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Johnson's Russia List


December 5, 2000   

This Date's Issues:   4669  4670


Johnson's Russia List
5 December 2000

[Note from David Johnson:
1. AFP: China Is Russia's Most Important Partner.

4. Washington Post editorial: Justice in Russia.
5. Reuters: Russian debt-equity plan may help Moscow save face.
6. Scot (Buck) McCallum: re Miller's list/4662.
7. Jerry F. Hough: Re: 4668-Menshikov/Petrodollar Fever.
8. The Russia Journal: Otto Latsis, Business ponders its image.
9. Christian Science Monitor: Scott Peterson, The war Russia still can't finish. Over a year into its current campaign in Chechnya, Russia has not stopped violence
10. SPECTRUM (IEEE): James Oberg, Russia's sorry infrastructure.]


China Is Russia's Most Important Partner

MOSCOW, Dec 4 (AFP) - The majority of Russian politicians, journalists and
business leaders view China as Moscow's most important strategic partner,
far outweighing the United States, a poll published Monday said.

The survey by ROMIR, a member of the US-based Gallup polling group, found
that 51 percent of the 650 respondents viewed China as Russia's most
important potential ally.

The isolated ex-Soviet republic of Belarus came in second place with 49.6
percent, while Germany grabbed third place with 39.4 percent.

The United States trailed in distant sixth, with 20 percent, trailing
Ukraine and India.

Respondents were allowed to name more than one nation in the survey.



     MOSCOW. Dec  4 (Interfax) - Sergei Rogov, director of the Institute
for U.S.  and Canadian Studies with the Russian Academy of Sciences, has
said he  believes that  Washington will  not start  deploying a national
ballistic defense system next year.
     "The U.S.  now has  absolutely no  technologies  for  beginning  to
deploy their national ballistic missile defense system," Rogov said at a
Monday press conference in Moscow.
     Even if Republican George Bush Jr. becomes president, and Bush is a
tougher supporter  of the  idea of  a national  ballistic defense system
than are  the Democrats,  he "will  be able to announce that the U.S. is
pulling out  of the  ABM Treaty and the creation of a national ballistic
defense system  only when  there is  something that can be deployed," he
said. According  to the  scientist's predictions,  this might not happen
until 2012,  when the  U.S. is planning to test a space-based laser, one
of the components of its future national ABM system.
     Rogov expressed  the view  that, regardless of the final outcome of
the U.S.  presidential elections,  the next administration will announce
sanctions against  Russia in  the event  that Moscow  drops out  of  the
'Gore-Chernomyrdin' memorandum concerning arms sales to Iran.
     At the  same time,  he went  on, the  key element of such sanctions
might not  be bilateral  trade and  economic  relations,  but  "external
economic pressure on Russia" brought to bear by Washington. He explained
that the  U.S. could  play hardball  with  Russia  within  international
financial organizations,  notably the IMF, in which Washington plays the
dominating role.



     MOSCOW. Dec  4 (Interfax)  - Russian Defense Minister Igor Sergeyev
has announced  that Moscow  will preserve  its balance of nuclear forces
with the  United States  after the  planned cuts  in  its  armed  forces
personnel and nuclear component in 2001-2005.
     "I think  the world  is ready  for a  steady reduction  of  nuclear
weaponry, and  we will  preserve the  balance of forces [with the United
States] at  the minimum  sufficient level,"  Sergeyev told  the press in
Moscow on Monday.
     Commander-in-chief  of   Russia's  Strategic  Missile  Forces  Gen.
Vladimir Yakovlev  has said  that "up  to six  Topol-M advanced  missile
systems" will  be put  into service  before the  end of  this year.  Two
Topol-M regiments  of 20  missiles  are  already  in  service  with  the
Tatishchevskaya division, he noted.
     The number  of Topol-M  systems to  be put into duty next year will
depend "on  meeting the budget targets and the defense production plan,"
Yakovlev said.
     The 180th  anniversary of  the Pyotr the Great Military Academy was
celebrated  in   Moscow  on  Monday.  Russian  military  commanders  and
Patriarch of Moscow and all Russia Alexy II attended the celebrations.


Washington Post
December 4, 2000
Justice in Russia
The trial in Moscow of American businessman Edmond Pope, charged by Russia's
Federal Security Service with espionage, slowly but surely has evolved into a
farce. The FSB, the successor agency to the KGB, claimed that Mr. Pope
improperly purchased papers about a superfast Russian torpedo from a
professor at a Russian technical college. But the professor, who initially
confirmed the charge, recanted in court, saying that he was pressured into
signing a false witness statement against Mr. Pope. The institute has
produced documents showing that all the technical material in question was
unclassified and that it was authorized to sell it.

Yet Mr. Pope, a former naval intelligence officer who now operates a private
naval-technology business, remains in jeopardy of receiving a 20-year prison
sentence as his closed-door trial nears an end. The judge in the case has
denied more than 15 defense motions seeking to include exculpatory evidence
and witnesses and expressed the view that Mr. Pope is trying to commit
espionage even during the trial. Mr. Pope, 54 and in remission from bone
cancer, has been denied a visit by an American doctor, the right to vote in
the U.S. presidential election and even a phone call to his dying father. In
an apparent gesture of futility, his defense attorney delivered his closing
argument in verse.

Though shocking when delivered to an American, this kind of justice seems to
be on the rise as Vladimir Putin, a former security service operative,
consolidates his position as president. Just last month a military court
ordered a second trial for a Russian journalist, Grigory Pasko, who was
acquitted last year on treason charges brought after he exposed the dumping
of military nuclear waste in the Pacific Ocean. Two floors away from Mr.
Pope's courtroom, a former Foreign Ministry official named Valentin Moiseev
is also being tried for the second time after winning a first case on charges
that he gave secret information to South Korea. All the trials are held
behind closed doors, under laws that broadly and vaguely define espionage and
state secrets and allow the security service to use secret evidence.

The Clinton administration has called for Mr. Pope's release, but it has not
said that Moscow's failure to do so could damage U.S.-Russian relations. It
should. At issue is more than the unfair prosecution and treatment of an
American citizen. The broader worry is that, as the veteran human rights
activist Sergei Grigoryants puts it, "war has been officially declared" by
Mr. Putin's security services "on civil society in Russia." If so, that is a
conflict in which the United States should take sides.


ANALYSIS-Russian debt-equity plan may help Moscow save face
By Julie Tolkacheva
MOSCOW, Dec 4 (Reuters) - A proposal to swap Russia's debt to Germany for
stakes in Russian companies may not fly, but the idea could spare Moscow's
blushes over a possible default to the Paris Club of creditor nations,
analysts said on Monday.

German Chancellor Gerhard Schroeder floated the debt-for-equity idea last
week during a visit to Berlin by Russian Prime Minister Mikhail Kasyanov.

"It (the debt-for-equity proposal) reflects the fact that the Germans did not
budge at all on the debt issue," Peter Boone, head of research at Brunswick
UBS Warburg, said.

"Politically that puts Kasyanov in a very difficult position. An easy way to
get out of this is to say that the Germans have agreed to a debt-for-equity
swap and we are going to discuss it, and it will be discussed for a long

Interfax news agency quoted Kasyanov as saying the debt-for-equity scheme may
be offered to other Paris Club creditors.

But UFG brokerage said there could be a political backlash against the idea
in Russia and immense technical difficulties in ensuring equality of
treatment for all Paris Club creditors.

Russia wants relief on Soviet-era Paris Club debt, estimated at $48 billion,
but Club members, including Germany, which holds 40 percent of the debt,
oppose the idea. They cite high energy and metals prices that have boosted
Russia's ability to repay.

Russia and the Paris Club have struck a transitional agreement to postpone
repayment until the end of this year. The first small payment not covered by
the deal falls due as early as January. A more significant payment is due in

Unless the government comes up with the funds, which are not provided for in
the budget, or starts serious restructuring negotiations, it could find
itself in default on the debt.

"In tactical terms, this debt-for-equity idea should be advantageous for
Russia," UFG said in a market note.

"While officials take time exploring it, Russia will be able to say that a
good faith negotiation with the Paris Club is under way. That would take much
of the sting out of the virtually inevitable technical default next


Sergei Glaser, Alfa Bank head of research, said the scheme would help Germany
to recover its loans to the Soviet Union.

"Russia's debt to Germany is very big and Germans cannot see the possibility
of getting the money back in the foreseeable future," he said. "Germany's
interest is very simple: to get at least something for the credits it has

Russian firms will benefit from getting a foreign partner who will boost
their investment attractiveness, push forward with structural reforms and
increase their value, he said.

The Vedomosti business daily quoted Kasyanov as saying the equity offered
could include shares in national power grid UES (EESR.RTS) and natural gas
monopoly Gazprom (GAZP.MO)(GAZPq.L).

Kasyanov also mentioned stakes in banks in which the government is a big
shareholder. The central bank owns stakes in several big banks, including
Russia's largest bank, Sberbank (SBER.RTS). Under Russian legislation, the
central bank is to get rid of its stakes in banks before 2005.

But some analysts said debtors were not usually keen on debt-for-equity
schemes, which they see as inefficient and not transparent.

"Once you start allowing equity swaps then all the assets that the government
owns are up for question: should they be giving away any assets they have in
order to relieve the debt?" Boone said. He said the government could choose a
simpler way by selling the equity and repaying some of the debt with the

Prime-Tass news agency quoted Mikhail Zadornov, deputy head of a
parliamentary budget committee, as telling Ekho Moskvy radio that the
government would not be able to swap any equity without the move being
discussed by parliament.

Zadornov, a former finance minister, said parliament "takes a hostile view of
any privatisation schemes."

"This is a serious concession to our creditors, because nothing of the kind
existed in Russia before," he said.


From: "Scot (Buck) McCallum" <>
Subject: Miller's list/4662
Date: Mon, 4 Dec 2000

I also wanted to comment on Andrew Miller's list of responses to 10 reasons
to study Russian. . .

Of course I laughed. I laughed because Mr. Miller's reasons were all true,
while the original 10 reasons were a little . . . idealistic. I identified
with each of the reasons Miller stated, as someone who lives here it was
obvious that Miller has spent some time here.

The exception I take is that it is foolish to underestimate Russia. Every
day I am both amazed at how shitty things are here, and at the same time,
how resourceful and competant these people are. Everyone underestimates
Russia. Napoleon did it. Hitler did it. We Americans do it all the time.
Hell, if you read the news from America, it's all we do. It's incredible,
unbelievable really, for me as I read the news from America about Russia.
The Russia they write about is rarely the Russia I see. And I don't live in
one of the Western oases of development. I live in the South, Rostov on the

I'm suspsecting that Mr. Miller understands all this. And what he wrote was
true as . . . a drunk Russian. But it's not wise to underestimate Russia.
They will surprise us.

Scot (Buck) McCallum
Active Technologies Group, Inc. Russian Office
71 Chekhova, n. 702
Rostov on Don
Russia 344082
007 8632 387 638

2999 Dublin Granville Rd. #205
Columbus, OH 43231


Date: Mon, 04 Dec 2000
From: "Jerry F. Hough" <>
Subject: Re: 4668-Menshikov/Petrodollar Fever,

Professor Menshikov was the first great Soviet economist of the 1950s
and 1960s who understood that the Western economies were not as unstable
as Varga and those still more doctrinnaire thought.  He was the son of
the Soviet ambassador to India and the United States and understood the
development process well.   It is a tragedy that his country's leaders
and the IMF have not followed his advice--and that of the great emigre
economists such as Gerschenkron and Leontiev.

I remember Georgy Arbatov saying in the 1980s that the collapse
in oil prices at that time were a blessing because they forced the Soviet
Union into necessary reforms.   Alas, he was wrong, but the petrodollar
surplus just allows politicians to continue to play the old game.

I would disagree with Menshikov only on one point.   Investment
in the manufacturing sector is crucial, but it does not depend on high
tech exports.   When I was young, Japan was synonymous with cheap toys,
like China is today, and its cars were tin.   But low quality goods can
be exported if they are priced cheaply enough.   What Japan shows is that
such exports expose manufacturers to world competition and force them to
improve quality if they want to earn more.   Exports precede quality, not
the reverse.   The production of components is a crucial way of improving
quality, and direct investment is the best form of technical
assistance.   It brings in real managerial training, and such managers
then move into the local economy.

But such a policy requires high tariffs.   I have worked with
manufacturers.   They will never go into Russia until they are protected
from Turkish, Indian, etc., imports.   It requires the kind of industrial
policy that Gerschenkron shows is crucial.   Oh, my God, how much good
would be done if all Soviet newpapers and television simply reproduced
and distributed the important four pages from his book!   How much good
would be done if Soros promoted it!

The IMF is necessary for countries with financial crises.   It
never gives money to well-functioning countries.   China would not think
of lowering its national digntity to call for IMF help.  So what if the
IMF does not approve?   Only countries in financial trouble need to
listen to it.   The Pacific Rim countries certainly do not. 

But to repeat what I have said hundreds of times.   Russia
absolutely must start with reform of agricultural wholesale trade and
agricultural price policy.   It must.   Since both those who want a
neoliberal policy and those who want an industrial policy can agree on
this, it is the leading sin of the Clinton Administration and World Bank
(the same thing) that it never said so.   It is a sin that contributed to
the death of millions, and we can pray that a new Administration will
change policy.


The Russia Journal
December 3-9, 2000
Business ponders its image
At a recent conference, Russian business leaders asked some important
questions - about themselves and their employees. Otto Latsis explains why
their meeting suggests hope for Russian capitalism.

'The Social Responsibility of Business" was the theme of an international
roundtable in Moscow on Nov. 25. The very fact of the meeting's existence
is evidence that Russian businessmen are increasingly less eager to be
associated with the image of the New Russian as a rude, money-grabbing
nouveau riche.

The meeting served as an opportunity to showcase the Russian-British
program "Window to Russia," aimed at improving relations between Russian
and Western business, which have suffered in the post-crisis period. The
program's organizers are quite serious, judging by the list of speakers at
the meeting. Among those who gave talks were Russian Vice Prime Minister
Valentina Matvienko and the British Ambassador, Sir Roderick Lyne.

In addition to the caliber of the guests, the meeting boasted a high level
of serious discussion. The All-Russian Center for Public Opinion Studies
prepared a research report for discussion at the roundtable titled
"Socially responsible business in Russia." Five separate groups in Moscow
were polled (employees of large industrial plants, government workers,
employees of private companies, managers and heads of small- and
medium-sized companies, and managers of large companies), and, as the
center's Alexei Levinson reported, the results were both intriguing and

Business leaders were asked: How do you think your employees view you?
Their answers reflected the standard set of opinions often voiced in the
media: Businessmen "think only of themselves;" they are "involved with the
mafia;" their "money is often shady;" it is time to "unhand" their wealth
because they "are in debt to the people."

But when workers were asked how they view businessmen, the answers only
partly confirmed their bosses' fears. Workers do believe that Russian
businessmen make dishonest money and avoid paying taxes, but employees also
voiced respect for their energy, their willingness to take risks, their
desire to make something of themselves and their independence.

And, unexpectedly, workers believe that businessmen have the right to spend
their money as they please. Thus, the study confirms the death of the old
Soviet idea that the rich should be fleeced, both in the minds of
businessmen and their employees. Members of the intelligentsia took a
similar stance, answering that a businessman owes nothing to anyone if his
money is earned honestly.

"Owing nothing to anyone" is just how most people view the modern Russian
businessman. Those surveyed said that the typical businessman is committed
to the principle that "my business is everything."

They want to take responsibility for themselves, their businesses, their
families, their partners, employees and their surroundings. The center's
sociologists were surprised that all five groups involved in the study saw
this kind of businessman as the norm. Furthermore, managers of large
companies also mentioned the appearance of a new breed of Russian
businessmen: These are people who feel responsible not just for their
employees and families, but also the city as a whole, the nation's cultural
level and its future.

The Nov. 25 meeting highlighted not only the social responsibility of
businessmen, but of the scientific community as well, in particular of the
scholar who opened the meeting, Manchester University Professor Theodore

It was on the initiative of Shannon (whose scholarship has long been
concerned with the question of social responsibility) that diplomats,
scholars, and businessmen came together this February in Cambridge under
the banner of "Window to Russia."

At the beginning of Shannon's work in Russia 10 years ago, he organized a
group of Soviet sociologists to carry out unprecedented research on Russian
peasants. The research continues today, and has provided material for a
host of interesting books.

At the beginning of the 1990s Shannon - together with Russian colleagues,
including Viktor Raushenbakh - led a Soros-funded educational reform
program. Under the program, in a mere two years, Russian authors created
over 400 new textbooks for elementary and high schools.

More recently, Shannon founded the Moscow School for Social and Economic
Studies - Russian-British University for Postgraduate Education. Shannon is
the rector of this new university, where graduates of Russian universities
can receive masters' degrees, previously unheard of in Russia.

Much was said at the meeting about how to cultivate a responsible
businessman who is not indifferent to his country. The program "Window to
Russia" was founded by people who are not indifferent to the atmosphere in
Europe and the world, and their efforts give birth to the hope that the
world can become a better place.

Christian Science Monitor
December 4, 20000
The war Russia still can't finish
Over a year into its current campaign in Chechnya, Russia has not stopped
By Scott Peterson, Staff writer of The Christian Science Monitor

Wrapped in a threadbare scarf and a long winter coat, with a near-empty
plastic shopping sack hanging from her chilled fingers, Aina Shovlahova walks
through the center of Grozny, the devastated capital of Chechnya, avoiding
the eyes of patrolling Russian troops.

Russia's ongoing campaign to rid its breakaway republic of separatist rebels
makes Grozny a top contender for "Most Destroyed Place on Earth." But while
similar leveling of parts of Beirut, Lebanon, and Kabul, Afghanistan, gave
way to relative peace, embittered residents like Ms. Shovlahova live under
what is essentially an occupation by Russian forces.

They say that, contrary to Moscow's assertion that it has already won this
war, there is no endgame in sight. Russian troops continue heavy-handed
"mopping up" operations, even as they are targeted almost daily by Chechen
guerrillas - some seven Russian soldiers were reported killed in a train
bombing on Saturday.

"It's only starting now. It will never be over," says Shovlahova, trying to
shuffle unnoticed through the rubble of Minutka Square, in the city center.
"It's impossible to live here, under the [Russian] bullets. They don't let
you live peacefully. There is not a single guerrilla left in the city, but
they still keep shooting."

Access for journalists is strictly limited and increasingly rare. But a
recent journey into Chechnya, organized by the Russian military, reveals a
people under siege, and barely under Russian control.

Moscow-appointed Chechen officials live under daily threat. Several have been
killed by separatist guerrillas - and they work in heavily fortified
compounds behind coils of razor wire and checkpoints. Even the simplest
movement by troops in built-up areas seems to require complex security

The Nobel Peace Prize-winning humanitarian group Medecins sans Frontieres in
late November accused Russia of imposing a "state of terror" on Chechnya and
creating an "illusion" of normalcy.

Tension is inescapable in the capital. "The task is to come away alive," a
Russian officer instructs his crew, as he loads a 12.7 mm anti-aircraft gun
for the drive into town. The soldiers chamber rounds in their Kalashnikov
assault rifles and scan the muddy, frigid horizon with uncertainty.

Just days ago, a roadside bomb here blasted a Russian convoy. Every road,
every day, is checked for mines. A prewar sign atop a ravaged building brings
a moment of mirth: "Don't joke with fire," it reads, "Dial 01."

"This is the agony period," says Col. Sergei Andreyanov, the Russian
commander in charge of Grozny's Leninsky district. "The problem, in a global
sense, is finished. Now most of the fighting is with criminal gangs, which
are connected to the guerrillas."

So when will Russia's military involvement end? "Spring next year," he
predicts. "Maximum." But Russian officials have often wrongly predicted swift
victory in the past here. Whenever the fighting does stop, it won't be soon
enough for Louisa Sulumova, a mother of three who hung on despite the battles
in Grozny. Today, she is hawking tape recorders, batteries, film, and a
mountainous coil of sausage from a market stall.

A brief walking tour for outside visitors required the deployment of more
than two-dozen anxious Russian special-forces troops, including snipers, from
Colonel Andreyanov's units.

"They do whatever they want, they don't care if you are a guerrilla or not.
At any moment they can come and cut your throat," Mrs. Sulumova says, nodding
toward the alert Russian troops. "I've never seen a guerrilla fighter here.
We don't care if Russians or Chechens rule, since we can't breathe."

One week ago, Russian troops completely razed Grozny's main central market,
saying that too many of their forces -18 in November alone - had either been
killed there, or simply disappeared. As stern-faced Russian troops withdrew
from this smaller market, one woman shouted: "We haven't seen the light for
two years!"

Nor is light likely to shine soon, analysts say. "The war in Chechnya is by
no means over. The Russians are really strapped to keep a lid on what is
happening there," says Terence Taylor, assistant director of the
International Institute of Strategic Studies in London. "They are in there,
and you can't see an end to the guerrilla war. It may even get worse, as the
Russians struggle."

Russia was humiliated in the previous 1994-96 Chechnya war, and forced to
grant autonomy to the republic. But law and order fell apart under Chechen
leadership, and kidnappings, killings, and other forms of lawlessness became

Russian troops poured into Chechnya again in September 1999, prompted by two
August invasions by Chechen militants into the neighboring Russian republic
of Dagestan. A string of apartment bombings across Russia that left nearly
300 dead - and which the Kremlin continues to blame on Chechens, while to
date showing no evidence - was portrayed as the final straw.

At first, Russia billed this as a limited "antiterrorist" campaign. But
Chechnya quickly turned into a costly quagmire. Official figures show 2,600
troops killed so far; unofficial estimates run far higher. After 60 days of
constant artillery and air bombardment of Grozny earlier this year, the
separatists have been pushed back into the snow-capped southern mountains.
But they still exact near-daily casualties with ambushes. "Long months are
passing, the people are suffering, and the antiterrorist operation needs to
be completed," Russian President Vladimir Putin told military chiefs last
month. Mr. Putin was elected president in March, in part on a wave of popular
support for the war in Chechnya. But marking his current frustration last
Tuesday, he created a new Cabinet post to deal directly with Chechnya.

Moscow's writ here is severely limited, if visits to embattled officials of
the pro-Moscow Chechen administration in Gudermes, east of Grozny, are any
indication. Offices appear besieged: Windows in the white-columned City Hall
are sandbagged, with tiny openings for sniper rifles; and the building is
surrounded by antitank barriers.

Mayor Malika Gezimilyeva says she is the target of daily death threats. Since
an assassination attempt on Nov. 6, she drives to work escorted by an armored
vehicle. On Nov. 23, her car came under fire again.

"I have a lot of enemies, but a lot of friends as well," she smiles, her
bright red lipstick in sharp contrast to the somber atmosphere in town. "The
guerrillas are very angry with me, and won't rest until they murder me."

She calls herself a "full blood" Chechen, and says that self-rule has been a
disaster for her country. "For 10 years of this freedom, this is what we have
gotten," she says, ticking off problems left unsolved by the elected Chechen
leader, Aslan Maskhadov. "So let this freedom disappear for good. The people
are spiritually and emotionally ruined."

Like many pro-Moscow officials, she says Chechnya's future can only be as a
part of Russia, and dismisses the "terrorists" as "criminals, bandits,
Wahhabis [a strict Islamic sect]; people with no consciences who would sell
their mothers for money."

The rebels once had strong popular support, but that has changed, she
contends. "People used to help the guerrillas hide, but now they don't even
give them water," she says. "They know who their real friends are, and are
afraid that if the Russians go away, the guerrillas will eat us."

Still, few civilians bold enough to speak briefly to visitors, often in the
presence of Russian troops, support Russia's intervention - or the apparent
arbitrary nature of the "mopping-up" operations.

Mr. Maskhadov told a Moscow newspaper what is widely apparent on the ground:
"[The military] can't even say they're in charge of the checkpoints at which
they stand." That makes declarations of victory in Chechnya - as Russia first
made in March - especially difficult to defend.

"In history, there has always been conflict in the Caucasus, though in the
last century there were no foreign journalists to cover it," says Col. Igor
Yegiazarov, commander of forces in northern Chechnya.

"We don't care who controls us," says Dokhi Medio, a civilian walking past a
Russian checkpoint, before disappearing into the darkening winter afternoon.
"The main thing is to establish peace now."


Date: Mon, 04 Dec 2000
Subject: Russia's sorry infrastructure

This piece in this month's SPECTRUM (Institute of Electrical and Electronic
Engineers) is obviously based on materials accessed via your service. Thank
jim oberg (

December 2000
Russia's sorry infrastructure
James Oberg
Contributing Editor
James Oberg is a 22-year veteran of NASA Mission Control in Houston and now
a writer and consultant. His most recent article in Spectrum, "NASA's big
push for the space station," appeared just last month.

A current Moscow joke begins, "Russia is a country of optimists," and ends
with the punch line: "All the pessimists have already left."

Following a decade of political upheaval, economic collapse, international
humiliation, and two nasty Caucasian wars, the latest blow to Russian
morale has been a pair of technological disasters.
Both occurred in August, one at sea and the other right in the center of

On 12 August, during naval exercises in the White Sea north of Murmansk,
the nuclear attack submarine Kursk sank with all hands lost after two
explosions. The 170-meter-long 13 900-ton Oscar-II-class submarine was
Russia's newest and most powerful, carried 118 men, including several
specialists from a naval weapons bureau among its crew.

Then, on 27 August, fire broke out in Moscow's landmark television tower,
Europe's tallest structure. Three people were killed, and Muscovites were
deprived of television broadcasts for several days.

Easily visible on the skyline from all over Moscow, the 540-meter-high
tower was an expression of Soviet-era pride, built in 1959-67 to
commemorate the 50th anniversary of the Bolshevik Revolution of November
1917. "It wasn't simply a tower," a Moscow TV commentator explained. "It
was the symbol of an epoch that now, it seems, has passed for good."

"This [last] emergency highlights what condition vital facilities, as well
as the entire nation, are in," Russian President Vladimir Putin told
government officials. "Only economic development will allow us to avoid
such calamities in the future."
Western observers agreed. "The sinking of the nuclear submarine and the
fire at the Moscow television tower have highlighted the crumbling state of
Russia's physical infrastructure," observed
Charles Frank, first deputy president of the London-based European Bank for
Reconstruction and Development. Speaking at Harvard University's
Russian-American Investment Forum in Cambridge, Mass., early in October, he
continued: "A decade of improperly addressed
investments, of disdain for maintenance and repair, and of the foolish
waste of enormous natural and human resources has led to an aging ...
infrastructure ... with diminished effectiveness."
In Russia the two disasters evoked the same consensus among a variety of
off-the-cuff commentators. Many of the assertions came from officials who
wanted more funding
for their own departments, while in other cases, dubious and undocumented
hypotheses were bandied about like authoritative conclusions.

Infrastructure decay from malign neglect, as it could be referred to, can
be seen everywhere in Russia. There are some exceptions, most conspicuously
commercial segments of the space industry fueled by Western payments. But
Government-funded programs, starved of funds, are collapsing--witness the
skimped satellite programs and the laggardly telephone system, of which
more later. But whether malign neglect was the direct cause of the two
August disasters was less clear. Still, if they focused Russian
attention--and resolve--on the larger problem, they might yet yield some


The most likely explanation of the submarine disaster seems to have been a
mishap in the forward torpedo tube during a launch, possibly a test, of an
improved high-speed Shkval rocket torpedo. Seismic stations in Norway
monitored a small blast, followed two minutes later by an explosion with
the force of one to two tons of TNT. The Richter 3.47 shock wave was
detected as far away as Canada and Alaska.

The subsequent rescue attempt was much more related to infrastructure
decay. Only then did most of the world discover that the Russian Navy's
undersea rescue teams had been disbanded several years earlier. Anatoliy
Vyrelkin, former head of one deep-diving rescue unit, told a Russian
newspaper it would have taken his men less than a day to get to the Kursk
hatches, but "there is not a single specialized ship in the Northern fleet

Later, the Russian Navy evidently concluded that Russia no longer possessed
the technical know-how to recover bodies from the wreck itself. In October,
it completed negotiations with the Norwegian subsidiary of Halliburton AS
to do the job. Halliburton is the largest U.S. company designing and
delivering oil and gas equipment.

To fill in some more details, Kursk, powered by two 190-MW
pressurized-water OK-650-b nuclear reactors, was taking part in a Northern
Fleet exercise. This was in preparation for the deployment of ships from
the Northern Fleet, Baltic, and Black Sea fleets into the Mediterranean, to
show the flag after a long absence.

The naval maneuvers coincided with a crucial Kremlin meeting on military
spending. Fiercely competitive, the country's nuclear and conventional
force commanders were heading for a showdown and the Navy was determined
not be left out.

On Saturday, 12 August, at about noon, Kursk requested and received
permission to fire one torpedo in the first of a series of torpedo runs.
That was the last signal ever received from it.

What happened next was monitored from Norway and from North Atlantic Treaty
Organization (NATO) ships at sea. The first blast was followed by sounds
that could be interpreted as a life-and-death struggle. These included the
sound of cavitation, as bubbles of water vapor were created by the twin
seven-bladed propellers spinning at top speed. Sounds of machinery working
and ballast tanks being blown were also heard.

"You can hear them desperately trying to reach the surface," a senior U.S.
naval officer who had studied the event told the Washington Post. But
whatever crisis overwhelmed the crew, it left them no time for even the
most basic responses, such as releasing a rescue beacon.

The second explosion terminated any mechanical sounds from the submarine.
All that could be heard was the creaking of the hull, perhaps signifying
slow collapse of weakened structures under the relatively mild pressures of
the shallow depth. Some 105 seconds later came the thud of the Kursk
gouging into the seabed (many Russians still insist the second explosion
occurred at the moment of impact with the bottom).

So how was all this to be interpreted? John Pike, a technology analyst for
the Federation of American Scientists, in Washington, D.C., told ABC News
that the first, smaller blast "certainly would be consistent with what you
might expect from either a torpedo or cruise missile warhead exploding."
But he added: "It would not exclude bumping into an old World War II sea

The later blast, said Pike, was consistent with one or more
near-simultaneous explosions of torpedoes or cruise missiles, or perhaps
the violent collapse of some internal pressurized bulkheads. Based on the
two-minute delay, he said, "one could speculate that the initial explosion
caused a fire in the torpedo room, [setting] off another weapon, or weapons
or ... breached part of the hull, which damaged another pressure bulkhead,
subsequently causing it to collapse."

Images on Moscow TV showing damage to the Kursk agreed with the idea that a
torpedo explosion set off the disaster.

Deep-sea inputs

Evidence for collision with another ship would exculpate the Kursk's state
of fitness, to a degree--the theory favored by the Russian Navy. So in
September the wreck was examined by the oceanographic research ship
Mstislav Keldysh, famous for its exploration of the sunken Titanic. In the
course of five days, it deployed its two deep-sea diving vessels to
photograph the submarine and to search for wreckage from another ship.

No evidence of such a ship was found. Yet public sentiment blaming the
disaster on a foreign submarine ("probably NATO, perhaps British," goes the
most popular rumor) remains strong. Meanwhile, Russian newspapers report
that the consensus among naval officers in Murmansk is that a missile from
the cruiser Peter the Great, also in the area, accidentally hit Kursk,
setting off the explosions.

What the Keldysh did find was grim enough. The submarine was upright, its
nose plowed about 2 meters into the clay bottom at a depth of 108 meters.
The periscope was raised. Besides the damage forward, there was damage to
the bridge, and two Granit missile tube lids were torn
off. Metal fragments were recovered that were traced to both the outer and
inner hulls of the submarine. The fragments, twisted and melted, were
evidence of a massive explosion within the forward torpedo room. Based on
these findings, officials concluded that all crewmembers had died during
the first few moments after the second explosion.

But Russian divers, supported by Norwegian specialists, made a grim
discovery when they entered the aft compartment of Kursk late in October.
In a pocket of one of the bodies there was a note describing how about two
dozen men had survived the initial explosions and had taken refuge in the
last compartment, where they knew they were doomed. Russian press reports
even suggested that additional notes showed the men had lived at least two
days, but under the known conditions on the sub experts consider that idea

New television inspections of the outer hull of Kursk showed what looked
like long gouges on its surface. Whether these were from a collision with
another vessel, or had been caused by impact with the bottom, or had been
there even before the disaster, still was unknown.

The danger of cutting corners

As the investigation widened, evidence uncovered suggested that
infrastructure decay might well have elevated hazards aboard the submarine,
as well as on other Russian warships. Apparently when the submarine went
out on the exercise its full weapons complement from its last combat patrol
was still installed and could have led to or reinforced the second explosion.

Normally, cranes are used to offload the weapons while the vessel is in
port, but according to documents obtained by Moscow newspapers, "the
Russian Technical Register put a ban on operating the cranes in the
Northern Fleet, saying they are too worn out for use." In fact,
in a budget deposition to the Russian parliament last year, the
commander-in-chief of the Russian Navy, Vladimir Kuroyedov, had complained
that of fourteen 100-ton cranes and sixty-three 40-ton
cranes at naval bases, only three of the big ones and seventeen of the
smaller ones were operable. A request for about $20 million for crane
repair was ignored.

One other credible report blames the initial explosion on budget-cutting
pressures. A few days after the sinking, the Russian military daily
newspaper Red Star embellished its Web site with an
article about faulty torpedoes. Three days later the piece was deleted
without ever appearing in print, perhaps because of military security

The Red Star article described how expensive, battery-powered torpedoes of
Russia's submarines were being replaced with liquid-fueled designs, to
eliminate costly battery components such as metallic silver.

According to the article, Navy officials argued against the new design
because the liquid-fueled torpedoes were difficult to handle and were
considered "too explosive." But the new design promised cost savings and
was adopted.

The case for a torpedo explosion is not altogether proven, even so. In
October, deputy prime minister Ilya Klebanov, in charge of the
investigation, told reporters that investigators had so far been unable to
get a torpedo to explode as hypothesized for Kursk. "So far, no matter what
harsh conditions we put a torpedo into, we cannot reach the variant of
anything happening to it," he said. "But obviously something happened to
it--either to a torpedo itself or as a consequence of other processes

Other Russian newspapers provided details of cost-savings measures on the
submarine. One wrote that no emergency batteries were installed. Another
described how emergency systems, such as the locator beacon and a crew
bailout pod, may have been welded to the outer deck because mechanical
equipment to hold them in place had worn out. These measures prove the
fraying of the infrastructure, but were unlikely to have contributed to the
loss of Kursk. (Still, they could
cause future disasters unless remedied.)

Even if the nuclear Kursk was "safe," the entire Russian submarine fleet
remains an environmental threat. It is assumed that Kursk's two reactors
shut down safely, and monitoring ships have not detected any radiation
leaks. But a hundred other Russian submarines, decommissioned but not
dismantled, float in Russian harbors with their reactors still installed.
For decades, expended reactor hardware was simply sunk off the Russian
coast. As detailed by private groups, such as the Bellona Foundation in
Norway, the collapse of the old Soviet nuclear navy is a slow-motion
catastrophe requiring urgent and expensive countermeasures.

The toll on the navy of budget cutbacks is seen in other figures. In the
past nine years more than 85 percent of Russia's naval vessels have been
scrapped. Today, Russia has only 12 nuclear and 10 conventional submarines
and 37 surface warships considered combat ready. This is less than half the
sea power of its neighbor, Turkey, and only half of these can be manned and
supplied to go to sea together. In 1989, Russia built 78 military ships,
and in 1998 it built 4.

Too little, too much

In the case of Moscow's television tower, originally inadequate
construction plus recent overdevelopment, not simply neglect, appears to
have fanned the flames. During construction, Soviet designers chose not to
purchase electric power line cable with nonflammable cladding from the West
and used cheaper Russian electrical lines. "The designers knew the tower
was dangerous even when it was being built," Moscow electrical engineer
Mikhail Ryzhok, a veteran of the cable installation, told Business Week.
In recent years, new private television stations just squeezed their
equipment into whatever spaces were available. From the tower's upper
spire, at the 460-meter level, down to the 334-meter level, with its
observation deck and rotating restaurant, the tower was crammed with
broadcasting equipment for 11 TV and 12 radio stations, and 17 additional
satellite TV programs. No one paid attention to fire safety.
In fact, the fire started in the upper spire, in electrical equipment owned
by a Moscow paging service. The fire rode down cable ducts to the 460-meter
observation level, and stopped only at the
70-meter level, where firefighters had erected a barricade of asbestos
sheets. Most of the structure above that level was gutted, and steel
support cables appear to have been damaged. The top of the
tower now tilts 2 meters off vertical.

Obviously the tower's safety and anti-fire systems were outdated, said
Eduard Sagalayev, the head of Russia's broadcasters association.
Suppressant systems either were never activated or soon
ran out of foam. Moreover, a day after the fire was extinguished,
firefighters found that some power cables in the tower were still hot,
despite a supposedly complete power-down during the fire. The discovery was
made when a firefighter inspecting damage at the 147-meter level noticed
that wall clocks were still keeping time.Now, with an estimated repair cost
of US $1 billion, the tower faces an uncertain future.


Meanwhile, for lack of funding, Russia's own fleet of space applications
satellites are wearing out and breaking down. This could leave the country
half-blind to foreign missile launches,
half-deaf to its own domestic communications, half senseless due to the
loss of weather satellites, and lost without a functioning navigation
satellite network.

"The past 10 years have already seen failures of equipment on board
spacecraft increase by more than three times," space forces commander
Valeriy Grin told a reporter in mid-1999. Of the 90 military satellites at
his disposal, more than 80 percent had already exceeded their design

The situation with the Glonass space-based navigation constellation
graphically illustrates the infrastructure crisis in the domestic space
program. Developed as a Soviet response to the U.S. Department of Defense's
Global Positioning System (GPS), Glonass planned to deploy 24 satellites in
12-hour circular orbits. Beginning in 1982, the satellites (code name
Uragan, for hurricane) were launched three at a time by Proton rockets.

By 1993, the  orbital alignment of the entire fleet of satellites, was near
enough complete for the system to be formally accepted by the Russian
Defense ministry. But within two years, replacement launchings ceased as
funding levels plummeted. By mid-2000, only 10 of the operational slots
were filled; the rest had simply died in orbit. All of the surviving
payloads have gone far beyond their nominal lifetimes of three years,
lasting on average about 4.5 years before failing.

After a five-year gap, three new Glonass satellites were launched last 13
October. Their launch had been scheduled for 27 September but was postponed
after an accident damaged one of the payloads at the Baykonur base. It was
being transferred by rail from the launch site to a fueling facility 30 km
away, when an improperly operated handcar ran into the carrier.

The payload suffered minor damage, but was airlifted to the factory in
Omsk, repaired and recertified, and then returned to the launch site. While
this urgent repair was being made, two of the remaining 10 satellites in
orbit suddenly died. The three new payloads reached orbit successfully, but
the network is still non-functional, with more launches planned for next year.

Eventually, Glonass managers hope to limp along on a bare-bones
12-satellite network for the next four years, until a new-generation
Glonass-M payload can be built. It will have a life span of seven to eight
years. Eventually, a lightweight Glonass-K satellite, to be launched one at
a time from a base inside Russia, will replace these designs.

launch warnings collapse

Perhaps more alarmingly, Russia's network of missile launch warning
satellites is also collapsing. A full constellation needs 21 satellites,
but as of mid-1999, there were only three left, the last
of which had been launched in 1997. On average, the surviving payloads
provide only "single-string" coverage, meaning there is no possibility of a
launch warning being confirmed by another satellite.

And even that single-string coverage exists for only about half of every
day. Six new satellite launches are required to resume 24-hour coverage,
but neither the payloads nor the boosters have been funded.

Other satellite systems are also suffering. Last August, for example, a
Russian Space Agency official, Vladimir Umnikov told a TASS news agency
reporter that 34 of the 44 satellites dedicated to economic applications
and scientific research "have used up their resources." He added that any
or all of them "could break down at any moment."

Earlier this year, Aleksandr Frolov, of the Russian federal weather
forecasting service, informed TASS that the situation with the weather
satellite network was "critical." The satellites remain in
orbit, he admitted, but "their equipment on board is not functioning."


But throughout the year, and in stark contrast to the public perception of
overall deterioration,  Russian space engineers have displayed high levels
of reliability and innovation and shown impressive competence. But their
success is fueled by money from the West.

Take the return-to-flight of the heavy Proton booster rocket. Its
blistering pace of flights will set a record for the year. Earlier failures
were traced to engines improperly assembled during a
financial crisis in 1991-2. Recent launches included both commercial
payloads to geosynchronous orbit and the successful launch of the Service
Module for the International Space Station (ISS).
An improved Proton-M variation was introduced, and the Proton's new Briz
upper stage had its first successful flight.

The new Fregat upper stage for the mid-sized Soyuz booster was introduced,
and there was the world's first demonstration of an inflatable heat shield
so that a rocket stage can return from orbit. Four Progress supply ships
have been launched (three to the Mir space station, one to the
International Space  Station), bringing the unbroken run of successes to
more than a hundred.

There's been a demonstration launch of the new Rokot commercial
small-satellite launcher, based on a converted intercontinental ballistic
missile, and the first launch from the Plesetsk cosmodrome
inside Russia of applications satellites into the sun-synchronous
near-polar orbit. (All previous launches into this orbital path had been
made from the Baykonur space base in Kazakhstan).

Although Russia's contributions to the International Space Station are
mainly funded by the government, they benefit from spillover from
commercial profits of the organizations involved. The Service module, which
received its first permanent crew for the space station last month, may
have been years late, but when it arrived it was of classic Soviet-era

Where money obviously makes a difference is seen around Moscow.
Construction of all kinds is booming throughout the Russian capital, funded
in part from sales of  expensive properties to western companies, and in
part from Russian tax revenues.  On 30 October, Moscow region governor
Boris Gromov told newsmen of his plans to attract a billion dollars in
western investments next year, including funding for the food industry,
manufacturing, trade, and construction. Western investments for 2000 would
be about $650 million, he predicted.

Moscow is becoming a  "showcase city." Repaving the ring roads around the
city and building a third, outer one, along with special highways such as
the Rublevka in northwest Moscow (connecting the downtown with the most
exclusive suburbs), are producing world-class roads. In contrast, and with
a few exceptions, roads outside Moscow are third-world class at best. The
route from St Petersburg to Tallinn, Estonia, for example, is a two-lane
unlighted quasi-dirt road.

Optical-fiber cables are being laid throughout Moscow, for the use of
commercial clients with cash. But in general the Russian telephone system
is "dismal," according to a recent
article in The Economist. The article states that Russia must spend $6.5
billion to end

the six-month waiting list for new phones, plus $9 billion to make
existing old-fashioned lines digital, and a further $6.5 billion on
modernizing the in-country, long-distance system. Less than half a billion
is spent annually.


To a large degree, the contrast between today's disasters and Soviet-era
"normalcy" is one of perception. In Soviet times, accidents such as the
Kursk sinking were not even reported, so the
level of infrastructure decay was hidden. And along with a precipitous
decline in maintenance funding in the past decade, has simply come the
aging of the equipment that is now beyond its design life.

Observers also suspect that people are more careless these days, and less
likely to obey safety regulations than in Soviet times. In the 1980s the
armies of underpaid but officious inspectors and social wardens probably
contributed to early detection of hazardous conditions. But the Soviet-era
response to infrastructure failure was usually coverup rather than cleanup.

Today's pattern is clear: when money is adequate, Russia's engineers can
deliver. Without money--for hiring more engineers, performing hardware and
software design and development, and buying new equipment--they are not
miracle workers.

The outlook for the rest of Russia's technological infrastructure remains
grim, experts insist. At the Harvard conference, Charles Frank described
the problems ahead. Almost 70 percent of the population drinks water that
is unfit by U.S. standards. One-third of waste water is released untreated.
Railways, electricity, oil and gas pipelines, roads and bridges all need
massive infusions of cash, he said.

Leonid Gozman, an official with a Russian electrical power monopoly, told
the same conference that the Russian national electric grid will need at
least $70 billion over the next five to seven years to maintain current
levels of power output, or the country will face a severe energy crisis as
the power distribution system collapses. In Moscow earlier this year, the
Emergency Situations Ministry issued an apocalyptic prediction that Russia
was becoming vulnerable to innumerable technological disasters, such as
fires, collapsing buildings, radiation leaks, pipeline ruptures, and toxic
spills. Experts warned that much of Russia's industrial equipment might
become virtually useless within five years.

The estimated cost of these needed repairs is about a hundred billion
dollars, about five times the total annual budget of the Federal government.

It seems the only resource in adequate supply is humor, as the
optimist/pessimist joke exemplifies. Even the psychological impact of the
recent disasters was ameliorated by another immediately famous joke.

"The fire in the TV tower has now been explained," the story goes. "They
found out it had collided with another TV tower, probably a NATO one."


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