Johnson's Russia List #7149 21 April 2003 davidjohnson@erols.com A CDI Project www.cdi.org [Contents: 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. 5. Trud: Vyacheslav NIKONOV, WHAT WILL RUSSIA DO IF THE USA PRESSURISES SYRIA? 6. RIA Novosti: COMMUNISTS PUBLISH THE FIRST NEWSPAPER IN POST-WAR IRAQ. 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. gazeta.ru: Duma makes women and men equal. 12. Wall Street Journal: Jeanne Whalen, Russian Oil Firms Hold Talks In Deal to Form Energy Titan. Yukos-Sibneft Merger Would Form World's Sixth Largest Oil Producer. 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 Russian's Comfort. 17. Daily Times (Pakistan): Alexey Malashenko, Russia’s waning clash with Islam. 18. gazeta.ru: Hungry Budanov goes back to court. 19. Baltimore Sun: Matthew Spence, Exporting democracy is a challenge. 20. RIA Novosti: RUSSIA WORRIES ABOUT NORWEGIAN RADAR. 21. RIA Novosti: FESTIVAL OF RUSSIAN FILMS IN HOLLYWOOD.] ******** #1 Rosbalt 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 Russia. 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. ******** #2 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 were. 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. ******** #3 Moscow Times April 21, 2003 Editorial 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. ******** #4 U.S. Victory Highlights Russian Weakness April 21, 2003 By VLADIMIR ISACHENKOV 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 army. 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. ******** #5 Trud No. 72 April 19, 2003 [translation from RIA Novosti for personal use only] WHAT WILL RUSSIA DO IF THE USA PRESSURISES SYRIA? 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 2001-02. 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? ******** #6 COMMUNISTS PUBLISH THE FIRST NEWSPAPER IN POST-WAR IRAQ 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. ******** #7 Russia likely to lose Iraqi oil contracts: top US adviser April 21, 2003 AFP 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 said. 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. ******** #8 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 month. 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 year. ******** #9 TV1 Review www.1tv.ru Compiled by Luba Schwartzman (luba_sch@hotmail.com) Research Analyst, Center for Defense Information, Moscow office WEEKEND HIGHLIGHTS, 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 districts. - 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 day. - The SMERSH military counterintelligence service was established 60 years ago today. - Aleksandr Sokurov's film Russian Arc is now playing in Moscow. - 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. ******* #10 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 cabin. 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. ********* #11 gazeta.ru 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 stated. 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. ******** #12 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 By JEANNE WHALEN Staff Reporter of THE WALL STREET JOURNAL 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. ******** #13 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. ******* #14 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 calamity. "Gambling drives many people to commit crimes," said Viktor Zaitsev, a senior researcher at the Bekhterev institute that seeks to help compulsive gamblers. "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. NEW SOCIAL VICE 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 family." 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. RUSSIAN TEMPERAMENT 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 Messaging:richard.balmforth.reuters.com+reuters.net)) ******** #15 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! ******* #16 New York Times April 21, 2003 VSEVOLOZHSK JOURNAL Factory Is Too Close for Rich Russian's Comfort By SABRINA TAVERNISE 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 riches. 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 neighbors. 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." ******** #17 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 voting. 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 ******* #18 gazeta.ru 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. ******** #19 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 written. ******** #20 RUSSIA WORRIES ABOUT NORWEGIAN RADAR 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 it. 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 hardware. ******* #21 FESTIVAL OF RUSSIAN FILMS IN HOLLYWOOD 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 others. There will also be meetings between the film industry people from Russia and the USA, and meetings between world-renowned film producers. RUSSIAN DIRECTORS WHO CONQUERED AMERICA 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. ******* Web page for CDI Russia Weekly: http://www.cdi.org/russia Archive for Johnson's Russia List: http://www.cdi.org/russia/johnson With support from the Carnegie Corporation of New York and the MacArthur Foundation A project of the Center for Defense Information (CDI) 1779 Massachusetts Ave. NW Washington DC 20036