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CDI Library > Johnson's Russia List

Johnson's Russia List
 

 

December 7, 2000   

This Date's Issues:   4673  4674

 


Johnson's Russia List
#4674
7 December 2000
davidjohnson@erols.com

[Note from David Johnson:
1. Reuters: Ron Popeski, Rumours say Russian PM, others may go.
2. Moscow Times editorial: Pope Verdict Caps Shabby, Unfair Trial.
3. Reuters: Yeltsin criticises Putin over Soviet-era anthem.
4. Interfax: Putin shrugs off Yeltsin anthem displeasure.
5. Izvestia: AN OPEN LETTER FROM A GROUP OF RUSSIAN INTELLECTUALS TO  
VLADIMIR PUTIN. THE NATION'S INTELLECTUAL ELITE IS AGAINST THE SOVIET ANTHEM
.
6. Washington Post:  Rose Gottemoeller, Lopsided Arms Control.
7. Bloomberg: UES' Chubais on Meeting Kasyanov, Reorganization.
8. Wall Street Journal: Russia Might Deregulate Gas, Break Up Gazprom Monopoly.
9. Reuters: Russia says Gazprom, UES not on offer in debt swap.
10. Komsomolskaya Pravda: Ye. Myachin, PUTIN'S GAMBIT. (re foreign policy)
11. Moscow Times: Boom Times? By Alexander Frenkel, Natalya Raiskaya, Lyudmila Roshchina, Olga Matveyeva and Anna Lobzova of Institute of Economics.
12. New book by Robert English: RUSSIA AND THE IDEA OF THE WEST: Gorbachev, Intellectuals, and the End of the Cold War.
13. AP: U.N. Hopeful for Former Communists.
14. BBC Monitoring: Spy case American interviewed in Moscow after sentencing.]

******

#1
Rumours say Russian PM, others may go
By Ron Popeski
 
MOSCOW, Dec 7 (Reuters) - Even by the high-speed standards of the Moscow
rumour mill, the past few weeks have seen it operating at a furious pace,
with Prime Minister Mikhail Kasyanov its prime target.

Kasyanov, an international debt negotiator in office since May, flatly denied
suggestions in a newspaper interview on Wednesday that President Vladimir
Putin was about to sack him.

But the rumours of a government overhaul have gone well beyond the prime
minister.

Other names in focus are presidential chief of staff Alexander Voloshin, long
associated with Putin's predecessor Boris Yeltsin, Defence Minister Igor
Sergeyev, who may be replaced by a civilian, and even Emergencies Minister
Sergei Shoigu, charismatic head of the national rescue service and newly
appointed chief of a pro-government majority party.

Kasyanov's brittle reply, in an interview with the daily Vedomosti, betrayed
little of the pressure on his government.

"It is premature to talk about a reshuffle," he said. "We need to work for at
least a year to get right the government structure, its effective management
and its very framework. So far, I am happy with the make-up of the cabinet."

Kasyanov had little choice but to acknowledge Putin's criticisms of the
government, but dismissed them as minor.

"We made errors, but they weren't critical ones," he told the daily. "And
there was no critical mass of errors."

Putin last week went public with a denial that he was about to dismiss the
government after accusing ministers of failing to produce a coherent policy
on non-ferrous metals.

He has also criticised Kasyanov and his ministers in recent weeks over funds
for the military and debt repayment policy.

"WHERE THERE'S SMOKE, THERE'S FIRE"

Glossy magazines on news stands have devoted whole sections to changes Putin
might be contemplating, evidence which might be used to outwit rivals,
officials whose loyalty might be wavering and "line-ups" in opposing camps
within the administration.

As most articles provide no source for forecasts, some analysts simply advise
allowing events to take their course.

"No one has resigned yet. When it happens it will amount to a political
revolution, changing the landscape," Andrei Ryabov of the Carnegie Endowment
think tank told reporters.

"What the rumours do show is increased confrontation. They are being spread
deliberately by special interest groups and their public relations
representatives to discredit rivals."

Other commentators refer to the aphorism "Where there's smoke, there's fire,"
to suggest that it is simply a matter of time and that rumours in Russia do
presage change.

The name most commonly raised as a replacement to Kasyanov is Sergei Ivanov,
a close friend of Putin's and like him a former KGB intelligence officer who
now heads the influential Security Council. Several prominent interviews with
him have appeared, portraying him as cultured, capable and efficient.

"(Ivanov) follows in the natural line of the president, who prefers not only
close allies in his appointments, but people with a certain mentality in the
way they work and make decisions," the weekly Itogi wrote. "In more concrete
terms, that means people who worked in the KGB."

OTHER POSSIBLE CANDIDATES FOR PM

Some analysts suggest other possible replacements for Kasyanov -- Finance
Minister Alexei Kudrin and Economic Development and Trade Minister German
Gref, author of the government's economic plan.

"Around here, there is always some basis for a rumour. It's simply a matter
of when and who, though I think nothing will happen until February" said Igor
Bunin, general director of the Centre for Political Technologies.

"Putin is vacilliating between various views of the future and decisions will
reflect the path he chooses. Sticking with Kasyanov shows stagnation, a
no-rush approach to reform. Kudrin or Gref would show a more radical
approach. Choosing Ivanov would mean opting for a completely different world
view."

Most analysts are sceptical about the chances for either reformer -- Kudrin
or Gref -- as a future prime minister.

But they said a powerful manager closely connected to Putin in the premier's
seat, like Ivanov, would enable Gref or Kudrin to push reforms through a
slow, bureaucratic machine.

The departure of Voloshin, described by some commentators as the head of a
new "family" representing vested interests in the Kremlin, is seen as a
foregone conclusion as differences emerge between Putin and Yeltsin -- the
man who made him prime minister in August 1999 and paved the way for his
entry to the Kremlin.

Speculation focused on his replacement by Nikolai Patrushev, another ex-KGB
man from Putin's home town of St Petersburg.

Sergeyev's departure from the Defence Ministry has also been widely mooted
after public clashes last summer with the armed forces chief of staff.

And 10 years after the fall of communism, few shock waves would be created by
his replacement by a civilian. Most forecasts have settled on Deputy Prime
Minister Ilya Klebanov, head of the investigation into the Kursk submarine
disaster.

"Putin has looked after the interests of the army," Bunin said. "The army is
happy. A civilian would make no difference."

*******

#2
Moscow Times
December 7, 2000
Editorial
Pope Verdict Caps Shabby, Unfair Trial

More than eight months after his arrest and following a seven-week,
closed-door trial, American businessman Edmond Pope has been convicted of
espionage and given the maximum sentence of 20 years in prison.

Such a result is perhaps the inevitable outcome of a judicial process that
was nothing short of a travesty. We do not know whether Pope is guilty or not
of violating any laws, but we are certain that his guilt was not established
during his trial. Therefore, we cannot help but be outraged at his seemingly
arbitrary conviction and punishment.

Pope's trial has been patently unfair. From the beginning, Judge Nina Barkina
and the prosecutors seemed to be in league against the defense. The judge
summarily denied 15 defense motions, including reasonable requests to include
exculpatory evidence and witnesses. She refused to allow Pope to use his own
translator at the trial, insisting that he make do with the services of one
provided by the Federal Security Service.

The court also refused to consider evidence that the supposedly secret
materials that Pope sought to purchase had been previously published in
textbooks and had been approved for release by the authorities. It refused to
subpoena the documents issued by the institute from which Pope acquired the
"secrets" authorizing their release.

The charges against Pope were based on secret decrees regulating the control
of sensitive information that were never released to the defense. The key
witness, Professor Anatoly Babkin, recanted his accusations on the stand and
swore that prosecutors had bullied him into testifying against Pope.

In short, the trial of Pope has been a sham, reminiscent of Stalin-era legal
proceedings in which the state stopped at nothing to get the result that it
sought. This trial has clearly demonstrated the weakness and
unprofessionalism of the courts and further reinforced the notion that the
state here is incapable of applying its own laws, to say nothing of
administering justice.

Unfortunately, the Pope case is not an isolated exception. Rather, it is a
typical example of Russian "justice" that simply managed to get more
attention than most cases. Defendants throughout the country sit for months
and even years in "pre-trial detention" before ever setting foot into a
courtroom. They are often forced to accept incompetent legal counsel and face
a virtually insurmountable presumption of guilt on the part of prosecutors
and judges.

When Pope was arrested in April, no one knew whether he was guilty of any
crime or not. We still don't. For this reason alone, his conviction should be
overturned.
 
******

#3
Yeltsin criticises Putin over Soviet-era anthem
 
MOSCOW, Dec 7 (Reuters) - Former Russian President Boris Yeltsin made his
first public criticism of successor Vladimir Putin in an interview published
on Thursday, for backing the reintroduction of the Soviet-era national
anthem.

Yeltsin selected Putin, a former intelligence officer, as his favoured
successor in August 1999 and handed power to him when he resigned last New
Year's Eve.

Yeltsin scrapped the old anthem soon after the 1991 collapse of Soviet rule.
He told the daily Komsomolskaya Pravda he could not stomach the music because
he associated it with Communist Party bureaucrats.

He quoted Anatoly Chubais, long a Kremlin adviser and now head of Russia's
power utility, in saying it was immaterial that opinion polls showed that
many Russians favoured the old anthem.

"Chubais was quite right on this score: the president of a country should not
blindly follow the mood of the people," he told Komsomolskaya Pravda. "On the
contrary, it is up to him to actively influence it."

In interviews since going into retirement, Yeltsin has said he has discussed
policy with Putin but always refrained from "picking up the telephone" to
offer him advice.

In a television address this week, Putin said the return of the stirring 1943
anthem was logical as Russians should not reject everything from their
history.

Parliament is to debate the matter, along with other state symbols, this week
and a contest is to be opened to replace words rewritten several times since
the time of Josef Stalin.

The anthem introduced by Yeltsin, a patriotic song by 19th century composer
Mikhail Glinka, was never adopted by law and no words were written for it.
Most Russians are unable to remember the tune and athletes complain they have
nothing to sing at matches or medal ceremonies.

Yeltsin dismissed the argument about sports, saying athletes were "young
people who look to the future, not the past."

He said it was inconceivable that yet another set of words would be written
for the old anthem and proclaimed Russians capable of writing a new
composition.

"...What now, another text? No, you cannot joke about such things," he told
the daily. "The situation with the anthem is a difficult one. So, let's get
going and compose some verse and music!"

******

#4
Putin shrugs off Yeltsin anthem displeasure
Interfax
December 7, 2000

Russian President Vladimir Putin said he had taken note of former President
Boris Yeltsin's displeasure at the choice of the tune for the Russian
national anthem but had not changed his mind on using the old Soviet anthem,
an MP said after meeting Putin on Thursday.

Russia's Regions parliamentary group leader Oleg Morozov said Putin was aware
of Yeltsin's "negative attitude" over the use of Aleksandr Alexandrov's
music, Interfax news agency reported.

"That attitude deserves attention and respect, as does the attitude of any
citizen of Russia, the ex-president is no exception," Putin was quoted as
saying. However, Yeltsin's attitude did not influence his own point of view.

******

#5
TITLE:  AN OPEN LETTER FROM A GROUP OF RUSSIAN INTELLECTUALS TO  
        VLADIMIR PUTIN
        [IZVESTIA DAILY, P. 1, DECEMBER 5, 2000]
SOURCE: FEDERAL NEWS SERVICE

THE NATION'S INTELLECTUAL ELITE IS AGAINST THE SOVIET ANTHEM
/This Song Cannot be Stifled or Killed/

     Esteemed Mr. President,

     The idea of bringing back the music of the former Soviet
anthem causes revulsion and protest.
     This melody is one of the most vivid symbols of the past era.
No new text can totally erase from memory the words glorifying
Lenin and Stalin which had come to be associated with the music of
Alexandrov. The polemics around the anthem has already split
society in which the process of reconciliation and consolidation
was already starting. Galina Vishnevskaya and Mstislav Rostropovich
write that they, like us, wouldn't be able to bring themselves up
to their feet when this anthem is played, while Zyuganov assures us
that at the sound of the familiar tune the whole planet "rises and
applauds".
     We will remind those who have forgotten: before Stalin
selected this melody to serve as the national anthem it was the
anthem of the Bolshevik Party. It remains such today and has just
sounded at the opening of the CPRF congress, without any words
because the music was eloquently speaking for itself. The exponents
of the Soviet past are absurdly preparing (or are we really a
country of the absurd? Or are the rumors true that the author of
the "new" words will be the very same master of applied poetry who
was once admired by Stalin?...) for the anthem of the implacable
opposition to become the official anthem of Russia.
     By what right (is the old anthem being brought back)? What is
the historical logic behind this? The state created by them has
collapsed. Why is it that people who have been vested with
legislative and executive power in the new, non-Leninist,
non-Stalinist, non-Bolshevik Russia want to present the communists
with a huge moral victory without any political justification? The
President himself has said that the Soviet system had driven the
country into an impasse. How can one recall from the past the
sounds that reverberated beneath the dome of that impasse and which
so persistently glorified it?
     Glinka's Patriotic Song has become not only the anthem of new
Russia but also a symbol of the restoration of the links of time.
And even the staunchest champions of an exclusively Soviet Russia
cannot say that this music slights their convictions. But the
essence of this plan is that they, especially the numerous
representatives of the present local authorities and those who are
longing for the past epoch and dream of somehow wreaking vengeance
on the entire decade of Russia's renovation, need a symbol of their
revenge. And the head of state must be clearly aware that millions
of fellow citizens (including those who voted for him) will never
come to respect an anthem that flouts their convictions and insults
the memory of the victims of Soviet political repressions. It is
precisely because we have a memory that we are convinced that it
will be impossible to seamlessly link the history of Russia to the
history of the USSR. The seams are there and they are still
bleeding.
     The main argument of the initiators of the return of the
Alexandrov music is that this is the opinion of the majority. But
it has long been known that in some cases the opinion of people may
run counter to their own interests. Ask anyone if he would like
"Soviet" prices to be back or wages to be increased five-fold, and
more than 60 percent will say yes. Many people found it easier and
more comfortable in the Soviet land. But it is dishonest,
short-sighted and dangerous to 'appease' them in this way. Reviving
ghosts is a risky business.
     We, the children of Russia, live and want to go on living in
a country that has an anthem at the sounds of which one is not
ashamed to stand up.

Signed by: Reverend Alexander Borisov, Yevgeny Anisimov, Oleg
Basilashvili, Vladimir Vasilyev and Yekaterina Maximova, Boris
Vasilyev, Alexander Volodin, Galina Volchek, Valentin Gaft, Yakov
Gordin, Natalya Ivanova, Vladislav Kazenin, Timur Kibirov,
Alexander Kushner, Kirill Lavrov, Yevgeny Mironov, Olga Ostroumova,
Gleb Panfilov, Alexander Panchenko, Andrei Petrov, Andrei Smirnov,
Gennady Rozhdestvensky, Viktoria Postnikova, Lev Rubinshtein, Boris
Strugatsky, Valery Todorovsky, Marietta Chudakova, Mikhail Chulaki,
Yuri Shevchuk and the group DDT, Rodion Shchedrin and Maya
Plisetskaya, Alexander N. Yakovlev, Yuri Saulsky, Alexander Sklyar
(the Va-Bank group).

******

#6
Washington Post
December 7, 2000
[for personal use only]
Lopsided Arms Control
By Rose Gottemoeller
The writer, a senior associate at the Carnegie Endowment for International
Peace, was an assistant secretary for nonproliferation at the Energy
Department during the Clinton administration.

Not yet knowing who will occupy the Oval Office, Russian President Vladimir
Putin put out a call to the next U.S. president to move quickly to further
reductions in strategic nuclear weapons. In a Nov. 13 press statement, he
said: "There must be no pause in nuclear disarmament--radical progress is a
real requirement. Russia is ready."

He went on to repeat an offer to move to a level of 1,500 warheads, well
below the limit of 2,000 to 2,500 agreed on in the 1997 Helsinki Statement.
For the Russians, this number has the advantage of being more in line with
the scant budget they say is available to support their strategic nuclear
arsenal.

How do we get there--to 1,500 warheads? Putin emphasizes that the most
important goal is for the two countries to move quickly and radically to
lower the numbers. He says he would be willing to do it either jointly or in
parallel. The second course, parallel action undertaken unilaterally, is
actually at the heart of nuclear cutback proposals brought forth by
Republican strategists this year. George W. Bush called for a unilateral
approach to strategic arms reductions in a May 23 speech to the Council on
Foreign Relations; he rejected formal negotiations and agreements as too
time-consuming to negotiate and too expensive to implement.

But would unilateral action be enough to satisfy us when the reductions are
in strategic nuclear arms, the weapons that pose the most direct threat to
the territory of the United States? In that regard, I have a story to tell
about how the Russians have carried out another arms reduction. It concerns
the presidential nuclear initiatives of 1990-91--measures adopted by
President George Bush and the Kremlin leadership. The goal was to remove
non-strategic nuclear weapons from operational deployment and place them in
central storage. The initiatives were not formal arms control agreements but
unilateral measures to be implemented informally and in parallel in the
United States and Russia. There were no understandings reached on
implementation standards and no negotiated monitoring or verification
measures.

Recently I was in Moscow and sat down for a chat with an old acquaintance, a
navy man. He raised the subject of how the Soviet Union and, later, the
Russian Federation, had implemented these unilateral measures in the Russian
navy. "We took the warheads off naval platforms but still require them to be
nuclear-ready," he said. "Our captains are still judged by how well their
sailors are trained to handle nuclear weapons, even though nuclear weapons
are no longer carried day to day."

I said that the United States had implemented the initiatives differently, in
that we no longer have such training requirements. He replied, "I don't
believe you. Why would you make changes absent a formal arms control
agreement?"

When I said, "Budget," he responded, "I still don't believe you. In our navy,
unless there is a legal government-to-government document in the form of a
treaty or agreement, the procedures and requirements stay the same."

When I recount this story, people tell me that it worries them. I agree: An
overemphasis on unilateral measures in arms control policy will cause
problems. President Bush and the two Russian presidents did not agree on any
particular approach to implementation, and so the Russians have carried out
the initiatives in a way that suits their law and policy. But the result does
not give the United States the military objective that it wanted: an end to
nuclear capability on Russia's non-strategic naval platforms.

Uncertain military results are the weak link in any arms control policy that
is wholly dependent on unilateral measures. The answer, however, is not to
abandon unilateral action--a proven method for accelerating stalled arms
control policies. Instead, the United States needs to consider ways to
strengthen unilateral measures.

One way might be simply to establish certain broad guidelines for
implementation. For example, stipulate that "warheads should be stored away
from active deployment areas." Although such a measure could not be formally
verified in a unilateral action, at least it would give the two sides a
common standard.

Another step might be to devise confidence-building measures, such as
reciprocal visits to naval platforms to see how unilateral reductions are
being made. Yet another could be a hybrid approach: Unilateral measures are
used to jump-start a reduction process but are then followed up by
increasingly ambitious implementation and cooperation in monitoring,
eventually arriving at a full-fledged reduction-and-verification regime.

This may sound complicated, but it is easier than trying to wrestle with the
questions that would arise from wholly unilateral reductions in strategic
nuclear arms. If the Russians chose not to disband units, halt training or
destroy launch platforms, then we could not know that we had actually
achieved a reduction in the strategic nuclear threat to the United States.
For our intelligence agencies and military, the burden of trying to judge and
counter the threat would be extraordinary. For the new president, the
uncertainty would be grave.

******

#7
UES' Chubais on Meeting Kasyanov, Reorganization: Comment
 
Moscow, Dec. 7 (Bloomberg)
-- Anatoly Chubais, chief executive officer of RAO Unified Energy
Systems, made the following comments about the results of a meeting on
reorganizing Russia's power monopoly chaired by Prime Minister Mikhail
Kasyanov. Energy Minister Alexander Gavrin and Atomic Energy Minister Yevgeny
Adamov also attended the meeting.

Minority investors have criticized UES' reorganization after it unveiled the
plan in March, saying it doesn't give them enough say in proposed sales of
power generators. UES wants to spin off power generators from units that
control energy transmission and distribution and create a national wholesale
electricity market.

Chubais spoke at a press conference.

On the results of the meeting:

``In general we've reached agreement, but there are questions that need
additional discussion.

``The first steps, which haven't yet been approved, include the creation of a
market infrastructure -- setting up an administrator to run the trading
system, preparation for the federal company to run the transmission system,
preparation for the creation of generating companies and distribution
companies -- and preparing all the laws needed for this.

``In 2001 work will intensify on preparation for additional share issues of
future generating companies, for discussions with strategic investors on all
this. We will create those generating companies in the second and third
quarter of next year.''

On Energy Minister Gavrin's proposals:

``The main thing Energy Minister Gavrin suggested was to separate generation
from transmission and distribution, but not to do it for the whole energy
system, but on the basis of the regional territories governed by'' seven
representatives appointed earlier this year by President Vladimir Putin.

``I argued. . .that attaching it to administrative territories doesn't make
sense. . .Clearly, natural regional energy zones will be created.

``The second part of Gavrin's suggestions I found unacceptable. He said we
should first reform the state railways, the state-subsidized system for
supplying essential services to residential housing and raise gas prices. .
.and solve cross- subsidies in the energy industry. . .and a range of other
problems.

``I can't agree with this. Kasyanov agreed with my positions in this part.''

On Atomic Energy Minister Adamov's proposals:

Adamov said he no longer supports nationalization of the transmission lines
and thinks the state's role in transmission and distribution can be resolved
in other ways. I was glad about this and our positions are close.

(State Atomic Energy company) Rosenergoatom proposed creating a generating
company from nine nuclear power generators. This concept in general fits with
our reorganization concept, with one exception -- I think that one such
company is bound to monopolize the market.''

******

#8
Wall Street Journal
December 7, 2000
[for personal use only]
Russia Might Deregulate Gas, Break Up Gazprom Monopoly
MOSCOW -- The Russian government is considering a radical but still
preliminary plan to deregulate the troubled gas market, including opening it
to competition, partially breaking up monopoly OAO Gazprom, and gradually
freeing low, government-set tariffs.

This article was prepared by reporters Jeanne Whalen of The Wall Street
Journal and Yulia Bushuyeva of Vedomosti.

The plan's blueprint describes the cash-starved gas sector as in a "crisis."
State-set gas prices are too low. Declining investment has led to declining
gas production. Many consumers don't pay their bills. The plan recommends
broad liberalization to rescue the sector within six years. The document,
written by several ministries including one led by liberal economist German
Gref, has been delivered to the government for review.

It was unclear whether the document would form the basis for a gas-market
restructuring that the government has promised to adopt in the first half of
next year. Gas analysts said the blueprint will likely meet stiff resistance
within Gazprom, the nation's most powerful company, which has thwarted
attempts to loosen its monopoly in the past. Gazprom couldn't be reached for
comment Wednesday.

Gazprom is Russia's most valuable asset, and most analysts believe the state
will tread cautiously in overhauling it. Still, the blueprint shows the
Kremlin is at least considering deep-seated change. The draft plan is least
radical when it comes to vital exports to Europe, keeping them under
Gazprom's full control for at least the first five years of restructuring.

Some Gazprom investors took immediate umbrage to the plan, saying it could
lead to the nontransparent sale of Gazprom assets at low prices. They argued
that the state should free gas prices and allow Gazprom to work profitably
before undertaking a breakup of the monopoly. Analysts who have criticized a
similar proposal to overhaul the electricity sector said the gas plan looks
just as ill-conceived.

Others said it was too soon to tell. "To say that this will likely degenerate
into insider asset deals is too suspicious, in my opinion, and makes the
mistake of evaluating [Vladimir] Putin's reform team through the prism of the
[Boris] Yeltsin years, which was a very different period," said Steve Allen,
an oil and gas analyst with Renaissance Capital in Moscow.

The proposed restructuring is divided into three stages. In the first,
independent gas producers would be given access to Gazprom's pipeline and be
allowed to compete on the domestic market. Gazprom subsidiaries would also be
transformed into joint stock companies with more independent management. The
document suggests Gazprom would control these firms but, crucially, doesn't
clarify who would own the rest. The state would lift gas prices to $20 (22.71
euros) per thousand cubic meters by 2003, from $14 today. Transport tariffs
and access to gas pipelines would be regulated by the state with equal
conditions for all.

In the second stage, independent firms would ideally hold up to one-quarter
of the domestic market. Gazprom subsidiaries would gain more independence by
selling their gas directly to consumers in Russia or the Commonwealth of
Independent States. Gazprom would maintain a monopoly on lucrative exports to
Europe and would be expected to finance big pipeline construction projects.
The state would lift gas prices to as much as $45 per thousand cubic meters
by 2008. That is still only half the price that gas fetches in Western Europe
today.

In the third stage, independent producers would be allowed to export gas to
Europe, but under Gazprom's control. CIS gas producers would be given access
to Russia's pipelines. The state would largely cease to regulate domestic
prices. Independent gas producers would play a greater role in financing
construction of pipelines and other investments.

Some Gazprom shareholders expressed alarm that the plan doesn't spell out
what exactly they would own after the overhaul. Analysts were also concerned
that the plan appears to recommend selling some Gazprom assets before
domestic gas prices are allowed to rise to world levels.

"If the government sells any assets before gas tariffs are raised to Western
levels, the assets will be sold too cheaply," said James Fenkner, equity
strategist at Troika Dialog in Moscow.

Write to Jeanne Whalen at jeanne.whalen@wsj.com
 
******

#9
Russia says Gazprom, UES not on offer in debt swap
 
MOSCOW, Dec 7 (Reuters) - Russian Prime Minister Mikhail Kasyanov said on
Thursday his country is not considering using shares in natural gas giant
Gazprom or national power grid Unified Energy System (UES) under a debt swap
proposal.

In an interview with the daily newspaper Vedomosti, he said the government
was considering using funds owed to Germany to help German companies
establish themselves in Russia, but the initiative still had to be developed.

"We are ready to cover the investment expenses of a German corporation
instead of repaying foreign debt in marks or euros," Kasyanov said. "Our
understanding is that we are not talking about shares in Gazprom or UES."

Kasyanov was speaking after talks last week with German Chancellor Gerhard
Schroeder at which the idea of a debt-for-equity swap was floated. Russian
officials have since said the proposal could be extended to other members of
the Paris Club of creditor nations.

Russia is seeking to restructure and partially write off about $48 billion in
Soviet-era debts to the Paris Club, but talks have been held up as the
International Monetary Fund has still not approved Russia's economic
programme.

Kasyanov elaborated on the debt proposal discussed in Germany, saying German
firms could play a big role in Russian manufacturing industry either through
joint ventures or fully owned enterprises.

He suggested Russia might provide funds for buying buildings, equipment, or
land, or for starting capital, rather than make debt payments. German
equipment might also be purchased for the plants, he said.

"The expected impact would be double: we pay off our debt and in Russia there
would be an expansion of existing and new production, growth in revenues and
in the number of jobs, tax payments," he said.

Kasyanov said German companies might be interested in taking stakes in
Gazprom or UES, but this was something that might be considered only in the
future as these companies had still to be restructured to make them more
attractive for investors.

Oleg Vyugin, executive vice president at Trioka Dialog brokerage and a former
first deputy finance minister, told Ekho Moskvy radio on Thursday that it
would be beneficial for Russia to provide co-financing for German business
ventures.

"This would be very advantageous for Russia, because on the one hand, there
will be a debt writeoff, on the other, the funds will be channelled to
investments in Russia, to create working places, to create new production."

******

#10
Komsomolskaya Pravda
December 7, 2000
[translation from RIA Novosti for personal use only]
PUTIN'S GAMBIT
By Ye. MYACHIN
    
     After the collapse of the "evil empire" the "democratic
regime" impersonalized by former Foreign Minister Andrei
Kozyrev promptly announced an end of the so-called Cold War.
Since 1945 the Cold War ebbed and heated up between the Western
democracies and the USSR de jure but de facto the United States
and the USSR waged it.
     The euphoria of the new friendship and cooperation era
between Russia and the United States engulfed politicians,
political scientists, businessmen, governments and a large part
of Russian society. Russians sincerely believed that the two
great peoples' eternal friendship was hindered by the Communist
ideology of the CPSU, lack of democratic freedoms and the
Soviet Union's aggressive foreign policy. The euphoria made no
impact on professional spies from the Main Intelligence
Department and KGB.
While political scientists had their heads in the clouds, the
spies were aware that besides political and ideological
interests all countries have national interests. Unlike the
first group of interests, national interests cannot be
reconciled. From the point of view of the US national
interests, Russia has been a rival of the United States and
will remain as such. The U.S.
desire for global hegemony is founded on the economic factor
and its financial system rather than the national pride or
political calculations.
     Russia willingly inherited all debts of the USSR.
Furthermore, Russia mutely agreed to have the Potsdam
Conference decisions annulled and assumed the cost of
withdrawing the huge military contingent. Kozyrev's policy for
reducing the Russian presence in the regions of geopolitical
importance marked an apotheosis of the new Russian-US
relations. This policy was fair but not for the Russian
Federation.
     Russia readily supported the US policy with regard to
Saddam Husayn. At the time, Husayn paid debts accurately and
bought a lot of Russian equipment. During the Soviet presence
in Afghanistan, Husayn waged a war with Iran that blocked
Iran's support for the Afghan mujahedins. That saved Russia
thousands of lives and billions of rubles.
     The "democratic" regime abandoned its Angolan friends and
allies.
     For the benefit of the US policy, Russia gave up the
Libyan arms market. It derailed contracts and gave Quadhafi a
chance to refuse to pay a multi-billion debt.
     Russia's joining the Paris Club during the Yeltsin era was
the last gasp of the "new" foreign policy. The terms of joining
the club were strange. Russia had to write off a lion's share
of the African countries' debts and restructure the remainder.
     We should spell out Russian Finance Ministry's maneuver
that coincided with Washington's desires but encountered
France's opposition. African raw material deposits will be of
crucial importance in the 21st century. Those who have access
to these deposits will prosper during the next century. US
corporations were displeased by France's strong positions in
Africa. After Russia withdrew from this raw materials market,
someone had to fill in the niche. However, equipment and
investment to African countries are needed to extract the
minerals. The International Monetary Fund and the World Bank do
not recommend investing in countries that have outstanding
foreign debt. There was only one way out. Russia's joining the
Paris Club would settle the issue of the African countries'
debt and pave the way for expansion of US international
corporations in the Black continent.
     The Russian Finance Ministry successfully accomplished
this task and ensured an ongoing supply of raw materials for
the United States in the 21st century. Russia in effect
renounced the African debt that exceeded $100 billion.
     Thus Russia's opinion was ignored when Washington launched
an open military aggression against the sovereign Yugoslavia
that, similar to Iraq, did not recognize the US diktat. Saddam
Husayn, Quadhafi and Milosevic are guiltier of refusing to
accept the new world order under the aegis of the USA than of
violating human rights.
     Putin is an expert in geopolitical issues and he
understood very well in what trap Russia had been pushed. He
set off to rectify the external situation simultaneously with
restoring the internal control system.
     Experienced political scientists are unanimous in the
opinion that Putin is phenomenal due to his professional
thinking that no other Soviet or Russian state leader had. The
president's real intentions are his best-kept secret and even
his closest allies are not let into it. This is an intelligence
law. Neither plans, nor methods for their implementation are
shared with anybody.
     However, some conclusions can be made given the practice
of indirect spying pointers.
     While beaming at Mrs. Albright Putin did not express a
strong desire to expand contacts with the United States.
However, he had already visited Britain, Germany and France.
Serious political scientists in these countries are openly
pointing to a threat of misbalance after the collapse of the
USSR. A growing number of European politicians agree that the
US and European national interests do not form parallel lines.
It's difficult to calculate the point at which they will cross.
But we can confidently say that the pan-European solidarity is
emerging.
Putin's policy indicates that he understands this process.
     Putin took steps toward warming up relations with the
countries that in the past used to be of Soviet orientation.
Those steps made Americans so nervous that contacts took place
between US officials and the Kim Il-sung regime. The Russian
foreign minister personally delivered a message to Saddam
Husayn.
The content of the message has remained unknown. However,
Foreign Minister Igor Ivanov's statement on Russia's position
with regard to anti-Iraqi sanctions indicate that the letter
contained not only formalities.
     Therefore, we can expect a renewal of top-level contacts
with Libya, Angola, Cuba and Vietnam in the not very distant
future. Putin can play such trump cards in these countries as
debt discount, and arms supplies that might be resumed on
mutually advantageous terms. Other people might substitute for
"Friend Bill" and "friend Helmut."
     Opportunities for the Russian policy in Afghanistan are of
particular interest. If special measures are interpreted
correctly, contacts with the Taliban movement might be
established. Taliban could be reoriented in the anti-US
direction. The statement of CIS countries bordering Afghanistan
that Taliban does not pose a threat to them seems interesting.
This statement was made after consultations with Putin. Special
measures made the Soviet intelligence famous when Putin matured
there as a spy. Such measures can be instrumental in resolving
domestic issues as well as in dealing with some of the external
problems. For instance, it's hard to find a better mediator
than the Taliban in settling the Chechen conflict. It is
probably morally wrong but this situation prompts us to recall
an adept politician Giulio Mazarini. "I must admit that my
policy was not always honest. But it has never been
unreasonable," the French minister said.
     Prior to being elected to the top post, spy and analyst
Putin could not help seeing that the US policy toward Russia
resembles special operations carried out by CIA and its
branches, the US State Department and the IMF.
     Putin certainly noticed that the IMF plays the role of US
gendarme in the third world countries. The IMF willingly
extended huge loans to Russia during a "privatization" of
budget assets via the GKO financial pyramid. For every 100
rubles loaned to the state, 300 rubles were received a month
later. The IMF leadership could not have been unaware that the
loans that the fund granted to the Chernomyrdin government
financed GKO. IMF terminated the financing as soon as the
Primakov government announced that it would use the loans
properly. Thus the US policy was not always honest but it has
never been unreasonable.
     We are probably witnessing a grandiose chess match between
Putin and Washington. The American player is faced with the
tactics that is not stipulated in the chess game theory.
     Putin inherited from the previous regime a government that
includes numerous pro-American executives. They are undermining
Putin's position.

******

#11
Moscow Times
December 7, 2000
Boom Times?
By Alexander Frenkel, Natalya Raiskaya, Lyudmila Roshchina, Olga Matveyeva
and Anna Lobzova
Alexander Frenkel, Natalya Raiskaya, Lyudmila Roshchina, Olga Matveyeva and
Anna Lobzova are researchers for the Academy of Sciences' Institute of
Economics. They prepared this study for Vedomosti.

As we enter the last month of 2000, the fundamental trends
of economic development seem to be stable. Real economic output is growing
and a number of positive factors continue to influence the economy as a
whole. However, despite these outwardly positive indicators, we still have
not observed qualitative economic improvement.

The economy as a whole is still characterized by barter and quasi-monetary
transactions. At the same time, the pace of investment has slowed over the
second half of the year. In June, according to figures from the State
Statistics Committee, the pace of investment compared with May was 22.2
percent. In November, that figure was just 6.6 percent compared with October.
Much of the investment that did occur was in the energy sector and was
generated from domestic sources. Such investment is, of course, virtually
impossible in other sectors of the economy.

The growth in personal income that was supposed to serve to expand the
consumer economy has been largely offset by inflation. Real disposable
incomes presently remain at just 80 percent of 1997 levels.

Gross domestic product has increased by 6.9 percent over last year and output
in the most important sectors of the economy â?" industry, construction,
agriculture, transport and retail trade â?" has increased by 8.3 percent.

The industrial sector accounts for 33.4 percent of GDP according to Finance
Ministry figures. The overall output of large and medium-sized industrial
enterprises increased by 11.2 percent in 2000. This figure encompasses
significant growth in all major industrial branches, with the greatest
increases being observed in machine-building (25.2 percent), ferrous
metallurgy (16.2 percent), the food industry (12.1 percent) and nonferrous
metallurgy (10.9 percent). The production of some consumer goods saw
impressive growth: The production of television sets, for instance,
quadrupled over 1999.

The energy complex dominates the industrial sector, accounting for 28.4
percent of output. On the whole, energy output has increased sufficiently to
keep pace with the demands of the growing economy. Energy production grew by
3.7 percent in 2000 and reached a total of 870.3 billion kilowatt-hours.

Oil production also increased, due to high global prices and increased
domestic demand. Natural gas production, however, continued to fall, caused
primarily by nonpayments by the countries of the former Soviet Union and by
domestic customers, as well as continued reduced investment and low domestic
prices.

Ferrous-metals production increased by 16.2 percent in 2000. This growth was
primarily stimulated by the improved structure of exports for ferrous metals,
increased domestic demand and high world-market prices. Improved solvency in
the machine-building, energy and construction sectors has led to increased
consumption of rolled steel and steel pipes.

Growth also continued in the chemical and petrochemical industries this year.
They saw growth of 13.4 percent over 1999, stimulated by higher exports and
increased domestic demand.

Production of truck tires, to take one example, increased by nearly 20
percent. Machine-building and metal-working also continued their upward
trend, improving by 16.9 percent over last year.

Growth in the food industry was led by a 20 percent increase in beer
production, followed by strong growth in meat production (19 percent) and
dairy production (12 percent).

The pattern of growth also continued in the forestry, cellulose and paper
industries. This sector saw 13.9 percent growth in 2000. However, the
greatest increase this year was seen in the light-industrial sector, which
improved by 29.1 percent over 1999.

Although the overall rate of capital investment has slowed toward the end of
the year, overall investment was up by 20.4 percent over 1999 due to heavy
activity in the first half of the year. The increase in investment was
primarily due to the overall improved financial picture for many individual
enterprises, for which internally generated resources form the most important
source of investment.

The rate of increased investment in 2000 has been nearly three times the
overall growth rate of the GDP.

The situation on world markets for Russia's most important exports continues
to be favorable and this has resulted in export growth of 34.7 percent in
2000.

In all, Russia sold exports worth $102.2 billion this year.

At the same time, imports continued to recover from the 1998 crisis, although
the rate of recovery is slow. Imports grew by 7.6 percent this year, reaching
a level of $42.6 billion. Therefore, Russia will have an overall positive
trade balance of $59.6 billion in 2000.

However, there are some dark clouds on the horizon. The slowdown of the U.S.
economy may result in reduction of the exchange rate of the dollar to the
euro, in which most Russian exports are denominated.

Naturally, such a development would make Russian products more expensive and
could slow the growth of exports.

*****

#12
Date: Wed, 06 Dec 2000
From: Gregory Houle <gh280@columbia.edu>
Subject: New book

Columbia University Press has recently published a new book by Robert English
called RUSSIA AND THE IDEA OF THE WEST: Gorbachev, Intellectuals, and the
End of the Cold War

The book is an intriguing intellectual portrait of a generation of Soviet
reformers, as well as a fascinating case study of how ideas can change the
course of history. In most analyses of the Cold War's end the ideological
aspects of Gorbachev's "new thinking" are treated largely as incidental to the
broader considerations of power-as gloss on what was essentially a retreat
forced by crisis and decline. Robert English makes a major contribution by
demonstrating that Gorbachev's foreign policy was in fact the result of an
intellectual revolution. English analyzes the rise of a liberal
policy-academic elite and its impact on the Cold War's end.

English worked in the archives of the USSR Foreign Ministry and gained access
to the restricted collections of leading foreign-policy institutes. He
conducted nearly 400 interviews with Soviet intellectuals and policy makers,
from Krushchev- and Brezhnev-era Politburo members to Perestroika-era notables
such as Eduard Shevardnadze and Gorbachev himself. English traces the rise
of a
"Westernizing" worldview from the post-Stalin years, through a group of
liberals in the late 1960s-70s, to a circle of close advisers who spurred
Gorbachev's most radical reforms.

ISBN 0-231-11059-6, paper $18.50 (also available in cloth, call for details)

to order by phone call 800-944-8648 or 914-591-9201, or order online at
http://www.columbia.edu/cu/cup/catalog

******

#13
U.N. Hopeful for Former Communists
December 5, 2000
By NAOMI KOPPEL
 
GENEVA (AP) - Economic development in the former communist countries of
eastern Europe and central Asia will be higher this year than at any time
since the fall of the Berlin Wall in 1989, a United Nations agency said
Wednesday.

The U.N. Economic Commission for Europe said, however, that many of the
countries of the former Soviet bloc, Yugoslavia and Albania still have
painful adjustments to make in the move toward a market economy.

UNECE predicted that the gross domestic product for the 27 nations of the
region would grow by more than 5 percent in 2000, outstripping western Europe
and matching North America.

``Strong import demand from western Europe gave a boost to exports from the
transition economies while commodity exporters benefited from higher global
demand and rising commodity prices,'' said the 176-page Economic Survey of
Europe.

The improving performance is likely to peak this year and fall off to around
4.2 percent in 2001, it said.

``I think there is hopefully the beginning of a new trend, but we must
remember that this is very often from a very low base,'' Danuta Huebner,
UNECE executive secretary, told reporters. ``So we need many years of strong
growth really to feel the impact on the standard of living of the
population.''

``For a few countries this will be the decade of completion, but
unfortunately for most this will be a decade of very painful changes,'' she
said.

In western Europe, UNECE predicted growth of 3.4 percent in 2000 and 3.1
percent in 2001. Growth in the United States will decline from 5.2 percent
this year to 3.2 percent in 2001.

Like other forecasts from major international bodies, UNECE said levels of
economic growth in the world's major economies are likely to fall over the
next year. But it said it saw little risk of a major rise in inflation in
western Europe, and therefore no reason for a tightening of monetary policy.

Huebner said the situation in Russia was particularly encouraging.

``In Russia, we can take note of more market-oriented behavior among
companies, and I think this has always been a crucial element in all
countries in transition that are successful today,'' she said.

*****

#14
BBC Monitoring
Spy case American interviewed in Moscow after sentencing
Source: Russia TV, Moscow, in Russian 2000 gmt 6 Dec 00

One of the main reports today is the news that US citizen Edmond Pope has
been sentenced by a Moscow court to 20 years in a strict-regime prison colony
for espionage in Russia. Today we can show you clips from an interview given
by Pope after sentencing... Here is a report from our special correspondent
Denis Yakovlev.

[Yakovlev]... After the verdict, Edmond Pope returned to the Lefortovo remand
prison, where he gave his first interview after arrest. Pope said that if he
were pardoned, he would not be against coming to Russia again.

[Pope, in English, with Russian voice-over] I would like to, but I'm afraid
my wife wouldn't let me. She's taking it badly at the moment. It was too
difficult an experience for her, and for my whole family, and for my very ill
father.

[Unidentified voice in English, with Russian voice-over] Do you regret coming
to Russia?

[Pope] No, I regret what happened. I have no regrets about coming to Russia.
I gained a vast experience - the experience of contacts with splendid people,
and I regard Russian people with profound respect.

[Unidentified voice in English with Russian voice-over] But, for you, is
negative experience also experience?

[Pope] Yes. We are maturing together in this way. It's how we learn to deal
with each another...

*******

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