council was criticised by some for its role in military reform and 
foreign policy. 

A Security Council source told Reuters it was neither and that the timing of 
the interviews -- as the council meets yet again to discuss long-delayed and 
controversial military reforms and troop cuts -- was a coincidence. 

Asked whether Ivanov was destined for higher places, the source said: "Where 
to? He's pretty high already." 

Ivanov himself made a similar point in his interview in another newspaper, 
the popular Komsomolskaya Pravda, saying media reports had named him as a 
would-be prime minister and head of the Kremlin administration. 

"I take it in my stride," the 47-year-old lieutenant-general said. "My job is 
to work, and to work where I have been put." 

Under Ivanov's control for the past year, the council has become increasingly 
influential and even regarded by some as a kind of shadow cabinet. Ivanov 

denied this, noting several ministers and the prime minister were members of 
the council. 

COUNCIL HAS FACED CONTROVERSY 

The council has not escaped controversy. Putin had to send military reform 
proposals back after commanders complained. 

Western diplomats say the council doggedly backed Yugoslav leader Slobodan 
Milosevic until it was arguably too late for Russia to extricate itself 
gracefully. The council also produced an information security doctrine, 
approved by Putin but criticised by the media as a possible precursor to a 
crackdown. 

Ivanov said that was not the case but argued the media were able to 
disseminate unsubstantiated information too easily. 

One Russian defence expert said Ivanov's interviews should be seen partly in 
this light. 

"Perhaps it is a kind of answer to the criticism, to remind people 'I'm a 
good guy'," he said. 

Ivanov's interviews portray him to be a modest and rather austere man with a 
small office in Moscow and a three-room, 12th-floor flat in a non-descript 
block on the outskirts. He told the weekly newspaper Vek the block had "old 
lifts and specific smells in the entrance." 

In an earlier interview, he described how the Beatles had provided early 
motivation to learn English. He has also said he enjoys reading Western spy 
novels, including John Le Carre's. 

Predictably coy about his previous work as a spy, Ivanov said in his latest 
interviews he had thoroughly enjoyed intelligence work but had been spared 
thriller-style dramas. 

He met Putin when they both worked for the KGB security police in Leningrad 
-- now St Petersburg -- in the 1970s. Ivanov said in their present roles they 
had a working relationship but no time for true friendship. 

"My whole life long, including now, I have had to work with very big 
secrets," he told Izvestia. 

"I can't tell you everything they taught us at spy school but they really 
drummed into us, firstly, not to stand out in a crowd and, secondly, to be 
able to speak professionally and at length about nothing at all." 

******

#2
Trud
November 9, 2000
[translation from RIA Novosti for personal use only]
HOW RUSSIANS SEE THE OCTOBER REVOLUTION
By Vitaly GOLOVACHEV

The Russian Center for Studying Public Opinion (VTsIOM) 
has conducted a sociological poll to find out Russians' opinion 
about the 1917 October revolution. It is sometimes called a 
coup. The responses are cited as a percentage from the total 
number of those polled.

Question: What impact did the 1917 October Revolution have 
on the life of the Russian people and the country's history?

A very positive impact 17%
Rather positive 32%
Rather negative 22%
Extremely negative 13%
I am in doubt 17%

Half of the respondents are sure that the Revolution made 
a positive (sooner positive than other) impact on the Russian 
history. They disagree with the opinion that it brought Russia 
to the dead end of history. The fact that "Marxist-socialist 
experiments" have not succeeded in any Eastern European 

countries and the living standard in Cuba and North Korea is 
extremely low does not change their opinion.
Issues of personal and public freedom, repressive nature 
of the old regime and socialist wage-levelling are considered 
of secondary importance. The important thing for many of those 
polled is that they lived better under the Soviet regime and 
they were "confident of their future." Drawbacks of the reform 
period, neglect of social issues during the Yeltsin era, 
chronic poverty on a large scale, deterioration of many 
enterprises, permeating crime and corruption make a lot of 
people, the elderly people in particular, yearn for the past.
These sentiments can be changed if the positive economic 
and social tendencies gain ground. If the living standard of 
the people suffering from poverty improves, their attitude to 
the 1917 Revolution would change. Over a third of Russians who 
have adjusted to the new conditions negatively assess the 1917 
coup while 17% of the respondents who were in doubt at least 
do not consider its impact positive.

******

#3
Moscow Times
November 9, 2000 
Putin's Mask of Reform 
By Gregory Feifer 
Gregory Feifer is a Moscow-based fellow at the Institute of Current World 
Affairs. He contributed this comment to The Moscow Times. 

An American couple strolls home through central Moscow on a warm fall night 
after a delicious dinner at a new restaurant. "It's not so bad here," both 
agree, "despite what everyone says." The pre-revolutionary neighborhood is 
pleasantly, encouragingly illuminated. The buildings have a fresh coat of 
paint. The Russian capital seems, well, European. 

The couple pays no attention to a dirty Moskvich hatchback parked on the 
corner of their street. Why should they?It's just another ordinary car on 
their block. But as they walk past, the car's door swings open and an 
Interior Ministry policeman jumps out, an automatic rifle strung across his 
chest. 

"Your documents!" he barks. He's reeling from drink. Passports and visas are 
duly presented f after all, this is hardly an unusual occurrence. 

"At what address are you registered?" the cop demands. Slurring his words, he 
doesn't wait for an answer. "You think you can get away with this? I could 
throw you into prison and set a large fine!" 

The couple protests that their "documents" are in order and that no wrong has 
been committed. "I'm going to punch your goddamned mug in!" he shouts. "What 
are you going to do about that?" 

Despite this unpromising start, the exchange ends peacefully. But the 
Americans are struck by a tone that they had never witnessed before during 
many similar encounters. If police in former President Boris Yeltsin's Russia 
were content to demand bribes where they could be had, civil servants in the 
era of President Vladimir Putin seem to have begun brandishing a rage-fueled 
moralism. 

Unfortunately, it seems as if this kind of might-is-right reasoning stretches 
all the way up the bureaucratic ladder, even if it's not immediately evident. 
When President Putin travels abroad f such as during his trip to France last 
week f he makes every effort to assure the West and its potential investors 

that he intends to oversee Russia's continued transition toward a fair and 
transparent market and a democratic political system. At home, however, his 
actions have done much to persuade observers that his chief interest lies 
elsewhere. 

In order to build his own power base, Putin has cracked down on two groups of 
political opponents f powerful regional governors and the influential tycoons 
known as "oligarchs." He has done so in part by empowering state bureaucrats 
and the police, while calling for a "dictatorship of the law" that would 
strengthen the state. Last July, tax police staged a number of high-profile, 
document-confiscating raids while prosecutors threatened lawsuits against 
companies such as Russia's top oil producer, its No. 1 automaker, a major 
metals producer and the only independent national television company. 

Far from yielding palpable results in combating the country's endemic crime 
and corruption, however, these raids, arrests and accusations have actually 
undermined the strength of the state and the rule of law. In the imbroglio of 
Russia's mafia-style capitalism, the state is making things worse by using 
its own gangster tactics. Civil servants such as Interior Ministry police 
have seen an increase in their power, and more often than not they have 
wielded it to extract bribes and heap indignation and threats. 

Single-minded capitalists often rationalize bad news, so perhaps it's 
inevitable that Western businessmen and analysts have generally ignored this 
tendency, pointing instead to the government's economic program. Those 
willing to give Putin the benefit of the doubt say he's serious about reform. 
Meanwhile, Putin, who has shown himself to be a wily politician, at times, is 
using that inclination to his advantage. 

During an interview with the French newspaper Le Figaro, Putin explicitly 
tied his authoritarian measures to the reform process, saying he would wield 
a "cudgel" against oligarchs standing in the way of reform. Such statements 
are evidence that the president is no longer paying lip service to 
westernizing reform. Soviet leaders used the myths of socialism to mask the 
repression of their subjects and to ensure their grip on power. Putin is 
little different. By making market-oriented economic reform the stated end of 
his repressive measures, he can continue courting the West's favor while 
pursuing his real ends: consolidating his personal political power and that 
of the bureaucracy supporting him. 

As a result, the police are allowed to ignore the laws they are supposed to 
enforce. Last summer, media baron and Kremlin foe Vladimir Gusinsky f no 
angel himself f was arrested for rigging a privatization deal and then freed 
with all charges dropped in a matter of days. Critics said Gusinsky walked 
after making a deal to sell his television station to the government. The 
following month, the Prosecutor General's Office declared the privatization 
of Norilsk Nickel f the world's second-largest producer of nickel f illegal, 
only to become suddenly silent on the issue. Such flouting of due process is 
fast undermining whatever rule of law Russia had to begin with. It would be 

hard to come up with a faster or surer way to erode real economic reform. 

Moscow's streets may seem increasingly westernized to visitors. However, 
simply having one's documents in order is no longer enough protection from 
harassment. It's further evidence that f in a pattern sickeningly familiar in 
Russian history f Putin's "reformism" not only serves to conceal political 
and economic thuggery, but also functions as a weapon to be brandished 
against potential enemies. 

******

#4
strana.ru
November 8, 2000
Strategy of reforms in Russia has been on the whole correct, says IMF report
By Vitaly Baskakov

The strategy of economic reforms in Russia has been on the whole correct but 
its successful implementation was blocked by "special factors," the IMF 
experts say in a report reviewing the decade of development in the countries 
with transition economies. In future Russia should think not about changing 
its strategy cardinally but about ways of restoring the process of change and 
controlling this process with better efficiency, the IMF considers. 

It associates its hopes that economic law and order will be established in 
Russia with the "emergence of a strong leader," with the strengthening of the 
middle class positions and influence on the part of international 
organizations. 

The authors of the report note that of late it looks like "commitment to 
macroeconomic stabilization, though late in coming and threatened by the 1998 
crisis, appears to have taken hold in Russia." At the same time they are 
concerned over the situation in which structural reforms leave much to be 
desired, and acknowledge that "greater attention ought to have been given to 
institutional reforms." It is noted also that privatization in Russia often 
evoked criticism.

The authors see one the main reasons of the slow pace of Russian reforms in 
the fact that after the 1996 presidential elections in this country 
influential forces with "special interests" increased control over political 
and economic power, which resulted in increased corruption. Now there is 
reason to hope that the same forces will come to realize that economic law 
and order would benefit them more than lawlessness, or others will call them 
to task. IMF experts write that changes may occur in this country if a strong 
leader appears, and as a result of political influence exerted by the growing 
middle class or under pressure from foreign rivals and international 
financial institutions. 

The authors of the report admit that there exists also a more radical point 
of view on what caused the slow progress of reforms in Russia. For instance 
Joseph Stiglitz, chief economist of the World Bank, considers that a policy 
pursued in Russia was wrong and that Russia should have paid attention to the 
experience of China, which "created its own path of transition, rather than 
just using a blueprint or recipe from Western advisors." At the same time the 
authors make it understood that their viewpoint draws, in particular, on the 
opinions of Russian economists like Andrei Illarionov and Boris Fyodorov.


On the whole, it is believed in the IMF that, while assessing the first 
results of the reforms in countries which have found themselves at the 
historical crossroads, one should not ignore significant achievements gained, 
and not only in economy. Among these, above all, is the strengthening of 
democratic norms. In their view, the outcome of the elections shows that, for 
all economic difficulties, people regard a return to the past as the "worst 
way."

******

#5
Date: Wed, 08 Nov 2000
From: "Stefan Korshak" <sbkhome@iptelecom.net.ua> 
Subject: Re: Traynor/Ukraine/4626

I liked the Traynor piece and it deserves credit for painting a fair picture
of some nasty Lviv nationalists, but I don't think the conclusion that there
is a language bomb about to detonate here really represents the mainstream
situation. Anything can set off people in a poor country like Ukraine, of
course, but I wouldn't bet on the language issue.

For one thing, on the other side of the linguistic fence you periodically
get demonstrations in Russian-speaking East Ukraine demanding acceptance of
Russian as a government language. It is almost always pensioners mobilized
by the Communist party, which natrually wants the centrist (sort of)
government painted as anti-pensioner as possible. They are almost always
peaceful, usually they're not even loud.

The Bilozir incident - which I personally strongly suspect to be triggered
by alchohol, not language - received lots of play in the local news anyway,
and certainly his death brought people out into the streets. Then they went
back home, and frankly I don't see much change. The Lviv city council banned
Russian language pop music in public places, which sounds threatening until
you remember that in Lviv, Russian music mostly irritates your customers, so
why play it in the first place?

I think an important thing to remember is that Ukrainian and Russian are
mutually intelligible to the average Ukrainian. Sure you can find farmers in
the provinces with really bad Russian, or miners or factory workers whose
Ukrainian is laughable, but bottom line use of one language simply doesn't
preclude comprehension of the other, and that removes a good deal of the
tension the language issue might otherwise create.

Sure the city of Lviv is pretty hard-line Ukrainian. But that doesn't prove
so much, my favorite Ukrainian city Odessa is proud of its own brand of
Russian, but all they do there about the language issue is gripe, and make
jokes about the President's wooden Ukrainian.

This is educated speculation, of course, but if you get an average Lviver
(?) and Odessite together the far more likely result is the both of them
will agree that the big shots in the capital are a bunch of thieves and
should stop stealing from the provinces, rather than the pair duking it out
to decide whose language should be more important. Except on the extreme
fringes, I just do not see the tension Traynor and his sources described.
What I see in general - and you find shades of difference from province to
province - is Ukrainian being used more and more as a language of electronic
media and officialdom, while Russian remains the business language, though

slowly is losing ground at the retail level. I would be delighted if an
economist out there could analyze this: a Ukrainian-language Cosmopolitan in
a Kiev/Kyiv subway underpass costs a little more than 10 percent more than
the same thing in Russian. I wonder what that means.

Anyway, kids in the universities seem to use Russian as their chat language
because classes are in Ukrainian, but if a couple of them happen to be from
the west or particularly patriotic or PC (essentially the same thing in this
case), they speak Ukrainian. If a Russian kid joins the conversation, most
of the time he seems to speak Russian and they talk Ukrainian back at him. I
see zero tension in such conversations; Americans and Englishman seem to
irritate each other more.

Another unscientific impression: Little children in Kiev/Kyiv, where I live,
seem to speak Russian and Ukrainian amongst themselves on about a 50/50
basis; and it is a granite fact their parents speak more Russian than that.
My theory is we are seeing nation-building in progress - when those kids
grow up Russian will probably take a back seat to Ukrainian in most walks of
life.

Another observation: The most dedicated Ukrainian-speaking group of the
Ukrainian citizenry, hands down, are in good European tradition the
college-educated intellectuals with a bit of money and pretension. Go
figure.

Stefan Korshak
Bureau Chief for Ukraine, Belarus, and Moldova
dpa (Deutsche Presse Agentur)

******

#6
The Guardian (UK)
9 November 2000
Letters
Russia talks over Ukraine in war of words 

While I agree that "independent Ukraine is struggling to shake off centuries 
of Russification", Ukraine is not waging war on the Russian language (Report, 
November 7). In recent years the number of Ukrainian schools has increased, 
but many people are unaware or unwilling to accept to what extent ethnic 
Russians still have disproportionate advantages over Ukrainians. 

There are about 2,400 Russians schools for more than 2m pupils who constitute 
30% of the total number of pupils, while only 20% of Ukrainian citizens are 
ethnic Russians. Around 35% of students are educated in Russian and most 
newspapers are published in Russian. Some ethnic Russians wish to preserve 
the privileged position they enjoyed under Soviet rule and are trying to deny 
Ukrainians' human rights, thus provoking some to irrational action. 

By labelling Ukrainians as nationalists and Nazis the small but vociferous 
groups of Russian chauvinists are trying to discredit and belittle the rights 
and natural demands of the Ukrainian nation and justify their resistance to 
the revival of the Ukrainian language and culture. 

V Vassylenko 
Ambassor, Embassy of Ukraine 


As an expatriate who spent most of the 1990s in Ukraine, I witnessed 
numerous "incidents" between Ukrainian and Russian-speakers. 

There is a widespread perception among Ukrainians in Lviv that their 
country's leaders, after nearly 10 years of independence, have not created 
conditions where Ukrainian-language cultural industries can compete for 
audiences. Big money and power prefers to fly in Russian pop stars from 
Moscow or establish Russian-language press outlets. In a "free market" they 

have every right to do this. But for resentful and economically 
disenfranchised Ukrainian-speakers, this preference is like salt on a 
festering wound. 

Language tensions provide fertile ground for the extreme right. A greater 
danger, however, may arise when mischievous political forces in Russia fish 
in these troubled waters to "defend" Russian-speakers, much as the Third 
Reich intervened on behalf of Sudeten Germans in Czechoslovakia before the 
second world war. 

Peter Bejger
San Francisco, California 
petroboy@earthlink.net 

******

#7
Trial Opens in 1994 Russian Killing
November 9, 2000

MOSCOW (AP) - Five former and current military intelligence officers went on 
trial in a military court Thursday, accused in the 1994 killing of a Russian 
journalist investigating corruption. 

The death of Dmitry Kholodov, a 27-year-old reporter for the outspoken daily 
Moskovsky Komsomolets, attracted nationwide attention. Russian media 
criticized prosecutors for taking so long with the probe, saying it reflected 
the government's inability or unwillingness to solve Russia's many violent 
crimes. 

No details of Thursday's proceedings in a Moscow military court were 
immediately available. 

At preliminary hearings last month, Judge Alexander Serdyukov rejected pleas 
from the defense for additional investigation and for the defendants to be 
released on bail, the ITAR-Tass news agency reported Thursday. 

Kholodov was investigating corruption in the military's intelligence service 
when a briefcase supposedly provided by an informant exploded in his hands 
and killed him on Oct. 17, 1994. His newspaper said the explosion was a 
contract hit connected to Kholodov's work. 

Earlier this year, the Prosecutor General's office charged the five officers 
with the killing, and charged a security guard with complicity. The case was 
then turned over to Moscow's central military court for trial. 

Russian media have suggested that the suspects were trying to protect or 
impress superiors accused of corruption. 

******

#8
Russia's chief rabbi says number of Jewish communities growing 
Russian news agency RIA 

Moscow, 9th November: Russia's chief rabbi Berl Lazar said at a news 
conference today that the number of Jewish communities in Russia was growing. 

Lazar said that there were 110 Jewish communities in Russia, 30 more than 
last year. Presently, 13,000 Jews live in Khabarovsk, 6,000-7,000 - in 
Vladivostok, 15,000 - in Kazan, and 20,000 - in Nizhniy Novgorod. 

The total size of the Jewish community in Russia is 1.5m people. Lazar said 
that this was official data, and that the real number of Jews was much 
greater. 

*****

#9
Russia Mending Relations With IMF Now That It Doesn't Need Cash

Moscow, Nov. 9 (Bloomberg)
-- Russia and the International Monetary Fund return to the negotiating 
table this week more than a year since the fund's last loan. This time, the 
government's not seeking money, so an agreement should be easy. 

Russian authorities, flush with cash as oil prices remain near 10-year highs, 
boosting government revenue, want an agreement that would pay out only if 
export earnings suddenly fall. The fund, which stopped lending in 1999, 

probably will agree, analysts said. 

``There will be no mention of money, so it will be much easier to reach an 
agreement,'' said Denis Rodionov, an analyst at Brunswick UBS Warburg 
brokerage. ``Their disagreements about the state of the Russian economy 
aren't critical.'' 

Russia's relations with the fund have been rocky since 1998, when IMF advice 
and a $4.8 billion loan failed to avert the government's default on $40 
billion of Treasury debt and the ruble's subsequent 75 percent decline. The 
fund resumed lending last year, approving a $4.5 billion loan agreement, then 
making the first $640 million payment before suspending lending. 

The suspension came after objections from the U.S. and other IMF member 
countries because of concerns about an investigation of alleged Russian money 
laundering through the Bank of New York Co., and the government's war in 
Chechnya, then just starting. 

Then the fund imposed new conditions, calling for changes to the tax system 
and other economic reforms. With a new president and parliament elected since 
then, some, though far from all, of those conditions have been met. 

Setting Priorities 

So far, President Vladimir Putin, inaugurated in May, hasn't made a new IMF 
agreement an urgent priority as Russia's economy grows at a record pace. The 
ruble's devaluation boosted domestic demand by driving up the price of 
imported goods, and oil prices are a third higher than last year, which has 
boosted export earnings. Oil, gas and metals account for about half of 
Russia's export revenue. 

In the first half of the year, the economy expanded by 7.5 percent, after 7.9 
percent growth in the first quarter. Russia hasn't reported a second-quarter 
growth figure. The government also reduced its debt burden, negotiating a 
reduction of more than half of its payments on its $32 billion debt. The 
government has met all of its foreign and domestic obligations without new 
borrowing. 

Now it needs an IMF agreement to help restore its credit rating, and start 
talks with creditor governments on rescheduling $3 billion in payments on 
Soviet-era debts due in 2001. It's also seeking an agreement to reduce its 
overall $42 billion of debts. 

``Russia doesn't need the money, but it does need the deal for credibility 
and to have its credit ratings raised,'' said Chris Weafer, director of 
research at Troika Dialog brokerage. 

Waiting for Florida 

The fund's policy on Russia as well as the willingness of creditor 
governments to reschedule debts will become clearer once a new U.S. 
administration is in place, analysts said. The U.S. is the IMF's key 
shareholder and member of the Paris Club of creditor governments. 

``We don't really expect they'll (the IMF and Russia) get into the new issues 
until there is a new U.S. administration in place,'' Weafer said. 

IMF and World Bank officials have praised the economic plans proposed Putin. 
Much remains to be done, however, they say. The government continues to keep 
utility rates artificially low to subsidize industry and citizens at the 
expense of the utilities' shareholders, and continues to tolerate barter, 
they say. 

``We're pleased at the (economic) growth, but that growth isn't guaranteed,'' 
said Horst Koehler, IMF managing director, in Vienna earlier this month. 
``President Putin wants to restructure but he has to deal with corruption. 
The conditions in Russia have improved, but still Putin has to implement his 
reforms.'' 

Russia's slow progress in breaking up the power, gas and railways monopolies, 
and making the state-controlled savings bank Sberbank more open, as well as 
the failure to improve the banking system -- will be contentious issues in 
the talks, analysts said. 

Unfulfilled Promise 

``That's what the fund insisted on in the previous program and it wasn't 
fulfilled,'' said Lyudmila Khrapchenko, an economist at Alfa Bank in Moscow. 
``The most important is the banking system reform.'' 

The IMF also has insisted the Russian central bank sell stakes in its foreign 
subsidiaries, after an independent audit last year found the central bank 
exaggerated its foreign currency and gold reserves in 1996 by including $1.2 
billion held in an offshore subsidiary of its French unit. 

The government earlier this month said the central bank should get rid of its 
foreign subsidiaries by 2002 and its stake in Vneshtorgbank, the foreign 
trade bank, by 2003, and divest itself from Sberbank by 2005, Russian media 
reported. 

The government also has proposed increasing the role of state banks in 
lending to agriculture and other projects. 

``The IMF will react negatively to this,'' Khrapchenko said. ``They think 
it'll strengthen the monopoly of state banks.'' 

Key to reaching an agreement will be the fact that the government isn't 
seeking cash. 

The government budgeted about $1.8 billion in IMF loans in 2001 Russia could 
probably cover this sum from its extra budget revenue, if world oil prices 
stay high, analysts said. In just the month of October, the government budget 
surplus totaled 18.1 billion rubles ($650 million). In the first half, the 
surplus totaled $5.7 billion, most of which was spent on the war in Chechnya. 

*******

#10
The Electronic Telegraph (UK)
9 November 2000
Living in the shadow of Putin's Russia
By Marcus Warren in Moscow, exclusively for Electronic Telegraph 
FOR an informed take on today's Russia one could do little better than 
consult a man who grew up inside the USSR but now leads his own nation on its 
heroic - and spectacularly successful - return to the European mainstream.
Mart Laar has packed a lot into his 40 years. After the Soviet Union's 
collapse he pushed through radical reforms which later yielded Estonia's 
economic miracle. Prime Minister for a second time already, he is currently 
frontman for its forceful campaign to join the EU and Nato.

The Baltic state may be tiny (population 1.4 million) but that is no cause to 
patronise the head of its government. In the opinion of a senior British MP, 
Mr Laar is one of the most impressive politicians in all Europe. That, plus 
his being a former insider now looking at Russia from the outside, lends his 
views on Estonia's giant eastern neighbour unusual authority.

I bumped into him in, of all places, Wiston House in Sussex, setting for 
grand conferences attended by the world's great and the good. The prime 
minister was in an excellent mood. He had just polished off a large English 
breakfast of sausages, fried egg and baked beans. And, he stressed, relations 
between Tallinn and Moscow had never been better. 

Everything is relative, however. Estonia has spent most of its recent history 
as part of Tsarist Russia or the Soviet Union and the hostility the two 
countries' nationalists feel for each other runs deep. Ahead lies a major 
battle over Estonia's accession to Nato, with Moscow trying desperately to 
veto its membership of the alliance.

Nevertheless, Mr Laar is enthusiastic about Russia's current economic 
policies, not surprisingly as some, such as a flat tax-rate, are similar to 
those he introduced at home in 1993 and he has been urging contacts in Moscow 
to enact such measures for years. He said: "In the economy they are doing 
well. The problem is: how will they spend their revenue from high oil prices? 
Will they invest it in the infrastructure which is in an enormously bad 
state? Or will they spend it on the military?"

And yet a mountain of problems remains. Estonia and Russia still cannot agree 
where their common border lies. Relations are still so frosty that no Russian 
head of state has visited Estonia since it gained independence. Estonia's 
president, Lennart Meri, has been to Moscow only once: on the famous occasion 
when he secured the final withdrawal of Russian troops from his country by 
taking on Boris Yeltsin in an epic drinking match in the Kremlin - and living 
to tell the tale.

Another vexed issue is compensation for the tens of thousands Estonians 
killed or sent to Siberia by Stalin's secret police. Mr Laar is cautious 
about pressing the matter but says discontent is growing amongst survivors of 
the period. He said "People who were in Siberia see how those who were 
imprisoned in German slave labour camps are getting money and they are not. 
There is a very clear question: why?" 

And what of President Putin, the former KGB colonel who promises to build a 
strong state and restore Russian might, a manifesto liable to worry nervous 
Estonians? At first sight, the omens are not encouraging. A book of 
interviews with Mr Putin published this spring (and still the most revealing 
guide to the private man behind the public mask) mentions the Baltic states 
only twice. Both references are to Estonia and neither hints at much 
affection for the place.

In one, the book's hero walks out of a speech delivered by Mr Meri in Hamburg 
when the latter describes the Soviet presence in Estonia as an occupation. In 
the other, Mr Putin reveals how his father, then a member of an elite unit of 
the NKVD, the Soviet secret police, was parachuted behind German lines in 
World War Two but betrayed to the Nazis by Estonian peasants. He escaped but 
only by hiding underwater in a swamp, breathing through a reed.

A professional historian by training, Mr Laar has researched this particular 
episode in person, calling up the Nazi archives of the time to check the 

Putin story against the facts. His conclusion is that the incident happened 
not on Estonian soil but on Russia's territory. (The Putin text is 
ambiguous.) And he has doubts as to whether the peasants who informed on 
Putin senior really were Estonians. Most Estonians in the area had been 
"purged" in Stalin's Terror, he said.

Were the German archives to be trusted? I asked. He believed so. With 
pedantic thoroughness the Nazis documented every murder and atrocity they 
committed, he said. He once found their report of their execution of his 
grandfather. He said: "The Germans were certain they were in the right so 
they documented everything they did. If you look at the NKVD archives, it is 
clear that they started to hide things right from the start. They knew that 
punishment would come one day."

Despite the book, Mr Laar dismisses the idea that the Russian president 
harbours any special grudge towards Estonia. Indeed, when he was the number 
two in City Hall in St Petersburg, Mr Putin was a regular visitor to the 
Baltic state next door. The only problem is that no one there has any 
recollection of ever meeting the man who would later become Russia's leader

The prime minister said: "Putin has one trait which is very characteristic of 
KGB officers: no one can remember him. We found some pictures of him in 
Estonia from that era. I have even surprised some people by showing them the 
photos and saying: 'here you are with Putin'. No one can remember anything 
about him."

******

#11
Carnegie Endowment for International Peace 

www.ceip.org
Russian and Eurasian Program Vol. 2, No. 7, Oct. 30, 2000
The Changing Nature of Ethnic Politics under President Putin

On October 30, 2000 Carnegie Endowment Senior Associate Thomas Graham
hosted a lunch meeting with Emil Pain, an expert on ethnic conflict and
ethnic relations in the Former Soviet Union and currently the Galina
Starovoitova Fellow at the Kennan Institute for Advanced Russian Studies.
In a provocative presentation,
Pain shared his views on such topics as the Chechen conflict, ethnic
separatism and the rebirth of Russian nationalism. We provide below a
summary of his remarks and the discussion that followed.

Introduction: The change in ethnic policy

Emil Pain began the presentation by defining his task as an attempt to
describe "new ethnic tendencies, which directly influence political
stability in Russia." These new tendencies include ethnic separatism and
the changing relationship between federal power and several republics in
the Russian Federation. Contrary to some experts' beliefs, the
relationship between Moscow and the republics during Yeltsin's regime was
not characterized by anarchy, Pain insisted. He went on to describe a
"secret pact against radical nationalism" made in 1993 between Yeltsin and
the heads of the republics. The effectiveness of this agreement was
confirmed by the absence of any manifestation of separatism, save for
Chechnya, during Yeltsin's presidency. 
Pain also countered the assumption that Putin is bringing order and
stability to center-regional relations. Indeed, in response to Putin's
pressure on the leaders of the republics, there has been a resurgence of

national-separatist strength in the regions.

The Impact of the Chechen Conflict

Undoubtedly, the continuing war in the North Caucasus has contributed to
the revival of nationalist sentiment in Russian republics. Yet, Pain
suggested that the Chechen struggle for independence had not always been a
mobilizing factor -- "destitute and criminal Chechnya did not inspire
anyone." If "Russia had cut out Chechnya like a cancerous tumor," Pain
argued, other republics would not have followed. However, as the Chechen
conflict drags on and on, solidarity with this breakaway republic appears
to be on the rise. Pain named three groups that are starting to identify
with the Chechens -- non-Russian nationalists, Islamic nationalists and
all "offended nationalities," resentful of being stereotyped as
"terrorists" on the basis of their dark skin. 

While both the death toll and the economic cost of carrying on the war in
Chechnya are increasing, no prospect of victory is evident, Pain
maintained. Demoralization of Russian troops and their inability to use
real advantages in guerrilla-type warfare preclude a clear military
triumph. As for an economic victory, Pain insisted that it is "utopian to
speak of turning the Chechens back to Russia through economic restoration
of their republic." Besides the human and economic costs, the protracted
war in Chechnya is having a direct
negative effect on other national-separatist groups within the Russian
Federation. "Rebels stop being afraid," Pain suggested, "thus activating
other nationalities, such as Tatars, who begin thinking that if the Russian
army cannot achieve victory over less than 400,000 Chechens, how could they
overcome 6 million Tatars?" While confident that Russia will have to leave
Chechnya sooner or later, Emil Pain wondered about the influence this
withdrawal would have on Russian overall development.

Ethnic Composition and the Threat of Disintegration

Besides the unresolved Chechen conflict, one of the biggest challenges
facing Russia is the problem of the changing ethnic composition of the
population. Although today Russians constitute 83 percent of the
population in the Russian Federation, they are already in the minority in
some regions, such as the North
Caucasus. In the Far East, illegal immigration is expected to make the
Chinese "the ethnic majority on the biggest part of Russian territory" in
10-15 years, Pain noted. And in Povolzhye (Volga regions), Russians are
already in the minority in Chuvashia, and close to losing their majority in
Tatarstan and Bashkortostan. The Chuvashis, Tatars and Bashkirs, all
belonging to the same Turkic group, are speaking of uniting and creating a
federation, which, Pain stressed, would be larger than the territory
covered by the Baltics and Georgia
combined.

The changes occurring in Russia are threatening the integrity of the
Russian Federation. Pain identified two kinds of potential disintegration.
The first is peripheral secession, which would involve Russian border
republics, such as Chechnya, splitting off and becoming independent. The
second type of disintegration is the collapse of the country due to "the

formation of one or two large states in the middle of the Russian
Federation." This, in Pain's opinion, could occur in Povolzhye, and it
would be much more dangerous for
Russia. Pain stressed that "the probability of either type of
disintegration will greatly depend on overall economic development." He
suggested that if economic growth continues to increase, peripheral
secession could still be expected, but the second type of disintegration
would then be more unlikely.

The Future Ethnic Doctrine

Threatened by disintegration, the Russian government will have to adopt
some kind of political doctrine to prevent secession and collapse. Pain
named two alternative approaches to increasing cohesion in Russian society,
with one being preferable and the other, more likely. The best way to ward
off disintegration, according to Pain, is through promotion of a
multicultural society. To implement this idea, the Russian government
would have to go through a radical change in the present course of ethnic
politics, allowing
for inclusion of all nationalities in the political elite, curbing the
domination of Russian Orthodox Church, and "establishing government symbols
less connected to pure Russian-specific features."

Unfortunately, while helping Minister of Trade and Economic Reform German
Gref to prepare part of his program, Pain saw that "the idea of a
multicultural society is absolutely foreign to current powers and the
majority of Russian population." Thus, the government is more inclined to
adopt the second method of social consolidation, one based on the recent
growth of Russian nationalism. The symptoms of this development are
already manifest: "xenophobia and suspicion of the West are growing as
nationalistic consolidation needs an external enemy," Pain pointed out. An
ethnic doctrine based on Russian nationalism would stimulate militarization
of the Russian economy, thus corresponding to social expectations. Pain
concluded his
presentation by suggesting that although firm establishment of nationalism,
imperialism and militarism could temporarily suspend disintegration, these
doctrines are harmful to the overall development of Russia.

The Discussion Period

Emil Pain's remarks inspired a very stimulating exchange of opinions. The
discussion focused on clarifying the following points, made by the speaker
during his presentation:
· War in Chechnya. Pain insisted that even in July of 1999, most Russian
military leaders were convinced that an invasion of Chechnya was
infeasible. However, after the Chechens were forced to withdraw from
Dagestan, the generals along with the Russian people started to believe in
victory under Putin's
leadership. Pain suggested that this stemmed from Russians' tendency to
"expect miracles." Yet even today Chechnya is an unmanageable territory,
with soldiers dying mostly in Grozny, not in the mountains. Pain predicted
that although Russia would not leave Chechnya anytime soon, maybe by the
2004 elections Moscow will realize that the costs outweigh the benefits in
this case.
· Impact of the Chechen conflict and ethnic separatism. When asked about
the importance of Chechnya, Pain argued that its fate would not have a
dramatic direct impact on Russian development, as it occupies a tiny
territory and plays no economic role anymore. Nevertheless, war is a
radicalizing factor, and the
politicization of Islam is dangerous for Russia. Thus, Pain regretted that
the Russian government did not nurture Maskhadov, who had outlawed the
radicalized version of Islam, wahhabism, in Chechnya. As he had mentioned
in the presentation, Pain believed that the war in Chechnya is serving as a
catalyst for the development of ethno-separatist sentiment in other Russian
regions, like Tatarstan. When asked about the politicization of Muslims
outside Tatarstan, Pain suggested that "all Islamic communities outside
Tatarstan,
like those in Astrakhan and Stavropol, are wahhabi." This is caused by
their lack of traditions and their education in Saudi Arabia. Yet, Pain
supposed that these communities are too small to serve as a mobilizing
factor for Islamic nationalism. 
· Russian nationalism. Repeating the argument made in his presentation,
Pain stressed that dramatic changes are taking place in Russian
self-consciousness. What Russians need to realize is that their main task
is preservation of the territory. However, at the present time, they are
unwilling to compromise, hence electing Putin with his nationalist and
imperialist policies. Responding to a question about the role of Gref's
team in ethnic policy, Pain said that "these people do not have time to
deal with this issue." Pain also stressed
that if Russian nationalism continues to develop, so will other kinds of
nationalism. And a potential collision of Tatar and Bashkir nationalism
with Russian nationalism will not be resolved peacefully.
· Economic development. Pain was asked to justify his assumption that
economic development will improve matters and prevent the collapse of
Russia. He argued that even though economic development by itself does not
resolve the ethnic problem, together with other factors of stabilization,
such as domestic and foreign policies, it will reduce the chances of
complete disintegration of Russia.
· Migration Policy. In answering a question about migration policy as a
potential solution to labor deficit, Pain suggested that the Chinese
immigration could be a real supplement to the labor force in the Far East. He
also proposed that migration from the Caucasus might improve the situation,
because "in Siberia, unlike in Moscow, the people of Caucasian descent are
liked, while the Chinese are not."
· The Western factor. When asked about the impact of Western policy in
fueling or curbing Russian nationalism, Pain smiled and replied that
foreign influence does not affect current Russian policies in any
significant way. In fact, the West has less sway now than at any other
time in the past. Nonetheless, Pain
noted that the opinion of foreign leaders has an effect on President Putin,
who cares about his reputation abroad. 

Summary by Victoria Levin, Junior Fellow with the Russian and Eurasian
Program.

****** 
#12
GORBACHEV THINKS REPUBLICANS' POLICY TOWARDS RUSSIA WILL BE "PRAGMATIC"


MOSCOW. Nov 8 (Interfax) - Mikhail Gorbachev, the former USSR
president, has said he believes that the Russian administration should
"develop a new agenda with the new U.S. administration."
"Both sides understand this," Gorbachev said in an interview with
Interfax on Wednesday.
The former USSR president said he believes that if the Republican
Party wins the presidency in the U.S., Washington's policy towards
Moscow will be characterized by "a higher degree of pragmatism, a higher
degree of clarity."
Gorbachev said that, although he does not expect "cardinal changes
in Washington's approach to Moscow," he believes that "questions will be
posed more toughly and more precisely." Gorbachev also stressed that
"the U.S. administration will also want more clarity about what is going
on in Chechnya."
Among other key aspects of the long-term Russian-U.S. relations he
also named ABM issues, nuclear weapons in general, and also trade in
arms.

*****

#13
MAIN ISSUES IN RUSSIAN-U.S. RELATIONS WILL REMAIN UNCHANGED -
CHERNOMYRDIN

MOSCOW. Nov 8 (Interfax) - Former Russian prime minister Viktor
Chernomyrdin does not rule out that the U.S. will adopt a somewhat
tougher attitude towards Russia if George Bush Jr. wins the presidency
in the U.S.
"I would not like relations between Russia and the U.S. to worsen.
And I hope that the main issues in bilateral relations will remain
unchanged. These relations have a planetary nature and are too important
for both the U.S. and Russia," Chernomyrdin said in an interview with
Interfax on Wednesday.
At the same time, to start with there may be "certain
organizational problems in the relations between the two countries,"
Chernomyrdin said.
"We have worked with the Clinton-Gore administration for eight
years. We knew each other's standpoints on the key issues of bilateral
relations perfectly well," Chernomyrdin said. It will take some time to
become familiar with the new U.S. administration if Bush wins, the
former Russian prime minister said.
He said he also believes that the Republicans' standpoint on the
deployment of a national ballistic missile defense system "may become a
bit of a problem in the relations between the U.S. and Russia."
"Unfortunately, this may become a big problem and have
unpredictable consequences for the entire world," Chernomyrdin said.
Referring to his words stating his intention to bring a lawsuit
against Bush Jr., who accused Chernomyrdin of misappropriating IMF funds
allocated to Russia, the former prime minister said, "Everything stands,
irrespective of the results of the U.S. presidential elections, but it
is not a simple issue, and lawyers are currently continuing to work on
it."

******

#14
The Independent (UK)
9 November 2000
Book review
The true story of this half-charming man 
By Steve Crawshaw

Midnight Diaries by Boris Yeltsin (Weidenfeld & Nicolson, £20) 

He is a rogue. He is a stranger to self-doubt. In many respects, he is a 
tyrant. Yet it is easy to find yourself half-charmed by Boris Yeltsin. His 
faults are so unashamed; like a wilful but entertaining child, he seems to 
defy you to regard him as a monster. 

From the first page of Midnight Diaries, Yeltsin's third volume of memoirs, 
he revels in his self-described "capriciousness". As he notes, after 
surprising everybody one more time (by suddenly refusing to pre-record his 
New Year's address, because he secretly planned to resign): "Thank God my 
staff had grown used to my nature, to my impromptu remarks and surprises. 
They were no longer truly fazed by anything." 

Rumbustious is the best summary of Yeltsin's style – in life, and in this 
book. He feels he has left a job well done. Even when he admits mistakes, it 
is a case of je ne regrette rien. Difficult situations are described with 
gusto. Thus, his government's failure to gather enough tax revenues to keep 
the state going in 1998 was "simply repulsive". The crisis included "an 
amazing paradox", whereby an educated government made "the most uneducated, 
ill-considered" decisions. So it continues, page after page. 

Midnight Diaries contains almost comic understatement. Yeltsin notes: "At 
times I made statements that appeared completely unjustified. It was 
difficult for my press secretaries to explain their meaning." (One pictures 
his ex-press secretaries nodding in furious agreement.) Yeltsin likes to 
emphasise his frankness and his errors. Of an ill-advised plan to cancel 
elections in 1995, aborted after pressure from his daughter and one adviser, 
he says: "To this day, I am grateful... I, who possessed enormous power and 
strength, became ashamed before those who believed in me." 

Sometimes, he dodges difficult questions. When referring to the suffering of 
Chechen civilians, he asks: "Should the Russian army bear responsibility for 
these woes?" "Yes" would be the honest, short answer. Yeltsin denies it all, 
and speaks only of the need "to ignore the excessive, unfair criticism". He 
does not explain why it is unfair to criticise a government that slaughters 
civilians. 

Other taboos are addressed. He discusses his well-documented love of alcohol, 
saying that he "couldn't bear to put up with drunks" (oh?) but concluded that 
alcohol was "the only means quickly to get rid of stress". Referring to an 
(in)famous occasion when he danced drunkenly with a conductor's baton in 
Berlin, he explains: "I can begin to feel my skin crawl as I think of that 
alarm, tension, and immeasurable weight of stress that pressed down upon me 
in those days... I remember that the weight would lift after a few shot 
glasses. And in that state of lightness I felt as if I could conduct an 
orchestra." 

Midnight Diaries contains truly extraordinary stories, like Yeltsin's claim 
that a secret memo from Russian intelligence warned in 1996 that "Clinton's 
enemies planned to plant a young provocateur in his entourage who would spark 
a major scandal capable of ruining the president's reputation." Yeltsin did 
not pass the warning on, sure that "Clinton, with his firm grasp of reality 
and staff of brilliant aides, would be able to figure out the cunning plot."

Such moments of alleged clairvoyance apart, most of the book smells 
remarkably real. In the end, it is a question of take-me-or-leave-me Boris. 
He feels as though he has run a super-marathon. "I honestly went the 
distance... If you think you can do it better, just try." On balance, Russia 
is probably lucky to have had him as its leader. There are many reasons for 
pessimism; Russia has not yet reached stability. But it could all have been 
much, much worse. 

*******

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