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1. Reuters: U.S. says doubts Russia, China vetoes on Iraq.
2. Moscow Times: Catherine Belton, Voloshin Trawls for Iraq Deals.
3. AP: Russian Decries 'Axis of Evil' Term.
4. Gazeta: Veniamin Ginodman and Andrei Reut, VOLOSHIN'S SECRET MISSION. Last-ditch efforts to avert war - and other negotiations. (includes 
interviews with Sergei Rogov and Alexei Malashenko)

5. Novaya Gazeta: Pavel Felgenhauer, HOW TO RESTRAIN THE UNITED STATES WHILE IN ALLIANCE WITH IT? The existing system of international law is at odds with the real world.
6. Hurriyet (Turkey): Russia's Primakov Comments on Possible War, Turkey's Involvement.
7. Luba Schwartzman: TV1 Review.
8. National Public Radio: Analysis: Exaggeration of al-Qaeda threat in the Soviet republic of Georgia in order to enlist the help of the US military to fight Chechen rebels.
9. Moscow Times: Nabi Abdullaev, Courts Find 0.8% of Defendants Not Guilty.
10. pravda.ru: Russian Regions Unhappy with Budgetary Revenues Allocation. The federal center takes the lions share of revenues, violating the Russian law.
11. The Guardian (UK): Paul Brown, Russia urged to rescue Kyoto pact.
12. Washington Times: Jeffrey Sparshott, Russian drinkers raise glass to new bar order.
13. St. Petersburg Times: Claire Bigg, Cards Muddy Visa Entry Process
14. Reuters: Russian revival at risk if hot foreign funds return.

********

#1
U.S. says doubts Russia, China vetoes on Iraq
By Richard Balmforth and Andrew Cawthorne

MOSCOW/LONDON Feb 26 (Reuters) - The United States said on Wednesday it
doubted either Russia or China would veto a new U.N. Security Council
resolution designed to pave the way for war on Iraq.

The comments, made by a senior U.S. administration official speaking on
condition of anonymity, seemed to improve prospects for the resolution,
although questions remained over the nine council votes it needs to pass
and a possible French veto.

Washington's main supporter, British Prime Minister Tony Blair, faced
potentially the biggest revolt yet within his ruling Labour Party in a
parliamentary vote on his stance on Iraq expected later on Wednesday.

Blair is hoping to head off the rebellion by presenting a motion which does
not mention the possibility of war but asks instead for backing for the
U.N. route to disarmament of Iraq.

He is betting that political and public opinion will rally round if a
second resolution is passed by the 15-member Security Council, of which
only four so far have pledged to vote for it.

The resolution circulated at the United Nations this week by the United
States, Britain and Spain says Baghdad has missed a "final opportunity" to
disarm peacefully.

Washington and London have made clear they would like it passed in
mid-March. Blair told the British parliament he thought the resolution
would gain the required support.

Iraqi Vice President Taha Yassin Ramadan told Russian newspaper Vremya
Novostei that countries which supported America in any future war would be
legitimate targets for retaliation. Asked whether Iraq could strike Kuwait
or Turkey, he said:

"War is war. If aggression is shown against Iraq, it can of course use any
means to defend itself. I want to say only that whoever helps the Americans
will be seen as their accomplice."

But White House spokesman Ari Fleischer said on Tuesday that if there was a
war, "people who are in charge of fighting the war to kill United States
troops cannot assume that they will be safe...of course including
(President) Saddam Hussein."

FOCUS ON IRAQI ELITE

The New York Times said U.S. intelligence officials had identified more
than 2,000 members of the Iraqi elite, with some to be captured as possible
war criminals and others the U.S. military would try to turn against the
Iraqi leader.

Saddam rejected suggestions he may accept exile in excerpts from an
interview with CBS television broadcast on Tuesday: "We will die in this
country and we will maintain our honour, the honour that is required in
front of our people."

The senior U.S. official, speaking in Moscow, said he doubted China and
Russia would use their vetoes despite their public stance that U.N.
inspectors should be given more time.

"I don't think there is any question of a Chinese veto. The most likely
result is that they'll abstain...They are not going to stand in the way,"
he told reporters.

"I don't think there'll be a Russian veto either," he said, adding that
Moscow might even vote for the new resolution.

"We're not there yet but we have got two weeks," he said, referring to the
preferred U.S. mid-March deadline for a vote.

One of the countries most concerned about retaliation from Iraq is Turkey,
which Washington would like to use as a launchpad for a northern invasion
of Iraq in the event of war.

Powell telephoned Turkish Prime Minister Abdullah Gul to stress the urgency
of deploying up to 62,000 U.S. troops in Turkey, Turkey's state-run
Anatolian news agency reported.

The Turkish government asked parliament on Tuesday to consider the demand
and discussion of a motion supporting it could begin on Wednesday or
Thursday, officials say.

A cargo ship docked at Iskenderun port in southern Turkey on Wednesday and
began unloading Dutch Patriot air defence missiles promised for the defence
of Turkey if there is a war.

AWACS air reconnaissance aircraft were due to arrive under a NATO agreement
in the central city of Konya later on Wednesday to patrol the skies near
the Iraqi border.

Russia, a veto-holding permanent member of the Security Council along with
the United States, Britain, France and China, has backed French-initiated
proposals to step up U.N. arms inspections and continue them for at least
four more months.

FRANCE STILL CONFIDENT

France kept its cards close to its chest over whether it might veto the new
U.N. resolution on Iraq, which it opposes on the grounds that it would mean
needlessly rushing into war.

Defence Minister Michele Alliot-Marie told RMC radio that a French veto was
"not an issue" at the moment, because Paris believed it was in the majority
for now.

Russian media meanwhile speculated over a mystery visit to Washington by
Alexander Voloshin, President Vladimir Putin's chief of staff. Voloshin has
met senior U.S. officials including, briefly, President George W. Bush.

Media reports said Voloshin could be seeking assurances that Russia's
economic interests would be looked after in post-Saddam Iraq in exchange
for supporting the U.S. draft U.N. resolution.

Chancellor Gerhard Schroeder of Germany, which put forward a proposal on
Monday with France and Russia to give U.N. weapons inspections at least
four more months, was due to hold talks with Putin later on Wednesday.

French President Jacques Chirac, who will also be involved in intense
diplomacy over the next few weeks to rally other countries to his side,
cancelled a planned trip to Japan in March on Wednesday because of the Iraq
crisis. The French parliament was due to debate Iraq later on Wednesday.

President Vicente Fox of Mexico, a temporary Security Council member,
offered support for a modified version of the new resolution on Wednesday
in a softening of his opposition to the U.S. stance. He did not say what
changes he wanted to see.

*******

#2
Moscow Times
February 26, 2003
Voloshin Trawls for Iraq Deals
By Catherine Belton 
Staff Writer 

President Vladimir Putin's Machiavellian, pro-Western chief of staff
Alexander Voloshin -- a man with a reputation of being Russia's ultimate
backroom broker -- was in Washington for talks on the Iraq crisis and met
with U.S. President George Bush, the White House said Tuesday. 

News of the talks came as a sign Russia is actively looking to make a deal
on supporting the United States over Iraq, even as U.S. Under Secretary of
State John Bolton said Tuesday in Moscow that no headway had been made
through traditional diplomatic channels.

A White House spokeswoman, speaking on condition of anonymity, said
Voloshin met with National Security Adviser Condoleezza Rice on Monday "and
President Bush also dropped by." She declined to give further details.

At his daily news conference Monday, Bush spokesman Ari Fleischer said,
"The president had a meeting with an important staff member of the
president of Russia ... and so there was a conversation today about [Iraq]."

Confirmation of Bush's talks with Putin's close aide came as Bolton said he
had been unable to convince Russia to back the United States on a new UN
Security Council resolution authorizing the use of force against Iraq
following two days of talks with Russian officials, including Deputy
Foreign Minister Georgy Mamedov.

"I didn't detect any shift in their position," Bolton said at a news
conference Tuesday. "But the nature of diplomacy is frequently that you
have to give your message and receive a message back, and there is further
consideration. ... Today is not the first and I am sure it is not the last
of the diplomatic discussions."

Bolton's and Voloshin's talks come as part of a wave of intense diplomatic
maneuvering following the United States and Britain's forwarding of a new
resolution to the UN Security Council on Monday that would pave the way for
a military attack. Britain and the United States said they expect a vote to
be taken on the resolution within two weeks. 

Russia, however, joined France and Germany on Monday in forwarding a
memorandum to the Security Council calling for inspectors to be given at
least four more months to look for weapons of mass destruction. The Foreign
Ministry has said it will use its "entire arsenal of diplomatic means" to
push for a peaceful solution.

But Voloshin's visit to Washington is a sign Russia is moving ahead on two
fronts, and is still ready to do business with the United States on
supporting its resolution if it can reach the right terms, analysts said. 

One front, represented by stalwarts in the political establishment,
especially the Foreign Ministry, staunchly supports France and Germany in
their push to find a diplomatic resolution and opposes any change to the
current situation, which is favorable to Russia because of its strong
business links to Saddam Hussein's regime. 

Putin is preparing for talks on further strategy with German Chancellor
Gerhard Schr?der, who is due to arrive in Moscow on Wednesday.

The other front, however, believes Russia's interests are best served by
maintaining good relations with the United States, in part because it has
been more lenient toward Russia on conditions for joining the World Trade
Organization than Europe. Putin is more likely to bend toward this camp,
and Voloshin's visit to Washington is a signal that the final bargaining
might go Washington's way, analysts said. Voloshin is reported to have been
a key architect of Putin's pro-U.S. line post-Sept. 11.

"It is significant that Putin has not sent anyone from the old political
establishment" of the Foreign Ministry, which has been pushing a tough,
anti-war line, independent political analyst Andrei Piontkovsky said.
"Putin is under great pressure from the political establishment."

He said Voloshin had fought and won battles against die-hards in the
Foreign Ministry ahead of Bush's visit to Russia last year over the drawing
up of a new security treaty following the U.S. withdrawal from the ABM Treaty.

The Kremlin press service would not comment on the aims of Voloshin's
visit. The Russian Embassy in Washington told Itar-Tass that Voloshin's
trip was planned six months ago.

Bolton criticized the French-German memorandum, saying it would fail to
persuade Hussein to disarm. But he said the United States had not "written
off any votes in the Security Council and we are working on them all."

He denied a report in The Washington Post on Tuesday that he had told
Russian officials the war was inevitable with or without the UN resolution.

Bolton said he had discussed former Prime Minister Yevgeny Primakov's
recent trip to Baghdad with Russian officials, but did not give details. A
spokeswoman for Primakov also refused to comment on the trip Tuesday.

Piontkovsky said that by joining France and Germany in their nonbinding
memorandum, Putin was seeking to put off the outbreak of war for as long as
possible to maximize the bounty Russia could reap from high oil prices
ahead of military action. Central Bank reserves have soared $3.6 billion to
a record $51.4 billion over the last six weeks -- a vital cushion against a
possible sharp drop in the oil price once the Iraq crisis is over. For
every $1 drop in the oil price Russia's budget loses $1 billion in
revenues, a potentially big problem for Putin ahead of presidential
elections in 2004.

In the meantime, however, Voloshin has been dispatched to Washington to
sniff out business deals for Russia in return for its support, said
Kremlin-connected political analyst Sergei Markov.

"Voloshin takes care of the political and business aspects of Putin's
regime," Markov said. "He is one of the most pro-Western in the
administration.

"Voloshin will seek not just promises but such things as a concrete [Iraqi]
oil field for a concrete Russian company or the transfer of [funds] in
compensation for the loss of stakes in fields," he said.

No. 1 oil major LUKoil lost the biggest oil contract in Iraq -- estimated
to be worth up to $20 billion -- for the vast West Qurna field in a
surprise move by Baghdad in December. Iraq accused LUKoil of seeking U.S.
guarantees that it would be allowed to retain its contract in a
post-Hussein regime. Since then, however, a few medium-sized Russian oil
companies have clinched smaller contracts to develop other fields.

A source familiar with a closed meeting Bolton held with local analysts
following his talks Tuesday said the U.S. official had clearly said
Russia's place in a post-Hussein oil patch "would depend on its stance on
the UN Security Council."

Markov cited sources in the government as saying Russia was seeking to make
concrete deals in return for its support, such as gaining U.S. backing of
Russian plans to become a major importer of spent nuclear fuel from
U.S.-allied countries such as Taiwan, Japan and South Korea -- a project
that could earn Russia billions, but one that the United States has so far
balked at approving. 

It is also looking to get the United States to soften its stance on
Russia's entry into the World Trade Organization. In particular, he said,
Russia wants to weaken conditions for opening up its aviation industry to
foreign competition.

Markov said Russia is also hoping the United States will drop its
opposition to Russia's work on Iran's nuclear program -- an unlikely turn
of events given U.S. concerns that Iran could be developing nuclear weapons.

He said, however, that Putin may still seek to play the European card if he
cannot come to terms with the Washington. During talks with Schr?der on
Wednesday, Putin could seek a partial write-off of Russia's foreign debt,
much of which is owed to Germany.

Piontkovsky pointed out that France and Germany had opted not to forward
another resolution to compete with the U.S. and British resolution -- a
sign they, along with Putin, might back down in the end.

"If France really wanted confrontation, it would have forwarded an
alternative resolution, not a memorandum that does not commit anybody to
anything," he said.

********

#3
Russian Decries 'Axis of Evil' Term
February 26, 2003
By KEN GUGGENHEIM

WASHINGTON (AP) - A Russian lawmaker is urging his American counterparts to
shun the term ``axis of evil'' as he defends his country's relations with
Iraq, Iran and North Korea.

Mikhail Margelov, chairman of the foreign affairs committee in the Russian
parliament's upper house, said his country's relations with the three
nations are based on its own economic interest and not any hidden strategic
ambitions.

``These relations do not threaten anyone's security,'' he said, in remarks
prepared for a hearing Wednesday by the House International Relations
Committee on Russia's policies toward the three countries.

U.S.-Russian relations have improved to a point unimaginable during the
Cold War, with President Bush stressing his friendship with Russian
President Vladimir Putin.

But tensions remain over Russia's relations with Iraq, Iran and North Korea
- the three nations Bush dubbed the ``axis of evil'' in his 2002 State of
the Union speech.

Margelov said he knows from his past experience ``in the Soviet propaganda
machine'' that such terms can be useful public relations tools.

``However, I believe that politicians and especially lawmakers should not
allow themselves to oversimplify the situation,'' Margelov said.
``Simplification can be a serious sin when long-term decisions are at stake.''

On Iraq, Russia has joined France and Germany in opposing military action
against Saddam Hussein's government and advocates giving weapon inspectors
more time.

``One can resort to force, but only when all other means have been
exhausted,'' Margelov said. ``I would hope this will not happen.''

Russia is concerned that a war could lead to the country's collapse or its
transformation into a fundamentalist dictatorship, he said. It could also
lead to volatility in the oil market, which could hurt Russia's own security.

On Iran, Margelov said the United States should not be concerned about
Russian assistance to the country's nuclear program. He said the program is
in its early stages and ``Tehran is prepared to demonstrate the maximum
transparency in its nuclear activities.''

On North Korea, Margelov repeated Russia's opposition to taking the
concerns over Pyongyang's nuclear program to the U.N. Security Council,
where sanctions could be imposed. North Korea said sanctions would be
tantamount to a declaration of war.

``The essence of this position is similar to the medical principle not to
cause harm,'' he said.

*******

#4
Gazeta
February 26, 2003
VOLOSHIN'S SECRET MISSION
Last-ditch efforts to avert war - and other negotiations
Author: Veniamin Ginodman, Andrei Reut
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
WHILE PRESIDENT GEORGE BUSH HAS APPARENTLY GONE TOO FAR TO BE ABLE 
TO AVOID WAR AT THIS STAGE, SPLITS IN THE INTERNATIONAL COMMUNITY ARE 
DEEPENING, AND THE UNITY ACHIEVED SINCE SEPTEMBER 11 IS UNDER THREAT. 
DIPLOMATIC ACTIVITY IS BECOMING EVER MORE FRANTIC.

There has been a conclusive split between the major world powers 
over whether a military operation against Iraq is inevitable. Straight 
after Jeremy Greenstock, British Ambassador to the UN, officially 
submitted a draft of a new UN resolution on Iraq, put together by the 
United States, Britain, and Spain ("Gazeta" reported about it in 
yesterday's issue), for examination by the Security Council, an 
alternative proposal for settlement of the problem appeared. In order 
to balance the US-British draft, France, Germany, and Russia, with the 
support of China, presented their plan for disarmament of Iraq. But it 
wasn't Foreign Minister Igor Ivanov who went to Washington to defend 
and explain Russia's position: it was Alexander Voloshin, head of the 
Presidential Administration.

"THERE WAS NOT ENOUGH HOPE LEFT"

In the draft resolution proposed by the United States, Britain, 
and Spain, it is stated that "Iraq has been breaking and continues to 
break its commitments," and also that "Iraq submitted a declaration in 
accordance with Resolution No. 1441, in which untrue statements and 
information were contained." It is noted also that: "In recognition of 
the fact that a threat is posed to international peace and security by 
the violation by Iraq of Security Council resolutions, and by the 
proliferation of weapons of mass destruction and long range missiles, 
proceeding in accordance with Chapter 7 of the UN Charter, the 
Security Council maintains that Iraq has missed its chance to make use 
of the last possibility, presented by UN Resolution No. 1441." In 
Chapter 7 of the UN Charter, the possibility of the use of military 
force against an aggressor-nation is discussed.
As the Acting President of the UN Security Council, Gunter 
Pleuger, announced, the Security Council could examine the draft 
resolution submitted by the United States and Britain as soon as 
tomorrow, February 27. The discussion will take place behind closed 
doors, but under the influence of pressure from the White House. 
President Bush's representative Ari Fleischer and National Security 
Advisor Condoleezza Rice have already taken the liberty of making 
several statements, the essence of which boils down to the claim: 
"There is too little hope left for a peaceful settlement of the 
conflict."

A CHINESE STALEMATE

France, Germany and Russia continue to insist the reverse. They 
have suggested extension of the term of the UN inspection team's work 
until June 1, 2003, that is, until the heat becomes unbearable and 
would not allow the troops of the allies to carry out an effective 
military operation in Iraq. "We do not see any reasons to reject our 
logic - the logic of peace - and to change to the logic of war," said 
French President Jacques Chirac. "We insist on an agreement for a 
schedule of staged disarmament of Iraq." The memorandum of the three 
powers was resolutely supported also by another great power, which, as 
well as Russia and France, is a permanent member of the UN Security 
Council. "China expresses total agreement and support in all ways for 
the ideas formulated in the memorandum of the three nations," the 
Press Secretary of the Chinese Ministry of Foreign Affairs Kun Zhuan 
emphasized. "China as before does not think that a new resolution on 
Iraq is necessary. At the present time all parties must act in 
cooperation with the inspectors' activity in Iraq, who will present 
their reports during a meeting of the Security Council on March 7."
Saddam Hussein once again gave assistance in relation to a united 
position of the opponents of war. After a meeting with President 
Putin's special envoy, Yevgeny Primakov, Saddam Hussein promised not 
to obstruct the work of the UN inspectors. The visit of the former 
Foreign Minister and Prime Minister of Russia to Iraq was undertaken 
in the circumstances of strictest secrecy. Only after its completion, 
an announcement appeared on the website of the Russian Foreign 
Ministry: "The goal of the meeting with Saddam Hussein was to explain 
the position of the Russian leadership on the Iraqi issue and to 
receive assurances that Iraq will strictly fulfill Resolution 1441 of 
the UN Security Council and completely and unconditionally cooperate 
with the international inspectors of UNMOVIC and MAGATE."

SECRET MISSION

Alexander Voloshin, head of the Presidential Administration, 
unexpectedly joined the negotiations over Iraq yesterday. He arrived 
in the United States in order to discuss Iraq with Bush, Powell, and 
other senior figures in the Washington administration. Voloshin is 
very rarely seen outside Russia, and this his first time as an 
independent negotiator on such an important topic in international 
politics. The visit of Voloshin to the United States was officially 
planned as far back as six months ago and, according to our Kremlin 
sources, it was postponed several times. "Eventually it turned out 
that it was convenient for him to go right now," explained the source. 
It is hardly a coincidence that Voloshin went to the United States at 
the moment of boiling over of the Iraq crisis, when the start of a war 
is waited for each day in turn. "He did not take any particular 
proposals on Iraq," people say in the Kremlin, "and he doesn't have 
the status of an official negotiator." The negotiations conducted by 
Voloshin over Iraq were secret, and their results are unknown. Even 
Voloshin's deputy Sergei Prikhodko, supervising international issues 
in the Kremlin, did not go with him to America.
For the time being it is only known that US President George Bush 
has still not made a final decision in relation to the use of military 
force in Iraq. Yesterday Senior Under-secretary of State John Bolton, 
presently in Moscow, made a statement to this effect. "Our task 
remains the same," the American diplomat said, "That is the 
liquidation of the weapons of mass destruction present in Iraq. This 
issue requires unanimity on the part of the members of the UN Security 
Council, and precisely for this reason we are undertaking increased 
diplomatic efforts in relation to a second resolution about this." The 
Senior Under-secretary of State of the United States gave a reminder 
about the statement of George Bush to the effect that in the final 
analysis there will be no weapons of mass destruction. "We are trying 
to attain the support of the Russian Federation in this issue," John 
Bolton stressed.
Today, the Federal Chancellor of Germany, Gerhard Schroeder, 
arrives in Moscow - also for the purpose of attaining the support of 
Russia in the issue of opposition to the draft American-British 
resolution.

"RUSSIA AND THE US CLASH OF HEADS"

Sergei Rogov, director of the USA and Canada Institute, thinks 
that war in Iraq in the near future is inevitable. In this interview 
he says that only the voluntary resignation of Saddam Hussein might 
satisfy the United States. It cannot be ruled out that Yevgeny 
Primakov traveled to Iraq to discuss that possibility.
Question: Do you think is it still possible to postpone or avert 
the war in Iraq?
Sergei Rogov: Events are now reaching the critical phase, since 
the deployment of American formations around Iraq has become 
irreversible. I think that the Turkish parliament will vote to give 
the Americans the right to open a northern front on Turkish territory. 
And then there will be a few weeks left before the start of a large-
scale military operation. It is very doubtful that the United States, 
having concentrated such a large group, will wait half a year before 
starting military activities. But since climatic conditions will make 
it difficult to conduct an operation after the end of the Middle 
Eastern winter, war seems inevitable.
Question: Under what conditions might Bush stop?
Sergei Rogov: If Saddam Hussein admits that he has lost and 
agrees to leave the stage. Ten or eleven years ago, just before 
Operation Desert Storm, Primakov went to Baghdad - but then Saddam 
Hussein did not listen to his advice.
Question: Has Primakov also advised Saddam Hussein to step down 
this time?
Sergei Rogov: I think we can rule out any scenario according to 
which the Americans give up the military operation and agreed to 
Saddam Hussein's regime staying in power. A military scenario is 
inevitable. The only exception to this judgment is if Saddam Hussein 
voluntarily agrees to resign. The chances of this are not great, but I 
would not 100% rule it out.
Question: Are there no milder scenarios for the rejection of 
military activities?
Sergei Rogov: I don't think so. The United States has gone too 
far. Just the mass regrouping of troops in the Middle East only 
started at the end of December, and until recently the Americans did 
not have sufficient forces to be able to wage a large-scale war. Now 
the deployment of this grouping is being completed. The one and only, 
but a very important aspect, - is the deployment of American troops on 
the territory of Turkey. However, for this a few weeks are also 
required.
Question: Russia and other opponents of the war are now 
undertaking active diplomatic work. What are they trying to achieve?
Sergei Rogov: There are several factors. Firstly, we proceed from 
the assumption that a military operation may only be carried out 
according to a resolution of the Security Council. From this point of 
view, while the international inspection has not confirmed the fact of 
gross violations by Saddam Hussein against his obligations, we also 
will not support the United States in a vote on a new resolution in 
the Security Council. I would not rule out that we may abstain in the 
voting, if the text of the resolution is fairly mild. However, we are 
very unlikely to vote "for". There are also other considerations 
connected to the economic and political consequences of war. The 
question of the Americans having enough strength to destroy Saddam 
Hussein's regime within a few weeks does not raise any doubts. What 
will happen further on, how a political settlement will be 
constructed, what will happen with Iraq's economic obligations, 
however, are unclear issues. In principle, it is impossible to rule 
out the possibility that the Americans will not be able to manage the 
situation in Iraq, and that there may be the most varied scenarios 
both in Iraq itself and in the whole of the Middle East.
Question: That means that the subject of negotiations has now 
become the consequences of war?
Sergei Rogov: It is necessary to go right through examination of 
the scenarios and possibilities. Of course, if a clash of heads 
between Russia and the United States happens in the Security council, 
to a significant degree Russian-American relations may turn out to 
have been thrown back. The very important things which we managed to 
achieve after September 11 may also be lost. I think that the 
possibility to find compromises exists, and discussion of this is 
occurring now.
Question: Does America have an interest in compromises as well?
Sergei Rogov: In the main game, the Bush Administration already 
lost politically to a significant degree before the start of military 
activities. The goal of the war against Iraq is the demonstration of 
the punishment of a regime which does not play by American rules, as 
an example for others. Oil plays a second-level, if not a third-level, 
role here. The Bush Administration's strategy is to demonstrate the 
overwhelming military strength of the United States, and at the same 
time to show that there is a single superpower in the world, by the 
rules of which the others have to dance. However, today it turns out 
that the American line has caused a very bitter split in Western 
society. It is clear that Russia and China do not support the US. The 
multi-nation anti-terrorist coalition, which the United States 
created, is under threat. World public opinion today is inclined 
sharply against the United States as well. Furthermore, war will bring 
the Americans not a demonstration of their absolute domination in the 
world, but to the contrary, it could turn out to be the first victory 
in its own kind of way of opponents of the US, leading to the self-
imposed isolation of the United States.

"IT WILL HAVE A VERY SHARP STING"

The only possibility for President Bush to avoid starting a war 
is to capture Osama bin Laden. Carnegie Foundation analyst Alexei 
Malashenko thinks that the other chances have already passed.
Question: In the last few days Voloshin has gone to the United 
States, Primakov to Iraq, and Schroeder is arriving in Moscow. Is 
something being prepared?
Alexei Malashenko: These are either the last attempts to prevent 
everything somehow, or else the discussion has already started about 
the split-up of the rewards - what will happen afterwards. Both the 
first and the second are possible. Of course, I have quite a lot of 
difficulty in imagining how the American soldiers would return to 
America without having fired a single shot. However, I have no feeling 
that everything once and for all has been decided and planned out 
either. There is a lot of irrationality in what is going on. They are 
demanding all the time that Iraq disarms itself, and it is disarming 
itself all the time. On the other hand, in Iraq itself the situation 
is being inflamed terribly: they want to give resistance to the end 
with hunting rifles and Soviet tanks.
Question: Would Iraq realistically be able to give resistance?
Alexei Malashenko: Of course, now Iraq itself does not present 
any kind of threat. There will be a threat, nevertheless, if the 
allies step on Iraq - like on a bee. Clearly, it will sting, and it 
will sting very sharply, and it is not known how all this will end. 
Bush is solving his own problems now, but there will be further 
unpredictability from this. If by, say, 20 March the war has not 
started and is postponed until October, then the cancerous growth will 
spread all by itself. In any case, however, you would not envy Bush. 
He raised his fist himself.
Question: Does Bush have any chance left whatever to avoid war?
Alexei Malashenko: He is not stupid; he understands that he could 
lose badly. There is one very clear way out for him. If he captures 
bin Laden tomorrow and shows him to the whole world, the issue will be 
resolved: Guys, we've done our job, and we can already spare somebody 
in this area. It would be possible to show bin Laden as credit, when 
it is necessary for them to give an account for themselves. 
Incidentally, if the Arabs do not want war, they can catch him 
themselves.
Question: Maybe Primakov was working on this in Iraq?
Alexei Malashenko: Probably. You have to bring some kind of 
offering in this situation. Which offering it will be is being 
decided: for the time being there is nothing to offer.
(Translated by Alexander Mazzucchelli)

*******

#5
Novaya Gazeta
No. 14
February 24-26, 2003
HOW TO RESTRAIN THE UNITED STATES WHILE IN ALLIANCE WITH IT?
The existing system of international law is at odds with the real world
Author: Pavel Felgengauer
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
THE GLOBAL BALANCE OF POWER HAS BEEN DISRUPTED; PRESIDENT PUTIN IS 
ALARMED BY THIS, BUT RUSSIA'S TOP BRASS SEEMS TO HAVE LEARNED NOTHING 
FROM THE SOVIET UNION'S COLLAPSE. THE GOALS NOW BEING SET FOR THE 
RUSSIAN ARMED FORCES ARE INCOMPATIBLE.

During a meeting with representatives of Russia's officer corps 
at the Defense Ministry last Friday, President Vladimir Putin made a 
speech which included this significant statement about the global 
situation: "The balance of power has obviously been disrupted. A new 
architecture of security has not yet been created. Yet we cannot fail 
to notice the increasingly aggressive attitudes of some fairly 
powerful forces in certain nations; given that institutions intended 
to uphold global security and resolve conflicts have become less 
effective, this is a cause for concern."
It's hard to disagree with such an analysis. The conflict over 
Iraq, and its reflection in disputes within the United Nations, are 
practically certain to lead to a total collapse of the existing system 
of international relations and international law - a system which took 
shape after the defeat of Germany, Japan, and Italy in World War II.
After the USSR had conclusively lost the Cold War and fallen 
apart of its own accord, the system of international law remained the 
same, and the new nation of Russia inherited all the rights of the 
former Soviet superpower while preserving only a small part of the 
former superpower's capabilities. An absurd situation has arisen: 
France (hesitantly supported by Russia and China) is threatening the 
United States with a veto in the UN Security Council. In formal terms, 
France can indeed forbid the United States to do something. But in 
reality, even if Russia and China support the veto, the United States 
will still overthrow Saddam Hussein and occupy Iraq; and no one in the 
world can stop the US or restrain it for very long.
A system of international law which is fundamentally at odds with 
the real world has no force, and no point. In principle, the old 
system might have survived for a while longer (legal traditions are 
generally slow to die) if France and Germany had not challenged the 
United States over its confrontation with Iraq. But now the United 
States, irritated by these pinpricks inflicted by nations so much 
weaker than itself, is ready to shake off UN restraints and the need 
to seek NATO "consensus" like a dog shakes off fleas.
Of course, both the United Nations and NATO will continue to 
exist, in formal terms, even after the Iraq crisis is over. But Putin 
is right: the new global "architecture of security" will be based on 
different principles, and as yet no one knows exactly what these 
principles will be. (That is, America will probably simply dictate its 
will to the rest of the world and make all the major decisions on its 
own, paying a little attention to its closest allies and ignoring 
everyone else. But nobody wants to accept such a model of the new 
world order.)
Unlike France and Germany, Russia has so far managed to avoid any 
clashes with the United States over the Iraq issue.
At the Defense Ministry, Putin spoke of the increasingly 
aggressive attitudes of "some fairly powerful forces in certain 
nations" - an apparent reference to America, or at least that's what 
the generals understood him to be saying. Putin spoke of the 
military's role in meeting this new threat, and of the "still 
relevant" need to ensure mobilizational readiness - something that is 
primarily required in fighting major world wars. In the same speech, 
Putin demanded that "the capabilities of the Armed Forces should be 
adapted to carrying out tasks within the framework of the battle 
against terrorism."
Defense Minister Sergei Ivanov said: "The new Russian Armed 
Forces will assist the FSB; they should be compact, mobile, and 
equipped with modern weaponry."
So it appears that our leaders are telling the Armed Forces to 
prepare to restrain the United States, now confidently striding 
towards total world hegemony; and at the same time to use the 
"compact" military in an alliance with America against terrorism. 
These objectives are not exactly compatible - and in combination they 
are completely impossible, especially given Russia's current economic, 
political, and military technology capacities.
The Cold War ended in our defeat primarily because the Soviet 
Union's military and political leaders set completely impossible 
objectives for the nation and the military, in strategically diverging 
directions: to prepare for all possible wars or conflicts 
simultaneously, while trying to cooperate with the West and building 
up weapons stockpiles. Judging by what was said at the Defense 
Ministry last week, our leaders have forgotten nothing; neither have 
they learned anything. The process of accelerating collapse in the 
Army and Navy is the result of intellectual devastation in the heads 
of the leaders; the unfortunate officers and soldiers will have to 
deal with the consequences.
(Translated by Andrei Ryabochkin)

*******

#6
Russia's Primakov Comments on Possible War, Turkey's Involvement 

Hurriyet (Turkey)
24 February 2003
Report by Nerdun Hacioglu: "No One Can Give a Guarantee Against 
Establishment of a Kurdish State" 

Moscow--President Putin has sent Middle East 
expert and former Prime Minister of Russia Yevgeni Primakov to Baghdad on 
a secret mission. Not agreeing to receive us, he replied to our written 
questions before his departure to Iraq. He said, "No one can guarantee 
that Iraq will remain undivided after the war." 
Primakov is the Chairman of the Russian Chamber of Commerce. He 
commented on the dangers Turkey might encounter in the Iraqi crisis as 
follows: "The war in Iraq not threatening Turkey's security is 
impossible. That also applies to Russia. In view of that, the 
opposition of the Russian and Turkish peoples to the war is very normal. 
An interesting point draws my attention when I carefully study Turkey's 
approach on the Iraqi crisis. A difference exists between what the 
Turkish people want and the Turkish Military Forces' [TSk] approach. 
The views of the TSK, which are a disciplined institution, are gaining 
strength. However, no one can guarantee that Iraq will remain undivided 
after the war. It might be divided into a few parts. That will harm 
Turkey. The situation has to be considered. A Kurdish state might be 
established in northern Iraq and the Kurdish minority in Turkey might 
take action to joint it with their territory." 
Primakov said that a war in Iraq might not be limited only to that 
country. He asserted: "Many regional regimes might be affected. An 
atmosphere of uprising might emerge in the streets of the Arab countries. 
The war in Iraq might create global clashes between religions and 
cultures. That is something we have to avoid most. I want to comment 
on the US approach at this point. If Washington launches its operation 
regardless of the reaction in the world, the United States might lose the 
sympathy and support of the countries that sided with it against 
terrorism after the 11 September incidents. The United States will be 
looked upon as a country that wants to annex Iraq. So, a US operation 
will be viewed as a criminal action." 
Asked to comment on the problem of Chechenia between Turkey and 
Russia, Primakov said: "Such a problem does not exist between the two 
countries. What exists is a struggle against separatist Chechen 
militants. Turkey was criticized in the recent past. It is common 
knowledge that the militants received arms and funds through Turkey. 
The incident on the Avrasya ferryboat confirmed the support that was 
given to the separatists a few years ago. The raid on the theater 
building in Russia was the last straw. However, positive steps have 
been taken now. Moscow submitted a list of several militants to the 
Turkish officials some time ago. Ankara banned their entry into Turkey. 
The two countries maintain an understanding approach towards each 
other." 

******

#7
TV1 Review
www.1tv.ru
Compiled by Luba Schwartzman (luba_sch@hotmail.com)
Research Analyst, Center for Defense Information, Moscow office

HEADLINES,
Tuesday, February 25, 2003
- Russian President Vladimir Putin chaired a closed meeting of the
Security Council of the Russian Federation. The meeting was
dedicated to the development of a Military Technology Concept for
2006-2015, but the president began by speaking about Chechnya.
He noted that check points should only remain where they are
necessary for maintaining security, and reminded security officers
that prosecutors have to be present at special operations. About
military technology, Putin asserted that providing the Armed Forces
with the newest arms and technology is an important strategic goal
for Russia's defense policy. He also stated that defense spending
cannot be a burden on the Russian people, and should not hamper
economic growth.
- President Putin spoke with Spanish Prime Minister Jose Maria
Asnar over the telephone. Putin congratulated Asnar on his 50th
birthday. The conversation also touched upon the situation in Iraq.
- German Chancellor Gerhard Schroeder is coming to Moscow on a
short working visit tomorrow. He will also discuss the Iraqi problem
with the Russian leadership.
- The once-famous figure skaters, Ludmila Belousova and Oleg
Protopov, who escaped from the Soviet Union while on tour in 1979,
are coming back to visit Moscow for the first time.
- President Putin congratulated Russian Patriarch Alexy II on the day
of his saint.
- Officers from Directorate K of the Ministry of Internal Affairs, the
directorate for the fight against high-tech crime, detained a man who
sold professional electronic eavesdropping devices. One man who
had bought such equipment had been arrested he robbed
apartments after breaking the passwords on telephone security
system.
- The Central Electoral Commission held a meeting for the parties
that will participate in the 2003 parliamentary elections. 30 Russian
political parties have already been registered for the elections; 20-30
others must complete certain requirements before the September
deadline. Central Electoral Commission Chairman Aleksandr
Veshnyakov invited the parties to send observers to the upcoming
referendum on the Chechen Constitution.
- An intergovernmental Commission for Tariffs and Trade will be
created for the Unified Economic Space of Russia, Ukraine, Belarus
and Kazakhstan.
- Colonel General Gennady Troshev has been appointed Presidential
Advisor for the Cossack Movement. Troshev will remain within the
structure of the Armed Forces, but be commandeered to the
presidential administration. The general was removed from the
position of Commander of the North Caucasus Military District last
December after a refusal to head the Siberian Military District.
- President Putin discussed administrative reform and economic
integration with the members of the Cabinet. He told the Cabinet
that he has asked the Russian Union of Industrialists and
Entrepreneurs and the Trade-Industrial Chamber to prepare
recommendations on the issues.
- A cafe made out of ice was built in the West Siberian city of
Salehard.
- A delegation from the United Russia party met with directors of
Krasnoyarsk Krai enterprises to discuss economic growth, relations
between the government and business, and the future of tax reform.
- A storm warning is in effect on the Black Sea coastline of
Krasnodar Krai.

******

#8
Analysis: Exaggeration of al-Qaeda threat in the
Soviet republic of Georgia in order to enlist the help
of the US military to fight Chechen rebels

Morning Edition (National Public Radio), FEB 18, 2003

11:00 AM-12:00 Noon , Since last year, several dozen
US military instructors have been in the former Soviet
republic of Georgia. They went there to train
Georgia's army to deal with an incursion by Chechen
fighters who were using Georgian territory as a base.
Among the rebels were some Arabs, fighting for the
Chechen cause, including some allegedly linked to
al-Qaeda. But some Georgian officials may be
exaggerating the al-Qaeda threat. NPR's Lawrence
Sheets reports from Tbilisi that they may be hoping to
attract sympathetic attention and aid from the United
States.

LAWRENCE SHEETS reporting:

Georgian soldiers dressed in uniforms donated by the
United States man roadblocks in the Pankisi Gorge, a
tiny strip of land home to a few remote farming
villages.

(Soundbite of vehicles)

SHEETS: Until the Georgian army moved in, the gorge
had become synonymous with crime, including
kidnappings for ransom. Locals here like
Shorshanna(ph) say after two years of anarchy, life is
returning to normal.

SHORSHANNA: (Through Translator) Before it was chaotic
here and there were many robberies. Since the army
arrived, we feel more secure.

SHEETS: There's no doubt hundreds of Chechen fighters,
and as many as a hundred Arabs, once used the gorge as
a base to mount cross-border attacks against Russian
troops in Chechnya. The Georgian government claims
nearly all of them fled back into Chechnya as the army
moved in.

Mr. NIKA LALIASHVILI (Spokesman, Georgian Security
Ministry): (Foreign language spoken)

SHEETS: Nika Laliashvili, a spokesman for the Georgian
Security Ministry, shows handmade manuals he says were
seized in Pankisi. Diagrams show how to rig up booby
trap bombs. The Arabs, he said, played an important
role.

Mr. LALIASHVILI: (Foreign language spoken)

SHEETS: `Among the Arabs there were financial curriers
and religious missionaries who were tightly connected
to al-Qaeda and other terrorist groups,' Laliashvili
says. The Security Ministry spokesman suggests that
these al-Qaeda operatives in Georgia could have been
involved in the production of chemical weapons,
poisons like the ricin recently found in the London
apartment of terror suspects.

Mr. LALIASHVILI: (Foreign language spoken)

SHEETS: `Judging from their biographies, we can't
exclude there were people in the Pankisi Gorge who
knew how to make ricin and other poisons,' says
Laliashvili. The Bush administration has picked up
this theme. In his presentation to the UN Security
Council of charges against Iraq, Secretary of State
Colin Powell linked an al-Qaeda suspect named Abu
Musab Zarqawi to Georgia.

Secretary COLIN POWELL (State Department): We also
know that Zarqawi's colleagues have been active in the
Pankisi Gorge, Georgia. Members of Zarqawi's network
say their goal was to kill Russians with toxins.

SHEETS: But Dr. George Kvesitadze, head of the
Georgian Institute of Biochemistry, says that while
the raw materials to make ricin, ordinary castor
beans, for instance, are available everywhere, the
substance would be nearly impossible to make in a
primitive place like Pankisi.

Dr. GEORGE KVESITADZE (Georgian Institute of
Biochemistry): I do not believe that it was possible
to organize in Pankisi, because if ricin is not
purified, its acidity is much less. The isolation of
ricin from the (unintelligible) plant, this is
definitely very difficult, and requires a special
technology.

SHEETS: An American expert on ricin agreed. He said
without sophisticated means, only small amounts of
low-grade ricin can be made. Analyst Mamouka
Arisedzay(ph) suspects some Georgian officials are
repeating the stories about ricin and the al-Qaeda
connection in hopes of deepening military ties with
the US and countering Russian influence.

Mr. MAMOUKA ARISEDZAY (Analyst): (Foreign language
spoken)

SHEETS: `The American presence in Georgia was based
upon the al-Qaeda elements in the Pankisi Gorge,'
Arisedzay says. `It's totally logical some in the
government may want to reinforce the US military
presence by emphasizing that we still face threats.'

And Georgia's national security adviser, Tedo
Japaridze, says there is no possibility the Arabs in
Pankisi were manufacturing toxic substances.

Mr. TEDO JAPARIDZE (National Security Adviser,
Georgia): There's no way for them to have the product
ready, you know, or something like the ricin or any
other, you know, chemical weapon or some kind of
component.

SHEETS: Japaridze insists al-Qaeda is no longer active
in Georgia. He blasts officials in the Security
Ministry who he says may have been out to `raise their
own profiles' with alarmist statements.

Mr. JAPARIDZE: Some people want to show off and to
talk in public about those things which, you know, a
normal, you know, well-established state it's not
appropriate to speak about.

SHEETS: National security adviser Japaridze says all
the talk about al-Qaeda in the Pankisi has strained
Georgia's already tense relations with Russia. Last
year, the Russians bombed the gorge in pursuit of
Chechen rebels. And lately Russian officials have
stepped up their criticism of Georgia, alleging
al-Qaeda has forged deep roots in the country.
Japaridze says hyping the al-Qaeda threat is a
dangerous game that could lead to further Russian
action against Georgia. Lawrence Sheets, NPR News,
Tbilisi.

EDWARDS: The time is 19 minutes past the hour.

Copyright (c) 2003 National Public Radio (r). All
rights reserved.

*******

#9
Moscow Times
February 26, 2003
Courts Find 0.8% of Defendants Not Guilty
By Nabi Abdullaev 
Staff Writer 

Courts acquitted a mere 0.8 percent of all defendants last year, a figure
that doubled from 2001 but suggests the courts are dragging their feet in
implementing judicial reforms.

Prosecutor General Vladimir Ustinov, who disclosed the figure in an
interview published in the Izvestia newspaper Tuesday, said he was pleased
that the jump in acquittals, saying it showed reforms were bearing fruit.

"This is 9,000 cases, and it allows us to look to the future with
optimism," he was quoted as saying.

Lawyers and other legal experts said, however, that they had expected
higher figures and accused upper court judges of resisting reforms
envisioned in the Criminal Procedural Code, which went into force in July.

"The upper courts define the practices of the lower ones, and they have
kept their old, punitive methods," said Sergei Pashin, a former judge in
the Moscow City Court.

Pashin, an analyst with the Independent Council of Legal Experts, said
upper courts toss out 40 percent of the acquittals granted by lower courts.
They overturn only 0.05 percent of the guilty verdicts, he said. 

In addition, judicial commissions that evaluate judges' performances take
into account how many of their verdicts were overturned by higher courts,
he said.

"As a result, judges don't want to be very liberal," Pashin said.

The Criminal Procedural Code aims to bolster the rights of the accused by
banning the practice of sending criminal cases back for additional
investigation - a tactic often used by judges to let investigators patch up
shoddy work or look for new evidence so as to avoid issuing acquittals.

The law also forbids the police from detaining a suspect for more than 48
hours without a court-ordered arrest - which effectively means
investigators don't have months to pressure suspects into admitting their
guilt.

Pashin said that before the law came into force, courts sent about 7
percent of all cases back for additional investigation. 

The rate in Moscow is much higher, about 25 percent, said lawyer Alexei
Kupriyanov. One of his clients, he said, had his case sent back for
additional investigation four times in a process that dragged on for four
years before investigators closed the case for lack of evidence.

"Judges are in a state of frustration. They rigidly stick to practices that
remain unchanged," he said. "I thought that the Supreme Court would
reorient lower judges after the new code was introduced, but this has not
happened."

Supreme Court officials could not be reached for comment Tuesday.

Pashin said judges do not seem willing to change their ways any time soon,
so the number of acquittals will probably only increase through the
introduction of jury trials. Jury trails are being phased in throughout the
country.

Since 1993, when jury trials were reinstated in Russia, they issued
acquittals in 15 percent of all cases, Pashin said.

A total of 44 of the 465 defendants tried by juries last year were
acquitted, but the Supreme Court overturned 11 of the verdicts over court
violations, Supreme Court chairman Vyacheslav Lebedev was quoted as saying
by Izvestia on Tuesday. 

The inclination of the courts toward issuing guilty verdicts not only
infringes on the rights of the accused but also damages the quality of
investigators' work, said Stanislaw Pomorski, a law professor at Rutgers
University in New Jersey who conducted a study of Russian regional courts
in the late 1990s.

"The policy of no-acquittal is likely to have a demoralizing effect on
prosecutors, since, under the circumstances, filing poorly prepared cases
has become a risk-free operation," he wrote in an article published in the
East European Constitutional Review last year.

The number of Russian acquittals is a fraction of those issued by courts in
the West. According to media reports, the acquittal rate in the United
States hovered around 17 percent throughout the 1990s, and reached 30
percent in big cities.

In Australia, the acquittal rate was 31 percent in 2000.

In Moscow, it was 0.25 percent that year, while the national average was
0.4 percent.

Russian courts have not always balked at acquitting defendants. In
pre-Soviet Russia, every third verdict was an acquittal. Even in the Stalin
era, which was infamous for its show trials, the acquittal rate was 10
percent, Pashin said.

*******

#10
pravda.ru 
February 26, 2003
Russian Regions Unhappy with Budgetary Revenues Allocation 
The federal center takes the lions share of revenues, violating the
Russian law 

Moscow Mayor Yury Luzhkov repeatedly set out his dissatisfaction regarding
the allocation of revenues between the Moscow treasury and the federal
center. Yury Luzhkov said that again at a session of the Moscow government
yesterday. The struggle for a more fair allocation of income in favor of
regions was lost during the discussion of the budget 2003 in the State Duma
last year. However, economic consequences of the fact that the federal
center obtained the lions share of that income are rather explicit at
present. 

Moscow Mayor Yury Luzhkov acknowledged that for the first time during his
stay at the post that the execution of the Moscow budget would be very
tense. As the mayor believes, the federal center is guilty of that. Luzhkov
said that the income allocation proportion of 68% and 32% in favor of the
federal center was absurd. He added that such an allocation violated the
Russian law. According to the law of the Russian Federation, the funds are
supposed to be allocated on the base of the 50x50 principle. There can be
one conclusion made from Luzhkovs statement: this norm is supposed to be
either cancelled or executed. None of that happens today. 

In connection with that fact, the Moscow Mayor is going to settle this
problem with the Russian Finance Ministry, with the Revenue Ministry and
with the Ministry for Economic Development and Trade. On the threshold of
the deal, Yury Luzhkov demanded the government should increase non-fiscal
revenues by means of extending the base of that kind of income, as he said. 

Yury Luzhkov stated at yesterdays session of the Moscow government that
the budget of the current year has a gap of more than 21.5 billion rubles.
The revenues of the budget make up 293.3 billion rubles, while the
expenditure is almost 315 billion rubles. This makes the budgetary deficit
of 21.5 billion. Of course, as the mayor stated, the gap would be covered
at the expense of attracting additional income and loans. However, the
Moscow authorities will have to mobilize all internal sources for that.
Yury Luzhkov stated that the Moscow small business was the main support for
the mobilization. There is nothing surprising about that, for, as the mayor
said, a half of Muscovites, who do not wish to work in state structures,
are employed for the small business. Some people have their own
businesses, while others work for them, Yury Luzhkov believes. 

Such an approach to the problem on the part of the Moscow mayor is not
really exotic. It is well known that almost the entire small business of
Moscow develops and grows on the base of the shadow economy. However, it is
the shadow economy that allows Moscow to settle monstrous social issues and
to find huge sums of money for construction and other ambitious projects of
the Moscow mayor. As experience shows, the scheme of the budget funding is
very exquisite in Moscow. The Russian Federation Office of the Prosecutor
General has a lot of questions pertaining to Moscow constructions. Yet,
federal prosecutors have not found anything that would be good for
instituting criminal proceedings about that. The only thing that they found
was about little occasions of untargeted use of the funds. 

As a matter of fact, Moscow has suffered a lot from the allocation of
revenues this year. As Valery Draganov, the chairman of the budgetary
committee of the State Duma, said in one of his interviews, that there was
a lot of money invested in the tobacco industry of Russia lately. As the
official added, that was registered in Russias eleven territories,
including Moscow. It goes without saying that tobacco producers became
large tax-payers. However, tobacco production excises were taken by the
federal center. Moscow lost at least 5.5 billion rubles on account of such
an allocation. What did the Moscow government say to investors? They just
thanked them for good quality cigarettes and said that it was up to the
federal center to deal with their problems. Farewell, so to speak. There
will be nothing surprising, if nothing is invested in the tobacco
production this year. 

It is worth mentioning here that other regions of Russia have the same
attitude to the issue of budgetary revenues allocation. Governors and
regional budgets have already experienced the results of such allocation in
favor of the federal center. One of adversaries of the federal centers
excessive financial nourishment, Sergey Sobyanin, the governor of the
Tyumen region, sets his hopes for the local self-government law. As the
Tyumen regional governor believes, the law will probably help to correct
the situation. However, he believes that the power in Russia suffers from
the system crisis of all levels. Sergey Sobyanin is certain that it was all
caused with unbalanced budgetary economy of all levels. 

State Duma faction Yabloko is also an adversary of the center-favored cash
flow allocation. Coming parliamentary and presidential elections will
definitely make the faction change its stand, it will make it tougher. For
the time being, Yabloko claims that the policy to centralize financial
resources and to reduce the share of regional budgets in the consolidated
budget of the Russian Federation is absolutely unacceptable. This policy
makes peoples living worse, while regional educational, healthcare, public
utilities, transport, budget institutions suffer from the lack of funding.
This is the pre-election verdict of the civilized opposition to the
incumbent Russian government. That is why, Yabloko is determined to strive
for the increase of the revenues share for regional budgets. The final goal
is to achieve the 50x50 level in the allocation of revenues between the
federal center and regions, as it is registered in the Budget Code. 

On the threshold of the parliamentary elections, such a common position of
the conservative party of the regional elite and of the socially-oriented
Yabloko faction might result in an expected union and an unexpected
surprise during the pre-election campaign. By the way, the Yabloko faction
and Russian regional governors have the same position regarding unpopular
power industry reforms too. 

Akhtyam Akhtyrov 
PRAVDA.Ru 
Translated by Dmitry Sudakov 

*******

#11
The Guardian (UK)
February 26, 2003
Russia urged to rescue Kyoto pact 
Paul Brown, environment correspondent

Pressure on Russia to ratify the Kyoto protocol is intensifying amid fears
in the European Union that Moscow may scupper the agreement to combat
climate change by refusing to sanction it. Vladimir Putin, Russia's
president, promised last year that the ratification process would be under
way by now in the duma, the lower house of the country's parliament, but no
progress has been made. 

The United States and Australia have already withdrawn their support,
putting Russia in a crucial position. Its support will make or break the
pact. 

Gerhard Schrder, the German chancellor, and Tony Blair have separately
written to Mr Putin in the past two months asking him to act, so far
without success. 

So concerned is the EU about the lack of progress that a delegation of the
leaders of three countries will be sent to see Mr Putin in March. 

Russian doubters about the value of ratifying the Kyoto protocol have
organised a world climate conference for September 29 in Moscow. This
conference is to "re-examine" the science on the issue, seen as casting
doubt upon it, a position that will delight President George Bush, who
wants to destroy the protocol. 

Behind the conference are the two scientists who lead for Russia in the
climate talks, Alexander Bedritski and Yuri Israel. Both are respected
members of the Russian Academy of Sciences, but they apparently believe
that climate change might be good for their country. They believe global
warming might pep up cold regions and allow more grain and potatoes to be
grown, making the country wealthier. They argue that from the Russian
perspective nothing needs to be done to stop climate change. 

The EU hopes that Mr Putin, having promised that the protocol would be
ratified this spring, will bring his reluctant scientists into line. The
energy and economic ministries are said to still be in favour of the treaty
because they expect to make money out of it. 

Under the complex rules Russia's support is essential if the protocol is to
succeed. This is because developed countries that are responsible for 55%
of the world's greenhouse gas emissions must ratify it for it to come into
force. With the US and Australia refusing to sign, Russia's cooperation is
needed to reach the required figure. All the other necessary countries have
already ratified the pact or are doing so. 

Currently there are 104 parties, representing over 44% of eligible
emissions - Russian's emissions would automatically bring the protocol into
legal force. 

All the developed countries have a target to reduce emissions on 1990
levels by 2010 based on the protocol becoming law this year. If a country
fails to reach its target by domestic measures, it is entitled to buy
surplus carbon from any country that has already exceeded its target. 

This provision could make Russia a lot of money because it already has more
than reached its reduction target because of the collapse of the economy in
the 1990s. Several countries not expected to reach their targets would be
offering hard cash for Russian surpluses. 

A second scheme under the protocol allows clean energy projects and carbon
saving schemes inside Russian borders to be financed by other countries
which can gain carbon credits as a result. 

To try to counter establishment scientists who believe climate change could
be good for Russia, a report on how the country will suffer will be
circulated in the coming weeks. The report, produced jointly by scientists
from Kassel University in Germany, Moscow State University and the centre
for ecology and forest production of the Russian Academy of Sciences,
contradicts the establishment view. 

It says that previous calculations that more warmth and rain will be bring
more crops for Russia fail to take into account regional variations. It
says that only 15 out of the 89 administrative regions of Russia provide
the rest of the country with much of its food. 

Under the most likely climate change calculations these 15 areas in the
south and west will suffer summer heat and droughts. The number of people
affected by these droughts is 58 million. It will rise to 77 million by the
2020s and 141 million by 2070. 

"The possibility of more frequent bad harvests is a threat to Russia's food
security that should be taken seriously," the report says. 

Although rainfall is set to increase in much of Russia, increasing river
flows and groundwater levels, and incidentally the risk of flooding, the
southwest will suffer the opposite. There is already pressure on water
supplies because of large withdrawals for cities and irrigation. Lack of
rain will reduce river flows even further. 

The report concludes: "Our findings challenge the belief that climate
change will generally benefit Russian agriculture and water resources.
Instead they point out how extreme events such as droughts may become more
frequent in key areas of Russia and may pose a threat to the food and water
security of its people." 

Dr Paul Jefferiss, head of environment policy at Britain's Royal Society
for the Protection of Birds, said: "Russia's ratification is vitally
important. If she doesn't go ahead, years of hard-won agreements will be
placed in jeopardy, and meanwhile the climate continues to change." 

********

#12
Washington Times
February 26, 2003
Russian drinkers raise glass to new bar order 
By Jeffrey Sparshott 

Russia's national drink is suffering from an image problem on its home
turf. 
Young people are drinking less vodka and more beer as health
considerations, better brews and good marketing are reordering the domestic
market.
That means that Russians, this year for the first time, are on a pace
to spend more on beer than on vodka, according to market-research firms.
"It's definitely going to happen," said Vicky Darwin, marketing
director at Concise Business to Business Information, an England-based
market-information and -analysis group.
It's a big change in the country that says it invented vodka. (Poland
also claims the honor.) The very word stems from "voda," Russian for water.
(In Polish, it's "woda.")
"Vodka is Russia's national drink. It is drunk in quantities that
amaze and horrify many visitors to Russia," says an analysis published last
year by Euromonitor International, a global research company.
But vodka has been steadily losing sales. And the trend away from
low-quality cheap vodka, which makes up the bulk of alcohol sales, is
expected to continue even as Russians continue to drink more, Euromonitor
says.
Russia consumes more units of alcohol per capita than any other nation
on earth, according to Euromonitor, and alcoholism rates are troublingly
high, health organizations say.
Russians now drink more beer, by volume, than vodka, and Euromonitor
sales projections show beer consumption rising 7.4 percent per year from
2002 to 2007, while vodka falls 2.3 percent.
The bubbling beer market has been developing since the mid-1990s as
breweries, allowed to compete in a capitalist market, accepted investment,
improved quality and advertised. 
A financial crisis in 1998 the ruble crashed and prices on imported
goods rose 400 percent hurt beer companies because they import hops and
other important components, but sales quickly recovered.
"Today, they are using the smoothness, the taste and variety of beers,
and that is making them very popular," said Dima Rahimov, a manager at
Russian Gourmet, a McLean store specializing in Eastern European products.
"But I wouldn't say vodka will go away. Vodka has its own way and clients."
Vodka is the most popular spirit category in the United States,
accounting for about one of every five bottles of distilled spirits sold,
according to industry sources. 
But beer is still the most popular alcoholic drink; Americans drink
more than 22 gallons per person per year of it, and just more than 1 gallon
of distilled spirits, according to the U.S. Agriculture Department.

********

#13
St. Petersburg Times
February 25, 2003
Cards Muddy Visa Entry Process 
By Claire Bigg 
STAFF WRITER 

A new immigration-card system for foreigners in Russia that came into effect 
on Feb. 14 may make life a little more difficult for holders of Russian visas 
who regularly leave and re-enter the country. The system, introduced in line 
with new legislation targeted at reducing the number of illegal aliens in the 
country, has already generated some confusion, with the responsible agencies 
often providing inaccurate or conflicting information.

All foreigners planning to spend more than three days in the country are now 
issued the cards upon entering Russia, in compliance with new laws governing 
the issuance of visas, residency and work permits that came into effect Nov. 
1. last year. The card consists of two parts, the first of which - indicating 
the person's name, date of birth, gender, nationality, address or host 
organization in Russia, and purpose and length of stay - is collected 
immediately at the issuing immigration-control point, and the second of which 
- carrying the same information, plus an indication on the back that the 
foreigner is legally registered in Russia - must be submitted upon leaving 
the country.

Through the end of last week, about 9,000 migration cards had been 
distributed to foreigners arriving by air, rail or automobile at the seven 
points in the Northwest Region currently handing out the cards. 

"One of the aims of the new law is to bring order to migration processes 
here," said Mikhail Utyatsky, the director of the Visa and Passport Service 
at the St. Petersburg and Leningrad Oblast branch of the Interior Ministry, 
at a press conference last Thursday.

"All foreign citizens who enter Russia, not only our region, now receive a 
migration card," explained Andrei Lovyagin, the deputy director of the 
Migration Department at the St. Petersburg and Leningrad Oblast branch of the 
Interior Ministry. "Registration, for foreign citizens, will be put on these 
cards."

While the cards will help the government keep track of registration for 
foreign residents who are not required to have visas to enter Russia - for 
the most part, citizens of countries in the Commonwealth of Independent 
States (CIS) - they may create difficulties for those foreigners with 
multi-entry visas for Russia, particularly if they leave and return to the 
country frequently. In response to a question from a British citizen on 
Thursday, Lovyagin said that the registration stamp for these people will 
also be on the card, implying that a new registration stamp has to be 
obtained with each new card.

But many specialists say that requiring visa holders to re-register every 
time they enter the country is unrealistic.

"Under the law, foreigners with multi-entry visas have to get re-registered 
every time they leave the country. In practice, this is nonsense," said 
Natalya Safronova, an associate with the St. Petersburg office of the law 
firm Salans, said in a telephone interview on Friday. "There are foreign 
businesspeople who leave the country and return regularly and who cannot, 
realistically, get registered every time."

"In order to remedy this situation, the Interior Ministry is going to have to 
issue more detailed information," she added.

Safronova said that foreigners with visas will have their registration 
stamped inside their passports as before, with an indication of some sort on 
the back of the card that this is the case.

Mikhail Tyurkin, the deputy head of the Interior Ministry's Federal Migration 
Service, confirmed that foreigners holding multi-entry visas will only have 
to register once, but could not provide specifics on how this will be 
arranged.

All foreigners living in Russia for whom a visa is not required and who 
entered the country before the card system was introduced - as well as those 
with visas who have either lost the second card or, for whatever reason, 
didn't receive one - will have to go to an immigration office to pick one up.

"In order to be registered by passport and visa services, foreign citizens 
who have not received migration cards have to receive them at the Migration 
Control Department, at 14 Smolyachkova Ulitsa," Lovyagin said. "We will be 
distributing the cards until May, and there are long queues right now."

Foreigners not required to have Russian visas will have to carry the 
immigration cards. Those found to be without the cards by law-enforcement 
officials face fines, or even deportation.

"The deportation measures are not new, as the law on deportation has been in 
force since 1981. Today, foreigners who fail to be registered within three 
days after their arrival without good reason can be deported to the country 
from which they arrived," said Utyatsky. 

According to Utyatsky, as many as 200,000 people currently live in St. 
Petersburg and the Leningrad Oblast without legal registration.

Although the new law is aimed at cracking down on the number of illegal 
immigrants to Russia, the measures for deportation and fines stipulated by 
the new law have drawn some criticism.

"Some countries decide to carry out an amnesty process, where all foreigners 
living in the country illegally are invited to come and be registered. This 
enables the country to monitor immigration questions effectively," Antonina 
Chetverikova, the head of the Labor Migration Department at the St. 
Petersburg and the Leningrad Oblast Immigration Service, said in an interview 
after the press conference on Thursday. "But Russia is obviously not ready to 
do this."

Although Interior Ministry officials in St. Petersburg say that the confusion 
over the immigration-card system will be cleared up within a few weeks, there 
have been reports of foreign citizens from CIS countries being denied the 
cards, as well as attempts by border guards to sell the cards on trains.

The U.S. Embassy in Moscow has even advised American citizens who entered 
Russia before the cards started being distributed to get migration cards at 
their local passport and visa offices.

"The police will not necessarily understand the fine points of the law, and 
they have already begun to stop foreigners and check for migration cards. In 
several cases, even though the foreigner did not need to have a migration 
card, the police detained the foreigner and, in two cases, demanded bribes," 
said Howard Solomon, the Chief of American Citizen Services at the U.S. 
Embassy in Moscow in early February.

Solomon said that the Federal Migration Service had advised the embassy that 
foreigners who arrived before the cards where handed out should get cards 
anyway to avoid problems with checks by the police.

Officials at the Finnish, U.K. and U.S. consulates in St. Petersburg said on 
Friday that they have yet to advise their citizens on how to deal with 
migration cards, saying they were waiting for more detailed information from 
the Russian authorities.

Staff Writer Robin Munro contributed to this report from Moscow. 

*******

#14
Russian revival at risk if hot foreign funds return
By Nick Edwards

LONDON, Feb 26 (Reuters) - Booming stocks, a clamour for corporate debt and
the fattest foreign direct investment deal in almost a generation signal
that Russia is getting back on the maps of mainstream international money
managers.

But the last thing the former Communist country needs is speculative "hot
money" fund flows from foreign investors.

"Russia needs more foreign investment now like a hole in the head," Martin
Taylor, a manager of Thames River Capital's $152 million Nevsky fund which
has about a quarter of its assets invested in Russia, told Reuters.

BP's (BP.L) $6.75 billion deal with oil firm TNK (NZGZ.RTS) earlier this
month, followed by a jumbo $1.75 billion bond sale by global gas giant
Gazprom (GAZPPE.RTS), boosted speculation that foreign fund managers might
revive plans -- shelved since the 1998 financial crisis -- to raise
billions more to invest.

But floods of hot foreign money now would only exaggerate the economy's
structural imbalances, risk ramping up the value of the rouble (RUBTNOR-),
slow reform of a ragged regulatory and legal system and prop-up
uncompetitive companies.

"It all confirms to me that the rouble is going to strengthen which means
the export sectors, like the oil sector, are going to get their margins
squeezed horribly," Taylor said.

Analysts estimate almost half of the $2-3 billion of inward investment
Russia gets every year already flows into the oil and gas sector, the
country's economic backbone and the driving force that has pushed foreign
reserves to a record $51.4 billion from $36.8 billion a year ago.

More money would just force asset prices higher, bad news in a market where
relentless speculation has pushed the key RTS (.IRTS) stock index up 164
percent since the end of 2000.

"People will chase performance. If everybody else is doing it, they'll do
it too," said Bill Browder, chief executive of HSBC's Hermitage Capital
Management, the biggest foreign public equity fund investing in Russia with
$750 million in assets.

PRICES STRETCHED

Browder says the premium paid by BP for TNK's reserves has effectively
doubled the price of the next Russian oil deal. That risks stretching
prices further.

"If I could see companies developing a competitive edge in areas outside of
oil and gas then I could invest there," he said. Unfortunately he doesn't
see that happening for years.

The manufacturing sector, creaking with uncompetitive but socially cohesive
Soviet-era companies, desperately needs the high value-added industries
that long term strategic inward investment would create, Taylor says.

But near term risks could outweigh the benefits if capital inflow merely
translated into further currency strength and made expensive poor quality
goods even more costly and uncompetitive.

Ironically the short term failure to lure more foreign funds could be to
the long term gain of both Russia and its investors.

With only a few million dollars of private equity raised since 1998,
portfolio flows hobbled by limited choices and a sub-investment grade
credit rating, the near term risks of a dangerous bubble blowing up could
be smaller than some fear.

Russia attracts around one percent of gross domestic product in foreign
fund flows a year, a level dwarfed by neighbouring China -- a country also
boasting vast mineral riches and cheap labour -- that lured $52.7 billion
worth of FDI in 2002.

"I would reckon that 90 percent of the fund inflows Russia has seen in the
past year has been Russian money repatriated," said Michael Calvey,
co-managing partner of private equity firm Baring Vostok Capital Partners
which has $205 million of committed capital in its key fund.

"At least half a dozen funds have been set up to raise private equity to
invest in Russia in the past year, but a lot of the institutions they would
raise funds from have become so risk averse because of global capital
market conditions that they can't raise the money," he said.

CONSTRUCTIVE CONSTRAINT

Analysts say it is arguably a constructive constraint.

"When you think about the investment climate, it is the legal system and
governance that are the real problems. Things have improved in the broad
economy, but they haven't improved enough at a micro level," Lubomir Mitov,
an analyst with the Institute of International Finance in Washington, said.

"It's four to five years down the road probably before something is to be
seen," Mitov said.

In that time corporate reform should have progressed, the legal system
should have improved and the domestic banking sector should be healthy
enough to have extended its financing horizon well beyond the 12 months
limit typical until recently.

Hermitage's Browder says governance is one of his key concerns, adding that
an expected return to investment grade from BB junk status and membership
of the World Trade Organisation would help alleviate that risk.

But with the timing of these shifts so uncertain, the best guide for
investors like Thames River's Taylor is the direction of domestic capital
flows.

"The idea that low FDI numbers means failure for Russia is simply wrong,"
he said. "The best investment story in Russia right now is about Russians
investing in Russia, not foreigners investing in Russia."