Johnson's Russia List #5621 30 December 2001 davidjohnson@erols.com A CDI Project www.cdi.org [Note from David Johnson: 1. Interfax: Most Russians will greet New Year at home. 2. BBC: Steve Rosenberg, Kremlin kitchen's culinary delights. 3. AP: Russian TV Station Wins Court Battle. (TV6) 4. Reuters: Russia begins farewells to Cuba over base pullout. 5. AFP: Yeltsin gives high marks to Kremlin successor Putin. 6. Interfax: Ex-Russian president says Putin has vindicated his choice of successor. 7. Interfax: Yeltsin on life after retirement. 8. Interfax: Yeltsin tells the press he wants to get about more. 9. Interfax: Yeltsin says he feels guilty about mistakes he made as Russian president. 10. strana.ru: Father Frost Brings Happiness and Wealth. How Russian Father Frost differs from his foreign counterparts. 11. RosBusinessConsulting: Attacks on US impress Russians strongly. 12. Le Monde: Natalie Nougayrede, Russia Monitors Its Stocks of Radioactive Products and Chemical Weapons Poorly. 13. RFE/RL: Michael Lelyveld, Russia: Financial Maneuvers Recall 'Bad Old Days' Of 1998. 14. Peter Signorelli: POLYCONOMICS` MAN OF THE YEAR: VLADIMIR PUTIN. 15. Miami Herald: Dave Montgomery, Old church takes on a modern role in Russia. 16. AP: Putin's plan to revamp a troubled military faces stiff resistance from top brass.] ****** #1 Most Russians will greet New Year at home MOSCOW. Dec 29 (Interfax) - This year, 92% of Russians plan to celebrate the New Year. Last year, the figure was the same; in 1999 - 94%; in 1998 - 90%; and in 1997 - 92%. These figures were reported to Interfax on Saturday at the All- Russian Public Opinion Center, and were ascertained on the basis of polls involving 1,600 Russians. The latest was taken on December 25 this year. This year, 72% of those polled said they would see in the New Year at home with their friends and relatives, 16% at a friend's place, 4% abroad, 3% alone, and 1% at a holiday home with new, unknown people. Responding to a different question, 19% said they would want to receive perfume or cosmetics as a gift, while 15% were planning to give such presents. Some 32% wanted to get sweets or a cake, and 9% intended to give them. An equal number of people hope to get clothes or footwear, and 8% are planning to give them. The other options were: knickknacks - 12% (5%), housewares - 2% (6%), alcohol - 5% (3%), jewelry - 2% (4%), flowers - 5% (4%), a book or album - 7% (3%), a car -1% (4%), a calendar for 2002 - 7% (2%), accessories like a scarf or gloves - 3% (3%), a cellular phone - 1% (3%), china and crystal - 5% (3%), a theater ticket or invitation to a restaurant - 1% (2%). In addition, 5% said they had nobody to give presents to, or to receive presents from. ****** #2 BBC 29 December 2001 Kremlin kitchen's culinary delights By the BBC's Steve Rosenberg in Moscow Think of Russian food and what comes to mind: beetroot soup, perhaps? Cabbage pies? Well, that is the image I had - until I visited the Kremlin kitchen. The occasion is a dress rehearsal for President Vladimir Putin's New Year banquet. It is also a chance for 100 Kremlin cooks to show off their talents. Some of the food here is so ornate, it looks as if it came straight out of the Hermitage Museum, instead of the oven. A waiter marches in with exhibit number one - a stuffed piglet on a silver tray. It is decorated attractively with fluffy pink mousse around the nose, and bright red cherries dangling down from its ears. And it is followed by sturgeon with olives, roast goose and a string of mouth-watering salads and sauces. Unique dishes It is not just quality which counts here - but quantity, too. "For the banquet we use 500 kilograms of meat, 500 kilograms of fish and 5,000 eggs," Kremlin spokesman Viktor Khrekov told me. A lot of food for a lot of guests - 1,000 of Russia's top politicians, scientists, film stars and religious leaders. The banquet menu was approved two months ago by a committee of 20 Kremlin cooks. Each dish is unique - to make sure that none of them are repeated on next year's menu, they are all photographed. As for the ingredients, they are tested in a Kremlin laboratory to make sure they are safe to eat. Team effort Preparing the banquet is a team effort. In one corner of the kitchen Tatyana Pankratova is busy peeling cucumbers and radishes and transforming them into 'roses' and 'tulips'. Meanwhile the Kremlin's Chief Chef is Mikhail Zhukov. After three years in America, Mr Zhukov is trying to spice up Kremlin cuisine with a string of mouth-watering dishes. He shows me one of them: turkey breast and prunes wrapped in bacon. "I call it Mona Lisa" he tells me proudly. Cream of society The Kremlin New Year banquet has always been the biggest party of the political calendar. For Russia's stern-faced leaders it is a rare opportunity to let their hair down in public. For the guests - the cream of Russian society - it is a chance to develop some useful connections. Chef Viktor Zernov has seen more Kremlin banquets than most people have had hot dinners - he has worked here for 36 years. Mr Zernov told me there was one big difference between banquets past and present. "In the old days there used to be a KGB officer on every corner, always watching," he recalls. "Nowadays things are much more relaxed." However, I could not leave the Kremlin kitchen without asking one final question: what was Vladimir Putin's favourite dish? The Chief Chef smiled politely, then looked down and started fidgeting - he did not answer. This was clearly one piece of information not intended for public consumption. But then, I suppose, every chef is entitled to have a few secrets. ****** #3 Russian TV Station Wins Court Battle December 29, 2001 By MARA D. BELLABY MOSCOW (AP) - Russia's TV6 television station, widely considered the last bastion of independence on Russian airwaves, won a major court battle Saturday to stay on the air. A Moscow arbitration court canceled earlier rulings to liquidate the company and ordered further hearings, said Tatiana Blinova, a spokeswoman for TV6. TV6 had faced liquidation after a minority shareholder brought a bankruptcy case against the station on accusations that it failed to earn a profit. The station denied it was losing money, and supporters accused the Kremlin of trying to force TV6 off the airwaves because of its criticism of President Vladimir Putin and his government. The legal battle has prompted international concern. ``The TV6 case represents a threat to the independence of the media in Russia,'' Alexander Vershbow, the U.S. ambassador to Russia, told the Echo of Moscow radio station Friday. ``For us, it seems a little bit bizarre that a station that is becoming very profitable is suddenly being liquidated for bankruptcy.'' TV6 is led by a group of journalists who left NTV television after it was taken over earlier this year by the state-connected Gazprom natural gas giant. NTV's former owner, tycoon Vladimir Gusinsky, accused the Kremlin of ordering the takeover to silence a critical voice. The government denied the allegation, and Gazprom said it was acting to protect its business interests. The bankruptcy suit was brought in May by Lukoil-Garant, a pension fund owned by Russian oil giant Lukoil, which holds a 15 percent stake in TV6. Lukoil-Garant, which itself is minority owned by the Russian state, demanded that the station be liquidated because the station's debts outweighed its assets. TV6 director Yevgeny Kiselyov argued that TV6 is now among the leaders on the Russian television market, and that the station was making a profit by Western accounting standards. The station is expected to have 12-13 percent of the audience share across Russia next year, the company said. Blinova said Saturday that TV6 now is in the black by $1.6 million. Blinova also said that during the hearing, station employees were told that as of Jan. 1, a new law would prevent minority shareholders from bringing bankruptcy proceedings against a company. It was not immediately clear if the law would be retroactive and have any impact on this case. ****** #4 Russia begins farewells to Cuba over base pullout MOSCOW, Dec 29 (Reuters) - Russia began its farewells to its former communist ally Cuba as it prepared on Saturday to close a big spy centre, ending four decades of Russian military presence on the Caribbean island. As Russian and Cuban officials held farewell ceremonies near Havana, Russian military officials were quoted as saying work to dismantle the Lourdes electronic spying centre in Cuba would start on January 15. Interfax news agency quoted the unnamed Russian defence ministry officials as saying three An-124 planes would be used to transport the centre back to Russia. President Vladimir Putin's decision to close the costly eavesdropping centre near Havana, from which Moscow listened in to U.S. secrets through the Cold War, has met resistance from veteran Cuban leader Fidel Castro but has won applause from U.S. President George W. Bush. A final Russian military pullout from Cuba will mark the end of a 40-year chapter in the Cold War in which Moscow sent troops and equipment across the world in the 1960s to the doorstep of the United States to shore up its new young communist ally. The Russian foreign ministry separately announced on Saturday that official ceremonies had been held in Lourdes to mark the closure of the base. It quoted the Russian ambassador to Cuba, A. Dmitriyev, as saying Russia remained committed to developing relations with Cuba in the future including military-political cooperation. ******* #5 Yeltsin gives high marks to Kremlin successor Putin December 30, 2001 AFP Former Russian president Boris Yeltsin lavished praise on his successor, Vladimir Putin, in a television interview, hailing in particular his policy of rapprochement with the West. The current Russian leader is "an honest and honorable person... with a moral core," Yeltsin told the RTR television channel. "Under Putin, rapprochement is stronger. That makes me happy, I congratulate myself, it is the right path," he said. "Without cutting our relations with China, with the East, we must remain friends with the West, so that the smallest differences inherited from the Cold War can be eliminated forever." Referring to the September 11 attacks in the United States, Yeltsin said they had "opened the eyes" of a lot of people. "Russia, the evil empire, as it was called, is not the principle danger. No, it is world terrorism. A common fight against it is taking place." Russia's first president said he feared his country being dragged into a war, "in particular in Afghanistan. We cannot allow it, at any price." Yeltsin said he meets with Putin "about once a month" for a meeting that forces him to keep up with events in order to be prepared for the exchange of ideas. "We don't always have the same opinions, that's normal. A new leader, a new way of thinking. He has his opinion and I respect it," said Yeltsin, adding that the two men never argue. Putin has become a "well-developed leader, a statesmen. It is not by chance that he is respected both here and throughout the world. I also respect him." Questioned about his poor health, Yeltsin, who is 70, said he feels "much better this year," and no longer suffers from the stress caused by his duties as president. He said German doctors who examined him in Berlin recently said his health was "very good." Yeltsin, who appeared relaxed, smiling and slightly tanned, said that on December 31, he is to play Died Moroz, Russia's version of Santa Claus, and hand out presents to his family. Russia's Orthodox church follows the Julian calendar and celebrates Christmas day in early January. ****** #6 Ex-Russian president says Putin has vindicated his choice of successor Interfax Yuzhno-Sakhalinsk, 29 December: Boris Yeltsin, the first Russian president, regards Vladimir Putin as "an honest, pure, democratically-minded person with morality at his core". Yeltsin said that he chose Putin as his successor in 1999 "after long thought and analysis," but even then he was sure that Putin "would lead the country along the planned road, and continue fighting for democratic achievements further and further." "I was convinced [of that] then and remain convinced, and in these two years my confidence has only grown," he said in an interview with the programme Zerkalo shown in the Russian Far East on Saturday [29 December]. In Yeltsin's opinion, Putin is continuing his policy of rapprochement with the West. "The rapprochement under Putin is even greater. This makes me happy. I welcome it. It is the right way," he said. "Without severing our relations with China, with the East, [we should] be friends with the West so that the slightest differences remaining from the Cold War will finally be settled," he said. "Many people started seeing clearly after 11 September and know from where the main threat comes," he said. "The evil empire, as it was called, is not the main threat. No. World terrorism is the main threat. A joint struggle is being conducted against it," he said. He said he was greatly worried that "Russia would be dragged into a direct war, in Afghanistan in particular. This should by no means happen." "Putin is pursuing such a line with the support of the entire nation," Yeltsin said. He said he meets with Putin "approximately once a month" and has frank one-on-one conversations. Yeltsin said that in order to live up to these meetings, he closely follows developments in Russia and on the world scene, and frankly tells Putin what he thinks. "Our opinions don't always coincide and that is natural. A new leader, new thinking. Of course, he can have a different outlook, I respect that," Yeltsin said. However, according to Yeltsin, they never argue; rather, they have "discussions, conversations". "We may disagree on personnel matters, on appointments, some other problems. I think this is my responsibility as the first president, my conscience. I should speak to him of this and I do," he added. In Yeltsin's opinion, in two years, Putin has achieved political and economic stability in Russia and is continuing the transition to market relations. He said he likes the way Putin communicates with the public. "The recent live TV contacts indicated how well Russians responded to this hotline of the president with the people," he said. Putin is now "a developed leader, a statesman. It is not without reason that he is respected here and in the world. I also respect him," Yeltsin said. ****** #7 Yeltsin on life after retirement Interfax Yuzhno-Sakhalinsk, 29 December: First Russian President Boris Yeltsin said he is convinced that he bears permanent and serious historic responsibility as the first president of Russia. "I feel this responsibility every day and that is why I behave with such restraint. I never venture to utter anything that might somehow negatively influence the situation. This would just be impermissible," Yeltsin said in an interview to the Zerkalo television programme, shown in the Russian Far East today. The first Russian president said he had not been unoccupied since his resignation, that he reads a lot, analyses information and has many meetings. "I have recently had meetings with [Unified Energy System of Russia boss] Anatoliy Chubays, with governors and presidents, such as [President of Tatarstan Mintimer] Shaymiyev. And these are just my recent meetings," he said. Yeltsin said he had also met recently with "oil barons to see how they are doing and what they intend to do when world oil prices go down. And gas prices will probably go down soon, too", [he said]. He also said he was "prepared to meet the heads of the main mass media, if they wish", noting that he often watches television, in particular, "Russia TV, Russian Public TV, NTV, NTV-plus, Eurosport, and TV-6". When asked about his health, Yeltsin said he felt good. "This year I feel much better. The feeling of life is completely different. There is no inner tension, as when I was president. I work and I rest." Yeltsin commented on his recent trip to Germany, which "made so much noise". "Specialists examined" his heart and said, "Sehr gut", Yeltsin noted. "I want to repeat what they said - everything is just okay, everything is in order," he said. He also commented on his attitude towards the marriage between his daughter and former presidential chief of staff Valentin Yumashev. "I always highly valued independence in my daughters. I love them and trust them. If she has loved, then this is her choice. I was surprised, but also welcomed this," he said. The first Russian president has a large family of 13 and they all visit him at home. "On Sunday, as a rule, we all gather together to have lunch or dinner. Everybody is used to this place and they like visiting it," he said. Yeltsin also said he will greet the New Year, as always, together with his family "and with a fir tree. I, as Father Frost, will give presents to everybody. Tanyusha [Yeltsin's daughter Tatyana], as ever, will be snow maiden. Not a little snow-maiden, but a grown-up one. Snow maiden is growing up, too, you know," Yeltsin said. ****** #8 Yeltsin tells the press he wants to get about more Interfax Moscow, 29 December: First Russian President Boris Yeltsin today met with a group of journalists who were accredited in the Kremlin during his presidency. Yeltsin noted that many of the journalists probably "bear a grudge" against him for rare meetings and interviews. "The matter is that I don't want to be a public politician anymore," he said. Yeltsin said he does "not regret resigning from the presidential post in 1999, as Russia is continuing the policy of reforms, deepening them, the freedom of speech is preserved and journalists can write on any subject". Yeltsin said he is convinced of this by regular viewing of TV programmes and reading Russian newspapers. The first Russian president said he receives "a lot of correspondence both from Russia and abroad" and regularly meets with his former colleagues. Yeltsin, who received members of the press in his Barvikha-4 residence outside Moscow, looked hale and hearty and demonstrated his awareness of the developments in Russia and the rest of the world. He said, in particular, that he would like "to travel around the country and the world freely", because in his previous capacity he was very limited in time and did not get a true impression of the places he visited as president. ****** #9 Yeltsin says he feels guilty about mistakes he made as Russian president Interfax Moscow, 28 December: Russia's first president, Boris Yeltsin, believes that "Russia took the right path during his presidency," although he did make mistakes. "Not every decision of mine was right. Such decisions had to be made for the first time, and they could not have been made without any mistakes," Yeltsin said in an interview with the programme Zerkalo (Mirror), which will be broadcast on Russia TV tomorrow evening. Yeltsin confessed that he still has a sense of guilt for the mistakes he made. At the same time, Yeltsin said that those were not strategic mistakes, "which would have influenced Russia's history". "There were no such mistakes. There were tactical mistakes in some less significant options, topics and issues. But on the whole Russia took the right path, and it became different," Yeltsin said. ****** #10 strana.ru December 28, 2001 Father Frost Brings Happiness and Wealth How Russian Father Frost differs from his foreign counterparts According to Father Frost's official Internet site, he has at least 20 colleagues around the world. The best known are Santa Claus whose present image goes back to a 1931 campaign to promote Coca Cola, and Joulupukki who has lived near Rovaniemi, Finland, since 1950 when preparations were being made for a visit by Eleonore Roosevelt. All of them possess magic powers and are of a kindly disposition. What distinguishes Russian Father Frost is a white beard and thick hair of the same color. Apart from anything else, these features also have symbolic significance - happiness, welfare and wealth. Father Frost in his "canonical" form wears a red garment stretching down to his heels and embroidered with silver ornaments and trimmed with swan down. It is allowed to decorate the gown with white fur instead of down but the shirt and the trousers are supposed to be made of nothing but flax. And there is also a sash around his body. All that is a must in the opinion of Svetlana Zharnikova, a historian, ethnographer and art critic, who has studied Father Frost as a cultural phenomenon. Father Frost wears a red cap embroidered with silver and pearls. Its shape is reminiscent of the headgear of Russian tsars, complete with a triangle-shaped cut in front. Father Frost also wears white mittens embroidered with silver. His red- or silver colored boots have upturned toes and slanted heels. Father Frost holds a crystal staff with a twisted handle depicting the moon or the head of a bull. Another unique feature is Snow-Maiden, Father Frost's granddaughter. None of his foreign counterparts walks about in such nice company. ******* #11 Attacks on US impress Russians strongly RosBusinessConsulting December 29, 2001 MOSCOW - The majority of Russian citizens, 57 per cent, called the Sept. 11 terrorist attacks on the USA ‘the event of the year’. The war in Afghanistan was in second – only 5 per cent of respondents named it the event of the year, the Kursk lifting operation was in third with 3 per cent and the war in Chechnya was in fourth with 2 per cent. These were the results of a public opinion poll conducted by the Public Opinion Fund on December 22. The poll was conducted among 1,500 people in 100 cities and settlements located in 44 regions and republics of Russia. Another question of the poll was the most positive and negative events of the year 2001. 12 per cent mentioned such positive factors as a rise in the standard of living, salaries, student allowances and pensions, 10 per cent named the Kursk retrieval operation and 2 per cent estimated the establishment of closer ties between Russia and the USA as well as with other NATO members as the most positive event. The most negative events were emergencies and terrorists acts, such as the flooding in Siberia and the crash of the Tu-154 plane over the Black Sea (17 per cent), the war in Chechnya (14 per cent) and a drop in the standard of living and high inflation (13 per cent). Last year respondents named the Kursk tragedy and the war in Chechnya and the most negative events of 2000. ****** #12 Paris Daily Reporter on Lax Security for Radioactive Materials in Russia Le Monde 22 December 2001 [translation for personal use only] Report by Moscow correspondent Natalie Nougayrede: "Russia Monitors Its Stocks of Radioactive Products and Chemical Weapons Poorly"--first paragraph is Le Monde introduction Russia does not monitor its stocks of radioactive products and chemical weapons well. Moscow-The six men, one of whom was a member of the Russian services who had infiltrated the group, were standing near the "Harvest" caf? that evening, 8 December, in the suburb of Balachikha southeast of Moscow. The merchandise they wanted to sell was one kilogram and 68 grams of uranium-235 in the form of tablets. The asking price: $30,000. Their arrest by the police led to a few short paragraphs in the press. The degree of enrichment of the seized uranium, which is a crucial detail for knowing whether it could help manufacture a bomb, was not revealed. The result of the expert analysis would not come "for a month," one police source told us. "There is nothing accidental about this case," Vladimir Chouprov, one of Greenpeace's officials in Russia, said, in an office full of files. "It is the result of the situation that this country finds itself in in general, and the nuclear sector in particular. There is old equipment, terrible salaries that make corruption easier, and alcoholism. Furthermore MINATOM (the nuclear energy ministry) is one of the most closed and most secretive agencies. What we are learning is only the tip of the iceberg." Mr. Chouprov enumerated the different sources of uranium-235 in the country, ranging from the best guarded sites to those that presented the greatest risks. They were, in order: the 6,000 nuclear warheads from Russia's nuclear arsenal, the 30 or so nuclear power plants, the 80 nuclear submarines that have reverted to the state in the Kola Peninsula's (northern) ports, and, finally, the research institutes spread across the country, some of which have experimental nuclear reactors. The possibility cannot be ruled out that the uranium that was seized in Balachikha came from one of the three institutes of this kind that the Moscow area has (Kurchatovsky, Troitsky, and Obninsk). In Balachikha in March 2001, the police proceeded to arrest a criminal group that was trying to sell 200 grams of cesium-137, a radioactive material. After 11 September, President Vladimir Putin stepped up the reassuring statements about the security of sensitive Russian sites. "What risk are people talking about?" he said recently. "We are talking about the use of weapons of mass destruction that terrorists might seize, chemical, biological weapons, etc. Russia is convinced that this should remain a topic for serious thought." During his recent trip to the United States, Mr. Putin said that stocks of biological weapons were "safe" and termed a "myth" the notion that terrorist might have been able to get hold of portable Russian nuclear bombs. Two recent developments worry ecologists, for whom, on the contrary, the risks of proliferation are heightened. On the one hand, Moscow has started to implement its program to import 20,000 tonnes of nuclear waste over 10 years, which was decided on last year despite a wave of protests. A 40-tonne shipment of radioactive waste coming from Bulgaria happened this past 9 November, via barges on the Danube up to the port of Ismail in Ukraine, then by train to Krasnoiarsk, in Siberia. The thousands of kilometers that were covered, the cars' uncertain security conditions, and also the opaque financing channels that were involved have raised concerns. On the other hand, the issue of the destruction of Russian chemical weapons (40,000 tonnes, the biggest arsenal in the world) is experiencing new delays. In early December Russia announced that it was not able to liquidate those stocks of toxic weapons before 2007, as it had pledged to do by signing the international 1997 convention. The new deadline is 2012. It is in Gorny, a remote community in the Volga region, that the first plant where chemical weapons will be eliminated is supposed to open (in May 2002, according to the authorities). But Russian financing, which was supposed to supplement European aid from the Tacis program, has been slow to materialize. So we are only at the very beginning of an interminable process, with just 2.9 percent of the total of the toxic stock supposed to be processed in Gorny. The other two expected plants, in Shoushey (Ural) and Gambarka (Oudmourtie), exist on paper only. Some western aid programs exist. US assistance to Cheliabinsk to reduce stocks of plutonium can be mentioned as well as the payment of decent wages to nuclear scientists in the "closed cities" so they will not be tempted by offers of jobs in Syria or Iraq; and also European aid to monitor radioactive sites in the Murmansk region. But these are only drops of water, and certain initiatives have been hit by budget cuts. More broadly speaking, fear exists that with Russia's return to acceptance with Westerners, ever since Mr. Putin positioned himself as an "ally" in the world antiterrorist campaign, it may have become even more complicated to follow the Russian authorities' actions in the area of non-proliferation. "Since the US wants to maintain good relations with Russia, any information on the possibility that terrorists might seize highly toxic substances in Russia is perceived as a criticism," said Chouprov, the Russian Greenpeace representative. However one Russian expert who cannot be suspected of complacency toward the authorities, since he was charged with "divulging state secrets" post-1991, for having signed an article on the Russian biological and chemical weapons programs, stated that, on these issues, one should not see everything in negative terms. Lev Fiodorov, a chemistry professor, is the chairman of a small association (the "Union for Chemical Safety," which publishes information on the size of toxic stocks in Russia). "Four hundred sites exist where chemical weapons are kept. Many have been kept secret. The real quantity is 170,000 tonnes, according to our data. The official figure of 40,000 tonnes of chemical weapons covers only those produced by the USSR after 1946," he said. "But when it comes to biological weapons, they are under fairly good monitoring, and kept in five institutes, three of which are military. For a terrorist to get his hands on this, there would need to be widespread complicity, you would have to buy the whole chain leading to the product," he said. ****** #13 Russia: Financial Maneuvers Recall 'Bad Old Days' Of 1998 By Michael Lelyveld Reports of financial maneuvers at the Central Bank of Russia and the gas monopoly Gazprom have clouded its year-end review of reform progress in 2001. A huge loan for tax payments may be a sign of hidden weakness in the budget, the monetary system, and the economy. Boston, 28 December 2001 (RFE/RL) -- The year 2001 is ending with high praise for the Russian economy and a report of at least one strange financial scheme that smacks of the bad old days of 1998. According to the newspapers "Vedomosti" and "The Moscow Times," Russia's biggest financial institution worked hand-in-hand with its biggest taxpayer to create an illusion of budgetary health at the expense of the monetary system and the currency. If the details prove true, the maneuver could be one of the worst misadventures at the Central Bank of Russia since the ruble crisis of August 1998. The story, which has fallen between the cracks of the holiday season, involves the Russian gas monopoly Gazprom, which was reportedly caught short in its tax payments after its board decided to put off a Eurobond issue valued at $750 million. To meet its tax commitment in early December, Gazprom took out a loan of 15 billion rubles ($500 million) from Vneshtorgbank. Gazprom's deputy chairman, Vitalii Savelyev, said the loan was for more than a year "at lower rates than Western banks." This is where the story gets complicated, but also potentially damaging. Vneshtorgbank (VTB) had enough money to lend Gazprom because the Central Bank transferred $700 million to VTB just before the loan was made, Russia's Investor Protection Association reported. The papers quote a Central Bank source as saying, "The Central Bank deposited the money in a currency account at VTB. The same day, VTB sold the dollars back to the Central Bank. Then Gazprom received the loan and paid its taxes, and the money ended up in the Finance Ministry's accounts at the Central Bank." There are so many things wrong with this alleged financial sleight-of-hand that they are difficult to enumerate. In the first place, it suggests that neither the Russian budget nor its biggest single contributor, Gazprom, are as financially sound as reports from the past year have made them out to be. Within the past month, both the government's debt and that of Gazprom won upgrades from Wall Street bond-rating agencies. But also in December, the government rejected Gazprom's plan to invest $5.2 billion in capital projects next year on the grounds that it could not raise the funds. On 27 December, Gazprom reported record-high export revenues of $14.5 billion and net profits of 100 billion rubles ($3.32 billion) for 2001. But those results are likely to be lowered by Western accounting and taxes. Gazprom has also glossed over the fact that its export volume has fallen 4 percent short of targets and 3 percent from 2000. The second big blow from the Central Bank tax maneuver is to transparency. Currency traders were fooled by the shift as they struggled to understand a sudden drop in Central Bank reserves, while the bank was quietly buying back its $700 million deposit at VTB. It seems that the lessons of the 1998 ruble crisis were lost in the process of an elaborate paper chase that may recall the worst practices of Central Bank Chairman Viktor Gerashchenko three years ago. The difference is that the bank has now accumulated $38 billion in reserves to protect itself from monetary damage. But the padding may not shield Gerashchenko from "The Moscow Times" charge that the bank "ran the ruble presses" to make the Gazprom loan, watering down the currency in what the paper called a "micro-devaluation." The incident may be tinged with suspicions of conflicts of interest, since both the Central Bank and VTB also own stakes in the Moscow Interbank Currency Exchange. Confidence in the system may suffer more than the ruble if Gerashchenko has gone back to his inflationary habits. The Central Bank has supposedly stopped lending money for the budget, but the Gazprom episode suggests that it has done much the same thing. The value of the entire exercise for Russia's economy and the average taxpayer is doubtful, considering that Gazprom is 38 percent state-owned, while 99.9 percent of VTB is owned by the Central Bank. One of the owners of the remainder of VTB is Gazexport, the export arm of Gazprom, according to VTB's website. The final blow from the circular payment scheme is that it may remind the international investors of the scandals that followed the 1998 ruble collapse, since some of the same players seem to be involved. VTB officials came to the defense of their Central Bank counterparts in 1999, after they were accused of hiding profits by running loans from the International Monetary Fund (IMF) through an offshore entity known as FIMACO since 1993. But in February 1999, former Prosecutor-General Yurii Skuratov told the State Duma that the Central Bank's sale of its Austrian subsidiary to VTB was the result of "grave legal violations." VTB has since been taking over other foreign holdings of the Central Bank in a move aimed at meeting IMF demands for a cleanup. Ownership links between VTB and the Central Bank are supposed to be severed by 2003 under a reform plan approved by the government in 2000 to appease the IMF. But the tax loan may lead analysts to examine the reform progress made this year and to retrace the Central Bank's steps, which now seem to lead back to the dark days of 1998. ******* #14 Date: Fri, 28 Dec 2001 From: "Peter Signorelli" Subject: POLYCONOMICS` MAN OF THE YEAR: VLADIMIR PUTIN Peter Signorelli has sent you this plain text report from Polyconomics.com (http://polyconomics.com). The fully formatted report may be found at http://polyconomics.com/showarticle.asp?articleid=1795 POLYCONOMICS` MAN OF THE YEAR: VLADIMIR PUTIN To: Website Fans, Browsers, Clients From: Polyconomics` Editors Re: Russia`s President For the past ten years, the senior Polyconomics staff has selected a "Man of the Year," with criteria heavily influenced by his contributions to the political economy. Our choice for 2001 is Vladimir Vladimirovich Putin, President of Russia, not only for his positive contributions to Russia`s national economy during the past year, but also for his leadership and creativity in the new global political economy. Mr. Putin`s remarkable accomplishments in Russia alone would have been enough to make our list of nominees for Man of the Year. Until he arrived at the helm, Russia was a shell of the once mighty nation that not long ago seriously challenged the United States for pre-eminence in world leadership ­ but which had been reduced to extreme poverty of social, economic and spiritual life, to despair, impotence and irrelevance. Russia inherited myriad problems from 70 years of Communism and the post-Communist decade of highly destructive "shock therapy" that essentially burned down the old structure of the state before a new one had been started. With his election as president, Mr. Putin confidently embarked on a series of supply-side economic reforms that have enabled Russians for the first time in post-Communist history to see their living standards rise instead of decline -- even during the pronounced slowdown of much of the world`s economy. Much of this flows from his confidence in undertaking dramatic policy measures that would have horrified the bureaucrats of the International Monetary Fund -- those who advised the governments of Mikhail Gorbachev and Boris Yeltsin into oppressive tax regimes and currency devaluations. Among his initiatives were the especially impressive range of supply-side tax reforms -- a 13% flat rate personal income tax and 23% corporate tax, and the most serious moves yet toward the private ownership of land. In 2001, Russia`s economy grew a robust 5.5%, as much of the world languished in economic recession, and the Russian stock market, an indicator of forward growth, surged from a low this year of 131 to more 254 points in dollar terms (1437.50 to 2884.21 in ruble terms)! There are still a number of serious tasks remaining in this great transformation, Russia`s reliance on a crawling peg as a guide to monetary policy an issue of worrisome concern. Yet a singularly important indication of the great turnaround underway now in Russia is that once again the people are proud to be Russian, with public opinion polls showing that a majority of the country now looks to the future with confidence. These accomplishments by themselves might not have been sufficient as decisive criteria for being chosen as Man of the Year. What elevates President Putin to this singular status is that no other world political leader is doing more to shape a positive direction for the post-Cold War era than he. His ability to think outside the box, to redefine the conceptual framework of the so-called New World Order, to move the world`s family of nations into new, positive relationships among one another has made Russia a critical and essential player in this regard. Under Putin`s leadership, Russia is becoming a major force for global stability. Perhaps his mastery of the art of judo plays a role in his approach to strategic questions, as President Putin displays an ability to take the most hostile, belligerent and threatening provocations thrown with great force against Russia and to turn them around to produce a result that lessens global instability and disarms the old Cold War-era strategists in the U.S. Those strategists -- ever convinced that Russia (with sometimes China and Islam included) remains the most dire threat to the "West" -- have devised one strategy after another to isolate Russia and to cast it as a permanent strategic adversary. Pres. Putin has taken on that offensive and effectively routed it. Rather than react with hostility and belligerence, Mr. Putin used diplomacy instead of force to turn around attempts to "contain" and isolate Moscow via extension of NATO right up to Russia`s borders. Now some West European leaders are even raising the prospect of Russian entry into the Alliance. Russia, once the great fear of Western Europe, is now increasingly welcome with open arms across the continent. Germany, for example, shows new appreciation of Russia as a moderating force for peace, as does more and more of Europe. His vision of a united, prosperous and peaceful Europe presented in his address to the German legislature -- delivered "in the language of Friedrich Schiller and Johann Goethe" as he put it -- received overwhelmingly positive responses. President George W. Bush of the U.S. very easily could be engaged now in an expansion of U.S. military power and might into Iraq, for example. The U.S. might take note of European -- and Indian, and Chinese, and Arab, and Muslim -- opposition to such an extension of the Superpower`s hegemony. Cheered on by Prime Minister Tony Blair of the U.K. and the Cold Warrior strategists in and around the Bush administration, though, Washington might be tempted to dismiss their complaints and attempt to remake the world in its own image, without much thought to unintended consequences. By adding his quiet charm and diplomatic skills to those in the Bush Cabinet who counsel restraint, Putin has thus far channeled a globally destabilizing impulse into one that points toward peaceful solutions. While differences on strategic issues remain, Russian views are given a serious hearing now with this U.S. administration. Rather than allowing U.S. abrogation of the ABM Treaty to worsen U.S./Russian relations, Putin registered his "disappointment" with the decision, but has gone on to persuade many West European leaders of the efficacy of the Russian proposals (cast as a European-wide perspective). This also has helped avert an adversarial reaction by China to the U.S. move. Pres. Putin has his equivalents in Russia of the U.S. bomber factions, yet he has managed very successfully to advance against their opposition toward closer relations with the West and the U.S. in particular. Russia`s relations with China, Iran, Western Europe, the Confederation of Independent States and former Soviet satellites, as well as the U.S., range from excellent to very good. Just appreciate for a minute that U.S. (as well as French and British) armed forces are being stationed at military bases within the Confederation of Independent States with the approval and encouragement of Moscow. Revolutionary!! The U.S. role as THE global superpower is unique, fraught with threatening pitfalls, the danger of reckless hubris, and potential for a new era of conflict. What a blessing that Vladimir Putin emerged particularly on the global stage at this time to help temper, guide and inform this development in a way that points toward an era of peace and prosperity. What an even greater blessing that Mr. Putin realizes what a world-historic role he is called upon to play in these times and does not shirk from it. We know he has read the works of Schiller and Goethe, and thus appreciates the fact that anything great or worthwhile in life ­ whether it be in the realm of art, love, or human vision ­ comes about only through willingness to take great risks. That certainly is the mark of leadership. President Vladimir Putin seems to have internalized the wisdom imparted by those great minds. He acts as Schiller advised in his work, Don Juan: Let each of your acts be your last battle on earth. Only under those conditions will your acts have their rightful power. Otherwise, they will be for as long as you live the acts of a timid man. I want to convince you that you must learn to make every act count, since you are going to be here only for a short while, in fact, too short for witnessing all the marvels of it.As Goethe proclaimed: "Knowing is not enough; we must apply. Willing is not enough; we must do." *** Remarkably, here is a national leader who recently went on live television to engage in a nationwide (across 11 time zones!) two-and-a-half hour phone-in, giving unprecedentedly frank and honest answers to callers. Total calls into the stations numbered in the hundreds of thousands, and in many cases he asked callers to leave numbers so that he could get back to them to help resolve problems. We provide here a link to the Russian text of the phone-in http://www.ortrtr.ru/. All contents (c) 2000-2001 Polyconomics, Inc ******** #15 Miami Herald December 25, 2001 Old church takes on a modern role in Russia BY DAVE MONTGOMERY Herald World Staff MOSCOW -- Growing up in Western Ukraine, Valentina Kasatkina was warned against even glancing at the shuttered church near her home. Every Soviet authority figure -- from schoolteachers to youth league directors -- constantly reminded her that practicing religion was an affront to the state. Ten years after the collapse of the atheistic Soviet regime, the 61-year-old pensioner no longer hides the deep religious beliefs she concealed as a child. So last week, undaunted by subzero temperatures and ankle-deep snow, she trekked enthusiastically to a familiar refuge -- Church of the Deposition of the Robe in south Moscow. ``Whenever I feel bad, I go to this church,'' she explained as she left St. Nicholas Day services with her 22-year-old daughter-in-law and her 16-month-old granddaughter. ``It's amazing. It makes all the difference.'' At Christmas time, the Moscow church embodies the surge of religious expression that has spread across Russia since the Soviet Union officially ceased to exist on Dec. 25, 1991. No longer fearful of arrest or official harassment, millions of Russians have found their spiritual voices. The Russian Orthodox Church, the dominant faith in Russia, now has more than 19,000 parishes in the country and other parts of the former Soviet Union, nearly triple the number in 1988. Although critics accuse Russian Orthodox leaders of suppressing ``imported'' religions, a directory of Moscow houses of worship offers a diverse roster of beliefs, including Protestants, Roman Catholics, Muslims, Jews, Christian Scientists, Mormons and Jehovah's Witnesses. FIVE CUPOLAS With five brownish-gray cupolas towering over a working-class neighborhood, the Russian Orthodox Church of the Deposition of the Robe is a touchstone for hundreds of parishioners. Struggling retirees, middle-aged breadwinners and teenagers with only vague memories of communism all find escape from their secular burdens within its icon-encrusted interior. The church, which was erected in 1701, somehow withstood decades of Soviet persecution, which destroyed thousands of other churches throughout Russia. The stately terra-cotta structure is a beacon of reassurance in Moscow's Shabolovka section -- both to the religious and nonreligious. ``This church has been standing here since the 18th century,'' said Natalia Savelyeva, a 29-year-old opera singer who regularly attends services there. ``I can't imagine the neighborhood without it, and I can't imagine what would happen if we didn't have it.'' The Rev. Vasily Blankovsky, the 64-year-old head priest, says his congregation has grown steadily since communism collapsed, including a noticeable number of young people struggling for direction in Russia's bumpy political and social transition. ``They have temptations, and they have questions,'' said the gray-haired, bearded priest. ``People are not completely satisfied with what they have outside the church. They are very unstable.'' As in the West, attendance swells on major holidays and tapers off at other times. At least 60 percent of Russians consider themselves members of the Russian Orthodox Church but little more than 5 percent attend church more than once a month. Services to honor St. Nicholas, one of the most revered saints, drew several hundred. In Russian Orthodox tradition, they stood for more than two hours as priests delivered the liturgy in Church Slavonic, an ancient form of Russian. ``There is something inside me that propels me to get up and go to church,'' said Andrei Vlasov, 33, who has built a Moscow advertising company that employs nine people. He was christened ``late in life,'' shortly after communism collapsed. Ivan Ivanin, a 73-year-old pensioner who walks with a cane, began going to church in the early 1990s to pray for the souls of dead relatives. ``A lot of people turned to religion when democracy started,'' he said. ``I feel like a great burden was lifted off of me. When I come to church, I feel so good.'' RELIGION BANNED Many recall firsthand experiences of Soviet-era religious oppression. Some defied the ban on religion and worshiped secretly. Others buried their beliefs until the post-Soviet constitution permitted religious freedom. During World War II, Soviet dictator Josef Stalin entered into a begrudging alliance with the Russian Orthodox Church to build support for the war effort, enabling the Church of the Deposition of the Robe and selected other churches to stay open under rigid state control. Priests were ostracized nevertheless and subjected to repressive measures. ``Back then we were outcasts,'' Father Vasily recalled. ``Life was much more difficult but I stood up to it.'' Father Vasily was born into a family of Russian Orthodox believers in the Soviet republic of Georgia and was summoned ``by some inner impulse'' to become a priest. While serving in the army, he was ``asked a number of times to drop the church altogether,'' but he persisted. He has been head priest at the Shabolovka church since 1993. He is married with two grown children -- the Orthodox Church permits married priests. ******** #16 Putin's plan to revamp a troubled military faces stiff resistance from top brass VLADIMIR ISACHENKOV, Associated Press Writer (12-29) 09:16 PST MOSCOW (AP) -- Ten years after the Soviet collapse, the Russian military has fallen on the worst of times. It lacks the money to properly clothe and feed its soldiers, but still has hundreds of generals commanding divisions and armies, many of which exist only on paper. The military is so short of fuel that pilots fly one-eighth of the hours that is the minimum in Western air forces. An estimated 70 percent of navy ships need overhauls. Wages are low, morale poor, draft-dodging rampant. Yet the top brass repeatedly has sought to thwart attempts to streamline the Soviet-era military, a Cold War relic with a primary mission of fighting NATO, which is no longer the enemy. Military reform tops President Vladimir Putin's agenda and faces two major obstacles: the military elite's perception of the West as Russia's main enemy, and the dreadful condition of the servicemen and their weapons. "There is nothing worse for the military than losing its enemy," Pavel Felgenhauer, an independent military analyst, said. "The new friendship with the United States means that the entire military structure must be changed." When the Soviet Union collapsed in December 1991, the former Soviet republics that became independent countries inherited the bases and arsenals of the 4 million-soldier Soviet Army. The Russian military retained all the nuclear arms but lost a large share of the most advanced conventional weapons deployed in other republics. The generals are now struggling to preserve a Soviet-style military machine on a fraction of its once-generous budget, and the result has been a shambles. "Throughout the 1990s, the military refused to abandon the huge Soviet-era mobilization system intended for a global war," Felgenhauer said. "It wants to preserve the Soviet-era ability to draft 20 million people and field 100,000 tanks." Military depots across the country still hold huge arsenals, but the number of serviceable weapons has dwindled sharply and troops get little or no training. The air force is so short of fuel that pilots fly 25 hours a year on average, compared with the West's minimum of 200 hours. The result is more crashes caused by pilot error and poor maintenance. The sinking of the submarine Kursk in August 2000 with its 118 sailors revealed to Russians that years before, the navy had mothballed all its rescue vessels and fired deep sea divers to save money. The exercise during which the Kursk sank was intended as training for the navy's first major deployment to the Mediterranean since the Soviet collapse, but the disaster thwarted the plan. The navy has complained that it lacks funds to combat poachers in Russia's own waters, let alone send ships on long ocean voyages. Military morale, which suffered a heavy blow during the botched war in Afghanistan, has plummeted to new depths amid misery, corruption, rampant theft and vicious hazing. Young conscripts can be seen begging outside stores for food and cigarettes. Draft-dodging is widespread, fueled by the brutal war in Chechnya, where troops are often sent into battle without radios or night-vision goggles. A recent newspaper report said the military asked parents in Russia's Far East to buy warm clothes for their children being sent to Chechnya. Chechen residents frequently report cases of Russian soldiers raiding homes and demanding food. Putin is determined to change this grim picture. His far-reaching reform plan would trim Russia's 1.2 million military personnel by nearly one-third in the next three years, modernize their arsenals, gradually abolish the draft and turn the military into a fully professional force. Along with a lack of money, the plan faces fierce ideological opposition from the brass, which points to Washington's missile defense plans and NATO's eastward expansion as Russia's biggest threats -- a view formalized by the nation's current military and national security doctrines. By placing Russia firmly in the U.S. camp in the war against terrorism, Putin has stunned the Russian military elite. "The Russian military has been trained to view the United States and NATO as its enemy, and it feels irritated by the latest policy changes," said Yevgeny Volk, head of the Moscow office of the Heritage Foundation, a Washington-based think tank. Putin's endorsement of the U.S. military presence in ex-Soviet Central Asian republics, his calm response to Bush's decision to withdraw from the 1972 Anti-Ballistic Missile Treaty and his push for closer ties with NATO have shocked the military. "Russia lacks a geopolitical doctrine, and it makes our foreign policy inconsistent and ... subservient to American and Western policy," fumed Col.-Gen. Leonid Ivashov, who until recently headed the Defense Ministry's department for international cooperation. In an interview with the daily Nezavisimaya Gazeta, Ivashov lamented Putin's decision to close an electronic intelligence station in Cuba and a naval base in Vietnam -- symbols of Soviet global reach. He also criticized the Kremlin for letting the U.S. troops into Central Asia. The generals showed their muscle when former President Boris Yeltsin issued a decree in 1996 ordering the military to end the draft within four years. The generals rebuffed it, saying they didn't have the money. But when they tried the same argument on Putin, he simply told them to reorder their spending priorities. Volk doesn't think the discontent threatens Putin. "The military opposition is limited to angry talk in smoking rooms and over the kitchen table," he said. Former Soviet President Mikhail Gorbachev, who was briefly ousted in the failed 1991 coup by Communist Party military and security officials, also doesn't see a threat. "No, I don't think that there could be some kind of coup. I exclude that," Gorbachev told The Associated Press. The rapprochement with the United States has given Putin an unprecedented chance to cut costs and free up funds for restructuring the military. "The favorable foreign policy changes allow Russia to concentrate on military reform," said retired Lt.-Gen. Vasily Lata, the former deputy chief of staff of Russia's Strategic Missile Forces. He is now a consultant to the PIR-Center, an independent military policy think tank in Moscow. President Bush pledged last month to cut the U.S. nuclear arsenals to 1,700-2,200 warheads, down from 6,000 the United States and Russia can each have under the 1991 START I treaty. Putin said he would like to go as low as 1,500. Many analysts say Moscow's push for radical nuclear cutbacks reflects the fact that most Soviet-built missiles are long past their designated lifetime and must be scrapped within a few years anyway. Besides, the cutbacks would spare Russia a costly, losing effort to match U.S. arsenals. But deployment of the new, single-warhead Topol-M missiles has lagged far behind the planned 30-40 a year, with just 26 going on combat duty during the last three years. The government has yet to decide on target dates for the reforms. The Cabinet recently considered a project by a group of liberal economists and lawmakers who proposed to begin phasing out the draft as early as 2004. The military leaders said it would need more time and money, but they didn't oppose it. Ivan Safranchuk, director of the Moscow office of the Washington-based Center for Defense Information, said the brass would seek to slow and dilute the reforms rather then oppose them outright. "The military will march on orders," Safranchuk said. "But it will try to drag out the reform for as long a time as possible." *******