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Johnson's Russia List


November 16, 2000    

This Date's Issues:  4638  4639

Johnson's Russia List
16 November 2000

[Note from David Johnson:
  1. Bloomberg: Deputy Secretary of State Talbott Takes Yale Globalization Post.
  2. Reuters: US, Russia more starcrossed under Bush -astrologer.
  4. AFP: Berezovsky accuses Putin of accepting Aeroflot cash to finance election.
  5. KGB bugaboo no longer scares anyone in Russia.
  6. RFE/RL: Sophie Lambroschini, Journalist Kholodov's Alleged Assassins On Trial In Moscow.
  7. National News Service: re Tamara Rokhlina's trial.
  8. Moscow Times: Yevgenia Albats, These Days, Even Good News Sounds Bad.
  9. Bloomberg: Carnegie's Rousso on Russian Foreign, Nuclear Policy.
  10. Reuters: AIDS body says catastrophe threatens Russia.
  11. Itar-Tass: Minister says barriers still hampering Russia's economic growth.
  12. The Straits Times (Singapore): John Helmer, PUTIN COMES TO APEC SUMMIT RIDING A WAVE OF SUCCESS.
  13. Central Asia-Caucasus Analyst: John Daly, GLOBAL IMPLICATIONS OF ARAL SEA DESICCATION.
  14. Reuters: Russian Duma says US vote proves America no example.
  15. Bloomberg: Russia's Putin Pressed By Clinton on Alleged Spy Pope.


Deputy Secretary of State Talbott Takes Yale Globalization Post
Washington, Nov. 15 (Bloomberg)
-- Deputy U.S. Secretary of State Strobe Talbott, the Clinton
administration's top Russia specialist, will move next year to Yale
University to direct an institute for the study of globalization, the
university said.

``In moving from government to Yale, I'm coming home to a community that has
always upheld the highest intellectual standards while actively engaging in
the affairs of the world,'' Talbott, a 1968 Yale graduate, said in a

Talbott, a former Yale trustee, will begin in July as director of the new
Yale Center for the Study of Globalization, the university said in the
statement. Talbott also will serve as a professor in the field of
international relations.

The former journalist was a roommate of President Bill Clinton at Oxford
University and spent the past eight years as one of Clinton's key foreign
policy strategists. He was named special adviser on the former Soviet Union
in 1993 and deputy secretary of state in 1994.

Talbott, 54, entered the government after a 21-year career at Time Warner
Inc.'s Time magazine that included assignments as editor-at-large, foreign
affairs columnist, Washington bureau chief, State Department correspondent
and White House correspondent. He is the author of several books on arms

The new center at Yale to be led by Talbott ``will serve as a catalyst for
research, writing and teaching on globalization,'' the university said in its

The buzzword describes the economic and political integration of countries as
cross-border flows of capital, labor and information have accelerated since
the end of the Cold War. The change, in turn, has sparked protests that rich
nations and companies operating globally are exploiting poor workers and
wrecking the environment in developing countries.

Yale's center will lead privately sponsored efforts to promote dialogue
between opposing sides in international crises and disputes, and will
establish an Internet site on globalization that will become the ``premier
Web site on all dimensions of the subject,'' the university said.


US, Russia more starcrossed under Bush -astrologer
November 15, 2000
MOSCOW (Reuters) - George W. Bush is more impulsive than Al Gore and will not
be as good a partner for Russia if he becomes U.S. president, a Russian
astrologer said Wednesday.

"He is not able to be versatile in the same way as (Russian President
Valdimir) Putin or Gore in building relations with those around him,"
Alexander Zarayev wrote in the weekly Argumenti i Fakti.

He said Bush had a desire to achieve results quickly which could lead to
conflict with Russia's plans. He also said Bush's astrological chart showed
him to be a person prone to being impulsive and not always thinking through
his actions.

"Between Bush and Putin, formal or even strained relations could arise,"
Zarayev said.

But he was not unqualified in his praise for Vice President Gore.

"(Gore) does not have sufficient breadth of outlook and he needs good
advisers. He will be a rather easily controlled president, but periodically
he will try to break free of this," he said.

The astrologer also said serious changes in the global arena, and in
particular with regard to America, would force Putin to operate more

"In general in 2001 we will see another Putin -- he will be more decisive and



     MOSCOW. Nov  15 (Interfax) - A recent survey shows that, of the two
U.S. candidates  heatedly contesting  the U.S.  presidency, the  Russian
'elite' prefers Al Gore (40.9%) to George Bush, Jr. (38.4%).
     These figures  were released  on Wednesday  by sociologists working
with the  independent Russian  Public Opinion and Market Research center
(ROMIR-Gallup International).  They are based on the results of a survey
of representatives  of the  Russian elite conducted in the first half of
November in seven large Russian cities.
     All in  all, 650  representatives  of  the  Russian  executive  and
legislative bodies,  business and  state company management, science and
the mass media were polled.
     The poll also revealed that the Russian elite is greatly interested
in the U.S. presidential campaign. For example, 25.5% of representatives
of expert  groups have  given their  attention to it during the past few
months. Another 55.6% of those polled followed the campaign process.
     Other results  indicate that  10.2%  of  the  respondents  paid  no
serious attention  to the  contest, only  5.8% of  those polled  did not
follow the presidential campaign at all, and 2.9% of the respondents had
difficulty responding to the question.


Berezovsky accuses Putin of accepting Aeroflot cash to finance election

MOSCOW, Nov 15 (AFP) -
Russia's most famous "oligarch" Boris Berezovsky declared all-out war on
President Vladimir Putin Wednesday, claiming his election was illegally
financed by cash diverted from flag carrier Aeroflot.

Claiming the mantle of a political refugee, the exiled billionaire tycoon
refused to return to Russia Wednesday for questioning over his alleged
embezzlement of hundreds of millions of dollars from Aeroflot.

"Putin, when a candidate in the presidential elections, did not worry himself
when profits from Swiss companies working with Aeroflot were used to finance
the (pro-Kremlin) Unity bloc and the presidential pre-election campaign," he

"But Putin, now president, without a scruple publicly orders me to be treated
as a suspect rather than a witness in the Aeroflot affair," Berezovsky added
in a statement published in his Kommersant newspaper.

The tycoon's bid to compromise Putin, whom Berezovsky helped to catapult to
the Kremlin, marked a sharp escalation of their feud, said Moscow-based
analyst Andrei Piontkovsky.

"The relationship between Putin and Berezovsky is beginning to resemble that
of Stalin and Trotsky," who was assassinated by a Soviet agent in 1940 in
Mexico, said the political commentator.

"This affair risks ending up with (Berezovsky getting) a bullet in the head,"
he added.

One of the most powerful men in Russia under former president Boris Yeltsin
due to his close ties to inner Kremlin circles, Berezovsky has emerged as a
bitter opponent of the new leader.

Putin has vowed to end the cosy relationship between government and the
business barons known here as "oligarchs" who accumulated vast wealth under

But Berezovsky, who is currently in New York, said late Wednesday he would
only return to Russia to answer questions about Aeroflot when the authorities
dropped their political vendetta against him.

"I will only come back in circumstances when I am sure that the inquiry will
be conducted from a legal point of view," he told the private NTV television

Piontkovsky commented that Berezovsky's allegations effectively threw down a
challenge to the Kremlin. "Berezovsky is declaring: I stole, but we spent the
proceeds together. It is well-known that Berezovsky bankrolled the Unity
party," Piontkovsky said.

Unity, a pro-Kremlin party set up just weeks before last December's
parliamentary elections, swept to surprising success, being outpolled only by
the Communist Party.

The poll triumph, which crushed an opposition bloc led by former premier and
presidential hopeful Yevgeny Primakov, paved the way for Putin's election as
president on March 26.

The head of Unity, Boris Gryzlov, denied his party had accepted any money
from Aeroflot.

"There is no mention of Aeroflot or its Swiss subsidiaries" in the records of
campaign funding submitted by Unity to Russian electoral officials, he told

The head of Russia's electoral commission, Alexander Veshnyakov, also said
that he had no such information.

"The commission has no documents showing the participation of foreign firms
and Aeroflot in the financing of the electoral campaigns of Unity and
president Putin," Veshnyakov told Moscow's Echo radio.

Berezovsky, who also has property in France, said he had no option but to
remain out of harm's way.

"Either I become a political prisoner or a political exile," the 54-year-old
businessman said.

Investigators are probing allegations that Berezovsky, who had at one stage
stacked Aeroflot's board with allies, stole hundreds of millions of dollars
from the airline and parked the money in Swiss bank accounts.

The embezzled Aeroflot cash is alleged to have transitted via Lausanne-based
financial companies Forus and Andava, which were set up by Berezovsky to
manage the airline's foreign currency funds, Swiss magistrates claim.

Another Russian tycoon, independent media magnate Vladimir Gusinsky, is also
in exile, after prosecutors issued an arrest warrant for the prominent
Kremlin critic on fraud charges.


November 15, 2000
KGB bugaboo no longer scares anyone in Russia
By Vitaly Baskakov

A small-size copy of the monument to Felix Dzerzhinsky, chief of a security
committee which later developed into KGB, notorious for ruthless treatment of
dissidents in the Soviet years, has been presented to Nikolai Kharitonov,
chief of the left-wing Agrarian Party in Russia's Parliament, the State Duma.
Kharitonov turned 52 a few days ago and parliament colleagues from the Union
of Right-Wing Forces (SPS) presented him with a one-meter long copy of the
monument on Thursday.

Handing in the birthday present, the leader of the right-wing SPS faction,
Boris Nemtsov, said that precisely Kharitonov demanded reinstatement of the
monument to "Iron Felix," which had been removed from its place opposite the
KGB building by a crowd during the August 1991 events.

Nemtsov said his faction, which was strongly opposed to reinstatement of the
monument to Felix Dzerzhinsky, had promised to present its small-size copy to
Kharitonov. They have kept their word.

Receiving the present with the words "From the SPS with love" engraved on it,
Kharitonov embraced the right-wing leader, then turned to the monument and
said with emotion, "Felix, forgive us, we didn't save you, but you have
remained in our hearts." He took his seat in the State Duma hall amidst
cheers and applause.


Russia: Journalist Kholodov's Alleged Assassins On Trial In Moscow
By Sophie Lambroschini

Six years after the crime was committed, the alleged assassins of Russian
journalist Dmitry Kholodov are finally standing trial. Kholodov, a reporter
investigating corruption in the army, was blown up by a booby-trapped
briefcase, and his killing is seen as post-communist Russia's first murder of
a prominent journalist for political motives. Moscow correspondent Sophie
Lambroschini reports on the trial.

Moscow, 15 November 2000 (RFE/RL) -- A military court in Moscow's decrepit
19th century "Sailor's Silence" prison yesterday began the reading of an
800-page indictment of six men accused of murdering journalist Dmitry
Kholodov. The full reading of the charges against five former paratroopers
and a paratrooper- turned-businessman could take up to 10 days.

Kholodov's murder in Moscow in October 1994 created outrage in the capital.
It was widely perceived as post-communist Russia's first "contract killing"
against a journalist because of his investigative work. A booby-trapped
briefcase Kholodov had been told contained important documents killed him
almost instantly.

At the time, Kholodov -- a 27-year-old reporter for Moscow's feisty
"Moskovsky Komsomolets" tabloid daily -- was investigating cases of graft in
the Western Army Group that had just pulled out of eastern Germany. In his
articles, Kholodov accused the Western Group of setting up a what he called a
"mafia" to sell planes, helicopters, and thousands of tanks illegally. The
then defense minister, Pavel Grachev, was often the direct or indirect object
of accusations or suggestions of corruption by Kholodov and other

The assassination occurred only three years after the Soviet era, and
censorship appeared to have ended. Its effect -- and perhaps its intention --
was to frighten journalists away from sensitive subjects. Vladimir Kosarev,
head of the Defense Ministry's information department at the time, told our
correspondent that he noticed how journalists became wary.

"They scared them, they really did scare them. I know journalists who really
became more careful after that. Military-affairs reporter Aleksandr Zhilin,
who was working then for 'Moskovskye Novosti,' kept out of sight for several
months -- and he wasn't the shy sort. It's certainly possible that this
reaction -- the fright -- was what was intended, but I don't have the
evidence to confirm that."

In its indictment, the prosecution rules out any contract killing. It accuses
the six former paratroopers of having concocted the briefcase murder on their
own initiative, simply to please the Russian Defense Ministry by ridding it
of a journalist seen as meddling in military affairs.

The six defendants, who have already spent up to two years in jail, all
pleaded innocent to the charges. They say the case against them is based
mainly on testimony that has been retracted since it was first given.

Last week, when the trial formally opened, the daily "Vremya Novostey" tried
to piece together the background to the murder, as seen by the prosecution.
According to the paper, the prosecution believes the idea for the
assassination came from Colonel Pavel Popovskykh, former head of the
paratroopers' intelligence department. In 1994, Popovskykh was often present
at meetings presided over by Grachev where the minister lashed out at
journalists' criticisms of the army.

The prosecution is also said by the paper to contend that in order to
ingratiate himself with Grachev, Popovskykh decided to teach journalists a
lesson. The daily says Popovskykh asked two paratroopers from an engineering
regiment, Aleksandr Soroka and Vladimir Morozov, to make the bomb and
booby-trap a briefcase, and the two involved four other alleged accomplices.

Eventually, Kholodov was told in a mysterious phone call that he would find
documents relevant to his investigation in a briefcase left in a Moscow train
station locker. Kholodov went to the station, picked up the briefcase, took
it back to his office, opened it -- and it blew up in his face.

The defense, however, says that this entire scenario is based largely on the
testimony of a single soldier who was serving in the same regiment as the
alleged bomb-makers and has since retracted his accusations. The defense also
notes that one of the indicted former paratroopers, who first admitted his
guilt, has since also retracted his testimony. At the time of the murder,
Kholodov was due to speak out at a State Duma hearing on corruption in the
army. In addition, the dismissal of a Western Group general some weeks after
Kholodov's murder further tied the Defense Ministry to the case. Deputy
Defense Minister Matvey Burlakov -- who commanded the Western Group until it
left Berlin -- was fired by Yeltsin because of what was called "on-going
investigations" and to "save the honor of the armed forces." Burlakov was
regarded as a close associate of Grachev.

Former Defense Ministry information chief Kosarev confirms that Grachev was
furious about articles at the time that raised suspicions of corruption about
himself or the Western Group.

"Indeed, Kholodov's articles irritated the heads of the Defense Ministry at
the time -- I mean, above all, minister Pavel Grachev. Sometimes they enraged
him to the point where he screamed. He would get indignant, saying, 'That
little kid allows himself to cover me in mud.' Not only that, at ministry
meetings, I would be rebuked for not stopping this flow of criticism."

Over the years, many journalists have expressed their apprehension that full
light would never be shed on the Kholodov murder. In the view of many of
them, the ex-paratroopers may only be scapegoats in a case reaching far
further up the military ladder. Commenting on the trial yesterday, Russia's
private NTV television said that "one accused is missing -- the seventh one,
the one who ordered the murder."


15 November, 2000
National News Service
[translation for personal use only]

Tamara Rokhlina, the widow of Gen. Lev Rokhlin, a Duma deputy murdered in
July 1998, declared that her husband had been killed by his own security
guards. She made this announcement in her final statement during the ongoing
trial in the city court of Naro-Fominsk (Moscow oblast). Rokhlina was
formally indicted as her husband's murderer. Her final statement was
distributed to journalists, but they were not allowed to attend. In her
statement, Rokhlina said that her husband "considered the Yeltsin regime to
be responsible for the destruction of Russia." He believed that Yeltsin's
entourage would never allow for fair elections to be held. Therefore, he was
planning a peaceful mass-based public action by servicemen from different
agencies. "I was supporting him", stated Tamara Rokhlina. "[The military
action] was the only way to proceed." In her opinion, "it is obvious" that
the general was killed "not by Yeltsin's people but by his own bodyguards."
"A very large sum of money that had been amassed from all over Russia by
Rokhlin's followers in order to finance the liberation of the country,
disappeared from our country house immediately after my husband was
murdered. Soon, his bodyguard Aleksandr Pleskachev reappeared as a "New
Russian" with a newly acquired Moscow residence permit."
The court verdict in the trial in which Rokhlina is the defendant will be
pronounced Thursday, November 16. The indictment was largely based upon
Pleskachev's testimony. Meanwhile, NTV showed archival materials of
Pleskachev's interrogation. The documentary suggests that three people in
masks may have entered Rokhlin's dacha in the night of his death.


Moscow Times
November 16, 2000
POWER PLAY: These Days, Even Good News Sounds Bad
By Yevgenia Albats

Russian politics is like the Russian banya - nothing but contrasts. However,
there is one important difference: The contrasts of temperature in the banya
makes you relax, whereas the endless political swings just make you really
tired. Thank goodness for the never-ending U.S. presidential election. At
least, it lets us think for a while that living in a mad house is not just
our dubious pleasure, but someone else's as well.

Just consider the following events. One day President Vladimir Putin comes to
the Russian cemetery in Paris and does what none of our top-ranking
politicians has ever done before: He bows before the graves of those who were
for decades considered the enemies of the Soviet state and calls for the
unity of all Russians despite their former or current ideological
preferences. In a way, one can see this as the penance of a man whose
previous life was dedicated to serving the organization that tormented so
many who ended up in this cemetery-in-exile.

Just a few days later, the Kremlin's Security Council approved a decision to
undertake a crucial reform of the Russian military-industrial complex. It is
hard to overestimate the potential significance of these reforms, should they
be properly implemented. They will have a healthy impact not just on the
economy, but on the nation's foreign and domestic policies as well.

This reform signifies Russia's acknowledgement of the fact that it is no
longer a superpower, but merely a regional one. It also outlines a major
change in the Kremlin's priorities.

If Putin manages to walk the proclaimed road in full f and that is still a
big "if" f I would consider the appeal that I wrote months ago to "give Putin
a chance" (which was sharply criticized by many readers) to be vindicated.
After all, it takes a person who is truly and genuinely concerned about the
common good to break the back of the Soviet empire.

But Russia would not be Russia if all the good news were not accompanied by
equal measures of bad news.

In another attempt to crack down on Russia's only nongovernmental television
network, NTV, the prosecutor's office once again issued a warrant for the
arrest of Media-MOST owner, Vladimir Gusinsky. The Kremlin's supporters once
again broke an already signed peace agreement between Media-MOST and its
creditors, thus proving that last summer's "freedom-for- property" deal was
not just a one-time mistake made by corrupt bureaucrats but the Kremlin's
chosen policy for fighting its various political opponents.

One could argue that the NTV crackdown is a necessary adjunct to military
reform. That is, in order to reform Russia's most powerful monopoly f the
military-industrial complex f the Kremlin needs to exercise control over the
liberty to question its policies.

It is clear that such a reform cannot be implemented in the course of just
one presidential term. Therefore, the Kremlin must secure the grounds for
Putin's re-election in 2004.

However, there is another way of looking at the situation as well. In order
to subvert the liberties gained during thelast nine years, the Kremlin will
have to invest many more resources into the muscles of the state, into its
security forces in particular. Sooner or later (most likely sooner), those
investments will turn into a political force.

And that force, being unquestioned and unchecked by a cowed civil society,
will stop military reform, not wanting to undermine its natural political

Yevgenia Albats is an independent journalist based in Moscow.


Carnegie's Rousso on Russian Foreign, Nuclear Policy: Comment
Moscow, Nov. 15 (Bloomberg)
-- The following are comments by Alan Rousso, director of the Carnegie
Moscow Center, on Russian President Vladimir Putin, his foreign and nuclear
policy, and the outlook for the Asia-Pacific Economic Cooperation summit.

On Russian suggestions that the U.S. and Russia should discuss reduction of
nuclear weapons:

``Putin is trying to make it look like he has seized the initiative on arms
control. For many experts in arms control, this is nothing new. People know
that Russia wants lower numbers of nuclear weapons in return for a pledge not
to violate the 1972 Anti-Ballistic Missile treaty.

``The problem is that one of the candidates in the U.S. doesn't believe in
arms control. I think the Bush camp believes in non-proliferation, but they
seem willing to break away from arms control. That challenges the old
patterns and could deprive Russia from one of the most prestigious diplomatic
dialogues -- the arms reduction process. That, I think, is dangerous.''

On potential relations between Russia and the U.S. if Republican presidential
candidate George W. Bush wins the presidential elections:

``I think the Bush team is unlikely to offend the Russians as it is not in
their interests. I think they will initially embrace this offer as it is in
their interests. We may have to wait six months before the Bush camp starts
to get really tough on Russia.''

On connections between the presidential elections in the U.S.:

``I am sure the timing of the recent statements by Putin are not

On what Russia wants in return:

``Russia wants a pledge by the U.S. not to violate the ABM treaty.

``It's well-known that Russia wants to reduce the number of weapons. Russia
can't really afford to keep the START-II levels of weapons.''

On what Putin will do at the summit of Asia-Pacific Economic Cooperation

``I think he may push his ideas on nuclear reductions at the APEC summit and
try to put more flesh on the skeletons.

``Putin is going there will a few main items on his agenda: to advance
Russia's economic interests and to argue why Russia is a good place to invest

On Russia's membership of the World Trade Organization:

``Russia's doesn't seem to be very focused on WTO membership frankly. I think
there is still a fair amount of protectionist sentiment in Russia and in the
world about Russia. Membership of the WTO is not on the fast track.''

On Putin's foreign policy:

``I think there is more to Putin on the foreign policy front than we expected
there to be. He has spent more time abroad than we expected him to.

``He has been acquitting himself very well. Admittedly, expectations were
very low so he had nowhere to go but up.

``Putin is pragmatic. He wants economic engagement with the world, he is
working for greater security on Russia's southern frontiers, bolstering
relations with the Commonwealth of Independent States, and he has not cast
Russian foreign policy in either a pro-European or a pro-Asian mould. He is
building relations with all of Russia's neighbors.

On the main influences on Putin's Foreign Policy:

``This is very difficult to say. I get the sense that Putin is his own best
foreign policy adviser.

``People like (Security Council secretary) Sergei Ivanov are very important
for advice on security and foreign policy.''

(Former Russian Prime Minister) Yevgeny Primakov is also very important. One
sees a lot of Primakovian influences on Putin's policy. And Primakov turns up
at a lot of important meetings.''


AIDS body says catastrophe threatens Russia
November 15, 2000
By Tara FitzGerald
MOSCOW (Reuters) - The spread of AIDS could reach catastrophic proportions in
Russia unless officials take quick action to reduce runaway growth rates of
the killer disease, Russian and foreign experts said Wednesday.

The joint United Nations Program on HIV/AIDS (UNAIDS), in a statement issued
ahead of a two-day visit to Russia, put the number of HIV and AIDS sufferers
at 130,000 at the end of last year. But there is broad agreement that the
number of cases is significantly under-reported.

Vadim Pokrovsky, director of the AIDS prevention center, told Ekho Moskvy
radio that at the current rate of growth Russia could have up to a million
infected cases in two to three years.

He said some consequences of the spread of the disease were already
irreversible and if "a passive and indifferent attitude to this epidemic
(continues) Russians will face many more serious problems and tragedies.

"The main plague will start in five or six years because people are dying on
average 10-12 years after contracting the infection and the mass epidemic in
Russia started in the 1990s," he said.

UNAIDS said the largest share of funds requested for Russia would go toward
preventing the spread of HIV -- the virus that causes AIDS -- through
injecting drugs, by far the most commonmeans of transmission in the country.

Resources would also be allocated for what is seen as a growing problem of
sexually transmitted infections, with efforts directed at young people and

"So far, the epidemic in Russia has been driven by drug users," Arkadiusz
Majszyk, UNAIDS representative in Russia, said in the statement.

"But a second wave of HIV infections spread by sexual contact could follow
the current drug-driven epidemic and in just three to four years, Russia may
well have a generalized epidemic."

UNAIDS said its executive director, Peter Piot, would meet high-ranking
Russian officials and non-governmental groups Thursday. The U.N. agency
called on donors to allocate at least $20 million over the next three years
to stem the epidemic.


Pokrovsky said the existing anti-AIDS programs in Russia were "surprisingly
weak" because they were poorly financed.

He said Russia had spent 44 million roubles ($1.6 million) on its AIDS
program this year, roughly one-thousandth of the sumspent in the United

Majszyk also told Ekho Moskvy Russia had the world's highest rate of growth
for the spread of the killer disease.

"In the space of one month this year, 30,000 new HIV cases were uncovered,
while last year this figure was three times lower," Majszyk said. "With so
many cases we can begin to talk about a threat to national security."

The World Health Organization said this month the number of registered HIV
infections in Russia had doubled annually for the last five years and it
urged the country to take tough measures.

AIDS is the fourth biggest killer worldwide. About 18.8 million people have
died since 1983, including 2.8 million last year, UNAIDS says. Nearly twice
as many -- 34.3 million -- are living with HIV.


Minister says barriers still hampering Russia's economic growth

Moscow, 15th November: "Russia's present GDP adds up to only 63 per cent of
the 1991 figure," Russian Deputy Minister for Economic Development and Trade
Andrey Sharonov told the Fourth International Marketing Conference here on
Wednesday [15th November].

He said that this testified to the seriousness of the problems with which
Russia was confronted in the early nineties and also to the depth of the GDP
drop. He also noted that an economic upswing was being recorded in Russia at
present, but one cannot say for sure that it is stable.

In Sharonov's opinion, economic growth in Russia should be based on equal
conditions for competition, optimally balanced participation of the state,
effective financial system, macroeconomic and social stability and also on
private property and free formation of prices.

He said that economic growth was arrested, among other things, by the
excessive volume of state property, redundant state regulation, barriers to
economic activity, lack of property guarantees and ineffectiveness of state
procurements. He said that renunciation of the state's excessive interference
in the economy and reduction of the share of state property were needed to
optimize the economy.

Sharonov also believes that Russia should ensure the transparency of natural
monopolies, should go over to market pricing, should encourage the formation
of independent production units and should guarantee their equal access to
natural monopoly services.


From: "John Helmer" <>
Date: Wed, 15 Nov 2000

This week in The Straits Times  (Singapore).
>From John Helmer in Moscow

President Vladimir Putin rides into the APEC summit in Brunei this week on a
wave of foreign policy successes his predecessor Boris Yeltsin never
enjoyed. But if you listen to the Russian and western press, you would
never know it.

"What was the cause of the fire in the Moscow television tower?" is the
question in the latest Russian joke.

This is a reference to the accidental blaze that knocked out Moscow's
television and radio transmitting complex on August 28. The disaster, which
kept Muscovites from seeing the main television networks
for several days, and delayed resumption of some radio broadcasts for weeks,
killed two members of a fire and rescue team.

It followed by days the sinking of the nuclear attack submarine "Kursk" in
Barents Sea, with the loss of all 118 men on board.

The "Kursk" drama began just four days after a bomb exploded in a crowded
shopping area of central Moscow, just 150 metres from the Mayor's office.
Over 90 people were injured; 21 were killed. Although Chechen terrorists were
first suspected, police now believe the bombing was ordered by gangsters
involved in a fight over street retail trade.

The answer in the Russian joke to what caused the television tower blaze?
"A collision with a foreign television tower."

For Russians, that is a cynical reference to the official version of what
caused the sinking of the "Kursk" -- a collision with an as yet unidentified
foreign submarine that then triggered the explosion of the
submarine's torpedoes.

The joke implies that Russians don't believe the
Kremlin explanation of the submarine disaster; and think it to be as
improbable as a collision between two television towers.

For domestic and foreign pundits, the three summer catastrophes in Russia
were pronounced signs of the worsening collapse of all Russian institutions.
Reporters in Moscow wrote of their certainty President Putin would pay
a heavy price in public confidence -- and maybe even in his
power to govern.

In fact, the humour turns out to be far blacker than reality -- at least for
Putin -- and the pundits should be looking red-faced.

Russian opinion polls show the president's approval rating took a dive from
73% in July to 60% in August. However, by the start of October he had
regained almost half the 13-point loss. By the end of October, Putin's
approval rating was at 72%. In other words, a full recovery.

Putin's foreign policy moves in the same interval have also been remarkable,
not least for exposing the yawning gap between what the pundits call Putin's
failures, and the concrete results:

-- US backdown on national missile defence (NMD). After months of worsening
relations with the Clinton Administration over threatened revocation of the
ABM Treaty, and unilateral American moves to start building the NMD, the
Clinton Administration backed away from its plans in September. Russian
resistance to the schemes, and in particular Putin's resistance, are cited
in a recent New York Times report as the key strategic factor, coming after
the failure of the Pentagon's interceptor test in July. The US report
suggests the outcome would have been different if Yeltsin were still
president. Not a single Russian military analyst or media commentator has
given Putin this credit.

-- India partnership. Putin's visit to India at the start of October helped
solidify relations with the traditional ally, and added substantially to the
defence export order book. Last week, Putin also delivered on a promise the
Indian military has been asking the Kremlin to deliver for years. He purged
the corrupt leadership of Russia's two arms export agencies, and ordered the
merger of the two rivals into a single unit.

-- Israel crisis. The Russian and western press have claimed Putin was
excluded from the Sharm el-Sheikh summit conference on October 20, thereby
indicating how weak Russia is today in the Middle Eastern "peace process".
Far from demonstrating weakness, Kremlin advisors say, Putin's absence saved
him from the embarrassment of a summit that got nowhere. It also preserved
Russia's leeway between Israel, the Palestinians, and the rejectionist Arab
states, like Iraq and Libya, with which Moscow is fast solidifying

-- Yugoslav reconciliation.  After weeks of reported indecision
and vacillation, Putin's position towards Yugoslav political rivals Slobodan
Milosevic, the president, and Vojislav Kostunica, the challenger, was finely
differentiated from the West Europeans and Americans, who entreated him to
abandon Milosevic. Although Putin was criticized in domestic and western
for failure to act quickly enough, the way in which he arranged to
support the Yugoslav Army, switching to Kostunica when Milosevic and the Army
decided it was time to step down, was far from failure. In retrospect, Putin's
move preserved Russia's real assets in the country -- the Yugoslav Army,
territorial integrity (including Montenegro), and the leftist parties, who
remain in control the federal and the Serbian legislature. Putin also
avoided the creation of any pretext for NATO military action in the country
once more. Kostunica's Moscow visit on October 28 -- his first to a foreign
capital -- capped Putin's achievement.

-- Euro Summit in Paris. On October 30-31, Putin ended the period of
estrangement with the Chirac administration with a visit to Paris
that, in domestic terms in both countries, went a long way to reviving
traditional Russian sympathy for France and liking for French culture. The
reciprocal effect was obvious in the French media too. Chechnya was much
diminished as one of Putin's negatives in France. His gesture of visiting the
graves of Russian exiles in Paris was another of the domestic political
reparations the president has been adept at making recently.

-- AWACS sale to China. During the Russian Prime Minister, Mikhail Kasyanov's
visit to Beijing at the start of this month, it became clear that, as a
result of Washington's veto of Israel's offer to supply AWACS technology to
China, the billion-dollar air defence order would go to Moscow instead.

In short, in the space of a few weeks, Putin has demonstrated an agility and
tactical impact on every significant foreign policy vector Russia's national
interests dictate. And contrary to the reports and assessments of his critics
at home and abroad, he gained significantly, not to mention financially, at
every stop.


From: (Justin Rudelson)
Date: Wed, 15 Nov 2000
Subject: CACI Analyst

Justin Rudelson, Editor
Central Asia-Caucasus Analyst

Central Asia-Caucasus Analyst
Dr. John C. K. Daly
AUTHOR BIO: Dr. John C. K. Daly received his doctorate from the School of
Slavonic and East European Studies, University of London in Russian and
Middle Eastern Studies. He is currently a scholar at the Middle East
Institute, Washington.

At the heart of the Aral Sea tragedy is a witch's brew of toxins. The Aral
Sea region was the location where Soviet scientists field tested some of the
world's most toxic diseases and viruses. The region was also chosen for
disposal of Soviet-engineered pathogens. It is crucial that the West
immediately focus its attention on the ecological and biological implications
of the Aral Sea debacle, and help Kazakhstan and Uzbekistan resolve their
problems. Otherwise, their problems may visit the West in a form more
virulent than anything seen since the Black Death.
BACKGROUND: The Aral Sea's Vozrozhdeniie Island was the main open-air testing
ground for Soviet biological warfare weapons. Weaponized agents included
tularemia, epidemic typhus, Q fever, smallpox, plague, anthrax, Venezuelan
equine encephalomyelitis, Glanders, brucellosis, and Marburg infection.
Numerous other agents were studied for possible use as biological weapons,
including the Ebola virus, AIDS, Junin virus (Argentinian hemorrhagic fever),
Machupo virus (Bolivian hemorrhagic fever), yellow fever, Lassa fever,
Japanese encephalitis and Russian spring-summer encephalitis. The
desiccation of the Aral Sea is destined to release these deadly toxins into
an environment already critically taxed in a region unable to cope with the
legacy of enviornmental destruction caused by Soviet cotton production.
Health experts maintain that once these toxins are unleashed, it will be
nearly impossible to contain them.
The Aral Sea at one time was the world's fourth largest lake, after the
Caspian Sea, Lake Victoria, and Lake Superior. It covered an area the size of
southern California, draining an immense area covering Tajikistan,
Afghanistan, northeastern Uzbekistan, Turkmenistan and Kyrgyzstan. During the
1950s, sixty cubic kilometers of water flowed annually into the Aral Sea.
Soviet planners in Moscow had decided that Central Asia would become the
USSR's cotton plantation, and the waters of the Amu and Syr Darya rivers were
diverted to irrigation of the crop. Fifty years later scientists estimate the
Aral Sea receives only between one to five cubic kilometers per year, where
as thirty-five cubic kilometers a year are necessary simply to stabilize the
remaining shoreline. 
The diversion of waters has led to a dramatic decrease in the Aral Sea's
surface area, shrinking its coverage from 26,000 kilometers in the 1960s to
about 11,000 kilometers today. On an American scale, it is equivalent to
losing both Lake Erie and Lake Ontario. Natural decline has been equally
precipitous. Only two species of fish are left of the more than twenty that
thrived fifty years ago. Only thirty-eight of one hundred and seventy-eight
indigenous animal species are still present. Salinity has increased 400%,
higher than that of the North Sea. The moderating effect of the Aral Sea on
the desert climate has also been lost. The region's weather has become more
continental, with warmer summers and cooler winters. The climate is much
drier and temperatures more variable.  Unfortunately, Uzbekistan cannot wean
itself from its dependence on cotton, its "white gold," which uses huge
amounts of water resources and sucks the Aral Sea dry. The country produces
over 5,000,000 tons of cotton per year, which accounts for nearly one-third
of state revenues.
IMPLICATIONS: The effects of Aral Sea desiccation on the local population
has been as, if not more, catastrophic than it has been on the environment.
Drinking water contains 7-16 times the maximum permissible level of
pollutants and pesticides. This pollutant level rises to 900 times the
acceptable levels in drainage and irrigation canals. Every pregnant woman in
the region suffers from anemia. Seventy percent of tenth grade boys have
serious morphological abnormalities in their sperm. Morbidity rates for
malignant tumors are increasing 3% each year. Life expectancy is as low as 40
years for men in some areas, while infant mortality rates reach 110 per
1000. As the sea shrinks, salinized land emerges. Today, an estimated
75,000,000 tons of toxic salts and dust each year blow off the Aral Sea"s
exposed sea bed to as far away as the Himalayas, Belarus and the Arctic
shores of the Russian Federation. 
When the USSR in 1988 decided to get rid of the evidence of their Chemical
Biological Weapons program, nearly one hundred tons of anthrax spores were
loaded into steel drums, doused with bleach, and shipped to the Aral's
Vozrozdeniie Island, where the sludge was dumped into trenches and then
covered with sand. Despite slipshod Soviet efforts at eradication, anthrax
spores have survived. American scientists have been visiting the island for
the last four years and have been able to culture anthrax from their samples.
The pulmonary form of anthrax has a fatality rate that can reach 90%. 
As the Aral Sea shrinks, Vozrozdeniie Island has grown from 200 to 2000
kilometers long. The regional worry is that a land bridge will form to the
island, allowing infected wildlife to transmit these diseases to the
mainland. At one point there is only a five-foot deep two mile water channel
between Vozrozdeniie and the coast. Kazakh scientists believe that if
nothing is done, the island will be joined to the mainland within ten years.
Kazakhstan has already experienced outbreaks of plague in Aralsk, a port
city. But the Aral Sea toxins will not be confined to Central Asia. 
CONCLUSIONS: The 4 June 2000 issue of the Australian newspaper The Age
carried a report that Osama bin Laden's associates had recently bought
anthrax and bubonic plague viruses from Kazakh arms dealers. Economic
desperation and terrorism area potent mix. Should these viral agents be
unleashed, the human and economic cost would be enormous. A 1997 report
published by the Center for Disease Control estimated that such an attack on
100,000 people would cause tens of thousands of deaths and would cost
between US$ 477.7 million to US$ 26.2 billion. Emergency services would be
immediately overwhelmed.

It is imperative that the West immediately focus its attention on the
ecological and biological implications of the Aral Sea debacle, and help
Kazakhstan and Uzbekistan resolve their problems. Otherwise, their problems
may visit the West in a form more virulent than anything seen since the Black
Death. As the Uzbek proverb says, "At the beginning you drink water, at the
end you drink poison."

Russian Duma says US vote proves America no example
November 15, 2000
MOSCOW (Reuters) - Russian parliamentarians, relishing a chance to turn the
tables on an old adversary, adopted a unanimous resolution Wednesday
criticizing the U.S. election process as flawed and archaic.

The statement, which passed with 246 votes to zero in the State Duma,
Russia's lower house, said muddle in the wake of last week's presidential
election proved that the United States had no business teaching other
countries about democracy.

"It is noteworthy that the political and constitutional crisis connected with
the election has emerged in a country that persistently attempts to play the
role of a 'model of the rule of the people' and arbitrator of the quality of
election laws and the purity of elections in other states," it said.

"This once again demonstrates that attempts by certain countries to play the
role of 'teachers of democracy' toward other states are without foundation
and can end in confusion."

Russia, ruled by dictators for all but a decade of its 1,000-year history,
has often been criticized abroad for staging less-than-perfect elections.
Last month election officials struck an incumbent regional governor and a
leading contender off the ballot just hours before the vote.

But the Duma resolution described the American vote in terms that might
embarrass many a shakier democracy.

It listed "unequal conditions" for third party candidates, the "hypertrophic
role of money in the election campaign" and "ignoring the total number of
votes" as examples of "significant flaws in election law and archaic

It also complained about "machinations with hundreds of disappearing ballots"
and "attempts by officials in several states to...influence the terms and
results of the counting of votes."

An initial version of the bill said the State Duma wished "success to both
candidates" in the U.S. election, but the wording was later removed when some
deputies said it made no sense, since one of the two was bound to lose.


Russia's Putin Pressed By Clinton on Alleged Spy Pope
Bandar Seri Begawan, Brunei, Nov. 15 (Bloomberg) -- U.S.
President Bill Clinton urged Russian President Vladimir Putin to release
Edmund Pope, an ailing former American Navy officer accused of spying,
boosting optimism about resolving the case, a U.S. official said.

The U.S. thinks Putin understands its concerns and American officials hope
for quick action on the matter, a senior Clinton administration official told
reporters at a news briefing in Brunei following the Clinton-Putin meeting.

Pope, a 54-year-old career U.S. intelligence officer turned private
businessman, was arrested in April and charged with collecting Russian
secrets. He has been described by his lawyers as suffering from maladies that
include a rare form of bone cancer.

The case should raise warnings for U.S. companies that the reform process in
Russia still has far to go, said Charles Gati, a former policy adviser in the
Clinton administration's State Department.

``It signifies that Russia has changed less than many people in the business
community would like to believe,'' said Gati, now a fellow at Johns Hopkins
University's School of Advanced International Studies. ``So prudence, when it
comes to investment, is still fully warranted,'' he added.

A Russian government spokesman, however, insisted that the country's handling
of the Pope trial proves the depth of legal reforms.

``Things in Russia actually changed, and now not the government, but the
court, decides on court cases,'' said Yuriy Zubarev, spokesman for the
Russian Embassy in Washington.

U.S. officials have discounted the charges against Pope, and have demanded
better access to him, freedom to attend his trial and improved medical
attention to his illnesses.

Clinton, meeting with Putin as both were in Brunei to attend the annual
Asia-Pacific Economic Cooperation summit, urged the release of Pope soon on
humanitarian grounds, the administration official said.

Trial, Charges

Russia yesterday granted U.S. officials their first visit with Pope in more
than a month, State Department spokesman Philip Reeker said. U.S. officials
planned to review the visit with Pope's family before discussing it publicly,
Reeker said.

U.S. officials also are studying the results of medical tests on Pope
provided by Russian authorities, Reeker said.

Pope recently collapsed in court during his trial, which began almost a month
ago and had been suspended until today to allow further review of the
evidence against him, Reeker said, citing statements by Pope's lawyers.

Russian experts, after a review, affirmed that the documents received by Pope
are considered classified, the Russian news agency Ria-Novosti reported.

A State Department spokesman earlier this month said the U.S., while pressing
Russia for cooperation in the Pope case, felt U.S.-Russia relations were too
important to sanction Moscow over the matter.

Pope has admitted buying designs and technical details involving Russia's
high-speed Shkval torpedo system. He has argued, however, that he acted
legally and that his company, CERF Technologies International of State
College, Pennsylvania, only was interested in its civilian applications. He
faces 20 years in jail if convicted.


November 15, 2000
[translation from RIA Novosti for personal use only]
     Mikhail Kasyanov have signed a resolution indicating the
subsistence level for the third quarter of this year. This will
allow the government to assess the people's living standards
and calculate how much will be needed for social payments in
Judging by the data of the State Statistics Committee, the
amount is not at all big, which means that no considerable
increase in pensions and student grants can be expected.
     According to the data submitted to the government of the
Russian Federation by the ministry of labour and social
development and the State Statistics Committee, the per capita
subsistence minimum in Russia has reached 1,234 roubles for
Russia as a whole. Taking this magic figure as a basis,
government officials are going to assess the living standards
of an average Russian and his needs for social assistance.
True, statistics show that the able-bodied population spends a
bit more - 1,350 roubles a months. However, the pensioners and
children do with less - 930 roubles and 1,218 roubles,
respectively. These figures will be basic when the budgets of
all levels will be formed, and student grants, children's and
other allowances determined for 2001. The minimum wages and
pensions on the federal level will also be calculated on the
basis of the above figures.
     However, there is nothing significant and history-making
in the fact that the government has somewhat raised the
subsistence minimum. Under the law "On the Subsistence Minimum
in the Russian Federation", the government must revise its
amount every three months. This is what it has being doing
during the whole year, consistently raising this amount
following price rises and a growth in people's well-being. At
the same time, the number of people with incomes below the
level established by the government and the State Statistics
Committee has also been growing.
According to the data of Alexander Pochinok, minister of labour
and social development, who, being the ex-minister for taxes
and dues, knows everything about incomes, a third of Russia's
population, i.e., about 50 million people, receive less than
1,000 roubles a month. One can expect that with an increase in
the subsistence minimum to 1,234 roubles, the number of people
officially registered as living below the poverty line will
grow by 10-15 percent.
     As for the real number of people who spend all their
income on the minimum set of foodstuffs,  and other commodities
and services, which are necessary to maintain their life and
health (as is written into the law "On the Subsistence
Minimum"), neither Alexander Pochinok nor the State Statistics
Committee can count them. In Moscow, for instance, according to
the data of the Moscow Federation of Trade Unions, the
subsistence minimum in October was much higher than the
country's average, i.e., 3,080 roubles a month. An average
Muscovite spends more than 1,300 roubles on food alone, 1,060
roubles on other commodities, 500 roubles - on services, and
200 roubles - on taxes. In St.
Petersburg, according to the local statisticians' data, the
subsistence minimum in October was 1,393 roubles, in Voronezh -
771 roubles, Tambov - 693 roubles, Kursk - 745 roubles, and
Belgorod - 776 roubles.

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