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1. AFP: Overwhelming majority of Russians opposed to war in Iraq: poll.
2. Interfax: Russians support Europeans opposing war in Iraq.
3. Interfax: Half of Russians say Putin has accomplished a lot - poll.
4. Konservator: Mikhail Tulsky, EXTINCTION. 2002: highest death rate since World War II and a record number of divorces.
5. Luba Schwartzman: TV1 Review.
6. Izvestia: HEAD OF THE MOSCOW HELSINKI GROUP: THERE ARE MORE DEFEATS THAN VICTORIES. (Liudmila Alexeeva)
7. Izvestia: Alexei Simonov, FIGHTING EXTREMES. The law on extremism is not a cure-all.
8. Los Angeles Times: David Holley, Iran Nuclear Threat Worries Russians. A U.S. official says Moscow has begun to share Washington's fears that a 
clandestine weapons program is being developed
.
9. Vlad Ivanenko: RUSSIAN ECONOMIC PUZZLES: 1) HAS RUSSIAN GDP FALLEN OR GROWN IN THE TRANSITION?
10. Moscow Times: Victoria Lavrentieva and Torrey Clark, Businesses Say Reform Must Start at Top.
11. Wall Street Journal: Jeanne Whalen and Bhushan Bahree, How BP Learned to Trust Ally That Once Burned It. Lord Browne Gambled on Oil Reserves -- And 
Improving Ethics -- in Russia
.
12. RIA Novosti: WASHINGTON POSITIVELY ASSESSES RESULTS OF KREMLIN HEAD'S VISIT. (Voloshin)
13. Financial Times (UK): Andrew Jack, Envoy's mission signals foreign policy shift. (Primakov)
14. AP: Russian journalist Pasko to continue his ecological work.
15. gazeta.ru: Communist daily on last warning after Zakayev interview.(Zavtra)
16. Wall Street Journal: Peter Savodnik, Russian Enclave Wants Closer EU Ties. (Kaliningrad)
17. Index on Censorship (UK): Irena Maryniak, Russia: Bad language laws ... Feeling the lash of a mother tongue.]

********

#1
Overwhelming majority of Russians opposed to war in Iraq: poll 
February 27, 2003
AFP

Some 87 percent of Russians are opposed to US threats of military action in
Iraq and just two percent would support a war to force Baghdad to disarm,
according to a new poll published Thursday. 

Some 45 percent of those polled by Russia's Public Opinion Foundation said
they believed UN weapons inspectors should continue searching Iraq for
weapons of mass destruction. The poll found that 42 percent thought Iraq
should be "left alone, international inspections stopped and international
sanctions lifted." 

The Russian government has been one of the most outspoken opponents to US
plans for war in Iraq and has urged UN weapons inspections to continue. 

Just 30 percent of Russians believe efforts -- notably by Russia, France
and Germany -- to sway the United States away from using force will be
effective and 45 percent believe the United States is set on launching war
despite staunch opposition. 

The Public Opinion Foundation found that 49 percent of the 1,500 Russians
polled consider Iraq, a traditional Soviet-era ally, a "friendly" country
-- up from 39 percent in a February 2002 poll. 

********

#2
Russians support Europeans opposing war in Iraq

MOSCOW. Feb 27 (Interfax) - An overwhelming majority of Russians - 87% -
basically support the position of a number of European countries opposing a
war in Iraq, and only 3% do not share this view. 
However, only 30% of Russians believe the antiwar drive in those
countries can influence America, while 45% think this position will not
change U.S. resolve to launch a war against Iraq. 
The Public Opinion Foundation on Thursday published this information
following a nationwide poll of 1,500 urban and rural residents on February
22. 
The survey showed that the number of Russians considering Iraq a
friendly state has notably grown in the past year - from 39% last February
to 49% now. The number holding the opposite opinion slid from 35% to 22%. 
However, even those who regard Iraq as a country unfriendly towards
Russia almost unanimously oppose the military action planned by the U.S.
and Britain (87%). Only 2% of those polled believe "it is necessary to
start military actions" against Baghdad. 
As many as 45% take the view that the work of international weapons
inspectors in Iraq should be continued, while 42% argue that "Iraq must be
left alone, the international inspections stopped, and the international
sanctions lifted." 
The latter opinion is shared more often by rural residents and people
with no high-school education (48% each). The continuation of international
inspections is more often championed by people with a university education
(59%).

********

#3
Half of Russians say Putin has accomplished a lot - poll

MOSCOW. Feb 27 (Interfax) - Some 48% of Russians think President Vladimir
Putin has accomplished many of his goals during his three years in office.
Three percent say he has managed to do all that he planned. 
Twenty-two percent think the president has failed to accomplish any of
his plans. 45% of such respondents are supporters of Communist Party leader
Gennady Zyuganov. 
This information was released on Thursday by the Public Opinion
Foundation with reference to a poll of 1,500 respondents on February 22. 
Respondents who said that Putin has done a lot within three years, but
without achieving all of his goals, were asked what he has failed to do. 
16% said that the president "failed to improve living standards." 7%
mentioned economic problems and inflation, while 11% named social problems,
including high unemployment and crime, terrorism, and the number of
alcoholics and drug addicts. 
9% said the president "failed to achieve peace in Chechnya." 
5% mentioned corruption and bureaucratic arbitrariness. 
2% noted problems in the reform of the army, housing and public
utilities, and slow rates of other reforms. 
42% of respondents estimated Putin's presidential activities as
"satisfactory," while 39% gave him "good" and "excellent" marks. 
Only 12% said the president performed his work "badly" or "very badly."

********

#4
Konservator
No. 6
February 21-27, 2003
EXTINCTION
2002: highest death rate since World War II and a record number of divorces 
Author: Mikhail Tulsky
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
RUSSIA HAS BEEN DYING OUT FOR ELEVEN YEARS, WITH THE DEATH RATE 
EXCEEDING THE BIRTH RATE SINCE NOVEMBER 1991. ETHNIC ORIGIN HAS A MORE 
SIGNIFICANT EFFECT ON THE BIRTH AND DEATH RATES THAN ANY OTHER FACTOR. 
BIRTH RATES AMONG ETHNIC GROUPS FROM THE CAUCASUS ARE MUCH HIGHER THAN 
AMONG ETHNIC RUSSIANS.

Russia has been dying out for eleven years, with the death rate 
exceeding the birth rate since November 1991. The situation 
significantly deteriorated in 2002 when 1,283,000 Russians were born 
in the first eleven months of the year (77,000 more than in the first 
eleven months of 2001) and 2,122,000 died (64,000 more). The rising 
death rate is only logical (with prices for medication rising, and all 
other factors) but the birth rate growth is unlikely to last. This was 
the first time in the history of Russia when over 80 divorces were 
recorded for every 100 marriages (948,000 and 785,000 
correspondingly). There were more divorces than marriages during the 
first six months of the year.
The current death rate (1.62% per year) is the highest in post-
war history. It is due to deaths from illnesses, alcohol poisoning (a 
6.5% rise), road accidents (a 3.2% rise), and crimes (a 3.4% rise).
The death rate exceeds the birth rate in 76 of Russia's 89 
regions. The birth rate exceeds the death rate only in Ingushetia, 
Chechnya, Dagestan, Tyva, Yakutia, and Agin, Buryat, Koryak, Chukotka, 
Nenets, Taimyr, Khanty-Mansiisk, and Yamal-Nenetsh autonomous 
districts. In the first six regions where the population is rising, 
ethnic Russians are in the minority, and the growth is to be 
attributed to the birth rate of non-Russians (the ratio of birth and 
death rates to 4.3 this year in Ingushetia amounted and to 2.3 in 
Dagestan). As for the remaining seven regions, the natural growth of 
the population there is essentially artificial. All the northern 
regions were settled recently (relatively), there are virtually no old 
people there yet (in Yamal, only 5% are over 60 years old) and parents 
of their residents die in other regions.
Ethnic origin has a more significant effect on the birth and 
death rates than any other factor. For some reason, however, even 
official documents of the State Statistics Committee, much less the 
media, have never released information on death and birth rates of 
different ethnic groups. This newspaper is revealing the data for the 
first time.

ETHNIC RUSSIANS ACCOUNTED FOR 78.3% OF ALL BABIES BORN IN THE RUSSIAN 
FEDERATION IN 1979; 74.1% IN 1989; AND TO 74.5% IN 1998. THEIR SHARE 
OF DEATHS REMAINED MORE OR LESS STABLE THROUGHOUT THE YEARS: 83% 
BETWEEN 1979 AND 1989 AND 82% IN 1998.

In other words, ethnic Russians' contribution to the birth rate 
is 6-7% below their share of the population (and has been such for 
over a decade already) and to the death rate it is 1% above.
In Moscow, the death rates for ethnic Russians, Ukrainians, and 
Belarussians are double their birth rates. For ethnic groups from the 
Caucasus it is the other way round - the birth rate exceeds the death 
rate: by three to one for the Dagestanis, five to one for 
Azerbaijanis, and between six and ten to one for Chechens and 
Ingushes. Take a look at who is born in Moscow there days and you will 
see the ethnic composition of the population 50 years from now. 
Between 1998 and 2001, the share of the Chechens and Ingushes born in 
Moscow (discounting the babies whose ethnic origin was not specified) 
rose from 0.52% to 0.75%, that of other peoples of the Caucasus from 
0.53% to 0.63%, that of Azerbaijanis from 1.44% to 1.94%, and that of 
titular ethnic groups of Central Asia and Kazakhs from 0.41% to 0.56%. 
In other words, Muslim peoples of the Caucasus and Central Asia 
account for approximately 5.5% of births in Moscow while back in 1989 
these peoples represented less than 0.7% population of the capital of 
Russia. According to the data for 1998, Armenians and Georgians 
accounted for 2.5% of births in Moscow even though they had 
represented 0.72% of the population of Moscow back in 1989.
There are even more foreigners in Moscow who have not settled in 
the city permanently yet and do not reproduce, but fully expect to do 
so in the near future. In 2002, 87,700 foreigners (a rise of 18,200 
compared to the figures for 2000) were legally employed throughout 
Moscow. According to Sergei Smidovich, Chairman of the Moscow 
Committee for Immigration, there must be at least two illegal 
foreigners per every legal one. By spring 2002, municipal tax services 
registered 2,767 citizens of the United States and only 346 citizens 
of the CIS and Baltic states. There are 600,000 citizens of Azerbaijan 
in Moscow, 60,000 of them registered, and only 13 of them registered 
by municipal tax structures. Only 216 Chinese out of 100,000 are 
registered at Moscow tax services. Meanwhile, colossal sums pass 
through their hands. Foreigners bought through currency exchange 
offices and retrieved from bank accounts sum total of $8 billion in 
2002.
Ethnic crime booms around this considerable amount of shadow 
capital. Drugs are usually handled by immigrants from Angola, the 
Congo, and Tajikistan; prostitution by Ukrainians and Moldovans; theft 
by Georgians; and armed robbery by residents of republics of the 
Caucasus. Absence of entrance control results in a situation when 
96,000 criminals wanted by CIS law enforcement agencies have found 
shelter in Russia (the data provided by the Prosecutor General's 
Office). According to the Interior Ministry, nonresidents without 
registration commit 30% of crimes in Moscow and over 13% of crimes in 
the Moscow region. The crimes are usually serious crimes.
Muscovites are outraged by "all these darkies". An opinion poll 
done by the ROMIR service in October 2001 shows that 72% of Muscovites 
dislike seeing people from the Caucasus in Moscow's marketplaces, 
while fewer than 10% feel no animosity towards them.
Both Russia in general and Moscow in particular essentially lack 
an immigration policy. The state does not provide any barriers to 
entrance (93,000 individuals were granted Russian citizenship in 
Moscow alone between 1997 and 2001). In the majority of European 
countries, however, the authorities pursue a wholly different policy - 
taking care of the interests of the indigenous population. No more 
than 10% of applicants from Muslim countries were granted citizenship 
(according to their own, somewhat exaggerated estimates) in France, 
Germany, and Britain, and not more than 2% in Italy (judging by 
estimates of secular researchers). The French, Belgians, and other 
Europeans dislike Muslims even more than blacks.
The share of the titular ethnic group is diminishing in Russia 
alone. It is time for the government to give some thought to this 
matter. It only has to tighten entrance rules and introduce some 
privileges for ethnic Russians from CIS countries to amend the 
situation. Why do titular ethnic groups in Germany and Kazakhstan 
enjoy privileges when they come to their respective countries while in 
Russia ethnic Russians themselves, and even members of parliament, are 
afraid to mention the fate of our compatriots abroad?

*******

#5
TV1 Review
www.1tv.ru
Compiled by Luba Schwartzman (luba_sch@hotmail.com)
Research Analyst, Center for Defense Information, Moscow office

HEADLINES
Wednesday, February 26, 2003
- About 10,000 people gathered in the center of Yerevan to protest
the results of the first round of Armenia's presidential elections,
according to which incumbent Robert Kocharian received 49.5
percent of the vote.
- Chechen Commandant Yevgeny Abrashin reported that the
number of security check points in Chechnya will be reduced. All
military checkpoints in the center of Grozny will be removed in
early March.
- A Russian delegation headed by First Deputy Duma Chairwoman
Lyubov Sliska is in Estonia to meet with representatives of Russian
organizations in Estonia and discuss the problems of Russian
speakers and cultural events in Estonia. Other delegation members
include parliamentarians, cultural figures and journalists.
- A working group of the State Council has formulated the major
principles of the mortgage credit lending system. The issue will be
discussed at the next meeting of the Presidium of the State Council.
- Russian Foreign minister Igor Ivanov begins his visit to Beijing.
He will discuss the situation in Iraq and other regional conflicts and
pressing international problems with Chinese Foreign Minister
Tang Jiaxuan.
- German Chancellor Gerhard Schroeder is in Moscow on a short
working visit. He will discuss the situation in Iraq with Russian
President Vladimir Putin.
- A powerful hurricane hit Novorossiisk. Emergencies services
have liquidated most of the damage.
- Renault President Louis Schweizer met with Russian Prime
Minister Mikhail Kasyanov and Moscow Mayor Yuri Luzhkov to
discuss the agreement allowing Renault to manufacture
automobiles in Russia.
- Government employees throughout Russia, including doctors and
teachers, are protesting the upcoming reform, which will only raise
budget salaries by about a third.
- Deputy Prime Minister Aleksei Kudrin announced that the
Russian Government will establish a stabilization fund to neutralize
a possible fall in oil prices.
- About 50 Russian diplomats and specialists will return from Iraq
this week; 30 have already returned to Russia last week.
- The Russian Ministry of Interior Affairs reported that 10% of all
medications produced in Russia are counterfeit.
- Deputy Premier Minister Valentina Matvienko presented a draft
law on benefits to World War II veterans and home front
participants at the meeting of the Federation Council. Senators also
discussed the demonopolization of the Russian energy complex.
These laws are expected to be approved at the 12 March meeting
- Less than a month remains until the Referendum on the Chechen
Constitution. The Russian Federation Ministry of Finances has
allocated 57 million rubles for the referendum.

*******

#6
Izvestia 
February 27, 2003
HEAD OF THE MOSCOW HELSINKI GROUP: THERE ARE MORE DEFEATS THAN VICTORIES
[from WPS Monitoring Agency, www.wps.ru/e_index.html]

On February 27, the presidential human rights commission will 
meet to discuss its plans for the year ahead. Liudmila Alexeeva, head 
of the Moscow Helsinki Group (MHG), comments on those plans.
Question: How has the human rights situation changed recently?
Liudmila Alexeeva: On the whole, it has neither improved nor 
worsened. Some regions have seen improvement, while in others things 
have deteriorated. In general, violations of human rights are 
widespread, with officials facing no punishment for that. Chechnya is 
the biggest problem. It is hard to say, but I might compare the 
situation there to conditions in Nazi-occupied areas of the Soviet 
Union during World War II. Soldiers, often drunk or on drugs, set 
about "restoring constitutional order" - and ordinary citizens have no 
protection against them. They are worse off than they were during the 
first war in Chechnya.
Question: What are some other primary concerns in terms of human 
rights abuses?
Liudmila Alexeeva: Beatings and torture at police stations. Two 
years ago we drafted a law on public oversight of the prison system. 
It passed through three readings in the Duma, but the government 
turned it down. We are going to propose it once again. In the 
meantime, there has been considerable improvement of conditions in 
preliminary detention centers. The number of inmates has substantially 
decreased, so conditions improved.
Question: How do human rights activists know this? Do you have 
access to preliminary detention centers?
Liudmila Alexeeva: In some regions we have, in some we do not. 
But we work fairly closely with the Justice Ministry, which is 
responsible for the prison system.
Question: It seems to me that human rights activists inform the 
public about the situation, rather than changing it.
Liudmila Alexeeva: The capabilities of human rights activists are 
underestimated in Russia. Still, we do help people, and the 
authorities take us into consideration. Our voice has become louder 
recently, since the number of independent media outlets has been 
reduced, while we remain independent.
Question: How many human rights groups are there in Russia?
Liudmila Alexeeva: Our database lists over 2,000, but that is not 
all, of course. I think there are tens of thousands of people involved 
nationwide.
Question: What are the sources of funding for human rights 
activists?
Liudmila Alexeeva: Out of thousands of organizations, only a few 
hundred have any financial assistance. Most organizations simply do 
their work. Those who have money receive it from two sources. In the 
past, money mostly came from western grants: the foundations of Soros, 
Ford, Bell. We cannot use state funding, because our objective is to 
protect citizens from the state.
Question: How do you get on with the authorities?
Liudmila Alexeeva: All leading human rights organizations are 
represented in the presidential human rights commission.
Question: Does the president listen to human rights advocates?
Liudmila Alexeeva: Last December we spoke out on the subject of 
Chechen refugee camps in Ingushetia, which had been threatened with 
closure by December 20. We stated our opinion to Mr. Voloshin, and the 
result is as follows: around 19,000 people currently live in those 
camps and no one is going to evict them. If the president had not 
given his instruction, the situation would be quite different now. 
Recently, at a meeting with regional leaders, the president advised 
them to listen to human rights activists.
Question: You have applied so much effort, even established 
contact with the president; but the situation in Russia, according to 
you, remains as it was. Don't you feel somewhat disappointed about 
your work?
Liudmila Alexeeva: A job like ours cannot yield results rapidly, 
especially in a country with such deeply-rooted problems. We need to 
be optimists, for there are more defeats than victories at the moment.
(Translated by P. Pikhnovsky and Sergei Kolosov)

*******

#7
Izvestia
February 27, 2003
FIGHTING EXTREMES
The law on extremism is not a cure-all
Author: Alexei Simonov
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
RUSSIA'S LAW ON EXTREMISM WAS PASSED IN HASTE, APPARENTLY TO PLEASE 
THE WEST. THIS IS PROBABLY WHY THE LAW IS OFTEN MISAPPLIED OR NOT 
OBSERVED AT ALL. HOWEVER, THE DEEPER REASON WHY IT FAILS TO PRODUCE 
THE EXPECTED EFFECT IS THAT MANY WOULD LIKE TO FIGHT THE EXTREMISM OF 
OTHERS, FORGETTING TO FIGHT THEIR OWN.

The other day my friends and colleagues had an argument 
concerning the law on countering political extremism. The friends with 
a legal background maintained that the matter was not that the law was 
bad or good, but that it was totally misapplied or just not observed 
at all. Those without a legal background insisted that law enforcement 
could never be different, as the law itself is bad, vague, passed in a 
hurry, and therefore doomed to be another board in the democratic 
fence with its face turned to the West and its ugly back to Russia's 
realities.
Let's forget about that law and cease to "counter extremism." I 
dare assume that the very term because of excessive use has turned 
into a phantom, something like "class struggle" or "social 
experiment." Let's look at our own writings and speeches: whoever is 
not extremist in this country? Everyone is, from bin Laden to the 
neighbor who walks the aged bulldog without a muzzle.
The aggregate number of verdicts of "not guilty" returned on 
legal actions in the Russian Federation amounts to 0.3%. Meanwhile, it 
amounts to 80% for cases of instigating interethnic enmity. Of course, 
this includes the rejections to open these cases, the number of cases 
closed after the opening, and verdicts of "not guilty" proper. Maybe, 
it is just worthwhile looking into the reasons for the selective 
humanism of out justice!
Or, for example, the dual nature of skinheads. When an 
Azerbaijani merchant is murdered in the market-place, or a black 
medical student by the hostel in St. Petersburg, everyone - both 
witnesses and reporters - knows that they are murdered by a gang of 
skinhead cut-throats; but when the case is tackled by our valorous 
police and arms of the law from the prosecutor's office, poorly-bred 
adolescents, if any, face justice, who commit hooligan actions by 
thoughtlessness.
Say, what connotations does the word "fascism" have for you? For 
me, it primarily means burning books. But if the books are being 
burned by nice young people from the Walking Together association, 
rather than by the Hitler Youth - then what am I to do with my own 
connotations?
Down with extremism! Due to a World War II anniversary amnesty, 
an early release is granted to persons convicted for fascist 
propaganda, and the favorite book of fascism fighters, Mein Kampf, is 
openly offered for sale again.
And now a three-star general recommends in his "Open letter" that 
the defense minister "...announce the nationwide mobilization of 
Russian citizens to fight the enemy, put the economy of the country 
into a state of martial law, and launch the mobilization plan targets 
of companies, ...as well as ... the flywheel of home guard and 
guerilla units for operation in the rear of the enemy."
In a frenzied country it is impossible to fight extremes (from 
the Latin "extremus") if they are fought in others, those who fight 
forgetting their beloved selves. The selective humanism of courts, the 
derangement of sight of law enforcement agencies, the impunity of 
generals, and the abuse of newspapers are derived in our unwillingness 
to admit the personal contribution of everyone to this universal 
frenzy. With all our forces of mind and spirit, we seek an enemy onto 
whom we can shift the responsibility for what we do ourselves.
(Translated by P. Pikhnovsky)

*******

#8
Los Angeles Times
February 27, 2003
Iran Nuclear Threat Worries Russians
A U.S. official says Moscow has begun to share Washington's fears that a
clandestine weapons program is being developed.
By David Holley
Times Staff Writer

MOSCOW -- Russia has begun to share some of Washington's fears about Iran's
ballistic missile and nuclear programs, a senior Bush administration
official said Wednesday.

"They are now more persuaded than they were before that Iran does have a
clandestine nuclear weapons program," the U.S. official said, speaking on
condition that he not be further identified. "I think for some time the
Russians felt that Iranians can't develop a nuclear weapons program. I
think now they're beginning to see that in fact they are."

In another sign of Moscow's shifting attitudes, Russian Space Agency chief
Yuri Koptev admitted this week in talks with a visiting U.S. delegation
that individual Russian scientists or engineers may be helping Iran build
missiles, the U.S. official said.

"Obviously, the expansion of their capabilities in ballistic missiles --
their ability to have longer-range missiles -- worries us, and we think
should worry the Russians as well," he said.

Washington is particularly concerned about Russia's help to Iran in the
construction of a 1,000-megawatt light-water reactor in Bushehr, a project
begun decades ago and revived in the mid-1990s. Undersecretary of State
John Bolton, who met here with Russian space and atomic energy officials
this week, said at a Tuesday news conference that he had stressed "the
importance of not having Russian assistance ... to any Iranian programs
involving weapons of mass destruction or ballistic missiles."

The United States believes that the Bushehr project, valued at $800
million, is a cover for obtaining sensitive technologies to develop nuclear
weapons. But Russia has insisted that the project is entirely peaceful, and
it has cited an Iranian commitment to return spent fuel to Russia, which
would help limit the risk of nuclear proliferation.

That commitment by Iran, however, is now in doubt.

Iranian President Mohammad Khatami announced this month that Iran has begun
mining uranium for use in nuclear power plants and will reprocess spent
fuel itself rather than sending it all to Russia. Possessing this sort of
complete "fuel cycle" would go far toward making it possible for Iran to
produce weapons-grade plutonium. But Khatami insisted that the program was
peaceful.

The U.S. official speaking Wednesday ridiculed that idea. "Here's a country
that floats on oil," he said. "What do they need a nuclear fuel cycle for?
Not their abstract interest in nuclear physics.... They are now well along
in a very sophisticated program for the development of nuclear weapons
capability."

Alexander Konovalov, president of the Institute for Strategic Assessment, a
Moscow think tank, said Russia should be far more careful with exporting
technology that can be used both for civilian and military purposes. Making
such sales is "like dancing in a minefield," he said. "If you are lucky,
you won't step on a land mine. But what if you are not?"

Moscow is aware of the risk, but its attitude on nuclear exports to Iran is
still ambivalent, Konovalov said. "On the one hand, it is absolutely not in
Russia's interest if Iran becomes a nuclear power," he said. "And there is
a clear understanding of this in Moscow -- it does not at all want a new
nuclear power in its southern underbelly."

Yet at the same time, "Russia does not want to lose the Iranian market, nor
does it want Iran to view Russia as a non-friendly neighbor," he said. "It
is understandable that Russia may want to sell certain things to Iran, and
it is also clear that if Russia does not sell these things, then other
countries will take Russia's place in this market."

Ivan Safranchuk, director of the Moscow branch of the Washington-based
Center for Defense Information, said fear of nuclear weapons getting into
the hands of terrorists has "whittled down the differences between Russia
and the U.S." on proliferation issues.

"In general, the development of weapons of mass destruction by such
countries as Iran, Iraq or North Korea runs counter to Russia's national
interests," Safranchuk said. "Russia has the same interest and the same
concerns as all other official and unofficial nuclear states. No one in the
world wants to have more competitors and potential adversaries than there
already are. No one wants nukes to sprawl all over the globe."

Russia's concerns in this regard until recently were primarily political,
because it did not consider countries such as Iran or North Korea as posing
any security threat to itself, Safranchuk said. But now, with Russia facing
issues such as a separatist rebellion in Chechnya and related threats of
terrorism, the thinking has changed, he said.

Alexei V. Kuznetsov in The Times' Moscow Bureau contributed to this report.

*******

#9
From: "Vlad Ivanenko" <vivanenk@uwo.ca>
Subject: A series of articles on Russian economic puzzles
Date: Wed, 26 Feb 2003 

Vlad Ivanenko,
Dept. of Economics,
University of Western Ontario

RUSSIAN ECONOMIC PUZZLES: 1) HAS RUSSIAN GDP FALLEN OR GROWN IN THE
TRANSITION?

GDP (or its close analogue GNP that was the benchmark prior to 1994) is a
relatively modern economic indicator. Yet, it has obtained political
significance unmatched by any other statistics. Today, GDP serves as a
commonly accepted gauge that determines international ranking of rival
countries and domestic performance of competing governments.

Given that GDP plays such an important role in developing public opinion,
it is disturbing that there are several estimates of Russian GDP. 

One measure, that is used to support the claim that the Russian economy is
insignificant internationally, is the Russian GDP at current rubles as
converted into US dollars at one of exchange rates. Let us consider what
inference one can make judging by this estimate.

In billion of US dollars, the Central Bank of Russia exchange rate (monthly
observations):

1992 -- 65
1993 -- 154
1994 -- 263
1995 -- 346
1996 -- 425
1997 -- 445
1998 -- 316
1999 -- 192
2000 -- 260
2001 -- 309
2002 -- 347

The above data show a curious picture. Prior to the default of 1998 the
Russian economy grew miraculously. Even after the default, the GDP was
still higher than in the beginning of the transition. Thus any talk of a
severe depression appears to be counterfactual.

Clearly, something is wrong. The trick is that currencies, including
Russian ruble, depreciate or appreciate for a variety of reasons. For
example, the exchange rate was fixed in Russia in 1995-8 and ruble
appreciated, thus driving the estimate of GDP up.

A more consistent way of estimating economic performance is to consider GDP
at constant domestic prices. If we adjust GDP calculated at current prices
using an index of prices for a base period, we can observe how GDP changes
in time.

In billion of old rubles at January 1992 prices, CPI deflator (monthly
observations):

1992 -- 4,284
1993 -- 4,743
1994 -- 4,479
1995 -- 3,911
1996 -- 3,708
1997 -- 3,801
1998 -- 3,135
1999 -- 2,930
2000 -- 3,742
2001 -- 3,819
2002 -- 3,983

The estimate at constant prices provides a more appealing picture
intuitively. It is generally agreed that Russian economy contracted in the
pre-default period and grew afterwards. Yet, estimating GDP at constant
prices is a problematic procedure as well.

First, while the exchange rate is not used in calculations directly, it is
present in the background. For example, if the net export is positive and
domestic currency has appreciated, GDP at constant prices becomes smaller
if all other things are equal.

Second, price indices are constructed using changes in prices for specific
goods considered to be representative of the whole economy. Changes in
tastes or quality are not captured by this statistics. For example, a new
car design or additional features that improve the quality of cars may
result in a higher price of the car and lead to a fall in GDP at constant
prices all other things equal. Again, such an outcome is counter-intuitive.

The estimate of GDP at constant domestic prices is of limited use because
it does not allow us to compare countries internationally. Can we answer
the question of how Russia has performed internationally? The answer is
yes, to some extent.

Bilateral and multilateral comparison is a discipline of its own importance
in economics. Here we mention the best-known indicator constructed by the
World Bank, namely the estimate of annual GDP at purchasing power parity
(PPP) prices.

GDP at PPP prices is calculated by the following procedure. We find how
much of domestic currency one needs to buy an identical basket of products
(600-800 names). Then the rate of exchange with a base currency (for
example, the US dollar) is calculated. This rate of exchange is applied to
the amount of GDP calculated at domestic prices and we get GDP at PPP
prices. Russian GDP at PPP prices is shown below.

In billion of US dollars, at PPP prices:

1992 -- 776
1993 -- 735
1994 -- 656
1995 -- 1,030
1996 -- 972
1997 -- 995
1998 -- 949
1999 -- 1,013
2000 -- 1,132
2001 -- 1,241
2002 -- 1,308 (estimate)

The above data are consistent with the estimate of Russian GDP measured at
constant prices. However, since the series experiences a break between 1994
and 1995 (a technical problem), the direct comparison of pre-and
post-transition GDP is a guess. Still, it is the best measure of GDP that
we have and it should be used whenever one compares this country with
others. For example, Russian international ranking in 1991 was the following:

National GDP at PPP prices, in billion of US dollars

9,907 United States
5,506 China
3,445 Japan
2,546 India
2,114 Germany
1,483 France
1,463 United Kingdom
1,414 Italy
1,339 Brazil
1,241 Russian Federation
892 Mexico
887 Canada

So, what can we say about the change in the Russian wealth during the
transition? A reasonable answer seems to be that Russia is approximately at
the same place where it was before.

Thus the data on GDP lead us to conclude that the transition was a
development somewhat unrelated to the creation of wealth.

********

#10
Moscow Times
February 27, 2003
Businesses Say Reform Must Start at Top
By Victoria Lavrentieva and Torrey Clark 
Staff Writers 

To make structural reforms work on the ground and open the country to new
business and foreign investments, Russia should start reforming itself from
the top down, former Economics Minster Yevgeny Yasin said Wednesday.

Yasin, presenting an annual economic and investment report prepared by his
Expert Institute in association with Ernst & Young and the American Chamber
of Commerce, said excessive bureaucracy and red tape remain Russia's most
troublesome and dangerous problem.

"Without an active civil society, state authorities want to acquire more
and more power. And so far they are succeeding because there are no
democratic constraints," he said at an economic conference.

The Union of Industrialists and Entrepreneurs, or RSPP, wants to do
something about it. On Wednesday, the business lobby set up a new committee
on administrative reforms and will present the Kremlin with a conceptual
program reducing the burden on business, RSPP vice president Igor Yurgens
said at a separate news conference.

The big guns of big business last week met to discuss corruption with
President Vladimir Putin, who demanded more suggestions and less criticism. 

"Speeding up the reforms is important. They're not moving very willingly in
the run-up to elections," Yurgens said. "We went to ask if our help was
needed or not. The answer was yes. We were given three months to prepare
proposals, which is 12 times less time than the government had."

The main points already under discussion by the committee are support for
small and medium-sized enterprises, which the RSPP concedes suffer more
than big business, reforming bureaucracy and separating conflicting
functions out of single government agencies, as well as the more amorphous
and pervasive problem of corruption.

Yasin said reforms have as a result become merely a topic of discussion and
dispute in the government, while real actions often lag behind. 

"There is nothing wrong in arguing about what is better for Russia, but
without public discussion any unexpected decisions frighten investors," he
said.

Deputy Prime Minister Alexei Kudrin acknowledged at the conference that the
government has not achieved "as much as we would have liked on important
reforms."

Yasin said his institute, which is affiliated with the Union of
Industrialists and Entrepreneurs, supports a new economic program approved
by the government last week. 

The program aims at diversifying the economy away from the energy sector.

"The structure of the Russian economy is very uneven, and it cannot grow
further without reforms," he said, pointing to the urgent need to
restructure Unified Energy Systems, Gazprom, the Railways Ministry and the
municipal sector.

Kudrin said the government is optimistic about the diversification, which
he said would allow for the modernization of the economy and give a
much-needed jump-start to domestic production.

The country is not ready to move faster on tax reforms because of its
dependence on oil, he said.

But reducing the tax burden depends on three factors: continued economic
growth, cuts in government spending and a shift in the tax burden from the
manufacturing toward the natural resources sector, which could also spur
diversification, Kudrin said.

Export duties on oil and petroleum products are likely to be increased to
$39 to $40 per metric ton as of March 1, which would provide an additional
$500 million in the following two months and contribute as much as 150
billion rubles ($4.6 billion) to a stabilization fund by the end of the
year, he said. 

However, he warned that the fund should not be used to speed up tax reform. 

If oil prices drop to $16 to $17 per barrel, due to the situation in Iraq,
"we could fall into a trap where we don't get those taxes we're counting on
in 2004," Kudrin said.

The budget should be drawn up based on a price of $18.5 per barrel, not
some high price from last year, he said.

Steve Chase, president of Intel in Russia, who was also speaking at the
conference, said the country remains an unfriendly place for investments. 

But despite the difficulties, including with free access to capital,
intellectual and property rights and infrastructure, Intel recently
announced plans to boost the number of workers at its research center in
Nizhny Novgorod from 350 to 1,000 in the next few years, he said. 

"But we could have done much more in Russia if it had a more open and
competitive economy," Chase said. 

The main question for Russia now is "how the country can increase its
competitiveness in the world economy," he said.

*******

#11
Wall Street Journal
February 27, 2003
How BP Learned to Trust Ally That Once Burned It
Lord Browne Gambled on Oil Reserves --And Improving Ethics -- in Russia
By JEANNE WHALEN and BHUSHAN BAHREE 
Staff Reporters of THE WALL STREET JOURNAL

MOSCOW -- Earlier this month, as BP PLC neared the end of a bruising,
decade-long campaign to become a big player in Russia's oil industry, its
Russian partners paid a visit to President Vladimir Putin.

Oil tycoon Mikhail Fridman and his associates were ready to sell half of
their Siberian oil empire to BP, but they wanted to be sure the Kremlin
didn't object to a multibillion-dollar deal that would give foreigners 50%
of what would be Russia's third-largest oil producer.

"Until we knew we had [Mr. Putin's] approval ... we couldn't feel
confident," says Mr. Fridman, a baby-faced 38-year-old who rose from a
window-washing business to become one of Russia's richest men.

Three days later, after some additional lobbying by British Prime Minister
Tony Blair, who phoned to nudge Mr. Putin, the deal went through. In return
for $6.75 billion, BP's chief executive, John Browne, acquired something he
had coveted since the early 1990s -- a prime chunk of one of the world's
richest oil frontiers. For Lord Browne, 55 years old, the deal is the
culmination of a personal crusade to make Russia work for BP.

The logic driving Lord Browne's quest is simple: BP, saddled with aging
fields in the North Sea and Alaska, needs new sources of oil. And Russia
has lots of it. Its proven reserves are only a fifth of those of Saudi
Arabia but experts believe there is much more still to be found. Moreover,
with the Middle East largely closed to big new deals, Russia is one of the
few places where a Western company can buy into hefty production.

BP's as-yet-unnamed Russian partnership will pump 1.2 million barrels of
oil a day. If it were listed, its oil production would rank it ninth among
the world's largest publicly traded energy companies. Some of the reserves
are near the border with China, a huge energy market. Quizzed by
shareholders on a conference call about the wisdom of the deal, Lord Browne
called Russia "a very important element in the long-term renewal of BP."

The transaction, announced Feb. 11, also reflects a growing faith among
Westerners that Russia is moving beyond the chaos, corruption and
commercial catfights of recent years. Lord Browne is so convinced of
Russia's transformation that he has agreed to go into partnership with the
same Russian tycoons whom BP just a few years ago regarded as exemplars of
the country's ills. It was largely thanks to the machinations of Mr.
Fridman and his associates that BP in 1999 had to write off nearly half of
an earlier, smaller investment in Russian oil.

Other foreign companies are also taking a fresh look at Russia .
TotalFinaElf of France last year bought a big stake in a Siberian oil
field. OAO Lukoil, Russia's biggest oil producer, says it has approached
Exxon Mobil Corp. about a possible joint venture developing reserves in
northern Russia ; Exxon declines to comment. But while the business climate
has grown more stable, many foreigners remain uneasy about risking billions
in Russia . The courts are still notoriously corrupt, and bureaucrats often
interpret regulations as they see fit.

BP's new venture also faces big risks. A dearth of export pipelines leaves
the domestic market flooded with so much oil that crude often sells for as
little as $5 a barrel, compared with an export price well over $30 a
barrel. Russian oil companies have recently announced big plans to build
additional pipelines to ease the bottleneck, but the initiatives have
gotten bogged down in government wrangling.

And while Mr. Putin blessed the BP deal, he clearly has concerns about
foreigners gaining too much sway over Russia's most important industry.
During their meeting, Mr. Fridman remembers the president posing a somber
question: "Who will have control? Will they have it, or will you?" The
Kremlin declined to comment on the conversation. Although BP won't control
the new venture, it is paying nearly 30% more than the current market value
of Russian oil reserves.

In recent years, all of the three biggest publicly traded oil companies --
Exxon Mobil, the Royal Dutch/Shell Group and BP -- have struggled to raise
their output. Exxon and Shell have also looked to Russia and plan to invest
billions in wells off the Far East island of Sakhalin. But BP's new venture
is by far the biggest firm commitment.

The Russia deal, says Lord Browne, "rivals any other potential opportunity
available anywhere in the world."

Until the collapse of the Soviet Union in late 1991, Russia jealously
guarded its energy riches. After that, Western oil companies piled in,
setting up offices in Moscow and joining with Russian partners to produce
oil in remote Siberian ventures.

But disillusionment came quickly as taxes and regulations kept changing.
BP's first agreement fell apart, and firms such as Exxon and Amoco found
themselves muscled out of projects by local politicians or rivals. The
country's most valuable oil fields fell into the hands of a few
well-connected tycoons.

BP persevered and hooked up with one of Russia's best-connected tycoons,
Vladimir Potanin, a banker and former first deputy prime minister who
bought oil producer OAO Sidanko in a privatization auction. In November
1997, BP paid Mr. Potanin $480 million for 10% of Sidanko. Prime Minister
Blair and Russian energy officials hailed the deal with champagne toasts at
10 Downing Street.

But within a year, BP got caught in the crossfire as another new oil
tycoon, Mr. Fridman, launched an aggressive takeover attack for Sidanko's
best oil fields. He had made a small fortune in the early 1990s selling
computers, founding a bank and trading oil. In 1997, he joined with two
aluminum traders, Viktor Vekselberg and New York-based Russian emigre Len
Blavatnik, to buy a big oil producer from the state. Though the company,
Tyumen Oil, was named after Russia's richest energy region, its fields had
been damaged by years of careless Soviet drilling. So the Tyumen partners
set their sights on the richer Sidanko fields next door.

Taking advantage of legal loopholes and Russia's notoriously weak and
corrupt courts, Tyumen got key Sidanko units declared bankrupt and bought
them on the cheap. By the fall of 1999, Sidanko was nearly an empty shell.

BP deployed its clout around the world to try to recover its oil fields. It
sent an army of lobbyists to the U.S. Congress and then-Secretary of State
Madeleine Albright to try to abort a $500 million loan Tyumen was seeking
from the U.S. Export-Import Bank. Lord Browne personally petitioned a
string of Russian officials to intervene on BP's behalf, warning Mr. Putin,
who was then prime minister, in a letter in late 1999 that defeat for BP
would send "an alarming message" to other potential investors.

BP's efforts didn't seem to be bearing fruit, and Lord Browne began to
consider cutting the company's losses and giving up on Russia , as many
rivals had. But BP needed the Russian reserves and had to consider its
corporate reputation, a critical asset in the often bare-knuckled
international oil business. "We did not want to leave the impression that
BP could be easily discouraged," says Bob Sheppard, a top BP man in Russia
at the time.

Mr. Fridman says he, too, began to weary of a battle that was muddying his
name. He had already amassed huge oil reserves and was also busy managing a
growing bank and other property. Gradually, he says, he began to see the
British giant as a valuable partner that could help him develop his damaged
oil fields and raise the value of his company.

"We understood it would be wrong to drive them out of Russia ," Mr. Fridman
says from a lofty white office in downtown Moscow decorated with the
abstract canvases of a well-known Soviet painter named Boris Messerer. "We
had to offer them something ... that could help us establish a new
relationship with them."

Mr. Fridman spent several months trying to get a meeting with BP toward the
end of 1999, but Lord Browne refused to take his calls. "There was nothing
to talk about," the BP chief says.

The son of an Auschwitz survivor, Lord Browne began his career as a trainee
petroleum engineer for the company in Alaska. He is a believer in the
advantages that come from being the first mover. He says that BP's merger
with Amoco Corp. of the U.S. in 1999, which set off an industrywide
consolidation, was a much better deal than BP's subsequent acquisition of
Atlantic-Richfield Co. In taking a huge equity stake in Russia , Lord
Browne once again seems to be betting that later, safer deals will be on
worse terms for foreigners.

In late 1999, Mr. Fridman managed to pass along a message through personal
friends of Lord Browne's and his late mother. Tyumen, Mr. Fridman said, was
a reasonable outfit willing to compromise with BP. A few days later, Mr.
Fridman's phone finally rang. "People I respect tell me you are a man of
your word, that if you promise to do something you'll do it. Is that true?"
the BP chief asked calmly, according to Mr. Fridman. "Of course it's true,"
Mr. Fridman answered in English. "Well then, we're ready to meet," Lord
Browne replied.

Weeks later, Mr. Fridman flew to London to propose a settlement to Lord
Browne's deputies: Tyumen would return the oil fields in exchange for 25%
of Sidanko. BP took the tentative deal, and Lord Browne met with Mr.
Fridman at the World Economic Forum in Davos, Switzerland.

Their gradual detente coincided with an impressive rebound in Russian oil
production that was reminding foreign investors of the country's potential.
After a decade of pumping Russia's fields dry for quick profits amid the
chaos of the Yeltsin era, Russia's tycoons were beginning to behave more
like real owners.

The year 2000 marked an important change. Oil prices soared, and Mr. Putin
came to power as president with a calming message for the business elite:
The state wouldn't question whether they'd acquired their companies
legally, as long as they started investing their profits at home rather
than stashing them in foreign banks. The tycoons responded by hiring
veteran Western oil executives and pumping cash into fixing their wells.
Russia started to re-emerge as a serious rival to the Organization of
Petroleum Exporting Countries, boosting output by 15% from 1999 to 2001.

Impressed, Western companies began to consider investing again -- but got
nowhere with their demands that the state pass special production-sharing
legislation to protect their multibillion-dollar expenditures. After its
bitter Sidanko experience, BP focused on finding a strong Russian partner
that could protect it better than Mr. Potanin had.

Cautiously, BP stepped up its efforts to close the tentative settlement it
had signed with Mr. Fridman in late 1999. After a year and a half of
delays, Tyumen returned the oil fields in 2001 and bought out all of
Sidanko's shareholders other than BP. That Mr. Fridman had kept his word
was a turning point, a "big positive signal" for BP that it could do
business in Russia , says group Vice President Robert Dudley, who soon
after began investigating new Siberian deals at Lord Browne's behest.

BP was still cautious about Mr. Fridman, though, so it began talking to
other Russian firms to see whether there was a better fit. Top BP officials
visited Mikhail Khodorkovsky, head of OAO Yukos, and sent geologists to
help explore some Yukos oil reserves in good position for export to China.
But BP ultimately decided the company was too expensive and unwilling to
cede control of management.

In April 2002, increasingly confident that it was best off sticking with a
known quantity, BP placed a tentative bet on Mr. Fridman and partners,
buying a further 15% of Sidanko from them to boost BP's total share to 25%.
Signing the deal in London, Lord Browne and Mr. Fridman began discussing a
broader partnership.

At a dinner last summer, Mr. Dudley began to sense that BP and the Tyumen
owners shared common strategic views on Russian oil. Over caviar, beef
stroganoff and wine at an exclusive, dark-paneled Moscow restaurant once
frequented by the Soviet elite, Mr. Dudley and two colleagues talked
excitedly with Messrs. Fridman, Vekselberg and Blavatnik about
rehabilitating Siberia's giant oil fields and targeting profitable new
markets in Asia. "I had been told these men were really just financial
investors, but it became apparent to me at this dinner that they had
strategic vision," Mr. Dudley says.

BP's board, however, was slower to trust again. Directors gathered for a
monthly board meeting last September were incensed by a Wall Street Journal
report that BP executives had already begun negotiating with two Russian
companies, according to a person familiar with the meeting. Mr. Browne had
been preparing to ask permission to start the talks.

BP says it conducted more due diligence on this deal than on any other in
recent memory. During final talks late last year, top negotiator Rodney
Chase spent hours outlining BP's expectations on corporate governance,
shareholder rights and management before even mentioning money. His
presentations left his Russian interlocutors "psychologically exhausted,"
jokes Mr. Vekselberg.

Money, too, became a sticking point. When BP proposed a price that didn't
suit the Tyumen shareholders, they printed out fresh data showing the
efficiency gains they'd achieved at some of their older oil fields.
Impressed, BP nudged up its offer.

Now the partners will tackle a restructuring on a scale never before
attempted in Russia -- the combining of dozens of giant oil fields and tens
of thousands of employees into one efficient corporation overseen by an
independent board and a chief executive to be selected by BP. The
shareholders hope to keep growing and acquiring new reserves, particularly
near the lucrative markets of China, Japan and South Korea.

Lord Browne says all this promise was worth the hard knocks and the
uncertainties ahead. "There is a toughness built into the culture of Russia
. ... You have to cooperate," he says.

*******

#12
WASHINGTON POSITIVELY ASSESSES RESULTS OF KREMLIN HEAD'S VISIT 

WASHINGTON, FEBRUARY 27, 2003. /FROM RIA NOVOSTI CORRESPONDENT ARKADY
ORLOV/. - George Bush's administration believes the Russian presidential
administration head Alexander Voloshin's visit completed on Wednesday was
"very important and fruitful" for specifying Russia and America's
standpoints, the US State Department official representative, Richard
Boucher, said at a briefing in Washington. 

In Washington the head of the Russian presidential administration met US
President George Bush as well as a number of key figures of the US
administration including US Vice President Richard Cheney, US State
Secretary Colin Powell, Government Chief of Staff Andrew Card, US
Presidential National Security Advisor Condoleezza Rice and others. 

According to Boucher, Colin Powell believes his meeting with Alexander
Voloshin was "very fruitful" as it allowed conducting "a comprehensive
discussion on Russia and America's standpoints" and on the Iraqi issue. 

"These negotiations were not wholly devoted to the resolution on Iraq or
reduced to discussion of Resolution 1441 alone," Boucher pointed out. "The
US State Secretary and the Head of the Russian presidential administration
had "extensive negotiations" on such issues as "war against terrorism,
threats, the Middle East situation, relations between the US and Russian
governments as well as cooperation in providing security, which we conduct
combating the common threat." They also touched upon "connection between
terrorists and Chechen separatist groups," Boucher said. 

The meeting of Powell and Voloshin "allowed both the USA and Russia to
understand their standpoints better," Boucher stressed and added that the
USA and Russia were currently conducting "intensive negotiations." "Now we
will see whether we will be able to bridge the gap between our standpoints
at this stage," he said. 

*******

#13
Financial Times (UK)
February 27, 2003
Envoy's mission signals foreign policy shift
PROFILE: YEVGENY PRIMAKOV: The former Russian premier's visit to Iraq -
though not expected to avert war - heralds a new direction in Putin's
previously pro-western stance
By Andrew Jack

When President Vladimir Putin despatched Yevgeny Primakov to Iraq last
weekend on a "confidential mission", he gave a fresh boost of personal
pride to Russia's former prime minister while triggering painful memories
in US policy circles.

In 1990-91 and again in 1998, Mr Primakov undertook similar voyages to
Baghdad in an effort to prevent military action. Both failed, resulting in
Operation Desert Storm shortly after the first, and the withdrawal of UN
weapons inspectors and US and UK-led air strikes after the second.

Mr Primakov, 73, a former journalist, academic, spymaster and diplomat with
a jovial face and hearty chuckle, is a professional Arabist, though he also
speaks English and Georgian and has Jewish roots. 

He has known Saddam Hussein personally since 1969, from his time as special
Middle East correspondent for the Communist party newspaper Pravda.

He has maintained close ties with the region ever since, formally spending
much of the next two decades as an academic, including as deputy director
of the prestigious Institute of World Economy and International Relations
(IMEMO). He became a Politburo member in 1989 and was appointed head of the
KGB in 1991 and then the foreign intelligence service.

"It's only natural to use Primakov (in Iraq)," says a former secret service
colleague. "He is well placed and knows the territory. But when I heard the
news about this new mission, I realised that war is now inevitable. We have
to do everything in our capacity to stop it, but the US will attack anyway."

Mr Primakov's background and his area of interest make him wary of the US,
and this mission to Iraq suggests a fresh nuance in Mr Putin's foreign
policy, which has been pro-western - and specifically pro-US - over the
past two years.

When then President Boris Yeltsin appointed Mr Primakov foreign minister in
1996, the move was interpreted as a conciliatory gesture to the
anti-western "red-brown" Communist-Nationalist voice in parliament. It
appeared to pay off, when politicians supported his role as a compromise
prime minister in the wake of the 1998 crisis.

Mr Primakov did not disappoint, criticising western policy towards the
former Yugoslavia and, most strikingly, turning around his aeroplane in
mid-Atlantic in March 1999 on the way to the US after vice-president Al
Gore informed him at the last minute about the Nato decision to bomb Serbia.

Dismissed shortly afterwards, Mr Primakov continued to warn of the dangers
of aggression, while proving no fan of the Iraqi leader.

"It is an understatement to say that (Saddam) is not the most optimal
person to be in charge of Iraq," he wrote last year, drawing a comparison
with Stalin.

"Primakov's position was always for stability and peace, and he advocated
joint efforts, but the US thought they could solve the issues themseleves
without interference from Moscow," says Nodari Simoniya, IMEMO's director.
"That bothered Primakov personally. His eagerness to compromise was seen as
being pro-Arab."

Others go further. A senior US official described Mr Primakov's role in
1991 as "a pain in the neck". Western intelligence leaks - repeated by
Richard Butler, the former UN weapons inspector, in arecent book - even
claimed that in 1997 he was bribed by Iraqis with Dollars 800,000.

The allegations are vehemently denied by those who know him. "The US
tremendously disliked Primakov's role and concocted rumours that are
unthinkable," says Sergei Karaganov, head of Russia's Council on Foreign
and Defence Policy.

Mr Butler writes that Mr Primakov served Iraq's interests, and says he
explicitly argued for Russia's Dollars 8bn in Soviet-era debts from arms
sales to be reimbursed by lifting sanctions - which froze payments as well
as oil contracts.

Mr Primakov certainly knows much of Russia's corporate elite and in 2001
was made head of the Russian Chamber of Commerce and Industry - which
nonetheless remains a rather low-key organisation. Observers describe his
strengths as being primarily in politics and diplomacy.

As a leader of the briefly anti-Putin Fatherland party, and a shortlived
presidential contender, Mr Primakov could have faced isolation under Mr
Putin. He was even among those who implicitly criticised the Kremlin for
failing to launch negotiations to resolve the conflict in Chechnya.

But Mr Putin prefers to co-opt potential enemies, and has consulted him -
alongside a variety of other advisers - on foreign policy issues. Mr
Primakov's cold war-style references to a "multi-polar world" have even
cropped up in recent speeches by Mr Putin and foreign minister Igor Ivanov.

********

#14
Russian journalist Pasko to continue his ecological work
February 27, 2003
AP

ST. PETERSBURG, Russia -- A Russian military journalist and environmental
whistle-blower, released last month after serving more than two-thirds of
his four-year prison sentence, said Wednesday that he will continue to
report on ecological abuses.

Grigory Pasko arrived in St. Petersburg to meet his supporters and also his
new colleagues at the ecological magazine Ecologiya i Pravo (Ecology and
Law), where he is editor-in-chief.

The magazine was founded by the Norwegian-based Bellona environmental group
last June and is published in St. Petersburg once every two months. It has
a circulation of 500 copies. Pasko said the magazine will cover all kinds
of ecological problems, including the Chernobyl nuclear disaster and
radioactive waste.

"Thank to Bellona and just more openness on ecology issues in the
Northwest, there is more progress with covering the radioactive waste
problem and attempts to solve it in the Barents Sea," Pasko said. "While in
the Far East the problem doesn't seem to have changed."

Pasko, who had already spent considerable time behind bars, was sentenced
by a Vladivostok military court in December 2001 to four years in prison
for attending a meeting of Russian naval commanders and taking notes while
there. The court said his intent was to pass the notes to Japanese media,
with whom he had worked.

Pasko called the case retaliation for his reports uncovering alleged
environmental abuses by Russia's navy, such as dumping of radioactive waste
into the Sea of Japan.

He was released last month for good behavior, and his lawyers have appealed
to the Russian Supreme Court in a bid to overturn his treason conviction.
Pasko's defense lawyer, Ivan Pavlov, told journalists on Wednesday that he
is hopeful of a positive outcome.

"I don't see any other variant for that case," he said.

The Supreme Court is expected to consider the appeal in the next few
months, Pavlov said. 

*******

#15
gazeta.ru
February 27, 2003
Communist daily on last warning after Zakayev interview
By Boris Sapozhnikov 

In the run-up to the parliamentary elections the leftist opposition may
loose one of its most popular media outlets, the Zavtra daily. On Wednesday
the Press Ministry took the first step towards its closure by issuing an
official warning to the paper for violating the law on mass media and
anti-terror legislation. After one more warning the Ministry has the right
to ask the courts to shut down the paper. 

The Ministry issued its warning after Zavtra ran a lengthy interview
granted by Akhmed Zakayev an aide to the separatist Chechen president
to the dailys chief-editor Alexander Prokhanov. Zakayevs name has been
put on the international wanted list and he is currently in London,
awaiting the British authorities decision on Moscows request to extradite
him. In Russia he faces charges of murder and terrorism. 

The Press Ministry said the interview, published in the papers February 6
and 7 issues, ''incites inter-ethnic enmity''. According to Deputy Press
Minister Mikhail Seslavinsky, ''spreading materials of an extremist nature
through the media is inadmissible''. 

As a spokesperson with Mikhail Lesins agency explained to Gazeta.Ru, the
Ministry was angered chiefly with ''the tone of the conversation itself,
the presentation of the questions and answers''. ''In particular, when it
came to Chechnya, Zakayev said that Chechens live on their own soil, while
Russians are occupiers. This bears a negative attitude towards Russians.
Also, more than once a centuries-old war was mentioned as opposition
between Russians and Chechens. This incites enmity between peoples.'' 

Our interlocutor said that by publishing the Zakayev interview Zavtra had
violated the provisions of Article 4 of the law on mass media and Article 1
of the federal law on countering extremism. In a letter sent to Alexander
Prkohanov, the Press Ministry also said that on the basis of Article 35 of
the law on mass media, the official warning must be published in the
papers next issue, following the day it was received. 

The Ministrys spokesman, however, noted that the Zavtra editors may still
contest the decision in court, but if the court upholds it, the Ministry
will watch the dailys publications even more closely, and ''another
mistake may cost them a licence''. 

A representative of Zavtras editorial office told Gazeta.Ru by telephone
that ''it is Alexander Andreyevichs [Prokhanov] birthday, and this is the
best present for him''. (Prokhanov has just turned 65.) At this, our
interlocutor sounded as though he was pleased with the situation, and
judging by the buzz of jovial voices in the background, Zavtras editors
have not taken the Ministrys threats too sseriously. 

It is worth reminding our readers that in its former guise the Zavtra daily
was called Dyen (Day), and it has already lost its licence once in the
wake of the parliamentary upheaval in 1993. Then, Prokhanovs daily harshly
criticized Boris Yeltsin, for which it was punished. 

After the closure of Dyen Prokhanov founded the Zavtra daily, published by
the same group of journalists, and pursuing the same hardline opposition
stance. It is noteworthy, that Prokhanov is absolutely independent and
determines his papers editorial policy himself. For instance, the
interview with Boris Berezovsky published by Prokhanov several months ago
nearly led to a split in the so-called National-Patriotic Union of Russia
(NPSR a coalition of all left-wing opposition forces, ranging from
ultranationalist factions to pro-democratic Communists). Prokhanov is one
of the co-leaders of the Union. In his interview Berezovsky called on all
opposition forces to unite in their struggle against the Kremlin. Some
Communist leaders indignantly rejected Berezovskys calls, considering any
sort of alliance with him inconceivable. 

As yet, it remains unclear whether the Press Ministry will attempt to close
the daily in the run up to the parliamentary polls, but the official
warning issued to Zavtra puts it in a rather tricky situation. Now the
paper will have to be more careful when publishing materials that irritate
the authorities. 

Some media observers on Wednesday suggested that the real reason behind the
Press Ministrys warning was not the interview with Akhmed Zakayev, but the
fact that Alexander Prokhanov has, of late, been on especially friendly
terms with outspoken critic of the Kremlin Boris Berezovsky, currently in
self-imposed exile in London. 

*******

#16
Wall Street Journal
February 27, 2003
Russian Enclave Wants Closer EU Ties
By PETER SAVODNIK
Mr. Savodnik, a reporter at the Daily Progress, in Charlottesville,
Virginia, recently visited Kaliningrad on a fellowship from the German
Marshall Fund of the United States.
Kaliningrad, Russia

Max Ibragimov started his furniture factory in this former Soviet military
colony by himself in 1992. Today, the ethnic Uzbek employs 125 carpenters,
seamstresses and salesmen. A map of Russia behind his desk makes clear the
breadth of the MaXick empire: His sofas, love seats and recliners are
selling everywhere from St. Petersburg to Khabarovsk, in the Russian Far
East. There are plans for five new factories, including two in Siberia. And
next month, Mr. Ibragimov plans to open his first American distribution
center in Oklahoma City.

The last thing on his mind is politics. Given the cheap labor, low taxes
and strategic location between Lithuania, Poland and the Baltic Sea,
there's no time to waste on the evening news. But lately, to hear it from
the politicians in Moscow and Brussels, they've been having a bit of a
"Kaliningrad problem" here in the oblast, or region.

In 2004, Kaliningrad's neighbors will join the European Union. The EU,
worried about the mafiosi and AIDS-infected heroin addicts who have
descended on the enclave, earlier insisted Kaliningraders get transit visas
to pass through Poland or Lithuania on their way to Russia proper. The
Putin administration argued that visas would curtail Russians' right to
travel freely within their own country.

More recently, the two sides have agreed on "facilitated transit
documents," striking a compromise. Some details must still be ironed out,
but EU diplomats are congratulating themselves on having passed a first
test of playing power politics with Russia . After all, President Vladimir
Putin had said impeding Russians' right to travel would be "worse than the
Cold War," while other Kremlin officials said the visas would amount to an
"Iron Curtain."

But the brouhaha over the visas has obscured the real Kaliningrad problem
facing the EU: As long as Moscow keeps a tight grip on political and
economic life, Kaliningrad will stay an exporter of crime and of disease
tucked into the future European Union. Given its deep port and location,
Kaliningrad should be an entrepot trade center for the southern Baltic.
Such hopes have been raised consistently, only to be dashed, ever since the
Soviet Union collapsed 11 years ago.

While Moscow intrudes in the everyday life of many regions, Kaliningrad is
unique. As the only region cut off from mainland Russia , its comparative
advantage is open trade. "One-third of our economy is connected with Russia
. Two-thirds of our economy is connected with our neighbors and the EU. The
gap is bigger and bigger every year," says Sergei Pasko, president of
Kaliningrad's Baltic Republican Party.

But it's unique in other ways. Like Sevastopol on the Black Sea,
Kaliningrad was closed to the outside world under the Soviets and tightly
run from Moscow. The enthusiasm of some regional leaders in recent years to
set up free-trade zones made Moscow nervous that the region might one day
seek to break free from Russia . The result has been sharp resistance to
any devolution of power to Kaliningrad.

Local officials say the interference threatens to stop a still-fragile
economic resurgence. There are blossoming (if not bustling) vegetable- and
milk-production sectors, new BMW and KIA plants, and 3,000 or so joint
ventures between Russians and foreigners in the city proper, where half the
region's one million people live. While Kaliningrad has become known as a
mafia hub, locals say the bulk of cross-border activity doesn't involve
narcotics or prostitutes but household goods that make up a "gray market"
extending from downtown Kaliningrad to Gdansk, Warsaw, Vilnius, Riga and
beyond. On a typical day, smugglers buy $50 in beer, cigarettes or felt-tip
pens; take the bus to Malbork, in Poland; sell the goods; and come home
with a $10 to $20 profit.

Kaliningrad's economy is thus dependent on the economies of rapidly
modernizing countries in the current and future EU. While Moscow
occasionally sought to help Kaliningrad create free economic zones in the
early and mid-1990s, the central government's failure to do away with
bureaucracy and enforce the law threatens to create what EU officials have
called a "black hole" in the middle of Europe.

According to estimates by Mr. Pasko, the average business here answers to
some 50 federal regulatory agencies. Among them are trade inspectors, fire
inspectors, energy controllers, sanitation controllers and the tax police.
Mr. Pasko, whose party has called for across-the-board deregulation,
calculates that many businesses pay as much as 1.5 times in penalties as
they do in federal taxes.

Mr. Putin's intentions toward Kaliningrad, his wife's hometown, aren't
clear. When he took over, the ex-KGB agent sought to centralize power and
rein in renegade governors. But recently there's less talk of appointing
(as opposed to popularly electing) governors.

The question now facing Kaliningraders is what to do about a central
government that won't let them join the rest of Europe. Mr. Pasko's Baltic
Republican Party offers the most radical approach. The party has demanded
not only less federal regulation but the right of Kaliningrad to negotiate
trade deals with the EU and to regulate commerce -- in short, to function
as a quasi-independent, fourth Baltic state. Doesn't this amount to
secession? "We'll be a partly independent state in connection with the
Russian Federation," Mr. Pasko said in his basement office. "But we hope to
be a subject of the EU as well."

Deputy Mayor Silvia Gourova doesn't go that far. Nor does Vladimir Egorov,
the region's governor and a former commander of the Soviet Baltic Fleet.
But there is growing frustration, even anger, with the Kremlin. And there
is an obvious yearning among Kaliningraders -- shop owners, university
students, government officials -- to chart their own, unfettered course.

"If all Russia works like we do, it will be a big problem for Europe," says
Mr. Ibragimov, only half-joking. Mr. Ibragimov, the sofa king of
post-communist Russia shows the potential of the region. Will Moscow get
out of the way?

********

#17
Index on Censorship (UK)
February 27, 2003
Russia: Bad language laws... Feeling the lash of a mother tongue
There's more to Russia's debate over the status of the Russian language
than just a law to ban president Vladimir Putin from saying 'shithouse' in
public. The Russian world beyond Moscow speaks a different language over
its lunchtime chizburger these days. Irena Maryniak reports. 

The debate in Moscow on the abuse and status of the Russian language is
redolent of one of those artificial villages built by Catherine the Great's
lover Prince Grigory Potemkin for her grand tour of the south. It screens
the real social issues and administrative weaknesses that underlie the
language problem in Russia. 

Opinion formers may waste words over what constitutes rudeness or swearing
and whether penalties are in order, but where are the discussions about
illiteracy, poverty, inadequate education, badly paid teachers, poor public
health, questionable political and public ethics, and state controls on
information and public discourse? 

Government proposals for a new media law, assessed by the International
Federation of Jouranlists as "potentially dangerous" have been forgotten,
as has President Vladimir Putin's recent call for an increased state role
in culture and the arts. 

Yet journalists are being threatened with more restrictions on reporting
and further discriminatory accreditation or registration procedures;
writers are being encouraged to produce works 'of indisputable social
value'; while the public's right to free information could soon be confined
only to what is carried by the press, radio and television. 

Not that the state of the language isn't a real issue. In addition to
barring expressions that are 'foreign', 'vulgar', 'offensive' or 'obscene',
the proposed Law on the Official Language of Russia (rejected on 11
February by the Federation Council, the Russian Parliament's upper house,
and referred to a conciliation council) would have prohibited public
insults that are racist, sexist, ageist, and denigrate social status or
religious belief. 

It would have harmonised the language used in official documents, judicial
proceedings and the media, and made Russian the official language of the
Federation in practice, not just on paper as it is now. 

At the moment a court case can take place in Buryat or Yakut or any one of
the 100 languages of the Russian Federation. Recently the republic of
Tatarstan - oil rich and mainly Muslim - attempted to replace Cyrillic with
Latin script. 

It is also true that the numerous English words that Russian has absorbed
since 1991 are affecting the sound, shape and associative qualities of the
language. 

Nationalists and linguistic aesthetes have warned for years that Russian is
evolving into a travesty of itself. But in newly established areas like
business, banking, the Net or democratic politics, words like mobilnyi
telefon, konsultant, broker, sponsor, diler, chizburger, kornfleiks,
veb-sait, kibord, onlain, chat, parlament, konstitutsiia, federatsiia,
referendum, prezident have no existing Russian equivalents. 

Scholars decry them as niu spik (new-speak). But it's not the first time
this has happened. Before the 1917 revolution, Russian was heavily
influenced by French which became the language of the Imperial Court and
most salons in Moscow or St Petersburg. 

Russia has long absorbed much of what both Europe and Asia had to offer,
but for intellectuals this has often raised anxieties about a loss of
cultural authenticity. "Everything in this countryhas the appearance of
something temporary, false, designed for show," 19th century Slavophile
Ivan Aksakov wrote. It isn't hard to see what he meant. 

There's Peter the Great's spectacularly contrived imperial city stuck on a
swamp in the Gulf of Finland, for instance; Stalin's vast hydroelectric
power plant on the river Dnieper; all those volumes of autobiography
Brezhnev is supposed to have written. 

More recently there have been those sparkling official openings
(prezentatsii) of institutions or businesses, which, everyone knows, will
collapse in weeks. 

And where does the proposed whirlwind imposition of linguistic standards
similar to those developed by the Academie Francaise over more than three
centuries fit in? 

The tension between what is perceived as imposed or authentic remains an
obsessive concern in Russia. "The ostentatious, fraudulent nature of the
civilisation begets superficial forms," critic Mikhail Epstein wrote
recently. 

People will remind you that the 'essential' Russia was repeatedly
suppressed by her rulers: Prince Vladimir who implanted Christianity; Tsar
Peter I who demanded that his people get civilised and shave their beards;
Lenin who imposed a western ideology - Marxism; Gorbachev and Yeltsin who
reverted to western capitalism. 

They are all, in the Russian context, 'forms', closed systems, packages
enforced on people in varying states of hunger and deprivation. And, as
systems, they survived only because the authorities unassailably delineated
their outer limits, prohibitions or taboos. 

Small wonder then that people hit back in the way most open to them: by
creating a language replete with those reassuring, 'vividly thrilling'
expletives that, Nikolai Gogol wrote, boil up from the bottom of the heart.
Curses, obscenities and earthy similes form a sub-language (maternyi iazyk
or 'mat') with specific cultural associations. 

Some are to do with the countryside and, by extension, the image of that
right-thinking, incorruptible Russian peasant 19th century writers like
Tolstoy so revered. 

(If the language bill were passed, one Duma politician observed, it would
be impossible for journalists to publish interviews with people living
outside the big cities. Mat is all the countryside has got.) 

But mat was also the lexicon of inmates of Stalin's Gulag, who invented a
language intended to be incomprehensible to outsiders which has since been
absorbed into street talk, and the slang used by criminal mafias. 

The word mat shares the same root as mother (mat') and matter (materiia).
In the early 1930s a popular pun had it that while the party chiefs adore
dialectical mat-erialism, the masses prefer the mat-ernyi dialect. 

The word maternyi suggests 'mother tongue ', but mat is really the language
of liberation from a mother figure, and by extension the 'mother country'.
Russia's most commonly used expletive is 'fuck your mother'. And what so
upsets nationalists like Pushkin House director Nikolai Skatov about the
use of mat in the public domain and literature is that it diminishes 'the
holy word mother' and the iconic notion of 'Mother Russia'. 

A language of male adolescents it may be with its strict hierarchy of
terms, 'obscene' to 'vulgar' (sexual, excrementary, religious, animal, in
that order), but its arrival in politics, publishing and the media can be
put down partly to the fact that it is remembered as the language of
Stalin's camps, of 'spiritual' and political liberation. 

This threatens to make the linguistically taboo respectable. But what then
of the threatened parameters of other systems of idea, the hallowed notions
of 'Russianness' and 'the Russian state' for instance? 

The last few years have seen the publication of steamy revelations about
the life of 19th century poet Aleksandr Pushkin, whom traditionalists
regard as a national symbol, including a diary with lots of rude scenes
which most scholars denounce as fraud. 

There have also been pulp rewrites of classics like Dostoyevsky's 'The
Idiot', Chekhov's 'The Seagull' and Tolstoy's 'Anna Karenina' in
computer-speak, niu spik or mat. And 'serious' literature, 'conceptualist'
and 'post-modern', has emerged at the forefront of the debate about
overstepping prohibitions and deconstructing ideological formations that
appear to hold societies intact. 

The postmodernists have offered spectacles of obscenity, violence,
mutilation interpreted by literary specialists as representations of
rupture and dismemberment, the shattering of form with all its aesthetic
presuppositions. 

They have picked up Andy Warhol's device of appropriating commercial mass
culture into a more heavyweight form of art, but their use of pastiche and
parody extends to anything that qualifies as a cultural artefact 'high' or
'low'. 

Yet what sophisticated critics call 'excremental poetics', 'a world of
quotations', 'citationality' or 'supplementarity', many readers call porn. 

Writers like Vladimir Sorokin, Viktor Erofeev, or Leonid Gabyshev have been
denounced in the press as 'anti-moral' and 'a pandemic, a philological
AIDS'. Sorokin has also been taken to court on charges of pornography by
the shadowy pro-Putin youth movement 'Walking Together'. 

One of the things which gall nationalists most are Sorokin's skilful,
stylised parodies of the classics - Dostoyevsky, Chekhov, Turgenev -
ruthlessly deflated with mat, the voice of raw, uncensored consciousness. 

Funny to reflect that this is a device also used, on occasion, by none
other than President Putin himself. In the midst of dry and very proper
public statements, he has threatened to wipe out Chechen separatists "in
the shithouse," invited Muslim extremists to undergo circumcision in Moscow
"in a way that guarantees nothing will ever grow back," or declared that he
wouldn't treat politics "like selling Snickers or Tampax". 

The Duma's far-right deputy-speaker, Vladimir Zhirinovsky, engages in
similar shock tactics all the time. He is currently facing disciplinary
action for a tirade against George Bush in Baghdad, shown on Russian TV
with most words bleeped out. 

Zhirinovsky may market himself very successfully as the therapeutic,
uncensored voice of the people but, predictably, he restrained himself from
voting against the imposition of a state language law. 

Why? Because, like everyone else, he must know that, brief excursions into
expletive notwithstanding, Putin shows every sign of abiding by the view
that if we began for one minute to say what we thought society would
collapse. 

Which is precisely why he'd find a protracted discussion on the finer
points of language, rather than on - say - media law, so appealing.