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1. Moscow Times: Death Rate Highest in 60 Years.
2. Moscow Times: Matt Bivens, In New York, Yelena Bonner Toasts 80 Years.
3. Ogonyok: BACK IN THE USSR? Interview with Leonid Sedov of the National Public Opinion Research Center.
4. Luba Schwartzman: TV1 Review.
5. Washington Times: Olga Kryzhanovska, Ex-Soviet republics plan for free trade
6. Rosbalt: Russia's Accession to WTO May Raise GDP by Third.
8. Versiya: Pyotr Akopov, MARGINALS STRIVING FOR POWER. Russia's political landscape in the lead-up to the parliamentary elections.
9. Vremya MN: Russian Capital Has New Daily Yuppy Evening Paper, 'Stolichnaya', with ex-'Kommersant' Staff.
10. RFE/RL: Gregory Feifer, Parliament Considers Overhaul Of Local Governments.
11. New Carnegie Brief: Steps to Stable Nuclear Future for US, Russia.
12. Marina Adamovitch: Continent's Review of Russian Periodic.
13. Transitions Online: Vladimir Kovalev, Russia Sentences 73-Year-Old Academic for Spying.
14. Washington Times: Christopher Pala, Former Soviet nation may be model for Iraq. (Kazakhstan)
15. Vremya MN: Speculation Over Dollar Collapse Provokes 'Minor Crisis' On Russian Currency Market.
16. Reuters: WORLD BONDS-Buyers eye Russian corporates as sovereign soars.
17. pravda.ru: Dont Hide Your Dollars. Can the government once again organize a tremendous devaluation of the ruble?


Moscow Times
February 25, 2003
Death Rate Highest in 60 Years

Despite a post-Soviet record in births, the population decreased by 856,700
last year as the death rate soared to a high not seen since World War II,
the State Statistics Committee said.

As of Jan. 1, the population has slumped 0.6 percent to 143.1 million
people, the committee said in a preliminary report issued Friday.

According to the report, 1,396,800 babies were born in 2002, an increase of
85,200 from the previous year. But the number of deaths also grew, from
2,254,000 in 2001 to 2,331,400 in 2002. 

The State Statistics Committee, without giving numbers, said the birth rate
was a decade-long high and the death rate was the highest since World War II.

It said last year's population decrease was about the same as in 2001. 

"The changes were not so significant and did not reverse the overall
unfavorable demographic situation in the country and in the regions," the
committee report said, Interfax reported. 

In other statistics, the report said the number of immigrants fell from
193,400 in 2001 to 184,600, while the number of foreign migrants dropped
from 121,100 to 106,700. The number of internal migrants fell 5.8 percent
to 2,016,700.

According to Federal Migration Service data, the total number of registered
refugees in the country was 505,700. Of them, 43 percent came from
Kazakhstan, 12.9 percent from Uzbekistan and 8.9 percent from Tajikistan.
More than 80,000 refugees, or 16.3 percent, were Russians fleeing unstable
regions such as Chechnya.


Moscow Times
February 25, 2003
In New York, Yelena Bonner Toasts 80 Years
By Matt Bivens 
Special to The Moscow Times 

NEW YORK -- Seventeen years ago, the husband-and-wife dissidents Andrei
Sakharov and Yelena Bonner were under house arrest, conversing via an
Etch-a-Sketch to foil KGB eavesdroppers, and in the habit of drinking a
nightly toast "to the success of our hopeless cause." 

If those two could raise a glass in good humor back then -- back when
Sakharov would be tied up and force-fed by a government exasperated with
his hunger strikes, and Bonner, a medical doctor, would nurse him back to
health -- there's little to stop their friends and family from doing so today.

Bonner celebrated her 80th birthday with well-wishers in New York on
Thursday. It was the 13th birthday she's celebrated without her husband,
who died in December 1989.

Actually Bonner's birthday is Feb. 15, a date she had marked five days
earlier in Boston with family. The New York birthday was a larger public
celebration, held in the bookshelf-lined Upper West Side apartment of
Edward Kline, president of the Andrei Sakharov Foundation. 

It was complete with reporters from NTV television and Kommersant
newspaper, with caterers in white coats serving hors-d'oeuvres, with
salutes and poetry read in Russian and English.

Bonner, with a laugh, suddenly realized she would be expected to give a
speech; she said she had forgotten to prepare. 

But she has lived a rich life, and so she reached back in memory --
skipping over the recent disappointments of the Vladimir Putin and Boris
Yeltsin years, over her and her husband's triumphant return under Mikhail
Gorbachev from their six years in exile, back past her husband's Nobel
Peace Prize; back past their endless travels into the provinces to bring
attention to the most obscure Soviet dissidents, back past Sakharov's
development of the Soviet hydrogen bomb. 

As the glasses were handed out for a toast, Bonner spoke instead of World
War II, and the day 61 years ago when she first drank champagne.

"I first drank champagne on my own birthday in 1942. I was fresh out of the
hospital" -- she had just undergone training as a nurse and, at age 18,
volunteered for the war effort -- "and we were in a medical train." 

"Our train was headed for the front, so it had no wounded on it. And the
few soldiers on the train, and the nurses, decided to celebrate my birthday."

Because food was being husbanded for the wounded, those on the train were
on limited rations: Each had been issued three slices of dried hardened
toast; some dried fish soup and a little cranberry syrup, "about the color
of this glass of [red] wine," Bonner said, indicating a glass on a table.

Food was scarce everywhere, and at each train station stop, all across
Russia, there was nothing for sale -- not eggs, not bread, not vegetables.
Nothing except champagne. The young people headed to the front, with money
in their pockets but nothing to spend it on, spent it on champagne.

"Even though I was in charge of a women's brigade of nurses, I was the
youngest," Bonner remembered. "So perhaps for this reason, or perhaps
because of family upbringing, I wasn't used to drinking. But I drank that
champagne, and I drank it.

"For zakuski, we took our black bread toasts and sprinkled them with water,
to soften them, and spread the [cranberry] syrup on top. And it turned out
as -- well, we called it pastries.

"That was a different birthday from today's, but both were wonderful." 

Bonner would be wounded twice during World War II, and her childhood
sweetheart -- a boy who lived a few blocks away from her in Moscow -- would
be killed at the front. Three years after that first glass of champagne,
she would be honorably discharged with the rank of lieutenant. 

After the war, she enrolled in the First Leningrad Medical Institute,
graduated and became a pediatrician. She married a classmate from medical
school, and they had two children, Tatyana, born in 1950, and Alexei, born
in 1956.

But if that was life after the war, she could not escape who she was and
could not escape what had come before the war. 

In 1937, at the height of Josef Stalin's purges of the party, Bonner was
14. That May, her father, a high-ranking party official, was arrested (he
was shot a year later). Her mother, as the wife of a "traitor," soon
followed him into the camps; after the war she was released.

From nurse to doctor, Bonner had made a life helping people. In the 1960s,
in the thaw following Stalin's death, she began to help Stalin's victims --
those who had been, or who were still, in the camps, and their families.
She and her first husband separated.

In 1970 she and Sakharov met, as they both were attending a trial of human
rights activists in Kaluga. Two years later they were married.

When Sakharov's opposition to the Soviet war in Afghanistan infuriated the
Soviet government, he was "exiled" in 1980 to Gorky (now Nizhny Novgorod).
Bonner was free to come and go, and was his link to Moscow and the outside
world, until she too in 1984 was ordered not to leave Gorky.

The six years of exile ended in December 1986, when workmen showed up
unexpectedly to install a telephone in their apartment. The next day it
rang, and Gorbachev invited Sakharov and Bonner back to Moscow. 

Soon Sakharov was elected to the perestroika-era Congress of People's
Deputies, and when the assembly first met, Gorbachev called upon him to be
the first speaker. 

Sakharov was dead two years before Yeltsin climbed upon a tank to stare
down the coup plotters, and it fell to his widow and colleague, Bonner, to
continue the fight for democracy and human rights. She has been a harsh
critic of the war in Chechnya and the anti-democratic tendencies of the
Yeltsin-Putin years -- even if she is still willing to raise a glass to the
success of the hopeless cause.


No. 7
February 2003
Interview with Leonid Sedov of the National Public Opinion Research Center 
Author: Boris Gordon
[from WPS Monitoring Agency, www.wps.ru/e_index.html]

Question: In what country would Russian citizens prefer to live?
Leonid Sedov: In the Soviet Union.
Question: Is that a joke?
Leonid Sedov: No joke. In our polls, 44% of respondents say they 
would have liked to live under Brezhnev, 3% under Stalin, and another 
3% under Khrushchev. In other words, half of respondents would not 
hesitate to revert to totalitarianism in any of its phase. Preferably, 
to the phase of its decade, that is.
Question: Let people be imprisoned, just as long as it isn't me?
Leonid Sedov: Yes. Twenty-three percent of respondents like 
Russia under Putin, and do not want anything else. Three percent long 
for Gorbachev's perestroika era. At first sight, social support for 
perestroika was very small; but perestroika did take place. It follows 
that revolutions and upheavals do not require widespread social 
Question: What about the remaining respondents?
Leonid Sedov: This is where it becomes interesting. Eighteen 
percent of respondents would prefer to live in any other country but 
Question: Does this imply that one-fifth of Russian citizens are 
potential emigres? I do not think any other country can boast of such 
a figure...
Leonid Sedov: Generally speaking, it is a high level of potential 
migration. This figure reaches 37% among young people. That's a 
record, certainly.
Question: No consolidation, in other words?
Leonid Sedov: No. Twenty percent of respondents are dissatisfied 
with the president. This particular group is diverse, including 
everyone from the extreme left to ultra-liberals.
Question: But 80% are satisfied, right?
Leonid Sedov: Yes, as long as oil prices enable them to live more 
or less decent lives.
Question: Why do you think so?
Leonid Sedov: Only 6% have protested over the past two years: 
attending protest rallies, demonstrations, and so on. We asked what 
respondents would do if their living standards deteriorate sharply: 
40% of respondents say they would participate in protest actions. 
About 25% doubt that they will ever adapt to a free market economy. In 
other words, the calm we are seeing nowadays is highly unstable.
Question: Can pollsters predict what might explode, and where?
Leonid Sedov: Chauvinistic views are held to some extent by about 
40% of respondents.
Question: Really?
Leonid Sedov: Yes. Three percent of respondents are prepared to 
participate in pogroms.
Question: Is that how many potential troublemakers we have?
Leonid Sedov: Fortunately, they are not concentrated in any one 
place, and lack a well-organized party with a charismatic leader. For 
the time being. Another 10% approve of pogroms but would not 
participate personally. Twenty-six percent of respondents do not 
approve of pogroms, but express some approval for the skinheads and 
claim that skinheads are entitled to express their views, though they 
should find some more decent form of doing so. Pogroms are bad - but 
"Russia without dark-skinned people" is good, as far as they are 
concerned. Forty-eight percent of respondents condemn skinhead groups 
and say they should be banned. Thirty percent say that ethnic Russians 
should get preference in employment and should get preference in the 
public service to other ethnic groups like the Tatars, Chuvashians, 
Mordvas. Thank God, over 60% disagree. I fear, however, that this 
disagreement is just a remnant of Soviet internationalism.
By the way, we ask the usual question: "Would you welcome the 
marriage of your son or daughter to a person of a different ethnic 
background?" It turns out that 55% of respondents do not want their 
sons or daughters to marry a person from the Caucasus or Central Asia. 
And over 40% of respondents do not want their offspring to marry a 
Question: They can relax! We do not have that many Jews in 
Leonid Sedov: The Jews are followed by the Balts in this negative 
Question: The Balts?
Leonid Sedov: Yes. More than 20% of respondents would not approve 
of marriage to foreigners.
Question: And yet, one-fifth of them would go abroad if given 
half a chance.
Leonid Sedov: Sixty-eight percent of respondents "dislike the 
flow of immigrants from southern republics of the former Soviet 
Question: Are there any respondents who do not mind it?
Leonid Sedov: Some. Fifteen percent have no objection to 
immigrants. The rest are uncertain. Immigrants are the top irritant. 
There was a time when the list of negatives was topped by inflation - 
but not any more. These days, immigrants are second on the list, and 
sometimes even the first.
Question: Does this mean political scientists are correct when 
they predict that ultra-right nationalists may come to power, given 
the right circumstances? Fascists, in other words?
Leonid Sedov: No fascists. Fascism is something well-known and 
scary, and fascists do not stand a chance in this country. But 
revanchists, expansionists, and populists may indeed come to power.
Question: Revanchists are those who want to restore the Soviet 
Union to its former borders?
Leonid Sedov: I don't think so. Although 70% of respondents wish 
the Soviet Union had survived, only one-fifth hope it will be 
restored. It is Chechnya that is the real target of revanchism in 
Question: Why Chechnya?
Leonid Sedov: Chechnya is the focus of the bitterness caused by 
the disintegration of the Soviet Union. "We let this people go, and 
this people as well, but you will stay" - that sort of thing. A strong 
state is another idee fixe, but even here we lack consensus. When 
pollsters ask respondents what should be done to ensure a strong 
state, about one-third reply in terms of increasing military power. 
Two-thirds say indications of a strong state are decent salaries for 
state-sector workers, and high pensions. There is another obsession - 
we all want order.
Question: What do respondents mean by that?
Leonid Sedov: Maintenance of the law, fortunately. Unfortunately, 
three-quarters of respondents are prepared to sacrifice some freedom 
and rights for that.
Question: How many Russians travel abroad for their vacations?
Leonid Sedov: Around 10-15%, no more.
Question: Do you mean that three-quarters of respondents are 
prepared to give up their freedom because they have never experienced 
it fully?
Leonid Sedov: Yes. This is an alarming imbalance. Unfortunately, 
we are not immune to producing a Lukashenko of our own. We don't 
really understand the meaning of a state based on the rule of law. 
Most respondents do not know what this means. Our reformers made a 
huge mistake in being disinclined to explain to the people what they 
were doing. They should have explained everything, every step. In the 
early 1990s, Andrei Vavilov once attended a meeting of the Moscow 
Tribune (a club established by Academician Andrei Sakharov). Vavilov 
was a deputy finance minister at the time. I rebuked him for the 
failure of the economic bloc of the Cabinet to explain anything to 
ordinary citizens. He replied with the following: "But that is a 
communist habit - launching promotion campaigns at every 
Question: And this is a widespread opinion, right?
Leonid Sedov: Right. We should not be surprised than that 
communists are still winning elections. Grigori Yavlinsky recently 
wrote an interesting article about our market being closed for 
newcomers. Actually, this issue concerns every economically active 
Russian citizen.
Question: Do you mean that the article explains to businesspeople 
how they should behave?
Leonid Sedov: Yes. An article like that should be translated into 
simple language and distributed more widely. It should be made 
available to the masses. No one bothers. As a result, only some 
readers of an obscure newspaper know what it is about. And here we 
are, with two democratic parties bickering over 15% of the vote, 
instead of expanding their electorate.
Question: Well, how will our divided society behave now?
Leonid Sedov: This split doesn't mean that we will rebel or 
anything like that. The regime would deal with anything of this sort. 
What worries me is that the elites themselves are split. The business 
elite wants to lead the nation in one direction, and the military-
police elite wants it to move in a different direction.
Question: What effect will this have on the elections?
Leonid Sedov: I do not know, as yet.


TV1 Review
Compiled by Luba Schwartzman (luba_sch@hotmail.com)
Research Analyst, Center for Defense Information,
Moscow office

Saturday, February 22, 2003
- According to unnamed diplomatic sources, former Prime 
Minister, President of the Russian Trade-Industrial Chamber 
Yevgeny Primakov, is heading to Baghdad, Iraq on a confidential 
- Russian President Vladimir Putin met with Ukrainian President 
Leonid Kuchma to discuss bilateral affairs, including the creation 
of a gas consortium. Kuchma lamented the slow progress of the 
work, but President Putin assured him that, now that
the document has been signed, Russia will not back out.
- The Ministry of Taxes and Collections of the Russian Federation 
has summed up the results of its work in 2002. A total of 2 trillion 
rubles were collected in taxes. The ministrys main objectives for 
the future are simplifying tax legislation, lowering the tax burden, 
and reducing the number of inspectors.
- In Moscow, the search continues for a dangerous criminal who 
escaped from detention yesterday. Vladislav Stepanov
captured the gun of one of the guards, shot two convoy officers
and escaped.
- One or two people died and about 5 were seriously injured when 
the driver of a Volga automobile lost control of the vehicle and 
crossed the median strip, crashing into other cars and
hitting several people who were standing by the road. The 
attempted to get away from the accident, but was detained by 
police officers.
- The influenza epidemic in Russia is affecting new and new 
regions. 16 people have died since the beginning of the season.
- A large shopping center burned down in Ivanovo. There were no 
victims, but the damage is estimated at about 32 million rubles. 
Investigators have not ruled out arson.
- Film Director Artur Peleshan turns 65 today. 

Sunday, February 23, 2003
- The presidents of Russia, Belarus, Ukraine and Kazakhstan met 
in Moscow to discuss the creation of a single economic
space. They signed a joint declaration on the creation of a
supranational organ -- the Organization of Regional Integration.
- Minister of Economic Development German Gref declared that 
the transition to a single economic space will require
intensive preparation.
- The Day of the Defenders of the Fatherland being celebrated as a 
state holiday for the first time in Russia. The Russian, Belarusian, 
Ukrainian and Kazakh presidents brought a four-sided wreath 
bearing the colors of the four state flags to the Tomb
of the Unknown Soldier. Concerts and demonstrations will be held 
throughout Moscow and fireworks will light up the sky
in Moscow and other cities.
- Defense Minister Sergei Ivanov congratulated the 1,200,000 
Russian servicemen on their holiday.
- President Putin visited the Burdenko Military Hospital and 
congratulated its patients on the Day of the Defenders
of the Fatherland.
- The United Russia Party brought presents to the soldiers 
undergoing treatment at the Vladikavkaz hospital -- TV
sets and VCRs, which will be installed in the rooms.
- Minister of Chechen Affairs Stanislav Ilyasov declared that one 
of the main tasks in the preparation for theReferendum on the 
Chechen Constitution is ensuring security and repelling any 
attempts by the fighters to throw off the voting.
- Former Prime Minister Yevgeny Primakov arrived in Baghdad. 
Primakov is known for his good personal relationship
with Iraqi President Saddam Hussein. His mission remains
confidential. The Russian Embassy in Baghdad and the Iraqi Ministry 
of Foreign Affairs refuse to comment on it.
- President Putin discussed the situation in Iraq with
British Prime Minister Tony Blair over the telephone. Putin told
Blair that Russia is attempting to defuse the situation through
diplomatic means.
- Painter Kazimir Malevich was born in Vitebsk 125 years ago 

Monday, February 24, 2003
- The Festival of Military Film opened in Vladikavkaz
for the third year.
- President Putin discussed bilateral cooperation,
including cooperation in the energy sphere over the telephone
with Turkish Prime Minister Abdullah Gul. They also spoke about
the situation in Iraq.
- President Putin had a telephone conversation with French 
President Jacques Chirac. The two leaders noted the
closeness of their positions on Iraq -- both favor a diplomatic
solution to the problem. Putin also discussed the situation in Iraq
with Italian Prime Minister Silvio Berlusconi.
- The head of the Presidential Administration Aleksandr Voloshin 
arrived in the US. He is expected to meet with the US
President and other highly-placed members of the American


Washington Times
February 25, 2003
Ex-Soviet republics plan for free trade 
By Olga Kryzhanovska 

The presidents of Russia, Ukraine, Belarus and Kazakhstan have agreed
to form a free-trade zone and develop a coordinated economic policy. 
The plan is intended to ensure the deepest level of economic
integration between the former key Soviet republics since the collapse of
the Soviet Union in 1991.
"This is a higher level of integration than the customs union or the
Eurasian Economic Community," Russian Economy Minister German Gref told
reporters in Moscow. "It envisages the creation of a supranational body on
foreign-trade regulation." 
In a statement signed Sunday, the four presidents said the goal of the
plan is to establish an organization of regional integration and a
free-trade zone by September.
Russian President Vladimir Putin said the group will be based in
Ukraine and led by a Kazakh representative. 
All four presidents stressed that the body, which will be set up by
September, was not intended to replace the Commonwealth of Independent
States, a loose organization of former Soviet republics established in
1991. Mr. Putin said other CIS states would be welcome to join the new body.
Analysts say that what separates the current attempt to create a
free-trade zone from previous efforts to integrate former Soviet republics
is the strong political leadership in Russia.
"A lot of it is going to depend on whether it's going to be something
that is truly modeled on the European Union or whether it's going be a
framework that allows geopolitical pressure," said Sherman Garnett, a
specialist in U.S. foreign relations and dean at Michigan State University.
The four former Soviet republics are not planning to introduce a
common currency, Mr. Gref said.
He said the four nations would have to first complete internal
restructuring and coordinate their economic policies to ensure free
movement of goods and services, Interfax news agency reported.
Belorussian President Alexander Lukashenko, criticized by the West for
anti-democratic and anti-market policies, was blunter in demanding closer
"We understand that we are of no use to anyone except our own
countries and peoples, and will defend out markets in any way that we can,"
Mr. Lukashenko said.
The four nations have also agreed to coordinate their respective
campaigns to join the World Trade Organization, stressing that it is
essential for the formation of common export-import policy.
In Ukraine, which also seeks to join NATO and the European Union, the
idea of the integration was met with controversy.
It was largely supported by communists and those who back the current
government. Pro-Western opposition forces insisted the union would
contradict strategic interests of Ukraine. 
Anatoliy Orel, a high-ranking Ukrainian official, told reporters in
Kiev yesterday that the move was driven by economic opportunities and that
it would accelerate Ukraine's integration with Europe.
Michigan State's Mr. Garnett said the effort faces an uncertain future.
"If it has an effect of turning Ukraine, Russia, Belarus and
Kazakhstan inward, if it sets up barriers between regions and the rest of
the world and, especially, if it has a set of political and security
ambitions, it's probably a bad thing," he said.
This article is based in part on wire service reports.


February 25, 2003
Russia's Accession to WTO May Raise GDP by Third

SAINT PETERSBURG, February 25. Russia's accession to the World Trade
Organisation could raise Russia's GDP by 3.8% in the medium-term and by
28.8% in the long-term. As a Rosbalt correspondent reports, this was
announced by Ksenya Yudayeva, an economist from the Moscow Carnegie Centre,
who spoke on Friday February 21 in Saint Petersburg. She said that Russia's
accession to the WTO will particularly benefit the metallurgy industry, the
chemical industry, the woodworking and paper-making industries. The Russian
services sector will suffer the heaviest losses. 

Other estimates show, however, that the machine-building industry in the
Urals, the North-West Federal District, the Central and Privolzhsk Federal
Districts could be the most vulnerable. Light industry could also suffer,
especially in the Far East Federal District. Industrial employment could go
down by 1-2.7%, especially in the Ivanovo, Kurgan Regions and the Jewish
Autonomous Region as well as the Adygeya Republic. Ms Yudayeva also said
that Russia's accession to the WTO would not bring any significant changes
in tariffs. 



MO0SCOW, February 25, 2003. /from Nikolai Makarov, a RIA Novosti
correspondent/--The formation process of Russian political parties has been
accomplished on the whole, Yevgeny Sidorenko, Deputy Minister of Justice,
said at Tuesday's session of the Central Electoral Commission, devoted to
political parties standing for election. 

The Ministry of Justice has got some 50 political parties, with over 1,500
regional departments, registered, the deputy minister stated. At the same
time only 30 parties have so far confirmed their all-Russian status,
registering departments in more than half of the constituent members of the
Russian Federation. 

Only those parties that will confirm their all-Russian status before the
official start of elections, exactly before this September, will be
authorised to stand for the election, Yevgeny Sidorenko reminded those

Over 1,500 public associations have been recorded in Russia, however the
list can be essentially reduced soon, the official remarked. Associations,
which were set up on a professional, religious, racial or ethnic basis,
will not be able to run in the federal elections. 


No. 7
February 24 - March 2, 2003
Russia's political landscape in the lead-up to the parliamentary elections 
Author: Pyotr Akopov
[from WPS Monitoring Agency, www.wps.ru/e_index.html]

All political parties in Russia are marginal. That may be 
attributed to the fact that we do not have a "true party system" yet, 
and to the fact that parties do not participate in the management of 
the state.
It has become a tradition in post-Soviet Russia to have many 
minor parties pursuing only one goal: to divert as many votes as 
possible from the communists and patriots. A great many such parties 
have been established for the upcoming elections: from Gennadi 
Seleznev's expensive Russia's Renaissance party, to the laughable New 
Communist Party led by Andrei Brezhnev, or the National-Patriotic 
Forces of the Russian Federation led by Schmidt Dzoblayev.
The Kremlin has two other projects underway. These do not fit the 
pattern - they divert votes from United Russia rather than the 
Communist Party. The parties concerned are Gennadi Raikov's People's 
Party and Sergei Mironov's Party of Life. Both parties were formed by 
pro-presidential circles, and both intend to take part in the 
elections. These petty pro-government parties are constantly getting 
in the way of United Russia, the major pro-government party, further 
splitting the not-so-monolithic structure devised by the Kremlin. 
Their purpose is simple. These parties are supposed to collect the 
votes of citizens who like Putin but do not want to vote for United 
Russia. The difference between the approval ratings of Putin and 
United Russia can reach 40%, but getting even a tenth of these votes 
will apparently be beyond either of the two minor parties.
Some Russian citizens are still "working for the cause". They can 
be divided into three categories: lunatics, pragmatists, and 
romantics. The lunatics take part in any and every election. One 
veteran of the lunatics is Lev Ubozhko, with his Conservative Party. 
Even the Kremlin won't associate with such parties.
The pragmatists are somewhat different. Many of these parties 
began their existence as "projects of the Kremlin", and some remain 
the Kremlin's projects even now. The pragmatists are people who get 
involved in party-building in order to promote their own interests: 
for money, careers, lobbying, or anything else. These parties have 
neither ideologies nor causes. Their list includes Ivan Grachev's 
Development of Entrepreneurship party; the Socialist United Party of 
Russia (Spiritual Heritage) led by Aleksei Podberezkin; Alexander 
Chuev's All-Russian State Party; Iosif Kobzon's Peace Party; and 
Mikhail Prusak's Democratic Party. The list includes Mikhail 
Gorbachev's Social Democratic Party as well. (A former general 
secretary cannot be without a party of his own, can he?) Virtually all 
these parties like trying to persuade the regime (quietly) that they 
are on the verge of diverting some votes from the communists, Yabloko, 
Vladimir Zhirinovsky, and so on. The Kremlin does use them, every now 
and then.
The pragmatists also include professional parties like the 
Russian Party of Labor, the Agrarian Party, the Party of Pensioners, 
and the Green party of environmentalists. The Kremlin takes these 
parties seriously. Practice shows that even the "fresh projects" like 
the Party of Pensioners bring rewards (this part got almost 2% of the 
vote in 1999). These professional parties will be actively promoted on 
television before the elections; or, to be more precises, the 
professional parties supported by the Kremlin will be promoted. Their 
goal remains the same - diverting votes from the communists and 
patriots. The stakes are higher here, because every such party may get 
between 1% and 3% of the vote.
What annoyes the Communist Party and the People's Patriotic Union 
is that some votes are diverted by representatives of the third 
category: the idealists. The majority of them are low-budget left-wing 
and radical right-wing parties which cut into the communist 
electorate. Their list includes Sergei Baburin's People's Will 
National Revival Party, the People's Patriotic Party of former defense 
minister General Rodionov, the National State Party of former media 
minister Boris Mironov, and Alexander Dugin's Eurasia movement. It is 
up to the Central Election Commission, of course - but the list may 
also include all sorts of parties like For Holy Russia or True Russian 
Most of these organizations have a cause, and cannot be said to 
be promoting the Kremlin's interests. As a rule, idealists are 
concentrated in the patriotic camp, but some can be found among the 
democrats, such as Liberal Russia. Like the pragmatists, however, they 
cannot hope to win very many Duma seats.


Russian Capital Has New Daily Yuppy Evening Paper, 'Stolichnaya', with
ex-'Kommersant' Staff 

Vremya MN 
13 February 2003
Report by Anastasya Askochenskaya: "Time of Events. Night Dose of 

A new publication has made its appearance on 
the Moscow periodicals market. It is an evening daily called 
Stolichnaya [Capital]. 
This project has been brought to fruition by the former director 
general of Kommersant, Leonid Miloslavskiy. This fact has determined 
the "Kommersant" lobby evident among the new publication's contributors. 
These include Kseniya Pomareva, the newspaper's editor-in-chief Kirill 
Kharatyan, Aleksandr Kabakov, the writer and columnist who is the chief 
guru of all the new paper's authors searching for their own style, and 
the majority of the so-called managers of blocks, supplements and groups. 
The zeal behind this enterprise concluded with the foundation of a 
newspaper for the middle class which, according to data from the 
Sotsekspress Center in the Russian Academy of Sciences' Institute of 
Sociology, accounts for ten percent of Moscow's population. Directions 
for reporters issued by the manager of Dmitriy Solopov's corresponding 
block are very much set for the offensive: if the door is closed, climb 
in through the window; if there is no window, climb through the flue and 
if there is no flue, then crawling through the drainage system will do. 
Solopov's training on the Ekho Moskvy [Moscow Echo] radio station is very 
apt for a publication that has to be sent to press by 2 p.m. Moscow Time, 
which means "putting to bed" events that happened literally two or three 
hours earlier and providing proper analysis of them. The start-up print 
run is 65,000 copies. By the end of the year, managers are forecasting, 
this figure will increase to 130,000. To produce and supply such a 
number of copies Stolichnaya has had to set up its own network 
unconnected with the distribution system that has already been 
established in Moscow. The newspaper will be sold on the hoof by 
hundreds of boys and girls in special uniforms who have been trained on 
the yuppies' daily migratory routes. This costly method can suit the 
pocket of only a guaranteed investor, about whom Leonid Miloslavskiy has 
reported the following: "These are private individuals who have paid all 
their taxes". This information tells us nothing, so we have to continue 
to feed on the rumors that are spreading persistently in media circles, 
to the effect that money for this publication has been provided by 
Anatoliy Chubays. 


Russia: Parliament Considers Overhaul Of Local Governments
By Gregory Feifer

The Russian parliament is considering legislation to clarify the authority
of local and municipal governments. The Kremlin says the laws are necessary
to bring order to the chaotic lowest levels of the administrative system
that took shape after the Soviet collapse. But as RFE/RL reports, some say
implementing the reform may create more chaos by giving rise to political

Moscow, 24 February 2003 (RFE/RL) -- When tens of thousands of Russians
were left shivering without heat in below-freezing temperatures this
winter, officials were quick to point fingers at one another. The public
generally allocated blame to regional and local levels of government,
saying bureaucracy in the country's provinces has reached such a state of
confusion that officials are allowed to misappropriate funds without
assuming any responsibility. A number of politicians say they hope that may
now change as parliament considers legislation that would revise the lowest
levels of Russia's government: the local and municipal systems.

The Kremlin drafted the law saying it wants to clarify the responsibilities
of the country's different levels of government. Most important, it says
the new rules would set out clear budget structures holding all levels of
administration accountable to the electorate for each of their duties.

Political experts agree the reform is necessary but say the government
hasn't done enough to make sure the restructuring will proceed smoothly.
They say a redivision of powers and jurisdiction at the local level will
generate disputes between regional and local politicians eager to grab a
bigger share of the pie.

The State Duma passed a draft bill in the first of three readings on 21
February, when the populist Russian Regions faction leader Gennadii Raikov
had this to say to reporters: "The law is controversial. There are many
points that need to be discussed before another reading. But if [the law]
is left as it stands now the -- I'm sorry -- mess that exists now in local
government will continue: when people give 2 million [rubles] for a
football team but don't replace [heating] pipes, and then [people] freeze."

Presidential administration deputy chief of staff Dmitrii Kozak spearheaded
the bill's drafting. He addressed Duma deputies on 21 February: "This
legislation proposes to solve this problem, to delineate the zone of
responsibility for each level -- federal, regional, and local -- to tackle
specific problems of providing for the lives of citizens. Those problems
have not been solved as of today." 

The Kremlin says its legislation constitutes a first step toward codifying
all the country's government structures. Reform on the local level was
given priority, officials say, because it concerns services such as
utilities and public transportation that affect daily life and have a
direct impact on standard of living.

President Vladimir Putin has called local-government reforms "one of the
most complicated and conflict-ridden questions of state building [in
Russia]," Interfax reported.

The changes would ensure that the federal and regional governments earmark
funds for those duties handed down to local governments, including
education and health care. The law would also draw up a new map for local
administrative districts, more than doubling the country's municipal
districts to 28,000.

Partially in a bid to placate opposition by regional governors, the laws
would give them greater powers at the expense of local officials, who would
be left with little more than jurisdiction over maintenance of buildings
and public spaces.

Aleksei Titkov is a regional-affairs specialist at the Moscow Carnegie
Center. He said that while the legislation may cut down on the independence
of local government, it may bring benefits by reducing the financial
dependence of local governments.

Titkov said that most local governments -- aside from those of larger
cities -- are currently not allocated enough financing to meet their
obligations and have to scrape by with additional grants from regional and
federal coffers.

Titkov said the new laws are part of Putin's overhaul of the country's
state structures, which began in 2000. "On the whole, the law corresponds
to the Kremlin's general strategy of creating a stricter order in the
administrative and legal system of power. On the whole, the law fits into
the logic of Putin's policies in that regard," Titkov said.

Titkov said the proposed law will not significantly change the current
system of local government but rather codify some existing laws while
expanding others.

Critics say the bill promises greater abuse of power by regional governors,
as well as bloating the country's already swollen bureaucracy.

But Titkov said the chief problems will arise in the legislation's
implementation, which may lead to disputes over property and debts. "The
very process of liquidating some municipal structures and of creating
others in their place on the basis of the new federal law may become
significantly conflicting and [may] cause a number of problems for the
federal government and many new points of tension on the local level. It's
not yet completely clear how the federal authorities are planning on
solving these problems," Titkov said.

Putin said the law would take effect in 2005.


From: "Karen Jacob" <kjacob@ceip.org>
Subject: New Carnegie Brief: Steps to Stable Nuclear Future for US, Russia
Date: Mon, 24 Feb 2003 

For Immediate Release
February 24, 2003
Contact: Karen Jacob, 202-939-2372, kjacob@ceip.org

Beyond Arms Control
New Policy Brief Outlines Steps to Stable Nuclear Future

The Cold War is over, but the nuclear threat is not, and significant risks
must be addressed. In a new Carnegie policy brief, BEYOND ARMS CONTROL:
argues that the United States and Russia can combine old and new approaches
to achieve nuclear arms reduction better and faster than ever before.

Dealing with nuclear arsenals is as important as ever, she writes. For
every Soviet and American missile that has been retired, several thousand
strategic warheads remain on hair-trigger alert. Many more - especially
thousands of Russian tactical weapons - are often stored insecurely. And
huge stockpiles - hundreds of tons - of excess fissile material must be
protected and eventually eliminated. Clearly the U.S. and Russia must
cooperate to reduce these risks, but neither side has the stomach for
lengthy negotiations like START I.

Gottemoeller identifies and explains four simple steps toward arms
reduction: 1) Make use of existing treaties and agreements; 2) Build on the
contributions of Cooperative Threat Reduction and related nonproliferation
programs; 3) Use existing U.S.-Russian technical cooperation to develop
technologies and procedures for new arms control initiatives; and 4)
Negotiate, but only in areas of highest priority.

Tactical nuclear weapons get the first treatment by this method, as
Gottemoeller explains how early problems in constraining Russian and U.S.
tactical weapons might be overcome. She writes that in the future,
cooperation need not be limited by past models. In fact, adherence to
such models is no longer desirable, given the much more powerful tools now
available. If these tools are fully exploited, nuclear arms control can be
accelerated and further deep reductions can be achieved. 

Rose Gottemoeller is a senior associate at the Carnegie Endowment. She
previously served in the U.S. Department of Energy, most recently as deputy
undersecretary for defense nuclear non-proliferation. Prior to her
Department of Energy work, she was deputy director of the International
Institute for Strategic Studies in London and director for Russia, Ukraine,
and Eurasia Affairs at the National Security Council.

The full brief is available at www.ceip.org/pubs. To request a copy, email


Date: Mon, 24 Feb 2003 
From: Marina Adamovitch <continent@comcast.net>
Subject: Continent's Review of Russian Periodic

Please find attached the first installment of Continents Review of Russian
Periodic (abridged internet version).
Marina Adamovitch

Continent # 114
Review of Russian Periodic
June-December 2002 (politics, history, philosophy, religion)
Internet version

Politics, History, Philosophy: 

The main characteristic of modern Russian society is the "vagueness of
meaning" which is symbolized by the famous Russian "avos' ", writes I.
Kondakov in his article "'Smuta': The Epoch of Stagnation in the History of
Russia" (Obshchestvennye Nauky and Sovremennost', #4, 2002). "Vagueness of
meaning" connects all oppositions into an "impossible unity" and keeps the
Russian civilization constantly at the brink of disruption or explosion.
This mechanism is used to provide the mental self-conservation of culture
in the "times of troubles". Incompatible forces collide under the
conditions of post-Soviet pluralism. The author believes that the Russian
"smuta" at the borderline of XX-XXI centuries threatens to bring a complete
collapse and self-destruction to the Russian civilization.

A number of articles express general anxiety towards the course of
development that Russia will choose and a particular disappointment with
the processes of globalization. A. Beloshapko writes about "Evraziystvo" as
a philosophy, a geo-political project, an economic theory and a system of
political thought ("The Euroasians are back", Uchenye Zapisky Academii
Narodnogo Khoziaystva pri Pravitel'stve PF, #5). The main idea behind this
version of Evraziystvo is multi-polar globalization which classifies world
society by geographic, cultural and civilizational similarities. The author
writes about four types of such geo-economical zones: Euro-African,
Asian-Pacific, Eurasian and American. 
N. Larionov criticizes liberalism as a chosen way for the modern Russia
("Would Russia Get into the Liberal Paradise?", Moscow, #7). The author
believes that the essence of the liberal strategy is the sell-off of the
nation's natural resources to international financial corporations.

Democracy, in contrast to the general belief, is not the power of the
majority but rather a technology of acquisition and realization of
political power, writes A. Keromov ("Defects of Democracy and Possible Ways
to Overcome Them" (Pravo I Politica, #4). In the real world democratic
power is realized by the ruling minority, and only with some help from the

The real problem of democracy as a power is that it does not have a
specific subject, writes A. Nesterenko ("Democracy: the problem of the
subject", Obshchestvennye Nauky I Sovremennost', #4). "The People" is only
an abstract theoretical category. Any implementation of a democracy will
substitute the people's power with the practice of majority rule. A
totalitarian version of democracy suggests the power of a majority based on
a social class, nationality, or a party, and may tolerate unchecked
violence in the society.

Some articles are dedicated to the events of September 11. A. Salmin writes
that the 11 of September means the end of the epoch of the Russian-American
"great confrontation", which post-Soviet Russia imitated due to historical
inertia ("Did the era of the Manhattan Project end in Manhattan?",
Politika, #1).

Analyzing the American response to terrorism, M. Epstein points to the rise
of "democratic fundamentalism" among the American intellectuals as a
symmetric response to Islamic fundamentalism ("Notes on the Fourth World
War", Zvezda, #5). Democratic fundamentalists accuse their own country of
being responsible for the tragedy, and are afraid of government limitations
on civil rights in the wake of increased patriotism.
Continent's Review also analyzes articles from the following journals:
Druzhba narodov, Neprikosnovenniy Zapas, Lichnost'-Cultura-Obshchestvo,
Philosophskye Issledovania, Obshchestvennye Nauky I Sovremennost',
Traditsionnaya cultura. These texts cover various topics such as
theoretical problems of political affairs, national traditions in the
interpretation of historical events, and problems of the feminist struggle
for civil rights.


The last months of 2002 clearly demonstrated that in the Russian Orthodox
Church (ROC)-Vatican controversy, the Russian government supports ROC. The
priests in Yaroslavl', Rostov-on-Don and Sakhalin were not allowed to renew
their visas. O. Nedumov ("To whom the entrance to Russia is forbidden",
NG-Religii, September 18) and K. Vasilenko ("Faith with signature", Vremia
Novostey, September 27) wrote more about this confrontation and Vatican's
efforts to protect its priests, who are 90% foreigners.

The Third Missionary Congress of ROC took place near Moscow from October 31
to November 2. More than 250 eparchial missioners from Russia, Ukraine,
Byelorussia, Moldova, Lithuania, Latvia, Estonia, as well as guests from
Japan, Austria, Hungary, Germany and Iran have participated
(www.russian-orthodox-church.org.ru). Before the opening of the Congress,
M. Shevchenko published a critical article about the negative aspects of
the missionary activity of ROC (www.Kreml.org). He laments that orthodox
missionaries often use law enforcement agencies as intermediaries. The
clash between the missionary and contra-missionary tendencies was evident
during the Congress. It was also reflected in its final Declaration that
demonstrated a hard position of ROC toward the "new" as well as
"traditional" religions in modern Russia. Saint Philaret's Institute
(www.sfi.ru) noticed that 12 years after the abolishment of the anti-church
laws, some of the eparchies do not conduct any real missionary activities.
In contrast, the Japanese Orthodox Church conducts active, well-planned
missionary work with the new converts who are preparing themselves for the

Some articles are devoted to the problem of the restoration of ROC's land
ownership. Nezavisimaia Gazeta (September 2) wrote that the Russian
government does not have a consensus on the proposal of Duma member I.
Starikov to give 3 million ha to the ROC. V. Krishtanovsky ("Monastic
rehashing", Vremia MN, October 15) criticized Starikov's point of view. The
author also quotes the Moscow Patriarch's words that the ROC does not need
3 million ha but does need the law that will give it ownership rights to
land that is already in the Church's possession. The Patriarch's interview
was published in www.Sedmitsa.ru on October 2.

The conference "Spiritual Tendencies among God's People. Past and Present."
organized by the Saint Philaret's Institute and by Vestnik RSHD magazine
took place in Moscow on October 2-4. Many well-known philosophers and
theologians, such as S. Averintsev, D. Pospelovsky, bishop Seraphim
(Sigrist) and others participated in the three panels: History, Theology
and "Spiritual Movements: Experience of the 20th century" (see www.sfi.ru).

Credo.ru reported that the regional court of the city of Vladimir upheld
the guilty verdict in the case of the leader of the Russian Orthodox
Autonomous Church Valentine Rusantsov, Metropolitan of Suzdal' and
Vladimir, who was accused of sexually abusing children. This is the first
official accusation of a high-ranking church official in the post-Soviet
Russia, although father Valentine does not belong to the ROC. 
Archimandrite Valentine Rusantsov broke off with the ROC in 1990 and became
a member of the Russian Orthodox Church Abroad. Later he founded his own
church - ROAC - in 1995. That is why some journalists do not trust the
official version and assume that the real reason for this case is
persecution of religious dissidents (Credo.ru, Religio.ru and Lenta.ru,

A review of these and other topics (terrorism and the Russian Orthodox
Church, the last census and ROC, Russian religious philosophy, etc.) can be
found in the Continent's Review (Continent, #114).

Subscribe to Continent - a literary, political and religious quarterly that
is essential to all who are interested in Russian culture.
60 $ per year (4 issues). 
Postage/handling is included. 
Checks/money orders only. 
Checks/money orders must be made to Continent:
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Our representative in the United States: 
Marina Adamovitch


Transitions Online
February 24, 2003
Russia Sentences 73-Year-Old Academic for Spying
By Vladimir Kovalev

ST. PETERSBURG, Russia--A 73-year-old professor from Moscow State Technical
University has been convicted of treason and sentenced to an eight-year
suspended prison term and five years probation.

The sentence against Anatoly Babkin is the latest in what liberal
politicians see as a concerted campaign by the Federal Security Services
(FSB) to target environmentalists and scientists with charges of espionage.

FSB officials have charged that in 1999 and 2000, Babkin handed over secret
documents containing technical data on the high-speed underwater Shkval
missile to Edmund Pope, an American businessman convicted of espionage in
December 2000. Pope was sentenced to 20 years in prison but was pardoned by
Russian President Vladimir Putin the same month.

Babkin has steadfastly denied the charged.

I am not guilty of treason. This is an absolutely political case, and I
will definitely appeal to be acquitted, Babkin said in a 20 February
article from the daily Kommersant.

The General Prosecutors Office expressed disappointment over the sentence,
which representative Ilya Yerokhin called too soft for treason,
Kommersant reported. According to the Russian Criminal Code, a conviction
on charges of treason carries with it a sentence of 12 to 20 years in prison.

The soft sentence was probably given in light of Babkins merits: He has a
Ph.D. in technical sciences and is old, Yerokhin added.

Babkin has insisted that he did not hand over any materials to Pope, saying
that he was sending reports to the University of Pennsylvania according to
a $28,000 agreement on scientific exchanges signed between the American
university and Moscow State Technical University in 1996.

FSB sources charged that Babkin, as head of the project, was supposed to
hand over four reports but gave five instead. They further charged that
Pope and Babkin were detained at a hotel in April 2000 with the fifth
report in their custody, Kommersant reported.

Pavel Astakhov, Babkins lawyer, insisted that the scientist could not have
handed over the documents about the Shkval missile because he had not
worked on topics linked to projects involving high-speed underwater
missiles since 1969.

The Shkval missile is described as an exceptionally high-speed unguided
underwater missile which has no equivalent in the West and travels at a
velocity that would give a targeted vessel very little chance to perform
evasive action, by the Fas.org Military Analyst Network web site.

The name [Shkval] appeared in the investigation materials only because
investigators insisted on including it and [Babkin] was bound to agree
because he could not resist such a pressure while he was in a pre-stroke
condition, Astakhov was quoted as saying by the independent
Rosbusinessconsulting (RBC) news agency on 14 February.

The RBC report said Babkins wife testified that Babkins statements had
been made under pressure from FSB investigators.

The Technical Universitys security service and an FSB representative knew
about work we were doing according to the agreement, and Americans had been
visiting the university with their permission, Babkin said in a 21
February interview with Kommersant.

Besides, there were two FSB representatives who came to my department in
1998. I told them the details of the work. When I asked them if I should
quit it, they told me to continue. I informed the universitys security
services about this conversation, he charged.

Liberal Russian politicians called the case another example of spy mania.

Such cases as that of Grigory Pasko, Alexander Nikitin, and Igor Sutyagin
are parts of this campaign. Spy mania does not only takes Russia back to
times of totalitarianism, but, in this case, contributes to brain drain,
Sergei Mitrokhin, a State Duma lawmaker and the Yabloko party deputy head,
said on 20 February, the Regions.ru information web site reported.

The threat of finding themselves as victims of a witch hunt could be the
last straw for scientists who have already been left in a tenuous position
by the state, Mitrokhin added.


Washington Times
February 25, 2003
Former Soviet nation may be model for Iraq 
By Christopher Pala 

ALMATY, Kazakhstan -- President Nursultan Nazarbayev, who in 1991
inherited from the Soviet Union a trove of weapons of mass destruction, is
urging Iraq to follow his nation's example and disarm. 
"We gained a lot from giving them up. Iraq should look at us as a
model," Mr. Nazarbayev told The Washington Times in an interview. 
When Kazakhstan became an independent country, public opinion was not
in favor of disarmament, he said.
"Most people wanted to keep them," Mr. Nazarbayev, 62, said in his
office in Almaty last week. "The general opinion was, what kind of country
gives away such powerful weapons? Everyone will respect us if we keep them."
The arsenal included one of the world's largest anthrax production
facilities and other biological weapons in the northern town of
Stepnogorsk, the world's most sophisticated bioweapons testing ground on an
island in the Aral Sea, 1,100 nuclear warheads placed in hundreds of
intercontinental ballistic missiles, and the world's largest nuclear
testing ground in Semipalatinsk, near the border with China.
Mr. Nazarbayev gave the weapons up under international supervision,
winning praise from the United States and others.
"The international community knows what real disarmament looks like:
We saw it in Kazakhstan," Secretary of State Colin L. Powell said last
month at the World Economic Forum in Davos, Switzerland.
Mr. Nazarbayev closed Semipalatinsk nuclear testing ground even before
Kazakhstan won formal independence from the then-collapsing Soviet Union.
With subsequent financial and technical support from the West, he
either destroyed or sent to Russia all the nuclear weapons. The bioweapons
plant was destroyed and the bioweapons testing range in the Aral Sea was
simply abandoned to scavengers.
A former metallurgical engineer who comes from a family of shepherds,
the Kazakh president has since taken on a peacemaking mission well beyond
his initial disarmament.
Last June, after 10 years of lobbying Asian leaders, he was able to
gather in Almaty the heads of 16 nations representing half the world's
population, including Russia, China, India and Pakistan, as well as
representatives of Israel and the Palestinian Authority.
The event marked the founding of the Conference on Interaction and
Confidence-Building Measures in Asia (CICA).
This month, he organized a meeting of American Jewish leaders with
representatives from six Central Asian governments, including two
presidents, and Muslim religious leaders.
For an afternoon, more than 60 American Jewish leaders led by Mortimer
Zuckerman, chairman of the Conference of Presidents of Major Jewish
Organizations, were able to talk with a group of Central Asian Muslim
clerics in a friendly atmosphere.
"This is an unusual gathering that would not have taken place in many
places," Mr. Zuckerman said. "What makes it unique is that it is sponsored
by a government."
Mr. Nazarbayev sees his country of some 14 million people, in which
Kazakhs are a slight majority over ethnic Russians and other Slavs, as an
example of how Muslims, Orthodox Christians, Roman Catholics and Jews can
live in harmony.
Authorities do, however, harass Islamic and Christian groups perceived
as extremist, according to the U.S. State Department's Bureau of Democracy,
Human Rights and Labor.


Speculation Over Dollar Collapse Provokes 'Minor Crisis' On Russian
Currency Market 

Vremya MN 
22 February 2003
Report by Sergey Guk: "A Dollar on the Brink of Collapse?" 

There is minor panic on the currency market: for a 
number of days in succession market players have been divesting 
themselves of American currency. 

The Bank of Russia has been forced to resort to serious intervention in 
order to prevent a collapse of dollar quotations. Yesterday alone the 
country's chief bank "neutralized" "greenback" surpluses worth 
approximately $1 billion. The market is in a state of agitation: as 
always in such cases there is talk of an inevitable collapse of the 
dollar exchange rate in the next few weeks. The newspaper Vremya MN has 
appealed to experts with a request for their assessment of what is 

Pavel Medvedev, member of the National Banking Council of the Central 
Bank and deputy chairman of the State Duma banking committee believes 
that external factors are having the greatest impact on the existing 
situation - primarily the drawn out period of waiting to see how the 
conflict surrounding Iraq will end. There may be a further rise in 
world oil prices and the CB would then face a continuing struggle with 
the devaluation of the dollar, since there would be an increase in the 
flow of export profits into Russia. But a drop in quotations for 
mineral raw minerals cannot be ruled out and, what is more, it could be 
drastic. There would be a decline in dollar receipts and the dollar 
exchange rate would rise sharply. At the present time not one serious 
analyst is willing to say which of these two scenarios is the more 

The Bank of Russia is facing a difficult task - it must not allow the 
exchange rate of the American currency either to take flight or to fall 
radically. At the moment the CB is being forced to buy up the surplus 
dollar mass. Moreover, forward contracts for March-April also include a 
high price for oil. It goes without saying that this weakens any 
efforts to reduce inflation. 

Holders of dollars, including non-"oil" dollars, are now wondering 
whether or not it might be better to get rid of them. The situation is 
not catastrophic for the economy although it does pose some difficulties 
for the CB, which finds itself faced with the problem of sterilizing 
surplus rubles. However I believe that this problem can be resolved. 
Talks are going to start with the Ministry of Finance about issuing 
securities that are attractive to investors. The Bank of Russia and the 
government have a great many other possible options at their disposal for 
keeping the situation under control. Pavel Medvedev sums up by saying 
that they understand what dangers await them and that they will be able 
to activate those levers that they have at their disposal in order to 
prevent a collapse on the currency market. 

Academician Nikolay Petrakov, director of the Russian Academy of Sciences 
[RAN] Institute of Market Problems believes that a surplus supply of 
American currency always incites market players to speculate for a fall. 
In principle they have chosen quite a felicitous moment for themselves - 
from one day to another people are promising war in Iraq and in principle 
it may be possible to knock down the dollar exchange rate. My only 
doubts refer to whether the CB would actually let them speculate for a 
fall. The state prints rubles and is therefore in a position to emit 
virtually any quantity of the national currency on to the market. Of 
course, this course of action is fraught with a new burst of inflation, 
but what would you wish? The Russians are people who have grown 
accustomed to everything. The most likely scenario is that the 
situation on the currency market will stabilize in the next few weeks and 
that there will be no crashes at all. 


WORLD BONDS-Buyers eye Russian corporates as sovereign soars
By Alexander Manda

LONDON, Feb 24 (Reuters) - Investors who snapped up Gazprom's $1.75 billion 
bond sale on Friday are chasing other Russian corporate debt, as high oil 
prices and the government's reluctance to borrow send Russia's sovereign 
bonds soaring.

A dozen Russian corporates have announced plans for new international bond 
issues to follow Gazprom (GAZ.MO), which upped its bond from $1 billion after 
orders topped $6.5 billion. They include TsentrTelekom (ESMO.RTS) and food 
group Wimm-Bill-Dann (<A HREF="aol://4785:WBD">WBD.N</A>).

"Russian corporates are attractively priced as a sector, compared to the 
Russian sovereign," said Igor Ojereliev, emerging debt strategist at 
Threadneedle Asset Management.

Russian corporate bond yields, although falling, are closer to those of 
similarly rated credits across the world than those of the sovereign, which 
is now viewed as expensive.

"Russia trades almost flat to Mexico. From the rating perspective, Russia is 
trading tighter than where it should be trading," said Ojoreliev.

JPMorgan's Emerging Market Bond Index plus (11EMJ), the industry benchmark, 
showed Mexican debt yielding 311 basis points more than safe-haven U.S. 
Treasuries on Monday.

Its debt is rated BBB- by both Fitch Ratings and Standard and Poor's, while 
Moody's Investors Service has Mexico one notch higher, at Baa2. These 
investment grade ratings allow Mexico to tap a much wider range of funds than 
sub-investment grade ratings of BB+ and lower.

Russia's EMBI+ segment was yielding 372 basis points, despite its much lower, 
"junk" ratings -- BB from S&P, Ba2 from Moody's and BB- from Fitch.

The yield premium on Colombian debt is almost double that on Russian debt, at 
681 basis points, despite the two sovereigns sharing two out of three ratings.

Russia has stayed out of international capital markets since August 1998, 
when the country suffered a painful financial crisis, triggering a default on 
its local debt, and a crash in the value of its currency, the rouble.

Russia never defaulted on its international bonds, although some Russian 
companies did so.


Investors are still wary enough of Russian corporates to demand yields in 
line with the risk they are taking, said Ojereliev.

Gazprom's bond nevertheless saw keen demand, from investors on both sides of 
the Atlantic, helping trim the firm's funding costs despite its size, which 
put the deal among the largest debt sales by sub-investment grade corporate 

"Up until three months ago, they were paying nine to 9.5 percent for one year 
money. They have just paid 9.625 for 10 year money. That is a great trade for 
them," said a trader at a German bank, away from lead managers Dresdner 
Kleinwort Wasserstein and Morgan Stanley.

The bonds ended Friday over 2.5 points higher, and rose again on Monday.

"There was a $6.6 billion order book, albeit a bit spoofy," said the trader. 
"I guess there was a $3 to $3.5 billion of real demand. A lot of people got 
massively under-allocated."

Buyers "spoof" when they bid for more bonds than they really want, 
anticipating that orders for a popular bond will be cut back. Lead managers 
in turn hope this will result in fund managers chasing bonds after launch, 
driving up the price.


Russian debt yields remain hostage to oil prices, however, although analysts 
said Russian companies would still be able to borrow if oil falls.

"In the case of Russian corporates much has to do with the high price for 
energy," said Isaac Tabor, head of emerging market economics at Merrill Lynch 
in London. "Part of the shine could disappear if the general expectation of a 
short-lived conflict in Iraq comes to fruition." Russia's budget it 
predicated on an average 2003 price for its Urals blend (URL-E) of $21.5 per 
barrel, which was trading at $31.2 per barrel on Monday. Russia's largest 
exports are oil and gas, which have helped support the country while it 
restructures its economy after 1998.

Tabor said the Russian state has a large enough fiscal reserve so that it 
would be able to stay out of bond markets, at least until Urals prices are in 
the teens.

At present, those prices have been boosted by fears of a war in Iraq. The 
U.S. has been pushing for military action against Iraq to enforce United 
Nations resolution 1441, passed in November last year, which demanded Iraq 
disarm or face "serious consequences."

Prices are expected to fall rapidly if the war in Iraq proves as quick as 
most market analysts expect.

At lower oil prices, "Russian corporates will have to pay more generously 
than they do these days, but the market will remain open," said Tabor.


February 24, 2003
Dont Hide Your Dollars
Can the government once again organize a tremendous devaluation of the ruble?

A tendency for ruble strengthening that has recently outlined in the
country seems to be a serious alarm for financial analysts. And there is no
wonder that it is so. First of all, a strong ruble will reduce the
competitive strength of Russian exporters. This is actually very serious,
as Russias export of raw stuffs is a condition of successful budget
performance and a guarantee of another exact foreign debt payment. No
matter what analysts may say, easy petrodollars are a considerable dope
for a worn engine of the Russian economy. But as nobody is interested in a
strong ruble, there will be no strong ruble at all. What may happen then?
Is it possible that the 1998 devaluation may repeat once again? 

Strengthening or relaxation of the ruble is directly connected with
activity of the RF Central Bank on the currency market. But after
resignation of the Central Bank Chairman Viktor Gerashchenko, the bank is
just an obedient financial instrument of the government without any
independent importance. That is why when the Central Bank leadership
declared it was undesirable to retain the ruble rate at the expense of
currency buying-up, the dollar rate immediately started dropping, which in
its turn made the Russian population rather nervous. 

We have already witnessed two rather considerable bounces of the dollar
rate. For the time being, it is not clear yet what consequences may still
follow. The people are already nervous about the fate of dollars they have
earned. Who needs Russians to be so much nervous? 

Analysts say that in a long-term outlook no radical changes are to happen
on the currency market. As it has been mentioned already, excessive ruble
strengthening is unprofitable neither for domestic commodity producers, nor
for the Bank of Russia itself. Strengthening of the nominal ruble rate, or
revaluation, that we are currently witnessing, is not a big surprise for
professionals of the currency market. However, forecasts concerning further
development of the situation are rather contradictory. 

As financial analysts think, the dollar rate will fluctuate up and down
within its present-day level within the limits of a month or several
weeks. Experts say, the situation may seriously change when either inflow
of currency proceeds will change, or when the currency regulation norms
will be changed. The Central Bank can also (after an instruction from the
Kremlin) recommence the policy of more active intervention into the
currency rate formation. It depends upon oil prices whether this period
will be long or not. However, from the point of view of a long-term
outlook, many people share the opinion that ruble devaluation must be
recommenced. At that, this can be done in a sudden bounce that will
immediately depreciate the ruble. Otherwise, under conditions of the
world-wide recession Russias economy will experience hard times. 

We would like to mention that about half a year before October 1998 many of
the Russian businessmen, economists and deputies started attacking
then-government and leadership of the Central Bank with appeals to start a
smooth ruble devaluation. Supporters of devaluation predicted a forthcoming
crisis and hoped to alleviate its consequences. At present, there is no
need to dwell on the reasons that made the government of the country reject
that variant of the situation development. When the Central Bank couldnt
any longer peg the ruble rate and devaluation occurred by itself, it turned
out that no stabilizing financing from the IMF could save Russias economy
from collapse. However, the number of supporters of constant floating
devaluation has seriously increased. 

At present, the situation is also influenced by a factor that is far from
economy, by forthcoming parliamentary and presidential elections. And
Russian politicians immediately decided to speak about needs of the people.
They state that because of the advance inflation rate the life of ordinary
people is not that careless as politicians promised a couple of years ago.
If so, the Russian authorities declared a war against inflation, even
despite objections of politicians. This fact was stated by Russian Minister
of Finance Alexey Kudrin and Prime Minister Mikhail Kasyanov at a recent
session of the government. 

The struggle against inflation for political reasons will finally deliver a
strong blow against the national economy. This is because the whole of
Russias financial system rests not upon increasing of domestic
investments, but upon inflow of dollars for export of Russian raw stuff.
Decline of export may in its turn result in reduction of financing meant
for elections, that may further entail recommendation of an alternative
candidate to the presidential post instead of Vladimir Putin. This
possibility is already being spoken about in the government. 

What can ordinary Russians do in this situation if they wish to preserve
their savings? Many experts and large-scale businessmen often say now that
the ruble is strengthening and its currently very profitable to keep
savings in Russian rubles. However, the situation is not like this at all.
Especially taking into consideration the fact that Russian bankers are
actively lobbying restrictions to be imposed upon preschedule bank deposit

Actual purposes of the Russian authorities are obviously far from mere care
about the welfare of the population. No doubt that our common interests
will be once again sacrificed to more important interests of the ruling

So, a recommendation for Russians is not to make haste and convert dollars
into euro. Converting of one currency into another is very unprofitable
under the present-day conditions in this country, even if you wish to
convert just small sums of money. Youd better find a job to be paid in
euro. Dont make haste to deposit your savings into Russian banks, as it
may become a problem in the future to get this money back. If you have
savings in dollars, let them remain in dollars. Remember that nobody needs
a strong ruble, that is why the Russian ruble wont be strong. 

And what is more, a probable war in Iraq is a nice opportunity to do
something with the ruble. To depreciate it several times, for example. And
dont be confused with the forthcoming elections. Why are you so much sure
that Vladimir Putin will be obligatorily on the presidential post for a
second term? There is also a suggestion that Prime Minister Kasyanov may
also take this post to become some kind of an alternative to the so-called
Yeltsins Family. A small-scale economic crisis together with a partial
default is a suitable instrument for cleansing and renewal of the ruling
elite, and for reviving of the national economy. 

Kira Poznakhirko 
Translated by Maria Gousseva