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1. Christian Science Monitor: Nathaniel Hoopes, To know Russia, know its classic novels.
2. Reuters: US senator offers bill to boost Russia trade status. (Lugar)
4. RFE/RL: Gregory Feifer, Moscow Stands Firm Against UN Resolution On Iraq.
5. Transitions Online: Sergei Borisov, Russia: Standing Firm.
6. BBC Monitoring: Influential Russian pundit critical of Iraq resolution veto plan. (Nikonov)
7. BBC Monitoring: Russia's relations with US will survive Iraq crisis, says top diplomat.
8. Rossiyskaya Gazeta: Moscow Daily Views Implications for Pensioners of Shift in State Debt Policy.
9. Moscow Times: Boris Kagarlitsky, United Russia Is No KPSS.
10. BBC Monitoring: Draft laws favour Russian Orthodox Church over other denominations - newspaper.
11. US Ambassador Alexander Vershbow: U.S.-Russia Energy Cooperation - The Logic of Common Interests.
12. Chronicle of Higher Education: Bryon MacWilliams, The Great Game, Campus Version. The United States and other countries battle for the minds of a former Soviet republic. (Kyrgyzstan)


Christian Science Monitor
March 11, 2003
To know Russia, know its classic novels
By Nathaniel Hoopes | Special to The Christian Science Monitor

PRINCETON, N.J. – Caryl Emerson has made more than 40 trips to Russia and
Eastern Europe, most of them under cold war conditions. A professor of
Slavic languages and literatures at Princeton University, Dr. Emerson
teaches courses on 19th-century Russian novels, including Alexander
Pushkin's classic in verse, "Eugene Onegin"; Leo Tolstoy's epic, "War and
Peace"; and Fyodor Dostoyevsky's psychological thriller, "Crime and

A conviction that "kids ought to have better teachers earlier" prompted
Emerson to start her career teaching Russian at the secondary-school level.

When she found that there wasn't a large demand for Russian in high
schools, she earned a PhD and eventually found a home at Princeton in New
Jersey, where she has taught for most of her career.

Although her small department attracts only a few majors every year,
Emerson has forged a reputation as one of the university's most compelling
lecturers, and her classes attract students from a variety of disciplines.
Last fall she was asked to address the student body in a ceremony
commemorating the Sept. 11, 2001 attacks.

Throughout her career, which has spanned nearly four decades, teaching
undergraduates has remained Emerson's true passion. She subtly weaves
profound philosophical thinking into each of her lectures, and sparks
lively debate in small-group discussions.

When her students connect with 19th-century texts in a personal way - and
leave her courses thinking more deeply about their own lives - she believes
she's done justice to the texts she has studied with such devotion.

Excerpts from her recent conversation with the Monitor follow.

On what sparked an interest in Russia:

I went on a trip to the Soviet Union with my grandmother in 1956. That was
three years after Stalin died, and it was a very gray and scary country at
the time.

We were carefully watched, and this was very exciting to me because I was
the sort of adolescent who felt that America had too many freedoms, and
that we were taking most of them for granted. I felt that studying a
country that was politically unfree gave me a better - and less voyeuristic
- position as a student of it.

If you study a wholly free country, then you are simply a tourist. Then in
the '60s, '70s, and '80s, when I was teaching and taking groups overseas,
we really could do valuable things for the [Russian] culture: take
documents out of the country, establish contacts with writers and dissident

It was dangerous, but also exciting. I was fascinated by some of the
hardships there.

On the resonance of 19th-century texts for 21st-century students:

Russian literature is one of those that, although grounded well in its own
experience, is universal.

What's going on inside the heads of these Dostoyevskian and Tolstoyan
heroes are questions of happiness, personal morality, virtue - and there's
no human alive who doesn't worry about those questions.

Novels are wonderful conduits for philosophy. Philosophical thought doesn't
often grab you as a personal investment until you have some sort of
fictional plot wrapped around it. But if we can identify with a character
who is living out the results of a moral choice, or a moral quest, then we
feel threatened. The voice of your conscience begins to speak up, and you
feel you must respond.

On what Russian literature means:

Pushkin, Dostoyevsky, and Tolstoy don't require any particular training to

In fact, if you asked any great writer or poet whether they wanted to be
taught via lecture classes, assignments, and secondary literature, they
would say 'No, just read me again, don't read about me.'

Especially in Russia, the great artist of the 19th century was supposed to
directly contact the reader. I want to help people maximize their own
personal experience, so that you ask the types of questions that the texts
want you to ask of your own life.

You have to design an attitude in literature, the way you design a building
in architecture or develop an ear in music training. Literature is a fine
art, and the real learning has to be dialogic, between student and student,
or student and teacher.

On the relationship between Russia's literature and its history:

It strikes me that the real wisdom of cultures has to be in literature -
especially [in] Russia. The country simply doesn't have a literature
outside her history, and the literature is a great deal more than

The Russians are a very philosophical people. This has been deeply
ingrained in them, which is one of the reasons the Communists were able to
tap such genuine enthusiasm.

Whether they were always that way and thus produced Dostoyevsky, or they
read Dostoyevsky and became that way, it's hard to know. Great writers
[whose works] become classics in their own culture are both a product of
and a contribution to those stereotypes.

The Russians really believe in reading their literature and taking their
identity from it. So while it would be hard to find an "American" text that
we could all agree was "American," it's not hard to find a Russian text.
Start with Pushkin and end with Dostoyevsky and you can combine them and
form an identity.

On the influence of the West in Russian culture today:

I think a lot of people assume that if you're studying a culture, you're
interested in what's happening right now.

In fact, I'm not especially interested. Any time you have an intact
culture, one with a strong self-image - even a culture that has been
tormented in a lot of ways - and you open it up indiscriminately to all
sorts of pressures, it takes some time to discover itself.

As Solzhenitsyn said in 1991, when the Iron Curtain began to rise, all the
slop from the West flowed in first. This is the problem with the free
world: The things it most easily exports are its least valuable aspects -
junk food, junk pulp literature, junk values.

There are excellent values in the West, like liberal democracy, but those
are the product of a thousand years of integral development on the soil of
Western countries. They don't import. The whole problem with liberalism is
that it doesn't happen quickly. Well, McDonald's and pornography happen

It's sad to see an ancient culture bombarded. But I also don't think it
will last for long, and there won't be anything like a total westernization.

The Russian people are going to want something that's more their own.


US senator offers bill to boost Russia trade status
By Doug Palmer

WASHINGTON, March 10 (Reuters) - With the backing of the Bush
administration, the Senate's foreign policy chief on Monday introduced a
bill to repeal a Cold War provision that has long linked U.S. trade
relations with Russia to emigration concerns.

The move to establish "permanent normal trade relations" with Russia comes
as President George W. Bush is trying to win Moscow's support for a new
U.N. Security Council resolution that would give Iraq a March 17 deadline
to disarm or face invasion.

Bush needs nine votes out of the 15-member U.N. Security Council -- and no
vetoes from permanent members France, Russia or China -- to get the
resolution through.

A spokesman for Senate Foreign Relations Committee Chairman Richard Lugar
said introduction of the bill to repeal the "Jackson-Vanik" provision for
Russia was deliberately timed to coincide with the U.N. debate.

It follows the Senate's unanimous vote last week to approve a treaty that
slashes the United States' and Russia's deployed nuclear weapons by
two-thirds over 10 years and places them in storage, the spokesman said.

In a statement, Lugar said the 1974 Jackson-Vanik amendment was no longer
needed to ensure Jews and other minorities could emigrate freely from Russia.

"Over the years, (Jackson-Vanik) has been an effective tool to promote free
emigration, but its continuing applicability to Russia no longer makes
sense," the Indiana Republican said. "Since 1994, successive (U.S.)
administrations have found Russia in full compliance with the requirements
of freedom of emigration."


The Bush administration has repeatedly urged Congress to repeal the
Jackson-Vanik provision in regards to Russia.

However, it has been stymied on that front largely because of congressional
unhappiness with Russian import barriers that block U.S. poultry and other
meat products.

Also, many lawmakers have not wanted to vote on permanent normal trade
relations with Russia until Moscow has finished its negotiations to join
the World Trade Organization.

In practice, the White House no longer makes an annual decision on whether
to maintain normal trade relations with Russia, as it did for many years
with China.

But it is still required by Jackson-Vanik to report semi-annually to
Congress on Russian emigration practices.

Repealing the provision would eliminate that "irritant" from U.S.-Russian
relations and allow the two countries to establish permanent normal trade
relations, Lugar said.

Congress has already taken that step for a number of Eastern European
countries and former Soviet Republics since 1991.

That list includes Estonia, Latvia, Lithuania, the Czech Republic, the
Slovak Republic, Hungary, Bulgaria, Romania, Kyrgyzstan, Albania and Georgia.

Maintaining the provision on Russia creates the impression "we think the
Cold War is still going on," U.S. Trade Representative Robert Zoellick
recently told lawmakers.

Democrats in the Senate and the U.S. House of Representatives plan to
introduce their own bill to graduate Russia from Jackson-Vanik and
establish permanent normal trade relations.

That bill would also allow Congress to vote on the terms of Russia's entry
in the WTO once those negotiations are done.



MOSCOW, March 10. /RIA Novosti corr./ - Moscow notes that "even provided the
US' rather noticeable dominance in the world economy, Washington's claim to
the unilateral leadership in the sphere of security faces a disguised or
direct counteraction on the part of a major group of countries." Russian
Foreign Minister Igor Ivanov voiced this opinion when he addressed a meeting
of the Academic Council of Moscow State Linguistic University.

Ivanov is convinced that it's impossible to build the whole system of
international security according to a "one-polar scheme." Besides, the
minister continued, the stake on a unilateral approach, in conditions of
absence of the former bloc confrontation system, faced "the lack of former
bloc discipline based on the fear of becoming a nuclear attack victim."
That's why, in Ivanov's opinion, "more and more states speak out their mind
on the world arena," openly defending their opinion.

When one-polar approach advocates collide with a "wide front" of states
unready to build their national priorities in accordance with "narrow
templates imposed from outside," Moscow is sure that the course for the
formation of a multipolar democratic world order will start dominating in the
international relations despite a tough resistance of certain circles in

The minister added that "in general, such a course meets the interests of the
US itself, who, as the September 11 2001 events showed, is unable to
unilaterally counter the modern threats and challenges."


Russia: Moscow Stands Firm Against UN Resolution On Iraq
By Gregory Feifer

Moscow's latest comments on Iraq indicate the Kremlin is not yet backing down
from its staunch opposition to a possible U.S.-led war. Foreign Minister Igor
Ivanov said on 7 March that Russia would try to block a vote on a second
United Nations Security Council resolution this week. What does Moscow have
to gain by opposing U.S. policy?

Moscow, 10 March 2003 (RFE/RL) -- Moscow over the weekend stood firm against
a possible U.S.-led attack against Iraq, continuing to defy predictions that
it would back down.

Speaking on 7 March on Russian television, Foreign Minister Igor Ivanov
warned against a "unilateral" U.S. decision to go to war. "That would be a
violation of the UN Charter," he said. "And of course, when the UN Charter is
violated, the Security Council has to meet to discuss the situation and
undertake appropriate decisions."

Ivanov went one step further today, saying the Kremlin would vote against a
resolution setting a deadline for Iraqi disarmament. A "no" vote by a
permanent member of the Security Council constitutes a veto.

The United States and Britain say they will introduce a resolution to the
Security Council this week giving Baghdad a 17 March deadline to comply with
demands to destroy all its weapons of mass destruction or face a military

Washington has also indicated that it is prepared to go to war without a new

As countries backing both pro- and antiwar stances stepped up diplomatic
jockeying over the weekend, Russian Deputy Foreign Minister Yurii Fedotov on
8 March insisted that Moscow "will do everything" to oppose a new resolution.

Russia has long contested U.S. policy on Iraq. But last week it ratcheted up
opposition to a campaign against Baghdad, signing a joint declaration with
France and Germany that threatens to oppose a new Security Council resolution.

Russian President Vladimir Putin spoke by telephone with French President
Jacques Chirac late yesterday, agreeing that inspections in Iraq should
continue and that the majority of United Nations Security Council members
backed the position, Interfax reported.

Russia is one of five permanent members of the 15-state Security Council with
veto power over any resolution. Fellow war critics France and China are also
permanent members.

President Putin has in recent years moved Russia's foreign policy closer to
Washington's, joining the U.S.-led fight against terrorism following the 11
September 2001 attacks.

But Moscow has continued criticizing what it sees as Washington's
unilateralism on the global geopolitical stage. The Kremlin has also moved to
forge closer ties with U.S. opponents, including Iraq, a traditional Soviet

Analysts have long said Russia may abstain from voting in the Security
Council over a new resolution but that it would not likely sink the
resolution by exercising its veto power.

However, with a deadline for action over Iraq now drawing near and Russia
continuing to play a part in brinkmanship over the issue, questions have
arisen about exactly how Moscow would profit by opposing a war.

Moscow has long cited economic concerns. Russia's powerful oil industry wants
to safeguard contracts worth billions of dollars in oil-rich Iraq. The
Kremlin is also keen on recovering some $8 billion owed by Iraq in Soviet-era

The obligations are currently frozen, chiefly because of UN-imposed sanctions
on Iraq.

Moscow last year also signed a symbolic five-year economic- and
trade-cooperation deal worth $40 billion that includes plans for cooperation
in the oil, electrical-energy, and railroad sectors.

Washington has lobbied Moscow hard over the economic issue, saying Russia
stands to gain much more from a solvent post-Saddam Hussein Iraqi regime.
U.S. officials say that contrary to Moscow's claims, Russia would in fact
actually risk possible financial losses by opposing the U.S.-led effort to
force a change of regime in Baghdad.

Sergei Karaganov is chairman of Russia's influential Council for Foreign and
Defense Policy. During a discussion on foreign policy in Moscow last week, he
said Russia's chief goal in arguing against war should be to insist on
respect for its economic interests, which include a part in the future
reconstruction of the country. "I think Russia has to use this conflict in
general -- perhaps for the first time -- to set a precedent: respect for its
interests, including economic ones," Karaganov said. "Naturally, the
president has said we're not in an eastern bazaar and we're not haggling. But
if we don't firmly say we're not going to go along the Kosovo path, that is,
saving someone's skin and receiving in return nothing clear except
embarrassment, then I think that will be a big mistake for Russian policy."

Karaganov added that Russia is motivated in part by the desire to maintain
the U.S.-led coalition against terrorism, saying it would be strained by a
unilateral U.S. decision to go to war in Iraq.

Duma Deputy Vladimir Lukin is a prominent member of the country's
foreign-policy establishment. He said Russia should help consolidate the
antiterrorism coalition's non-American members to stop Washington from using
the campaign to achieve its own goals.

He said such a "historic" role should supersede economic interests, not least
because Russia "already has its own oil." "[Our] main problem is how to make
it so that international institutions such as the UN -- which symbolize not
only the American role in global politics, but which qualify it -- work
actively enough," Lukin said.

Lukin said Russia's position on Iraq is unique because disagreements with
Washington over the issue have not reached an emotional level -- as with
France and Germany -- and that the relationship with Washington is therefore
more "rational." "Our policy is on the whole correct," he said. "It consists
of working toward ensuring that war does not take place -- that's not in our
interests, of course. But if it does take place, I personally don't see a big
catastrophe for Russia."

In addition to being a bargaining chip, the Kremlin's hard line against a
campaign in Iraq is seen as a nod to the country's conservative
foreign-policy and military establishments, which have fiercely criticized
Putin's post-11 September concessions to Washington.

These included the deployment of U.S. troops in former Soviet republics and
agreeing to Washington's withdrawal in 2001 from the 1972 Anti-Ballistic
Missile Treaty, which Moscow had previously said was the cornerstone to
global security.

With parliamentary elections this year and presidential elections in 2004,
and with the pro-Kremlin Unified Russia party losing support in at least one
public-opinion poll, Putin risks losing some of his overwhelming popularity
by being perceived as soft on the Iraq issue.

But while criticizing U.S. policy, Moscow has also sent out signals that war
would not irreparably damage relations with Washington. Deputy Foreign
Minister Fedotov yesterday said the United States and Russia share too many
common interests for relations to be soured over Iraq.

"Time" magazine cited on 9 March an unidentified White House official as
saying that Putin had assured U.S. President George W. Bush that Moscow would
not veto a UN resolution authorizing force in Iraq.

Such statements, together with periodic criticism of Baghdad, have fueled
ongoing expectations that despite Moscow's hard bargaining over Iraq, it will
indeed step down at the last minute.


Transitions Online
March 10, 2003
Russia: Standing Firm
Despite the threat of worsening relations with Washington, Moscow appears
ready to defeat a new UN resolution on Iraq. Whether it will do so by veto
is not so clear.
By Sergei Borisov

ULYANOVSK, Russia--Russian Foreign Minister Igor Ivanov vowed that Russia
will vote against a new U.S.-backed resolution on Iraq at the UN Security
Council, CNN.com reported on 10 March.

However, a 9 March report on Time magazine’s website indicated that Russian
President Vladimir Putin may have promised that Russia will not veto the

"There were rumors that the Russians were going to veto," an unnamed White
House official told Time. "The president [George W. Bush] had a
conversation and got a different impression--not that Putin was with him,
but that he's not going to veto."

Deputy Foreign Minister Yuri Fedotov said on 8 March, “Russia will do
everything in its power not to allow this resolution in the UN Security
Council. … How we do that is an operational question,” Interfax reported.

But Fedotov told ITAR-TASS the same day that Russia was willing to use its
veto to stop the adoption of “a mistaken resolution.”

Fedotov made his comments following his return from New York, where the UN
on 7 March debated the Iraq issue. Prior to the debate, the Russian
president told Bush during a telephone conference that Moscow was
determined to press for a diplomatic solution to disarm Iraq, Reuters
reported on 7 March.

Bush’s call to Putin coincided with the 6 March U.S. Senate ratification of
a treaty intended to reduce U.S. and Russian nuclear arsenals. Analysts
indicated that the U.S. administration clearly hoped the vote would help
win support from Moscow on the Iraq issue.

According to Interfax, the Russian Foreign Ministry stated on 7 March that
Moscow welcomed the U.S. Senate’s unanimous ratification of the
Russian-American Treaty on Strategic Offensive Reductions (SOR) but did not
make any additional concessions.

Some Russian analysts have charged that the United States was trying to buy
Russia’s approval for the tougher resolution on Iraq. But Foreign Minister
Igor Ivanov’s warning that the United Nations would react “appropriately”
to unilateral U.S. action against Iraq provided “the clearest indication
yet that Russia is prepared to risk U.S. wrath rather than endorse
immediate strikes against Baghdad,” AFP reported on 9 March.


The lack of movement confounded “confident predictions by U.S. and Russian
analysts that Moscow would fall into line behind U.S. military action to
disarm Iraq,” the article continued.

Ivanov in fact went even further, warning that “if the United States
unilaterally launched a military operation against Iraq without a UN
mandate, this would be a violation of the UN charter.”

Recent Russian statements on the Iraq issue refute most analysts’
predictions that the Kremlin would decide its policy based on a cold
calculation of profit and loss, bearing in mind its stake in Iraqi oil
fields and Baghdad’s $8 billion debt to Russia.

The decision to veto or not veto the new resolution on Iraq will not be
based solely on Putin’s domestic interests, but they do seem to be playing
a key role. As Rosbalt reported on 3 March, the percentage of Russians who
consider Iraq to be friendly toward Russia has significantly increased over
the last year. According to an opinion poll carried out by the Public
Opinion foundation, 49 percent of Russians consider Iraq to have a friendly
attitude toward Russia--a year ago the figure was 39 percent. Only 2
percent consider Iraq to be an unfriendly state, while 35 percent of those
polled agreed with that statement a year ago.

Nearly 90 percent of respondents were opposed to the war being planned by
the United States and Great Britain, and only 2 percent answered that it is
“right to begin military action.” In addition, 45 percent of those polled
hold the view that the work of international observers in Iraq ought to be

Some Russian officials suggest that Putin would be more sympathetic to the
U.S. position on Iraq if he had more to show for past concessions,
including the demise of the 1972 Anti-Ballistic Missile treaty and U.S.
military presence in the former Soviet republics of Central Asia.

Future oil revenues are another concern. According to a 7 March article in
the Washington Post, many analysts expect that war in Iraq could lead to a
collapse in oil prices, which would sap revenue from Russia’s oil exports.
A steep decline in oil prices would be a great blow to Russia’s budget.

Russian Prime Minister Mikhail Kasyanov once estimated that for every $1
drop in the price of oil, the Russian economy risks losing as much as $2


But some observers believe that by taking such a firm stand against war in
Iraq, Russia may not only hurt its economic ties with the United States but
also undermine its WTO hopes.

According to a 6 March article in the Moscow Times, the United States on 5
March “resorted to economic blackmail and warned Russia that it risks
jeopardizing its bid to join the World Trade Organization if it vetoes a UN
Security Council resolution.”

A senior U.S. diplomat speaking to the Moscow English-language daily on
condition of anonymity added, “Russia also risks having to endure the
continued humiliation of Soviet-era U.S. trade restrictions and being
locked out of a post-Saddam Hussein Iraq.”

Some Russian analysts charge that the U.S. administration seems to have
chosen the way of blackmailing Russia rather than giving any guarantees of
access to postwar Iraq. The beginnings of a trade war could be already be
under way, as 24 U.S. agriculture groups wrote a letter to Bush urging him
to look into retaliation against Russia’s new quotas on foreign poultry,
beef, and pork announced at the end of last year. For Russia, the move was
retaliation for new European Union limits on cheap wheat from Russia and

U.S. government and industry officials have said imposing the quotas runs
counter to WTO agriculture goals. In 2001, Russia--the largest market for
low-priced U.S. chicken legs--bought 1.1 million tons of the poultry,
according to Reuters. In 2002, Russia twice halted U.S. imports, citing
concerns about safety. The value of the poultry trade in 2002 was down
about 40 percent. U.S. industry officials said Russia’s moves amounted to
an effort to protect domestic poultry producers.

According to Reuters, U.S. Senate Finance Committee Chair Charles Grassley
on 7 March warned that the meat import barriers were ruining chances that
Congress would pass legislation this year to establish “permanent normal
trade relations” with Russia.

Regardless of Russia’s vow to vote down or stop the second resolution and
the effects of that decision on U.S.-Russian relations, Moscow seems to
have accepted that there is little chance of a peaceful solution to the
Iraq crisis. The Emergency Situations Ministry announced on 10 March that
it has already voluntarily evacuated 567 Russian citizens from Iraq,
RIA-Novosti reported.


BBC Monitoring
Influential Russian pundit critical of Iraq resolution veto plan
Source: Ekho Moskvy radio, Moscow, in Russian 1400 gmt 10 Mar 03

[Presenter] Russia will vote against a new resolution on Iraq, Foreign
Minister Igor Ivanov has said. According to him, at the last Security Council
session Russia did not hear any convincing arguments in favour of using force
to resolve the Iraq issue.

The USA, UK and Spain are asking the Security Council to endorse a list of
specific weapons-destruction demands for Iraq and have set a deadline of 17

It is not in Russia's interests to veto a new resolution, Vyacheslav Nikonov,
president of the Politika foundation, believes. He was speaking live on air
to our radio station today.

[Nikonov] The Russian leadership's dogmatic and cynical position in this
affair, in pursuit of all its long-term foreign-policy interests, is surely
not to use the veto. Because I fear that if we do veto it, we'll probably be
the only ones. We'll be left by ourselves against an infuriated USA, having
squandered all our political and diplomatic capital in order to save a regime
whose days are numbered. That's not a very productive way of using our
resources. I believe that in this situation Russia has gone too far in order
to support the USA. We've spent too long objecting. But Putin at least has
left all his options open, including that of abstaining if there is a vote in
the UN.


BBC Monitoring
Russia's relations with US will survive Iraq crisis, says top diplomat
Source: NTV Mir, Moscow, in Russian 0905 gmt 9 Mar 03

A top Russian diplomat has said that differences over how to handle the Iraq
crisis will not damage Moscow's relations with the US. Speaking in Russian
NTV Mir's "Vliyaniye" programme, hosted by Savik Shuster and joined by US
Ambassador to Russia Alexander Vershbow, Deputy Foreign Minister Yuriy
Fedotov said Russia and the US had "too many common interests". He said that
Moscow was seeking a common language with the US, Britain and other
supporters of the military option in Iraq, but he reiterated his belief that
this course of action is a mistake. He also said that he did not believe
there was any need for a second UN resolution on Iraq, and that the latest
draft submitted by the US and Britain was an "ultimatum", not only to Baghdad
but also to other members of the Security Council. The following is excerpt
from the programme, broadcast on 9 March; subheadings have been inserted

[Shuster] Hello, the programme "Vliyaniye" [Influence] is on the air. The
participants in this programme have an influence on the decisions which are
taken in the country. The participants in today's programme have an influence
on the solution of such issues as war and peace, if we are to speak about the
crisis around Iraq.

So, the participants: US Ambassador to Russia Alexander Vershbow and Russian
Deputy Foreign Minister Yuriy Fedotov. Yuriy Viktorovich has returned from
New York, where on Friday [7 March], as a member of the Russian delegation,
he heard the report of the UN inspectors, he returned just 24 hours ago.
Yuriy Viktorovich, I have a question for you almost as a colleague, you were
there and we were not, what changed, what happened?

[Fedotov] The main thing that happened is that everyone is beginning to
realize that the world has come up against a very serious crisis, and it is
now difficult to recall when we lived through such a tense and intensive
period of diplomatic contacts.

[Shuster] Mikhail Gorbachev [former Soviet leader] in the last programme
compared it to the Caribbean crisis.

[Fedotov] Well, even during the years of the Caribbean crisis the UN Security
Council did not meet three times at the foreign minister level over a period
of just a few weeks. This really shows just how serious the crisis is, and
how crucial the decisions which are to be taken are. It is not just a
question of Iraq, it is a question of how we are going to live in this modern
world, how we are going to wage a common struggle against the new challenges
and threats...

US "changing the rules of the game"

[Shuster] Yuriy Viktorovich, the Russian position is not quite the same [as
that of the US], we can even say it is not at all the same.

[Fedotov] We know the position of the US very well, of course, we are in
constant contact, we work very closely, and we try, even for ourselves,
somehow to understand the motives, and also why, if we call a spade a spade,
the rules of the game constantly change as we go along. When Resolution 1441
was voted on, which was voted on at the proposal of the US, Russia, as you
recall, took quite a sceptical attitude at that time, and believed there was
no need to adopt this resolution. The first point of Resolution 1441, which,
I repeat, was proposed by the US, says: yes, Iraq has breached its
obligations, but it is now being given a last chance to return to the path of

Thus, everything that had happened over the previous years was written off by
this point, a line was drawn and a new starting point appeared. And by the
way, it isn't 12 years that have passed, less time has passed - seven years -
because for four years the inspectors were not in Iraq. Why not? Because the
then chief inspector, Richard Butler, without consulting with the Security
Council, withdrew the inspectors from Iraq and terminated the inspections.
Incidentally, over the seven years of inspections in Iraq, and American
officials have often spoken about this, far more weapons of mass destruction
were destroyed than during Operation Desert Storm. This was a matter of
chemical and biological weapons, and also missiles. Yes, the material balance
doesn't tally, because some of these weapons were unilaterally destroyed by
the Iraqis. But in not a single report of the former Unscom nor the current
Unmovic will you find any assertion that Iraq has weapons of mass destruction.

[Shuster] Unmovic is headed by Hans Blix, and before it was Richard Butler.
Yuriy Viktorovich, you say the rules of the game change constantly. Do you
mean -

[Fedotov] I'll explain. At first, when we were preparing - yes, at first,
there was no Resolution 1441 as yet, and the main objective was to return the
inspectors to Iraq after a four-year absence. That was objective number one.
It was achieved, including thanks to massive pressure on Baghdad, including
from the US. President [George] Bush made a very harsh statement at the UN
General Assembly last year which served as a very serious warning to Iraq.
Russian diplomats made efforts to persuade the Iraqis to accept the
inspectors, the Arab countries too, and as a result a decision was taken.
Iraq agreed without any conditions to let the inspectors work in their
country. After that, when Resolution 1441 was being written, the main
emphasis was on ensuring the inspectors had access everywhere, to all
palaces, to all military units, depots, enterprises, barracks, everywhere.

[Shuster] But not everyone thinks they got it.

[Fedotov] They got such access -

[Shuster] But the US thinks they didn't.

[Fedotov] No, the US thinks they got it, but afterwards they told us no, it's
not enough, this is cooperation in form only, a process of real disarmament
has to begin. And now a process of real disarmament has begun. Missiles are
being destroyed -

[Shuster] The Al-Sumud system?

[Fedotov] Yes, as Hans Blix said yesterday, these are not toothpicks after
all, these are serious weapons. A third of these missiles, of the overall
arsenal of these missiles, has already been destroyed. In addition, smaller
things are also being destroyed, like the 122-mm shells which can carry
chemical charges, additional documents are being handed over, fragments of
R-400 aviation bombs which are capable of carrying chemical and biological
weapons -

[Shuster] So the process is under way?

[Fedotov] - And now they are telling us, it's not enough because it's
necessary not to destroy some types of weapons but to change policy, to prove
that Iraq is doing this with enthusiasm. But how can you measure enthusiasm,
by what criteria?...

Is Iraq a threat to world security?

[Shuster] Yuriy Viktorovich, I'll just sum up, for those viewers who have
just tuned in after the commercials, what was said by the ambassador before
the commercials. So, in principle, this is a dangerous dictator, Saddam
Husayn, who possesses weapons of mass destruction, most likely chemical and
biological, who in one way or another supports Arab terrorist groups, who in
principle has no right to exist, such a dictator in the 21s century, and if
such dictators are going to exist then there will be a crisis of confidence
in the UN before our very eyes. That's what was said, in principle.

[Fedotov] Yes, that's what was said, and this reaffirms my point that the
rules of the game change as we go along. Not a single UN Security Council
resolution says that the aim of the international community, the aim of the
UN, lies in overthrowing the regime of Saddam Husayn. Yes, it's a regime
which very few people feel any liking for, including in Russia, for a whole
range of understandable reasons, but in law, including international law, it
is customary to act on the basis of the decisions which have been taken, it
is these that determine the contours of the future world, the world system.
And in this case the main question which everyone has to try to answer is:
does present-day Iraq present a threat to international peace and security?
Does Iraq present a threat to the security of the US? Does Iraq present a
threat to the national security of Russia?

From the point of view of possession of weapons of mass destruction, this
question can only be correctly answered on the basis of the work of the
international inspectors in Iraq. As yet, I repeat, they have not found any
evidence that there are stocks of chemical or biological weapons in Iraq.
They are working, they have not yet drawn their final conclusions, and it is
for this reason that they have to be allowed to do their work and they have
to be given specific objectives. It is precisely by way of specific
objectives that it will be possible to verify whether Iraq has changed its
attitude to fulfilling the resolutions of the Security Council or not. That
is, not to just demand that it hand over everything it has, but to say that
by such and such a date you have to hand over missing documents on such and
such issues, and then we will obtain objective criteria for assessing the
degree of Iraq's cooperation with the UN.

As concerns terrorism, terrorist organizations, this evidence, too, does not
as yet look very convincing. Yes, Al-Qa'idah sounds serious, but let's recall
that Al-Qa'idah really does exist in Iraq, it is based in Kurdistan, on
territory which is not under the control of the Iraqi government, and also
carries out subversive activity against the Iraqi regime.

[Shuster] But Al-Qa'idah is based in very many places, in Europe and in the
Middle East, as far as we know. But tell me, please, the Russian position,
which was expressed quite clearly by the president, lies in this, among other
things: the US is our partner, at the present time, from our point of view
they are making a mistake, and we cannot fail to tell them this. Wherein lies
the real essence of the US's mistake?

[Fedotov] In my opinion, the real essence of the mistake which could be made
lies in the fact that we are risking ending up in a very difficult situation
with unpredictable consequences. Yes, it's not easy dealing with Saddam
Husayn, and the process of disarming Iraq has always proceeded falteringly.
It is now proceeding quite quickly, and yesterday, at the Security Council,
US Secretary of State Colin Powell even acknowledged that there is certain
progress both in questions of procedure and in questions of essence. But we
are now being told by our American partners that we cannot wait any longer,
that we have to use other means.

The question is, why? What is the sense of abandoning the mechanism which is
just gaining momentum, beginning to work and yield the first results, and we
know that these results could turn out to be still more substantial if we all
continue together to take a firm position in favour of implementing the
Security Council resolutions. Or should we take an as yet unknown path with
unknown consequences both for security in the region and in broader terms,
for the security throughout the world, and in terms of the threat of
international terrorism it is still unknown what the consequences of such use
of force could be. Not everything has been thought through here, in our view,
and that is why we say that this is a great mistake...

"No need" for a second UN resolution

[Shuster] Yuriy Viktorovich, let's return again to what Mr Ambassador said
regarding the various stages. So, Saddam Husayn can disarm from Monday [10
March] or from today and everything can happen without regime change, and if
not then there will be regime change, there is no doubt of that. But this
resolution, the second - we call it the second, it's already a cliche - this
resolution is in principle essential, although the US can act without it. But
how and when will this resolution be adopted?

[Fedotov] It is expected that this resolution could be put to the vote some
time next week. I can say, by the way, that Russia agrees with the US on this
matter. We also believe that there is no need to adopt a second resolution,
that the international inspectors in Iraq have sufficient mandate to continue
their work, and it is precisely for this reason that we take a negative
attitude to this resolution, including in its latest draft, which sounds like
an ultimatum, an ultimatum to Iraq and an ultimatum to those members of the
Security Council which are not prepared to take the military path of
resolving the problem...

I would like to take up Mr Ambassador's idea and say that for us, relations
with the United States are of exceptional importance, and what is happening
now - the Iraq crisis, the UN Security Council, the differences in the
positions of a number of members of the council - we do not believe that
these differences will prevent us from continuing to develop our relations.
Our countries have too many common interests in the world. We now have to
actively engage in implementing the agreements on reducing [nuclear]
offensive potentials, we have Afghanistan, we have the Middle East. As
concerns the Iraq crisis, here too, if you noticed, Russia has always
stressed that it is trying to find a common language, with the USA, with
Britain, and with the other countries which support a different point of
view. We have never been supporters of artificially whipping up confrontation
and polemics, the situation is now too serious to engage in polemics.

[Shuster] You personally were at this discussion, you saw how people felt,
you spoke to people. That is, war is inevitable, in spite of the fact that Mr
Ambassador tells us that there is still a chance for a peaceful solution.

[Fedotov] I was very glad to hear these words that there is still a chance
for a peaceful solution, and as a diplomat I have to use the smallest chance,
a chance in a thousand, in order to preserve the path leading to a solution
to the problem by political means, if it proves possible. Although the
situation is, of course, very serious...

Unilateral action the greatest threat

[Shuster] Yuriy Viktorovich, what presents the greatest threat to
international stability? The unilateral launch of military action, without
coordinating it with the closest allies, or inaction?

[Fedotov] Unilateral action, which is not sanctioned by the Security Council,
which will inevitably cause a wave of protest throughout the world, and will
certainly inflict great damage on international stability. And afterwards it
will be necessary, by joint efforts, to escape from this situation, to think
about what to do in order to alleviate the obvious negative consequences
which will inevitably appear. That is, we must, and we hope, to emerge from
this crisis not disengaged but united, and the UN, as a worldwide, unique
organization, which addresses a broad range of issues, from political to
humanitarian, social and economic, is an irreplaceable instrument. And every
time when in the past we came up against situations and when unilateral
action was taken in circumvention of the Security Council's decisions,
nevertheless, within a certain period of time the issue returned to the legal
field of the UN Security Council...


Moscow Daily Views Implications for Pensioners of Shift in State Debt Policy

Rossiyskaya Gazeta
6 March 2003
Report by Yelena Lashkina: "Change of Concept. Pensioners to Pay
Country's Foreign Debt"

At the second time of asking the Finance Ministry
has finally produced a draft strategy for the state debt. First one
version of the strategy arrived at the White House the day before and was
then rapidly replaced by another.
However, this is not the Finance Department's first attempt to carry
out the government's directive on defining the state's debt policy. The
Finance Ministry spent the past two years drawing up the second document
(in two versions) which will be examined at the government session today.
It is not a continuation of the concept for the unified management of
the state debt approved by ministers last year. The essential point of
the concept was that there will be a consolidated debt which will not be
divided into the foreign and the domestic and there will be a single
center which will manage all the state's financial obligations. However,
the new document envisages not only a division of financial obligations
but also a reduction in the foreign debt by means of an increase in the
domestic debt.
The total state debt currently stands at $144.9 billion of which
$123.5 billion is foreign debt (or 36.2 percent of GDP) and $21.4 billion
is domestic debt (or 6.3 percent of GDP). The domestic debt currently
makes up 14.8 percent of the structure of the country's state debt.
The main idea behind the development of the state domestic debt
market, according to the authors of the plan, is to increase it as much
as possible so that the state does not need to borrow from the foreign
market at excessively high interest rates.
Meanwhile, with a clear reduction in the overall volume of financial
obligations and a fall in the foreign debt the domestic debt will
increase. In the opinion of Finance Ministry officials, the fact that
the foreign debt is so much greater than the domestic debt today poses
extreme risks linked to the exchange rate. This is why the strategy also
provides for a cautious increase in the volume of domestic borrowing
compared with foreign borrowing.
Thus the assumption is that in the space of four years the state's
foreign debt will decline by $10 billion -- to $113.3 billion -- in 2006.
At the same time the domestic debt will rise by $13 billion -- to $34.4
billion -- by 2006. "In this way the state's responsibility toward
foreign countries is being replaced by a responsibility toward its own
citizens. I am not confident that this is the optimum trend because
there is a regrettable experience which shows that our state is far less
obliging within the country," Ashot Yegiazaryan, deputy chairman of the
State Duma Committee for the Budget and Taxes, believes.
In addition the Finance Ministry's documents also speak about the
state's obligations which have not been fully defined yet. These
obligations include the Russians' savings at the USSR Sberbank which
vanished in the early nineties. What is more, this is a tidy sum --
R10.9 trillion or $300 billion. "On the one hand to accept the savings
debt would place a heavy burden on debt policy. But on the other hand,
the recognition of the debt and the approval of a clear scheme to repay
this debt would be a signal that the state is taking its domestic
obligations seriously," Yegiazaryan noted. But to judge from the draft
strategy there is only a hypothetical possibility that these debt
obligations toward the Russians will be honored. Admittedly, instead of
the R10.9 trillion citizens could receive R600 billion over 15 years plus
an extra 150 million within 15 years. So the Russians have nothing to
look forward to at the moment.
The financial department also lacked the imagination to see where to
get the funds in the domestic market so as to repay the foreign debt.
The only idea that came to mind was the pensioners' funds in the
fully-funded pension scheme. "The calculation of the domestic market's
potential is based on the assumption that funds from the fully-funded
pension system will be invested through management companies in state
securities to the tune of no more than 50 percent of the total," the
Finance Ministry documents say. In other words pensioners are going to
pay for all the Finance Ministry's ideas once again.


Moscow Times
March 11, 2003
United Russia Is No KPSS
By Boris Kagarlitsky

The prominent Bolshevik and Politburo member Nikolai Bukharin once joked that
there could only ever be two parties in Russia: one in the Kremlin and the
other in prison. It was an unfortunate joke and Bukharin no doubt realized
this when he was moved from the Kremlin to prison in the Lubyanka.

While the Communist Party of the Soviet Union still existed, the country was
kept firmly behind the bars of official ideology, but even party bosses had
to abide by certain rules. The Soviet "social pact" was straightforward: The
population unquestioningly did as it was told, and party bosses did not allow
themselves too many excesses. After the collapse of the Soviet Union, the
nomenklatura preferred for a while the freedom of life without party
affiliation. Former party functionaries joyfully threw away their party
cards, and along with them any responsibility before the people and the law.
For them, democracy meant that the ruling class was freed from any kind of
constraints or need to observe proprieties.

Over the years, there have been several attempts to introduce order in the
ranks of the ex-nomenklatura, using traditional top-down methods. The first
attempt at building a "party of power" was undertaken by the unforgettable
Viktor Stepanovich Chernomyrdin, who in slapdash fashion constructed Our Home
Is Russia out of national, regional and local-level functionaries.

Chernomyrdin's jerry-built edifice collapsed the minute its owner ceased to
be prime minister. All that remains of this flawed project is the immortal
phrase of its chief architect: "No matter how we build the party, we always
end up with the KPSS." Alas, Chernomyrdin was flattering himself: Our Home Is
Russia was a far cry from the KPSS. The Soviet Communist Party was a solid
and durable structure, fragments of which can still be seen here and there on
Russia's political landscape. Post-Soviet parties of power cannot boast of
such achievements.

In 1999, the old nomenklatura overreached itself and hastily put together two
whole parties of power: one under then-Prime Minister Vladimir Putin, and the
other under Moscow Mayor Yury Luzhkov and former Prime Minister Yevgeny

One can, of course, criticize such profligacy, but the problem was that
regional bosses couldn't figure out who was going to emerge as the country's
head honcho. And that's why we ended up with both Unity and Fatherland --
like two broilers off the same production line. When the situation cleared
up, the parties had to merge, and the result was United Russia. Now, the
country's leadership finally has a single party -- the only problem is what
to do with it.

Any Soviet schoolboy could explain the necessity of the KPSS. It coordinated
and controlled the mechanism of government, selecting cadres and punishing
the disobedient. Today's United Russia would like to be like the KPSS, but
cannot and does not want to play an analogous role in society. Previously,
the party selected officials and assigned jobs to them. Nowadays, officials
are ready to join the party, but personnel decisions are made elsewhere. They
are happy to be members of United Russia, but not to be accountable to it.

So, how can they be brought to book? The Soviet Communist Party had a
clear-cut ideology. United Russia has none. There is a joke doing the rounds
that in Sergei Shoigu's Emergency Situations Ministry, only the fire hoses
haven't been made to join the party. Once you occupy a certain position in
the bureaucracy, you have no choice but to join the party of power. However,
if you are a member and you occupy a respectable position, no one really
cares about your ideological predilections. United Russia is a party of
like-minded individuals -- but only in the sense that its members want to be
big bosses.

The formation of government along party lines is a sound democratic
principle. However, the formation of a party based on the position you occupy
in officialdom is a very Russian approach, or rather, a very Soviet one.
United Russia resembles the former nomenklatura daydreaming. On the one hand,
the political bosses think they are young again and members of the KPSS. On
the other, even in their worst nightmares they would never swap their luxury
Mercedes for an uncomfortable Volga, or return to the Soviet norms of
pilfering, which are rather modest by today's standards.

In short, you can't really turn back the clock. And I only hope that the bad
habit of locking up dissidents will never be revived by the country's

Boris Kagarlitsky is director of the Institute of Globalization Studies.


BBC Monitoring
Draft laws favour Russian Orthodox Church over other denominations -
Source: Nezavisimaya Gazeta, Moscow, in Russian 4 Mar 03

Two draft laws on relations between the state and religious organizations,
one put forward by the Communists and the other by an independent State Duma
deputy, seem to favour the Russian Orthodox Church over other denominations,
according to the Russian newspaper Nezavisimaya Gazeta. The "left" version of
intensifying the role of religion in society is even more radical than the
"right" version. It recognizes the Orthodox Church as virtually the only
traditional religion in Russia and makes no mention at all of other Christian
denominations or Judaism. Islam and Buddhism are only allowed this status in
some regions. The following is the text of the article headlined "Left and
right seek support of Russian Orthodox Church" published on 4 March.
Subheadings have been inserted editorially:

Two draft laws

On the threshold of the elections it seems that the deputies have decided to
enlist the support of the Russian Orthodox Church. This week two draft laws
will appear on their desks, both with approximately the same content and
virtually the same name - about social partnership between the state and
religious organizations. Sergey Glazyev from the Communist Party of the
Russian Federation [CPRF] "fired" the first round when he introduced his
draft back at the end of December last year. However, a Duma majority held
back his initiative until the appearance of a similar document signed by
independent deputy Aleksandr Chuyev, who is head of a special-interest
parliamentary committee.

Orthodox Church recognized as the only traditional religion

It is interesting that the "left" version of intensifying the role of
religion in the life of society is more radical than the "right" version. The
former version takes a tougher stance in determining which religious
organizations are actually traditional for Russia - it sets out a procedure
for proving this status and proposes the possibility of various financial and
property allowances for those that pass the test - even to the extent of
providing for the restitution of property taken away after the 1917

In Glazyev's draft law the Russian Orthodox Church is virtually the only
entity to be recognized as a traditional religious organization on an
all-Russian scale; Islam and Buddhism are only accorded this status in places
where appropriate communities "are settled in a traditional compact manner",
while the draft makes no mention at all of other Christian denominations and

The alternative version of the law is less candid although the terms
contained within it for acquiring the status of a "traditional organization
of federal significance" are more suited to the Russian Orthodox Church and a
certain sector of Russia's Muslim community, because they require the
existence of branches no less than 10 Russian Federation subjects plus a
central organization that has been active for the past 85 years.

Only traditional church will enjoy tax concessions and be allowed in armed

It is the traditional denominations that will be allowed into the armed
forces and other security structures to provide for the spiritual needs of
personnel; it is the traditional denominations that are to receive tax
concessions for charitable work and access to the state media for
self-advertising and educational activity; only the traditional denominations
will be able to show mercy to prisoners and other outsiders, as well as
performing many other useful functions for which the state does not always
have enough time.

Restitution of former property

But the main thing is that only denominations that are recognized as
"fundamental" will be able to put forward claims to their former property.
According to Glazyev's more radical draft law, a religious organization that
is attempting to prove its right to property must be able to demonstrate
continuity with their pre-revolutionary predecessors not only in their
theological principles but also in their management structures. So to all
intents and purposes the Catholics might as well not bother at all while not
all Muslim associations will be able to lay claim to material wealth.

In Chuyev's draft there is only one paragraph that mentions the possibility
of gradual restitution. But Glazyev's draft makes it clear that if the
traditional nature of a religious organization and the continuity of its
existence have been proven, that organization can confidently take legal
action and demand the restitution of its property. The main thing is that at
one time the property must either have been confiscated as a result of
nationalization or alienated without payment of compensation, and also "in
difficult circumstances". Evidently that is how we must regard the first
decades of Soviet power.


US Deparment of State
Ambassador of the United States of America to the Russian Federation
Alexander Vershbow
U.S.-Russia Energy Cooperation - The Logic of Common Interests
Moscow International Petroleum Club, March 4, 2003

Thank you for inviting me to participate in the Moscow International
Petroleum Club's luncheon today. Unlike many of you, I am not a neftyanik
(oil man). I'm just a chinovnik (official). But I'm happy to have the
opportunity to talk to you today about my own perspectives on the oil
business, on what President Putin has referred to as "the logic of common
interests" of our two countries, and a bit on current events.

I know that both Russia and the U.S. have been in the oil business for a
long time. In the middle of the 19th century, Russians and others were
producing oil in Baku while, in the U.S., oil development was centered in
Western Pennsylvania. Today, the oil industry remains important in both
countries, though today we talk about different places like Sakhalin and
the Gulf of Mexico rather than Baku and Western Pennsylvania.

Despite this common interest in oil and gas, until a year ago energy was
not considered one of the key elements in Russian-U.S. relations. But
President Putin and President Bush have changed all that. During their
summit meeting last May and again in November, the Presidents issued joint
statements emphasizing the important role of energy cooperation. October
marked the first Russia-U.S. Commercial Energy Summit in Houston, with
Ministers Gref and Yusufov and Secretaries Evans and Abraham presiding. But
the real stars of this business-to-business dialogue in Texas were the
representatives of Russian and U.S. petroleum and petroleum service
companies, because true cooperation means Russian and U.S. companies
working together on concrete projects.

I believe the Commercial Energy Dialogue that grew out of the Houston
Summit (and was launched here in Moscow in December) offers great promise
both in facilitating effective communication between business and
government, and in facilitating cooperation between Russian and U.S.
companies. I am sure that those of you in the business community would
agree that many agreements and contracts between companies arise from
informal discussions held on the margins of other meetings. We trust the
same will be true with the Commercial Energy Dialogue – that individual
Russian and U.S. companies will, in the course of discussions, realize that
they have mutual interests, and will jointly develop projects that will
benefit both companies.

One of the most recent headlines has been the decision of BP and the
principal shareholders in TNK to form a new Russian company, comprised of
assets belonging to Sidanco, as well as BP and TNK assets in Russia and
Ukraine. As many have noted, this is a landmark event, as BP, a major
international oil company, plans to invest billions of dollars in this
venture. And, although neither BP, TNK, nor Sidanco is a U.S. company, we
wish the companies and their shareholders well and hope that the new
venture will serve to encourage other international companies, including
U.S. firms, to increase their cooperation with Russian companies and their
investment in Russia.

Looking at the BP-TNK-Sidanco deal, some market-watchers have concluded
that it paves the way for a flood of foreign energy investment in Russia
and that it signifies that Russia has reached "investment grade" status.
While we recognize and applaud Russia's progress over the last 12 years in
moving from a state-controlled economy, guided by the teachings of Marx and
Lenin, to one that features a vibrant private sector, following the
teachings of Adam Smith and Andrew Carnegie, we don't believe the
BP-TNK-Sidanco deal guarantees a surge in foreign investment – either in
the energy sector or elsewhere. We think it is premature to say that, as a
destination for foreign investment, "Russia has arrived." We continue to
see room for improvement in Russia's investment climate. And we have
concerns about both the content and the pace of reforms.

For example, we continue to support passage of beneficial Production
Sharing Agreement amendments to the tax code. We believe an attractive PSA
regime can facilitate investment in the development of "difficult" oil and
gas reserves – reserves that might not be developed for years, if at all,
were it not for the financial incentives and recourse to international
arbitration that PSAs provide. We hope the Duma will move forward on this
legislation soon, and that the results will provide a real stimulus to new

We also look forward to the development of new subsoil legislation for
projects that do not need to be developed on PSA terms. We believe the
Russian Government should strive for a tax and license regime that is
transparent, stable, enforceable, and that offers investors a fair
opportunity to earn a reasonable profit. We would particularly welcome a
regime that would permit holders of exploration and development licenses to
freely sell or transfer those licenses. We would also welcome subsoil
legislation giving investors access to international arbitration for
resolution of commercial disputes.

Whatever the regime oil and gas companies are operating under, it is
critical that federal, regional, and local authorities respect the sanctity
of agreements and contracts. I can think of nothing that will do more to
discourage investment than efforts to violate or unilaterally renegotiate
contracts and agreements. Such efforts, even when unsuccessful, breed
distrust among current investors and encourage prospective investors to
look for safer places to risk their capital. In the past year, we were
particularly concerned about threats to declare the Caspian Pipeline
Consortium a "natural monopoly," even though its founding agreements
stipulated that it would not be subject to the relevant legislation.

Finally, it is no secret that oil producers in Russia are constrained by a
shortage of export pipeline capacity. Lack of export capacity hampers
Russia's effort to meet world demand for its oil and to play the role of a
reliable supplier.

This is unfortunate because it goes to the heart of what make Russian-U.S.
energy cooperation mutually beneficial. The U.S. and other major
energy-consuming countries seek adequate, reliable supplies of oil from
diverse sources. Russia, with its substantial oil and gas reserves, is
ideally suited to the role of bolstering world energy security. But to do
so it must be able to increase its exports to meet growing world demand for
Russian oil. U.S. companies over the years have developed many technologies
that can improve oil recovery. Many U.S. companies also have ready access
to relatively low-cost capital. Both could be put to use in helping Russian
companies increase their production, maintain and develop their energy
transportation infrastructure, and increase their exports to the world market.

To date, this hasn't happened. Or, at least it hasn't happened enough. We
hope the Russian Government, Transneft, and the oil companies working in
Russia can find a way to work together – with help from American and other
partners – to ensure that the right pipelines are built, in the right
places, and at the right times. This will ensure that Russia will be able
to play the pivotal role in seeks to play in promoting world energy
security, as well as attract more investment.

For example, in their November joint statement, Presidents Putin and Bush
welcomed the prospect of constructing a deepwater port for energy exports.
The proposed Murmansk pipeline and terminal project at this ice-free port
certainly would fulfill the promise of this initiative.

From its location in northwest Russia, a Murmansk oil terminal would be
well-placed for direct exports to the U.S. market, as well as to European
markets, 12 months a year. Shippers also could avoid the constraints,
possible delays, and environmental challenges involved in shipping oil
through the Bosphorus or the Danish Straits.

Overall, we agree with many western and Russian oil company representatives
who note that capital needs and logistical challenges might make it
difficult for Transneft to expand Russia's pipeline capacity quickly enough
to meet Russia's export goals. This calls for creative solutions. We see
merit in involving the private sector in pipeline development, both for its
capital and for its know-how. We note that some have proposed that, at a
minimum, the Russian Government permit private companies to help finance
construction of the pipeline. In return, the companies could receive lower
tariffs or more favorable access to the pipeline.

When it comes to pipelines and countries that serve as sources of imported
oil, my Government has followed a particular philosophy summed up by the
English expression, "Don't put all of your eggs in one basket." It means,
don't rely entirely on one thing or person or approach to achieve your
goals. Relying on Middle Eastern oil, we ran into big problems that had
huge economic implications during the OPEC oil embargo in the 1970s. For
the past several years, however, we have tried to diversify, receiving oil
shipments from many countries from various points of the globe, including
Venezuela, Canada, and Nigeria. We've also been working on the development
of energy resources in the Caspian region, promoting the construction and
use of multiple pipeline routes as a means of enhancing world energy

I would point out though that the advice, "Don't put all your eggs in one
basket," is as valid for major oil-exporting countries as it is for major
oil-consuming countries like the United States. Russia would be wise to
expand both its pipeline capacity and the directions of its pipelines. In
that way, if bottlenecks or unforeseen difficulties emerge in shipping via
one route, Russia will have the ability to continue exporting via other
routes and to a variety of destinations. In the end, both of our countries
will benefit: you will continue receiving additional revenue from sales of
oil, and we will have more secure access to energy sources.

This seems like a natural point to raise a topic that I know has been on a
lot of people's minds in recent times: the situation in Iraq. This is an
issue on which our two countries clearly have differences, but I would
argue that they are more over tactics than over strategic goals. We both
agree that Saddam Hussein must be disarmed of his weapons of mass
destruction. The question is how to get there.

Here's our approach: We all know that Saddam had weapons of mass
destruction. He used chemical weapons years ago against Iran and even
against his own people. Before the last group of UN inspectors departed in
1998, they had already catalogued the existence of thousands of tons of
nerve gas and thousands of liters of deadly anthrax and other toxins. Those
substances cannot have just disappeared into thin air. Saddam Hussein must
account for Iraq's weapons of mass destruction – either declare that he has
them so they can be destroyed, or give evidence that they've been
destroyed. If he fails to do either, he must face "serious consequences."
That's what UNSCR 1441 says. This resolution gave him one last chance,
after 12 years, to comply with the terms of the bargain that ended the Gulf
War in 1991. And the sad but clear fact is that Saddam has already failed
to comply. He has missed his last chance.

So we – the international community, but especially the members of the
Security Council – are fast approaching the moment of truth. We understand
that Russia wishes to avoid military action and to keep the issue firmly
within the UN Security Council. But Russia also shares our interest in
demanding that Saddam fulfill his obligations to disarm. With Saddam's
continued refusal to disarm peacefully, there may be no alternative to war.
Time is running out.

Meanwhile, we recognize that Russia and Russian oil companies have
significant economic interests in Iraq. So we understand Russia's concern
about the effect regime change and/or war in Iraq could have on repayment
of Iraq debts to Russian companies and on the fate of existing petroleum
contracts. We will take such interests into account and support a
level-playing field for investors. Contrary to what some journalists and
conspiracy theorists have suggested, the United States's efforts to achieve
Iraq's disarmament are not a cover for acquiring control of Iraq's oil. We
believe Iraq's oil and gas belong to the Iraqi people and should be
developed for their benefit. We hope future Iraqi Governments also will
take this view, and that they will manage Iraq's petroleum resources in a
way that serves the interests of the Iraqi people.

I've talked about energy, energy security, and Iraq, but let me end on a
broader topic – the central role energy can play in Russian-U.S. relations.
Both our countries have long talked about how the Cold War is over, about
how it's time to move beyond the "old agenda" of arms control toward a more
normal relationship. And, of course, we're doing exactly this in a number
of fields. We cooperate in space exploration, law enforcement, the fight
against terrorism and HIV/AIDS, indeed in a large number of areas that we
could only have dreamed about a few years ago when we lived on the verge of
mutually assured destruction.

But energy has the potential to be the most important of them all, at least
in economic terms. We are talking about huge sums of money, in a field
where Americans both have the practical experience and the willingness to
invest if the conditions are right. Just witness the Caspian Pipeline
Consortium and Sakhalin I.

You could hardly find a better symbol of the transformation of our
relationship, from Cold War foes to 21st century friends, than cooperation
in a peaceful business venture that clearly advances the economic and
security interests of both Russia and the United States. We truly are
living in a far different world, and I think our grandchildren will read
history books about the incredible changes over the past ten years with awe
and wonder.

Well, I think I've spoken enough, so I'll end my remarks here. Thank you
again for inviting me today.


Chronicle of Higher Education
March 14, 2003
The Great Game, Campus Version
The United States and other countries battle for the minds of a former
Soviet republic
Bishkek, Kyrgyzstan

Outsiders have vied for power and influence in Central Asia for centuries.
The Scythians, Alexander the Great, Turkish alliances, and the Mongols
predated Britain, which bowed out of the so-called Great Game with Russia
in the 19th century. The Soviets yielded in the 20th century.

Even though independent nations re-emerged in the region in the 1990s, that
has not meant an easing of the struggle. In Kyrgyzstan, countries such as
the United States, Russia, and Turkey are still trying to curry favor --
not on the battlefield, but in universities.

"We've got our own mini-version of the Great Game going on in Bishkek,"
says David Huwiler, president of American University-Central Asia. (The
institution is not part of, or associated with, American University in

Some 53 percent of Kyrgyzstan's 115,000 college students study here in the
small capital of this mountainous, landlocked, mostly Muslim country about
the size of South Dakota. The secular government, with its liberal
political and economic leanings, is perhaps the most accommodating to
foreign influence in Central Asia.

Local Kyrgyz institutions operate much as they did during the cold war,
only today rectors milk the underfinanced system -- along with its current
students -- while fending off change. That has opened the door for Russian,
Turkish, and American institutions, as well as a Kuwaiti and an Uzbek
university, and a few Islamic religious institutions.

While controlling higher education is the ostensible goal, the stakes are
higher. Universities and their sponsoring countries hope that when this
generation of students ascends, as it inevitably will, to the leadership
positions of Kyrgyzstan, it will look favorably upon those countries that
influenced students' education.

The theory is that if institutions like AUCA -- which is backed by the U.S.
State Department, the Soros Foundation's Open Society Institute, and the
Eurasia Foundation -- flourish here, then Kyrgyzstan will gravitate to
so-called civil societies of the West in general and the United States in
particular. And so the United States may be able to use Kyrgyzstan as a
military base convenient to operations in, say, Afghanistan or the Middle
East. (U.S. troops are already in Kyrgyzstan, and U.S. military planes are
parked on the tarmac of the Bishkek airport.)

That's why, across town, Kyrgyz-Russian Slavonic University, which is
financed by Russia, is recruiting students for the Soviet system of
education that it so proudly preserves. And why Turkish institutions like
Manas Kyrgyz-Turkish University try to instill not only knowledge, but
language and ideology, in a bid to foster what scholars there refer to as a
"renaissance of Turkish civilizations."

The Wild Blue Yonder

There is competition for students. There is competition for professors. And
sometimes, the rivalries get personal.

"There's hostility from other rectors," says American University's Mr.
Huwiler. "I don't go out to dinner with other college presidents here."

He has not been invited to the city's monthly meeting of rectors since
June, when Camilla Sharshekeevasic, who had close ties to American
University-Central Asia and is now provost there, was dismissed as
Bishkek's minister of education and culture.

"Relations are not as good among universities as they are among the
countries they represent," concedes Salavat Usmanov, dean of international
relations at Slavonic.

On a recent Monday, AUCA was nearly empty, as students were elsewhere
training to become military officers and medical assistants in order to
sidestep the mandatory draft. American University-Central Asia, unlike
Slavonic, for example, does not provide military training, in part because
it has no desire to emulate the old Soviet model of higher education in
which the military was essentially a component of every university.

That same day, a colorful hand-drawn banner in the cafeteria proclaimed
International Coming Out Day. "Here we have a different atmosphere. Here we
have rights," says Ekaterina Shiriaeva, a third-year student majoring in
international relations. "At Slavonic, you feel like you're in the '80s or
'70s, communist stuff."

American University-Central Asia was essentially spun off from the
Kyrgyz-American School at the Kyrgyz State National University in 1993. It
strives to be a classic American liberal-arts college, with a credit-hour
system and an American-style curriculum, and administrators say it is
dedicated to freedom of expression and inquiry. Certainly it is the only
one of its kind, in that regard, in Central Asia.

Among its offerings are bachelor-of-arts degrees in economics,
international and comparative politics, journalism, law, psychology,
socio-logy, information technology, and various "studies" including
Anglo-American, Austrian and German, and Kyrgyz, as well as a B.A. and an
M.A. in business administration. The courses are generally taught in
English, though many are carried out in Russian, and Russian is spoken in
the hallways. American professors have returned (most left following
September 11, 2001), but four-fifths of the 203 faculty members are Russian
or Kyrgyz. The graduates go on to government posts, American graduate
schools, American or Western nongovernmental organizations in Kyrgyzstan,
and to American or Western companies with operations in Kyrgyzstan.

About 30 percent of the student body of 1,065 is from elsewhere in Central
Asia. The number, which hovered at about 12 percent several years ago, is
expected to climb to 50 percent in 2003 -- when the number of students will
be officially capped at 1,500 to hold the university to its mission as a
model liberal-arts institution.

Annual tuition here is $1,700, an enormous sum. By way of comparison, a
one-room, 62-square-foot apartment can be purchased for around $1,000,
according to a paper glued to a cement telephone pole on the street
outside. Still, most of these universities are now tuition-driven; the
state contributes only about $150 per student annually to Kyrgyz institutions.

Administrators at AUCA say their university is the only one not permeated
with corruption. Indeed, it is no secret that corruption pervades higher
education on all levels in Kyrgyzstan. But bribery and cheating, according
to students and professors, as well as ministry officials and knowledgeable
NGO observers, is far less common at AUCA and Manas Kyrgyz-Turkish University.

Perhaps it's the pledge on the walls of the cafeteria at AUCA. It's a
slogan borrowed from the U.S. Air Force and printed in three languages: "We
will not lie, steal, or cheat, nor tolerate among us anyone who does.
Furthermore, I resolve to do my duty and live honestly."

But corruption may nonetheless have a strong influence at American
University-Central Asia, because the children of the country's wealthiest
families attend it. And conventional wisdom in Kyrgyzstan has it that
anyone with money is corrupt, since there is no way to honestly make a good

From Russia With Love

Slavonic was once the country's most prestigious university. White-birch
saplings have been planted along correct rows of red and pink rosebushes
outside the university's main building. Mercedeses, mostly white, are still
parked regularly on the front pavement near the base of a statue of
Alexander Pushkin, the Russian poet.

And some say it remains the premier institution, as it awards both Kyrgyz
and Russian diplomas -- the latter enabling graduates to leave the country
for employment in Russia and other former Soviet republics. The university
was created in 1993 primarily to help retain the Russian population, many
of whom (the most educated, more often than not) were emigrating because of
the increased "Kyrgyzification" of life and education. (Kyrgyz, for
instance, was made the official language a few years earlier.) It was also
meant to attract Russian-speaking students from all Central Asian countries.

"There have been very few changes over the past 10 years. The curriculum is
almost identical to that which was taught in the Soviet Union," Mr. Usmanov
of the international-relations department says.

About half of Slavonic's 6,000 students are ethnic-Kyrgyz, and half are
ethnic-Russian. In 1991, about 70 percent of all students enrolled free,
and 30 percent paid for their tuition. By last fall, the numbers had been

Tuition now costs up to $800 annually for the more popular departments,
such as law and economics. By way of comparison, a beginning instructor at
Slavonic earns 1,000 som per month, or about $46, in a country where the
average monthly salary is around $30. A teacher with about 10 years of
experience earns $184 per month.

"This is the Soviet system of education, and it, in its time, was regarded
as the best, like Harvard, or Oxford," says Aidai Baidzhigitova, a
third-year student majoring in international economics. "We're more
oriented to the Near Abroad, not the United States or Europe."

Here, memorization is rewarded over creative thinking. Here, exams are
oral. "The idea of such education is, an expert like me comes in the room,
pours tremendous amounts of information into their empty heads, and that
information is repeated back to me in periodic intervals," says William
Hansen, a professor of international and comparative politics at AUCA.
"They have this concept of pedagogy that ... you come in at 8 in the
morning and leave at 5 in the afternoon, and everyone is in lockstep."

Mr. Usmanov boasts that the 678 international-relations majors spend 42
hours per week in lectures, or six hours more than the university's
maximum. "There is no freedom of choice. We don't have a democracy here,"
he says. Students attend lectures during which they are expected to take
down all that a professor says, then recite it during exams, which are
almost always oral. Discussion at lectures is not encouraged.

Manas Kyrgyz-Turkish University officials say that it was founded on an
Anglo-American model. But according to its own professors, it is a uniquely
Turkish institution.

For starters, tuition is free. In fact, students receive monthly stipends
of between 500 and 600 som, or up to $13, just for attending what is easily
the most attractive and well-financed institution in the city.

Some 1,800 students, many of whom were undereducated village kids recruited
for Turkish-financed suburban high schools, attend the university, opened
in 1995 in what was formerly a Soviet institute for mass-construction
projects. Manas put $14-million into renovating the structure, and by 2010
will have spent another $138-million on a new, 210-acre campus that will
accommodate 7,500 students and 11 departments. Professors teach primarily
in Turkish and Russian, and occasionally in English.

"American University is one of the best, but for now our possibilities are
greater," says Karybek Moldobaev, Manas's rector.

Manas currently has four departments: economics and management,
communications, engineering, and humanities. It's this last department --
with its teachings about Kyrgyz Turks and emphasis on Turkish language,
literature, and history -- that most influences the perception of the
university as a scholarly entity.

"We don't allow anyone to infuse the university with some kind of ideology
or other," Mr. Moldobaev says. "The people of Central Asia are Turks. They
share one root. They lived in one united state, where there was a united
culture, a unified language. "There are no political agendas. What, Turkey
is going to establish itself as God?"

But some Manas professors disagree on that last point. One, who asked to
remain anonymous, says the ideology dominates the curriculum. "The
nationalist-Turkish politics are intense here. They are trying to make
people believe that they are all Turks. The quality of scholarship,
unfortunately, is not on par with the quality of architecture."

How will higher education's Great Game play out in Kyrgyzstan, with the
Americans, Russians, and Turks all trying to make an impact? In an e-mail
message, David Hu-wiler says that the outcome of the game is less important
than ensuring that Central Asian students have access to affordable,
high-quality educations. Most students who graduate from American
University-Central Asia find jobs, he says, and a large number go on to
graduate school in the West. As a result, the number of applications, both
from Kyrgyzstan and from the other Central Asian republics, is increasing
annually. "To the extent that universities here are freed from rigid
Education Ministry constraints and are allowed to compete with one
another," Mr. Huwiler says, "they will continue to improve."