Johnson's Russia List #5611 21 December 2001 davidjohnson@erols.com A CDI Project www.cdi.org [Note from David Johnson: 1. Moscow Times: Oksana Smirnova, Hunting For Russia's Next Dostoevsky. (Interview with literary critic Alla Latynina) 2. Reuters: Patrick Lannin, YEARAHEAD-Russia faces 2002's hurdles with confidence. 3. The Russia Journal editorial: New Year Wishes. 4. Kommersant: THINGS WILL GET WORSE. Political scientists predict Russia's future. 5. Moscow Times: Manana Aslamazian, A Year of Hard Lessons for the Media. 6. Obshchaya Gazeta: MOSCOW-WASHINGTON ALLIANCE POSSIBLE, RUSSIAN ACADEMICS SAY. 7. Moscow Tribune: Stanislav Menshikov, Subject: UNANSWERED DOUBTS ABOUT NMD. Will the Putin-Bush Love Affair Last? 8. The Russia Journal: Andrei Piontkovsky, Russia’s elastic elite turns its eyes West. Putin has chosen to face reality, and the herd has gone with him. 9. NEWSWEEK WEB EXCLUSIVE. Christian Caryl, Robbery, Russian Style. What could be behind the bizarre break-in at NEWSWEEK’s Moscow bureau? 10. Washington Times: Jane Wiegand and Zurab Vanishvili, Georgia, Moscow ease tensions. 11. Financial Times (UK): Moscow's elusive market makers show up online: Paul Taylor tracks down Russian securities information on the internet 12. Reuters: Russian parliament backs new labour laws. 13. Tribuna: Vladimir Kuklev, PRESIDENT OF THE UNITED STATES ISN'T TELLING THE WHOLE TRUTH. Possible consequences of the US withdrawal from the ABM Treaty.] ******** #1 Moscow Times December 21, 2001 Hunting For Russia's Next Dostoevsky By Oksana Smirnova Literary critic Alla Latynina has been with Literaturnaya Gazeta for as long as she can remember. She has been a columnist, a department head and deputy editor of literature. Today Latynina also writes a weekly column for a second paper, Vremya MN. She is a member of the critics' guild, which is grandly named the Academy of Russian Letters. Latynina has a handful of books and hundreds of articles to her name. At present she is compiling her critical articles from the 1990s for publication in book form. Latynina's opinion carries weight in the world of Russian literature. Her services are in constant demand, and she can frequently be found on the juries for Russia's various literary prizes, including the Russian Booker, for which she chaired the first jury in 1992. Latynina recently spoke to The Moscow Times about the state of literature in Russia since the collapse of the Soviet Union. Q:In the past decade we've seen the rise of pulp fiction in Russia. What genre of popular literature interests you most? A: Detective novels, because intellectuals are experimenting with them now. Polina Dashkova is, of course, an intellectual writer. Alexandra Marinina, well, what can you say. She's a former police officer. But Nik Perumov is a microbiologist with a huge fund of technical knowledge and a great understanding of Russia's culture of science. He doesn't create his fantasy worlds simply in order to entertain the reader. Boris Akunin fits in this category, too. The detective novel attracts writers who have shied away from writing traditional psychological novels about contemporary life. And if you think about it, an old-fashioned novel about Russia in the last 10 years would be a terrifying thing. The detective novel has its own strict generic frame, and today's reality fits quite nicely into it -- crime, the mafia, kidnapping, murder. Q:So ours is the era of detective fiction? A: To a great extent, the potential for realistic prose has been vested in the detective novel. For that reason, we should pay close attention to how this genre develops in Russia. Because something very interesting might result down the line. The reader who wants to know what's happening in Russia these days reads newspapers, of course, but he also reads detective novels. Q:Are these writers just catering to the market? A: All writers who want their books to be read take their readers into account when they work. Some of our authors write to win prizes, to build up their reputation. And others write in such a way as to interest Slavists at Western universities. There is a very specific category of poets and prose writers whose work is studied in the West. These writers carry on creating a sort of legend of Russian literature for foreign professors. But this approach is totally unproductive because there are fewer and fewer Slavists in the world, so these writers are receiving fewer grants, invitations to lecture abroad, etc. Q:Who were the important writers of the 1990s? A: I don't think that the 1990s produced a single writer of truly historical importance. We had Viktor Pelevin and Vladimir Sorokin, among others, but all in all I would characterize the 1990s as a sort of twilight period in Russian literature. Will things change? That's very hard to say. I am prepared to bury literature for good, but I am also prepared for things to develop in a positive direction. Q:How did the 1990s compare with the 1980s? A: During the 1980s, we witnessed a remarkable explosion of literature. There was a fantastic stirring in society. At the same time, a terrible uncertainty struck absolutely everyone at once. We all knew that the Thaw had come and gone once before. I did not believe that the changes then underway were irreversible. But we had the sense that miracles could happen, and that we had to do everything as fast as possible. Things changed so quickly. In 1988, the progressive Yegor Yakovlev cut the name of Alexander Solzhenitsyn from an article I wrote for Moskovskiye Novosti. In 1989, Novy Mir published "Arkhipelag GULAG." The pace of change was incredible, and the interest in literature was just as incredible. People devoured every new publication. Q:But did the 1980s produce truly significant works? A: No. Everyone was busy reading all the new and formerly forbidden books that appeared. Reading itself seemed a crucial activity, and during all the commotion we lost track of one thing -- what was actually being written while we read. Time has shown that not much of interest got written. We were busy eating up dishes prepared long before. And while you're eating, there's no need to cook. Q:So in the 1980s we were busy reading. What about the 1990s? A: In the 1990s, we overturned all the achievements of the past. We tore down everything done by preceding generations, including the literature of perestroika. We ripped Anatoly Rybakov, Vasily Aksyonov and Vladimir Voinovich from their pedestals along with everything dear to the 1960s generation. The new generation of writers was occupied with clearing the ground, making room for itself. But literature is not a cemetery, where old graves must be removed to make room for the new. Literature is a boundless field. Anyone who has the strength can make their mark. Q:How do you know what writers will leave their mark? A: Sometimes it's immediately clear. Take Solzhenitsyn. When I read "Arkhipelag GULAG" in the mid-1970s, I did not say it was a great work of art. But I knew that it would endure, like a chronicle, that it would never be forgotten. It is one of the books that one must read in order to be considered an educated person. As for Lyudmila Ulitskaya [who won the Russian Booker prize earlier this month], it's clear to me that she is simply the cream of this year's crop. That's what the literary prizes are -- a one-year cross-section of literature. But I read nothing in the 1990s that will stand the test of time. For example, I like the work of Vladimir Makanin very much, but I clearly see that it will leave no trace in literary history. His name will remain among the ranks of second-rate authors. Q:How do literary prizes affect the development of literature? A: Prizes, paradoxically, have no direct relation to literature. Prizes always establish a hierarchy, and that only makes sense in terms of a single year. They attract attention to literature from society at large, but they do little to increase actual interest in literature. Often they do nothing to develop literature, especially in Russia, where they accomplish nothing at all. Books that receive the English Booker are published in huge runs, and the books fly off the shelves. In Russia, the winning authors get a financial shot in the arm and their picture in the papers. But strangely, this does nothing to make them more famous or anything else. I can't say that prizes are useless, however, because they do attract the public's attention to literature. Q:Does literature have a future in Russia? A: If it has a future here, and that future lies in stepping back from the current dead end into which postmodernism has led us. Our writers need to turn their gaze back to real life, because life is the inexhaustible source of stories. In our fashionable literary circles this approach is considered "slumming," because this is what our detective writers do. Contemporary reality is seen as an "abandoned field" that has been claimed, for the most part, by the detective novelists. ******* #2 YEARAHEAD-Russia faces 2002's hurdles with confidence By Patrick Lannin MOSCOW, Dec 21 (Reuters) - Russia, reviled as a bankrupt pariah state just three years ago, enters 2002 as one of the few countries showing good economic growth and a rising stock market and with new, closer relations with the West. After 10 years of economic and political chaos unleashed by the collapse of communism in 1991, many commentators say the country seems to be finally getting it right. It is not just the economy and reforms which have earned praise, but also President Vladimir Putin's pro-western policy, particularly his energetic support of the U.S. campaign in Afghanistan. Putin is a pragmatic leader, intent on easing tensions by cooperating with Cold War foe the United States, in the hope of getting concrete benefits from the West, commentators say. Benefits would include accelerated entry to the global trade body, the WTO, and help with restructuring the country's huge foreign debt if economic times get tougher. But Putin faces short-term economic and political challenges next year and unease remains over Chechnya, where human rights groups say abuses continue. Oil, the key driver of Russia's success in the last two years, is top of the economic list next year. A dollar fall in the price of a barrel of oil lops $1.0 billion off Russia's revenues, economists say. A sharp fall in oil prices was one reason for the country's 1998 financial crisis, which brought almost pariah status. But the International Monetary Fund's representative in Moscow Poul Thomsen was calm about Russia's prospects. "There is of course a scenario where oil prices drop so much and the recession in the West is so bad that there will be a need for even further adjustment of policies and perhaps also some borrowing, but it is not on the horizon," he told Reuters. He said the country could withstand a substantial fall in oil prices and still keep its financial house in order. The government forecast economic growth next year of around four percent, down from an expected 5.5 percent this year and a record 8.3 percent in 2000 but above one percent growth estimates for the United States and the joint economies of the European Union. LONG-TERM, RUSSIA NEEDS BILLIONS But the bare economic facts do not give the whole picture, World Bank chief economist for Russia Christof Ruehl said. "One has to make a distinction between the macro figures which all indicate that things are good...and the real financing demand, which is what you see when you go 10 minutes out of Moscow when roads get dilapidated and trees are growing in the factories through the roof," he said. Russia, omce a major power, has per capita GDP of around $2,000, compared with $10,000 in Portugal, the poorest EU state, and more than $30,000 in the United States. Russia needs to ensure steady economic growth for many years to come, something Ruehl said could only be done by broadening the economy away from oil dependence. Putin's economy broadening plans, which are set to continue in 2002, have included key reforms such as a new code which allows people to buy and sell land for the first time since the 1917 October revolution, and efforts to make doing business easier. Ruehl said legislation was just a first step. "If 2001 was the year of reform then 2002 will be the year of implementation. The real difficult part is to track what happens on the ground (with reforms)," he said. Economic changes which restored investor confidence and boosted the stock market by almost 30 percent this year, making it one of the best-performing bourses, have come with political and diplomatic shifts. PUTIN NEEDS BENEFITS FROM POLICY SHIFT Firming ties with the United States will continue in 2002 despite criticism that the government is selling out to the West, being soft on issues such as Yugoslavia, the Anti-Ballistic Missile Treaty and NATO expansion, commentators say. But strengthening links with the West is expected to be balanced by further efforts to woo China. Putin will also need to claim concrete benefits to show Russian citizens and policy makers he is doing the right thing. Benefits could come from better ties with NATO and greater cooperation with the United States and European Union to get Russia into bodies like the World Trade Organisation. "The changes in Russian foreign policy have been so abrupt and unexpected that the Russian political elite has had no time to reorient itself," military newspaper Nezavisimaya Voyennoye Obozrenie said. "The president will be able to prove the correctness of the new course only if the West really moves toward Russia and Russian citizens really feel the impact of this. If this does not happen, the present pro-Western turn could easily be replaced with an opposite one." ******** #3 The Russia Journal DECEMBER 21-27, 2001 Editorial New Year Wishes Assessments of Russia have often borne the stamp of either deep pessimism or exuberant enthusiasm, and in virtually no case have these expectations been fulfilled. Expectations were high at the beginning of the decade. Many in Russia and abroad were laboring under the illusion that dismantling the communist system overnight, freeing Russia from its obligations to fund the other Soviet Republics and imposing shock therapy would, in a twinkling of an eye, transform the country from an authoritarian, lumbering monolith into a peaceful and prosperous democracy a la Sweden. These hopes were naive in the extreme, as experience has proven to be true in spades. The old nomenklatura simply switched its rhetoric to appear "democratic" and shifted to brazen instead of hidden looting; the democratic aspirations of the Yeltsin government were quickly shown to be no more than window dressing; and bureaucracy, corruption and the uncompetitiveness of Russian enterprises proved to be too entrenched to be eliminated effectively. Instead of becoming a new European country, Russia appeared to be drifting toward Guatemala. All this was often ignored in the West. Then came the 1998 financial crisis, the infamous Bank of New York money-laundering scandal and revelations that the International Monetary Fund might better be termed the "International Oligarch-Enrichment Fund." Once burned, Western commentators discovered what had long since been common knowledge in Russia: The country and its economy had been hijacked by brigands, double-dealers and thieves, not to mention one alcohol-besotted president. Suddenly, commentators changed their official tune; instead of a success-story-to-be, Russia was now seen as a perennial and irremediable basket case, its future consisting only of a slow and inevitable slide into wretchedness and irrelevance. It has only been three years, but the West, and much of Russia itself, have once again become enamoured of this country. Like former Soviet leader Mikhail Gorbachev and former President Boris Yeltsin, President Vladimir Putin is held by many as possessing the Keys to the Kingdom. Under Putin, it is said, Russia will finally lay the groundwork for a prosperous economy and (relatively) democratic state. It is true that Russia under the leadership of Putin has seen great improvements. Unlike Yeltsin, whose promises seemed never to come true, Putin’s tutelage has seen economic growth unheard-of since the Khrushchev era. The past two years have also seen a level of political stability that is like a breath of fresh air after the chaos of the past decade. And he appears to be attempting to wind down the incompetently run debacle in Chechnya, which has been the principal stain on his record to date. It is also true, however, that all this has not been without a downside. This political stability has been bought with harassment of media hostile to the Kremlin and the transformation of the Duma into a body that does little expect rubber-stamp legislation passed to it from above. The economy continues to improve, but at a slower rate, and it remains to be seen whether or not the Putin administration can deal with slashed oil prices on international markets. It is also possible that Kremlin-inspired reform projects will just end in an oligarchic feeding frenzy like those Russia saw in the 1990s. Still, all in all, we have reasons to feel optimistic. We hope that in the coming year these expectations will be fulfilled and that Russia and the Russian people continue moving toward a better future. ******** #4 Kommersant December 21, 2001 THINGS WILL GET WORSE Political scientists predict Russia's future Author: Yelena Tregubova [from WPS Monitoring Agency, www.wps.ru/e_index.html] AT A ROUNDTABLE CONFERENCE ON "THE POLITICAL ARENA MIDWAY THROUGH PUTIN'S PRESIDENCY: HALFWAY FROM CHAOS TO ORDER", POLITICAL SCIENTISTS WERE PREDICTING DOOM AND GLOOM FOR RUSSIA IN THE NEAR FUTURE. SURPRISINGLY, PRESIDENTIAL ECONOMIC ADVISER ANDREI ILLARIONOV WAS AMONG THEM. <> The latest forecasts for Russia's political and economic future At a roundtable conference on "The Political Arena Midway Through Putin's Presidency: Halfway from Chaos to Order", political scientists were predicting doom and gloom for Russia in the near future. Surprisingly, presidential economic adviser Andrei Illarionov was among them. "The problem isn't that we have a Stalin in control," said Mikhail Delyagin of the Globalization Institute. "The problem is that it's a small Stalin who can't even make up his mind on the strategy and where he wants to lead the country." The economist is convinced that a tough crisis and brutal military-police regime await the nation in 2003-05. The only optimistic phase in Delyagin's speech was his call for "continuation of the work on economic strategy, because it will be needed in any case, if not during the junta period then right after its inevitable fall." Virtually all participants in the roundtable conference accepted the classification of the groups fighting for power and control over the nation's major resources: the former Yeltsin Family, Anatoly Chubais' group, and the people from St. Petersburg, also known as chekists. Surprisingly, this thesis was even accepted by presidential economic adviser Andrei Illarionov who turned up at the meeting "just to listen. Illarionov openly announced that the power struggle and media wars under President Putin "are no less vicious than they were under President Yeltsin". Illarionov: We are back on the tracks we have traveled over the last ten years. At the same time, the dynamism and scale of corruption are even higher than ever before. It was amateurish in the past, but now corruption is becoming institutionalized." According to Illarionov, the first two years of Putin's presidency were a waste of time from the economic point of view. "Had we pursued at least the policy we had back in 1999, we'd have had growth of 15% rather than 5%," he said. "Instead, we live on oil revenues only. The relative stability of 2000 and 2001 should be ascribed to the incredibly favorable situation on global oil markets, not to a new team in the driver's seat." Completing his speech, Illarionov predicted an inevitable collapse for Russia unless substantial structural changes are initiated and power struggle ended: "Because any entity which is not integral splits and disintegrates sooner or later, as the example of the Soviet Union shows." Gleb Pavlovsky of the Effective Policy Foundation was more concerned about foreign policy. He warned against overly-close relations with the United States, because "it is always the same pattern with us: Russians are friends first, and then we're being called bastards." Alexander Oslon of the Public Opinion Foundation took all gloomy predictions in his stride, stressing that Putin's approval rating remains unbelievably high. "When we approach respondents with a list of ten names, 50% choose Putin. When the list contains his name alone, he is supported by 54%," Oslon said. ********* #5 Moscow Times December 21, 2001 A Year of Hard Lessons for the Media By Manana Aslamazian Manana Aslamazian is general director of Internews-Russia, a non-profit organization which provides support to independent regional television broadcasters. He contributed this comment to The Moscow Times. The main events of 2001 in the Russian media have undoubtedly been the change of ownership at NTV, with Gazprom-Media taking control of the channel from Vladimir Gusinsky, and the ongoing legal problems surrounding the Boris Berezovsky-controlled TV6, which is currently undergoing bankruptcy proceedings. What conclusions are to be drawn and what lessons to be learned from these events? It is clear that state officials have become less tolerant toward so-called opposition media outlets and are adopting a more interventionist approach than was the case a few years ago. What's less clear, however, is the level of the state administration at which these interventionist impulses are conceived. Media companies (in particular television companies), therefore, need to take all precautions -- insofar as is possible -- to ensure a maximally risk-free existence. This means, first, not borrowing or accepting money with political or other strings attached, which could lead to an unhealthy state of dependence and the attendant negative consequences. The case of NTV and Media-MOST provides the most graphic illustration of the risks associated with getting involved in this game. And second, media companies need to make sure that all their legal paperwork is in order so that they are not an easy target for attack on legal grounds. In this regard, the case of TVK television in the Lipetsk region comes to mind. TVK genuinely had one of the strongest teams of journalists of any regional television channel, but as a result of legal sloppiness and mistakes made by the management, the Lipetsk regional administration was able to close the company down in August of this year. The result is that a team of talented journalists is out of work and Lipetsk has been deprived of a valuable source of news and analysis. So, the main lesson to be drawn from the events of this year is that media companies have to do everything within their power to minimize their exposure and vulnerability to pressure and "attacks" from regional and federal authorities. This should be taken on board by both national and regional television companies, but especially by the latter. In contrast to NTV, most regional companies cannot mobilize high-profile defenders to lobby on their behalf in the case of aggression from the authorities. Nor do many regional channels inspire sufficient loyalty in their viewing public to be able to get people out onto the streets to demonstrate in their defense (as was the case with NTV). However, not even regional governors would dare to openly close down a television station for providing critical or oppositional news coverage -- they will always look for some legal technicality or other pretext. So the task is to deprive the authorities, as far as is possible, of any such pretexts. In terms of the news and current affairs content of national television, this year has seen the differences between channels diminishing. On the plus side, this points to greater professionalism and a more balanced approach to reporting. On the negative side, it is an indication that channels are exercising more self-censorship and worrying excessively about how the authorities will react. The ownership change at NTV has not altered the media landscape as radically as many thought or feared it would. And, in fact, there have been some positive consequences -- in particular the exodus of journalists from NTV has resulted in the talents and skills of the NTV journalistic team being spread across RTR, TV6 and NTV, raising overall levels of journalistic professionalism. A strongly positive trend this year has been the growth of advertising revenues on the back of general economic growth in Russia. Revenues have grown by an estimated 60 percent to 70 percent this year and are now approaching (or may even have exceeded) pre-crisis levels. This is a particularly important development as advertising money comes without strings attached and increased revenues reduce the media industry's dependence on support from the state or from oligarchs. It is not easy to assess the role of Press Minister Mikhail Lesin. For a government official he gets too emotional and involved in situations where he should remain firmly above the fray. He would do well to adopt a more neutral stance. Lesin is undoubtedly a clever and effective manager, as well as being a good operator. However, he is pulled in different directions and this is evident in his behavior. On the one hand, as a former businessman he supports the freedom of the media and views things through the prism of the free market, while on the other hand the laws of political survival dictate that he behave loyally. For a number of reasons, I don't think he wants to strip TV6 of its broadcasting license, but that does not mean that he will stick his neck out in order to protect the channel to the bitter end. Looking ahead to 2002, I expect that the state will continue to try to strengthen its control over the media and that there will be more pressure applied to "opposition" media outlets. Assuming that the economy continues to grow, this should translate into increased advertising revenues for media companies. Furthermore, amendments to the profit tax that come into force on Jan. 1 should have a positive impact on the industry, as they permit companies to write off considerably more of their advertising expenses than has been the case up to now. Although, it seems that few media managers currently have a clear idea of how this will affect the financial position of their companies next year and thereafter. To conclude, the main dangers faced by the media industry are the strengthening role of the state, economic instability (with the attendant loss of advertising revenues), and a failure to learn the lessons of this year and to learn from the mistakes that have been made. In general, the media community would do well to pay more attention to its common interests, act with greater solidarity and to be fully cognizant of the potential dangers that lie ahead. ******** #6 Obshchaya Gazeta No. 51 [translation from RIA Novosti for personal use only] MOSCOW-WASHINGTON ALLIANCE POSSIBLE, RUSSIAN ACADEMICS SAY By Nikolai DMITRIYEVSKY A group of outstanding Russian international affairs scholars have introduced Moscow's diplomatic and expert community to their monograph entitled Between the Past and the Future: Russia in the Transatlantic Context. Within the framework of this scientific project, headed by Academician and honorary director of the Russian Academy of Sciences' Institute of European Studies Vitaly Zhurkin, the political scientists analysed what place Russia may occupy in the world after September 11. The new study by the Russian political scientists has evoked great interest in the Russian political establishment and the expert community. Apart from representatives of Russia's leading scientific institutions and chief executives of the Russian Academy of Sciences, the presentation ceremony was attended by highly-placed officials of the Foreign Ministry, parliament deputies, and foreign diplomats accredited in Moscow. The interest displayed by the political and diplomatic elite in Academician Zhurkin's project was partly evoked by the high reputation of the people who took part in it. Besides Zhurkin, the project's editorial board included Andrei Kokoshin, Sergei Rogov and Nikolai Shmelyov, who are well-known on the Russian political scene, as well as historian Vadim Milstein, the son of a famous intelligence officer, General Mikhail Milstein. Yet, there was another, perhaps, more important factor that caused the interest in the book. Between the Past and the Future: Russia in the Transatlantic Context is actually the first analysis of Russia's new place in the world which has irreversibly changed after the September 11 tragic events. According to its authors, one of the consequences of the terrorist attacks on the United States was a serious change in U.S.-Russian relations, which gives grounds for "cautious optimism." First, priorities in Washington's and Moscow's policies have for the first time coincided. At the beginning of the second Chechen war, Russia declared struggle against international terrorism one of its major goals. After September 11, the U.S.A. declared its firm resolve to counter "global terrorism." Second, the present-day antiterrorist operation is being conducted in regions where Russia has everlasting influence. Russia occupies a unique geopolitical position between Europe and Asia, the authors of the monograph say. The United States, cut off from the Old World by two oceans, simply needs a friendly Russia in the centre of Eurasia. The authors hold that the new political configuration, taking shape between Russia and the U.S.A., may result in the formation of an alliance between the two countries. Although the Russian scholars realise very well that Russia and the U.S.A. have different weight, they nevertheless think that even an "asymmetric alliance" between Washington and Moscow could be stable enough. Even the alliance between the U.S.A. and Israel, which is even more "asymmetric" compared to a hypothetical Russian-U.S. alliance, has been marked by amazing stability for decades. The potential of Russian-U.S. relations has not been fully tapped, one of the authors, Sergei Rogov, director of the Russian Academy of Sciences' Institute of U.S. and Canada, holds. In his view, the present-day relations between Moscow and Washington, which are actually an alliance formed to combat international terrorism, should be used for broadening their cooperation also in other fields, as there is a "dangerous gap" between the good personal mutual understanding between the Russian and U.S. leaders and "inert bureaucracy" at the executive level. ********* #7 From: "Stanislav Menshikov" Subject: UNANSWERED DOUBTS ABOUT NMD Will the Putin-Bush Love Affair Last? Date: Fri, 21 Dec 2001 "MOSCOW TRIBUNE", 21 December 2001 UNANSWERED DOUBTS ABOUT NMD Will the Putin-Bush Love Affair Last? By Stanislav Menshikov The mild reaction by Vladimir Putin to George W. Bush's decision to scrap the ABM Treaty came as a bit of surprise. The initial comments by Russian parliament figures and experts were more critical. Some saw it as a slap in the face despite all the good things that Russia did for America after September 11. Others called on the government to respond in kind by abrogating SALT-1 and SALT-2 and re-installing MIRVs on heavy rockets. Then came the official presidential statement, and practically all experts and commentators hastily followed line. One could even hear something like a general sigh of relief as if forsaking former policies was the natural thing to do once the president said so. Putin called the Bush decision a mistake but it was not exactly clear what, if anything, the US was losing as a result of this error. Of course, refusing to retaliate and thus help spoil the new atmosphere in US-Russia relations is a welcome gesture on the eve of Christmas and New Year. However, many questions and doubts remain unanswered. For instance, why was Bush in such a hurry to make his move now and therefore risk what some critics considered an inevitable resumption of the armaments race? And why did Putin move so easily away from his earlier harsh stance in Ljubljana when he threatened to scrap the SALTs and MIRV his missiles? After carefully reading US congressional testimony on the subject one gets the clear impression that there was not a single item on the NMD programme in the coming year that would come into conflict with the ABM Treaty. When Russian military experts asked their US counterparts point blank which particular restrictions they had in mind so that these could perhaps be amended there was no conclusive response. The impression was that the US side was not willing to discuss its plans lest some secret details emerge. By scrapping the Treaty it could avoid disclosing the true intent. So is there a hidden part to the NMD iceberg? One possibility is that if current tests fail for technical reasons nuclear warheads would be installed on the interceptors to guarantee their effectiveness. In 1972 only nuclear equipped killer missiles were available. The US scrapped their own system permitted under the Treaty because destroying incoming warheads in their last phase meant setting off nuclear explosions over American territory. The USSR kept a similar system to protect Moscow. But technical progress in the last three decades has permitted interceptors to reach incoming enemy warheads in the midcourse phase of their trajectory, i.e. away from US territory proper. So far the existing killer systems are not too effective because they use traditional warheads that need to hit the target head on. To make them effective nuclear warheads could be used that need only to explode somewhere near the incoming weapons. Developing such a system is certainly in conflict with the ABM Treaty. And, unlike the present systems undergoing tests, they are not toys, as sarcastically described by Putin, but a serious potential threat to the Russian deterrence capacity. Apparently, Kremlin believes no such danger exists. But so far it has no guarantees that American nuclear NMD systems will not be deployed. Starting June 13, 2002 no restrictions will apply. The US will be free to do as they wish. Mr. Putin's change of heart since Ljubljana is indeed remarkable. Not only is he willing to proceed with drastic reductions in offensive weapons with no detailed arrangements for control but he now also doubts the need to deploy MIRVs on the new Topol-M missiles. A new group has emerged in Moscow who are fans of the new "freedom" to re-fashion Russia's own armed forces without being restricted by international treaties. They are happy at the prospect of saving on costs of maintaining an excessive nuclear arsenal in the belief that this will somehow help provide money to modernise the armed forces. Actually, despite ambitious long-term plans to re-equip the army with new weapons very little is done to allocate necessary resources for this purpose. The share of defence expenditure in GDP is still a miserly 2.6 percent, exactly were it was at the end of the Yeltsin era. Only 22 percent of funds needed to develop the new third-generation fighter aircraft are provided from the federal budget. The remainder is to be earned by exporting old military hardware. Other defence projects are in a similar beggarly condition. Mr. Putin is apparently counting on his love affair with Bush to last despite America's resolve to ignore Russia's strategic interests. This is a dangerous game because in the real world, unlike the virtual world of idealistic expectations, conflicts between nations are inevitable. Compassion and altruism are the last things that can help resolve them. When George Bush scrapped the ABM Treaty he acted only in his own interests, as he saw them. When Vladimir Putin readily concurred, one wonders if his hope for a lasting alliance was well founded. Perhaps the mistake was his, not Bush's. ******* #8 The Russia Journal December 21-27, 2001 Russia’s elastic elite turns its eyes West Putin has chosen to face reality, and the herd has gone with him By ANDREI PIONTKOVSKY It’s happened. The two fattest rats of Russian politics – Vladimir Zhirinovsky and Alexei Mitrofanov – have unfurled their banners and ceremoniously deserted the ship of anti-Western strong-state ideology. The brave few who continued to defend the idea of an alliance between Russia and the West during the deepest and darkest years of Primakov Thought (with its idiotic triangles between China, India and Russia) are now in danger of being swept aside by the herd of multipolar rhinoceroses stampeding their way. It makes me want to salute those who haven’t abandoned the ship, those whose refusal to compromise verges on madness, or who are mad in any case – Alexander Prokhanov, the last soldier of the empire, Alexei Pushkov, the romantic troubadour of the Cold War and people’s academician Vasily Shandybin. Don’t despair. These herds will yet come running back your way and then go the other way again. And so it will go on, to and fro, depending on which the way the Kremlin winds blow. The winds from the Kremlin can be very unpredictable. In the first year of Vladimir Putin’s presidency, Russian foreign policy was starkly anti-American in nature. It’s main aim, it seemed, was virtual opposition to the United States on every front possible. It’s enough to recall the deliberately insulting withdrawal from the Gore-Chernomyrdin agreement, Putin’s demonstrative visits to Cuba and North Korea, the pertinently false rumors that the Kursk sank after colliding with an American submarine and the blatantly anti-American tone taken by Russian publicists. Putin’s foreign-policy change of thinking seems to have been gradual and linked above all to the fact that he, more than anyone, is now responsible for the country’s future and to his being better-informed about the real state of affairs. What the real state of affairs showed him was that Russia is a huge country with the GDP of the Netherlands and has a poorly armed and unreformed army with all its combat-ready units tied up in a single rebellious province and its military doctrines and plans designed to ward off a non-existent threat from the West when the biggest security threats are in the South and, potentially, in the Far East. The problem was most succinctly and accurately summed up in August 2000 by the father of one of the sailors who died on the Kursk: "How long can we keep thumbing our nose at America when our backsides are bare?" Putin’s foreign-policy turnabout is the product of long reflection, not of chance. On Sept. 11, he didn’t just propose a new concept for foreign-policy thinking, he showed in practice how to resolve Russia’s main national-security challenge – liquidating the threat of Islamic extremism from the South – by completely changing his views on relations with America. Sept. 11 gave the bare-bottomed Russian "elite" a fantastic opportunity to pursue its favorite sport and thumb its nose at America. Most of the elite did just this, announcing with malicious hypocrisy that they were "sorry for the Americans, but not for America." Putin, on the other hand, showed both dignity and pragmatic spirit. He said, "Americans, we are with you," and used the political, economic and military might of the world’s only superpower to resolve Russia’s security problem. The results of this new experiment have been so obvious and impressive for Russia that it has provoked among the "political elite" a mass exodus of rhinoceroses and rats. (The writer is director of the Center for Strategic Research.) ******** #9 NEWSWEEK WEB EXCLUSIVE December 20, 2001 Robbery, Russian Style What could be behind the bizarre break-in at NEWSWEEK’s Moscow bureau? A Web exclusive by Christian Caryl By Christian Caryl The call came in the wee hours of a frigid subzero morning. This winter has been a particularly cold one in Moscow, and it was harder than usual to drag myself out from under the warm covers. But this time I didn’t hesitate: “Your office has been broken into,” the voice in my ear had said. Just minutes later, I was dressed and setting off across the courtyard. “What now?” I wondered. Moscow is the kind of place where you get used to fending off nasty surprises. The hot water gets shut off without warning, or a construction site suddenly materializes in the corridor in front of your door. A monster traffic jam can form anywhere, at any time of day, without rhyme or reason. The street you were planning to use to get to that urgent interview is suddenly cordoned off for 40 minutes because a senior official needs to hog it. A few years ago, Muscovites were regularly getting killed by ice falling off high roofs, or being swallowed up by boiling water suddenly emerging from burst pipes underneath a park. I’m willing to concede that similar things happen in other countries all the time. I just don’t live in other countries. And a robbery is always going to be a drag, no matter where it happens. Still, I was sure that a Moscow robbery would have some sort of darkly satisfying twist, something to make it just a touch more disturbing than it might have been otherwise. I couldn’t get in the door of the office at first. The burglars had locked it from inside. We had to wait for a car full of Moscow cops to go around the back way and enter the crime scene the way the robbers had done it: up a long and rather precarious 20-foot metal ladder with hooks on the end. They’d somehow managed to latch it to the top railing of our office balcony, two and a half stories above the ground. Then they’d climbed up, broke open the balcony door and pushed their way inside. None of the neighbors, predictably, had seen or heard a thing. Now we stood in the hallway, outside the door, and felt the icy wind whistling out through the keyholes. We waited for what seemed like hours. My employees began to worry that the cops, left to themselves, might finish what the thieves had started. (I fleetingly recalled a poll, taken a few years ago, in which a large percentage of Russians said that they were more afraid of the police than they were of criminals.) At last the police opened the door. The destruction wasn’t quite as bad as we’d feared. A few papers were scattered around and cabinet doors stood ajar. Our smashed office safe lay incongruously in the bathroom. They’d evidently taken it in there to muffle the noise as they cracked it—apparently in vain. We keep our money elsewhere, and they had missed it. They had also missed the money one of my Russian colleagues keeps stored in another cabinet. In fact, the more we looked around, the more we realized that they hadn’t taken much of anything—an observation that soon began to acquire its own malevolent subtext. They had removed a small but very expensive satellite telephone from its case—and left it behind. They had ignored our desktop computers, our scanner, our phones, our fax machines. It soon became clear that they had taken only one thing: the Toshiba laptop computer that I had left lying on my desk the night before. It wasn’t just any computer. It was the computer I used to write my stories, to do all of my journalistic work. Surely that wasn’t what interested them about it? The detectives—all men in their mid-30s, with short dark hair, black pants and black sweaters—took long statements from each of my employees. Then they sat me down in my office and began to ask me questions. “Let me tell you,” said the man in charge, “this doesn’t look an ordinary robbery. It just doesn’t make any sense.” He began to describe the oddities we’d already noticed. “This mess is just for show. It’s just to make it look like this was a real robbery.” Then he began to ask me what I’d been working on lately. First he wanted to know whether I’d been preparing any “particularly scandalous stories”—the kind of thing, he implied, that might have given someone in power a reason to take a closer look at me. Nope, I said, there’d been a project or two back during the summer, but since the attacks of September 11 we’d been preoccupied by Afghanistan. Then the detective wanted to know about possible “business competitors” who might be eager to find out my “professional secrets.” Well, gosh. Who would be the best candidate for a Watergate-style dirty-tricks campaign? A colleague at a competing magazine? I figured I’d ask them the next time we went out to dinner together. None of this was calculated to calm our already overheated imaginations. The behavior of the cops wasn’t much help, either. My answers to their questions went unrecorded; no statement was taken from me. They collected fingerprints from the furniture, and then, for reference purposes, they fingerprinted me—the only American—but no one among the Russian staff. And when our office manager volunteered the brand, the make, and the serial number of the missing computer, the detectives declined: “That won’t be necessary,” they said. They did ask me to autograph a few copies of NEWSWEEK for them, though. It doesn’t get any weirder than that. Christian Caryl is NEWSWEEK’s Moscow bureau chief ******* #10 Washington Times December 21, 2001 Georgia, Moscow ease tensions By Jane Wiegand and Zurab Vanishvili SPECIAL TO THE WASHINGTON TIMES TBILISI, Georgia — Georgian President Eduard Shevardnadze says he has seen a "certain thawing" in his country's traditionally tense relationship with neighboring Russia since September 11, even as Georgia moves to improve ties with the United States and the West. In an interview with The Washington Times earlier this week at the executive mansion in Tbilisi, Mr. Shevardnadze said Russia had agreed not use its oil and natural gas stocks as a strategic weapon against energy-dependent Georgia and that Moscow had softened its stance on the separatist conflict in the restive Georgian province of Abkhazia. "There are certain difficulties in this relationship,"he said. "But after my recent visit with [Russian President Vladimir Putin] in Russia, there is a certain thawing in the relationship," said the Georgian president, a former Soviet foreign minister who has served as president of this strategically placed country since 1995. Georgia accuses Moscow of providing aid to Abkhazian separatists as a way to keep the former Soviet republic weak and dependent. Russia was maintaining 1,600 "peacekeepers" in the province, which fought a bloody, inconclusive civil war with Tbilisi in the early 1990s. Russia contends that Tbilisi has allowed rebels in neighboring Chechnya to use Georgian territory as a base in their independence war with Moscow. Matters appeared to be coming to a boil in early October when Georgia charged that a Russian military helicopter bombed three villages inside its territory, apparently targeting Chechen rebel forces. Georgian militants also were reported to be planning another strike on Abkhazia. But after Georgia protested, Mr. Putin stunned the region by making a conditional offer to remove the Russian peacekeepers from Georgian soil and suggesting the dispute should be turned over to the United Nations for settlement. In the interview, Mr. Shevardnadze said he and Mr. Putin had agreed to set up a joint council to investigate the bombing incident. He said Georgia had accepted refugees from Chechnya, but that the refugees were civilians threatened by cold and starvation. ******* #11 Financial Times (UK) 21 December 2001 Moscow's elusive market makers show up online: Paul Taylor tracks down Russian securities information on the internet By PAUL TAYLOR As most investors in emerging markets know, Russia has been the best performing securities market in the sector this year. But keeping track of market developments in Moscow is not always that easy. The first stop for those with an interest in Russian securities and an internet connection should be the website of the Federal Commission for the Securities Market (www.fedcom.ru) - the Russian equivalent of the Securities and Exchange Commission, which was established in 1994. The site includes regulatory information and other news related to the securities industry and an information disclosure link taking visitors to a searchable database of issuers, announcements and quarterly reports. It also provides links to other useful websites under the subheading Internet Resources on the Russian Securities Market. These include the Central Bank of the Russian Federation website (www.cbr.ru/ eng) and the Russian Trading System (www.rts.ru/ engl), the stock exchange website. The Central Bank site is packed with currency, financial and monetary data as well as economic news and press releases. The RTS website includes RTS index statistics and graphical information and, perhaps most usefully, a searchable database of all RTS-listed companies, including current price quotes, trading volumes, historical stock data and basic company information with a link to the company's own website. Under "participants", the RTS site also gives details of RTS members and market makers. A "news" link provides two news streams, one related to the exchange, the other running all the official announcements issued by listed companies. Another key web resource for those interested in investing in Russia - or any of 50 other nations, including many in eastern Europe, Transcaucasia and Central Asia - is the European Internet Network (www.europeaninternet.com), a business information and online news service. EIN's operations include both paid-for subscription-based services and a searchable database of more than 51,000 articles and a family of country-specific, advertising-supported websites. EIN's Russia site operates as a portal, enabling visitors to browse by category. The business category leads to 55 sub-categories such as financial services, stockbrokers and venture capital firms. The venture capital section includes links to the Russian Venture Capital Association and a number of international organisations. Among these, the US Russia Investment Fund, a private US investment firm managed by Delta Capital that claims to have invested almost Dollars 200m in Russian companies since the fund was set up in 1995. Registered users, who pay Dollars 5.83 a month, can access EIN's aggregated news services, although headlines are provided free of charge. ****** #12 Russian parliament backs new labour laws MOSCOW, Dec 21 (Reuters) - Russia's parliament pressed on with President Vladimir Putin's economic reform programme on Friday, giving final approval to a labour law replacing Soviet era legislation, when the state was boss. The new code adapts to post-Soviet economic reality in allowing private firms to hire and fire workers. It also seeks to boost job security, locking in workers' rights and penalising employers over delays in paying wages. Deputies approved the labour code on Friday in the third and final reading by 289 votes to 131, with only a minimum of discussion. Putin had called for quick passage of the measure, replacing laws from the 1970s, as part of his efforts to overhaul the Russian economy. The bill must now go before the Federation Council upper house, which has a track record of backing Putin's initiatives. "We upheld all the main amendments to the labour code which has resolved problems of defending citizens' interests and boosting the role of trade unions," Vyacheslav Volodin of the centrist Fatherland-All Russia group told RTR state television. "Look what issues have been settled here -- the length of the working day, overtime pay, defending the interests of young people, women." The new code formally provides for a 40-hour working week, enshrines the right to paid leave after six months' employment instead of 11 months, and sets 28 days as the minimum holiday entitlement. It also requires the minimum wage to be equal to a sum considered to be the poverty line. That currently stands at the equivalent of $10 a month, well below any objective assessment of income needed to survive. But the means of calculating the sum remains under debate. Ten years after the collapse of the Soviet Union, Russian legislation does not yet recognise private employment, leaving 80 percent of the population outside the legal framework. Russia's largest trade union grouping, the Federation of Independent Russian Trade Unions, supports the new code, but many other labour organisations do not. Communist supporters had denounced the bill during months of discussion, saying it left workers at the mercy of employers, but there were no protesters in sight for Friday's debate. The bill is part of a long list of reforms to be considered by parliament, including bills on liberalisation of land sales, and an overhaul of the pension and tax systems. ******* #13 Tribuna December 21, 2001 PRESIDENT OF THE UNITED STATES ISN'T TELLING THE WHOLE TRUTH Possible consequences of the US withdrawal from the ABM Treaty Author: Vladimir Kuklev Source: Tribuna, December 21, 2001, p. 6 [from WPS Monitoring Agency, www.wps.ru/e_index.html] MAJOR-GENERAL VLADIMIR KUKLEV LOOKS AT HOW THE US WITHDRAWAL FROM THE ABM TREATY OF 1972 IS LIKELY TO AFFECT RUSSIA. THE UNITED STATES IS ASPIRING TO UNILATERAL NUCLEAR RESTRICTION, WHEN THE US WOULD BE ABLE TO RESTRICT ANY OTHER STATE, BUT NO OTHER STATE WOULD BE ABLE TO RESTRICT THE UNITED STATES. George Bush has announced that the United States is pulling out of the ABM Treaty of 1972. What will be the consequences for Russia? The mutual nuclear restriction (or mutually assured destruction) between the USSR and the United States envisaged in the treaty maintained stability in relations between the two states, and had a positive influence on the global situation. This provided favorable opportunities for developing the process of limitation and decrease in other weapons of mass destruction, non-proliferation of them in the world, securing the atmosphere of trust in relations between states. The decision of the United States to withdraw from the treaty means a conceptual change in its nuclear strategy. The United States is rejecting the idea of mutual nuclear restriction and aspire to unilateral nuclear restriction, or a situation when the US would be able to restrict any other state, but no state would be able to restrict the United States. And this is strategic domination in the world, which Russia has long been fighting against, favoring the ABM Treaty. The American supporters of creating a missile defense assert that present relations between Russia and the United States have outgrown the level of mutual restriction, and it is necessary to look for new frames of strategic relations between the two countries. Firstly, the president of the United States did not tell the whole truth. In fact, the United States does not deny the doctrine of restriction as it is. Representatives of present US administration speak about the necessity to strengthen restriction, with more stress on defense. The United States now wants only to make this restriction one-sided. Will it be in the interests of Russia? I doubt it. The US national missile defense will lessen the value of our strategic potential, and question our security, at least from the side of the United States. Of course, at present there is no direct threat from the United States, however, political situation is changing more rapidly than defense abilities of countries. And the events of recent years show that military forces are more often used in the United States as a universal and most convincing argument in settling all questions. And it would be a crime to abandon the last what we have - ability to maintain strategic nuclear restriction in respect to any country. While we maintain it, we can continue talking to the United States as equals in the sphere of security, at least. Secondly, on what foundation is the establishment of this "mutual cooperation" based, what should replace the mutual nuclear restriction? There is no definite answer to this question yet, there is only talk about some "partnership", which should be agreed on as soon as possible. At the same time, the experience of the closest allies of the United States in NATO proves that there is no equality in it. Especially since Russian-American relations have not yet reached the level, when we could forget about our own security. Thirdly, if we are going to be partners with the United States on some basis, different from mutual nuclear reastriction, what shall we do with the military doctrine of the Russian Federation, in particular with its major point about the role of strategic nuclear restriction in securing defensive capacity of the country? And of this position keeps its importance, then it is necessary to admit discrepancies between the approaches of Russia and the United States toward the essence of our future relations. And in its turn, it shows the necessity of minute elaboration of each step and danger of haste in forming a new relationship with the United States. Fourthly, even if we admit that it is necessary to replace mutual nuclear restriction with something else, it would make sense first to agree on these new relations, fix them and then start destroying the old ones. However, the US administration decided otherwise, and our obvious concernment about working out new frames as soon as possible helps them, because it comforts Russian and the world public opinion, worried about dangerous actions of the United States. There is another question: how much do we need those new frames? Is not it high time for us to get rid of that old habit to place the relations with the United States in the center of our foreign policies? We do not consider changing our relkationships with other states. Besides, this would correspond to the idea of building a multi-polar world. even officials of the United States declare that relations with Russia are no longer a priority in foreign policy. (Translated by Daria Brunova) ******