November 27, 2000   

This Date's Issues:   4654 • 4655

Johnson's Russia List
#4655
27 November 2000
davidjohnson@erols.com

[Note from David Johnson:
1. Reuters: U.S. urges Russia to fulfil arms commitments.
2. Trud: Andrei Stepanov, IT SMELLS OF COLD WAR IN THE USA.
3. BBC Monitoring: Russian leader tells judges courts too slow and expensive.
4. David Aserkoff: RE: 4653-Stack/Economy.
5. Edward Lucas: Protectionism, xenophobia and paranoia in Russian attitudes to the foreign press.
6. Wall Street Journal: Guy Chazan, Russian ISP Defends Privacy Rights, Challenges Government Snooping.
7. Erin Powers: Just in time for the holidays: 36 new PONARS memos.
8. PONARS: Dmitri Glinski-Vassiliev, The Essence of Putinism: The Strengthening of the Privatized State.]

******

#1
U.S. urges Russia to fulfil arms commitments
By Richard Murphy
 
VIENNA, Nov 27 (Reuters) - The United States called on Russia on Monday to
fulfil pledges it made a year ago to allow an international mission into
Chechnya, withdraw troops from Moldova and Georgia and implement cuts in
conventional forces.

Speaking at a meeting in Vienna of foreign ministers from the Organisation
for Security and Cooperation in Europe (OSCE), U.S. Secretary of State
Madeleine Albright said it was tragic that key issues still remained
unresolved.

OSCE heads of government meeting in Istanbul last November called for a
political settlement in Chechnya with international help. But despite
Russia's pledges, an OSCE "Assistance Group" has still not returned to the
troubled region.

"The OSCE can play a valuable role on the ground in Chechnya," Albright
told the 55-nation security and human rights watchdog. "I call upon the
Russian government to agree to an early date for the group's return."

At last year's Istanbul summit, leaders adopted a landmark charter
proclaiming that conflicts in one state are the legitimate concern of all.

They also signed a major new arms control treaty for Europe, updating
limits on armed forces and heavy equipment set in the dying days of the
Cold War in 1990.

Albright said the Conventional Forces in Europe (CFE) arms control treaty
had been made possible in part because of important commitments undertaken
by former Russian President Boris Yeltsin and reaffirmed by President
Vladimir Putin.

"But these agreements were reached almost a year ago," she said. "I call
upon the Russian Federation to end the stalemate on withdrawal from Moldova
by beginning to remove arms and equipment in accordance with the Istanbul
timeline.

"Likewise, the United States looks for continued progress on Russian
withdrawal from Georgia, including completion of the first phase of
equipment withdrawal by year's end, and the closure of specific military
bases by the middle of next year."

"Finally, we call upon Russia to reduce equipment levels in the CFE flank
region in accordance with President Putin's assurances. This is imperative
if we are to achieve our shared goal of bringing the adapted CFE Treaty
into force."

IVANOV REJECTS LECTURING

Russia withdrew its forces in humiliation after the first Chechen conflict
in 1994-96, but sent its troops back in just over a year ago, pledging to
crush separatists.

It has established nominal control over the region but its troops regularly
fall prey to ambushes. At least 2,500 Russian servicemen have died in the
campaign. The number of casualties among rebels and civilians is unknown.

Russian Foreign Minister Igor Ivanov did not directly respond to Albright's
comments in his opening address, but expressed concern about a trend among
western OSCE countries to do little more than lecture eastern European
countries.

"A trend has appeared...to reduce the OSCE to considering only humanitarian
and human rights issues and solely and exclusively in the eastern part of
the euro-Atlantic area," Ivanov said.

"History has shown that any attempts to impose certain patterns on any
state from outside are doomed to failure."

The OSCE groups the United States, Canada and all European countries. The
two-day gathering of OSCE foreign ministers was expected to be dominated by
Yugoslavia.

Yugoslavia's new President Vojislav Kostunica attended Monday's opening
session and signed several key OSCE documents, marking his country's
readmission to the organisation eight years after it was suspended because
of the Bosnia conflict.

Ministers were due to agree a final declaration on a range of political
issues and sign accords on the control of small arms and light weapons,
protecting children from armed conflict and trafficking in human beings.

******
 
#2
Trud
November 25, 2000
[translation from RIA Novosti for personal use only]
IT SMELLS OF COLD WAR IN THE USA
By Andrei STEPANOV
    
     Washington is clearly suffering from a recurrence of the
Cold War syndrome again. Its convalescence from the painful
stereotypes of the past is taking too long. The current, or
rather, the departing US administration is again hinting at the
possibility of introducing scandalous "sanctions" against
Russia.
    
     This time Russia is "guilty" of daring to uphold its
national interests by notifying Washington of its withdrawal
from all confidential agreements, signed within the framework
of the Gore-Chernomyrdin commission back in 1995, on December 1
this year. In accordance with a secret memorandum, allegedly
signed at that time, Russia pledged to complete all contracts
on the delivery of weapons to Iran within four years and not to
sign new agreements to this effect. In its turn, the USA
pledged not to introduce punitive sanctions in such sensitive
spheres as cooperation in the sphere of high technologies,
prospects of American investments in Russia, the visa regime,
and in several other spheres.
     Today Moscow is getting rid of these limitations. And not
only because this promises economic advantages (new Iranian
military orders can earn the Russian treasury up to 2 billion
dollars, while Russo-American cooperation, above all in the
sphere of high technologies, is skidding, to put it mildly).
The thing is that the aforementioned agreements are infringing
on the dignity and national interests of Russia. What country
would agree its relations with other countries to be regulated
by the legislation of a third country? In addition, Russia has
been faithfully complying with the international regime of
non-proliferation of weapons of mass destruction, above all
nuclear ones. This fully concerns Iran, of which the US
administration has been informed more than once.
     It is clear that Russia needs the mutually beneficial
research-technical and economic partnership with the USA. But
can it allow this partnership to be used as an instrument of
political pressure? Moreover, how should it understand
Washington's hints on the desirability of Russia's involvement
in the counter-terrorist operation against the USA's
"arch-enemy and Terrorist Number One," bin Laden, on the
territory of Afghanistan? This would amount to drawing Russia
into a new military conflict in Central Asia. Indeed, how
should Russia regard such hints made against the background of
threats of sanctions against it for the resumption of
deliveries of conventional armaments to Iran?
     The Russian leadership, on behalf of which Foreign
Minister Igor Ivanov and Defence Minister Igor Sergeyev spoke,
unambiguously rejected the claim of the US administration to
dictate its view of the world to the other subjects of
international law. Russia will not speak in the language of
sanctions.
    
******

#3
BBC Monitoring
Russian leader tells judges courts too slow and expensive
Text of report by Russian NTV International television on 27th November

[Presenter] The fifth all-Russian congress of judges opened in Moscow today.
The Russian president attended the congress. He spoke about the advantages of
the judicial reform under way and the remaining drawbacks in the work of
courts. Here is a live report from our special correspondent Ilya Zimin:

[Correspondent] The congress of judges which is now being held in the Hall of
Columns of the House of Unions is a supreme body of the Russian judicial
community. The appearance of Vladimir Putin at such a forum is quite natural.
He has lately been trying to visit all the venues where the best
representatives of any industry gather: from agriculture to the military
sphere. The judges received Putin very warmly. Bright chandeliers were
switched on three minutes before he came to the hall. The lights had been
dimmed until then.

Putin made a laconic 20-minute address, in which he outlined the most urgent
problems in the dispensation of justice in Russia. He had prepared well for
this meeting with judges: the day before yesterday, the president signed a
decree raising the wages of court and prosecutor's offices employees by 120
per cent. The main idea of the address was that the judicial authority had
become a real power. However, it is still a long way before courts become
speedy, just and accessible. Here is what the president told the judges, in
particular:

[Putin] Everybody knows that many cases spend a long time being considered by
our courts: sometimes several years. As our predecessors said, the truth is
often lost in this judicial languor. Besides, any court procedure requires
funds, often considerable funds. I am now first of all talking about
citizens, of course. It is them who have to have these funds. This is why far
from everybody can afford to seek justice in court. It has become necessary
to earmark budget funds for setting up lawyers' services which would help
those who cannot afford to pay for all the court expenses.

[Correspondent] Vladimir Putin said that a lot of people spend a very long
time in pretrial confinement. This is the main problem about which the
president spoke. He also touched upon other painful issues: these are, as I
said, low wages and the absence of security for judges. Such an address could
not fail to find fundamental approval among the participants in the congress.
The head of the [Russian] Supreme Court, [Vyacheslav] Lebedev, who spoke
after Putin, said that the president's address and his appearance at the
congress of judges would provide a new impetus to the judicial reform in the
Russian Federation.

Putin spent less than an hour at the Hall of Columns with the judges. He
apologized, saying that he had to go to an important international meeting
with the Italian president, and left for the Kremlin.

The Russian judges, delegates to the congress, are now on their own, without
the president, discussing their urgent problems.

******

#4
From: "David Aserkoff"
Subject: RE: 4653-Stack/Economy
Date: Mon, 27 Nov 2000

Graham Stack asks the most interesting question in Russian economics and
financial markets in 2001.How well will the Russian economy do, assuming (as
I and most everyone else does) that oil prices fall back to US$22-25/bbl,?

First of all, to clear up one point, most economists and analysts in 1998
were, in fact, acutely aware of the Asian crisis the pressure on the Real
and the low level of oil prices and their deleterious effects on the Russian
economy and financial markets. The bullish case for Russia in the mid-1990's
was one of structural reform; the reason that investors/analysts were so
disappointed by the lack of structural reform  was because that was the
story that was being sold, not one of a commodity play. I think now most
investors primarily see Russia as a commodity story with some deeply
out-of-the-money option on future restructuring (look at the UES stock
price).

Oil price-driven cash in the economy brings down barter. High energy prices
for non-Russians (Russians pay well below world prices) makes Russian
industry that much more competitive - in addition to the massive
devaluation. Huge energy sector profits swell the government's coffers while
the default and devaluation mean sharply cut the domestic debt burden. High
oil prices matter, a lot.

How Russia will deal with lower oil prices and the consequence remains to be
seen. The IMF is dissatisfied with Russia's progress on "structural" (i.e.
non-macroeconomic) issues. Witness the Western business press growing
interest in Itera. Read the Smolensky interview in the WSJ a couple months
ago - and try to find evidence of bank sector reform. Putin's stance on
property rights is mixed. The central bank has not announced clear policy
guidelines for dealing with lower oil prices and its impact on the rouble.
The government is talking about going into "technical" default on Paris Club
debt.
I fear that the ebbing tide of oil prices will reveal some of the same old
rocks on the Russian economic shore.

******

#5
From: "edward lucas" <esl@economist.com>
Date: Mon, 27 Nov 2000 09:32:23 -0000
Subject: From Edward Lucas

To subscribe to this weekly mailing, send an e-mail to
edwardlucas-subscribe@egroups.com

Last week gave me a chance to pay a flying visit to Latvia, where I made a
speech at the tenth anniversary of Diena.

Protectionism, xenophobia and paranoia in Russian attitudes to the foreign
press
Riga, Nov 24 2000

(Thanks to Diena for invitation, Paul Raudseps for being good friend &
source etc)

I just want to start with a bit of historical perpective. As some of you
may know, in 1990 I was one of the last, if not the last, journalists to be
expelled from the Soviet Union. Foreign journalists' working conditions in
Russia are in many respects still a great deal better than then, in the
final years of the glasnost era. I am not just talking about infinitely
better communications and logistics, and the array of food in Moscow
restaurants, but also the professionalism of many of the press offices of
Russian businesses and even government offices.

However I do think things in other respects have been getting worse and
likely to get much worse, which brings me on to my troika of
problems-xenophobia, paranoia and protectionism.

To define the terms: by Xenophobia, I mean dislike or even hatred of the
outside world; by paranoia I mean something similar but but with a
different nuance: the belief that the outside world is planning to do down
Russia. And by Protectionism I mean the favouring of local press against
the foreign media.

None of these are new--indeed in some ways they go back hundreds of years.
But under President Yeltsin, they were at least braked from the top. For
all his many faults, Mr Yeltsin did believe that a free press was a good
thing, and that Russia's friendship with the west was basically of great
benefit.

Let me start with protectionism. It is clear from the Kremlin's information
security doctrine that the Russian authorities think that their own media
should get priority. To take a practical example, I was recently talking to
the head of the "a large western news organisation" in Moscow. When Mr
Putin became president, he had a meeting with the head of the presidential
press service, where he made him an offer-what he thought was a very
flattering offer. Now that your country has a proper president, he said, we
would like to give him and the Kremlin the same 24-hour coverage that we
give the White House and the American president. We would like to have a
bunch of reporters permanently accredited to the Kremlin press pool, and
have someone travelling with Mr Putin whenever he makes a trip-in fact,
just like the Russian press do already.

Nyet, came the answer. We would never have a foreign reporter on the
presidential plane. Well, what about one of our Russian reporters? No. My
colleague then suggested that if his journalists organised their own
transport, if they could still be accredited during Mr Putin's public
events and meetings. Nyet came the answer again

Another even more banal problem came up with mobile phones. As you  know,
Russian officials are paranoid about these devices, believing that they are
often concealed eavesdropping devices for western spies. This suggests to
me that this is exactly what Russia does with mobile phones and therefore
believes that others are doing the same. Anyway, no outsiders are allowed
to bring mobile phones into the Kremlin. However, Russian reporters are
allowed to keep a mobile phone there, which has been thoroughly checked by
the security people to make sure it is a phone and only a phone. Of course
this puts the foreign news agencies at a disadvantage. Tass, Interfax and
the others can phone the news straight from a press conference to their
newsrooms. The westerners have to go outside to their cars. My friend asked
if his organisation could at least have a mobile phone in the Kremlin like
their Russian colleagues. NYET, came the answer-but then a concession. The
Kremlin press office agreed to tell the Russian reporters that when they
had finished filing their own copy, they might if they wished lend their
phones to western colleagues.

Now the other point behind this is that the Russian authorities do not like
important media that they do not control. This is at the heart of the
current battle over NTV, the country's main independent television station.
There has been a lot of interest in this, clouded to some extent by the
fact that Vladimir Gusinsky is almost as unattractive a character, in a
different way, as the crooks and spooks in the Kremlin. The point is that
the Russian authorities see the media, both in financial and political
terms, largely as a zero-sum game: if foreigners are doing well, that must
mean that locals are doing badly.

But the big question for me is where the Kremlin goes next. Having
castrated NTV, their next move I believe will be to increase the subsidies
and benefits for media that they do like, and raise the costs and
difficulties for media that they don't. That, I fear, will include the
foreign-owned media. Obvious targets include the Russian-language services
of Radio Liberty and the BBC, and Reuters We don't know yet what the new
media law will mean in practice, with its provisions about licensing and
restrictions on foreign ownership, but I am not optimistic, either about
the final text, or about the way in which officials will implement it,

Secondly, Xenophobia. There is therefor a big drive on at the moment to
improve Russia's Imeedzh. I recently spent an evening with a Russian
imeedzmeker who had been given the task of talking to foreign journalists
to find out why the country's portrayal in the western media is so bad.
Why, she asked me in all seriousness, had the western media "used" the
Kursk tragedy to put Russia in a bad light. I tried and failed to explain
to her that the reasons for this-to use jargon familiar to anyone who
remembers the way we used to talk about things before 1989-that she was
trying to find subjective factors, whereas the answer lay in objective ones.

This reflects both the famously low self-awareness of Russian officialdom,
and a misunderstanding of the way in which the Western media works. Because
the Russian media itself is so cowed, bought, and easily manipulated,
Russian officials are convinced that the western press is the same. As some
of you know, I have a pathologically mischievous sense of humour that often
gets me into trouble. As I am very often asked "How do you decide what
stories to write in the Economist". I used to reply, facetiously, that
"Every Monday morning I go to a special room in the British embassy, and
there I get a small brown envelope from the British Ambassador. In it are
my instructions for the week, and they are so secret that even he does not
know what is inside the envelope, and I read it and burn it there on the
spot."

I stopped telling this joke rather quickly, when I discovered that many
Russians thought that I was telling them nothing more than the truth! This
seemed much more likely an explanation of how I worked than the banal
truth, that ideas come to me when I am stuck in traffic jams, in the
shower, or talking to my friends.

If foreign countries are critical of Russia, the Kremlin will not and
cannot understand that there may be good reasons for this. The answer,
according to the Russian official mindset, can only be that they are
misinformed, or actually malevolent. At the moment we are still at the
stage where the Kremlin is trying to correct the so-called misinformation.
When that fails, I expect to see a much harsher tone in Russia's official
language.

The basic problem is that the Russian government does not like the media's
message, so it wants to bribe, bully, obstruct lock up or even shoot the
messenger.  In practice this means that it is harder and harder for foreign
journalists in Moscow to get officials to talk to them. By comparison with
the past, the Putin Kremlin is all but impenetrable for foreign
journalists. There are a few spin-doctors and imeedzhemekeri or
speendokteri who will come and give us the current line, but senior Russian
officials no longer see the point of talking on or off the record to the
foreign press about what is really going on-even though at the same time
they are whinging and whining that they are not properly understood in the
west.

That brings me on to the third thing: paranoia. The trial of Edmund Pope,
an American businessmen who has spent months in a Moscow jail on espionage
charges, seems to show that the lawful gathering of unclassified
information from open sources is a potentially dangerous business in
Russia. There have been other cases involving businessmen and academic
researchers, and at least one journalist, Jamie Dettmer of the Washington
Times, was denied a further visa to Russia without explanation. You have
all heard of the Russian authorities' appalling treatment of Andrei
Babitsky, the Radio Liberty correspondent, who was kidnapped by the Russian
authorities in Chechnya and then, preposterously, charged with using false
documents when he managed to get away. It is worth remembering that the
Russian authorities have never apologised for this-indeed Mr Putin said, in
a revealing comment, that if Mr Babitsky wanted to be treated like a
Russian citizen, he should act like one. In other words, if you do
something that the government doesn't like, don't expect protection from
the law or the constitution. This week has also seen a very disappointing
verdict in the case of Grigory Pasko, a journalist from Vladivostock who
helped Japanese TV investigate nuclear pollution caused by the navy.

I think we are nearing the point when journalists interested in defence and
security matters are going to get very worried about what happens to their
sources, their Russian colleagues, or to their careers, if they touch
subjects that the Russian believe no outsider can have a legitimate
professional interest in. Unfortunately, these are just the sort of things
that readers of serious publications are often interested in and which
their journalists need to investigate and report.

Just for comparison, imagine how easy it is for Russian journalists in
western countries to report on these things, and compare that with the
risks and obstacles their counterparts face in Moscow.

To conclude: I think that Russia wants a tame domestic  press, which does
what the government wants, just as it used to do what the oligarchs wanted.
I think we are going to see this press used to fan the flames of xenophobia
in the Russian population, to match the authorities' own distorted view of
the world--we have already seen this to some extent in the Kursk tragedy,
with the repeated attempts to blame a foreign submarine for the disaster.
And I think we are going to see increasing pressure and difficulties facing
foreign
journalists who try to report on this. It is nothing like as bad as the
Soviet Union, of course, but for those of us who were covering this part of
the world in the 1980s, some of the echoes are uncomfortably familiar.

******

#6
Wall Street Journal
November 27, 2000    
[for personal use only]
Russian ISP Defends Privacy Rights, Challenges Government Snooping
By GUY CHAZAN
Special to THE WALL STREET JOURNAL

VOLGOGRAD, Russia -- Nail Murzakhanov would much rather talk gigabytes than
human rights. A self-confessed computer nut, he has little time for politics.
But that changes when you ask him about spying on the Internet.

"Next thing they'll be asking for a spare set of keys to our apartments," he
fumes. "They want to control anyone, wherever and whenever they want."

Despite his unassuming demeanor, Nail Murzakhanov is a folk hero in Russian
high-tech circles. As head of a tiny Internet-service provider in this
southern city, he was the first person ever to challenge the government's
right to eavesdrop on private e-mail correspondence. Perhaps more impressive,
the government backed down.
 
"They wanted me to let them snoop on people, without any outside checks or
controls," says the 34-year-old head of Bayard Slavia Communications. "But I
sign a confidentiality agreement with my customers, and I won't violate that
for anyone."

The object of Mr. Murzakhanov's wrath is the system for
operative-investigative measures, or SORM. Based on a 1995 law, it gives
Russian security services -- among them the FSB domestic intelligence agency
-- the right to tap phones, read postal correspondence and intercept e-mail.
Police say it's a vital weapon in the fight against crime. Civil-rights
campaigners say it's a snooper's charter, the first step on the road to a Big
Brother-style police state.

SORM's supporters like to cite laws in the West, such as Britain's Regulation
of Investigatory Powers Act, which sets down the rules police must follow
when they monitor e-mail and tap phones, or the U.S. National Security
Agency's Echelon project. Also in the U.S., the Federal Bureau of
Investigation has had a hard time trying to sell its controversial Carnivore
Internet-surveillance software to Congress.

But SORM differs from RIP, Carnivore and Echelon in one crucial respect.
Russian law requires Internet service providers to integrate surveillance
equipment into their own systems -- and do so at their own expense. Mr.
Murzakhanov says the FSB told him he would have to buy the SORM hardware and
install cables connecting it to the local FSB headquarters -- and train FSB
personnel how to use it. He says it would have cost up to $100,000 to set up
-- enough to drive him out of business.

The debate about SORM goes to the heart of liberals' fears about President
Vladimir Putin, a former spy who came to power last March promising to create
a "dictatorship of law." SORM wasn't his initiative; nonetheless, liberals
see it as symptomatic of an administration in which former KGB officers are
playing an increasingly active role.

That's why the ministry's backing down in the Murzakhanov case is viewed as
significant by many in Net circles. If a small provincial ISP -- with only
1,420 subscribers and a staff of six -- operating out of the corner of a
Volgograd electrical goods shop can fight SORM, then maybe others can, too.
"It shows you can challenge the authorities and not only survive but win,"
says Anatoly Levenchuk, head of Moscow-based human-rights group Liberatarium.

Under SORM's provisions, ISPs and telephone operators are mandated to install
a kind of black box that reroutes traffic to the headquarters of local
law-enforcement agencies, allowing them to listen in on phone or e-mail
conversation. Those that refuse can lose their licenses.

In theory, the authorities require a court warrant to read a criminal
suspect's e-mail. But critics of SORM say judicial oversight of Russia's
security services is so weak that there's no guarantee they'll always ask
first -- especially if the information they want is just a click away.

Police counter that without this kind of clout they're powerless to deal with
Russia's newest scourge -- high-tech crime. Russia's hackers are gaining a
reputation as perhaps the most talented in cyberspace -- especially after
Microsoft Corp. disclosed that passwords used to access its source code had
been sent to an e-mail address in St. Petersburg. Low-tech, low-paid Russian
policemen are ill-equipped to deal with these problems.

Anatoly Stolbikhin, a police lieutenant-colonel and head of a regional
computer-crime department, says the ISPs are on their side. "The kind of
people we investigate are hackers illegally using other people's passwords or
credit-card details," he says. "These are crimes that can severely damage a
provider's commercial interests."

Mr. Murzakhanov says he was first asked to install SORM by the Volgograd
branch of the FSB domestic intelligence agency a month after Bayard Slavia
Communications began operations in January 1998. He says he told the FSB that
he would be quite happy to cooperate on a case-by-case basis, and only if the
FSB showed him a court order confirming that a given subscriber was under
criminal investigation. He says the agents refused, and told him that they
never tell anyone whom they are investigating.

According to Mr. Murzakhanov, the FSB referred to Bayard Slavia's license,
which says a provider must assist law-enforcement agencies in carrying out
"operative-investigative measures". But Mr. Murzakhanov says he cited another
clause of the license that makes any disclosure of a client's personal data a
criminal act. He refused to sign.

The authorities went on the offensive in April last year, switching off
Bayard Slavia's satellite dish, which forced it out of business for two
months, according to Mr. Murzakhanov. Then in November, the Communications
Ministry threatened to revoke his license unless he complied with the FSB.
The businessman responded by taking the ministry to court.

A session of the Moscow Arbitration Court was scheduled for Aug. 21, 2000,
but a week before it met, Mr. Murzakhanov received a letter from the ministry
saying it had dropped its claims against Bayard Slavia and canceled its
threat to withdraw the license.

"We realized that we just didn't have the necessary legislation in place to
proceed," said Sergei Grigorenko, a ministry spokesman. The case was closed,
and since then, Bayard Slavia has been left in peace. Mr. Grigorenko didn't
rule out the possibility of pursuing the ministry's case against Bayard
Slavia further once additional laws have been passed.

Mr. Murzakhanov says the FSB is fooling itself if it really thinks it can
monitor all e-mail correspondence in Russia. "Internet traffic is doubling
every month," he says. "You need a hundred highly qualified people,
well-versed in cryptography, to monitor just 10,000 subscribers."

But Liberatarium's Mr. Levenchuk expressed doubt that other operators would
follow Bayard Slavia's example. "Most people think it's easier to give in to
the state than oppose it," he says. "They just want a quiet life."
 
------

SORM Storm
A summary of Russian state actions

Russia passed a law on "operative-investigative activity" (SORM) in August
1995, giving the state the right, among others, to control postal, telegraph
and other communications, wiretap phones and intercept information from
technical communication channels.
In July 2000, the Ministry of Communications issued order No. 130, stating
that the technical means allowing for operative-investigative measures must
be installed at electronic telephone exchanges, and at switching centers for
mobile and wireless communications and paging services.
In August 2000, the Ministry of Communications dropped all claims against
Bayard Slavia Communications and withdrew the threat to revoke its license.

******

#7
Date: Sun, 26 Nov 2000
From: Erin Powers <epowers@fas.harvard.edu>
Subject: Just in time for the holidays: 36 new PONARS memos  :)

Just in time for the holidays: 36 new PONARS memos  :)
http://www.fas.harvard.edu/~ponars
Program on New Approaches to Russian Security (PONARS)

1. The Dictatorship of Law in Russia: Neither Dictatorship, Nor Rule of
Law, Vladimir Gel'man
2. The Essence of Putinism: The Strengthening of the Privatized State,
Dmitri Glinski-Vassiliev
3. Can Putin Rebuild the Russian State? Stephen E. Hanson
4. The Importance of the Politics of Friendship for Contemporary Russia,
Oleg Kharkhordin
5. Alexander Solzhenitsyn as a Mirror of the Russian Counter-Revolution,
Eduard D. Ponarin
6. Russian Nationalism and Vladimir Putin's Russia, Astrid S. Tuminez
7. The Social Cost of Russian Military Reform: Redefining Priorities for US
Assistance, Oksana Antonenko
8. Putin's Court: How the Military Fits In, Pavel Baev
9. The Duma and Military Reform, Brian Taylor
10. Putin and the Russian Military, Kimberly Marten Zisk
11. Russia's Periphery in the Global Arena: Do Regions Matter in the
Kremlin's Foreign Policy? Mikhail Alexseev
12. Russia's Path to a New Regional Policy, Matthew Evangelista
13. Gubernatorial Elections in the Volgograd Region: Do They Matter? Ivan
I. Kurilla
14. Broken Pendulum: Recentralization Under Putin, Nikolai Petrov
15. The Russian Constitution and Foreign Policy: Regional Aspects, Mikhail
I. Rykhtik
16. The New Federal Structure: More Centralized, or More of the Same?
Steven Solnick
17. Russia's New Caspian Policy, Douglas W. Blum
18. The Forgotten Abkhazia: Anatomy of Post-Socialist Ethnic War, Georgi M.
Derluguian
19. Peace-Building and Conflict Resolution in Nagorno-Karabakh, Stuart J.
Kaufman
20. Russia's Strategic Partnerships and Global Security, Andrew C. Kuchins
21. A Dangerous Balancing Act: Karimov, Putin, and the Taliban, Pauline
Jones Luong
22. International Terrorism in the Southern Tier: Perceived or Real Threat
to Russia's Security? Ekaterina A. Stepanova
23. Central Asia's Stability and Russia's Security, Dmitri Trenin
24. Too Much of a Good Thing? Conditionality and Change in Post-Soviet
States, Jeffrey T. Checkel
25. Why the United States Should Cede its Russia Policy to Europe, Ted Hopf
26. EU Enlargement in the Baltic Sea Region and Russia: Obvious Problems,
Unclear Solutions, Arkady Moshes
27. Russia and the European Union: The Case of Kaliningrad, Alexander A.
Sergounin
28. The Limits of US Influence on Russian Economic Policy, Mark Kramer
29. Exchange Rate Policy After the Currency Crisis: Walking the Tightrope,
Vladimir Popov
30. Too Much of a Good Thing? High Oil Prices and Russian Monetary Policy,
David M. Woodruff
31. Russia's Views on Cruise Missiles in the Context of START III, Deborah
Yarsike Ball
32. A Sober Second Look: Reassessing the Logic of Missile Defense, Bear F.
Braumoeller
33. Nuclear Programs in North Korea and Iran: Assessing Russia's Position,
Vladimir A. Orlov
34. Nuclear De-emphasizing in Russia's Military Thinking: Phantom or
Reality? Alexander A. Pikayev
35. Putin's Boost-Phase Defense: The Offer That Wasn't, Pavel Podvig
36. "Kosovo Syndrome" and the Great Nuclear Debate of 2000, Nikolai Sokov

Erin R. Powers
Assistant Director
Program on New Approaches to Russian Security (PONARS)
Davis Center for Russian Studies * Harvard University
Cambridge, MA  02138
tel: (617) 496-3426  *  (617) 495-8319
email: epowers@fas.harvard.edu
program website: http://www.fas.harvard.edu/~ponars

******

#8
Program on New Approaches to Russian Security
Policy Memo Series
Series Editor: Erin Powers
http://www.fas.harvard.edu/~ponars
Memo No. 147

The Essence of Putinism: The Strengthening of the Privatized State
Dmitri Glinski-Vassiliev (dmitri_glinski@mtu-net.ru)
IMEMO--November 2000
Dmitri Glinski-Vassiliev is currently Senior Research Associate at the
Institute for World Economy and International Relations (IMEMO) of the
Russian Academy of Sciences.

The Revenge of Kremlinology

As Russia moves further along the path of semi-authoritarian rule, studying
the mindset and beliefs of the Kremlin dwellers again becomes important. The
logic of Russian politics remains, as before, profoundly anti-institutional,
as a tightly knit group of individuals continue to mold and remold the
institutional design according to their will. While their ability to shape
or influence developments in the depth of Russian society should not be
exaggerated, the cognitive framework of Russian President Vladimir Putin and
his entourage is turning into the decisive factor of Moscow politics and of
Russia's conduct on the international stage.

Since the beginning of Vladimir Putin's rise out of the blue into the
highest office, many conflicting definitions have been applied to him. He
has been portrayed as a statist and a market liberal, an ethnocratic
nationalist and a pragmatic pro-capitalist Westernizer. As for Putin himself
and his comrades-in-arms, they have defined their policies with a few
articulate slogans, such as "strengthening the Russian state" and
"dictatorship of the law." Putin's claimed purpose of strengthening the
state was hailed for a wide range of reasons by many Westerners and Russians
alike, from would-be foreign investors to the Communist Party, who
attributed very different aspects of former president Boris Yeltsin's rule
to "state weakness". Indeed, strengthening the state has become a powerful
catch-all slogan, but given the broad spectrum of its supporters, some
difference in interpretation is unavoidable. The key question, however, is
what Putin himself means by strengthening the state. The notion itself is
profoundly misleading without a clear sense of how Putin and the ruling
elite he speaks for conceive of the state that they claim to be
strengthening. We are not looking here for any kind of rationalistic
ideology of the "State" that drives Putin's policies and could be located in
the existing range of definitions of statism (which would be pointless), but
rather to spell out basic cognitive elements of Russian rulers'
understanding of the state they govern.

This examination leads to the conclusion that Putin's policies cannot be
seen as either statist or nationalist in the classical Western sense of
these notions. The state that Putin has vowed to strengthen is not conceived
of as a public asset, as a set of institutions in the service of society,
nor as a commanding force of national mobilization, but rather as an
exclusive corporate entity, the property of the state apparatus, competing
against similar but much weaker entities in an attempt to monopolize the
coercion and protection market.

What Is to Be Strengthened?

The Kremlin dwellers' view of the state on behalf of which they speak comes
from President Putin's own book and interviews, from a collection of
"concepts" and "doctrines" that was produced over this year mostly by the
Security Council, and from statements and pronouncements from the closed
circle of Putin's attendants--Security Council Secretary Sergei Ivanov,
Prime Minister Mikhail Kasyanov, Economics Minister German Gref, Media
Minister Mikhail Lesin, and Kremlin political consultant Gleb Pavlovsky. It
is quite evident that for all of them, the state is conceived as totally
autonomous from society. The National Security Concept and similar documents
are built around a quite revealing hierarchical order of "interests," which
begins with the interests of "individuals," followed by the interests of
"society" and then by the interests of the "state"--the latter being wholly
separate and not deducible from the other two. A state whose interests are
conceived in this way is clearly not a public asset, not a res publica, if
by the latter we mean a set of instutitions performing a clearly defined
service to society. But if it is not a liberal Anglo-Saxon state, which is
fairly obvious, then perhaps Putin's vision is inspired by the Germanic
model, which views the state as the supreme embodiment of the national
spirit and the nation's historical purpose.

In spite of some superficial traces of "Germanic" influence upon the
mentality of Putin and his cohorts, a crucial element of the Germanic
model--the intimate link between the state and the nation--is entirely
absent in Russia. Except for the lip service paid to the idea of nation
(narod) in a few documents--mostly a reference to the constitution's
preamble, which imitates the US Constitution and is a leftover from Russia's
experiment with Western models in the early 1990s--the nation is not present
in any official pronouncements as a real historical actor to be taken into
account. To the contrary, mutual alienation between the state and society is
virtually accepted as a given. Disdain for and manipulation of the populace
is one of the most enduring legacies of the Soviet and post-Soviet
nomenklatura, and a central element of historical continuity between the
Yeltsin and the Putin eras. The developmental mission of the state that is
so central to the European model is also mostly absent in Russia. In this
regard, even the Yeltsin state had a certain teleological claim, promising
to implement reforms that were to bring Western-style prosperity. The Putin
state is devoid of such claims; it is not inspired by any historical purpose
that would serve to mobilize a critical mass of Russians around this state.

Thus, the state that is to be strengthened is neither in the service of
society, nor in command of the nation with which it happens to coexist
geographically. It is just separate, leading a virtually autonomous
existence. Some evidence points almost to a conscious strategy of the Putin
state's self-alienation from the social environment and an exclusionary
positioning of itself vis-a-vis society. One of the most graphic
explanations of this attitude came from Putin himself, in his statement to
Natalia Gevorkyan of the Kommersant Daily, on the subject of semi-official
hostage trading that involved Andrei Babitsky, a Radio Liberty
correspondent. If Babitsky does not respect the law, said the president,
then the state has no reason to treat him according to the law. This
treacherous slip of the tongue was expunged from the book version, but
remained on record. This statement encapsulates a whole range of similar
pronouncements and actions on the part of the Kremlin that reveal the
distancing of the state from its subjects, the selectivity of its
relationship to them, and selectivity in the application of the law. It is a
state that is prepared to sort the people into loyal and disloyal, into
"ours" and "aliens," and make its own choice about whom to extend the grace
of its legal, physical and material protection.

The exclusion of some categories of the population from the legal system of
the state is not unprecedented in Russia--there were disenfranchised strata
both under the tsars and in the early Soviet period. The psychological
attitude of the state's self-exclusion from society, however, has only one
rather distant parallel: the system of separation of the coercive apparatus
of the state from the rest of the nation instituted by Tsar Ivan the
Terrible, which was called oprichnina, literally meaning the state of being
apart. This is, of course, not a comparison, just a metaphor. It will,
however, serve us as a springboard to actual historical analysis.

The Historical Context

It is tempting to try to situate the present understanding of the state in a
broader cultural and historical tradition. Thinking about the state was
naturally one of the key elements of Russian political identity. In Russia,
as in many other countries, the state was defined in juxtaposition to nation
and class. Since the end of the absolutist monarchical state in 1917,
Russia's rulers operated with two basic understandings of the state--the
class state (under Lenin and, at least as lip service, under Stalin as well)
and the "all the people's" (obschenarodnoe) state that was proclaimed by
Nikita Khrushchev and sanctified by the party program in 1961. These are the
historical landmarks in relation to which the present Russian notion of the
state is to be viewed.

Of course, the Khrushchevian idea of "all the people's" state (which was
rooted deep in the history of agrarian populism, Russia's quintessential and
most authentic democratic-revolutionary tradition, sidelined by the
Bolsheviks) was the pinnacle of Russia's idealistic political thinking.
Whatever remained of this slogan by the late 1980s was swept away by the
ideologists of the Yeltsin-era reform, who set upon the implementation of
their vision of a country inhabited by atomistic individuals, and for whom
the very idea of the people as a community was at best meaninglessly
abstract, at worst an evil legacy of Communism ("The 'people' does not exist
any more," boasted one of them, "There are only individuals.") The idea of a
class state in reverse--a state serving the interests of the New Russians,
or, more narrowly, the "oligarchs"--certainly gained currency. The Seven
Bankers' Cabal and the Davos Bargain of 1996 were the most far-reaching
attempts to institutionalize a "class state" in reverse. But this model was
not viable from the outset for a variety of obvious and not-so-obvious
reasons, in particular, because the status and function of the state
apparatus would be fundamentally unclear in this system (just as under "the
dictatorship of the proletariat"). Attempts to implement the "class state"
in the aftermath of Yeltsin's re-election, by putting in the key
decision-making roles such direct representatives of the privileged class as
tycoons Vladimir Potanin and Boris Berezovsky, had brought the system to the
verge of financial and political collapse. The severe limitations upon
Bolshevik dictum that "every kitchenmaid can participate in governing the
state" proved to be applicable not just to kitchenmaids, but to financial
oligarchs as well.

As for Putin's state, it does not qualify as an asset of the
quasi-capitalist "class," and this is not just because of the Kremlin's real
or purported rift with some of the oligarchs. It is simply because the state
budget is the ultimate source of most wealth in Russia, it was so in the era
of "reforms" and it only became more conspicuously so under Putin. Likewise,
gravitating in the state orbit is the surest way to acquire top positions in
business, not vice versa. Before 1998, the capitalist class was allowed to
purchase government services and access the state coffers more freely, these
resources being in the de facto private ownership of Yeltsin's overextended
family and similar groups of owners at a lower level. In this sense, the
Yeltsin state qualified as an electoral fiefdom. The collapse of the Seven
Bankers' rule in 1998, the brief and failed attempt of the Duma-led
"renationalization of the state" under former Prime Minister Yevgeny
Primakov, and the subsequent rise of security agencies to power created all
the more uncertainty about the ownership structure of the privatized state.
Finally, the withdrawal of the Family from its official position left state
resources in the physical possession of its ad hoc managers. The State that
is being managed by Putin and his cohorts, and that is supposed to be
strengthened, is neither a nation's state, nor a class state, not even a
Family state any more. Is it, perhaps, nobody's state?

Russia Incorporated

The broader cognitive framework within which Russia's present rulers think
of their state is still defined by the "iron laws of the market." In this
context, Putin's state can be seen as a corporate entity specializing
(beside its regular economic activities) in the production of such services
as the protection of life and property (which in the Russian context are not
universal because, as discussed above, access to them is fairly selective),
and coercion services selectively provided to the business community under
the guise of "law enforcement." It is consequently expected to try to
maximize its profits, both by increasing demand for its production among
solvent consumers (both domestic and foreign, potentially covering all
unstable areas of the Eurasian landmass) and by squeezing alternative
suppliers of these goods from the market (or at least transforming them into
state subcontractors). From its very beginning, the actions of Putin and his
retinue fit this pattern of rational market behavior with remarkable
consistency. The ostensible goal is to monopolize violence, not in the
universal Weberian sense that would fit the Germanic notion of the state,
but primarily as regards the production of violence (protection,
enforcement, etc.) as a marketable commodity for sufficiently affluent
consumers. So the question of "revenues" is more or less clear, and this is
reflected in the dominant position of security agencies, as major
"profit-making" departments (in addition to the raw material and
arms-trading corporations) in the organizational structure of the state.
However, the question of strategic directions of spending these "revenues"
remains open, and this is related to the unresolved question: to whom does
the State belong? It seems that at least some of the current Kremlin
inhabitants are genuinely concerned with clarifying this relationship, and
that they conceptualize the state as a sort of shareholding corporation.
This shareholding mentality transpired most graphically in Putin's abortive
idea to organize regional representation in the State Council in proportion
to regions' financial contributions to the state budget. The idea was
overrun by political and constitutional considerations, but its very
emergence is quite revealing.

Of course, a corporate state is not a uniquely Russian idea, nor is it
necessarily disastrous. "Japan, Inc." was an enduring and successful example
of such an arrangement, at least for a certain period. The difference was
that Japan, Inc. was highly, if not totally inclusive with regard to the
Japanese, and it had an overarching developmental purpose that was
culturally ingrained and shared by most of society, all the way along the
social ladder. In Russia, where the idea of national solidarity is currently
absent, the state behaves in an anti-developmental and exclusionary manner.
The idea of Russia, Inc.--or better, Russia, Ltd.--derives from the Russian
brand of libertarian anarchism viewing the state as just another private
armed gang claiming special rights on the basis of its unusual power. To use
the powerful image of Mancur Olson, this is a state conceived as a
"stationary bandit" imposing stability by eliminating the roving bandits of
the previous era. For Russia's ruling elite of the Putin vintage, the state
of universal anarchy ruled by the "iron laws of the market" is primary, and
the idea of strengthening the state as a violence-producing corporation is
only derivative. In this regard, they do not fit into the category of
statists, let alone nationalists, in the Western European or Japanese
meaning of the term.

Who Is Mr. Putin?

Given that the idea of strengthening the state has become so central to
Putin's political identity, it is only appropriate to answer the question in
this subhead by analyzing the properties of this state that emerge from the
Kremlin's official and semi-official pronouncements. Based on the cognitive
images that transpire from these pronouncements, Mr. Putin does not qualify
either as a public servant in the modern Western sense, nor as "the master"
of Russia in the semi-feudal sense, which was to a certain extent Yeltsin's
self-image. Putin is the chief manager of the privatized state, a corporate
entity with no clear sense of ownership. Indeed, he speaks and behaves as a
hired officer with limited responsibility (but potentially unlimited
immunity). Putin and his cohorts do not address the public on fundamental
developmental issues, because thinking and planning in these terms are not a
part of their contract.

To the contrary, one of the major managerial tasks that is clearly present
in the heads of the Kremlin dwellers and their audiences is managing
Russia's foreign debt. Regardless of whether the threat of a bankrupt Russia
being placed under an international receivership has anything to do with
reality, it figures as a perception in Russia's domestic debate, placing
severe limits upon the extent of Russia, Inc.'s internal obligations and
prompting a reduction in the number of its potential domestic
"shareholders." The breadth of Putin's support and toleration of his rule
can be partially explained by the fact that some elite groups see Putinism
as an externally conditioned solution, because the strengthening of the
police apparatus, repression of societal claims and, ultimately, arrested
development may be the only way to get the debt paid. At least some segments
of Russian elites and society see him as a Russian Wojciech Jaruzelski,
whose police rule may hopefully be a temporary device required to protect
the country from either real or virtual invasion by fulfilling the most
pressing foreign claims, while giving society a respite and time to organize
itself. Whether this notion has a grain of truth to it, or whether it is
just a public relations ploy to further maximize domestic and foreign demand
for "security protection" should be the subject of a separate analysis.

What About the Nation?

The disconnect between the nation and the state, as well as between the
grassroots "nationalists" and top-down "statists," is neither new in Russian
history, nor unique to Russia. It is, however, for the first time over a
long span of history that the nation and the state are so much mutually
alienated from each other, while the nation itself is socially pulverized,
having virtually no cohesive institutions at the grassroots level and being
deprived of means to organize itself. In this environment, the
"strengthening" of the privatized state will hardly lead to the
strengthening of Russia as a nation. The more likely path is the further
de-modernization of Russia, reverting to its predictable past as described
by its major historian Vassily Klyuchevsky: "the state kept swelling, while
the nation was withering." An imaginable alternative would consist of an
attempt to "renationalize" the state, at least at the lower levels,
undertaken by some as yet invisible societal force that would be
"nationalist," and perhaps "statist," in a very different way than are Putin
and his cohorts. Since such an effort would involve first and foremost
restoring popular representation in the government from the bottom up, we
may see in this case fairly unusual forms of social organization, somewhat
along the lines of communal republics in medieval Europe.

*******

CDI Russia Weekly:  http://www.cdi.org/russia

Johnson's Russia List Archive (under construction):  http://www.cdi.org/russia/johnson