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1. BBC Monitoring: Will USA bring democracy to Kyrgyzstan Iraq-style, with cruise missiles?
2. BBC Monitoring: USA's psychopathic cowboy versus Iraqi hero - a Kyrgyz view.
3. AFP: War jitters no barrier for Russian sun-seekers.
4. New York Times: Michael Wines, Russia Sees a Chance to Get Some Respect.
5. Washington Post: Sharon LaFraniere, Rift Over War Sours Bush-Putin Partnership. U.S. Officials Working for 'Damage Limitation.'
6. BBC Monitoring: Iraq war not to spoil US-Russian ties - liberal MP. (Yavlinsky)
7. Interfax: One in two Russians backs government policy on Iraq - poll.
8. New York Times editorial: Supplying the Enemy.
9. UPI: Sam Vaknin, Russia's stealth diplomacy.
10. The Economist (UK): Chechnya's referendum. The vote of the dead souls. The referendum on Chechnya's future was haunted by spirits of the past.
11. ITAR-TASS: Leader of pro-Kremlin party outlines its tasks.
12. Reuters: Pro-Kremlin party to challenge economic reformers.
13. The Independent (UK): Is Russia at last facing up to its image problems? To attract foreign investors, the country must try to shake off comparisons with the Wild West. Paul Lashmar, James Mawson and Adrian Gatton report.
14. AFP: Resurgent Russia flexes economic muscle in Armenia.
15. BBC Monitoring: Russia's national power grid head gives details of communal reform. (Chubais)
16. BBC Monitoring: Crime and abuse in Russia's "degenerating" army.
17. AP: Russia Displays Art Looted From Germany.
18. Moscow Tribune: Dmitry Polikarpov, Kremlin planing to combine regions.
19. Moscow Tribune: Dmitry Polikarpov, Police end passport checks.


BBC Monitoring
Will USA bring democracy to Kyrgyzstan Iraq-style, with cruise missiles?
Source: Argumenty i Fakty Kyrgyzstan, Bishkek, in Russian 26 Mar 03 p3

After Iraq, will the USA turn its attention elsewhere and seek to champion
human rights in Kyrgyzstan with cruise missiles, as it is now doing in
Iraq? This question is posed in a satirical article by Narkas Mulladzhanov,
leader of the Islamic Democratic Party of Kyrgyzstan, in the Kyrgyz
newspaper Argumenty i Fakty Kyrgyzstan, under the title "Will the Yankees
bomb Kyrgyzstan?" The following is the text of the article, published on 26
March. Subheads have been added editorially.

Speaking [on 16 March at the Azores press conference] just before the
invasion of Iraq, US President George Bush made the following
pronouncement: "Tomorrow is a moment of truth for the world." What does it
consist of?

Worldwide protest at war in Iraq

Millions of people throughout the world have come out on to the streets,
demanding that the war should be stopped immediately and that the money
should be channelled into resolving social problems, education and
medicine. "Don't try to fool the people any more", demonstrators in
American cities shouted. I don't know whether the Bush administration is
aware that the States themselves are on the threshold of a major
destabilization that may end in total tragedy.

Just 48 hours before the ultimatum to Saddam Husayn expired, the Voice of
America reported, Daniel Pipes's book "Militant Islam Reaches America" went
on sale. Six million Muslims live in the USA, and a great deal may change
in their convictions within a matter of hours, especially since literally
the whole world has come out on to the streets, staging acts of protest.

All quiet in Kyrgyzstan

But what's happening here in Kyrgyzstan during these anxious days for the
world? The "voices on the airwaves" of the irreconcilable opposition "For
[President Askar] Akayev's resignation and reforms for the people" have
gone noticeably quiet. Evidently, the "moment of truth" has come for them
too. It would seem that human rights activists have also finally realized
where the "principles for the defence of human rights" are based not on
pickets, but on the noses of cruise missiles. In this connection, let me
quote a dialogue between one elderly pensioner and a young friend of his at
a bus stop:

"So, have they started bombing?"

"Yes, they're bombing," the boy replied reluctantly.

"So they may bomb us too," the old man concluded.

"Why bomb us?"

"What do you mean, why?" the pensioner said. "Because there's no
democracy." Then, after a pause, he added: "If we did have democracy,
people here would be out in the streets protesting too."

The boy parried that with:

"Maybe we in Kyrgyzstan agree with Bush."

The old man's toothless jaw dropped, and he too fell into a "moment of
truth" state, as George Bush promised. The Yankees need the head of the
defiant Saddam Husayn and the oil belonging to the Iraqi people. They have
chosen for themselves an ideological doctrine that it is, in practice,
dangerous to oppose. They really will bomb you to pieces on the pretext of
the absence of democracy and "human rights violations".

US designs on Kyrgyzstan?

Today many people in Kyrgyzstan are wondering whether we will be left
unscathed. After all, they hint, we've got neither oil nor gas. But they
may well go for us too, since we have both land and unique natural conditions.

God forbid! If they emerge as victors from this critical state for the
world, we too may well hear them demanding, for example, that our law on
land should be brought into line with international law on private
ownership, which says that land is a commodity, so that it can be sold to
anyone, regardless of citizenship, and especially since Kyrgyzstan is a
member of the WTO [World Trade Organization]. If we don't comply with that
ultimatum, they'll bash our heads in with cruise missiles so that we don't
violate the "human right to property".

That's what the global "moment of truth" consists of.

It should be remembered that the persecuted may turn into persecutors.
Russian President Vladimir Putin was absolutely right to say that "the USA
has made a big political mistake". The mistake must be put right
immediately. One should recall that a worldwide flood occurred on this
earth 7,000 years ago, and it may be repeated.


BBC Monitoring
USA's psychopathic cowboy versus Iraqi hero - a Kyrgyz view
Source: Argumenty i Fakty Kyrgyzstan, Bishkek, in Russian 26 Mar 03 p1

As the world's only superpower, the USA is now flexing its muscles and
seeking to make all other countries pander to its needs and interests.
Finding that its adventurous policy was successful in Yugoslavia, America
has now turned to Iraq. Tomorrow it may be the turn of other countries.
This view is put forward by journalist Ibragim Rustambek in the Kyrgyz
newspaper Argumenty i Fakty Kyrgyzstan, in an article entitled "George Bush
has saddled a chronic jihad". The world can respond in three possible ways,
according to Rustambek: it can be conciliatory, tough or pragmatic. It can
appease the aggressor in the hope of better behaviour in the future; set up
an alliance, perhaps between Russia, China and the Muslim world, to
restrain the USA; or it can learn to live with the situation and wait for
America's downfall, since the superpower has bitten off more than it can
chew, and the forces it has unleashed will eventually prevail. The
following is the text of the article, published on 26 March. Subheads have
been added editorially.

By unleashing war in Iraq, the USA comes across as the principal aggressor
in the modern world. On the other hand, Bush & Co have involuntarily opened
up a "second front" inside America itself, giving a free hand to new
extremists, in comparison with whom Bin-Ladin's intrigues may seem like the
pranks of a dilettante. Experts think that the occupation of Iraq will
provoke a chain reaction of conflicts in the most varied regions, including
Central Asia.

US behaviour stems from upset balance of world forces

It all began with the bombing of Yugoslavia. The USA tested other
countries' patience and subservience. It spat brazenly in the face of
Russia, the Slavs and Europe. They put up with that. The war in Iraq is a
challenge to the Muslim world and to the states and peoples that do not
want an American lifestyle. Iraq may be followed by Iran, North Korea and
the countries of the former USSR. And all this because no one can just give
America a bloody nose. Hence the tyranny. The Yankees respect strength.
That was once provided by the Soviet Union, the same evil empire as the
USA, but a restraining balance. Today's Russia, alas, will not stretch to

It is hard to forecast the behaviour of the former Union republics, just
like the present members of the CIS. The Baltic states were, as is known,
the first to toe the USA and NATO line, followed not so long ago by
Georgia, which has given the American military a free hand on its
territory. It was probably so that others should not follow this example
(and also recalling the recent Enduring Freedom campaign in Afghanistan,
over which I'm sorry Russia, quite honestly, made a complete fool of
itself, allowing NATO to gain a foothold in Central Asia) that Vladimir
Putin gathered together in Moscow the secretaries of the Security Councils
of the countries that are party to the Collective Security Treaty
immediately after the US attack on Iraq. The official reason was an
expected upsurge of extremism. But it may well be that the partners were
asked forthrightly: whose side are you actually on, gentlemen? At any rate,
it will now be harder to sit on the fence.

[Russian] MPs condemned the military action in Iraq last Monday [24 March].
But the most noteworthy event was a protest march, albeit with a thin
turnout and soon over, by American University students in the capital's
[i.e. Moscow's] Staraya Ploshchad [Old Square].

The world's three options

In the current situation, the international community has three main lines
of conduct:

- Conciliatory. Try to persuade the USA to return to the international
legal (UN) fold. Pacifists hope that the Yankees will become
conscience-stricken at some time and will revert to being democratic and nice.

- Tough. The Yankees only understand the language of force, so that an
alliance between Russia, China and the Muslim world could be an axis of
restraint. Protest demonstrations must give way to tough pressure and a
boycott of everything American. And the outcome must be the forging of a
new military-political bloc in place of the old Warsaw Pact.

- Pragmatic. The truth is, as usual, somewhere in the middle, and one has
to behave prudently with the Yankees. The USA is now the only superpower,
and it wants to subjugate the world's political, economic and social
resources to meet its own cherished needs. But who said that that cannot be
resisted and defeated?

The Yankees are driving themselves into a corner, and the most terrible
thing is what they may experience (and are already experiencing) a collapse
of their own "invincible" ideology ("I'm right because I have more rights
because I'm a Yankee!"). They are not used to losing. That is their
weakness rather than their strength. The Americans cannot take a blow. That
was shown by their experience in Vietnam, and it was also demonstrated by
11 September 2001.

Everyone is now arguing about what is more beneficial a quick end to the
war or not? From the point of view of stabilizing oil prices and the
international economy, the answer is yes. But that is only one side of the
matter, acknowledging yet again the USA's dominant role in the new
partition of the world. The other is that each extra day of war means a
triumph for the indomitable spirit of the Iraqis and the demoralization of
the army of the USA and its allies. The blitzkrieg has already failed. The
Iraqis are proving that their cause is just and that they are defending not
the regime of Saddam Husayn, but, first and foremost, their ancient land
from the occupiers.

Saddam as hero, Bush as psychopathic cowboy

Iraq today is in the frontline of the struggle against a man-made
militaristic monster that seeks to make the world kneel before it. Whatever
Saddam Husayn may be a dictator, miscreant or anything else he has been
fated to personify that just struggle. If anyone will go down in history,
it will clearly not be George Bush, but Husayn thanks, incidentally, to Bush.

Such is the unenviable fate of the American presidents of recent years, and
there is, if you like, a higher justice in that. What would you say the
present younger generation remembers Bill Clinton for? Hardly for anything
other than the matter of Monica Lewinski's dress. For what will George Bush
go down in the chronicle of America's rulers, if even the sociologists
there are crediting him with the lowest intellectual level of any president
throughout the USA's 200-year history? One shudders to think.

The dashing cowboy is behaving like a psychopathic rider on a mare that has
not been broken in. He is frenziedly reining her in and is already
panicking, but he is still posturing before falling from the saddle.

[The article is accompanied by a photomontage in which George Bush is made
to look like Hitler standing against a background of tanks in a desert
battle and an aircraft dropping a bomb]


War jitters no barrier for Russian sun-seekers
March 30, 2003

As western tourists shy away from "risky" destinations such as Turkey and
Egypt because of the war in Iraq, Russians are likely to flock there in
even greater numbers, attracted by bargain prices.

Turkey, where tourist officials fear that fallout from the conflict in
neighbouring Iraq may ruin this year's season, is the top destination for
Russians, with 686,000 spending their holidays there last year.

"The British and the Germans will be afraid to go to Turkey, which will
lower its prices for Russians," Deputy Economy and Commerce Minister
Vladimir Strzhalkovsky told a tourist forum in Moscow, predicting a slump
in domestic tourism.

"You can buy a tour to Turkey for as little as 200 dollars, and the water
is cleaner and the service better than Sochi (in southern Russia), although
it costs more there," explained Maxim Shandarov, a journalist from travel
magazine Tourinfo.

In the aftermath of the 1997 massacre in Luxor, in which Muslim militants
killed four Egyptians and 58 tourists, Russians rushed to snap up cheap
tours to Egypt as foreigners deserted the country in droves.

"Russians were the saviours" of the Egyptian tourist industry, with the
numbers of tourists from Russia jumping by more than 50 percent the year
after the carnage at Luxor, said KPM tour operator's director Vladimir

"Our citizens are strangely immune, they are not afraid of terrorism or
war," said a salesperson from travel agents Grineks, which has not seen any
drop in bookings for Turkey.

In Egypt, where hotel occupancy rates are reported to have dropped to an
average 30 percent from a usual spring average of 80 percent, the close to
a quarter of a million Russians who visited the country in 2002 are
unlikely to be deterred.

The manager of a four-star hotel in the Red Sea resort of Sharm el-Sheikh,
on the southern tip of the Sinai peninsula, complained earlier this month
that "almost all Italians, who are our main clients, have left."

But he said that the Russians remained.

So far, the low living standards of most Russians has limited the market
for foreign holidays. Only three percent of them were able to travel abroad
in 2002, making five million trips.

But in a sign that Russia is bucking the gloom-and-doom in the world travel
industry, a German tour operator, LTU Touristik, has set up shop in Moscow
and hopes to serve 45,000 tourists in the coming summer season.

LTU Touristik, which will concentrate on seven countries including Turkey
and Egypt, has joined up with a small Moscow-based charter carrier called
Airlines 400.

"The Russian market is very interesting to us from a growth point of view,"
the tour operator's vice-president, Dierck Berlinghoff, told a press
conference in Moscow.

The KPM director, whose firm's revenues expanded by 50 percent in 2002,
said that Russia itself could benefit from war fears.

"It's in fashion, suddenly Russia seems safe compared to Muslim countries
and the United States, and prices are mainly dollarised so it's cheap for
Europeans" because of the euro's rise, said Kantorovich.

In the former imperial capital Saint Petersburg, foreigners' favourite
destination in Russia, "all the hotels have been solidly booked since
December" because of the upcoming tricentenary of the city in May, he added.

"War is bad news for everyone, but it could create opportunities for
countries like Russia," said Francesco Frangialli, secretary general of the
World Tourism Organisation, on a visit to Moscow this week.

Russians' favourite destinations are Turkey, followed by Poland, Finland,
Egypt and Spain.


New York Times
March 30, 2003
Russia Sees a Chance to Get Some Respect

MOSCOW -- Put yourself for a minute in President Vladimir V. Putin's
loafers. Russia's economic revival and global status, not to mention your
own political fortunes, hang in no small part on your much-vaunted
partnership with the United States. But with the next presidential election
barely a year away, about all most Russians see in the romance is a nuclear
weapons treaty you resisted, NATO forces on your European doorstep and
American military bases in what was once your southern empire.

Now the Americans are ignoring your protests and invading Iraq, the only
Middle Eastern nation where you still have serious political and economic
clout. Ordinary Russians are pouring Coca-Cola down the sewers, and your
generals and oil barons are hopping mad. What's a president to do?

Some influential Russians are now starting to say that the best thing that
could happen to Mr. Putin — and maybe to the partnership — might be for
the United States invasion of Iraq to go badly.

Not to fail. Just to fumble enough that average Russians could take some
pleasure in Washington's public humbling. And enough that Washington would
think twice before going it alone again.

Such speculation is not rooted in Russian delight at the prospect of an
American comeuppance, though that is surely on the rise. It is in a
dry-eyed calculation of Russia's strategic interests, which include an
increasingly close relationship with Washington, war or not.

Sergei M. Rogov, the director of the Institute for the Study of the U.S.
and Canada here, said the diplomatic damage from the American decision to
invade Iraq over Russian objections already has been wrought, and will take
years to mend. The potential for further injury now, he said, is that the
invasion will succeed too well.

"If America decides to repeat the Iraqi precedent," he said, "the fragile
Russian-American partnership will fall apart for good."

The operative word is fragile.

At the very top, Mr. Putin and President Bush still talk of a growing
partnership. But the facts increasingly speak otherwise: on most major
strategic issues resolved since Sept. 11, 2001, Russia has resisted, then
grudgingly accepted, American dictates that it has been powerless to change.

Even where interests coincide, as in the Caucasus Mountains of Georgia,
where American advisers are helping root out terrorist bands active in
neighboring Chechnya, United States involvement is seen as much as a
calculated intrusion on Russian turf as an aid. That was clear last week
when Russia complained for the second time in a month about flights by
American U-2 spy planes in Georgia, near the Russian border.

The United States expressed similar public pique last week when it angrily
accused the Kremlin of allowing arms merchants to sell Iraq sophisticated
electronic jamming devices in defiance of an arms embargo. Separately,
American officials acknowledged that the devices had probably already been
destroyed in combat and were therefore useless.

Some of the Russian barbs are clearly meant to stoke nationalism, this
country's great unifying force, as an election campaign starts to gear up.

But to a degree that neither side may yet fully realize, the
Moscow-Washington sniping raises the grave question of whether the two
partners really do have enough in common, beyond a hatred and fear of
terror, to sustain their romance.

Which is what generates the gut feeling among Russian experts that what the
American-Russian relationship needs most is a United States with less sharp
elbows. What was envisioned here -- a true global partnership against truly
evil forces -- has become, in the Russian view, one-sided.

It is not that Russians wish Saddam Hussein well, for a majority see him as
a dictator in need of his own comeuppance. Rather, the view is that Russia,
with genuine if reduced global influence, must be regarded not as a
Potemkin partner in the new world order, but as a real one, with real power.

By that way of thinking, a painless American victory in Iraq would only
reinforce the notion that Russia does not matter to Washington — and
right now, to bruised Russian egos, that would be the worst outcome of all.


Washington Post
March 30, 2003
Rift Over War Sours Bush-Putin Partnership
U.S. Officials Working for 'Damage Limitation'
By Sharon LaFraniere
Washington Post Foreign Service

MOSCOW, March 29 -- When U.S. Ambassador Alexander Vershbow told Russian
reporters in an interview Wednesday that it was increasingly risky for 15
Russian diplomats to remain in Baghdad, it may have seemed that he was
stating the obvious.

The Russian Foreign Ministry saw it differently. Ignoring Vershbow's offer
in the same interview of American help in evacuating diplomats -- and
Russia's own warning eight days ago that its citizens should flee Baghdad
-- the Foreign Ministry issued a formal protest today, accusing Vershbow of
making "veiled threats" against Russian officials.

U.S. and Russian analysts say the incident is telling: Russia is eager to
display its unhappiness over the U.S. invasion of Iraq in any way it can
that does not permanently damage U.S.-Russian relations.

In the past week, the Kremlin protested the flight of a U.S. spy plane over
Georgia, put off parliamentary action on an arms control treaty with the
United States and charged that the U.S.-led war is creating instability far
beyond Iraq's borders.

The United States has fired back, accusing Russia of endangering American
soldiers by allowing Russian companies to sell sophisticated weaponry to
Iraq despite an arms embargo and urgent pleas from Washington to halt the

The diplomatic protests reflect the deterioration in U.S.-Russian relations
since early February, when Russia joined France and Germany in opposing a
U.S.-backed resolution at the U.N. Security Council that would have given
the United Nations' stamp of approval for an attack on Iraq.

U.S. officials suggest the chill is temporary -- that President Bush and
Russian President Vladimir Putin want to preserve and even enhance the
partnership they established 18 months ago. "The watchword is damage
limitation," said one senior U.S. diplomat on Wednesday. "We hope we can
contain this disagreement."

But others worry that the sour turn will have more lasting impact,
especially if the rift over Iraq is followed by new clashes over how to
deal with Iran and North Korea. "The partnership has not fallen apart yet,"
said Sergei Rogov, director of the Institute for U.S.A. and Canada Studies,
a research organization here. "But it is very fragile and may fall apart if
the situation develops in a negative way."

Dmitri Trenin, deputy director of the Carnegie Endowment's Moscow Center,
said he thinks that much of what Putin has accomplished by his
pro-Washington foreign policy has been sacrificed over Iraq. He said he
sees a possible "cooling of relations . . . which deprives Russia of
serious help in the matter of domestic modernization and deprives the
United States of a serious potential partner" in a part of the world where
it needs support.

So far, any losses are intangible. Although the Kremlin withdrew the
strategic arms treaty from consideration this week, saying it wanted to
focus on stopping the war, few doubt that the Russian parliament will
eventually approve the accord. The treaty, which requires both sides to cut
their stockpiles of nuclear weapons by roughly two-thirds, helps Russia
more than the United States because Russia lacks the money to maintain its

A senior U.S. diplomat said the issue of Russian arms sales to Iraq is also
receding because the U.S. military managed to destroy six
electronic-jamming systems in Iraq that were the biggest concern.

But if the United States and Russia managed to skate around those trouble
spots, it was only after days of harsh public exchanges. Bush called Putin
Monday to complain that Russia had not tracked down and blocked arms sales
to Iraq, despite what U.S. officials called a virtual road map from
Washington. A Kremlin spokesman said Putin denied that any illegal arms
transfers took place and warned Bush that groundless accusations could
damage relations.

While Putin and Bush personally remain on mostly friendly terms, U.S. and
Russian officials agree, Putin has given Foreign Minister Igor Ivanov free
rein to play bad cop against the Bush administration.

A week ago, the Foreign Ministry complained about the flight of a U.S. spy
plane near Russia's border, saying Russia does not accept the U.S.
explanation that the pilot was searching for al Qaeda followers in the
Pankisi Gorge in Georgia, Russian news media reported.

Since the war began, Ivanov has criticized the United States almost daily,
arguing that the conflict is destroying Iraq and exposing the falsity of
U.S. claims that its military would free the Iraqi people. "Iraq does not
need a democracy which is carried on the wings of a cruise missile," he
said this week.

But Kremlin insiders say Putin is weighing more than domestic polls at this
juncture. For the Kremlin, they say, the Iraq war has brought to the fore
troubling questions about whether the United States wants Russia as its
partner or its lackey, and whether it offers in exchange concrete support
or simply "empty air," as one Russian journalist put it.

Those questions will not go away if the United States wins the war in Iraq,
analysts here point out. They are likely, instead, to sharpen as
discussions open over the status of a postwar Iraq and what to do about
other countries -- notably Iran and North Korea, which Bush has labeled,
along with Iraq, as an "axis of evil."

"Five years from now, there will be more Iraqs," said Sergei Karaganov, who
heads the privately funded Council on Foreign and Defense Policy and who
has close ties to the Kremlin. "We have to establish some rules of behavior."

In Russia's current mood, anything that smacks of acquiescence to the
U.S.-led war seems almost "obscene," Karaganov said. Russia's touchstone in
any upcoming negotiations over a postwar Iraq will be Russia's own
interests, he said.

"This time, we don't want to make our partner's situation easier," he said.


BBC Monitoring
Iraq war not to spoil US-Russian ties - liberal MP
Source: Radio Mayak, Moscow, in Russian 0910 gmt 29 Mar 03

The USA made a gross political mistake by starting the war in Iraq, Yabloko
leader Grigoriy Yavlinskiy told the "Power and People" slot on Russian
Mayak radio on 29 March.

Being asked about his party's stance on the Iraq conflict, Yavlinskiy said
the following:

"A major political mistake has been made by the USA that leads to numerous
casualties among civilian population and troops. The Yabloko party believes
that there were no direct threat from Iraq at this very moment. Although
carrying inspections and disarming Iraq was not easy, there was no direct
cause for starting the war.

"At the same time the official Yabloko stance is that the regime in Iraq is
very dangerous. This regime has killed hundreds of thousands of people.
This regime is politically repressive.

"We know that the United States sold biological warfare to Iraq, in
particular in 1986-88. The USA sold to Iraq strains of botulism and
anthrax. We are also aware of the fact that the Soviet Union was building
major plants for the production of chemical warfare. These war gases were
used by the Baghdad regime against its own people to kill them.

"We, Russia, are interested in our neighbours being transparent and
predictable, and not possessing the weapons of mass destruction. However,
we believe that it was possible to evade the large-scale military
operation, the war in the form it was started by the United States. That is
why we consider it to be a gross political mistake".

Still, the Iraq war is not going to spoil the Russian-American relations,
Yavlinskiy said.

"By all means, it is in Russia's interest to preserve its strategic
relations both with the Western Europe and the USA. The war in Iraq will
not be the transition to a cold war between Russia and the USA, nor will it
ruin the Russian-American strategic relations. This is not in our
interests," he added.


One in two Russians backs government policy on Iraq - poll

Moscow, 29 March: Almost half, 49 per cent of Russians, expressed support
for Russia's policy related to the Iraq crisis, while 17 per cent
criticized it and 30 per cent gave a neutral assessment, according to a
poll conducted by the ROMIR-Monitoring company.

Some 1,500 of Russians were polled in the wake of the launch of the Iraq war.

One quarter, 25 per cent of the respondents, said that Russia has
strengthened its position on the international arena, 14 per cent maintain
it was undermined and half of those polled cannot see any changes.

Furthermore, 43 per cent of the respondents said that Russian-US ties
deteriorated while 42 per cent noted that they remained unchanged. Some 6
per cent believe that bilateral relations improved.

Regarding the UN role in the Iraq crisis settlement, 49 per cent of
Russians expressed opinion that the organization became weaker, 33 per cent
cannot see any changes and 8 per cent said its position strengthened. At
least 10 per cent were undecided.

Commenting on the outcome of the US-led military action in Iraq, 28 per
cent fear that it will trigger the Third World War, 27 per cent expressed
concern over an environmental catastrophe and 14 per cent expect a global
economic crisis. Moreover, 13 per cent said the United States would take a
domineering position in the world and 5 per cent worry about the United
Nations' dissolution.


New York Times
March 29, 2003
Supplying the Enemy

Whatever one may think of Russia's political opposition to the war in Iraq,
no one denies Moscow's right to it. Supplying arms to Iraq is something
else. Not only is this a clear violation of U.N. sanctions, but Russia has
weapons that pose a lethal threat to U.S. and British soldiers. Those are
exactly the kinds of weapons that the Bush administration has accused
Russia — and now Syria — of supplying Iraq. Whether President Vladimir
Putin chooses to acknowledge the sales or not, he would be well advised to
make sure they are stopped right now.

U.S. officials say they have been pressuring Russia for many months now to
end sales of three types of equipment: night vision goggles, antitank
missiles and equipment that can jam global positioning systems, used to
guide "smart" weapons. The ability to fight at night is one of the
coalition's strengths; the Russian missiles can knock out the mighty Abrams
tank, and smart weapons can be sent astray with the jamming device. These
things may have already been used to deadly purpose.

Yesterday, Defense Secretary Donald Rumsfeld also said Syria was shipping
such equipment into Iraq, although the Pentagon says it does not know if
that, too, is Russian in origin.

The Russian government and the firms that manufacture this equipment have
denied providing any of it to Iraq. But the White House has been quite
specific in its allegations, and even the Russian press has suggested that
the charges are not without substance. Perhaps the Kremlin is technically
correct, and the arms are being smuggled out by old-guard military officers
or impoverished military enterprises, or they are reaching Iraq through
intermediaries and third countries. These are sadly familiar routes for
arms sales by former Soviet states and satellites.

It is also possible that Mr. Putin has legitimate grievances against
Washington. He made sincere efforts to forge a partnership with President
Bush, including extensive support in the war on terrorism, but ended up
swallowing some tough political pills with little to show for it. So Mr.
Putin may have decided to draw the line on Iraq. Russia has substantial
interests in Iraq, including a huge unpaid debt for past arms sales and
lost contracts in Iraqi oil fields. If Moscow had been promised some way to
recoup, Mr. Putin may not have thrown in his lot so ardently with France
and Germany.

None of that, however, justifies providing Iraqis with means of killing
Americans. This goes beyond political calculation, and beyond pique. Mr.
Putin must understand that if Russian arms are reaching Iraq by any route,
and are putting American men and women in harm's way, it is simply not
enough to declare that he is not responsible, or to pretend it is not
happening. Many Americans may share the Russian objections to this war, but
no Americans will tolerate or forgive having an American tank blown up by a
Russian missile.


Analysis: Russia's stealth diplomacy
By Sam Vaknin
UPI Senior Business Correspondent

SKOPJE, Macedonia, March 28 (UPI) -- Possibly irked by persistent American
U-2 aerial spy missions above its fringes, Russia on Thursday fired a
"Topol" RS-12M intercontinental ballistic missile from a mobile launcher.
On Wednesday, Agriculture Minister Alexei Gordeyev offered Iraq aid in the
form of wheat. The Russian Grain Union, the industry lobby group, claims to
have already provided the besieged country with half a million tons of
grain under the oil-for-food program.

Russia linked with Syria in declining to approve the new oil-for-food draft
resolution as long as it implied a regime change in Iraq. The Duma - having
failed to ratify a key nuclear treaty with the USA - called to increase
defense spending by at least 3.5 percent of gross domestic product, or
about $4 billion this year.

Only 28 percent of Russians polled now view the United States favorably,
compared with 68 percent a mere few months ago. A majority of 55 percent
disapprove of the United States in a country that was, until very recently,
by far the most pro-American in Europe. A Russian telecom, Excom, is
offering unlimited free phone calls to the White House to protest U.S.

Washington, on its part, has accused the Russian firm, Aviaconversiya, of
helping Iraqi forces to jam global positioning system signals. Other firms
-- including anti-tank Kornet missile manufacturer, KBP Tula -- have also
been fingered for supplying Iraq with sensitive military technologies.

These allegations were vehemently denied by President Vladimir Putin in a
phone call to Bush, and ridiculed by the companies ostensibly involved.
Russia exported about $5 billion of military hardware and another $2.6
billion in nuclear equipment and expertise last year, mostly to India and
China -- triple the 1994 figure.

Russia and the United States have continually exchanged barbs over the sale
of fission technology to Iran. In retaliation, Russia's atomic energy
minister, Alexander Rumyantsev, exposed an Anglo-German-Dutch deal with the
Iranians, which, he said, included the sale of uranium-enrichment centrifuges.

Is Putin reviving the Cold War to regain his nationalist credentials,
tarnished by the positioning, unopposed, of American troops in central
Asia, the unilateral American withdrawal from the anti-ballistic missile
treaty and the expansion of NATO and the European Union to Russia's borders?

Or, dependent as it is on energy exports, is Russia opposed to the war
because it fears an American monopoly on the second largest known reserves
of crude? Russia announced on Thursday that it would insist on honoring all
prewar contracts signed between Iraq and Russian oil companies, worth
billions of dollars -- and on the repayment of $8 billion to $9 billion in
Iraqi overdue debt to Russia.

According to Rosbalt, every drop of $1 in oil prices translates into annual
losses to the Russian treasury of $2 billion. Russian aggregate corporate
profits rose in January by one-fifth year on year, mostly on the strength
of surging crude quotes. The Economist Intelligence Unit expects this
year's gross domestic product to grow by 3.8 percent. Foreign exchange
reserves are stable at $54 billion.

The threat to Russia's oil prominence and market share is not imminent.
Iraqi oil is unlikely to hit world markets in the next few years, as Iraq's
dilapidated and outdated infrastructure is rebuilt. Moreover, Russian oil
is cheap compared to the North Sea or Alaskan varieties and thus
constitutes an attractive investment opportunity as the recent takeover of
Tyumen Oil by British Petroleum proves. Still, the long-term risk of being
unseated by a reconstructed Iraq as the second largest oil producer in the
world is tangible.

Russia has spent the last six months enhancing old alliances and
constructing new bridges. According to Interfax, the Russian news agency,
yesterday, Russia has made yet another payment of $27 million to the
International Monetary Fund. The Russian and Romanian prime ministers met
and signed bilateral agreements for the first time since 1989. This week,
after 12 years of abortive contacts, the republics of the former Yugoslavia
agreed with the Russian Federation on a framework for settling its $600
million in clearing debts.

Recent spats notwithstanding, the Anglo-Saxon alliance still regards Russia
as a strategically crucial ally. Last week, British police, in a sudden
display of unaccustomed efficacy, nabbed Russian oligarch and mortal
Putin-foe, Boris Berezovsky, charged by the Kremlin with defrauding the
Samara region of $13 million while he was director of LogoVaz in 1994-5.

The Russian foreign minister, Igor Ivanov, did not remain oblivious to
these overtures. Russia and the United States remain partners, he asserted.
RIA Novosti, the Russian news agency, quoted him as saying: "If we settle
the Iraqi problem by political means and in an accord, the road will open
to teamwork on other, no less involved problems."

As Robert Kagan correctly observes in his essay "Of Paradise and Power:
America and Europe in the New World Order," the weaker a polity is
militarily, the stricter its adherence to international law, the only
protection, however feeble, from bullying. Putin, presiding over a decrepit
and bloated army, naturally insists that the world must be governed by
international regulation and not by the "rule of the fist."

But Kagan -- and Putin -- get it backwards as far as the European Union is
concerned. Its members are not compelled to uphold international prescripts
by their indisputable and overwhelming martial deficiency. Rather, after
centuries of futile bloodletting, they choose not to resort to weapons and,
instead, to settle their differences juridically.

Thus, Putin is not a European in the full sense of the word. He supports an
international framework of dispute settlement because he has no armed
choice, not because it tallies with his deeply held convictions and values.
According to Kagan, Putin is, in essence, an American: he believes that the
world order ultimately rests on military power and the ability to project it.

Russia aspires to be America, not France. Its business ethos, grasp of
realpolitik, nuclear arsenal and evolving values place it firmly in the
Anglo-Saxon camp. Its dalliance with France and Germany is hardly an
elopement. Had Russia been courted more aggressively by U.S. Secretary of
State Colin Powell and its concerns shown more respect by the American
administration, it would have tilted differently. It is a lesson to be
memorized in Washington.


The Economist (UK)
March 29-April 4, 2003
Chechnya's referendum
The vote of the dead souls
The referendum on Chechnya's future was haunted by spirits of the past

PERHAPS it was the ghosts who votedflowing up the steps, floating
through the windows, squeezing through the bullet holes and broken
walls to exercise their franchise. The authorities declared that
477,000 people turned out for Chechnya's referendum on March 23rd.
That would have been 88% of registered voters. People were
supposedly "standing in line at some polling stations for ten or 15
minutes". But even on a tightly-controlled government tour of
selected polling stations in and near Grozny, the bombed-out capital,
there were only handfuls of people in the dusty streetslet alone
voting. To anyone who has seen the activity in any country when just
half the electorate takes part, in Chechnya it seemed that it was not
the living souls who made up the numbers but the dead ones.

It would be fitting. Uncounted thousands, or more likely tens of
thousands, have died and many more have fled since the first post-
Soviet Chechen war began in 1994. Last October's census, according to
preliminary figures, found nearly 1.1m people in Chechnyaa shade
more than when the wars beganbut in the same month the Danish
Refugee Council, the aid agency most active in Chechnya, which does
regular population surveys, estimated 785,000.

Never mind, then, that there was no open campaign for the no vote,
that the only election monitors were a pro-Kremlin political party
and a scattered handful of foreigners, or that two foreign
journalists picked up ballot papers and dropped them (marked no, they
promise) into the box at a polling station in Grozny. Never mind the
old lady in Chernokozovo who showed a polling-station official her
marked ballot paper to check if she had done it right. ("No, no,"
cried the distraught official, "I told you to mark just one box!" And
gave her a fresh ballot and showed her where to put the cross.) The
referendum was meant as an exercise not in democracy but in political

Control has fragmented since the start of the second war in 1999. The
rebels, nominally led by Aslan Maskhadov, still inflict heavy losses
on the Russian army south of Grozny, particularly in the mountainous
regions where Caucasian clan warriors first resisted the Russian
invaders two centuries ago. But Mr Maskhadov, the last man to be
elected president of Chechnya, in 1997, has lost authority to more
radical rebel commanders who have adopted the battle cries of Islamic
fundamentalism, increasingly popular with angry young Chechen men.
Meanwhile the lowlands of the north are supposed to be under the sway
of a Kremlin-appointed administrator, Akhmad Kadyrov, a former mufti
of Chechnya. But he shares power with a government of other centrally-
appointed ministers. They have been shuffled twice recently, in what
pundits interpret as attempts to clip Mr Kadyrov's wings.

So the point of the referendum was not merely to end Chechnya's
separatist aspirations, which it did by adopting a new constitution
that declares it firmly part of Russia. It was also to start defining
who runs the place. As well as the constitution, Chechnya's voters
(or their phantoms) overwhelmingly approved laws for electing the
president and parliament. The elections, which may take place later
this year, will be another step in the "Chechenisation" of Chechnya.

An elected Chechen government, whether the poll was fair or not,
would let the Kremlin shrug off much responsibility for what happens
there while appearing to honour its promise to give
Chechnya "autonomy within Russia's borders". It may also be a way to
squeeze control out of military hands and into civilian ones. Kremlin-
watchers debate to what extent President Vladimir Putin commands the
army. Some think his inability to bring the military conflict to an
end may be partly because he cannot get the army to leave. Combat
pay, the siphoning-off of budget funds, arms sales, kidnapping and
general racketeering make the war profitable for both sides.

And since the new constitution allows the Russian president to sack
the Chechen one without giving a reason, there is little danger of
his getting too independent. Nor should Chechnya's ethereal electors
have any trouble choosing the president that Moscow likes best.
Indeed, if Sunday's visible turnout was anything to go by, a little
spiritual boosting of the numbers may be essential just to make the
election valid. Mr Putin said that the event had "exceeded all our
optimistic expectations."

But whoever wins must have not just good relations with Moscow but
also legitimacy among Chechens. Most are sick of the war but also
distrust politicians. Some think that Mr Kadyrov, the current
administrator, might turn out to be the least unpopular president.
Despite a rocky time in office, capped by a rebel bombing that
destroyed his headquarters in December, he may be winning support for
his attempts to piece Chechnya back together. There are some "small
but very positive signs" of reconstruction in Grozny, says Lars
Hallberg, the country director for the Danish Refugee Council. Other
analysts point to Moscow-based Chechen politicians such as Aslanbek
Aslakhanov, the MP for Chechnya, or Ruslan Khasbulatov, a former
parliamentary speaker. They enjoy local respect but less local
experience. It remains to be seen what the spirits will decide.


Leader of pro-Kremlin party outlines its tasks

Moscow, 29 March: Chairman of the Supreme Council of the One Russia party
Boris Gryzlov has outlined the main gaols and tasks at the party at a party
congress continuing in Moscow.

The ideology of One Russia is the ideology of national success which the
party understands as the success of every family, every Russian citizen.
The aspirations for national success make the One Russia not merely an
association of political forces of the country conscious of their
responsibilities, but the party of the majority in Russia, Gryzlov declared.

It is a programme of a process in dynamics, rather than a mere document. It
is a first ever programme-schedule that should be fulfilled step-by-step,
rather than be a declarative document. and it should create a basis for
strategic development of the country for four years head, Gryzlov declared.

One Russia is not a party of a certain class or a social system, but a
party for all citizens of Russia who believe in strong democratic statehood
and who care for the future of the country.

The party platform should meet the aspirations of the people who approve
and support the politics of the president. In essence, it should be a
platform of the presidential majority whose interests our party represents,
Gryzlov declared.

He outlined three most important tasks of the party. First, party
construction itself, including creation of an efficient party structure,
attracting new members and supporters. A second task that has come to the
fore now is a sweeping victory in the elections. A third most important
task is to ensure that the year 2003 continues the dynamics of constructive
legislative activities, Gryzlov told the congress.

[Gryzlov also said that he would join the party if the law permitted it and
disagreed with the opinion that One Russia was becoming a party of
governors. The party has popular support across the nation, ITAR-TASS news
agency, Moscow, in English 1118 gmt 29 Mar 03, reported him as saying.]


Pro-Kremlin party to challenge economic reformers
By Larisa Sayenko

MOSCOW, March 29 (Reuters) - Russia's second biggest political party, the
only political grouping to claim Kremlin support, said on Saturday it would
challenge the government's economic reformers in December's parliamentary

United Russia, which came out of nowhere in 1999 to become the second
biggest party after the Communist Party by backing then Prime Minister
Vladimir Putin, said it would also campaign to end Russia's bid to join the
World Trade Organisation (WTO).

The party, which includes Kremlin figures and the leaders of major regions,
said the government could not tackle the problems facing a population mired
in poverty.

"Today we are obliged to note that the government has largely lost the
ability to energetically and decisively solve the country's most urgent and
painful problems," party leader Boris Gryzlov told delegates at a Moscow

The party's pledge most likely to find popular support is its demand to
lower prices Russians pay for electricity and gas. Energy prices, regulated
by the government, have risen in the past few years.

Gryzlov, who currently serves as interior minister, attacked the gradual
erosion of Russia's huge energy subsidies.

Putin, elected president in 2000, has said cheap energy is the birthright
of oil-and-gas-rich Russia, a remark made in open defiance of a key demand
by the WTO which wants prices to reflect market levels.

"To demand that Russian energy prices be raised to world levels to deprive
our industry of their ability to compete," Gryzlov said. "This is like
demanding bananas cost the same in Brazil as they do in Finland."

The party said it would push for a cabinet of party members, and would
exclude Prime Minister Mikhail Kasyanov and German Gref, who is in charge
of economic planning and a driving force behind free market reform. Neither
is a member of United Russia.

Gryzlov criticised powerful industrialists and financiers whose influence
soared after they helped finance Boris Yeltsin's win over the Communists in
a presidential election in 1996.

"Because of the absence of a party regime in Russia, an unusual role has
been given to major financial groups," Gryzlov said. "Their weight has
allowed them to take on many political functions...We need parties that are
also companies, and not companies that are also parties."


The Independent (UK)
March 30, 2003
Is Russia at last facing up to its image problems?
To attract foreign investors, the country must try to shake off comparisons
with the Wild West. Paul Lashmar, James Mawson and Adrian Gatton report

On Tuesday morning, as the extravagant Russian billionaire Boris Berezovsky
makes his first appearance in the oak-panelled dock at Bow Street
Magistrates Court in central London, just down the road in Westminster, the
Russian Economic Forum will open with great fanfare. These two entirely
coincidental events could not more starkly present the two contrasting
faces of Russia on the international business stage.

Mr Berezovsky, 57, is facing extradition to Russia, where it is alleged he
defrauded the authorities of $1.9bn (1.2bn) in tax from one of his
companies. Last week British police, acting on a Russian extradition
warrant issued in November 2002, arrested him in London, where he has been
living for the last three years in self-imposed exile while seeking
permanent residence in the UK.

As Mr Berezovsky, currently on bail, begins what is likely to be a very
protracted extradition battle, over at Westminster's Queen Elizabeth
Centre, some of Russia's new generation of top businessmen will be trying
to persuade their Western counterparts that the day of the oligarchs is
over and that Russia is a now good place to take their business. They face
uphill work.

President Putin's government would undoubtedly claim that the effort Russia
is putting into repatriating the high-profile Berezovsky demonstrates the
seriousness of their intent to clean up the Russian business world. But on
Tuesday Mr Berezovsky will deny corruption, claiming the extradition is
politically motivated and President Putin, a former KGB head, wants to
silence him.

Mr Berezovsky is the only child of a builder and a nurse. His fortune is
based on Logovaz, set up in May 1989 to offer cheap cars to the Russian
people. Later he established a media empire and forged a close relationship
with Boris Yeltsin, then Russian President.

Even for oligarchs, business in Russia could be risky. On 7 June 1994, Mr
Berezovsky walked out of his Logovaz car dealership headquarters in Moscow
and climbed into the back seat of his Mercedes. As they pulled out, a huge
car bomb exploded nearby. Mr Berezovsky's driver was decapitated. Shrapnel
took out his bodyguard's eye. His own burns healed only after months of
expensive treatment in a Swiss clinic.

At the time Moscow was not a safe place to be for a businessman. Battles to
divide up the rich spoils of the former Soviet Union spilled over into
violence, making the city like Chicago in the 1920s.

Undeterred, Mr Berezovsky built up a portfolio that eventually encompassed
oil, aluminium, newspapers and television stations. He was so influential
that he received invitations to join Rupert Murdoch on his yacht.

Although he organised the election campaign that brought Mr Putin to power
in 2000, the new President, who wants to be seen to distance Russian
politics from big business, quickly snubbed him.

But as relations between the two deteriorated, the man who had survived the
mob wars decided discretion was the better part of valour, and fled his
native country. But from the West, Mr Berezovsky has remained a thorn in Mr
Putin's side.

His battles with Mr Berezovsky are only one reason why Mr Putin has a long
way to go to persuade the international business community that Russia has
turned over a new leaf. In the most recent bribe perception survey from the
watchdog Transparency International, Russia was found to be the most
corrupt of all the world's major trading nations. Russian companies were
also perceived as most likely to use bribes in the developing world.

According to a study by the think-tank Indem, Russian business people pay
more than $30bn (19bn) a year in bribes, a sum roughly equivalent to the
revenues of the 2002 state budget and about 1 per cent of GDP. This is
harming Mr Putin's attempts to match China in attracting foreign
investment. Russia received only $4.43bn in 2000, compared to $48bn in
China. Accountants PricewaterhouseCoopers estimate investment could be
$10bn higher if Russia improved its reputation for corruption and poor
corporate governance.

To his credit, Mr Putin and his government are working relentlessly to
tackle the problem. At a corporate governance conference in London last
week, organised by leading City PR firm Brunswick, Alexander Arifulin,
deputy chairman of the Russian arbitration court, assured the delegates
that Russian courts would favour neither the state nor Russian companies if
in dispute with Western ones. This had previously been one of the big
sticking points for Western businesses.

"After 10 years of legislation, last year the Council of Europe said the
Russian system was one of the best," said Mr Arifulin, adding, "We are
even-handed." He claimed that 1,000 cases a year were being bought by
foreign claimants. But, crucially, these changes have not filtered through
to Western investors.

At the same conference, research from consultants SRU and Expert
Information Group, a Moscow-based publishing and information firm, claimed
that Russia was still perceived as a frontier, "Wild West" economy. More
importantly, since Russia defaulted on its debts in 1998, it had been "off
the investment map", according to Peter Wallis, managing director of SRU.
The survey of 30 UK and US business heads and finance editors showed Russia
well down the list of regions attracting foreign investment. As one US fund
manager said: "Why invest directly in problematic countries like Russia if
you can invest in P&G [Procter & Gamble], who have operations everywhere
and know what they're doing?"

To improve the investment climate in Russia, Japan and the European Bank
for Reconstruction and Development are funding a joint initiative to create
a corporate code of conduct addressing such problems as asset stripping,
transfer pricing and share dilution.

The Moscow Brokerage firm Troika Dialog estimates that Russia's reputation
as a place where chief executives routinely violate the rights of minority
shareholders wipes about $45bn annually off the value of the stock market.

But some change is taking place, as witnessed by BP's $7bn investment last
month in a joint venture with TNK to create Russia's third biggest oil
company. Crucially, despite the 50:50 split in ownership, BP has management
control. Shell has also admitted sniffing around Russian oil companies and
has said it has no intention of being the last buyer in the market. And
Russian fund manager Hermitage Capital is preparing its latest report on
Gazprom, Russia's main gas company, in a bid to improve the utility's
corporate governance and transparency.

But with Mr Berezovsky's court case likely to keep corruption firmly in the
headlines for months to come, investment in Mr Putin's "new" Russia may
remain slow.


Resurgent Russia flexes economic muscle in Armenia
March 30, 2003

Armenia, a small republic high in the Caucasus mountains, had a problem.
Since it emerged from the Soviet Union the economy had fared badly and it
owed Russia massive debts it could not pay back.

Last year it hit upon a solution: Moscow would take over Armenian
industrial assets equal to the value of its borrowings from Russia and the
100-million-dollar (93.5-million-euro) debt would be written off.

But now, with the crown jewels of its economy in the hands of its former
imperial masters in Moscow, analysts and pro-Western politicians are asking
if Armenia has paid its debt with its political independence. "These
assets-for-debt swaps... put into question, on a conceptual basis, the
sovereignty of the republic of Armenia," said Raffi Hovannisian, a former
Armenian foreign minister who now heads a think-tank.

Armenia is not an isolated case. More than a decade after the Soviet empire
collapsed, Russia is using its resurgent economy to re-assert political
control over the weakest of its former satellite states, say analysts.

They claim that similar scenarios are also being played out in other former
Soviet republics including Ukraine, Belarus, Moldova and Kyrgyzstan.

"Armenia has become the first case study in... Russia's strategy to regain
political dominance over post-Soviet countries by taking over their
economic infrastructure," said Vladimir Socor, a fellow with the
Washington-based Institute for Advanced Strategic and Political Studies.

Armenia has welcomed Russian investment because it has had little success
attracting businessmen from anywhere else.

Western investors have been scared away by a protracted conflict with
neighbouring Azerbaijan that has left Armenia isolated from its markets,
and by rampant official corruption.

The list of assets now controlled by the Russian government under the
debt-for-assets deal is substantial.

Six generating units at the Hrazdan power station, which account for 15
percent of Armenia's energy supply, the Mars electronics plant in the
capital, Yerevan, and three other high-tech factories were all handed over.

Armenia's government argues there is nothing unusual about any of this.
Foreign ownership of businesses is a feature of the global economy, they
say, and the World Bank has backed the arrangement.

"We are doing this for the good of our people," Serge Sarkissian, Armenia's
defence minister who also chairs a commission formed to oversee the
debt-for-assets swap with Russia, told AFP.

"No one is going to take equipment out of this country. If they buy into
the electricity network, they are not going to strip out the transformers
and take them away," he said.

"On the contrary, these businesses will be given a boost by the new
investment and they will, most importantly, bring in big tax revenues for
the Armenian budget."

"You don't hear anyone saying that since Armenia sold its airport to the
Argentinians it lost its sovereignty, or if it sold shares in its
enterprises to other investors that it lost its sovereignty."

But what worries sceptics is that the latest acquisitions by Moscow join a
long roster of other Armenian assets already in Russian hands which, taken
together, make up a big chunk of the country's tiny economy.

For example, Armenia's gas distribution company is already 55-percent owned
by a Russian firm and Russian metals giant Russian Aluminium holds a
74-percent stake in the Kanaker Aluminium Factory.

In addition, Armenia depends on Russia to supply fuel rods for its creaking
Metzamor nuclear power station and though officials deny it, western
diplomats say Moscow may own the station itself.

In the background are major Russian military bases on Armenian territory
and the fact that almost every Armenian family depends on cash sent home by
a relative working in Russia.

"Armenia is integrating so closely with Russia you could even say it is
becoming part of Russia," wrote the opposition Haikakan Zhamanak daily.


BBC Monitoring
Russia's national power grid head gives details of communal reform
Source: Channel One TV, Moscow, in Russian 1700 gmt 27 Mar 03

[Svetlana Sorokina, presenter of "Basic Instinct"]... Anatoliy Chubays,
chairman of the board of the United Energy Systems of Russia, said today
that he wants to set up a company which will specialize in communal and
housing sector services. The first test pilot will be carried out in 10
major Russian cities...

Mr Chubays, you put forward a whole programme for the communal and housing
sector reform today. What is the main thing in your programme? Are you
afraid of the reform?

[Chubays] You'll be laughing, but yes, I am afraid of it. I am afraid of it
for one simple reason: all those present here are divided not into those
who either support or oppose the reform. If we remove the factor of the
forthcoming elections, the electorate, being likeable or not likeable, if
we are talking business, then all those present here can be divided into
two main groups: those who will do the job and those who will keep talking
around it. This is why I honestly said that I am afraid of the reform.
Together with my colleagues I am most likely to find myself among those who
will be doing the job. And then others will discuss us, tell everyone how
we failed to do it properly, and how it should have been done properly, all
these party deputies will be describing what the real right way was, - and
we'll be soldiering on and we'll have to fulfil our tasks.

[Deputy Mayor of Moscow Valeriy Shantsev] We must not be afraid of work
because if one is afraid one will achieve nothing. We started the reform in
1997 and followed our own way, not what Boris Nemtsov suggested, and we are
going to continue our work normally, without shifting it onto other
people's shoulders and without frightening anyone, without putting the
burden of payments onto ordinary people.

[Chubays] There are rules in Moscow: people can pay 100 per cent for their
housing. Personally, I as a resident of Moscow, pay 100 per cent. I think
that many other people do the same thing. This is 100 per cent exactly the
same thing that Boris Nemtsov proposed in 1997.

[Shantsev] You are wrong. I'd like to comment because Chubays is
exaggerating. We did what we did for those who would like to pay
voluntarily, but at the same time we protected those who cannot afford full

[Sorokina] Why do you think the reform can be carried out under current
catastrophic conditions?

[Chubays] To tell you frankly, I believe in all honesty that in the coming
three to five years there will be nothing more difficult and painful than
the [communal and housing] reform in our country. For those who understand,
being cold is much worse than being hungry. It is a frightening thing. It
is a frightening thing. Strange as this may sound, everyone knows what to
do. Ask any of the governors here and they will tell you very clearly what
to do and how to do it. All these discussions about the law are not worth
the paper they are written on, I am sorry. All we need to do is to do
simple elementary things: we need to establish order in the sector, we need
to use people with brains and skills, those who can work, and we must look
into business plans, budgets, supplies. We spent five years establishing
order in the power supplies - this is the kind of work the housing sector
needs now...


BBC Monitoring
Crime and abuse in Russia's "degenerating" army
Source: Grani.ru web site, Moscow, in Russian 25 Mar 03

Crime and bullying are "rampant" in the Russian armed forces, not to
mention shady dealing on a grand scale, the political website Grani.ru
reported. It quoted figures, and instances of entire Defence Ministry
assets - including some frontline bombers - almost ending up in private
hands. The following is the text of the report, published on 25 March, with
subheadings added editorially:

Prosecutor-General Vladimir Ustinov, who signed a document titled "Analysis
of the State of Legality and Crime in the Russian Federation in 2002," paid
special attention to the observance of legality in the security structures.
The general prosecutor's assessment is grim. Apparently crime is "rampant"
(Mr Ustinov's expression) in the security departments.

Crime and physical abuse

Last year the military committed a total of 2,400 crimes. One in four
offences was "harassment and manhandling by commanders". According to the
Prosecutor-General's Office, as a result of these barracks fights 180
people were seriously injured and eight died. During the year a total of
over 500 servicemen died "as a result of criminal assault". Naturally,
people are fleeing this hell. In 2002 a total of 4,200 servicemen made a
dash for freedom.

There is a separate section on law and order in the Combined Force in
Chechnya. According to Mr Ustinov, here offences (there were more than
2,000 over the year) are having a "disastrous effect" on the course of the
military actions in the rebel republic. In particular, the document touches
on flight safety. Last year five helicopters were shot down. A total of 136
people died in aircraft-related incidents. But, the prosecutor-general
states, the command is not bothered about rectifying the situation. For
example, after the loss of the Mi-26T helicopter (19 August 2002) a defence
minister order was issued on measures to improve flight safety in Chechnya.
But a Prosecutor's Office check carried out six weeks later showed that
units had not even received the order. And another two helicopters were
shot down in October and November.

Commercial scams

Some very curious things are taking place in the area of the
"commercialization" of military matters. Civilian business people
(obviously, with the assistance of partners in the military) have developed
a new method of conversion: they buy up Defence Ministry enterprises' debts
(and they are up to their ears in debt, as we know) and then set the
bankruptcy wheels in motion.

For example, business people succeeded in gaining possession of the 775th
artillery military plant of the Russian Federation Defence Ministry main
missile and artillery directorate, which is unique in term of capacity and
facilities. The deal was stopped, but only just. In exactly the same way,
having bankrupted the air force's 566th aircraft maintenance plant,
business people tried to get their hands on equipment worth R28m and eight
Su-24 aircraft. Business people almost acquired the Defence Ministry 52nd
Central Planning Institute lock, stock and barrel. They were on the point
of stationing their security guards throughout the building. But something
went wrong. These are well-known cases. But how many "gunpowder factories"
have passed into private hands unbeknownst to prosecutors? Not even Ustinov
knows this.

Theft and trade in arms

Trade in weapons on the side is a very natural occupation for a military
organization. The military currently have at their disposal 750,000
wagonloads of missiles, shells, and explosives. Less than one-half of these
resources are kept in brick or concrete depots. The rest are in the open
air. A sure way of concealing theft is fire. In the past two years
ammunition worth R10.9bn has gone up in flames. Around 1,500 automatic
weapons, more than 300,000 items of ammunition, and 1.2 tonnes of
explosives have been found. Experts reckon this is only 10 per cent of the
amount stolen from military depots.

Ustinov subtly observed: "The changes taking place in the armed forces
unfortunately are not accompanied by a strengthening of discipline." If
only he had put it bluntly: The army is degenerating.


Russia Displays Art Looted From Germany
March 30, 2003

MOSCOW (AP) - Close to three decades after he dragged 364 artworks from
defeated Germany to the Soviet Union in a suitcase, a former soldier,
Viktor Baldin, saw a chance to send them back to their owner - an art
museum in Bremen.

Soviet leader Leonid Brezhnev was about to set out for a state visit to
West Germany, and Baldin wrote him to propose that he bring the collection
with him as a goodwill gesture. That 1973 letter brought no results - nor
did the series he subsequently wrote to top Soviet political and cultural
officials, up to the last Soviet leader, Mikhail Gorbachev.

The Baldin collection remains in Russia, at the center of a decades-long
dispute over the so-called trophy art that Soviet troops looted from
Germany and its wartime allies. The collection of 362 drawings and two
small paintings went on display Saturday at Moscow's Museum of
Architecture, along with copies of Baldin's letters and accounts of his
quest to return the art.

The exhibit comes amid a furious dispute between Russian Culture Minister
Mikhail Shvydkoi, who is intent on returning the collection to Bremen, and
a group led by Communist legislator and former Culture Minister Nikolai
Gubenko, who opposes returning trophy art, especially without compensation.

On Tuesday, the Prosecutor General's Office stepped into the fight, warning
Shvydkoi that it would be illegal to send the collection to Germany.

Gubenko claims the collection is worth about $1.5 billion. Architecture
Museum director David Sarkisian said Saturday that a Russian auction house,
Gelos, had appraised the collection at about $23.5 million - with one work
alone, a Goya portrait, worth more than $4 million.

The collection is but one of many taken from Germany and its World War II
allies. Many Russians see the trophy art as rightful compensation for the
20 million deaths, untold injuries and immense destruction the Soviet Union
suffered in the Nazi invasion.

Baldin, an art restorer who served as a Soviet army captain and later
directed the architecture museum for 25 years, ``was a front-line
soldier,'' Sarkisian said. ``Nonetheless, he always wanted to give the
Germans what he carried out of Germany.''

Baldin believed he had saved the collection from destruction. His
engineering and demining unit had requisitioned a castle, Schloss Karnzow,
near the town of Kyritz north of Berlin, and the night before they were to
return to the Soviet Union a soldier tipped him off about a pile of
drawings in the dark, dank basement. The pile included works by Raphael,
Titian, Durer, Rubens, Rembrandt and Delacroix.

He wrote in his 1990 memoirs of spending a furious night cutting the
drawings out of their packaging and laying them in a suitcase, taking as
many as he could manage. His commanders refused him use of a truck, so he
carried the artworks all the way home - along the way trading belts,
watches and money for drawings, ``mostly nude women,'' that other soldiers
had grabbed from the basement stash.

Baldin kept his collection for three years under a bed in his office. In
1948, he gave it to the Architecture Museum, and in 1991, it was
transferred to the Hermitage Museum in St. Petersburg. For more than two
decades, he tried unsuccessfully to get it back to Germany.

``In all spheres, the war is over for us. We're already friendly with
Germans, we marry them, we dream of traveling there and they here,''
Sarkisian said. ``But for some reason, there's a terrible war going on for


Moscow Tribune
March 28, 2003
Kremlin planing to combine regions
By Dmitry Polikarpov

The Kremlin is planning to unite several Russian regions in an effort
to increase its control over them, a spokesman for the presidential
administration told The Moscow Tribune this week.
"According to our plans, the number of regions that constitute the
Russian Federation will decrease in the coming decade as a result of
the unification of several regions," the official said.
One of the most ambitious projects is to merge St Petersburg and the
Leningrad area, a plan advocated by the Kremlin's new envoy to the
northwestern federal district, Valentina Matviyenko.
"This plan has very bright prospects," Matviyenko said this week.
The union would reduce the influence of the current St Petersburg
governor, Alexander Yakovlev, and would make it easier for a
pro-presidential candidate to become governor of the new region.
According to Kremlin sources, the presidential administration may also
be considering plans to merge Moscow and the surrounding area in the
coming years.
The only definite merger so far is the intended unification of the
autonomous Komy-Permiatsky region and the Perm area. A referendum in
December may decide the future of that project. Debates about a
possible union of the autonomous Taimyr district and the Krasnoyarsk
area, and of the Irkutsk region and the autonomous Buriatsky district
have already begun.
The idea of consolidating several of the 89 administrative areas
within Russia has been considered by the Kremlin since Vladimir Putin
became president in 2000. The presidential administration has already
revised power-sharing agreements with the regions signed by Boris
Yeltsin in order to improve control over the areas and bring local
legislations into line with the Russian constitution.
"The agreements continue to exist, but power-sharing is now based on
the federal law," Dmitry Kozak, deputy chief of the presidential
administration said .
During the Yeltsin era, 42 regional leaders signed power-sharing
agreements with the Kremlin, which, according to several analysts,
were effectively used as political bribes.
"In the early 1990s, Yeltsin agreed to give special benefits and
privileges to the leaders of several regions in exchange for their
support. Sometimes, these benefits were not fully in line with the
Constitution," said Igor Bunin, director of the Centre of Political
Presidential envoys to the seven federal districts of the Russian
Federation will play a key role in the promotion of the forthcoming
unions, which are expected to be completed by 2015. New power-sharing
agreements with the new areas will also be signed.
Several influential regional leaders have been urging with the Kremlin
to put more taxes into the regional budget. They demand that 80 per
cent of income tax go into the regional government budget, while the
current figure stands at only 50 percent. The regional authorities
also ask that local coffers retain 30 percent of the excise-duty on
oil and gas. The Kremlin insists that the local authorities' financial
demands are impossible to meet.


Moscow Tribune
March 28, 2003
Police end passport checks
By Dmitry Polikarpov

The Moscow Police (GUVD) may soon lose a stable source of supplementary
income. GUVD chief Vladimir Pronin this week ordered his subordinates to
discontinue the practice of indiscriminate identification checks on the
The new regulation, signed by Pronin, applies to policemen working in all
departments, including street patrolmen and traffic police (GIBDD) that
have been especially zealous in the passport checks. In 1998, a similar
order was signed by the then Interior Minister Sergei Stepashin, who banned
random checks of vehicles for documents by traffic police.
The Russian legal code does not stipulate that citizens are required to
provide proof of identity at all times. However, the police have made a
regular practice of checking passports in the street, supposedly in search
of illegal residents. Normally, those failing to provide their passports
have been detained for identification. Many people complained that the only
way to avoid detention was to bribe the police.
All Russians over the age of 16 are required to carry with them internal
passports or national ID booklets, containing residence information, at all
times. Citizens must have stamped proof of registration in order to remain
in another Russian city for more than three days.
According to Pronin, the main objective of the large-scale checks was to
discover illegal immigrants. The new directive states that a police officer
may ask a person to present a passport only if there is a suspicion that he
or she has committed a crime. How exactly this will be determined remains
unclear. Excluded from the new regulation are special police operations.
Police who violate the new orders will face disciplinary action. Those
affected are urged to report corrupt police by calling 02.
Legal experts said that the police might continue to carry out passport
checks despite the new regulation.
"They can still use their alleged suspicions as a pretext. However, I have
always recommended that my clients protest against the arbitrary checks,"
renowned Moscow lawyer, Leonid Olshansky, told The Moscow Tribune.
Interior Minister Boris Gryzlov recently threatened his subordinates with
"massive purges" in the face of accusations of increasing crime levels
among employees of the law-enforcement agencies.
Prosecutor General Vladimir Ustinov said earlier this month that state
employees, including police officers, received $16 billion in bribes last
year and that police were shutting their eyes to the problem.
"The measures [taken by police] in effect only target minor bribe-takers,"
Ustinov said.
President Vladimir Putin recently made major reshuffles in Russian security
structures, under the centralised control of the Federal Security Service
(FSB, ex-KGB), that the president once headed.
According to research by the INDEM think-tank, who surveyed a random sample
of respondents as well as a group of analysts, politicians, state officials
and businessmen, law-enforcement agencies currently head the list of the
most corrupt state institutions. Local law enforcers, who protect criminal
business enterprise, reportedly pocket 60 percent of incomes made from
drug trafficking.