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Johnson's Russia List


November 21, 2000   

This Date's Issues:   4645  4646


Johnson's Russia List
21 November 2000

[Note from David Johnson:
1. Vek: WATCH SELF INSTEAD OF AMERICA. Interview with Academician Georgy ARBATOV.
2. Reuters: OECD says Russian growth rate to double in 2000.
3. Vremya Novostei: BEAR'S RATING FALLS. (poll about parties)
4. Val Samonis: Ex-Soviet dinosaurs cannot be turned into birds that fly in the new economy of Russia.
5. Andrei Liakhov: RE: 4640-Lucas,Economist/Boris Fedorov.
6. Time: How Business Learned To Love Russian Missiles.
7. RFE/RL: Paul Goble, Compounding A Demographic Disaster.
8. AFP: Putin hints at drawn-out Russian offensive in Chechnya.
9. Reuters: Top Russian TV journalist says probe not political.
10. BBC Monitoring: Prospective governor Abramovich's plans for Chukotka viewed.
11. Interfax: Russian official warns over West's industrial, military espionage.
12. BBC Monitoring: Russian right-wing forces criticize the Kremlin on media policy, Chechnya. (Nemtsov)
13. Moscow Times: Yevgenia Borisova, Looting, Neglect Suck Chechnya Dry.
14. Moscow Times: Human Rights Official Attacks UES.
15. Financial Times (UK): Stefan Wagstyl, Moscow close to Caspian deal.
16. Reuters: Russia gripped by "spy mania" -naval eco warrior. (Pasko)]


No. 46
[translation from RIA Novosti for personal use only]
By Honorary Director of US and Canada Institute,  Academician Georgy ARBATOV
     Question: Mr. Arbatov, your recent remark about the
de-intellectualization of foreign policy gave rise to wide
repercussions. What exactly did you mean?
     Answer: Confusion in international relations continued
after the termination of the Cold War and almost nothing
happened in the world, not a single new idea appeared. However,
the end of the Cold War requires a serious consideration and
actions toward the creation of a new system of international
relations. This has not happened.
     Question: Do you mean that neither side took appropriate
     Answer: Neither this side, nor the other side. Russian
President Vladimir Putin did initiate a reduction of the
nuclear threshold the other day. The United States put forward
similar proposals. Then an idea of the National Missile Defense
System turned up there. But this is not of crucial importance.
The main thing is that talks have been wrapped up. No one is
paying attention to this fact! Talks were underway for 30 years
and they brought about tangible results. The world became more
secure and stable. A limitation system for the most destructive
types of weapons was created. It even envisions the elimination
of some of them. But this was in the past. Nothing has occurred
     What does it depend on? The quality [caliber] of the
politicians that we currently see in the international arena
has gone down. I do not want to insult anybody by giving names.
However, I can make competent comparisons because I've been
watching big politics for over 30 years. Today's politicians
would not gain from the comparison. This is relevant to our
country, to Americans and West Europeans alike. There was a
time when even small countries - no offense meant - produced
such outstanding politicians as Olof Palme, Bruno Kreisky,
Pierre Trudeau, to name but a few. I am very concerned that
such people disappeared somewhere nowadays.
     We can certainly speak about "collective intelligence" of
political elites. I've been observing the elite in our country,
in the United States and in Europe. I am confident that their
level has deteriorated sharply too. Previously people emerged
in big politics after they had acquired a lot of experience and
knowledge along the way. It is currently commonplace that
"great politicians" turn up from nowhere. The level of our
domestic decision-makers has lowered. The same is true of our
journalists, diplomats and politicians. This seriously worries
me. Public and worldwide processes have become more complex,
manifold and unlike they were in the past. We are caught
unprepared for large-scale changes. We failed to form a new,
competent elite for these processes.
     Question: Do you think it will influence the development
of the world order?
     Answer: Of course it will! Neither oil, nor gasoline, nor
kerosene are the worst deficits today. What is lacking is the
     Question: You spoke of de-intellectualization in
connection with the extraordinary events in the United States
and the vote count problems. What issues surfaced in this
     Answer: This problem also involves both sides. Remember
all the guesswork about who would be better for our country,
Republicans or Democrats? I think that it would be better for
us if there is a clever president rather than a silly one, an
experienced president rather than an inexperienced one in the
USA. I would not specify a name to avoid a precarious situation.
Otherwise Russians might be blamed for backing someone.
     I cannot give a final analysis of all nuances in the
current situation. This will take time. However, one fact is
obvious: the liberal wing of the Republican Party has totally
disappeared. It was respectable and trustworthy, it served as a
shock-absorber and even a brake to "bad deeds." Similarly to
Democrats they used to have both a very conservative and a
liberal wings. Now the latter has disappeared. This gave rise
to a disproportion in the US politics. It incidentally reflects
the same tendency for de-intellectualization in domestic and
foreign politics. A lot of other things are linked to this
     Question: Imagine that a new US president is announced
today. Will the current neurosis, the outcries and arguments
calm down instantly and things would proceed as usual? Or has
something happened in the United States that shook it so deeply
and consequences are to follow?
     Answer: I want to repeat that I do not attach much
importance to who is voted the next US president. Although
certain things depend on this, but not to the extent to make us
crazy. I pointed out on several occasions that a lot depends on
us. During the Cold War years we got used to blaming them for
everything and they shifted the blame on us. Dialogue and
interaction are needed here. The power of an example, if you
want! We could give an example by putting forward good,
constructive initiatives. They would have no other choice but
to respond to them or advance their own initiatives.  Dialogue
will begin and the negotiating process will be resumed. We will
certainly cooperate, negotiate and work on agreements.
Significant changes might follow this "election threshold."
However, we should watch ourselves instead of Americans. A lot
depends on this. Why is a "bad person" able to come to power in
our country? Only because the country is ruined economically
and remains in chaos. Why is it possible in the United States?
For the same reasons. Order must be restored in the country,
dialogue should be substantial and an end should be put to the
hateful "friend of such and such." Serious, long-term problems
that are vital and urgent for us and for humankind in general
should be discussed. There are a lot of people both in the
United States and in Russia who have not yet been appointed to
key posts but who understand this. I hope that our countries'
leaders would realize this too. Unfortunately, this has not
been the case yet.
     Question: The world is looking up to the United States in
surprise. Its system exemplified reliability, internal
flexibility, and capacity for overcoming crises...
     Answer: The US democracy, of course, won't break that
easily. We will not benefit if it breaks. I repeat: we need to
think about ourselves rather than about America. We need to
become a great power again and restore full-fledged authority. 
I am not calling for the super-power status. Nobody needs these
obsolete imperial principles. We have to become a truly great
power, that is influential and makes an impact on the world's
development and generates ideas. The Cold War ended not because
of the US strength but because the Soviet Union's new leader
promoted new ideas in the international arena.


OECD says Russian growth rate to double in 2000
MOSCOW, Nov 20 (Reuters) - The OECD said on Monday that Russian economic
growth should more than double this year, though it will taper off slightly
in 2001 and 2002.

The Paris-based Organisation for Economic Cooperation and Development, in its
bi-annual economic outlook, forecast real Russian GDP growth at 6.5 percent
this year and 4.0 percent in 2001 and 2002.

This compares with GDP growth in 1999 of 3.2 percent.

The OECD also forecast inflation this year of 22 percent falling to 15.0
percent in 2001 and 2002. Inflation in 1999 was 36.7 percent.

"Current positive trends in output, investment fiscal consolidation and
macroeconomic stability are sufficiently strong to carry into at least early
2001," the report said.

The report added that the pace of industrial growth is likely to slow because
of pressure for the real appreciation of the rouble and much-needed increases
in domestic energy and transportation prices.

"Medium term prospects continue to depend critically on key structural
reforms, including taxation, fiscal federalist relations corporate governance
and competition," it said.

"The current political and economic situation presents a major opportunity
for Russia to make progress in this area. The recently adopted comprehensive
economic programme of the government, and a number of recent initiatives to
amend or pass new laws are important first steps in this direction."

It said that high export growth prices and growth in export volumes, coupled
with only a modest recovery in import demand, have significantly increased
Russia's current account surplus.

The report forecasts a current account surplus of 18.0 percent of GDP this
year, and 9.0 percent next year. In 2002 it sees a current account surplus of
4.0 percent of GDP.


Vremya Novostei
November 20, 2000
[translation from RIA Novosti for personal use only]
Oleg SAVELYEV, VTsIOM press-service
     On October 27-30, 2000, the All-Russian Public Opinion
Research Center (VTsIOM) conducted a poll among 1,600 Russians
according to a selection representative of the adult population
of the Russian Federation. Answers to one of the questions are
given below as a percentage of the total number of respondents,
together with the data of a similar VTsIOM poll conducted in
late May this year. The statistical error of such polls is
within 4%.
     If elections to the Russian State Duma were held next
Sunday, for which of the following parties would you vote or
would you come to elections and vote "against all"? *
                                                                   - May     October
1  The communist party, led by G. Zyuganov    33        37
2  Unity, led by S. Shoigu                                 26        21
3  Union of Right Forces, led by B. Nemtsov 
and I. Khakamada                                              9        11
4  Yabloko, led G. Yavlinsky                              8          9
5  LDPR, led by V. Zhirinovsky                          4          6
6  Women of Russia, led by A. Fedulova             4          4
7  Fatherland, led by Yu. Luzhkov                       6          3
8  The movement Russia, led by G. Seleznev        -           2
9  Agrarians, led by N. Kharitonov                       1          1
Other                                                                   1          1
Against all                                                            4          3
- * The answers are given only of those who intend to take part
in the voting and who have chosen a party or a bloc in the
decreasing order of the frequency of mentioning these parties.


Date: Mon, 20 Nov
From: Val Samonis <>
Subject: Ex-Soviet dinosaurs cannot be turned into birds that fly in the new
 economy of Russia

I am glad to see more people (see E. Dyson/JRL4642) arguing what I have
been arguing for quite a long time (jumpstarting digital economy in
Russia). The window of opportuninity provided by high oil prices will soon
be closing so the time for action is now or never. Sure, such action would
result in a "dual economy" but this is nothing new (in several dimensions)
and hardly avoidable in Russia or other developing countries for that
matter. It is the highest time to realize that ex-Soviet dinosaurs of
enterprises cannot be turned into birds that fly in the new economy of
Russia. Let them die in a transparent and orderly way via bankruptcy or
other exit channels; any valuable pieces left will be picked up by the new
economy birds that can fly.

Is there a such a political will, courage, and vision in Russia and/or
international development organizations?

Val Samonis
The Center for European Integration Studies (ZEI Bonn)
and SEMI Online


From: "Andrei Liakhov" <>
Subject: RE: 4640-Lucas,Econmist/Boris Fedorov
Date: Mon, 20 Nov 2000

On Lucas and Fedorov.

Mr.Fedorov's father may be of humble Soviet origins, but Mr.Fedorov's past
is certainly not. And he should be described as banker turned politician
turned banker when he flopped.

He graduated from a very prestigious institute in Moscow, was trained as a
hard currency trader at the Vnesheconombank, worked closely with
Mr.Geraschenko during late 80-ies actively participating in, inter alia, the
famous change of 100 Rbs. banknotes in 1990 and other equally dubious
Geraschenko "exploits" of that time.
As a reward he was sent to London and became the senior Russian person at
the EBRD where, using his old connections, arranged for the EBRD to manage
Vnesheconombank's frozen assets in 1991 and 1992. After various agencies
started investigations into mishandling of the EBRD's funds which ultimately
resulted in very public sacking of the then EBRD head, Fedorov swiftly
retreated (or was retreated) back to Moscow where in contrast to startling
Gaidar incompetence as a PM, Fedrov made a positive impression as a Finance
Minister. When he was leaving the Ministry of Finance he quite publicly
stated that he would like to take the post of Gazprom's Chairman and would
do everything in his power to achieve this.
UFG is not the principal market maker for Gazprom shares - there is no such
single broker (definitely not of UFG's financial strength!) who can be
titled "the principal market maker for Gazprom shares".
UFG is using a very peculiar provision of Gazprom's charter which severely
restricts free dealing in them and in practice requires a custodian for
effective trading in them (even in Russia) to keep Fedrov on Gazprom's
Furthermore, although there are two classes of Gazprom shares - Ordinary and
Preference Shares, but that is in line with what every other large Russian
company does.
ADR is exactly what it stands for - i.e. a receipt for X number of shares
kept in custody (by BONY by the way) at a reputable US investment bank.
Obviously the price of 1 ADR is more than the price of one underlying share
- simply because one ADR represents X (i.e. SEVERAL) Gazprom shares. The
only additional value of ADRs is that it allows US investors (depending on
the level of ADR either QIBs or retail) to invest into securities which
otherwise would be unaccessible to them and somewhat mitigate the associated
risks (by virtue of the custodian having taken risks of title on itself).
Gazprom, Lukoil and UES regularly publish annual, semi-annual and quarterly
reports distributing these to all the shareholders (those who hold Gazprom
shares through custodian arrangements receive them via the relevant (Russian
or BONY) custodian). The level of disclosure is absolutely the same (and by
virtue of ADR's listing is NYSE relevant requirements compliant) as the
reports differ only in the language.     

That, I hope, will shed a slightly different light for JRL readers on
Edward's piece about Fedrov (who by the way could be a very persuasive and
charming person when he chooses to be one).

Besides one of his old friends is with Boston Globe.....
As they say in Moscow nowadays - Dig it?


November 27, 2000
How Business Learned To Love Russian Missiles
By Jeffrey Kluger

Russia's SS-18 missiles seemed scarier when they were pointed at Washington
and Wichita, Kans. Like so much else in the onetime land of Lenin, however,
the big guns have gone Big Business. Last week the U.S.-based One Stop
Satellite Solutions (O.S.S.S.) announced that it had signed an agreement
with the Russia-based Kosmotras to use decommissioned SS-18s as launchers
for commercial satellites.

Perhaps appropriately, the rockets from the former classless society will
loft decidedly proletariat payloads. O.S.S.S. hopes to mass manufacture
satellites known as CubeSats, boxes measuring 4 in. a side that can be
bought and launched for less than $45,000. Up to 100 CubeSats could go
aloft on one SS-18 and be used for anything from experimental sensors for
university science students to Internet relay stations to resting places
for the ashes of a loved one.

It will be a year before the first of the minisatellites take to space, but
the companies stand to make up to $4 million per fully loaded rocket - a
nice payday for a missile designed for Doomsday.


Russia: Analysis From Washington -- Compounding A Demographic Disaster
By Paul Goble

Washington, 20 November 2000 (RFE/RL) -- Russian President Vladimir Putin's
suggestion that increased immigration from former Soviet republics could help
solve Russia's demographic crisis may trigger new problems in those
countries, in Russia itself as well as in relations between the two.

Speaking in the Siberian city of Novosibirsk on Friday, Putin said that "we
could have a perfect opportunity to attract labor resources from the former
USSR through immigration."

He added that Moscow would have to rigidly control where such migrants would
settle. "In our country, the immigrants settle on the Black Sea coast and
live in Sochi," the Russian leader said, when in reality such people are most
needed in Siberia and other regions.

And while Putin was not specific, he almost certainly hopes that this
immigration will consist primarily of some of the more than 20 million ethnic
Russians who remain in the 11 former Soviet republics and three Baltic states
rather than of non-Russians from these countries.

But regardless of whether that is the case -- and Putin's remarks elsewhere
strongly suggest that it is -- his proposal now highlights both the
seriousness of Russia's demographic situation and the political risks he is
willing to run to try to address it.

The extent of Russia's demographic debacle was outlined on the same day by
Russian Labor and Social Development Minister Aleksandr Pochinok. He told the
Duma that the country's demographic situation now threatens not only economic
progress but also national security.

The population of the country, he said, has fallen by six million since 1992
and could fall 7.2 million more by 2015 if current trends continue. In that
event, Pochinok added, Russia would fall from the seventh-largest country in
the world in terms of population to the fourteenth.

He said that the extremely high death rates and low birth rate in Russia are
"incomparable" with the demographic situation elsewhere in Europe, and he
noted that in the last year, average male life expectancy in Russia fell
below the pension age "for the first time ever."

The resulting aging of the population, Pochinok continued, means that Russia
may soon face not unemployment but a lack of workers for the economy. And
such a shortfall would represent an additional restriction on Moscow's
ability to maintain a sizable military force.

Pochinok told the parliament the Russian government has "worked out" a
demographic policy for the future to change these negative trends, but he
gave few details. Consequently, Putin's remarks on the same day take on
greater importance as a clue to future Russian policy.

But to the extent they do, the Russian president's words point to serious
problems ahead across the region. The non-Russian countries could be the most

If a large number of ethnic Russians in these countries -- almost all of whom
are citizens of these states -- were to respond, that would both disorder
their economies and exacerbate ethnic tensions, possibly leading some to view
ethnic Russian communities there as disloyal.

And if a large number of ethnic non-Russians were to move to Russia,
something Putin does not appear to want, that too could hurt the economies of
these states, especially given Moscow's exit from the CIS visa free regime.

But Russia too could face numerous problems. Since 1991, Moscow has generally
discouraged any Russian return, not only because of the lack of housing and
jobs for such immigrants but also out of a desire to use its "compatriots" as
a political lever in these states.

If large numbers of ethnic Russians did return, that would put a burden on
the country's housing stock and challenge the government's ability to ensure
that the immigrants went where Moscow would like them to go.

But if sizable numbers of non-Russians were to enter the country, that would
almost certainly exacerbate ethnic tensions in Russia itself and possibly
lead to a new outburst of extreme nationalism.

Russian politicians, such as Vladimir Zhirinovsky and Moscow Mayor Yuri
Luzhkov, have played on the anger many Russians feel toward "persons of
Caucasus nationality." And opinion polls show that relatively few Russians
would welcome even more such "Gastarbeiter" in their midst.

And because of the consequences such immigration would have in both the
non-Russian countries and in Russia itself, such a policy almost certainly
would cast a shadow on relations between Moscow and the 14 other states

For most of the last decade, both Russian and non-Russian leaders generally
have sought to promote the integration of all those living on the territories
of their countries as the best means of preserving both internal stability
and ethnic accord.

But because the situation in Russia has become so grave, Putin now appears
prepared to move in a very different direction, one that could compound that
demographic disaster into a political one as well.


Putin hints at drawn-out Russian offensive in Chechnya

MOSCOW, Nov 20 (AFP) -
President Vladimir Putin said Monday that Russia must avoid seeking "victory
at any cost" in Chechnya, raising the specter of allowing the brutal 13-month
offensive in the rebel republic to drag on.

Putin's comments were in stark contrast to his promise during the spring
presidential campaign to deliver a lighting strike that would crush Islamic
rebel fighters in the volatile North Caucasus.

The Russian leader warned the army was no longer combat-ready and would have
to be radically restructured if it was to have any chance in future of
winning the second Chechen war.

Some 2,600 hundred Russian soldiers have already been killed in the
offensive, said Putin before lashing out at senior generals for infighting.

"We cannot afford even the slightest crack to appear between the military
branches," said Putin. "We do not need a victory at any cost.

Focusing on Russian army reform, Putin declared that the number of senior
military commanders who have had any previous battlefield experience "could
be counted on the finger of one hand."

He added that less than one third of field commanders had any secondary

"The current state of the armed forces does not correspond to either the
goals or the size of the tasks set before them," Putin said.

Military analysts intepreted Putin's address, made at an annual conference of
top Russian commanders, to mean that he was preparing Russians for a long
drawn-out campaign in Chechnya.

"I am concerned by Putin's statement. The longer the situation remains
unresolved, the more casualties, including those among civilians, we will
carry," said Yury Gladkevich of the AVN military news agency.

"Putin does not now seem prepared to take measures that will quickly end the
war," he said.

In the past, the Russian leader had often vowed he would swiftly rein in the
breakaway republic, on one occasion even threatening -- in criminal
underworld slang -- to "wipe out (the rebels) while they are sitting in the

Those comments played well with a public eager for stability and still
frightened by a wave of apartment block blasts that killed 292 people across
Russia in September 1999, and which authorities blamed on Chechens.

However since launching a ground assault the following month, Moscow has
struggled to secure a political solution that might allow it to stamp
authority on the enclave.

A recently elected Chechnya deputy to Russia's State Duma lower house of
parliament told AFP that Putin had personally assured him Moscow would never
let the republic to break free.

"I met Putin, and he reassured me that Chechnya will always remain a Russian
subject," Aslambek Aslakhanov said.

And in a local television address aired late Sunday, Akhmad Kadyrov -- the
top pro-Moscow official in Chechnya -- accused separatist President Aslan
Maskhadov of being the head of a criminal and illegitimate state.

"He remains the chief organizer of terrorist acts, and all responsibility for
terrorism lies on him," Kadyrov said.

However, the Russian military was later forced to deny that Kadyrov himself
had narrowly escaped injury when his entourage came under fire from an
unidentified source.

Both Russian troops and separatist Chechen rebels -- who refuse to recognize
the Moscow-appointed government and have put a price on Kadyrov's head --
have been known to attack the chief administrator.

With guerrilla warfare spreading across the North Caucasus, Moscow-appointed
officials have become one of the separatist rebels' prime targets.


Top Russian TV journalist says probe not political
By Ron Popeski
MOSCOW, Nov 20 (Reuters) - One of Russia's most prominent television
journalists appeared on Monday before prosecutors investigating the affairs
of a big media empire and said he had been treated politely and without any
political undertones.

The summons served on Yevgeny Kiselyov, anchor for private NTV's flagship
analytical programme Itogi (Summing Up), took place against the background of
a battle pitting authorities against media bosses who grew rich after the
fall of communism.

The first journalist to be summoned in connection with attempts to rein in
bosses known as "oligarchs," Kiselyov was answering questions in a probe into
the security service of media empire Media-Most.

The hearing had been seen by some as a pointer to press freedom under
President Vladimir Putin.

The Media-Most security service is alleged to have spied on other companies
and on some government agencies. Media-Most says such a security service has
never existed.

Kiselyov told reporters outside the prosecutor's Moscow office that questions
related to how NTV, under the Media-Most umbrella, had acquired documents for
items broadcast three years ago about the disputed privatisation of the
aluminium industry.

Kiselyov said the prosecutor questioning him for three hours was "polite and
good-natured and wanted to get on with matters."

"I am not inclined to believe that our conversation had any political
undertone about NTV or me," he said. "It seems to me that the prosecutor's
office is trying to prove that something is wrong to justify the case. I
firmly doubt this is so."

The prosecutor, Vladimir Danilov, told Interfax news agency he had no more
questions for Kiselyov for the moment.


An arrest warrant has been issued for Media-Most's chief executive, Vladimir
Gusinsky, on embezzlement charges. Another media boss, Boris Berezovsky, has
been summoned for questioning in a separate case. Both remain abroad.

Some analysts say proceedings have gone beyond the issue of press freedom and
are a matter of trying to bring under control opposition to the Kremlin and
its plans to centralise authority.

Kiselyov expressed shock that the political climate in Russia had changed to
allow such a case to proceed.

"If laws are observed in this country, I am not concerned, but laws are very
often broken by the people who are supposed to enforce them," he said in

"A year ago, I would never have imagined that criminal proceedings could be
opened against Mr Gusinsky...that certain people could change so much that I
would not recognise them."

Kiselyov's colleagues earlier said the hearing might be a pointer to press
freedom under President Vladimir Putin.

"There are two versions to be considered. One is that they are trying to
revive this old story about the security service, which is nonsense and can
produce nothing," Sergei Parkhomenko, editor of Media-Most's weekly, also
called Itogi, told Reuters.

"The other is that we may be seeing a new stage in applying pressure and
intimidation to editors and journalists."

Kiselyov's summons was made public two days after NTV all but lost its status
as Russia's only independent national television channel when state-dominated
natural gas monopoly Gazprom said it had become the station's largest


Kiselyov, NTV's general director, enjoys one of the highest public profiles
in Russia. His Sunday evening programme has frequently been critical of Putin
and his administration.

Media-Most's security service was the reason given for a search conducted at
the group's office earlier this year by armed and masked police.

News on Friday that Gazprom had become NTV's largest shareholder marked the
end of a battle to control the station, the most influential information
source outside Kremlin control.

Gusinsky lost control of his empire after being forced to sell shares to
Gazprom to pay debts. Gazprom does not have enough voting shares to sack
staff at NTV, and Kiselyov has said this would mean the station would retain
editorial independence.

Gusinsky had battled to keep his grip on Media-Most, saying the Kremlin was
threatening him with prosecution as a way of stifling criticism, and using
the debt to Gazprom as a lever to win control of his media holdings. He was
briefly jailed in June. Gazprom said it only wanted to get its debts paid.

(Additional reporting by Nathan Pettengill)


BBC Monitoring
Russia: Prospective governor Abramovich's plans for Chukotka viewed
Text of report by the Russian newspaper 'Nezavisimaya Gazeta' on 18th

Despite a squally wind which has been buffeting Chukotka throughout
November, Roman Abramovich and his team managed to reach Anadyr on a
special flight. At the electoral commission for the Chukotka Autonomous
Area he was presented with his credentials as a candidate for the
governorship of Chukotka. Roman Abramovich held a number of meetings with
the Area centre voters. He answered most of the questions. Judging by the
answers, he will seek, if elected to the top job, to conduct a pragmatic,
well-regulated economic policy in the Area. The core of specialists
currently working in the Area's administrative bodies will be retained, but
specialists will also have to be brought in from the country's central
regions. If they are going to work productively in the Far North, there
will have to be financial incentives. If he is elected governor of
Chukotka, Abramovich intends, first and foremost, to develop the
gold-mining sector and make more rational the use of local biological
resources. He does not intend to invest his own capital in the development
of Chukotka because it is unprofitable; he can use it to greater advantage
in other regions of the country. Time will tell whether other investment
will be attracted. He intends to develop cooperation with Alaska, but is
not making optimistic plans. So far only small oil stocks have been
discovered in Chukotka, so it is advisable to use them for internal
purposes. When he was asked what prompted him to run for governor of
Chukotka, Roman Abramovich's reply was brief: "The electorate asked me." If
he is elected governor, he would like to see someone from his team take the
vacant seat of State Duma deputy for Chukotka. The candidate plans to visit
Bilibinskiy District during his present visit to Chukotka.


Russian official warns over West's industrial, military espionage

Moscow, 20th November: A parliamentary deputy called on Monday [20th
November] for a better system to protect Russia's defence industry secrets.

"Russia does have something to be proud of today in the military
technological and scientific spheres and something to protect it from
uninvited guests. The latter are making use of our openness and economic
difficulties, and sometimes of the venality of individual figures in the
military industrial complex, and seek to get cheap access to Russian
know-how, technologies that are our national asset," Frants Klintsevich,
deputy leader of the Unity group in the lower house, has told Interfax.

"At the same time, the system of protection of secrets is imperfect today,
the gaps in legislation at times offer the opportunity to dodge prosecution
to those who are trying to profit on the work of many generations of
scientists and engineers," he said.

"Geopolitical rivals of Russia are building up efforts to get hold of
military technological and scientific secrets," Klintsevich said.

"Spy mania is unacceptable, but a serious, thoughtful attitude to the
problem of defence of achievements of Russian science and engineering
thought is the order of the times and an urgent need," he said.

"The everything for sale principle, the time of total sloppiness and the
devil-may-care attitude to the defence of state secrets must be replaced,
and are being replaced, by the principle of reasonable state protectionism.
A time has come of tighter self-discipline and organization for members of
the military industrial complex," he said.

"The freedom of access to open information resources is incompatible with
general laissez-faire. The Russian side stands for the comprehensive
development of mutually beneficial economic cooperation with the outside
world, but it is against banal industrial and military technological
espionage. A spy must be in prison and must be thinking about his distant
homeland. That is my opinion. The double standards principle is
unacceptable as far as espionage goes," he said.

In comments on the case of US national Edmond Pope, currently on trial in
Moscow, Klintsevich said: "The United States is itself fighting in a harsh
and uncompromising way industrial and other espionage, the intelligence
activities of other countries, including their own NATO allies. The
attempts to put pressure on Russia in connection with the Pope case are

Nor, Klintsevich said, is any pressure on a law court acceptable in a
democratic state. The supposed practice of using lawyers for the purpose
"is wrong and must be stopped", he said.


BBC Monitoring
Russian right-wing forces criticize the Kremlin on media policy, Chechnya
Source: 'Kommersant', Moscow, in Russian 18 Nov 00

The leader of the Union of Right Forces (URF) in the Russian State Duma
(lower house), Boris Nemtsov, has accused the Kremlin of wanting to have
total control over television and of displaying "childish obstinacy" in
continuing "the carnage" in Chechnya. Nemtsov was addressing a conference
of the URF leadership in Moscow Region and effectively put the URF, which
has decided to become a political party, into "tough opposition to the
federal authorities". The following is the text of a report by the Russian
newspaper 'Kommersant' on 18th November:

The three-day conference of the leadership of the Union of Right Forces
[URF] began in Moscow Region yesterday evening [17th November]. The URF
believes it is time for it to become a political party, and the movement's
[State] Duma faction leader, Boris Nemtsov, announced that "on many
fundamental issues" the URF is "in tough opposition to the federal

Perhaps this is the first time since the Duma scandal involving the
"collusion" between the pro-Kremlin Unity and the Communists early this
year that the URF has criticized the authorities so fiercely. Yesterday at
the Moscow Region conference of right-wingers, Mr Nemtsov accused the
Kremlin of wanting "to establish total control over television" and also
stated that "the authorities are continuing the carnage in Chechnya with a
kind of childish obstinacy".

It is true that it is not known how the right-wingers' informal leader,
Anatoliy Chubays, who, heading the Unified Energy System of Russia Russian
joint-stock company, is deeply embedded in the present state structure and
depends directly on the Kremlin's goodwill (in restructuring the Russian
joint-stock company, for instance), will react to the statement that the
URF is in part withdrawing into the opposition. Mr Chubays is also taking
part in the conference of right-wingers which opened in Moscow Region
yesterday and which is designed to turn the URF into a political party. But
most of the URF leadership (and the rank and file to an even greater
extent) shares the position stated yesterday by Mr Nemtsov and it is
evidently that position that is the foundation of the future party's

In addition, the right-wingers have to decide on a key issue: how to build
the party's strict vertical structure. However laughable it may seem, to
judge by the words of Viktor Pokhmelkin, the faction's deputy chairman, the
liberals will take their example from the Communists: "The CPRF [Communist
Party of the Russian Federation] is created in such a way that, even when
the leader changes, the structure does not suffer, so precisely is the
vertical structure and system of cells set up there." Yabloko's experience
is deemed to be flawed: "The organization of the leader type is bad because
then a blow is struck against Yavlinskiy the entire party suffers."
Nevertheless, the URF leaders have so far not had second thoughts about
going to the next elections with Yabloko: According to the right-wingers'
calculations, this could bring in up to 100 seats.

Mr Nemtsov admitted to `Kommersant' that fateful decisions are hardly
likely to be made in Moscow Region - "this is just the start of the
process". Nevertheless the right-wingers are now acting according to the
Leninist principle of "yesterday was too early and tomorrow will be too
late". The point is that, as `Kommersant' has already reported, under the
draft law prepared by the Central Electoral Commission with the
participation of the presidential staff, only political parties and not
movements will be able to take part in the elections. Of course the law
will be adopted no earlier than next year and after that some further time
will probably be allotted for parties to re-register. However, considering
the tense relations between Nemtsov's faction and the Kremlin, which will
probably not improve after his sharp statements yesterday, the URF can
expect any surprises from the authorities.


Moscow Times
November 21, 2000
Looting, Neglect Suck Chechnya Dry
By Yevgenia Borisova
Staff Writer

Oil, metals and other valuables are being spirited out of Chechnya in
enormous quantities by thieves f many in federal military uniform f while a
trickle of Russian government funding headed back into the region seems
mostly to have gone astray.

Officials of Akhmed Kadyrov's Chechen administration and officers of the
Russian Interior Ministry agree that the looting of Chechnya, which has been
underway for years, today is raging anew.

"The stealing of the republic is in full swing," said a report written by
Vasily Boriskin, who heads the energy department of the Kadyrov
administration, for federal authorities. Shamil Beno, head of Kadyrov's
office in Moscow, agreed. "Looting is going on on a daily basis," he said.

Boriskin's September report said shipments of metals and oil leave the
republic on military transport, often under guard by federal troops. The
report put the damages this year to the energy sector of Chechnya alone at
around $2 billion.

"Things have not gotten any worse since September [when the report was
issued], but they haven't gotten any better either," Boriskin said Monday in
a telephone interview from Gudermes.

Boriskin's account was partially backed up last week by General Yevgeny
Timlev, a top Interior Ministry official, who told Vremya Novostei that
"several interesting cases involving massive theft of Chechnya's oil-drilling
equipment are now under way." Timlev told the newspaper that among those
under investigation was an unnamed top military official.

Meanwhile, the Finance Ministry has allocated only 2.268 billion rubles ($82
million) this year to keep Chechnya afloat f a third of what Chechnya was
supposed to get, according to a plan for reviving the region approved Aug. 29
by the Cabinet. In a statement, the Finance Ministry said that the remaining
5.7 billion rubles ($206 million) "will be allocated fully by the end of the

Meanwhile, teachers, doctors and police in Chechnya have gone unpaid for
months. Most hospitals are without medicines and most buildings without heat
or light, as gas pipes and power lines are taken down and stolen as fast as
they are put up. Not a single apartment block has been reconstructed.

"Our families are hungry, there is nowhere to live and for many months we
have not been getting our wages," said a teacher at a protest last week in
Chechnya broadcast by NTV television.

Teachers last week went on strike indefinitely. Khizir Gerziliyev, head of
the Chechen Teachers Union, told Interfax that some had not been paid since

A Finance Ministry official, who asked not to be named, said there had been a
delay in sending federal funding because of bureaucratic glitches created
when the Kadyrov administration replaced the previous one of Deputy Prime
Minister Nikolai Koshman.

But while the Finance Ministry said that 25.8 million rubles ($930,000) had
been transferred to the Kadyrov administration to cover its expenses, Beno
said it had not yet arrived.

"We are waiting for it. We know that the order to transfer the money was at
last given on Oct. 27," he said. "But we also know that it does not take two
days for money [wires] to go through. Maybe the money goes to Siberia first?
In a big suitcase? And by foot?

"Even when they do arrive, these allocations are just laughable," Beno
continued. "Look at the funds allocated for refugees of 50 million rubles.
Let's say there are only 100,000 displaced people within Chechnya. That
equals 500 rubles per person. That sum must cover food, tents, infrastructure
and medical care."

Beno said with such funding each refugee within Chechnya would be able to
receive a mere 50 grams of bread a day. "Even in besieged Leningrad [during
World War II], people were eating better," he said. "It's idiocy, just

As a result, many refugees now outside the borders of Chechnya have no plans
to return home, preferring instead to shiver in their thin tents in

Another result of such poverty is that anyone with arms f including the
police themselves f is a potential looter.

"Several months ago I wrote to the defense minister about the
irresponsible attitude toward the people who fought in this war," said Grozny
Mayor Beslan Gantamirov in an interview earlier this month with Versia
newspaper. "These people are systematically involved in criminal activity.

"Imagine 3,500 people with weapons are thrown out onto the streets. They are
not paid wages, they are not being fed. Thank God they just stole a piece of
energy equipment and sold it," he said, adding with a laugh, "It is even

Good or not, it is certainly happening on a daunting scale.

Consider Grozneft, an oil company of obscure origin and status, that was
recently managing the entire republic's oil complex. According to Boriskin's
survey of looting in Chechnya, "Ten thousand tons of pipe worth about
$150,000 were stolen [from Grozneft] by local criminals accompanied by the
[federal] military."

Or consider the oil extraction in Pravoberezhnoye, where employees tried to
stop thieves from siphoning oil off of one of their wells. "Firing by the
military prevented them from getting close to the thieves who, once they
finished their work, left without any problems in the direction of Argun,"
Boriskin's report said.

"Restored power lines are getting stolen," the report continues. "Thus one
power line was restored by energy workers three times, and three times was
stolen. Overall more than 45 kilometers of power lines built anew have been

Beno said thieves drive cranes up to ruined factories and enterprises, lift
all sorts of metals onto trucks and then drive the trucks away.


Moscow Times
November 21, 2000
Human Rights Official Attacks UES

Human rights commissioner Oleg Mironov has appealed to the Prosecutor
General's Office to "check out the legality of cutting off electricity to
citizens who pay for it," Interfax reported Monday.

Mironov, the people's ombudsman, is unhappy with the steps taken by national
power grid Unified Energy Systems in response to a protest letter he sent
Oct. 31. Mironov said in that letter that when UES cuts off power to debtors,
it violates the constitutional rights of citizens and punishes all the
organizations and people that are hooked into the same section of the energy

In response, UES board member Andrei Trapeznikov said that any
"constitutional violations" aren't the fault of UES, but the fault of paying
agents, who mediate between various UES subsidiaries and its consumers.

Interfax quoted Mironov as saying that often an entire apartment building is
starved of electricity because a single company located in the building fails
to pay its bill.

"The Constitution says that the Russian Federation is a social state. A state
where old women, men and children do not have light or heat, where maternity
hospitals, kindergartens and schools have their power cut off, cannot be
named 'social'," said Mironov.

UES spokesperson Yury Melikhov said Monday that UES agrees with Mironov about
the power cuts, but he was appealing to the "wrong addressee."

UES only supplies energy to its subsidiaries in the regions, Melikhov said,
putting the blame for power cuts on UES' regional subsidiaries, which are
responsible for distributing the energy.

The nation's electric grid was only designed to distribute energy, not to
sell it.

As a result, there is no way to cut off a single user for nonpayment without
cutting off everyone else on the same grid section.

Analysts said Monday that Mironov's protests are largely symbolic and were
unlikely to change anything at UES.

"We do not take seriously the appeal of Mironov f it does not offer any
threat to UES," said United Financial Group's Mikhail Seleznyov.


Financial Times (UK)
20 November 2000
Moscow close to Caspian deal
By Stefan Wagstyl, East Europe Editor, recently in Baku

Russia and Azerbaijan are close to an agreement on the legal status of the
Caspian Sea in a deal which would reinforce the legal position of billions of
dollars of planned offshore oil investment.

Vladimir Putin, Russian president, and Heydar Aliyev, his Azeri counterpart,
could sign an initial agreement as early as next week during a visit by Mr
Putin to Baku.

Viktor Kalyuzhny, Mr Putin's envoy for the Caspian, said in Baku recently
that Russia and Azerbaijan were narrowing their differences. Rauf Huseynov,
an official on Mr Aliyev's staff, said: "The indications are positive" for an
agreement signed during Mr Putin's visit.

Russia hopes that an agreement with Azerbaijan, following a similar bilateral
deal struck two years ago with Kazakhstan, could pave the way to a
comprehensive treaty binding all five littoral states - Azerbaijan, Iran,
Kazakhstan, Russia and Turmenistan.

Such a treaty could improve the legal security of the international oil
companies seeking oil and gas under the Caspian, promote environmental
protection and possibly lead to co-ordinated measures against sturgeon

BP Amoco, which is leading the Azerbaijan International Operating Company, a
consortium active in Azeri waters, said: "An agreement would make life more
comfortable for us."

While the company was not operating in any disputed fields, it was
nevertheless encouraging the government to reach a settlement to avoid
potential future problems.

In the absence of new agreements, the Caspian is governed under international
law by the Soviet Union-Iran agreement of 1921. However, the creation of new
states in the last decade has raised new issues - notably the precise
demarcation of seabed boundaries, a vital consideration for oil and gas field

In the early 1990s, Russia sought a treaty under which the seabed would be
divided into national sectors but the sea would be managed in common. Russia
argued that joint control of the waters was essential to cope with problems
such as mobile populations of fish, especially the valuable stocks of
sturgeon, the source of caviar.

However, Azerbaijan and the other new states saw Russia's proposal as an
attempt to extend Moscow's influence beyond its territorial waters.
Azerbaijan argued that seabed and waters should be divided into sectors.

However, two years ago, as the pace of oil and gas exploration increased,
Russia and Kazakhstan struck a bilateral deal, dividing only the seabed, as
Russia sought. Now, Azerbaijan seems to be preparing to accept a similar

Russia hopes that if Azerbaijan signs an agreement, other states will follow
suit. However, problems abound. While the seabed boundaries between Russia
and Kazakhstan and between Russia and Azerbaijan are not seriously disputed,
there is a long-running argument about the boundary between Azerbaijan and

Meanwhile, Iran disputes the whole basis of dividing the sea, which is based
on internationally-agreed conventions involving extending land borders into
the sea. Unfortunately for Teheran, this gives Iran the smallest share, just
13 per cent. Iran is therefore seeking a split in which each state gets 20
per cent, something the others reject.


Russia gripped by "spy mania" -naval eco warrior
MOSCOW, Nov 20 (Reuters) - Former Russian navy captain turned eco-warrior
Grigory Pasko said on Monday that Russia was gripped by a "spy mania" driven
by the need of its secret services to justify their inflated numbers.

Pasko also accused President Vladimir Putin, a one-time KGB spy and former
head of the FSB domestic intelligence agency, of putting the rights of the
state above those of ordinary citizens.

He made the comments at a news conference to promote his book, "Case No 10:
Grigory Pasko against the FSB," written during his 18-month detention and
trial on treason charges linked to his ecological activities.

The ex-naval officer was arrested and charged in November 1997 after handing
Japanese journalists evidence that the Russian navy had dumped toxic waste in
the Sea of Japan.

After a five-month trial in a closed-door military court Pasko was cleared of
treason but convicted of the lesser offense of abuse of office and was freed
under an amnesty.

But he insists the material he handed over was already in the public domain
and has appealed his conviction. A military appeals court is due to issue its
ruling on Tuesday.

"Tomorrow's decision will determine which way the justice system in Russia
will develop, whether it will be punitive and repressive, or democratic,
defending rights and freedoms," he said.


"Everybody knows that there's a wave or epidemic of spy mania or spy frenzy
sweeping over Russia, and if you look at history you can find an
explanation," he said.

"Suddenly the FSB have started realising that they have to show society they
are earning their keep, that their huge numbers are justified.

"Putin for some reason often...speaks of the interests of the state,
forgetting that the main interest of the state is people."

Also present at the news conference was Alexander Nikitin, a submarine
captain who in September won the final round in a five-year legal battle
against treason charges linked to his own ecology activities.

Nikitin had provided Norwegian environmental group Bellona with details of
the radioactive pollution in the Arctic seas.


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