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JRL #7105 Plain Text - Entire Issue

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1. AP: Putin: War on Iraq Would Be a Mistake.
2. Reuters: Russia says war in Iraq a mistake and illegal.
3. Interfax: Russia will be warned of beginning of military operation against Iraq - Ambassador.
4. AFP: Putin offers Chechens sweeping autonomy under new constitution.
5. gazeta.ru: Maskhadov falls victim to referendum campaign.
6. Nezavisimaya Gazeta: SECURITY STRUCTURES BEING PREPARED FOR ELECTIONS. Experts comment on the significance of recent security structure changes.
7. Moscow Times: Matt Bivens, Oligarch Amnesty Is Not on the Money.
8. AP: Drug Problem Cited at Russia Nuke Plants.
10. Vremya Novostei: Dmitry Olshansky, THE STATE OF THE PARTIES. Positioning of the Russian political forces.
11. Prime-TASS: Peter Lavelle, Fashionable Feudalism.
12. Moscow Times: Boris Fishman, Investors Toast Putin in New York.
13. Konservator: National Strategy Council report, RISKS AND THREATS FOR RUSSIA IN 2003. The Pax Americana, the Russian ruling elite, and the
Kasianov government
14. Reuters: Image-conscious Russian women fuel cosmetics boom.


Putin: War on Iraq Would Be a Mistake
March 17, 2003

MOSCOW (AP) - Ending weeks of silence, Russian President Vladimir Putin
condemned military action against Iraq, saying Monday that war would be a
mistake that could imperil world security.

His comments came as Deputy Foreign Minister Yuri Fedotov, Russia's
diplomatic point man on Iraq, said the U.N. Security Council would not
approve a U.S.-backed resolution opening the way to military conflict.

Putin's earlier silence appeared to be an attempt to avoid opposing
Washington even as the Russian Foreign Ministry battered home the message
that Russia would join France in opposing any U.N. resolution that
automatically authorized force.

``We are for solving the problem exclusively by peaceful means,'' Putin was
quoted as saying by the Interfax news agency. He said Russia's position was
clear, comprehensible and unwavering.

``Any other development would be a mistake - fraught with the toughest
consequences, leading to victims and destabilization of the international
situation as a whole,'' Putin told Chechen spiritual leaders, according to

U.S. officials have said Russia's relations with the United States could be
damaged by Russian opposition to a U.N. resolution.

But Fedotov said ``no additional resolutions are necessary.''

``As before, this draft has no chances for passage by the Security
Council,'' he was quoted as saying by Interfax.

Fedotov indicated that Russia supports France's call for a ministerial
meeting at the U.N. Security Council to discuss the latest report by chief
U.N. weapons inspector Hans Blix, the ITAR-Tass news agency reported.

After an emergency summit Sunday in the Azores with allies Britain, Spain
and Portugal, President Bush made it clear that diplomatic efforts would
end by Monday night.

The U.S. ambassador to Moscow, Alexander Vershbow, told Russian lawmakers
that the United States would inform Russia when it felt all diplomatic
avenues had been exhausted, a U.S. Embassy official said. A senior military
diplomat in Moscow, speaking on condition of anonymity, said the U.S.
Central Command had invited Moscow to send a liaison officer to deal with
``consequence management'' - postwar issues such as humanitarian aid - but
that Russia had declined.

Russian diplomats contend that even to discuss postwar issues is to
acknowledge the inevitability of war.

As Bush prepared for war, Putin attempted to portray himself as a man of
peace. In a TV address, he urged voters in Chechnya, where Russia is
battling separatists, to approve a new constitution he said would help end
bloodshed there.

Worked at the Russian Embassy in Baghdad continued as usual. But the
Foreign Ministry called on Russians to leave Iraq and not to travel there.

However, a group of Russian Islamic and Orthodox Christian clergymen left
Monday for Iraq, Interfax reported. It quoted Iraq's ambassador to Moscow,
Abbas Khalaf, as saying the delegation would meet with Iraqi officials and
participate in prayers for peace.

The chief of the Russian Orthodox Church, Patriarch Alexy II, called on the
world's governments to do everything possible to avoid a war launched
``without taking into account the opinion of the world community,''
Interfax reported.


Russia says war in Iraq a mistake and illegal
March 17, 2003
By Viktor Korotayev

MOSCOW (Reuters) - Russia called for last-minute attempts to solve the Iraq
crisis peacefully on Monday, saying any resort to force would be both a
mistake and illegal.

Russia has aligned itself with France and Germany in calling for further
U.N. arms inspections to ensure that Iraq is free of what the United States
says are illegal weapons. Like France, a fellow permanent member of the
U.N. Security Council, it has threatened to veto any new resolution
endorsing military action.

President Vladimir Putin, speaking before the United States and Britain
said they would no longer seek a vote for a new resolution endorsing force,
said any approach other than peaceful disarmament would be a mistake.

"We would like to resolve it through political and diplomatic means," he
told reporters. "I am convinced that any other solution would be a mistake."

Putin, who has made infrequent statements at home on the crisis, said war
"will not only bring about human casualties but also destabilize the
international community in general.

"There are 20 million Muslims living in Russia. We cannot afford not to
consider their opinion and we fully share their alarm," he added.

Both Washington and Britain say military action now against Iraq would be

But Foreign Minister Igor Ivanov, speaking after the abandonment of
Washington's bid to seek U.N. endorsement for war, said existing U.N.
Security Council resolutions gave no one any legal right to launch a strike
on Iraq.

"We believe the use of force against Iraq, especially with reference to
previous resolutions of the U.N. Security Council, has no grounds,
including legal grounds," Ivanov told reporters.


Ivanov said resolution 1441 of last November, under which U.N. weapons
inspections were resumed, gave no endorsement.

"Resolution 1441, to which so many references are made, does not give
anyone the right to use force automatically," he said.

That resolution, approved unanimously, spoke of "serious consequences" if
Iraq failed to comply with demands to disarm.

Ivanov said the resolution contained a clause obliging Security Council
members, if necessary, to meet immediately to ensure Iraq's strict
implementation of its terms.

There was still a chance, he said, for diplomacy to succeed.

The Foreign Ministry said no decision had been made on whether Ivanov would
fly to New York to press an 11th hour case. France, Germany and Russia
called at the weekend for a Tuesday meeting of ministers of Security
Council members.

Georgy Mamedov, a deputy foreign minister, said Russia would do its best to
minimize differences with Washington.

"Russia will not launch an anti-American campaign, but will try its utmost
to return the situation to a proper legal basis," Mamedov was quoted as
telling Itar-Tass news agency.

"We will not gloat over a tragic mistake by the United States or start a
noisy campaign. Our relations are too important for international peace to
hold them hostage to differences over the Iraq problem."


Russia will be warned of beginning of military operation against Iraq -

MOSCOW. March 17 (Interfax) - U.S. Ambassador to Russia Alexander Vershbow
has said Russia will be warned about the time when military action against
Saddam Hussein's regime is to be launched, if such a decision is made.
In an interview with Interfax, Vershbow, however, said such a decision
has not yet been made.
The ambassador said the U.S. will be in permanent contact with Russia
and will keep it informed if military actions are to be taken in Iraq. When
asked to clarify whether Russia would be notified prior to the fact, he
answered positively.


Putin offers Chechens sweeping autonomy under new constitution
March 17, 2003

Russian President Vladimir Putin offered Chechnya "sweeping autonomy"
within Russia if the separatist republic approved a new constitution in a
contentious referendum next weekend.

The constitution would "give Chechnya a chance to reconstruct its life and
obtain sweeping autonomy within Russia's borders," Putin said in a
televised address broadcast late Sunday to the few Chechen households that
still have access to television.

Putin's speech was also broadcast in full as top news on Russian news
bulletins on Monday morning.

The Russian leader -- linked inseparably to the campaign that he launched
in October 1999 -- said voting in the referendum would be "an important
step" towards ending the devastation caused by fighting and restoring order.

"Only the people can determine their destiny. You have your children's
future in your hands, and that of your homeland. So I call on you to vote
and make a correct choice," he said.

The poll comes three and a half years after Russia, headed by then prime
minister Putin, sent its troops into Chechnya to put down a separatist

Critics argue that the security situation in Chechnya, where rebels
continue to inflict regular losses on Russian forces and pro-Russian
administrators, is too precarious to lend the poll validity.

Russian liberals gathered in central Moscow Monday to speak out against the
disputed vote, which comes against the backdrop of daily violence in the

But, split for much of the past decade on the issue, they ended up fighting
among themselves instead of uniting against the referendum vote.

A statement saying that the referendum would be a "political mistake" was
not signed by Grigory Yavlinsky, the head of the liberal Yabloko faction
who is considered by some to be one of Russia's most influential lawmakers.

Those attending the session told AFP that Yavlinsky disagreed with the
premise that any peace conference between Russian officials and Chechen
separatists should not include Putin at the first session.

"We cannot afford to have the president (sit at the peace table) because
what he is trying to do is to fix the (Sunday) referendum," said respected
liberal lawmaker and member of the Memorial organization Sergei Kovalyov.

"He is only backing the policy of one of the sides -- the Russians. The
Chechens are not being involved," Kovalyov said.

Yavlinsky refused to sign the document, saying that any peace talks must
involve the Russian president directly and stormed out of the session, he

"We believe that only the president can take part in such talks," Igor
Artyomyev, a senior Yabloko party member said after Yavlinsky's departure.

Putin has argued that the new constitution would form the basis of a
durable peace in the republic. The Russian president has refused to parley
with the Chechen rebels, denouncing them as terrorists.

"A constitution accepted by its people would become a basis for a political
settlement in Chechnya, allowing them to choose truly democratic
authorities that would rely on popular trust," Putin said, stressing that
the republic would not be allowed to secede.

He said the new constitution would help end Russian troops' "security
sweeps," bureaucracy, corruption and the harsh military rule in Chechnya.

Putin also held out the prospect of an amnesty if the result of the poll
proved "positive."

A "positive outcome" to the referendum would allow the State Duma (lower
house) in Moscow to consider a request for an amnesty, he said in response
to clergymen who said there should be an amnesty for Chechens who had "gone

The Russian leader was upbeat in his assessment of the present situation in
the republic, though he admitted that life in Chechnya for the moment
"still looks as it has been hit by a natural catastrophe."

Around 530,000 Chechens are eligible to vote in the referendum, as are some
23,000 Russian troops permanently stationed in the breakaway republic.


March 17, 2003
Maskhadov falls victim to referendum campaign
By Artyom Vernidoub

In a televised address broadcast by the state-run Russia channel Vladimir
Putin has urged the Chechen people to take part in the forthcoming
referendum, on March 23, at which the new republican constitution is to be
adopted. Paradoxically, a day earlier residents of several Chechen villages
received leaflets, in which the separatist leader Aslan Maskhadov addressed
Chechens with a similar call. Observers, however, doubt the authenticity of
Maskhadov’s address, assuming it was falsified by unscrupulous federal

On Sunday evening Russian leader Vladimir Putin addressed the people of
Chechnya with a six-minute speech broadcast by state television. He
described the forthcoming referendum as ''a historic event'' for the
Chechen people and ''a very important step in the fight against economic

Putin promised Chechens ''broad autonomy within Russia'' outlined by a
special agreement on relations between the federal centre and the republic.
He mentioned the recent reduction of road checkpoints in Chechnya and the
partial withdrawal of troops. In his address Putin focused mainly on
Chechnya's economic problems, putting special emphasis on the restoration
of food and light industry, housing construction and the republic's oil
sector. The president promised financial compensation to residents who have
lost their houses and flats during the war. At the end of his speech, Putin
called on all citizens of Chechnya to participate in the referendum.

A day earlier residents of several Chechen villages received leaflets
containing Aslan Maskhadov’s address to the Chechen people, in which he,
too, urged them to take part in the referendum. During his trip to Chechnya
at the end of February, the Kremlin aide Sergei Yastrzhembsky called on the
pro-Moscow Chechen authorities to campaign more actively and ingeniously,
in order to persuade the republican residents to use their right of vote in
the forthcoming referendum. Obviously, someone has heeded Yastrzhembsky’s
advice and released a statement allegedly made by the Chechen leader, who
still enjoys certain influence in the war-torn province.

On Saturday the Interfax news agency reported that in leaflets that
appeared in several Chechen villages Maskhadov allegedly acknowledged that
his allies ''turned out to be the people's enemies". "The Arab world
betrayed the Chechen people to its foes,'' the statement signed by the
President of Ichkeria (Chechnya) reads. According to the leaflet, Maskhadov
urged the Chechen people to unite and vote in the referendum. In his
address Maskhadov apologizes to Chechens and says he was mistaken to
support the calls for independence.

The Chechen separatists immediately refuted the news of Maskhadov’s sudden
change of heart on their websites. The rebels claim that the leaflets had
been written and issued at the federal military base in Khankala.

In the Russian military there have always been experts in charge of
psychological warfare. They worked in Chechnya at the beginning of the
second campaign, throwing leaflets from helicopters. But now that the war
is over, or so we are told, the pro-Moscow republican authorities as well
as the pro-Kremlin United Russia Party have taken the task over from the

The Kremlin’s aide for Chechnya Sergei Yastrzhembsky ignored reports of a
change of heart in Maskhadov. That is easy to understand, since
falsification of Maskhadov’s statements amounts to not merely an element of
struggle against the Chechen rebels, but to a typical display of the dirty
campaigning so popular in Russia, despite efforts to counter it.

To ward off possible allegations that the Russian military could be
involved in disseminating controversial leaflets, the deputy to the head of
the Chechen administration Taus Dzhabrailov suggested that rebels
displeased with Maskhadov’s leadership could have planted them. In his
opinion, Maskhadov's rivals among the rebels might have written the
statement to divert foreign sponsors from Maskhadov and get hold of
finances from abroad.

That assumption is hardly convincing, however. It is difficult to believe
that the rebels’ sponsors would be so easily taken in by the hoax. It could
also be that the move to discredit Maskhadov could have been someone’s
private initiative, as not only the official authorities support the
referendum. For instance, Bislan Gantamirov, though a republican official
at the head of Chechnya’s press ministry, has recently launched a private
TV station. The channel began its work by actively supporting the
referendum campaign.

The main thing is that the rebels not only refuse to recognize the
forthcoming referendum, but are also set to do everything in their power to
disrupt the event. The other day, a rebel website published a verdict
passed by a court of Shari’ah, obliging Mujahedins to ruthlessly kill
anyone who takes part in campaigning and work at the polling stations.

Aslan Maskhadov’s latest official statement concerning the referendum
posted on the web is dated February 27. Unlike the court of Shari’ah the
Chechen leader did not openly call for his compatriots to be killed but
denounced the voting as an attempt to undermine Ichkeria’s statehood.

His aide Akhmed Zakayev reiterated that stance talking to Gazeta.Ru by
phone from London, where he is awaiting a court ruling on his extradition
case. ''All this is aimed to deceive public opinion in Russia, the world,
and to deceive the Chechens themselves. The referendum will bring nothing.
Such things are not held at the height of armed conflicts. The Chechen side
has said many times that it was ready to abandon the armed struggle. I make
it something like 22 times Maskhadov has proposed talks,'' Zakayev said.

As yet, it is quite difficult to figure out, who exactly is behind such
extraordinary methods of campaigning as distributing leaflets allegedly
signed by the separatist Chechen president, and it is highly doubtful that
the federal authorities will go to great lengths to investigate the
incident. But a probe into the leaflets, as to where and by whom they were
printed, could help answer many questions.


Nezavisimaya Gazeta
March 17, 2003
Experts comment on the significance of recent security structure changes
The link between the approaching election campaigns and the personnel
reshuffles in the security structures was confirmed by the president
Author: not indicated
Source: Nezavisimaya Gazeta, March 17, 2003, EV
[from WPS Monitoring Agency, www.wps.ru/e_index.html]

Are the latest rearrangements in the state security structures
connected to preparations for the upcoming parliamentary and
presidential elections? We asked some well-known political analysts to
answer this question.

People are saying that the president is trying to make the
security structures more effective. The former KGB has been partly
revived with the return of FAPSI (Federal Agency of Governmental
Communication and Information) and the Federal Border Guard Service
(FBGS) as constituent parts of the Federal Security Service (FSB) -
powers have partially been redistributed between the FSB, the Foreign
Ministry and the Defense Ministry - and the elimination of the Federal
Tax Police Service. This has very great significance for the reduction
of corruption and for reduction of pressure on the economy, on
business. This has no connection to the elections. It relates solely
to the executive branch, to the security structures. At the same time
Putin, obviously, is strengthening his own "personnel". All the new
appointments are people close to him. On the other hand, those who
have been sent to Brussels - both Fradkov and Totsky - were really
part of the former team. The strengthening of Putin's personal team is
not connected with any looming dangers, however.

The fact that there is a connection between the elections and the
reorganization in the security structures was confirmed by Vladimir
Putin himself. In an address to employees of the Prosecutor General's
Office, he said that there are particularly important tasks facing law
enforcement agencies in this election year. This sometimes happens to
politicians: they say more than they would really have wanted to say.
It prompts the question: what kind of specific tasks could be facing
the law enforcement agencies at election time? What - will more crimes
be committed? Do these have to be investigated more vigorously?...
Returning to your specific question, I think that such a link does
exist and the president essentially spoke about this. Or, to be more
specific, we all know what kind of special role the FAPSI plays in the
election process, and its transfer into the FSB means that the
functions in question will come under the control of people loyal to
the president, whom General Nikolai Patrushev can trust absolutely.
You see, up until now FAPSI was headed by Vladimir Matiukhin; but he
is viewed as an appointee of "Yeltsin's Family". So the idea of this
transfer and its connection to election campaign concerns is perfectly

I think that the elections and the personnel reshuffles are
totally unrelated matters. It has simply required a very lengthy
period for President Putin to take power. Putin came into an existing
team, and he had no extensive previous experience of state
administration. And while he settled into his place of power,
naturally, he did not make any changes. But the time came when he
started to understand what suited him and what did not suit him.
Structural changes in the government made earlier were dictated by the
concepts held by the people around Putin. Today, obviously, Putin is
forming his own concept of how it might be easier for him to control
the executive branch of government, and whom he would like to see
within this branch. When people say that Putin is strengthening the
FSB for the purpose of countering opposition, I think it's either a
propaganda trick or an error. I think that Putin, judging by his whole
character, is not the kind of person who would use unlawful methods of
rule. He may be as tough as necessary, but he will not act against
established standards, against the law. I do not expect any form of
revolutionary change from Putin, or any similar steps.

Of all the recent changes, only one is linked to the elections:
the appointment of Valentina Matvienko. This means she is being
groomed for the upcoming election for governor of St. Petersburg. The
other new appointments are not related to the elections. Putin is
strengthening state institutions as a whole, making them more
effective. Since he primarily relies on support from state
institutions in his battles with other groups, including oligarchic
groups, you could say that all the good things the president is going
to do for the state will serve to strengthen his own position for a
possible battle against he oligarchs. However, that way of putting it
is too abstract.
(Translated by Alexander Mazzucchelli)


Moscow Times
March 17, 2003
Oligarch Amnesty Is Not on the Money
By Matt Bivens

"The symbiotic relationship between political parties and the oligarchs is
surprisingly transparent. Voters see it, and they are disgusted by the
whole political system. This situation is reminiscent of unstable
oligarchic democracies in Latin America."
-- Anders Aslund, a Carnegie Endowment thinker, writing in Friday's The
Moscow Times.

Wow. That sounds bad.

Luckily, though, this problem is easily solved. As Aslund explains in
"Amnesty the Oligarchs," an op-ed piece that appeared on these pages,
President Vladimir Putin simply needs to guarantee the oligarchs their
property rights -- see, he should "legislate an ironclad guarantee of
property rights starting from a certain date." Aslund thinks a "natural
choice" for this date would be Jan. 1, 2000. This amnesty would "reduce
corruption," "revive the housing market," and make oligarchs stop investing
money in politics, which in turn would force Russian political parties "to
organize, formulate credible electoral programs and mobilize their voters,
thereby strengthening democracy."

What a beautiful vision.

A man surveys the nation and sees a handful of fat cats have bought all the
political parties and much of the federal and regional bureaucracies; he
sees voters aware of this and disgusted by the whole political system; he
sees parallels to history's worst banana republics.

But he also sees a solution: The president, a Christian of deep feeling,
simply has to make these fat cats assemble contritely before him; and then
in his most sincere voice, say, "By the power vested in me by a corrupt
political system that disgusts the voters, I absolve you of your sins. Keep
your stolen oil companies, nickel mines, gas fields; keep the unpaid taxes
and gobbled-up budget money; keep it all, as long as you took it before
Jan. 1, 2000. Go in peace, your 'property rights' secure."

Then the president makes the sign of the cross over the oligarchs, thunder
peals and lightning flashes, and oligarchs rise reborn. They will say,
"Look, we're safe. We no longer have to spend money on corrupting the
political system!"

And this will be a huge relief for these men, because throughout their
careers they have amassed gargantuan fortunes by spending relatively tiny
sums on bribery, graft, phone taps and videos of prosecutors cavorting with
whores -- and frankly they're tired of it. They'd much rather amass much
smaller profits via tiny investments into things that "add value" for the
ordinary Ivan -- you know, things like art galleries in New York City, or
pig farms, or, heh heh, The Moscow Times parent company.

So imagine the joy of the oligarchs when they rise from their knees and
realize they will no longer suffer from "extortion" (Aslund's word) by

"We can cut all those politicians off today!" the oligarchs will cry. "And
then they'll owe us nothing, and we'll owe them nothing, and they'll have
to turn to the people for support. And that'll mean they'll owe the people
and not us, so they'll do things the people want. You know, the people --
the ones who are disgusted with the way we stole the oil companies and the
nickel mines and then co-opted the political system. ... Hmmm. Well,
perhaps we should keep those politicians close after all. ... Yes, we
should. At least until we get an ironclad guarantee from whomever the next
president is that our 'property rights' will be respected."

Matt Bivens, a former editor of The Moscow Times, writes The Daily Outrage
at www.thenation.com


Drug Problem Cited at Russia Nuke Plants
March 17, 2003

MOSCOW (AP) - Drinking and drug abuse make the danger of accidents and
theft at Russia's nuclear facilities a severe problem, activists and
sociologists warned Monday.

Citing what they called a crisis in Russia's nuclear industry, members of
Greenpeace and other groups urged the government to improve safety and
security at existing sites instead of building more nuclear reactors.

President Vladimir Putin has stressed the importance of the nuclear sector
for defense and power needs. Russia said two years ago it wanted to build
20 new reactors by 2020 and double reliance on nuclear power - which now
accounts for about 14 percent of Russia's electricity.

At a news conference Monday, experts described a nuclear industry beset by
alcoholism and drug addiction - and a leadership that not only fails to
address the problem, but aggravates it.

``Every day, every month, every year, we see less and less attention to the
human factor,'' upon which ``the safety of our country depends to a
decisive degree,'' said Gennady Denisovsky, of the Institute of Sociology
at the prestigious Russian Academy of Sciences. That inattention is a risky
mistake, Denisovsky said.

``A nuclear power plant does not fight alcoholism, it propagates
alcoholism,'' said Vladimir Lupandin, also with the Institute of Sociology.

``Alcoholics are advantageous for nuclear power plants - they are modest
and undemanding, they can work where all norms of sanitary safety are
violated, and they can be fired at any time,'' he said. He said drug abuse
is also a problem because of the high stress at nuclear facilities.

The Nuclear Energy Ministry has defended the industry's safety record as
very good and ministry spokesman Nikolai Shingaryov said Monday that
alcohol and drug abuse are less prevalent in cities housing nuclear
facilities than elsewhere. He said abuse among employees in responsible
positions is nonexistent.

Nadezhda Kutepova, director of the Planet of Hopes activist group, said
alcoholism is common at Mayak, a nuclear processing plant that was a major
Soviet-era weapons facility.

In Ozyorsk, the Ural Mountains city where Mayak is located, ``people
sitting with a can of beer on the bus on the way to work, people working
with hangovers - this is the norm.''

She said in 1999, Ozyorsk recorded the highest per capita growth in drug
addiction in Russia, and that the drinking problem developed in part
because of the Soviet-era teaching that alcohol helps counter radioactive

Last year, 45 cases of drunkenness on the job were recorded at Mayak, and
11 people were fired, Kutepova said. But she believes those statistics - at
a facility where she said workers could drink alcohol on the job during
Soviet times - are the tip of the iceberg.

She said Russia's ``closed cities'' - communities surrounding plants like
Mayak that were part of the Soviet nuclear weapons industry - should be
opened to increase accountability.

``In closed cities ... violations are simply covered up because nobody
wants them to get out,'' Kutepova said. ``The majority of people in
leadership positions protect their employees when they find them under the

She said reports of technical problems or safety violations often do not go
beyond the fences of facilities.

Sergei Kharitonov, who worked for 27 years at the Leningrad Atomic Power
Station near St. Petersburg, said nuclear power plants have similar problems.

Kharitonov, who works with the Norwegian environmental group Bellona, said
the Leningrad plant suffers from ``a total lack of a culture of security.''


No. 40
March 2003
[translation from RIA Novosti for personal use only]

Society is waiting for the appearance of three new
political parties: a democratic, a national-patriotic and a
socialist ones, say experts of ROMIR Monitoring and the
Regional Political Studies Agency, which polled 1,600 people in
28 constituent members of the federation.

Nearly 70% of the polled agree that the country needs a
national idea and the bulk of them favour two projects: a
democratic and patriotic ones. As many as 32% of the
respondents cited either notion as the basis for the national
idea, 14% opted for the great-power spirit and socialism, and
the rest mentioned national identity, communism, religion and
capitalism (see Table 1). The aggregate figure exceeds 100%
because the respondents could choose several answers.
"One should not take these results too literally, setting
different ideologies against each other," says Mikhail Tarusin,
director of socio-political studies at ROMIR Monitoring. For
example, 69% of the democracy-supporting group embrace the idea
of patriotism. In general, the advocates of all ideological
trends uphold the idea of patriotism; it has become nearly bad
taste not to be patriotic now, say sociologists.
Democracy as the basis for the national idea is advocated
mostly by well-educated people with a medium income aged 25-50.
The groups of those who prefer patriotism and great-power
spirit include very many pensioners (36% and 34%,
respectively), who are worse off materially.
The adepts of socialism and communism are the oldest group
(two-thirds of it are pensioners) with a great many believers
(who go to church at least once a month) and superstitious
persons. This combination of belief in God, Zyuganov and occult
forces can give rise to a new ideology, the more so that the
population of Russia is gradually becoming older.
Sociologists also asked if the country needs a new
political party. "We tried to see what is happening to the
voters not within the framework of the political projects
offered to them but under the influence of ideologies in their
minds," says Mikhail Tarusin.
Over 40% of the respondents believe that they need new
parties (see Table 2). Scientists explain this by the
disappointment of socially active people in the current
political players. These new parties should focus on the three
predominant public preferences: democracy; socialism;
patriotism and great-power spirit.
"Democrats" say more actively than "patriots" that the
country needs a new political organisation. Sociologists
explain this by the relative youth of the group and by the fact
that "patriots" mostly carry their ideology "within," meaning
that they energetically discuss the idea but cannot get down to
establishing a social structure that would embody it.
"Socialists" and "communists" come third and fourth,
respectively, as a considerable part of them are disappointed
in Zyuganov, Seleznev and Anpilov.
So, a party that would rally the people under the
ideologically kindred notions of patriotism and great-power
spirit and would also uphold democratic values will express the
socially most wanted idea. But there is a "but" - the number of
participants in the Russian political show is limited and the
appearance of a new player in the election year seems quite

Table 1
What Should Be the Basis of the National Idea?
1. Democracy 32%
2. Patriotism 30%
3. Great-power spirit 14%
4. Socialism 14%
5. National identity 13%
6. Communism 8%
7. Religion 6%
8. Capitalism 3%
9. No answer 6%

Table 2
Do We Need a New Political Party Now?
1. Yes 41%
2. No 53%
3. No answer 6%



Vremya Novostei
March 17, 2003
Positioning of the Russian political forces
Author: Dmitry Olshansky, Director of the Strategic Analysis and
Forecasting Center
[from WPS Monitoring Agency, www.wps.ru/e_index.html]

Determining the public's preferences six months ago, pollsters
assumed that the proportion of the "undecided" (i.e. the "swamp,"
those who don't know whom to support since nobody seems to be worthy
of support) was around 20-25%. This was normal, with over a year
before the elections. However, six months ago the situation changed:
the "swamp" expanded and now includes some 40% of the electorate. Whom
they may like and support at the very last moment is an alarming
In order to clarify the situation within the parties, jointly
with the Glas Naroda (People's Voice) center for the study of public
opinion, the Strategic Analysis and Forecasting Center questioned 55
experts. They were asked to evaluate the parties' potentials on ten
parameters: support's organizational structures, creative potential of
electoral headquarters, administrative resources, renown of programs,
financial resources, charisma of the leaders, scope of the PR-actions,
reputation among the electorate, information support of the media
agencies, electoral support.
The parties were given the highest evaluations for their
financial resources, information support of the media agencies,
promotion of their leaders and the renown of the parties' brands. This
enabled outlining a chain: money - media agencies - party leaders and
The lowest evaluations were given for potential of the
headquarters and renown of programs and, as a consequence, (with the
exception of the CPRF and United Russia) the electoral support. This
also makes a chain: low level of functionaries - indistinctness of
programs - non-preparedness of the population to support them. The
parties are interested for PR-politics, while the population is
unprepared for that.
The top ten of the parties was divided into two and a half
groups. The first group: the CPRF, United Russia, the LDPR and
Yabloko. Their chances seem to be more preferable so far. However, the
URF and the People's Party of Russia, the latter rising from the
second group, are very close to them and are ready to struggle to the
passing vote. The two parties mentioned last make a "sub-layer"
between the first and the second group. The second group includes: the
Agrarian party of Russia, the Green (former Kedr) Ecological Party,
the Party for Restoration of Russia and the Party of Life. In the
majority of parameters, the latter two are about to leave the top ten.
To enlarge the picture we have calculated the total of places in
all parameters (the smaller the amount, the higher is a party in the
top ten).
1. The CPRF - 25.5
2. United Russia - 31.5
3. The LDPR - 32.0
4. Yabloko - 33.5
5. The URF - 41.0
6. The People's Party of Russia - 56.5
7. The Agrarian Party of Russia - 72.5
8. The "Green" Ecological Party - 78.0
9. The Party for Restoration of Russia - 97.0
10. The Party of Life - 94.5
Let's compare the leaders. The CPRF relies on the high level of
party structures; renown of its program; habitual name and stable
electorate. It won the second positions for the administrative
resource, (the "red" governors are meant), charisma of the leader and
PR-actions. However, the CPRF didn't put on weight. Results of United
Russia are lower than its claims to creation of the "ruling majority."
Thus far its potential relies on the first positions for the
administrative resource, finance and support of the state-control
media agencies. That's all.


As evaluation of the support's organizational structures
indicated, there are only two parties the organizational structures of
which are estimated "above the average" - the CPRF and United Russia;
at the same time, organizational structures of the LDPR have enhanced
over the past few years (the third place, followed by the URF and the
People's Party of Russia).
Creative potential of the headquarters. The amazing fact is that
the Ecological Party won the third place in this aspect, but the
paradox is well-programmed. The parties have so slight distinctive
factors that, stressing that they are not politicians, the Green look
more "advanced" against the background of the boring general party
rhetoric. The People's Party of Russia won the fourth place in this
very aspect, due to its non-trivial approaches. The sixth place of
United Russia is alarming. It should be noted that if Yabloko (ranking
first) and the URF (second) are still heading the list, the experts
expect no "creative activities" from the CPRF, the LDPR and others.
United Russia won in the nomination administrative resource. The CPRF,
the PPR and the URF are close to one another, claiming to a small part
of the administrative resource. "The administrative resource" is
connected with proximity to the executive branch of power (United
Russia), influence of the regional leaders (CPRF) and general
"belonging to power." The latter seems to be the privilege of the
parties which already have their representation. The PPR and the URF
go ahead of the LDPR and Yabloko.
The population knows little about programs of almost all of the
parties and, in the opinion of experts, the CPRF alone was evaluated
higher than the average in this issue. The communist ideas enjoy
popularity of some Russians. Yabloko with its human rights protection
ideas, the URF with its ideas of economic liberalization, the LDPR
with its patriotic rhetoric and the "Green" with their ideas of
environment protection follow the communists with a large gap.
United Russia is far ahead by its financial resources. Yabloko
and the URF are a little poorer, followed by the LDPR, which is
slighter rich than the CPRF.
The charisma of the leaders seems to be unexpected under the
current conditions. Zhirinovsky, even though our intelligentsia is
annoyed with him, won the top place. Gennady Zyuganov, who has tamed
the public, proved to be the second. Grigory Yavlinsky, who hadn't
seemed to be charismatic before, finished the third. All of a sudden,
the URF leaders won the fourth position. To all appearances,
"brilliance" of Boris Nemtsov and Irina Khakamada are intentional.
This is not a charisma, but its PR-imitation.
Equal evaluations of leaders of United Russia (Boris Gryzlov),
the PPR (Gennady Raikov) and the Party for Restoration of Russia
(Gennady Seleznev) are noteworthy. These leaders seem to be typical
creations of the political system, ranking officials pushed into the
public. Their charismatic potentials are limited. Although, in the
election campaign Raikov's potential may prove to be higher than those
of Gryzlov and Seleznev at the expense of the demotic rhetoric.
The LDPR won the first place by brilliance at the expense of its
leader's PR-efforts. The ruling party shares the second and third
places with the CPRF. Besides the LDPR, none of the parties reach even
the average level by the scope of their PR-actions.
The CPRF leads in the nomination reputation among voters, due to
its 80-year-old brand name; with the LDPR holding second place thanks
to its publicity stunts. Yabloko managed to take third place, owing to
its constant "special opinion." United Russia ranks fourth.
United Russia enjoys the most evident support of the media
agencies, which the experts link to its financial and administrative
resources. The LDPR, the presence of which in the news reports become
oftener after the New Year, ranks second, followed by Yabloko and the
The CPRF ranks fourth, even though the circulation of all left-
winged editions around the country is about 30 million copies.
By evaluation of the electoral support, the CPRF holds the
leading place, followed closely by United Russia. The LDPR ranks the
third with a gap. The gap of Yabloko from the LDPR is less than from
the URF which is on the fifth position, followed by the PPR.
However, it shouldn't be forgotten that the situation will be
(Translated by Andrei Ryabochkin)


OPINION: Fashionable Feudalism
Contributed by Peter Lavelle
Moscow-based analyst

MOSCOW, Mar 17 /Prime-TASS/--Amongst most observers of Russia,
it has become a cardinal rule of faith that this country's
transformation away from communism is essentially the adoption or
even duplication of Western institutions and ideas. These assumptions
are so embedded in the discourse on today's Russia that the concept
of change is measured by the ideal type that is assumed to exist in
the West, be it in discussions of whether Russia's economy can be
described as a market economy, if its society can be considered a
civil society or whether its democracy is a meaningful and lived

Of course, this is understandable - the confident West sees the world
through the lens of its own constructed definition of its successful
self. Russia's political elite does not publicly disagree with this
outlook, as adopting the West's teleology of progress hides what
Russia has become 10 years after the collapse of the Soviet Union: A
feudal system mixed with a modern, if not fashionable, sensibility.

The use of the term "feudalism" has a dual fold. First, it is a
pejorative appellation describing anything deemed to be anti-modern or
backward looking. This usage is emotive. The second designates a
political and economic system prevalent in Europe in a certain period
- the Middle Ages. Historians of this period have identified and
generally agreed on its basic elements - which can also be found in
Russia's political economy today. What makes this difficult to discern
for some is that it has a veneer of modern fashion.

If this seems a bit too esoteric to have anything to do with Russia,
then consider six elements that have common currency among those who
study feudalism and that reflect of the state of Russia today. The six
elements are: heavy cavalry, vassalage, enfeoffment immunity, private
castles and chivalry.

The heavy cavalry is, of course, Russia's oligarchic class or feudal
lords, created during the chaotic 1990s and negotiated with under the
Putin presidency. During feudalism, the heavy cavalry was officially
with its state-of-the-art armor charged to protect the state while, in
the process, becoming the force that could undermine the king's
legitimate right to rule. The president is the lord of the realm, but
he is prisoner more often than not of his retainers, who, in theory
serve the sovereign but, in reality, tolerate him. This is an echo of
feudal power relations.

Vassalage is very prevalent in Russia today, it is just called
something else: The "krysha" (roof) phenomenon has not only been
recognized, it has been institutionalized. Under feudalism, every man
had a lord; in today's Russia, this appears to be the case as well.
Those who claim to be part of the middle class have made being able to
pay off the corrupt and rent-seeking and pyramidal bureaucracy as
something normal. Free holds of land were an anomaly under feudalism;
they are an anomaly in Russia today. And, for the powers-that-be,
i.e., the new ruling financial class, the idea of production for use
over exchange limits Russia's economic potential. Just as during
feudalism, a mutual contract of reciprocal duties and obligations is
observed in Russia: The vassal swears to serve and protect the lord
and maintain the status quo for unspecified protection in return.

The concept of enfeoffment also applies to present-day Russia. Back
then, enfeoffment meant when the patron sovereign would make a gift of
land to a lord in the vague expectation of reaping some future
advantage. In Russia case, land is access and financial enrichment by
way of natural-resource exports. It needs to be remembered that, when
the sovereign died or was replaced, the social contract that defined
feudalism had to be renegotiated. This sounds vaguely similar to the
recurring fear that the state has designs to some how return natural
resources exports for its own self-aggrandizement.

Immunity from the law should speak for itself. Exemptions from the law
were the hallmark of what was wrong with the feudal system and what is
wrong with Russia today. Corruption remains rife in Russia, and the
state is doing its best to normalize and regulate it - not eradicate
it. In today's Russia, the greater the corruption, the better chance
no jail time will ever be served. A promotion to pillage yet more is
the negotiated penalty.

Private castles during feudalism were the savior and, later, the curse
of that system. The ability to protect the king or prince's realm long
after the raiders of that time had departed foresaw the collapse of
feudalism. The castle walls of Russia's oligarchs are thick and almost
impervious to state intervention. Feudalism was about survival in a
world that was threatening until the system became a barrier to change
for those who no longer needed the legitimating power of the ultimate
temporal lord. An interesting historical note is important here: When
Western Europe was pulling down its feudal castle walls, the Kremlin
was being built.

The idea of chivalry may be the oddest thing one comes across when
comparing feudalism to present day Russia. Loyalty has nothing to do
with the law books in contemporary Russia, but loyalty is the
unofficial law of the land. Feudalism created the precursor of the
modern idea of honor. Among the business elite and government, honor
means little more than maintaining a delicate status quo - those who
are part of the in group are to be treated as family, no matter how
egregious the offense. This contemporary expression of chivalry in the
service of the supreme lord does not serve the best interests of
Russia in the longer-term.

So where does the fashion part of the equation come in? Fashion, in
Russia's case, is a function of a desire for order and a modicum of
certainty. A fashion is a class of acknowledged appearances in dress,
thought or behavior that aims to signify membership in a dominant or
influential group and epitomize one's merit as a constituent member of
that group. A fashion therefore creates a pattern of social relations
focused on display. Fashion, more often than not, is the property of a
ruling class and part of its modus operandi of legitimization.

Much has been said about Russia's reform project, but there has been
not a meaningful breakthrough creating a new Russian future. The bean
counters and pundits would have us believe that the right path, the
West's path, is slowly but surely being followed. However, few have
given thought to the fact that driving a BMW, vacationing in the hot
spots of southern France and owning a mobile telephone only might look
Western, but looks can be deceiving. Modernity is not about
appearances or the possession of high-tech amenities. Modernity is a
certain social sensibility and mindset. Russia today lacks both.

Peter Lavelle is a Moscow-based analyst. He is currently writing the
book to be titled "The New Kremlin Walls: Russia's Political


Moscow Times
March 17, 2003
Investors Toast Putin in New York
By Boris Fishman
Special to The Moscow Times

NEW YORK -- President Vladimir Putin and his economic team were the heroes
of the day at the seventh annual forum on Investing in Russia & CIS, hosted
by Sachs Associates and Bloomberg at the Plaza Hotel last Thursday.

In formal presentations and private conversations in the lavish reception
rooms, conference participants agreed that Putin's stewardship has fostered
unprecedented political stability and enabled significant macroeconomic
reform in Russia.

"There is a sense of Russia truly coming of age," said former U.S.
Ambassador James Collins, now a senior advisor at Akin Gump Strauss Hauer &
Feld. "They've always known how to improve the economy, but the political
environment hasn't been conducive. With Putin, this missing ingredient is
finally in place."

Although the dreary performance of world markets has contributed to more
modest GDP growth, the Russian economy had another surpassing year in 2002,
outperforming almost every other emerging market. Central Bank reserves
exceed $50 billion, foreign debt as a percentage of GDP has fallen by 20
percent since 2000, and real incomes increased by 10 percent last year.
Russia was also one of only two nations operating a budget surplus in 2002,
said William Browder, CEO of Hermitage Capital Management.

As a result, investor confidence has risen dramatically. General Motors,
Caterpillar, and Frito-Lay are developing new projects in Russia, and
enterprises as diverse as Nike, Dow Chemical and Wal-Mart have investigated
the possibility of joining them. Last month, BP's landmark commitment of
$6.75 billion to a joint venture with Tyumen Oil Co. served notice of a new
era in foreign investment.

"We've reached the point when this kind of transaction leads to an increase
in share price," said Charles Ryan, the CEO of United Financial Group.
"Only several years ago, a deal like this would have sent shareholders out
of the room gagging." Ryan also pointed out that Russians themselves were
showing a newfound faith in their economy. Native capital returned to
Russia in record numbers in 2002.

But disagreement between Russia and the United States on war in Iraq
deflated some of the prevailing optimism. Both political and economic
stability -- and, consequently, the investment climate -- depend on the
course Putin elects. If the country sanctions the war, he risks handing the
Communists, eager to portray him as an American lapdog, a public relations
coup on the eve of parliamentary and presidential elections. A Russian
veto, on the other hand, would likely restrict Russia's access to the
spoils of postwar Iraq, a crucial source of income Putin would need to
offset declines in revenue caused by falling oil prices and unwelcome
reforms in pensions and the electricity sector. The Communist opposition
draws most of its support from Russians embittered by poverty.

Dimitri Simes, the president of the Nixon Center, noted the dramatic change
in Russia's position on the war in recent weeks. "Just several weeks ago,
you had Russian officials privately reassuring the American government that
the talks with France and Germany were meant merely to appease public
opinion back home," he said. "That kind of implicit guarantee hasn't been
available in the past 10 days. There is a distinct possibility that Russia
may choose to veto. We've really underestimated the degree of resentment in
Moscow toward U.S. foreign policy."

Boris Nemtsov, a leader of the Union of Right Forces, said the Russian
government felt short-changed by the Bush administration. "After 9/11,
Russia was the first country to support the United States in its war on
terror," Nemtsov said. "We provided assistance in Afghanistan. We approved
American bases in Central Asia. And what did we get in return? Even
Jackson-Vanik still exists. It's like a bad joke."

Simes and Nemtsov warned, however, that Russia could not weather the
consequences of a veto, referring to the promises of economic retaliation
from American officials in recent days.

"We have to think about our long-term strategic interests," Nemtsov said.
"We can't afford rash behavior. Sometimes it's tough for men to set aside
their emotions, but there's no other choice here. President Putin
understands that."

Conference participants disagreed on whether the economy were sufficiently
diversified to withstand a fall in oil prices. Christopher Weafer, the
chief equity strategist at Alfa Bank, conceded that Russia remains
oil-dependent, but he said that it was far less vulnerable than several
years ago to a steep slide in oil revenue. "In 1998, the Russian economy
needed more than $26 a barrel to balance," he said. "Today, that figure is
$16." Whether the Russian economy will come to resemble Portugal's -- as is
Putin's much-publicized aspiration -- or Venezuela's, its fortunes
determined by boom-and-bust oil cycles, remains to be seen, he said.

Ryan pointed out that the oil sector claimed a mere one-seventh of foreign
investment in Russia, and that considerable gains posted in consumer goods,
construction and engineering offered evidence of a diversifying economy.

Most presentations ignored Iraq and oil dependence altogether, focusing
instead on strides in ownership rights and debt servicing, and reforms
necessary to encourage investor confidence. Speakers said an overweight,
obstructionist bureaucracy and a weak judiciary sabotaged foreign
investment, as did unreliable corporate governance and persisting
corruption. As usual, the harshest criticism was reserved for the banking
sector. A proliferation of small banks subsisting on negligible assets
unbound by effective regulation have resulted in mistrust of the banking

Nonetheless, the consensus seemed to be that Russia had earned
investment-grade status, the coveted seal of approval conferred by rating
agencies such as Moody's. Helena Hessel, a director at Standard & Poor's,
was less sanguine. She cited the deceleration of reform in view of
impending elections and declines in GDP growth as reasons the upgrade was
at least two years away.

Browder coyly undermined her assessment.

"It would seem that the market has been a better indicator of economic
performance," he said. "The credit agencies failed to downgrade Russia for
163 days after it defaulted in August 1998. They did a little better with
Enron -- that downgrade came only two days after the company filed for

The comment drew grateful snickers from an audience sapped by a day of
phlegmatic presentations delivered either in a joyless monotone or with
ear-straining speed required by the brief time allotted to speakers.

Rushing through his PowerPoint presentation, Weafer seemed to propose that
oil sector reform might begin with the unpronounceable names of firms like
Surgutneftegaz, but the audience, casting longing looks toward the coffee
and dessert being served in the outside hall, failed to pick up on the humor.

In the reception chambers, the mood was more upbeat. Though half the name
tags on the welcome table remained unclaimed, the conference brought
together many old acquaintances and business partners, lending a genial
atmosphere to the proceedings. Amid the bullish banter of the assembled
brokers, investors, and company executives, it was sometimes difficult to
imagine they discussed a nation that only four years ago seemed at risk of
receding into chaos. Indeed, if it weren't for the surnames, the accidental
visitor might have assumed this was a fund drive for the South Koreans. The
bland lunch of grilled chicken and pasta salad was avowedly stateless in
its influences, and the gallantly attired Russian executives who made
presentations seemed to have embraced the global nature of their economy to
the point that the English translator wandered the halls without much to
do. Investment in Russia seemed a no-brainer.

"We are always accused of being boosterish here," said Robert Langer, the
bearded, affable moderator of the afternoon panel and a partner at Akin
Gump. "And we certainly should talk more about what we've gotten wrong. But
I think the glass is definitely half-full rather than half-empty. What it's
full of, I'm not sure I could tell you."


March 14, 2003
The Pax Americana, the Russian ruling elite, and the Kasianov government
Author: National Strategy Council report
[from WPS Monitoring Agency, www.wps.ru/e_index.html]

We present to our readers some excerpts from the National
Security Council's report on the risks and threats facing Russia in
2003 - a report which has drawn a great deal of attention, becoming a
political event. While "Konservator" does not agree with many of the
assessments and conclusions in this report, we still consider that the
approaches it takes to interpreting the political situation in
contemporary Russia are fairly characteristic and worthy of attention
and a response. Readers can find the full text of the report on our
website: http://www.egk.ru


A general trend in recent times has been the rapid formation of a
new unipolar world order, which rejects commonly-accepted standards of
international law, guarantees of nation state sovereignty, and common
criteria of rights and liberties for all citizens, including ethnic
and religious minorities. This world order - which is presented as an
essential response to the threat of international terrorism - ignores
other, no less significant, threats to global development and
international peace and stability: the widening gulf between
development conditions for rich and poor nations, lack of access to
modern technology for the majority, and continuing, chronic poverty in
many regions of the world.
The world is seeing more intense competition for the right to be
part in the "club of winners": for the opportunity to invite the
United States to make amendments to the "rules of the game", for
corresponding interests to be taken into account in the new "global
matrix" of the US.
In the late Gorbachev era and the Yeltsin era, the Kremlin made
geopolitical concessions in exchange for aid from the West (primarily
from the US), while implementing liberal reforms in politics and the
economy, and suppressing widespread opposition to unpopular changes.
The West was also primarily interested in seeing that post-Soviet
territory should not become the kindling place of a major military
conflict or a source of global destabilization.
Under Vladimir Putin, cooperation in its previous form is
The ruling elite (the oligarchs and their political
superstructure) is prepared to give up Russia's status, its real role
as a regional power and the localized heir to the superpower that was
the USSR - in exchange for legitimization of the capital which was
taken out of Russia to the West between 1991 and 2002, security
guarantees for the owners of that capital, and the integration of
those owners into the Western (international) elite. The United
States, as the world's only remaining superpower, is acting as
guarantor in this deal. The sums of money which need to be legitimized
amount to around $100-120 billion. Essentially, it's a matter of a
strategic alliance between the Kremlin and the Republican
administration in the US, based on acceptance of the terms set down in
the Amerocentric world which is being created (the Pax Americana).
The process of providing international legitimization for the
capital of Russian oligarchs also entails a gradual transition of a
significant part of Russia's strategic resources and key economic
facilities to the direct control of the major corporations of the
Anglo-Saxon world.
Washington launched intensive efforts to implement the Pax
Americana strategy immediately after the dramatic events of September
11, 2001. Not long before those events, the US administration approved
a five-year strategic plan for restructuring the world. This included:
a transition to direct control over sources of energy resources, and
thus over energy prices; as the first steps towards that, the conquest
of Iraq and establishing a totally Washington-controlled regime in
Venezuela (in 2003). Potential (expected) moves included: establishing
a completely loyal regime in Saudi Arabia and eliminating OPEC (in
2004); relegating the European Union, Japan, and Russia to the "second
league" in global politics, shunting them aside from the role of
independent "regional moderators"; establishing direct (not mediated
by other entities, despite their quasi-alliance status) military-
political control over regions which are potential sources of global
instability - primarily the Middle East, post-Soviet territory, and
South-East Asia; the isolation of China, as a potential alternative
superpower, including by means of supporting constant systemic discord
along the axes of China-India, China - the Islamic world, and China-
Nominally - according to formal agreements between President
Vladimir Putin and President George W. Bush - Russia is given the role
of an oil supplier to the United States, an alternative to the Islamic
world's oil suppliers. The US takes on a commitment to support energy
prices at a level acceptable to Russia (with oil prices at no less
than $20 a barrel).
Due to the abovementioned reasons, such a system of agreements is
in the interests of Russia's ruling elite. Russian oligarchs have
already expressed open loyalty to the new positioning within the Pax
Americana. It should be noted that Mikhail Khodorkovsky, owner of the
YUKOS oil company, who is considered the richest person in Russia
today, has publicly said that it might make sense to eliminate OPEC,
and for Russia to oppose OPEC before its elimination. This idea was
publicly supported by presidential economic adviser Andrei Illarionov
at the World Economic Forum in Davos in January 2003. (Andrei
Illarionov is considered to represent the interests of the owners of
Sibneft and Russian Aluminum, within President Putin's team.)
In December 2002, Russia's four largest oil companies - LUKoil,
YUKOS, TNK, and Sibneft - signed an agreement on building an oil
pipeline from Western Siberia to Murmansk, which would deliver oil to
the United States from 2007.
It should be stressed that such a system of agreements between
Washington and Moscow does not guarantee that Russia will retain the
role and status of a regional power. NATO membership for the Baltic
states and the establishment of US military bases in Central Asia
(accomplished), as well as in Georgia, Moldova, and Ukraine (planned
for 2003-05) mean that Washington, as indicated above, intends to
participate in implementing direct military-political control over the
territory of the former USSR, and to minimized Russia's independent
role across post-Soviet territory. As a result of priority measures
for shaping the Pax Americana, Russia is losing its capacity for
geostrategic maneuvering - and its ability to take part in forming
international coalitions as an instrument for counteracting global and
regional policies with which it does not agree.


At present, Russia's ruling elite is made up of a group of major
business tycoons (the oligarchs), who have concentrated in their own
hands control over key economic, political, administrative,
informational, and media resources. Russia's intellectual and cultural
elites cannot now be viewed as self-sufficient groups, and are
positioned solely in relation to the ruling elite. Neither the
bureaucracy nor the enforcement structures are independent groups with
their own ways of thinking. They are divided into factions attached to
the interests of various oligarchs (members of the ruling elite), and
dependent on the oligarchs.
Despite the increasing concentration of resources under the
control of its members, Russia's ruling elite is currently in crisis.
This crisis is primarily determined by the qualitative imbalance
between the level of abilities and the level of responsibility among
members of the ruling elite.
The ruling elite can be described as an elite only conditionally
(based on the classic definition of that term), since it is incapable
of making strategic decisions based on the demands of: a) nation-state
responsibility; and b) social responsibility.
The ruling elite does not consider itself as having a
responsibility to maintain Russia's nation-state and moral-ethical
foundations, or Russian culture and the Russian language as the most
important components of the nation's ethnic bulwarks. At the same
time, the ruling elite does not accept responsibility for ensuring
social harmony in Russia; or providing development opportunities for
the majority of citizens, who demand a reduction in the gulf between
the richest and poorest layers of the population; or implementing the
contemporary requirements of social justice which make up the
quintessential world-view of the vast majority of Russian citizens.
The logic behind the actions of Prime Minister Mikhail Kasianov's
government, which expresses the applied economic strategy of the
ruling elite, shows that the oligarchs have no intention of taking
responsibility for modernizing Russia's national infrastructure
either. On the whole, the contents of the pension reforms, the housing
and utilities reforms, and planned social sphere reforms come down to
making ordinary citizens pay for the costs of modernization.
In principle, the ruling elite does not view Russia's long-term
geopolitical interests or internal stability as being among its own
categorical imperatives.
All of the above enables us to conclude that the ruling elite is
not a national elite, and that it has a "time-server syndrome".
As the ruling elite of contemporary Russia was taking shape, the
"Yeltsin convention" was formulated and implemented; this set out the
basic rules of the game among the ruling elite, and the principles of
its interaction with the external environment. That convention was
based on segmenting Russia into quasi-feudal holdings, including both
regions and state agencies, as well as oligarchic empires. The
Kremlin, in the person of President Boris Yeltsin, acted as guarantor
for the convention. The "Yeltsin convention" was disavowed in 2000;
but no new convention appeared. Since its dependence on big business
had qualitatively increased, the federal government was incapable of
becoming an arbiter or authority figure. The declared rules of the
game - ignoring the law, in proportion to one's closeness to the
formal center of key state decision-making - were repeatedly violated.
This lack of clear and commonly-accepted rules of the game is like a
To one degree or another, the Kasianov government is implementing
the transfer of the spending burden for modernizing Russia's
infrastructure from big business to the citizenry, and the further
concentration of resources in the hands of a shrinking group of major
tycoons. By its actions, it is alleviating the negative effects of the
oligarchs' unconventional actions.
However, since it reflects the ruling elite, the Kasianov
government is not at all a united entity in terms of its thinking and
techniques. This government's collapse (see below) will take place at
the zenith of differences between the basic influence groups
represented in the Cabinet and in other key structures of the
executive branch.
Look at the following events:
- the privatization auction for a 75% stake in the Slavneft oil
- the battle over redistributing assets in the forestry sector,
which has clearly gone beyond the limits of law;
- the battle for leadership posts at Gazprom;
- the attack on the Russian Joint Energy Systems management team,
against the backdrop of RJES shares being bought up by structures
affiliated with the owners of Russian Aluminum;
- the battle for control over the NTV and TVS television
These events all demonstrate that one key player in the ruling
elite - the owners of Russian Aluminum (sometimes together with Alpha
Group allies) - have launched a decisive attempt to monopolize a
number of important national resources. This "conclusive
monopolization" of the economy will be extrapolated to politics
(control over the government and parties) and the media industry. In
the process, that key player in the ruling elite will rely on the
support of some exclusive political and administrative resources.
There are some declared political grounds for the monopolization
attempt: that key player in the ruling elite is presenting the Kremlin
with the thesis that only it is capable of being a reliable support
for the regime in the long term - and therefore, all these events are
highly significant in the lead-up to the parliamentary and
presidential elections of 2003-04. This, in part, is the motivation
behind the determination to inflict a decisive political-bureaucratic
defeat on RJES chairman Anatoly Chubais and members of the "St.
Petersburg liberals" faction in Kasianov's Cabinet. According to the
reasoning of that key player in the ruling elite, removing Chubais
from RJES, as well as removing Alexei Kudrin and Herman Gref from the
Cabinet, can be justified as a pre-election move; and therefore 2003
is the most favorable year for implementing such a personnel upheaval.
Very likely, parallel efforts will be underway to dismiss Alexei
Miller as chief executive of Gazprom, thereby destroying the political
and economic support base of Putin's "Leningrad team", which includes
such figures as Sergei Pugachev, Nikolai Patrushev, Igor Sechin, and
Viktor Ivanov. Efforts to push aside the "Leningrad team" will be made
under the banner of battling "incompetence", discrediting Putin
himself, as the source of personnel decisions. The "conclusive
monopolization" of political resources entails weakening Putin himself
as much as possible, making him a hostage to that particular faction
of oligarchs.
Essentially, this is a matter of transforming Kasianov's Cabinet
from an "oligarchic affairs committee" into the committee for the
affairs of that key player in the ruling elite. To a large extent,
this transformation is obstructed not only by opponents of the more
influential oligarchs in the ruling elite, but by the prime minister
himself, who developed into a self-sufficient political figure in
2001-02 against the backdrop of weak presidential rule. Thus, in the
event that Kasianov doesn't measure up to the goals and logic of
conclusive monopolization, the prime minister himself could fall
victim to this process before the December elections; and under those
circumstances, a party-based government model may be implemented.
In the absense of a new "Putin era" convention, "conclusive
monopolization" will lead to oligarchic power-struggles intensifying
drastically at all levels in 2003: in the economy, in state
administration, in law, in politics. The Duma elections will be the
culmination of that battle; it will peak in the pre-election period
(autumn 2003), and it could lead to the ruling elite in its present
form falling apart.


The Cabinet's dismissal has been predicted ever since it was
formed in May 2000. However, only in 2003 does there seem to be a real
intersection of factors objectively pushing the Cabinet towards
In its role as "oligarchic affairs committee", the government
could become a logical casualty of the "conclusive monopolization"
process. That key player in the ruling elite has been expressing a
certain amount of dissatisfaction with the actions of the Kasianov
government since the start of 2001. Initially, there was something
like "blackmail" of the government, with the aim of removing ministers
who were not at all loyal to the Russian Aluminum group - for example,
Alexei Kudrin and Herman Gref; and arguments were found for the
dismissal of Anatoly Chubais from his leading role at RJES. By 2003,
the prime minister himself was under attack. This bears no small
relation to the transformation of the system of interests of that key
player in the ruling elite: Kasianov has turned out to be politically
and conceptually unsuited to this.
Despite favorable external economic circumstances, the socio-
economic condition of the majority of Russian citizens has not
improved between 2000 and 2003; against the backdrop of the nation's
infrastructure crisis, it frequently appears disastrous. In the lead-
up to a series of elections, such a state of affairs could have a
substantial negative impact on the position of President Putin and the
political parties associated with him. In order to ameliorate the
negative political consequences of what is happening, the president
may choose to make a "ritual sacrifice" of the Kasianov government, as
scapegoat for the fact that the poorest groups in Russian society are
becoming even worse off. Along with the government, other figures
likely to be sacrificed are RJES chief Anatoly Chubais and Gazprom CEO
Alexei Miller, who may be named as the main guilty parties in the
energy crisis of winter 2002-03. Given that most Russian citizens
dislike Chubais, and that the media has created an image of Miller as
an incompetent manager, their dismissals - along with the dismissal of
the Cabinet - could be a tactically successful pre-election move.
Four to six months before the parliamentary elections, Putin
could, with some certainty, choose (nominally) the strategy of forming
a political (party-based) government. This would enable the president
to buy some time, in political and historical terms, and create the
illusion that the guiding logic behind political construction has been
changed - although a party-based government would actually be nothing
more than a manifestation of the "conclusive monopolization" process.
The following political structures are now under the direct
control of that key player in the ruling elite: the United Russia
party, the People's Party of Russia, and the Yabloko party. The
Communist Party is partially controlled by that key player in the
ruling elite. All of the above-mentioned parties could be used as the
basis for forming a political (party-based) government.
The post-Kasianov government would declare a "shift to the left"
in socio-economic policy, and a battle against "liberal obstructions".
Such publicity, and the public's willingness to wait a while in the
hope of improvement, would enable such a government to maintain some
level of popularity for six to twelve months. Essentially, as
described above, a post-Kasianov government would be a tool in
"conclusive monopolization"; and the real policy program of such a
"party-based government" would be determined by that fact.


The National Strategy Council is an independent, non-government,
non-profit organization (partnership) established in 2002. Its
founders and participants include many well-known and influential
political analysts. The National Strategy Council has been created as
a non-government think-tank, intended to counter the shortage of
conceptual strategic planning in contemporary Russia. In January and
February 2003, the National Strategy Council produced reports entitled
"The Big Game in Russia" and "Risks and Threats for Russia in 2003".
(Translated by Arina Yevtikhova)


FEATURE-Image-conscious Russian women fuel cosmetics boom
By Julie Tolkacheva

MOSCOW, March 17 (Reuters) - In Russia's crisis year of 1998, when banks
collapsed, life savings were wiped out and hundreds lost their jobs, a
leading market research team asked Russian women whether they would spend
less on cosmetics.

Despite the hard times, the majority said no.

"For Russian women it is very important to be beautiful and they were not
willing to change," Marya Vakatova, communications director at market
research firm COMCON, told Reuters.

And with the economy now back on course thanks to high energy prices and
post-Soviet structural reforms, Russian women are on a spending spree.

"A Russian woman is used to styling herself very fashionably, she dyes her
hair, wears expensive perfumes and expensive labels," said Mattias Schupp,
managing director for the German hair-care group Wella in Russia.

"But what is most important is that the mass market is growing. People have
more money to spend."

Unlike women in most other countries, Russian women are not burdened by
expenses for education, mortgage and insurance and have more disposable
income to spend on cosmetics, Schupp said.

"A Russian woman takes much more care of her outward appearance than women
in Germany. If I was to compare Russian women with European women, I would
compare them with Italian or French women," he said.

According to Sweden's direct sales cosmetics group Oriflame, Russia's
cosmetics market is worth $8 billion a year, and set to swell still further.

"I am sure the market will increase...20 to 30 percent a year," said Johan
Rosenberg, Oriflame's general director for Russia. "And we are still very
far from Western consumption levels on cosmetics, though a large portion of
disposable income is spent on it."

He said Oriflame's sales rose 55 percent last year and the company expected
another 50 percent rise this year, but he declined to give absolute
figures: "Growth here is bigger than in many other countries."


Encouraged by its success in Russia, Oriflame has decided to build a
factory on its own plot of land west of Moscow.

"It is the biggest single investment Oriflame has ever made and it will
also be Oriflame's biggest factory," Rosenberg said.

Construction will start this year with the first products, around 30 to 40
percent of the Oriflame range, due to roll off the lines at the end of next

"With the rate at which Russia is developing, the rate at which purchasing
power is increasing and the direction the country is taking, we are very
positive," Rosenberg said.

The factory will primarily supply Russia and the CIS but could also serve
as an alternative supply point for some Eastern European countries.

And Oriflame is not alone. U.S. cosmetics company Avon, known for its
door-to-door sales, is also thinking of building a plant in Russia.

"Avon is evaluating options for building a manufacturing facility in Russia
and...intends to apply for permission to construct this proposed facility
in the Moscow region," Avon said in a statement, but declined to give more

Wella has a factory in the Volga city of Nizhny Novgorod which supplies the
whole of Russia with Wella consumer products as well as with two hair care
products sold only in Russia.

"The competition here is very strong," Schupp said. "All the main
competitors are here. The market is good for well-established companies and
we see our future here. For new people coming into this market I think it
is a bit too late."

But Oriflame's Rosenberg said he saw no shortage of companies seeking to
compete for the attention of beauty-conscious Russian women.

"There will be more and more competition," he said. "The more the country
develops the more competition there will be, both local and foreign."

Industry sources said Russian women like different products to their
Western counterparts, preferring brighter colours and make-up to skin care.

Rosenberg said Swedish women used more skin care and sun protection products.

"It has probably to do with a person's disposable income and in some part
to education," Rosenberg said. "People here are not so much afraid of sun,
because the knowledge is very poor about what it can do to you in the future."

But he said Russians' tastes would come closer to Western ones as the
market developed and people became more informed.

"A Russian woman is very extravagant, she is not conservative as we see in
other countries," Schupp said.

"Some people, not knowing Russia, say that all Russian women are blonde. I
think this time is over. They are really very fashionable. Russia is an A
market for us."