Johnson's Russia List
21 April 2003
A CDI Project

  1. Rosbalt: 4% of Russians Are Regular Internet Users.
  2. Moscow Times: Catherine Belton, Killing Raises Awkward Questions.
  3. Moscow Times editorial: Country Is Still Stuck in Deadly Rut.
  4. AP: U.S. Victory Highlights Russian Weakness.
  7. AFP: Russia likely to lose Iraqi oil contracts: top US adviser.
  8. Reuters: Russia may borrow abroad, 1st time since 1998 crises.
  9. Luba Schwartzman: TV1 Review.
  10. Financial Times (UK): Lisa Clifford, Aeroflot learns how to smile. 
  11. Duma makes women and men equal.
  12. Wall Street Journal: Jeanne Whalen, Russian Oil Firms Hold Talks In
to Form Energy Titan. Yukos-Sibneft Merger Would Form World's Sixth Largest
  13. Kyodo: Russians say Kyoto pact offers no economic benefit.
  14. Reuters: Gambling fever grips Russia's second city.
  15. Business Week: Jason Bush, Putin Has Been Working on the Railroads.  
The President looks to the private sector to help rebuild Russia's rails.
  16. New York Times: Sabrina Tavernise, Factory Is Too Close for Rich
  17. Daily Times (Pakistan): Alexey Malashenko, Russia’s waning clash with
  18. Hungry Budanov goes back to court.
  19. Baltimore Sun: Matthew Spence, Exporting democracy is a challenge.

4% of Russians Are Regular Internet Users 

SAINT PETERSBURG, April 21. The number of frequent users of the Russian
section of the Internet rose last year, according to Russian Communications
and Information Technology Minister Leonid Reiman. The minister was
speaking today at an international congress entitled 'Trust and security in
the information community'. Reiman said that about 4.2% of the population
regularly uses the Internet and that there are around 15 million infrequent
Internet users. He also said that there are 9 computers per 100 people in

The minister predicted that this year would see 20-40% growth in the number
of Internet users. According to his figures, over 3 million fixed telephone
lines were installed in Russia last year, which was 41% more than in 2001.
The minister also said that the number of mobile phone subscribers rose 2.2
times to 18 million last year. 


Moscow Times
April 21, 2003
Killing Raises Awkward Questions
By Catherine Belton 
Staff Writer   

State Duma deputies mourned the loss of Sergei Yushenkov, the Liberal
Russia leader who was shot dead by an unknown gunman, and unleashed a storm
of criticism against the Putin government for failing to crack down on crime. 

But some leading liberal deputies close to Yushenkov warned that it was
precisely President Vladimir Putin's attempts to strengthen the power of
the security services in the name of law and order that had posed a threat
to the man who had been at the forefront of Russia's first wave of
democracy. More recently, Yushenkov had strongly opposed authoritarian
moves under Putin and was the deputy head of a Duma committee investigating
the possible involvement of security forces in the apartment bombings of 1999.

The debate poses awkward questions for Putin, who has built his rule on
establishing "dictatorship of the law" after the chaos of the Yeltsin
years, giving new powers to the security forces and taking steps to bring
Russia's unruly regions into line. But as the list of high-profile,
unsolved contract killings of national and regional politicians grows,
Putin's law and order moves give the appearance of being more successful in
curbing political freedoms than in reining in crime.

Duma Speaker Gennady Seleznyov saw the killing as proof that Putin has not
done enough on crime. He called for a closed-door hearing to be held on
Wednesday with the heads of the Federal Security Service, the Interior
Ministry and the Prosecutor General's Office, with a warning that anyone
who cannot answer for their responsibilities should "step down."

"The question of questions that citizens are putting before the state is
when will we end the reign of criminality in Russia?" he told reporters
Friday following a stormy Duma session where one after the other deputies
from the Communist Party, Vladimir Zhirinovsky's LDPR and the pro-Kremlin
Unity faction lashed out at the government for its inability to solve
crime. "Murders, attempted murders, theft, a whole pile of economic crimes
-- all this remains today and, in the eyes of the people, it remains
unpunished," Seleznyov said, Interfax reported.

Communist Deputy Ivan Nikitchuk called on Putin to speak before the Duma to
explain why the contract killings of the past year remain unsolved. And
fellow Communist Viktor Ilyukhin joined Seleznyov in calling for heads to
roll. Ilyukhin proposed a Duma vote on firing Interior Minister Boris
Gryzlov, but the measure fell 76 votes short of the 226 required.

But the only remaining co-chairman of Yushenkov's Liberal Russia party,
Viktor Pokhmelkin, asked the deputies on Friday not to drum up "PR out of
blood." And a close associate of the murdered deputy, independent liberal
lawmaker Yuly Rybakov, said he thought the killing had its roots in the
unchecked rise of "certain sections" of the security services under Putin.

"There are groups within the security services that are getting more and
more influential and getting more and more money. The names aren't
important, what's important is that there are such forces," Rybakov said in
an interview. "These are forces that don't want to see liberal ideology in
Russian politics.

"There is a systematic destruction of all liberal politicians of the first
wave. There is a definite trend," he said, citing the deaths of liberal
lawmaker Galina Starovoitova in St. Petersburg in 1998, and of Vladimir
Golovlyov, another Liberal Russia co-chairman, last summer.

Leading liberal lawmaker Sergei Kovalyov, meanwhile, urged Putin in an open
letter Friday to make sure law enforcers examined the possible involvement
of the president's own political supporters in the killing.

"The people who ordered and organized Yushenkov's death ... could be people
who are supporting the current vector of political development in Russia,
secret or open co-authors of this course -- in other words, your
supporters, Mr. President," Kovalyov wrote. He said even though he had no
reason to suspect official members of the state security services of being
involved, former KGB officials or other opponents of liberal ideas could
stand behind the crime.

Kovalyov, along with the majority of Yushenkov's colleagues from the left
and right wings, have rejected that financial misdoings or rifts in
Yushenkov's personal relations could have been behind the murder Thursday,
which Russia's political elite has branded a political killing. 

But Interfax on Sunday cited unnamed sources within law enforcement
agencies as saying the main line of inquiry was heading toward the deputy's
financial and personal dealings. "The investigation is being based on the
fact that Yushenkov could be a victim of infighting over party financing,
mixed up with personal ties," the sources told Interfax. 

The unnamed law enforcers also said investigators had managed to put
together a composite sketch of the killer based on the reports of witnesses. 

Gryzlov on Sunday sought to assure the public that the police force this
time at least was on its way to solving the crime. He told Interfax that
investigators had managed to determine the serial number of the pistol that
was abandoned at the crime scene.

Yushenkov's only public conflict was with Boris Berezovsky. The oligarch,
who is living in London to escape fraud charges, had funded Yushenkov's
party until the two fell out last fall.

Yushenkov expelled Berezovsky from party ranks. Just hours before he was
killed, at a press conference held to announce the final registration of
Liberal Russia with the Justice Ministry, Yushenkov stressed that
Berezovsky had nothing to do with the party and said they were ready to sue
him for creating a parallel Liberal Russia, Kommersant reported on Friday.

In a telephone interview Friday, however, Berezovsky dismissed talk of a
rift. He said Yushenkov had deliberately publicly stressed the conflict to
avoid problems getting the party registered.

"Liberal Russia would not have been registered until I was officially
excluded from the party," he said, adding that the two had agreed on
tactics at a meeting in London a month ago.

Berezovsky said he was going to send documents that would "shed light" on
Yushenkov's murder to Russian law enforcers on Monday. He said one of the
documents was a letter penned by Yushenkov to the British home secretary
supporting a request for political asylum in Britain by Nikita Chekulin. 

Chekulin has said he witnessed the "uncontrolled transfer of explosives,
including hexogen" ahead of the 1999 apartment bombings and did not want to
return to Russia "because he could be murdered," according to Berezovsky.

He said Yushenkov had laid out how he thought the FSB was involved in the
bombings in the letter. Berezovsky would not say what the other documents

Yushenkov distributed in Moscow a film made by Berezovsky called "Attack on
Russia" that alleges the FSB was involved in the bombings. 

Alyona Morozova, a Russian who said she had worked with Yushenkov on
investigating the blasts, said on Sunday she feared for her life and was
asking for political asylum in the United States where she is currently
studying. Morozova's mother was killed in one of the apartment blasts.

Moscow Times
April 21, 2003
Country Is Still Stuck in Deadly Rut

The shocking and senseless murder of Sergei Yushenkov serves as a grim
reminder of just how little progress has been made since the high-profile
murders of Moskovsky Komsomolets investigative journalist Dmitry Kholodov
and ORT head Vlad Listyev almost a decade ago.

Yushenkov is the third liberal Duma deputy to have been killed in the past
five years: Last summer, his Liberal Russia co-chairman Vladimir Golovlyov
was gunned down while walking his dog; and in November 1998, Galina
Starovoitova was shot dead in the stairwell of her apartment block.

In contrast to other recent high-profile killings, the dominant view is
that the murder was politically motivated rather than linked to money.
Which in many ways makes it all the more disturbing.

Tributes to Yushenkov's integrity and unimpeachable character have been
flooding in. A veteran of every Russian parliament since 1990, he
distinguished himself as a politician of principle who did not change tack
depending on how the political winds were blowing (a rarity not just in
Russia). And Liberal Russia presented no serious threat to anyone, with
extremely modest prospects in the upcoming elections.

Probably the most controversial aspect of Liberal Russia's activities was
its involvement with Boris Berezovsky, who was briefly a co-chairman of the
party. Relations soured last fall and Berezovsky was expelled from the
party, although wrangling over control of the party still goes on.

In the past few days, there has been a great deal of speculation
surrounding the murder and highly contradictory versions have been put
forward -- with certain politicians cynically seeking to exploit the murder
for their own political ends.

Some say that shady elements close to Putin are trying to sow fear among
the opposition before the elections and/or to intimidate Berezovsky
personally; others see the hand of Berezovsky behind it attempting to
blacken the reputation of the Putin administration and bolster the case
against his extradition; while still others see the murder as an attempt to
discredit Putin and his promises to institute law and order. And on, and on.

However, in the fog of speculation, at least one thing is overridingly
clear: As with previous cases, Yushenkov's murder will not be solved and
those who took out the contract on him will not be found. Furthermore, the
chances that any high-ranking law enforcement official will be fired for
failure to do his job are extremely remote.

And while this all-pervasive atmosphere of lawlessness and impunity reigns,
real progress will remain just as elusive as it has been for the past decade.

U.S. Victory Highlights Russian Weakness
April 21, 2003

MOSCOW (AP) - There's a message to the Russians in the swift defeat of
Saddam Hussein's military, which was modeled on the rigid Soviet war machine.

The triumph of a high-tech adversary has spotlighted the weakness of
Russia's own crumbling armed forces and strengthened the hand of radical
reform advocates.

``The Iraqi war has proven once again that a volunteer contract force
equipped with state-of-the art weapons and using modern tactics can fulfill
any task ... and do it with minimal casualties among civilians,'' said
liberal lawmaker Alexei Arbatov, a leading advocate of a Russian volunteer

When the war began, Russian generals forecast a long and fierce battle and
expected the United States to suffer massive casualties if it stormed Iraqi
cities. Just a week before Baghdad fell, Russian Defense Minister Sergei
Ivanov extolled the strength of the Iraqi army and said a U.S. victory was
``far from certain.''

``There were expectations of a new Vietnam,'' said Yuri Fyodorov, a deputy
director of the PIR-Center, an independent Russian think-tank.

Russian generals and diplomats, who also predicted an all-out battle for
Baghdad, drew on Russia's own botched experience in the storming and
virtual destruction of Grozny, the Chechen capital.

``The U.S. victory in Iraq has become an unpleasant surprise for the
Russian political and military elite,'' said Yevgeny Volk, head of the
Moscow office of the Heritage Foundation, the U.S. think tank.

The Iraqi army closely copied the Soviet organization and tactics and was
equipped with mostly Soviet-built tanks, aircraft and missiles. Although
official military contacts were severed after the 1990 Iraqi invasion of
Kuwait, two retired Russian generals visited Baghdad to advise its
defenders, according to Russian media reports. They later acknowledged the
visit but denied serving as military advisers.

Many Russians say their army suffers from the same weaknesses that
contributed to Iraq's defeat - badly maintained weapons, poorly trained
troops, rigid command and poor coordination.

Retired Gen. Andrei Nikolayev, head of Parliament's defense affairs
committee, said the Russian army is similar to the Iraqi army in its low
morale and lack of motivation.

``Go on the street and ask who is ready to defend the motherland and you
will immediately see unpleasant parallels,'' he said. ``The outcome of a
war depends on army's morale.''

In an article published this week in the daily Nezavisimaya Gazeta,
commentator Maxim Glikin recalled his own experience in the Soviet military
in the late 1980s, saying he and his comrades would have surrendered just
like Saddam's soldiers.

``We would have thrown away our rifles and changed into civilian clothes
before an aggressor approached our unit,'' Glikin wrote.

The Russian military has declined steadily since the 1991 collapse of the
Soviet Union, lacking funds to modernize weapons, hold exercises and even
properly feed and dress servicemen.

Miserable conditions and rampant hazing of young conscripts have led to
suicides, desertions, shootouts and widespread draft-dodging. All Russian
men aged 18-27 are required to serve two years in the military, but 90
percent avoid the draft.

President Vladimir Putin has sought to reverse the meltdown by ordering a
gradual transfer from the draft to a volunteer force by 2010. But the top
brass are stubbornly defending a bulky, Soviet-era military on a meager
budget equivalent to $11 billion this year. In contrast, Soviet defense
spending stood at the equivalent of $155 billion in 1991, the year of the
Soviet collapse, according to official statistics. Some Western experts
believe it was even higher.

In stark contrast with the computerized, satellite-guided U.S. military,
the Russian army's arsenals are of Cold War vintage, precision weapons are
few and tactics largely imitate the World War II patterns. A lack of fuel
and spares has grounded aircraft and left most navy ships to rust in port.

While the top brass is using the Iraqi war as a pretext to plead for more
funds, critics are urging the military to further trim ranks, dump
excessive weapons and radically streamline its bloated, antiquated structure.

``Pumping more cash into the outdated defense structure would be a useless
waste of money,'' said Konstantin Kosachev, deputy head of Parliament's
foreign affairs committee.

No. 72
April 19, 2003
[translation from RIA Novosti for personal use only]
Vyacheslav NIKONOV, president of the Politika Foundation 

     I was in the USA when the Iraqi war ended. Meeting with 
dozens of experts, journalists and politicians, taking part in 
conferences and watching the round-the-clock media coverage of 
the situation, I tried, above all, to determine what damage the 
war did to the Russia-US partnership. Relations with the USA, 
the world's only superpower, are extremely important to any 
country, including Russia. 
     My first impressions and feelings were not optimistic.
Russia has greatly surprised the USA, where nobody expected it 
to take such a harsh anti-American stand. The fact that Moscow 
sometimes spoke even harsher than the Arab countries did was 
duly noted. Those in the US Administration and academic circles 
who were sympathetic to Russia were criticised and pushed back 
for failure to predict that Russia would stand by Saddam 
Hussein to the last. They could not forecast our logic, which 
seemed utterly unreasonable. 
     But the hawks, who had initially denounced rapprochement 
with Russia as a gross mistake of George Bush, were happy. What 
else could you expect from Russians? they seemed to say. The 
developments of the past few weeks engendered more problems.
Information about alleged Russian arms deliveries to Iraq was 
consonant with Russia's violation of the UN Security Council's 
sanctions against Iraq, which Russia had supported. 
     In general, Russia was mentioned on television, if at all, 
along with France and Syria, which the Americans saw as the 
allies of Saddam Hussein. Germany has been "forgiven" but 
negative feelings for France have been growing. On the list of 
most hateful politicians, Jacques Chirac was put only slightly 
below Saddam Hussein. And the invitation of the French 
President to St. Petersburg did not add sympathy for Russia. 
     Both analysts and the general public were shocked by the 
multi-thousand anti-war meeting at the US Embassy in Moscow at 
a time when all television channels were showing US troops in 
Baghdad and crowds of cheering Iraqis. The impression was that 
Moscow was situated on some other planet. 
     By and large, there were reasons to doubt that the 
Russia-US partnership had a future. But the more I talked with 
Americans, read newspapers and watched television, the more I 
thought that not everything was lost yet. 
     Happily, there was little information from Russia because 
France took the main blow. I noticed that "negative" 
information about Russia was not repeated by one television 
channel or newspaper after another. It appeared that Washington 
was deliberately let drop the shows that could potentially 
explode Russia-US relationship. I believe the reason is that 
the improvement of relations with Russia was proclaimed by 
President Bush two years ago as a US foreign policy priority. 
The White House is not in a hurry to denounce this line as 
wrong, as this would redirect the blow at the Chief Executive. 
     The opposition, though it is becoming increasingly 
dissatisfied with Moscow, does not dare yet criticise President 
Bush, who is extremely popular in the country now. The 
statement of Vladimir Putin, who said that Russia did not wish 
defeat to the USA, had a positive effect and greatly softened 
the tone of commentaries in the USA. 
     I am convinced that Bush will attend the celebrations of 
the 300th anniversary of St. Petersburg, unless something 
extraordinary happens. The warming of bilateral relations, 
which Russia needs no less than the USA does, is possible. But 
I do not think they will soon become as warm as they were in 
Neither do I think that Russia has a good chance of preserving 
its positions in post-Saddam Iraq. 
     There will be many more trials. I hope to God that the 
"trial by Iraq" is over and no fresh proof of our military 
collaboration with the defeated regime will be found there. But 
we are facing a trial by Syria. It does not look as if the 
Americans plan to use force there, but they will use the threat 
of force to demand the liquidation of Hezbollah-type 
organisations there. How will Russia react to such a demand?


ABU-DHABI, April 21. /RIA Novosti correspondent Igor Kuznetsov/. 
According to Saudi newspaper Al-Sharq al-Awsat, Iraqi Communists published
the first newspaper in the post-war Iraq. 

The first issue of Tarik al-Shaab (People's Way) newspaper, which used to
be published by the Communist Party until 1979, was distributed in Iraqi
capital free-of-charge. 

Iraqi Communists have opened their headquarters on Andalus Square in
downtown Baghdad. 

Iraqi Communist Party was founded in 1921. The party faced persecutions on
the part of authorities on numerous occasions. After being banned in Iraq,
the party had split. Two fractions were in opposition to Saddam Hussein's
regime. In the north of Iraq, there is also Kurdish Communist Party. 


Russia likely to lose Iraqi oil contracts: top US adviser
April 21, 2003

A senior US defense adviser suggested in an interview published Monday in
Moscow that Russia was likely to lose rights to Iraqi oil contracts signed
under the Saddam Hussein regime.

"There is a high probability that all previous deals with Russia will be
declared meaningless," Richard Perle, counselor to Defense Secretary Donald
Rumsfeld, said in an interview with the Kommersant business daily.

"Of course this is something for the new Iraqi government to decide," Perle
said in an interview published in Russian. 

"But I would be surprised if Russia wins the support of the new Iraqi
leadership -- the same support that it received from (Saddam) Hussein," he

The comments threatened to undermine already testy relations between Moscow
and Washington amid efforts from both sides to ease the tensions ahead of a
meeting between US President George W. Bush and Russian President Vladimir
Putin next month.

Russia has vowed to defend its oil interests in Iraq, through international
courts if necessary.

Its leading private oil company LUKoil holds a 68.5-percent share in a
consortium to develop the West Qurna-2 field with the Iraqi energy ministry
and two other Russian companies under an agreement signed in 1997.

LUKoil was to invest some four billion dollars in the site's development by
2020 under the deal. But the company was unable to exploit the site due to
existing UN oil embargoes on Baghdad.

The company estimated the site has oil reserves of some 20 billion barrels.

Washington officials have said that Iraqi oil must be used to benefit "the
Iraqi people" -- the remark, implying a US decision-making role, drew
concern in Moscow -- but have so far failed to specify the future of Iraqi
oil fields which are now guarded by US troops.

Russia has stepped up its defense of Iraqi oil rights through diplomats in
the foreign ministry as well.

An unnamed diplomat told the IRAR-TASS news agency that Russia wants the UN
inspectors to pronounce Iraq free of weapons of mass destruction before
economic sanctions against it are lifted.

The unnamed official said UN weapons and nuclear arms inspectors must
"return to Iraq and confirm that it has no weapons."

The UN Security Council -- where Russia wields veto power -- must approve
the removal of Iraqi sanctions, including those concerning its oil exports.

The Russian official said United States "want the sanctions to be lifted
immediately ... but this stance contradicts international rights."

US President George W. Bush said last week he would soon propose a UN
resolution ending the economic sanctions that put an embargo on the trade
of Iraqi oil.

Russia also is concerned that allowing Iraq to trade its substantial oil
resources freely on the world market could damage a Russian economy heavily
reliant on oil exports.

Perle is seen as more hawkish in foreign and defense affairs than Rice and
he was scathing of Russia's position in relation to Iraq and its stance
against the US-led war there.

Asked whether he was concerned by reports that Russia may have helped Iraq
in its program to develop weapons of mass destruction, Perle said that he
was suspicious of Moscow's stance.

"This is a very serious problem," he said. "I am certain that Russia is not
disclosing full information about cooperation between its own biological
weapon development program and Saddam Hussein's regime," he told Kommersant.

The Russian government has denied reports that it cooperated with Iraq --
its Soviet-era ally -- in its military program in recent years.


Russia may borrow abroad, 1st time since 1998 crises

MOSCOW, April 21 (Reuters) - Russia is considering tapping international
debt markets for $2-3 billion next year in what could be its first
borrowing abroad since the 1998 financial crisis, a senior finance ministry
official said on Monday.

"At this point we consider (borrowing) $2-3 billion next year," Sergei
Kolotukhin, a deputy finance minister, told reporters, referring to the
volumes of Russia's foreign borrowing in 2004.

"But if the situation is favourable we may not need to."

The last time Russia issued a Eurobond was in July 1998, when it
restructured short-term domestic debt into longer-term foreign debt. But
that did not help Moscow avoid a domestic market debt crash the following

Since then Moscow has been paying down foreign debt without refinancing and
plans to increase foreign borrowing to refinance future debt repayments
after the 2003 debt payment peak year is over and Russia wins a better
credit rating.

The 2003 draft budget provides for a $1.25 billion Eurobond, but the
government has said it could keep its books balanced without the issue as
long as the average annual price of oil, Russia's main export item, stays
above $20 per barrel.

Russia's main Urals export blend was traded at $23.55 per barrel on Monday.

Russia has to pay $14.9 billion in foreign debt in 2004, $8.2 billion of it
in principal. Russia has to service foreign debt worth $17.3 billion this


TV1 Review
Compiled by Luba Schwartzman (
Research Analyst, Center for Defense Information, Moscow office

Saturday, April 19, 2003
- Indonesian President Megawati Soekarnoputri gave an interview
to TV1 and ITAR-TASS on the eve of her visit Russia.  She said
that she feels a kinship to Russia and hopes that her meetings with
Russian President Vladimir Putin will be productive.  She also
expressed her confidence that there is great potential in Russian-
Indonesian cooperation.
- President Putin chaired a meeting on foreign and domestic policy
issues.  Administration head Aleksandr Voloshin, Foreign Minister
Igor Ivanov, Defense Minister Sergei Ivanov, Federal Security
Service Director Nikolai Patrushev and Minister of Internal Affairs
Boris Gryzlov attended.
- Russian Prime Minister Mikhail Kasyanov is in Italy on a
working visit.  He attended the opening of the Russian General
Consulate in Palermo, Sicily.
- Major General Aleksandr Burutin, a member of the General
Staff, has been appointed Presidential Advisor on the Military-
Industrial Complex and the State Defense Order.
- The first Congress of the Party of Life was held in Moscow.
Federation Council Speaker Sergei Mironov was elected Chairman
of the party.  In the upcoming parliamentary elections, the party
will cooperate with the United Russia Party in single-mandate
- An arms cache with 7 landmines, 4 grenade launchers and 15
grenades was discovered on the border of Ingushetia and
Chechnya.  An investigation has been initiated.
- Security measures will be heightened in St. Petersburg in
connection with the upcoming celebrations of the city's 300th
anniversary.  The Passport Service is deporting illegal migrants
and auto inspectors are checking every truck.
- Deputy Foreign Minister Sergei Razov declared that Russia and
Lithuania have found a solution for the problem of transit visas to
Kaliningrad.  Simplified documents will be available.
- In Volgograd, 70 children and 5 adults poisoned by toxic gases
that leaked from an oil-processing plant have been hospitalized.
Deputy head of theGeneral Prosecutor's Directorate of the
Southern Federal District noted that the people responsible for the
accident may face up to 5 years inprisonment.
- Preparations are underway for large-scale training exercises of
the Pacific Fleet.
- Firemen took 8 hours to put out a fire at a storehouse in
Murmansk.  Smoke from the fire smothered the city's center all
- The SMERSH military counterintelligence service was
established 60 years ago today.
- Aleksandr Sokurov's film Russian Arc is now playing in
- The first ever Festival of Russian Cinema opened in Hollywood.

Sunday, April 20, 2003
- Indonesian President Megawati Soekarnoputri arrived in
Moscow.  At the Sheremetievo Airport she was greeted by
Minister of Industry and Science Ilya Klebanov and Deputy
Foreign Minister Aleksandr Losyukov.  Tomorrow Soekarnoputri
will meet with President Putin and highly-placed government
officials to discuss international and regional issues and bilateral
cooperation, including military-technical cooperation.  Indonesia
plans to purchase a batch of Su-21s and Su-30s from Russia.
- A package containing a bomb made from 6 live cartridges, a
detonator and a timing device was discovered at a polling station
in the Kuzbass, where voting for the regional parliament and local
government was underway.
- Sergei Yushenkov's funeral was held at the Vagankovo
Cemetary.  State Duma deputies, ministers, film stars and regular
citizens attended.
- Friends and colleagues in Zvezdny City threw a traditional send-
off for cosmonauts Yuri Malenchenko and Edward Lu.  They will
fly out on the 7th Expedition to the International Space Station on
April 26th.
- National Advertisement Awards were held in St. Petersburg.


Financial Times (UK)
April 21, 2003
Aeroflot learns how to smile 
By Lisa Clifford 
In the late 1980s and early 1990s, as the Soviet Union quietly faded into
oblivion, a flight on Aeroflot was a rite of passage for many western
travellers. You couldn't claim to have experienced Russia until you'd
steeled your nerve and boarded a creaky Tupolev or Ilyushin for a white
knuckle flight to Novosibirsk.
Passengers told of aircraft without heat in the winter and without air
conditioning in the summer. The food was inedible, the stewardesses
truculent and the delays legendary. It was not uncommon to be left queueing
in the snow for hours, ignored by stone-faced Aeroflot staff in
military-style uniforms.

In 1994 an Aeroflot flight from Moscow to Hong Kong crashed into the
Siberian tundra, killing 75 people. Investigators later revealed the pilot
had allowed his young son to fly the plane.

"You knew it wasn't safe, but you kept your fingers crossed and hoped for
the best," said a western journalist who lived and worked in Moscow during
that era.

But that was more than a decade ago and Aeroflot, like Russia, is changing.
With the help of British brand consultants Identica, the Russian national
carrier will spend $30m (£19m) over the next three years casting off its
dowdy and dangerous Soviet past.

"The face of Aeroflot was bureaucratic, hostile and cold," says Lev
Koshliakov, the airline's deputy director of public affairs. "The new brand
reflects service, openness, friendliness and professionalism." Almost
everything is earmarked for change - uniforms and surly staff. The hammer
and sickle logo, 80 years old, will be replaced by something more
"neutral", Mr Koshliakov says. "It really had negative perceptions."

The aircraft will be repainted silver, blue and orange, warmer than the
current blue and white, while the tail fin will feature a fluttering
Russian flag. Aeroflot says the new colour scheme - meant to evoke images
of "sunrises, cupolas, golden autumns and poetry" - will be repeated inside
the aircraft and on staff uniforms, which are currently being drawn up by
top Russian fashion designers.

Passengers, who in the Soviet days often had to make do with a single glass
of water, will cheer the improved meals in economy class. Aeroflot will
offer a choice of three or four freshly prepared meals in the upper class

Lastly, Aeroflot's flight attendants are to work with consultants and
psychologists who will teach them to smile and at least pretend to care
about the customer.

In the past, the airline has tried to poke fun at its famously sullen
stewardesses, launching an advertising blitz in the 1990s that explained:
"We don't smile because we are serious about making you happy."

That campaign also featured print advertisements with an elephant flying
over London and New York accompanied by the slogan "light on its feet".
Consumers remained doubtful that either an elephant or Aeroflot could get
off the ground, and the adverts flopped.

Though the Identica overhaul is more radical, Aeroflot points out that
improvements in service and reliability were already under way before the
British brand consultants arrived. It had little choice after losing its
monopoly following the break-up of the Soviet Union when almost all of
Aeroflot's domestic routes were spun off to form a series of small,
regional airlines. At the same time, other domestic carriers moved in and
competition from western airlines increased.

The company went public in 1995 and, although the Russian government still
owns 51 per cent, it has said it will reduce its stake. Passenger numbers
are forecast to rise 5 per cent this year with net profit increasing to
$100m from $74.2m last year. Ever optimistic, Aeroflot hopes that war in
the Gulf will work in its favour as travellers shun British and American
airlines in favour of the newly friendly Russian carrier.

As the passengers trickle back, Aeroflot has also worked hard to bring its
safety standards up to scratch. There hasn't been a crash in years, Airbus
and Boeing jets now make up about 20 per cent of Aeroflot's fleet, and more
than 60 per cent of its flights are carried out by new aircraft.

Despite this, everyone involved in the rebranding knows the image problem
will be tough to overcome.

"The perception in the west is much worse than the reality of flying on
Aeroflot," Mr Koshliakov says.

Industry insiders agree. "They've got a safety record that can challenge
any airline in the world," says David Learmount, operations and safety
editor at Flight International magazine. "It's not as bad as people think."

Should the Aeroflot executives ever get downhearted about the challenges
ahead, they could visit a busy production line at Skoda, the former
down-at-heel Czech carmaker that also called in a marketing agency to
revamp its shoddy image.

The changes, accompanied by an amusing advertising campaign, were a huge
success and Skodas are flying off the car lots - the stigma of their Soviet
past forgotten.

Only time will tell if Aeroflot can emulate the success of its carmaking
comrade. In the meantime, the jury is still out on whether travellers
booking on the former Aeroflop should take their own sandwiches and a
sleeping bag.

April 17, 2003
Duma makes women and men equal
By Lera Arsenina 

The State Duma has passed at the first reading a draft bill proclaiming
equal rights, freedoms and opportunities for men and women. According to
its author, Fatherland-All-Russia deputy Yekaterina Lakhova, the adoption
of the bill is an event of historic importance for the nation, although the
male population of Russia is not yet aware of it. 

On Wednesday the State Duma passed the draft bill 'On state guarantees of
equal rights and freedoms for men and women and equal opportunities for
realizing them' at the preliminary first reading. It faces a further two
readings before being sent to the upper house for approval. 

The bill was submitted by the chairperson of the Women of Russia movement,
the OVR deputy Yekaterina Lakhova. 342 deputies backed her initiative; 2
abstained and only 1 deputy voted against the bill. 

The OVR press-service reported that the house voted almost unanimously for
the final version of the document re-worked on the basis of proposals
submitted by the government and the State Duma’s committees. 

The bill aims to ensure equal rights for women and men in areas such as the
civil service, voting rights, education and the sciences. In particular,
the document enshrines equal employment opportunities for men and women, as
well as equal pay. 

Furthermore, the bill obliges an employer to prove that by dismissing a
certain employee he was not taking into account his or her sex. Under the
bill, those who have suffered sexual discrimination will have the right to
sue the offender. Ensuring equal rights for men and women will be the task
of executive authorities both on the federal and regional levels. 

After the bill was adopted on Wednesday Yekaterina Lakhova told Gazeta.Ru
that ''a historic moment has come for women’s organizations in Russia,
though our men have not realized it''. 

According to the deputy, this is the first time that the Duma has discussed
a bill on gender equality, and its adoption at the 1st reading signifies
the start of a serious process. ''We have been preparing it for three years
and conducted preparatory work with ministries, governmental agencies and
parliamentarians. Even the SPS [Union of the Rightist Forces] and Yabloko,
which at first were opposed [to the bill], have backed it. Although, we had
to overcome a lack of understanding, to explain that it is not a bill
asserting the rights of women, but a law on gender equality,'' Lakhova

The deputy believes that the bill has won the Duma’s approval relatively
easily because it does not require extra budgetary expenditure, but merely
calls for current laws and the Constitution to be observed. 

''Some consider that in essence the law is but a declaration. In truth,
however, this is a law of direct action – it demands that each executive
body observes the principle of gender equality,'' Lakhova specified. 

The bill was prepared with the help of several national women’s
organizations, including the Women of Russia Union, the Consortium of
Women’s Non-governmental Unions, and Village Women. 

Their representatives attended the ''historic'' session at the State Duma
on Wednesday and are set to continue to fight for their rights. According
to Lakhova, most likely the second reading of the bill will take place at
the end of the year. In the meantime, Lakhova and her supporters intend to
continue their mission, sending out the draft to the regions for
consideration and analyzing any amendments consequently submitted. ''The
main thing is to unite and not allow men to think that we are here only to
serve them,'' the deputy emphasized. 


Wall Street Journal
April 21, 2003
Russian Oil Firms Hold Talks In Deal to Form Energy Titan
Yukos-Sibneft Merger Would Form World's Sixth Largest Oil Producer

MOSCOW -- Two Russian oil companies are in talks to merge and form an
energy concern that would rank sixth by production among the world's
publicly traded petroleum and gas concerns, according to people familiar
with the negotiations.

These people say the merger could be announced early this week.

OAO Yukos and OAO Sibneft, two fast-growing Siberian producers, are close
to signing an agreement to combine their assets into a company that would
pump 2.2 million barrels of oil a day, just shy of the output of
fifth-ranking TotalFinaElf SA. The business would hold 20.7 billion barrels
of petroleum and natural-gas reserves and have a market capitalization of
about $35 billion.

If completed, the deal would mark the largest merger in Russia's fledgling
market economy and create a new international heavyweight capable of
financing big development projects in Russia and beyond, analysts said. The
transaction would follow hard on the heels of BP PLC's $6.75 billion
investment in Russian oil, which was announced in February.

People familiar with the discussions say Yukos's current shareholders would
own a majority stake in the combined entity, with Sibneft shareholders
retaining a smaller stake in the range of 25%. Both producers are majority
owned by a small circle of Russian businessmen, who bought the assets at
rock-bottom prices from the state in the mid-1990s. Foreign portfolio
investors own minority stakes in both firms.

Officials from Sibneft and Yukos declined to comment on the negotiations.

Russia's petroleum production collapsed after the fall of the Soviet Union
but has begun soaring in recent years as the newly private sector boosts
investment. Already the world's second-biggest oil exporter after Saudi
Arabia, Russia plans to build several new pipelines in coming years to help
it grab more market share from the Organization of Petroleum Exporting
Countries. Washington has welcomed the growth, hoping that Russia can help
ease the West's reliance on Middle Eastern crude.

The oil merger would signal a maturing of the Russian economy and a rare
sign of cooperation among the fiercely competitive tycoons who control much
of that nation's industry. Mikhail Khodorkovsky and Roman Abramovich, the
biggest single shareholders in Yukos and Sibneft, respectively, came close
to combining their firms in 1998 but stopped short of signing a deal.
Analysts at the time said Sibneft wanted a bigger stake than Yukos was
willing to cede.

People familiar with the current talks say the transaction would involve
Yukos's making a cash payment to Sibneft. They add that Yukos approached
Western commercial banks last week seeking acquisition financing of as much
as $1.3 billion to complete the deal. Yukos produces 1.6 million barrels of
petroleum a day, while Sibneft pumps 600,000 barrels daily.

Mr. Khodorkovsky, chief executive of Yukos, would run the new entity,
according to people familiar with the matter. The politically powerful oil
chief worked his way up through the chaos of early Russian capitalism by
starting a bank, Menatep, which eventually failed in the 1998 financial
crash. After helping finance Boris Yeltsin's re-election campaign in 1996,
he bought Yukos from the state and presided over several years of stagnant
oil output at the company.

But as political stability has taken root under President Vladimir Putin,
Mr. Khodorkovsky and other businesspeople boosted investment and begun
adopting Western management and technology. Yukos's oil production and
market capitalization have soared as a result, making Mr. Khodorkovsky
Russia's richest man, with a net worth of about $7 billion.

The Yukos chief often has voiced ambitions to vault his company into the
top tier of world energy firms, and the merger talks appear aimed at that
goal. One person familiar with the discussions said the oil chiefs
approached the Kremlin last week to get its blessing for the merger.
Russian petroleum shares have been rising in recent weeks amid rumors of a
coming transaction, with some analysts speculating that a major foreign oil
company planned to buy part of Sibneft.

Both Yukos and Sibneft have enjoyed double-digit petroleum output growth in
recent years, but they face steep future investments to keep production
growing and to get their oil to market. The firms have announced plans,
along with other Russian partners, to build multibillion-dollar pipelines
that would carry crude south to China and north to a new Arctic port.

The $4.5 billion Arctic project, which could eventually send large
quantities of oil to the U.S., got a boost last week when Moscow endorsed it.


Russians say Kyoto pact offers no economic benefit

MOSCOW, April 21 (Kyodo) - The Russian Ministry of Economic Development and
Trade, the government agency in charge of evaluating the 1997 Kyoto
Protocol on global warming, has concluded that the treaty would yield no
economic benefits for Russia, hinting that Moscow has no economic grounds
for ratifying the treaty.

According to diplomatic sources, the Russian officials made the argument in
a policy paper drafted in late March that they circulated to members of an
inter-ministerial panel set up to discuss climate change issues.

The Economic Development Ministry draft serves as the basis for debate at
the inter-ministerial committee, which is expected to present a final
report to Russian Prime Minister Mikhail Kasyanov this summer.

As the United States has opted out of the Kyoto Protocol, ratification by
Russia, the world's third biggest producer of global warming gases, is key
to bringing the treaty into force.

The treaty requires industrialized countries to slash their greenhouse-gas
emissions from 1990 levels by an average of 5.2% between 2008 and 2012.

Russia has obtained massive emission rights of global warming gases under
the treaty, as the economic turmoil that followed the collapse of the
Soviet Union suppressed the country's emission levels.

Under the treaty's emission trading system, Russia can sell its surplus
emission rights to developed countries that are unable to cut down their
emission through their own conservation efforts.

The Russian calculation appears to have backfired. The diplomatic sources
said the high prices Russia has set for its emission rights have scared off
potential buyers.

The Russian Economic Development Ministry was ''disillusioned'' that none
of the developed countries has shown interest in buying Russia's emission
rights, a Japanese government source said.

At the same time, Russia has seen its own emission levels grow, spurred in
part by a robust economy and a decline in the consumption of natural gas,
which emits little carbon dioxide.


FEATURE-Gambling fever grips Russia's second city
By Claire Bigg

ST PETERSBURG, Russia, April 21 (Reuters) - Gambling fever is gripping
Russia's old tsarist capital and is wrecking homes, breaking up families
and attracting crime, social planners say.

Hundreds of slot machines, casinos and gaming houses have sprung up on the
boulevards and elegant canal walkways of St Petersburg, luring Russians,
young and old, to make one more roll of the dice.

This is nothing new for Russia's second city. More than a century ago, one
of its most famous sons, writer Fyodor Dostoyevsky, pawned his wife's
wedding ring to pay for his gambling debts.

But today, to the alarm of the city's social services, the number of
addicted gamblers is growing -- mainly white-collar professionals, bitten
by a bug that pushes them to one more spin of the wheel -- and personal

"Gambling drives many people to commit crimes," said Viktor Zaitsev, a
senior researcher at the Bekhterev institute that seeks to help compulsive

"Many start stealing money from relatives or valuables to sell so they can
raise gambling money," he said.

Zaitsev says up to five percent of the Russian population could be addicted
-- as many as seven million people. That would mean that in Petersburg
alone there could be as many as 240,000 compulsive gamblers.


Betting is by no means an unknown phenomenon in a country where men will
risk their shirt on a cockroach race.

But today's surge in gambling, reflected in many other Russian cities,
marks a new form of post-Soviet social vice away from the traditional
scourge of vodka.

Soviet-era gambling was limited to lotteries with modest prizes, a handful
of racetracks and gaming tables in parks and on beaches.

Nowadays, catchy advertisements on public transport encourage punters to
try their luck. Slot machines appear in posh and sleazy cafes alike and
every corner of many metro stations.

According to Zaitsev, compulsive gamblers tend to be intelligent,
professionally successful and highly active people, driven to gambling by
an inability to relax.

This social sector can draw on average salaries of between $1,000 and
$4,000 a month to fund their addiction, he said.

Others -- the ones that Zaitsev and others like him tend to see -- do not
fare so well, turning for social help only when their family life is in
tatters and they have run into major problems with their employers.

Only 200 people have turned to Zaitsev's institute for help since it opened
in 1995. Of the 95 patients who underwent psychiatric care, only half were
cured -- the others went back to the gambling tables.

"One woman visited after losing $170,000 in casinos in two and a half
months. She came to two sessions, then gave up, saying she was rich and had
more money to gamble," Zaitsev said.

"Many people stake money that their company has entrusted to them. I saw a
man, who was earning $5,000 a month, first gamble his own money, then the
company's money, after which he was fired. Then he had problems with his

One company manager gambled away his salary, then the car he had been lent
by the company, and finally a large sum of money he had been entrusted with
by his firm.

"He was fired. Now he gives lifts in his car for a living," said Zaitsev.


Poor living standards, as well as the Russian temperament itself, help
explain why gambling is so popular.

"Russians tend to have a fatalistic approach of life. They think that if
they are going to lose, they might as well lose straightaway," he said.

Grigory Vlasov, general manager of "Vegas," a huge gaming centre near the
Fontanka canal in the very heart of the city, says half of its clients play
"one-arm bandits" -- spending hours feeding 10 rouble notes into the
machines and hoping for the jackpot.

"There is nothing we can do," he said, when asked about compulsive
gamblers. "It's like a drug for them. We cannot really kick them out."

The profile of today's compulsive gambler could have been written 150 years
ago by Dostoyevsky, himself an inveterate gambler who based many of his
novels in Petersburg.

In "Igrok" (The Gambler), drawing on his own experiences, he depicts the
decline of a hero who knows both jubilation and despair at the roulette
table before he is engulfed by his addiction.

Dostoyevsky squandered a small fortune in gambling dens, his terrible guilt
not preventing him from regularly pawning his wife's clothes and jewellery
-- including, finally, her wedding ring -- to finance his habit.

(Reporting by Claire Bigg, Writing by Richard Balmforth, Editing by
Victoria Barrett; +7 095 775 1242; Reuters

Business Week
April 28, 2003
Putin Has Been Working on the Railroads  
The President looks to the private sector to help rebuild Russia's rails 
By Jason Bush in Moscow
Quick, what's the longest train line in the world? Russia's Trans-Siberian
Railway, of course. But the storied route, running 9,335 km from Moscow to
Vladivostok, is only one spoke in a sprawling network of rail lines that
spiderweb across Russia. Trains are almost as important to the Russian
economy as oil: 80% of freight traffic goes by rail, compared with around
20% in the West. But the once-mighty system is falling to pieces. According
to official estimates, 58% of railway equipment is worn out. The tab to
replace it is more than $20 billion.

The Russian government doesn't have that kind of money. So President
Vladimir V. Putin is looking to the private sector for help. In May, the
Kremlin will transfer the country's rail assets to a new
government-controlled company called Russian Railways Co. It's the most
important step so far in a 10-year plan to rejuvenate the rail system by
breaking the control of the Railways Ministry, which now owns, operates,
and regulates the entire rail network. Starting next year, the new company
will be divided into subsidiaries, parts of which will be sold off to
private investors later. While the infrastructure will remain
government-controlled, 60% of the rolling stock should eventually be in
private hands. "Our primary objective is to increase the competitiveness of
the Russian economy," says deputy railways minister Anna Belova, appointed
in 2001 to spearhead the sector's makeover.

The big question is whether private competition will be able to make much
headway against such a powerful incumbent. Russian Railways Co. will
inherit not only the track but also much of the rolling stock. That means
it will have little incentive to welcome competitors on its rails. And
while the Railways Ministry should in theory become an independent
regulator, it is notoriously conservative, and its links with the state
railway company are sure to stay strong. "The whole atmosphere is Soviet,"
says one U.S. diplomat in Moscow.

That may be. But some hardy entrepreneurs already are riding the rails.
Private operators account for 9% of rail cargo transport in Russia, and
they're making enough money to expand rapidly. "We've operated in this
environment successfully for 10 years," says Gaspard Boot, finance director
of Russkiy Mir, Russia's largest private railway company. Set up as an oil
trading firm in 1991 by Western European investors, the company now owns
13,000 railcars. Its main selling point: You order a delivery, it's
delivered -- promptly. "With [the state railways], the cargo is loaded into
a container, but it doesn't follow that it is actually put on a train,"
says Boot.

Russkiy Mir's main customers are Rus-sian oil companies, which are now
exporting like mad to cash in on high crude prices. They're keen to boost
rail shipments, bypassing physical and legal limitations on their pipeline
exports. As a result, some oil companies are getting heavily involved in
the railways themselves. Yukos (YUKOY ), Russia's No. 2 oil producer, has
built up a fleet of 6,000 tanker wagons in the last two years, and it's
buying 3,000 more this year. Even without their own rolling stock, oil
companies have a strong interest in seeing the railway sector reformed.
"The sector is [organized] just the same as it was in the '30s or '50s, yet
the country has gone a long way ahead," says Alexander Sapronov, Yukos'
vice-president for transport and logistics. Metals companies and coal
mines, too, are looking for ways to cut costs by handling their own rail
transport. One incentive is a 23% rate discount, rising to 30% in July, for
companies that supply their own wagons.

Little wonder investment by private companies in rolling stock is booming.
Last year, private operators spent about $250 million on 10,000 new
railcars. Their biggest complaint is that Russia's railcar factories can't
produce quickly enough to meet demand. Russia's wider rail tracks and
unique specifications mean that rolling stock cannot simply be imported.
That's why some foreign manufacturers are considering investing in
production in Russia. General Electric Co. (GE ), for instance, sees a
great opportunity in upgrading Russia's 15- to 20-year-old locomotives --
locomotives even older than the post-Soviet regime. All aboard! 


New York Times
April 21, 2003
Factory Is Too Close for Rich Russian's Comfort

VSEVOLOZHSK, Russia — Valentin L. Kovalevsky's shining silver Range Rover
glided like a hovercraft over the narrow, snowpacked road toward his
country cottage in the prestigious outskirts of this northern Russian town.
Through the pine trees on either side of the car, old wooden Soviet-era
cabins were interspersed with new palatial brick homes of Russia's nouveaux

Mr. Kovalevsky is a wealthy, bespectacled restaurateur from nearby St.
Petersburg. He is an entitled property owner in Russia's new moneyed class.
His substantial plot of land includes four houses and a tennis court rimmed
by a gate of brick. He plays soccer here on Sundays with his well-to-do

So it was with a feeling of particular affront that Mr. Kovalevsky, a man
accustomed to getting what he wants, found out in December 2000 about a
plan to build an aluminum plant just one mile from his house. 

"I was deeply offended and very surprised," said the ordinarily serene Mr.
Kovalevsky, in a white turtleneck sweater and a leather jacket, ensconced
in a leather seat in the back of his speeding car.

Mr. Kovalevsky, 55, knew that aluminum factories were some of Russia's
worst polluters. He also knew that the plan for the plant, drawn up by a
local vodka king, was completely serious and that it would soon leave
pollution at his doorstep if he did not act quickly. So he gathered a group
of 30 wealthy residents from his piney neighborhood. They decided to
finance a fight against the plant.

There were rallies — including one in front of the regional administration
in St. Petersburg last year, at which grandmothers held signs with sad
poems about dying birch trees, and young people showed up in gas masks —
public hearings and articles in the newspaper.

The public protests were unusual enough. Russia is a country where such
efforts have historically ended in failure at best and Siberian exile at
worst. In the chaotic changes after the Soviet Union's collapse that
widened the gap between rich and poor, early 1990's idealism hardened into
sour hopelessness and a sense of futility. Protests have largely been
limited to demands about wages.

So perhaps strangest of all was the fact that the campaign has been
remarkably successful. Driven by Mr. Kovalevsky's sense of entitlement — an
aide said early conversations with the local government ruffled officials,
who were not used to being talked with as equals — the lobbying worked. The
following year, the aluminum project was rejected.

But, Mr. Kovalevsky, who in Soviet times managed a network of cafeterias
and now owns 17 restaurants, two health clubs and two beauty salons and is
dabbling in real estate, did not consider the victory an achievement.

"Our country has a very weak government and, in these conditions, anything
is possible," he said.

Indeed, the aluminum factory planners took a new tack in March 2002. They
gave the proposed factory a new name — Vsevolozhsk Factory of Rolled
Products — requiring government regulators to consider the project all over
again. For Mr. Kovalevsky, it was a wolf in sheep's clothing.

The general director of the proposed plant, Arkady I. Zatulovsky, has said
it will be state of the art. Also, the owners had agreed to a compromise —
only half the output would be primary aluminum, the most pollutive in the
production cycle. He fumed by phone recently about the protests, saying
that only the government, expected to decide on the project at the end of
April, should be assessing its sins.

"Society is very incompetent in many issues," said Mr. Zatulovsky, a
lifelong metals industry worker. "That's why there are experts. That's why
it's the government's job to make this decision."

But in the past decade of poverty and economic dislocation, underpaid
government bureaucrats have proved to be poor judges in such matters. Urban
planning is virtually nonexistent, with development progressing willy-nilly
at an astonishing rate. If in the early 1990's, state environmental
commissions rejected one in three projects, now fewer than 3 percent of
projects are turned down.

Vsevolozhsk, a town of 40,000, does have an industrial sprawl that includes
a cement plant and a farm equipment maker. But many of those factories,
most Soviet-era, are quietly disintegrating. The Ford Motor Company plant
that opened last year is an exception. It was noxious fumes from aluminum
that people feared.

"Let industry come — food, Ford, even cement," said Irina
Gureyeva-Doroshenko, a local journalist sympathetic to Mr. Kovalevsky's
cause. "Just not aluminum."

One afternoon recently, Mr. Kovalevsky stood on his property surveying his
bounty: a two-story periwinkle house, and a bright red building that serves
as a bath and sauna and small billiard room. A young man was clearing snow
with a snowblower, a rare tool in Russian yards.

A man who respects ceremony, Mr. Kovalevsky displays in his living room a
portrait of himself, his wife and two sons. A bust of himself is on an
armoire underneath. 

"I guess you would say I'm not a poor man," he said. "I can afford to speak
my mind."


Daily Times (Pakistan)
April 21, 2003
Russia’s waning clash with Islam
By Alexey Malashenko
Alexey Malashenko is a Senior Associate at the Carnegie Endowment for
International Peace, Moscow, and the author (with Dmitri Trenin) of “The
Time of the South: Russia in Chechnya, Chechnya in Russia”

In the months before the December election, Russia’s leaders must make a
concerted effort to convince Chechnya’s people that they were wise to risk
voting in the referendum. They can do so by speeding up reconstruction
efforts and increasing humanitarian assistance

As the so-called “clash of civilisations” between Islam and the West
commands world attention, Russia’s war in Chechnya has frequently been seen
as a major front in that broader battle. So it is noteworthy that, as the
US-led invasion of Iraq — and with it, America’s clash with the Islamic
world — grows more heated, Russia’s battle with Muslim Chechens may be
waning into something like peace.

The recent referendum in Chechnya on a new constitution coincided with the
start of the war in Iraq. The outcome was better than anyone in the Kremlin
could have hoped for: 89 per cent of the Chechen electorate turned out to
vote, and 96 per cent of voters supported the Moscow-drafted constitution.
These numbers surprised even President Vladimir Putin. At a cabinet meeting
after the vote, he openly suggested that his officials might have been just
a little too “proactive” in achieving such overwhelming results.

How should we interpret this “Yes” vote by the Chechen population? The
numbers speak for themselves. Of course, ballot rigging took place. But if
officials falsified 10 per cent, 20 per cent, or even 30 per cent of the
ballots — and no one suggests such a level of fraud — the vote in favour of
the constitution would still amount to an overwhelming majority of
Chechnya’s population. Even if one subtracts the votes cast by Russian
soldiers (five per cent of the total), most of those who participated in
the vote supported keeping Chechnya in Russia.

The mere fact that a vote took place is important. Exhausted by the ongoing
war, most Chechens now are ready to resolve their problems within the
framework provided by Russia’s elastic federal structure. They are prepared
to discuss a constitution according to which they remain within the Russian
Federation, but with a great deal of local autonomy, such as the republic
of Tartarstan enjoys.

A simple, practical calculation was also in play. The Chechens hope that
adopting a constitution, followed by the election of a Chechen president,
will spare them the horrors of purge and arrests that would invariably have
followed had either side secured a military victory. Pavel Krasheninnikov,
president of the State Duma’s Committee on Legislation, recently promised
an amnesty for the guerrillas, which could never have been issued without
President Putin’s express approval.

Add to this the fact that a constitutional settlement makes material
support and compensation from the Russian government more realistic, and it
becomes apparent why Chechens now see a glimmer of hope, albeit still
somewhat faint, that peace will leave them better off than pressing on with
armed struggle.

The separatists’ silence as the referendum took place was something of a
surprise, despite the fact that the vote was a moment of truth for them as
much as for Putin’s government. If guerrillas loyal to Aslan Maskhadov (the
man elected president of Chechnya some years ago) or Shamil Basaev (another
guerrilla commander) had committed a terrorist act at merely one voting
station, the huge turnout of Chechens voluntarily expressing “pro-Russian”
sentiments would not have been possible. By not staging terrorist acts, the
rebels admitted that they are not what they were in 1995 or 1997. 

If Russians are stunned by the outcome of the Chechen referendum, so too is
the international community. Some organisations — the Council of Europe’s
Parliamentary Assembly and the Organisation for Security and Cooperation in
Europe, to cite two examples — greeted the referendum results with
scepticism, citing the lack of independent foreign observers during the

Other bodies want to revive the idea of creating an international tribunal
to investigate war crimes in Chechnya. Given the strength of the vote in
its favour, and the importance that Putin’s administration has given to the
war in Chechnya, Russia’s government is unlikely to give much weight to
these quibbles.

What the Kremlin will care about is the looming choice of Chechnya’s
president. The election will take place this December, which coincides with
scheduled elections for the Duma. The head of the Kremlin-appointed Chechen
administration, Akhmad Kadyrov, is already discussing this with the
president of the federal election commission.

Kadyrov thinks that the referendum results put him squarely on the path to
securing the Chechen presidency for himself. Perhaps. But it is also
possible that this former Chechen mufti doesn’t grasp the Byzantine nature
of Kremlin politics. President Putin might easily replace him with someone
deemed more reliable or better suited to challenge Maskhadov, should he run.

In the months before the election, Russia’s leaders must make a concerted
effort to convince Chechnya’s people that they were wise to risk voting in
the referendum. They can do so by speeding up reconstruction efforts and
increasing humanitarian assistance. The sooner this happens, the more
difficult it will be for the separatists to claim that they alone are the
legitimate authors of Chechnya’s fate. —DT-PS


April 21, 2003
Hungry Budanov goes back to court
By Ksenia Solyanskaya 

The retrial of Russian officer Yuri Budanov, charged with murdering Chechen
girl Elsa Kungayeva in March 2000, started in Rostov-on-Don on Monday. The
colonel is continuing a hunger strike that he started two weeks ago in
protest at the protracted examination of his case. The hungry and petulant
defendant will not appear before the public – the judge has ruled that the
hearing will be closed to the press. 

The retrial of the Budanov case was ordered by the military board of judges
of the Supreme Court of Russia after the country’s highest judicial
instance overturned the verdict passed on the officer by Judge Viktor
Kostin, who on December 31 found him not criminally responsible for Elsa
Kungayeva’s murder and ordered him to undergo compulsory medical treatment. 

At the end of February the Supreme Court decided the verdict was
''unfounded'' and ruled that Budanov must face a retrial in the same court,
with a new judge appointed to hear the case. The deputy chairman of the
Rostov-on-Don military court, Vladimir Bukreyev, was subsequently appointed
to preside over Budanov’s case. 

A preliminary hearing into the case was held in Rostov-on-Don on April 9.
It was then that the court banned the press from the trial, Budanov’s
defence withdrew its earlier request to have the colonel’s case heard by a
jury, and the defendant launched his hunger strike. 

Abdulla Khamzayev, the Chechen lawyer representing the aggrieved party, the
Kungayev family, in court, proudly informed the press that he had forced
his opponents to drop the jury idea, promising that several months later
the Supreme Court would review his appeal, annul the decision inviting the
jury, and again order a retrial. 

Upon hearing Khamzayev’s threat an exasperated Budanov reportedly cursed
loudly and said he would go on a hunger strike. In an official statement,
presented by his lawyer to the court, the colonel explained that his move
was connected with ''the biased attitude to the criminal case by the main
military prosecutor’s office and the thorough attempts of the aggrieved
party to protract the court proceedings''. 

On the eve of Monday’s session the director of the Rostov-on-Don prison,
Viktor Pershin, confirmed that for the past two weeks Budanov has been
abstaining from meals, and wardens say that lately the colonel has become
''excessively irritable''. 
Also during the preliminary hearing on April 9 the court ruled to summon
the Defence Ministry as a defendant in a civil case initiated at the
request of the aggrieved party who are claiming compensation for moral
damages. Later, however, the court officials said that the Finance
Ministry, and not the Defence Ministry, would be requested to pay
compensation to the parents of the dead girl. 

During the retrial the court plans to question 21 witnesses, summoned at
the request of the prosecutor’s office, Abdulla Khamzayev told the press
prior to today’s session. Afterwards, the court will hear the witnesses of
the defence. 

During the previous trial there were serious problems with summoning
witnesses, on whose questioning the Chechen side insisted. A few of them
found it difficult to get to Rostov-on-Don, prompting Khamzayev to keep on
asking the court to postpone the hearings. As a result, Judge Viktor Kostin
overlooked very important witnesses, in particular, the residents of
Tangi-Chu village, who could shed light on whether Yuri Budanov, indeed,
had grounds to suspect that Elsa Kungayeva was a rebel sniper and to
interrogate her in the middle of the night before her murder. 

The court’s refusal to wait for those witnesses, along with other
procedural violations, gave cause for the Supreme Court’s annulment of the
verdict. This time, however, the court is likely to hear all the witnesses,
because they are being summoned at the request of the military prosecutor
Vladimir Milovanov, who in his complaint to the Supreme Court had insisted
that Budanov must be found guilty and sentenced to 12 years in prison. 

For his part, Abdulla Khamzayev, who also seems to doubt the impartiality
of the court, is set to keep Budanov behind bars as long as possible before
a final verdict is passed. Filing an appeal against the initial court
ruling in January Khamzayev pledged that Budanov would mark at least three
more Christmases in prison. 

The first thing Khamzayev did on Monday was challenge the court’s
impartiality. However, the lawyer’s request to replace the judge was
rejected almost immediately.  


The former commander of the 160th tank regiment Colonel Yuri Budanov stands
accused of abducting and murdering 18-year-old Elsa Kungayeva, a resident
of the Chechen village Tangi-Chu, in March 2000. The court hearings into
the colonel’s case began in February 2001. Twice the court ordered Budanov
to undergo additional psychological and psychiatric tests. Both
examinations were conducted at the Serbsky Institute in Moscow, and in both
cases the experts ruled the officer was temporarily insane at the moment he
committed the murder, saying he could not fully understand the social
danger of his actions and was not able to control them. 

On December 31, 2002 the military court found Budanov not criminally
responsible for Kungayeva’s murder and ordered him to undergo compulsory
medical treatment. The ruling was challenged by the lawyer representing the
aggrieved party and by the prosecutors. At the end of February the Supreme
Court of Russia overturned it and sent Budanov’s case for re-trial. 


Baltimore Sun
April 21, 2003
Exporting democracy is a challenge
By Matthew Spence
Matthew Spence is a visiting scholar at the Stanford University Center on
Democracy, Development, and the Rule of Law and is completing a project on
American democracy promotion in the former Soviet Union. 

STANFORD, Calif. -- A message to the aspiring leaders of the new Iraqi
republic: Learn English. 
If you seek the money and trust of the American government, your best
credential is neither policy expertise, nor political savvy, nor even the
backing of your own people. America's driving logic of democracy promotion
for much of the last decade has been this: If you look and talk like us, we
will work with you and democracy will come your way. 

Of course, reality has never been that simple. As George W. Bush has remade
himself from Texas rancher into global cowboy, he has chosen either to
reject the world or remake it in America's own image. But a mirror is a
poor tool for promoting democracy. 

Look to America's troubled crusade to transplant the American system into
the former Soviet Union after the Cold War. It teaches that the task in
Iraq will take far more time, money and creative energy than America expects. 

Yet, in Iraq today, the ships are departing, the massive foreign aid is not
yet forthcoming and the White House has already moved on to threatening the
next rogue state. Instead, take three lessons from the Soviet Union. 

Lesson one: First impressions matter most. 

The cruel irony of state-building is that initial decisions -- made under
the greatest uncertainty and with the least resources -- have the greatest
impact. A former government minister from a Central Asian republic told me:
"After the 1991 collapse of the Soviet Union, we kept asking the Americans
what to do, but they had nothing to tell us. When the Americans were ready
to talk, we were no longer ready to listen." 

As in the former Soviet Union, Iraq's moment of euphoria and America's
window of influence close faster than we think. 

Soon after the Soviet collapse, American policymakers stood idly by while
Boris Yeltsin left his Soviet-elected parliament and bureaucracy largely
intact. Yet America was shocked when these relics of the ancien regime
thwarted Russian economic and political reform for the next decade. 

Likewise in Iraq, who polices the streets, distributes food to the regions
and staffs the bureaucracy today will determine the future of the Iraqi
state for years to come. The ad hoc, cost-cutting decisions of today will
become the pathologies of Iraq's political system of tomorrow. Facts, once
established, rarely change. 

Lesson two: State-building is chiefly a political, not a humanitarian or
administrative, task. 

In post-communist Russia, American democracy promoters claimed to offer
"technical assistance." 

In reality, their help was far from technical and anything but
value-neutral. Americans advised former Soviet governments about the most
basic features of how to organize their society: how to divide powers
between the president and parliament, whether to adopt a flat tax or
progressive income tax and how much of a social safety net the government
would provide. 

American policymakers are lying to themselves and the Iraqi people by
professing to stay out of Iraqi domestic politics. 

Instead, America disingenuously practiced what some call the Field of
Dreams school of democracy promotion: Build it, and they will come. But
building courthouses, writing laws and paying legislative staffs do not, in
themselves, make democracy. Democracy is an outcome of an intense political
struggle and profound cultural change. If America wants to bring democracy
to Iraq, it must join the political fight. 

Lesson three: American domestic politics matter as much as Iraqi politics. 

How America organizes its democracy promotion will help determine how the
Iraqi state organizes itself. America speaks not with one but with many
conflicting voices. In the former Soviet Union, the State Department,
Treasury Department, Pentagon and U.S. Agency for International Development
each preached from a different gospel. 

Russian policymakers were either confused or cleverly listened only to
which message they liked best. 

America should give Iraq a tested statesman, not an administrator-general. 

State-building is not just about organizing the distribution of food and
medicines, but about understanding the distribution of property rights,
conduct of local elections and development of civil society. 

Symbols speak louder than words. Russians knew what foreign aid without a
Marshall Plan said about America's commitment. 

Iraqis will quickly learn what reconstruction run by the Pentagon signals
about America's intentions. 

The rest of the world has been awed by how fast America won the Iraq war
with our weapons but will hardly be shocked by how easily we may lose the
peace with our politics. The story of "Who lost Iraq?" is waiting to be



MOSCOW, April 21, 2003. /From RIA Novosti correspondent Maria Balynina/ --
Russia is worried by the fact that Norway has a radar station, Globus 2,
capable of controlling a territory of 35,000 kilometres, Russia's Deputy
Foreign Minister Vladimir Chizhov said during Russia's National Interests
in Northern Europe hearings in the Federation Council, or the upper house
of the Russian parliament. 

The radar station is meant to help NATO /specifically the U.S./ control the
Russian territory, but "Norway keeps insisting that the purpose of the
station is space control," said Chizhov. 

Likewise, according to him, the Russian side cannot but feel worried by the
prospect of the United States deploying a national missile system - all the
more so since some Northern European countries are meant to participate in

Evaluating Russia's relationships with Northern Europe, Chizhov described
them as "corresponding with the requirements of the good-neighbourly
relations belt." At the same time, according to his account, Finland is
trying to "expand its influence in the boundaries of Northern Europe and
step aside from the neutrality policy," which has been causing some
problems. "Sweden might soon assume the same position," he remarked. He
added that Russia was also worried about Norway's refusal to limit
participation in naval manoeuvres. 

At the same time, Russia and Finland are negotiating resumption of
military-and-technical co-operation. There was a time when the USSR handled
30% of the import of weapons to Finland, but Finland has lately "switched
over to NATO standards," remarked Chizhov. However, the sides have already
signed an agreement on conversion of a part of Russia's debt to Finland,
which totals 550 million euros, namely that Russia will repay 10 million
euros of the debt by supplying Finland with "special munition," i.e. combat


RIA Novosti

The Stas Namin Center and the Culture Ministry of the Russian Federation
are organizing a festival of retrospective and young Russian films in Los
Angeles, CA, between April 18 and 24. The festival features more than 40
films by well-known Soviet and Russian filmmakers like Andrei Konchalovsky,
Sergei Paradzhanov, Andrei Tarkovsky, and others. 

The event will be staged in Hollywood. It will be the first full-scale
screening of Russian films in the world's cinematographic capital. 

The first festival of Russian films in Los Angeles is being organized, on
the American side, by the American Film Institute, Seven Arts Productions,
etc. The Board of Trustees is made up of Russian Culture Minister Mikhail
Shvydkoi, 1st Deputy Culture Minister Denis Molchanov, Press Minister
Mikhail Lesin, 1st Deputy Press Minister Vladimir Grigoryev, General
Director of Russia's ORT TV channel Konstantin Ernst, head of the Motion
Picture Association of America Jack Valenti, Miramax President Harvey
Weinstein, producer Peter Hoffmann, Director of the American Film Institute
Jean Furstenberg, Tom Pollack, etc. 

The festival is accompanied by photo exhibitions dedicated to Sergei
Eizenshtein and Andrei Tarkovsky and an exhibition of drawings by Sergei
Eizenshtein and Russian film posters of the early 20th century. 

The festival opens in Hollywood's most prestigious movie complex, ArcLight
in Sunset Boulevard, with the US premiere of Andrei
Mikhalkov-Konchalovsky's latest movie, "House of Fools," presented by
Paramount Pictures. 

Some of the films will be presented by their creators, actors playing the
major parts, and world movie stars. The ArcLight art cafe will become a
place of meetings between actors, filmmakers, the audience and the press.
The Russian delegation unites screenwriter Rustam Ibragimbekov, filmmakers
Andrei Konchalovsky, Alexander Shein and Ilya Khotinenko, actors Alexander
Kalyagin and Georgy Kutsenko, Cinema Museum Director Naum Kleiman, and

There will also be meetings between the film industry people from Russia
and the USA, and meetings between world-renowned film producers. 


Americans know Russian cinema mainly by Oscar-winners, such as "War and
Peace", the film version of Leo Tolstoi's epic shot by the outstanding
Soviet film director Sergei Bondarchuk. It won Oscar for the Best Foreign
Film in 1968. 

Battle scenes, showing the scale of the patriotic war against the French
army and Bondarchuk's personal vision of history, became the visiting card
of the film. Most film critics believe that the director managed to fully
reflect the life of Russian society in the beginning of the 19th century
with the help of realistic, even naturalistic technique. 

Vladimir Menshov's film "Moscow Does Not Believe in Tears" (1979), with
popular Russian actress Vera Alentova starring, also became an Oscar-winner. 

The film follows the lives of three provincial girls, who came to Moscow to
study and to find happiness. The life of the main heroine was full of
hardships and obstacles, but in spite of them she managed to make a
brilliant career, to find her beloved man and to bring up a daughter. In
its time the movie was an absolute box-office leader in the Soviet Union
and won many international awards, the main of them Oscar for the Best
Foreign Film in 1981. 

"Burnt by the Sun", a film by the celebrated Russian film director Nikita
Mikhalkov, became an Oscar-winner in the same category in 1994. Well-known
actors Oleg Menshikov, Ingeborga Dapkunaite, Vladimir Ilyin, Vyacheslav
Tikhonov, Inna Ulyanova, Svetlana Kryuchkova, Avangard Leontyev and Nikita
Mikhalkov himself starred in "Burnt by the Sun". The action takes place
over the course of one day in the mid-1930s. Mitya, a young officer of
Soviet security service, comes to the country house of Bolshevik commander
Kotov to arrest him. It turns out that Kotov is married to Mitya's once
beloved woman. The film won high recognition of the world cinema art both
for direction and acting. 

In 2002 a film shot by Nikita Mikhalkov's elder brother Andron Konchalovsky
represented Russia for the best foreign language film. Konchalovsky worked
for many years in Hollywood. The film "House of Fools" reveals the
little-known side of the events in Chechnya. A psychiatric asylum located
on the border of North Caucasian republics of Chechnya and Ingushetia
passes from hands of federal forces to Chechen terrorists and back. The
main idea of the film is that people should stop bloodshed in the name of
common human interests. Young Russian actress Yulia Vysotskaya and famous
British singer Brian Adams starred in the film. 

Andron Konchalovsky is one of the first Russian directors to shoot several
films in Hollywood, including "Maria's Lovers" with Nastassja Kinski,
"Homer and Eddie", "Tango and Cash" with Sylvester Stallone and "Runaway
Train". All these films enjoyed great success with the American audience. 

Konchalovsky also shot "The Odyssey" series, which won the Emmy Award,
established by the National Academy of Television Arts and Sciences
(NATAS). The film was highly popular with NBC audience. The premiere
gathered 27 per cent of American TV viewers, a considerable rate for a TV
series. World famous producers, including Francis Ford Coppola sponsored
the project, which cost 32 million dollars. 


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