Johnson's Russia List #7153 24 April 2003 firstname.lastname@example.org A CDI Project www.cdi.org [Contents: 1. Reuters: OECD sees Russian economic growth of 5 pct in 2003. 2. AP: Russia's Population Declines Sharply. 3. Wayne Merry: STATE DEPARTMENT REMAINS NON-TRANSPARENT ON RUSSIA POLICY. 4. www.inthenationalinterest.com: Yevgeny Verlin, Russia, Again at the Crossroads: Fallout from the Petersburg Summit. 5. Laura Belin: Yushenkov. 6. BBC Monitoring: Famous Russian Lawyer Set to Defend Suspected Murderer of Duma Deputy. 7. Interfax: Yushenkov murder case suspect released, promises not to leave Moscow. 8. Moscow Times: Nabi Abdullaev and Oksana Yablokova, Student Arrested in Yushenkov Case. 9. Financial Times (UK): Rafael Behr, Political murders and inside sources. 10. New book: Protest and the Politics of Blame: The Russian Response to Unpaid Wages by Debra Javeline. 11. Izvestia: Svetlana Babayeva and Georgy Bovt, REFORM BURNOUT. Russia's system of bureaucratic capitalism is in crisis. 12. The Globe and Mail (Canada): Amy Knight, A modern crime and punishment. Who killed Russia's leading liberal? The evidence points to the President's pals. 13. Kennan Institute Continues Series on Russian Cultural Influences on America. 14. Edward Lozansky: Inviation to World Russian Forum to be held April 28-29 in Washington. 15. RFE/RL: Gregory Feifer, Debate Over Slain Lawmaker Not Expected To Affect Politics. 16. Bloomberg: Matthew Lynn, Russia Bids to Create Its First Global Company. 17. BBC Monitoring: US Envoy Notes Improvement in Relations with Ukraine. (Carlos Pascual)] ******** #1 OECD sees Russian economic growth of 5 pct in 2003 MOSCOW, April 24 (Reuters) - Strong domestic demand will help Russia sustain robust economic growth in 2003, but high oil-driven capital inflows are likely to fan inflation more than officials had hoped, the OECD said on Thursday. "Investment, mainly in oil and utilities, has recently picked up, and private consumption will continue to be strong due to a further rise in disposable income," the Organisation for Economic Cooperation and Development said. According to the OECD's twice-yearly economic forecast, Russia's gross domestic product (GDP) is expected to grow five percent this year after a 4.3 percent rise in 2002. The OECD appeared to be more upbeat on Russian economic growth this year than the International Monetary Fund and the European Bank for Reconstruction and Development, which have forecast a 4.0 and 4.5 percent rise for 2003 respectively. The OECD noted that Russian inflation declined gradually to 15.1 percent in 2002, supported by the real appreciation of the rouble against the dollar and was likely to ease to 14 percent this year, but officials had sought a steeper decline. "Given underlying inflationary pressures and high oil-driven capital inflows, achieving the 2003 inflation target of 10 to 12 percent without damaging the competitiveness of the Russian economy will be challenging," it said. High global crude and commodities prices as well as rising investment have flooded Russia with oil dollars, boosting the value of the rouble, whose strength is increasingly blamed for hurting the competitiveness of local producers. The central bank has tried to absorb extra oil dollars into its own reserves, but it has to print more roubles, further adding to inflationary pressure. The OECD said that further expansion in oil production and planned investments in utilities were likely to help Russia to sustain growth beyond 2003, but warned that the unbalanced nature of the economy might pose a medium to long-term threat. "Growth in the oil sector and a further shift away from more complex and less competitive manufactured goods into commodities and basic manufacturers should contribute to increase overall productivity levels," it said. "These developments may, however, increase the vulnerability of the Russian economy to external shocks, while rising wages and real exchange rate appreciation risk undermining growth in other industrial sectors." To offset these risks, Russia has to accelerate structural reforms, particularly in taxation and banking, to reallocate resources to more dynamic sectors, the report added. ******** #2 Russia's Population Declines Sharply April 23, 203 MOSCOW (AP) - Russia's population has declined sharply since 1989 but an influx of migrants helped to partially fill the gap, according to preliminary census data reported Wednesday. The population shrank by 1.3 percent - about 1.8 million people - and now stands at 145.5 million, according to preliminary results from October's census, reported by the Interfax news agency. Russia's last census in 1989, two years before the Soviet Union collapsed, counted 147 million people. Officials had earlier predicted a sharper decline, to 143.4 million, due to Russia's minuscule birth rate and an overall decline in health following the Soviet collapse. However, a wave of migration partially filled the gap, according to the census data. Russia lost 7.4 million people but more than 5.5 million migrants entered the country, Interfax reported. Russia now has the seventh largest population in the world, after China, India, the United States, Indonesia, Brazil and Pakistan. Some 73.3 percent of Russia's population live in cities, and women outnumber men 54 percent to 46 percent. The October census was originally scheduled to take place in 1999 but was delayed three years due to lack of funds. Critics have questioned whether the head count was capable of providing an accurate snapshot of the nation, given Russians' traditional distrust of authorities. Many were wary of letting strangers into their homes or revealing information about themselves. Many Russians have unofficial side jobs and do not pay taxes on their wages. Others break regulations that require official registration at their place of residence. Human rights groups have also expressed skepticism about preliminary results already announced from Russia's breakaway republic of Chechnya, where officials say the population has grown since 1989, despite two wars in the last decade and a mass exodus of civilians. ********* #3 From: "Wayne Merry"
Subject: STATE DEPARTMENT REMAINS NON-TRANSPARENT ON RUSSIA POLICY Date: Wed, 23 Apr 2003 It is an irony of the post-Cold War world that our former adversaries are sometimes more forthcoming in releasing policy-related documents about East-West policy than is Washington (but, then, we won the Cold War, didn't we?). As a case in point, consider the following story of the State Department, its Dissent Channel, and the Freedom of Information Act. While serving in the Political Section of the US Embassy in Moscow in the early Nineties, I became disenchanted (to put it diplomatically) with the "Washington consensus" and US missionary efforts -- led by the Treasury and IMF -- to attempt to remake Russia in our image of what it should be. Many more astute commentators have written publicly about this subject in recent years, but I was among the few insiders who put doubts down on official paper at the time. The Moscow Embassy, to its credit, has a tradition of encouraging dissenting views (within limits). Ambassadors Strauss and Pickering and Charge Collins allowed me to send in doubting analyses on a number of occasions, labeled as solely my views rather than as cleared Embassy product. In early 1994, my conviction that US "reform" policy in Russia was badly misconceived and likely both to fail and to damage US interests led to my "long dissent telegram", a fairly massive denunciation of official policy. While Ambassador Pickering was willing to send it as an expression of individual views, vehement objections from Embassy officers serving the Gore-Chernomyrdon Commission persuaded me the message was more appropriate for the State Department's Dissent Channel. Dissent Channel, a product of the Vietnam War era, is an established vehicle for the submission of dissenting views on important policy issues. Messages in this channel are not subject to clearance procedures and are distributed to the top policy officials of the State Department, but not to other parts of the government. Dissent Channel rarely changes policy, but is a venting mechanism (and a way of identifying troublemakers). It has been used more often than one might think. My long Dissent Channel message of 1994 was submitted and, predictably, had no influence on policy whatsoever. Then-Deputy Secretary of State Strobe Talbott did respond to the message in a thoughtful and respectful letter which showed he had given my arguments time and consideration. I appreciated the courtesy, which is a good deal more than most State dissenters ever receive. After retiring from the Foreign Service, it occurred to me that this text, ineffectual though it had been, would be a useful addition to the material under review by scholars examining the Clinton-Yeltsin years of US policy toward Russia. I therefore requested its release under the Freedom of Information Act on July 27, 1999. Hearing nothing for months, I made discrete inquiries and was told my request was viewed as politically "hot" in light of the upcoming 2000 presidential contest. This struck me as silly, as my views on Russia of five years before could not alter a single vote in an American election. Therefore, I renewed my request on March 29, 2000, and received only a "Dear Sir or Madam, Don't Call Us, We'll Call You" response. Imagine my surprise this week actually to receive a formal response to my FOIA request! Dated April 17, and thus almost four years after my initial request, the State Department denies release of the message on the grounds that "release and public circulation of Dissent Channel messages, even as in your case to the drafter of the message, would inhibit the willingness of Department personnel to avail themselves of the Dissent Channel to express their views freely." In addition, as "Dissent Channel messages are deliberative, pre-decisional and constitute intra-agency communications" they cannot be released. Doublethink lives! It strikes me that making Dissent Channel messages public at the request of the drafters would probably attract Department personnel to use the mechanism rather than the contrary. In addition, I should think scholars would find "pre-decisional" documents of greater interest that post-decisional ones. That dissent is so threatening to the established order of the State Department that it cannot be revealed even years after the event reflects a mindset familiar to anyone who has had the opportunity to examine the materials made public from former Communist governments about their decision-making processes. Let me conclude by dissuading any reader from the notion that my 1994 Dissent Channel message could constitute any kind of "smoking gun" indictment against US policy or policymakers of the time. So far as I recall the message (and it was about seventy-five paragraphs long), it expressed doubts that Russia could or would respond to US-designed reform stimuli and argued that US intrusion into Russian decisions about how to restructure their own economy would both fail and produce resentment toward the United States. I am sure the analysis would, in retrospect, appear lacking in many keys points of criticism and add little to the detailed writings on the subject of respected scholars. Nonetheless, I see no reason why it should not become part of the public record, along with the vast number of pre-decisional documents declassified to accommodate the memoirs of senior officials from administrations of all political hues. The difference is that former policymakers cherrypick documents for declassification to demonstrate how they did everything right. Is it so terrible that less than the statutory thirty years must pass before some documentation to the contrary can become public? In any case, I intend to appeal, with every expectation the next denial will also consume years. E. WAYNE MERRY Senior Associate American Foreign Policy Council 1521 16th Street, NW Washington, DC 20036 202-462-6055 Fax 202-462-6045 Email email@example.com ********* #4 Date: Wed, 23 Apr 2003 Subject: Yevgeny Verlin/Russia at the Crossroads From: Nikolas Gvosdev http://www.inthenationalinterest.com/Articles/Vol2Issue16/vol2issue16verlinp fv.html Russia, Again at the Crossroads: Fallout from the Petersburg Summit April 23, 2003 By Yevgeny Verlin Yevgeny Verlin is the assistant international editor for Nezavisimaya Gazeta (http://www.ng.ru). He is also a contributing editor to In the National Interest. In the aftermath of the Chirac-Putin-Schroeder in St. Petersburg, it is clear that the "trio" is quite concerned about the reconfiguration in world affairs that has begun in the aftermath of the American victory in Iraq. This development challenges the customary arrangements that enabled Russia, Germany and France to have a certain number of "shares" on the world exchange market of influence--without having to reform either their foreign or domestic politics, or to revise their current circle of foreign political partners (from Iran and Gabon to Cuba and North Korea). The unexpected American success--which greatly perplexed the "coalition of the reluctant"--has marginalized a great deal of what the three had earlier anticipated and discussed. The St. Petersburg meeting was an attempt by Chirac, Putin and Shcroeder to maintain face. After all, any sudden change in their expressions would run the risk of losing prestige, both in the eyes of their own domestic publics and foreign partners. But the trio is worried. Take economic matters. The reconstruction of Iraq could prove to be a real boon; the tens of billions of dollars allotted by Congress is capable of resuscitating many American companies which are close to bankruptcy. The upsurge in the value of the dollar and the revival of the American financial markets is not a prospect that makes Europe particularly happy. Russian economist Vladislav Inozemtsev points out that any recovery in the global economy resulting from Iraqi reconstruction is likely to be an American phenomenon that will have little impact on Europe and East Asia. As a result, he predicts that not only the political, but also the economic interests of the United States and Europe may seriously diverge. For its part, Moscow already has a headache contemplating the sudden drop in oil prices (and the corresponding negative effect on the Russian budget) caused by the American victory. The Russians and Europeans are hardly excited at the prospect of playing only in the role of small sub-contractors for American companies in reconstruction projects in the recent theater of military events. But let's not forget that there are differences. A contract that might not necessarily attract the French or the Germans may well arouse Russian interest. Especially since Bushıs promise regarding the "fate" of oil and other Russian interests are well remembered in Moscow--there still are high hopes that the White House can positively influence Congress and the new Iraqi government on Moscow's behalf. That is why Putin reacted differently from Schroeder and Chirac in St. Petersburg to Paul Wolfowitz's suggestion that the old Iraqi debt be forgiven. Russia is ready to discuss the question at the upcoming June summit of the G8 and under the auspices of the Paris club. Schroeder, speaking after Putin, remarked that since the war is not yet completely over it would be "premature" to discuss concrete proposals about the debt. Nevertheless, it is clear that the united "anti-American" front vis-a-vis Iraq is over. After the St. Petersburg summit, Schroeder met with Tony Blair, and after a two-month break, Chirac phoned Bush and announced that France would take a "pragmatic approach" to solving post-war problems in Iraq. After that metamorphosis, the rhetoric of Putin and his European colleagues in St. Petersburg--about not permitting a "new colonization" in Iraq, re-affirming the "central role of the UN" and calling for an international conference on the model of what was done for Afghanistan--are now primarily perceived as face-saving gestures. Or a soul-saving ritual. Russian political analyst Aleksey Bogaturov described the St. Petersburg summit as "trilateral therapy." What remains to be seen, however, is whether the trilateral relationship can move forward--away from focus on an anti-American agenda and to a means for Russia to seek closer integration with Europe. After all, there is a mass of other formats--of which the EU is the largest--where Europeans meet regularly with each other, yet Russia's links to these are tenuous. Regular summits with other European states, gradually widened to include more and more participants, may lay the foundations for a more permanent Russia-Europe organization. But at this point, Moscow again finds itself at the crossroads. Where to go--eastward to China or India? Seemingly, such an Eastern direction is already not the option favored by the Russianıs elite. Then, the only way to go is West. But westward is where - to Europe or to America? Russia must not be deceived into thinking that the current crisis in Euro-American relations represents any permanent bifurcation of the West. Euro-American disagreements will never take a confrontational character, and Russia can gain nothing positive by focusing on them. The Kremlin seems to realize that Russian-American relations have their own dynamic that must be kept separate from Russia's relationship to Europe. Thus, Putin has realized that it is necessary to minimize the damage that was created in the Russian-American relationship as the result of disagreements over Iraq. It should be mentioned that a few days before the St. Petersburg summit, President Bush sent Condoleeza Rice on a short visit to Moscow with a clear message to Vladimir Putin. The chief goal should be keeping the relationship on track, and this means restraining disagreements and beginning an immediate dialogue regarding post-conflict questions in Iraq. When, after Riceıs departure from Moscow, I asked ambassador Alexander Vershbow whether he was sure that relations are now firmly on track, he replied with one word: "Absolutely!") At the same time, however, fear of American power (and American intentions to promote "regime change") has drawn the authoritarian countries of Central Asia closer to Moscow. It was not accidental that as the United States was achieving victory in Iraq, the major gas agreement - after two yearsı deliberation by Turkmenistan - between Russia and Turkmenistan was signed. (It can be nicknamed a ³gas for arms² program since half of the volume of gas supplied by the dictatorial regime of Turkmenbashi will be exchanged for Russian-made armaments.) The post-Soviet elites in Central Asia now see Russia as the guarantor of their authoritarian regimes; and if Russia renounces that role, then they are prepared to look to China, who, as it is well known, has no desire to see Central Asia brought into the American sphere of influence. Yet, the "pragmatic" foreign policy of the current Russian elite, in its desire to secure as many economic "cookies" as possible, is not focusing on the strategic and economic interests of the country, but on present-day concrete needs (increasing the growth of its resources-reliant economy). This creates the paradox: Moscow is pursuing substantive deals with its immediate neighbors, whose governments are loved little by Washington. In pursuing closer ties, however, Russia may find that it will harm its efforts to promote the U.S.-Russian relationship and successful Russian integration into Europe. ******** #5 Date: Wed, 23 Apr 2003 From: Laura Belin Subject: Yushenkov The profiles of Sergei Yushenkov haven't said much about his sense of humor, but it has been on my mind ever since I heard the news about his murder. I keep thinking about his reaction to the State Duma's March 1996 adoption of a resolution condemning the December 1991 Belavezha accords as illegal. The presidential campaign was gaining momentum at that time, and there was a huge uproar about that vote, with many politicians and commentators saying it showed the Communists' dangerous desire to rebuild the USSR. Yushenkov quickly introduced a motion calling on the Duma to disband itself and reconvene the USSR Congress of People's Deputies. (Needless to say, that motion failed!) I was working for the Open Media Research Institute at the time, and my colleagues and I in the Russia section got a big kick out of that at a time when there wasn't much in the news to laugh about. Yushenkov understood that sometimes lampooning one's opponents is more effective than denunciations. I imagine that JRL readers have lots of memories about funny things Yushenkov did and his sense of the absurd (for instance, the parodies of laws that he occasionally drafted). I hope they will share some of those stories with the list. ******** #6 BBC Monitoring Famous Russian Lawyer Set to Defend Suspected Murderer of Duma Deputy Source: NTV, Moscow, in Russian 0400 gmt 24 Apr 03 Presenter: Well-known Moscow lawyer Pavel Astakhov has volunteered to defend Artem Stefanov, a 20-year-old student, who was detained on 23 April on a suspicion of murdering State Duma deputy Sergey Yushenkov on 17 April . Stefanov has not been charged yet. Under the law, investigators can keep him in police custody for 48 hours in order to clarify the circumstances of the case. His parents say that the investigators asked them to write a statement to the effect that they did not need a defence lawyer. The investigators said it would accelerate the course of legal formalities. Meanwhile, the parents do not know their son's whereabouts for the second day. They are staying near the building of the Tushino intermunicipal prosecutor's office, to which Artem was initially taken for questioning. Astakhov tried to enter the building last night, but he was refused. Astakhov, standing in front of a closed door, keeping his ID-card in front of the peephole and speaking in a loud voice: I am a member of the Moscow chamber of lawyers, Pavel Alekseyevich Astakhov. My registration number is 775365. Man's voice from inside: I shall let you in when I receive an order. Astakhov: What order? A lawyer can enter this building at any time. Open the door! Voice: I have a list of authorized persons. Do you know the password? Astakhov: What is your name? Voice: Tell me the password. Astakhov: Tell me your name. Voice: Aleshkevich. Astakhov: Are you a warrant officer? Voice: Yes. Astakhov: Everything is clear then. Correspondent: Astakhov has phoned the Prosecutor-General's office to inform them that he represents the interests of Artem Stefanov and the further investigation would be illegal without his participation. ******** #7 Yushenkov murder case suspect released, promises not to leave Moscow MOSCOW. April 24 (Interfax) - Artem Stefanov, 20, who was arrested on suspicion of killing Duma deputy Sergei Yushenkov, was released from custody after he had given a written pledge not to leave Moscow. "We deemed Stefanov's further detention unwise and decided to ask him to give a written pledge not to leave Moscow and released him from custody," Russian Deputy Prosecutor General Vladimir Kolesnikov told Interfax on Thursday. "The investigators intend to continue investigating this case," he said. Stefanov will be released around noon on Saturday, Kolesnikov said. ******** #8 Moscow Times April 24, 2003 Student Arrested in Yushenkov Case By Nabi Abdullaev and Oksana Yablokova Staff Writers A day after releasing a composite sketch of Sergei Yushenkov's killer, prosecutors on Wednesday arrested a 20-year-old Muscovite who they believe could have killed the lawmaker to avenge his father. Artyom Stefanov, a student of the Moscow Academy of Enterpreneurship, was arrested in his apartment in northwestern Moscow at 3 a.m. Wednesday and placed in custody for at least 48 hours. Stefanov is suspected of killing Yushenkov to avenge his father, who was jailed for six months in 1995 after sending a threatening letter to the lawmaker, Interfax said, citing a source close to the investigation. Investigators had said their main line of inquiry was into Yushenkov's party-related finances. Stefanov might have an alibi. Rossia television showed a friend of his, Pavel Maslovets, saying he had met Stefanov at the Oktyabr Stadium just before 6 p.m. last Thursday. Yushenkov was shot on Ulitsa Svobody at 5:48 p.m. The stadium is a short drive away. Prosecutor General Vladimir Ustinov, who was called to the State Duma on Wednesday to report on the progress of the investigation, refused to elaborate on Stefanov's detention. His subordinates have also been tight-lipped. His spokeswoman, Natalya Veshnyakova, said Ustinov was displeased that the information about the arrest became public. Deputy Interior Minister Vladimir Vasilyev, who also reported to the Duma, told reporters the grounds for the arrest "were sound and exhaustive." Stefanov's parents told NTV television that their apartment was searched and that were trying to find out where their son was taken. "They, the men with automatic weapons, took away my son and would not give me any documents," Alexander Stefanov said. Calls to the Stefanov home went unanswered. Under Russian law, the relatives of someone detained are free to make the detainment public if the case does not involve state secrets, according to lawyer Andrei Soya-Serko. Yushenkov's colleagues in his Liberal Russia party reacted to the news of Stefanov's arrest with a certain skepticism. They confirmed, however, that Yushenkov had received a letter from the elder Stefanov eight years ago threatening the safety of his family. Alexander Stefanov was arrested and spent six months in Butyrskaya jail while awaiting trial. Stefanov admitted he had sent the letter to Yushenkov because of his harsh statements about the military's operations in Chechnya, according to Yuly Nisnevich, Liberal Russia's executive secretary. The court found Stefanov guilty but released him on time served, Nisnevich said, adding that Yushenkov had asked the court to be lenient. Yushenkov's murder evoked a wave of criticism from fellow deputies, who lashed out at law enforcement agencies for their inability to prevent or solve contract killings. But after the closed-door hearing on Wednesday, most deputies promised their cooperation. Journalists were barred from the session out of concern that sensitive information would be disclosed, but afterward deputies told journalists that they had not heard anything that had not already been in the press. Gennady Raikov, head of the People's Deputy faction, said that judging from Ustinov's report, his investigators still do not have any viable explanation for Yushenkov's murder. Communist Deputy Viktor Ilyukhin told reporters the session was closed because members of the United Russia party did not want any criticism of their leader, Interior Minister Boris Gryzlov, to be made public. Gryzlov did not attend, sending Vasilyev in his place. Federal Security Service director Nikolai Patrushev, who also attended the hearing, told reporters that he had rejected a proposal from the head of the Duma's security committee, Alexander Gurov, to create a commission of lawmakers to oversee the investigation. "Any involvement in the investigation would jeopardize its impartiality. Or, if pressure is exerted on investigators, if they are hurried, it would lead to negligence in their work," he said. Duma Speaker Gennady Seleznyov said the deputies had not demanded details about Stefanov's detention from Ustinov. "We understand it is classified operational information," he said. ******** #9 Financial Times (UK) April 25, 2003 Political murders and inside sources By Rafael Behr in Moscow On Thusday 17th April Sergei Yushenkov, a highly-respected liberal politician and opposition figure in Russia's parliament, held a press conference, drove home, got out of his car and was shot dead. It was, said "sources inside the law enforcement organs", probably a political murder. Which was astute of them. They must have overheard the whole of Moscow cry out with one voice: "This is a political murder." Except, like good law enforcement officials, they did not make firm conclusions based on hearsay. And rightly not, because within days there was a new version, also from "sources inside the law enforcement organs", to the effect that financial questions in Mr Yushenkov's Liberal Russia party were the subject of the investigation. Mr Yushenkov, according to everyone who knew him, was a man of impeccable integrity. He manned the barricades when hardliners tried to crush Russian democracy in 1991. He consummately failed to exploit his parliamentary seat to get rich (bucking the national trend). Instead he embroiled himself in such nefarious activities as opposing the Chechen war, championing military reform and investigating claims that the security services (the FSB) were complicit in a series of bombings that destroyed apartment blocks in 1999, killing 300 people. The blasts were the trigger for renewed military action in the Caucasus, followed by a khaki election for President Putin. After their initial outburst "sources inside the law enforcement organs" have not had much to say on the political angle. But they have been chattering away on other leads, most of them focusing on the connection with Vladimir Golovlev, co-chairman of Liberal Russia, who was also shot dead last year. Mr Golovlev had, horror of horrors, "business interests". He was involved in some fishy and lucrative privatisations in his native Chelyabinsk region. There may also have been a connection with Liberal Russia party finances, "sources inside the law enforcement organs" speculated within earshot of journalists. This is a rich seam for conspiracy theorists. Liberal Russia was once funded by Boris Berezovsky, exiled tycoon, controversy magnet, agitator against President Putin and chief proponent of the FSB-dunnit version of the apartment bombings case. Mr Berezovsky is facing extradition to Russia on fraud charges (which he says are politically motivated). He is seeking asylum in Britain on the grounds that the FSB wants to kill him (he says). In case anyone missed the fact that Mr Yushenkov's murder strengthens the sanctuary plea, Mr Berezovsky was quick to remind them. He circulated a letter apparently written by the late Mr Yushenkov to the UK home secretary supporting the asylum case of Nikita Chekulin, a witness in the apartment bombings case. But didn't Mssrs Yushenkov and Berezovsky fall out a while ago over the future of Liberal Russia? (Stop right there, journalists! Change the subject. The litigious Mr Berezovsky mercilessly punishes in British libel courts any unfounded association of his good name with contract killing). On it goes. Different versions, droplets of events, seep to the surface like sweat from the pores of journalists in feverish consultation with their sources in law enforcement organs. It is instructive that the leaky organs and their scribes readily accept that hired assassination might be standard practice for resolving spats in fringe political parties. And that every political pilferer knows how and where to rent a murderer. Since it is that easy, why aren't the jails full of hitmen caught in dial-a-killer police sting operations? Maybe they are. The murder of Mr Yushenko certainly seems to have had a tonic effect on Russian crimebusting. Interior Minister Boris Gryzlov suddenly announced that a suspect had been found for the murder of Valentin Tsvetkov, the governor of the Magadan region who was gunned down in broad daylight on a busy Moscow street last year. He also mentioned in passing that the murder last year of a general in the federal coastguards had been solved. Inconveniently, Mr Gryzlov had to make these announcements from Kamchatka, where he had flown at short notice after personally taking charge of the Yushenkov investigation. What better way to wrong-foot the killer than travel thousands of miles from the scene of the crime for a week of minor official engagements. Sudden developments too in the case of Galina Starovoitova, a liberal politician with a reputation for probity who was gunned down in St Petersburg in 1998. Sources (this time "from inside the security services") told a newspaper they could confirm an old canard version of events by which Ms Starovoitova was in fact killed not for political reasons, but because she happened that day to be carrying a suitcase full of money. The moral of the story, the unusually didactic spooks pointed out, was that "in our country people don't get killed for politics." Meanwhile, Vladimir Vasiliev, Mr Gryzlov's deputy holding the fort in Moscow, put the Yushenkov case in context. Of the 53 murders or attempted murders of Russian parliamentarians "all of them have been solved," said Mr Vasiliev, "except for 16 of them". Soon to be 15? (Or had he already counted Mr Yushenkov?) A handful of suspects have been detained. Most promising is a 20-year-old student with a bitter grudge against Mr Yushenkov, said "sources inside the law enforcement organs". The young man's father did time in prison for making a death threat to Mr Yushenkov back in 1995. What is more he matches a composite image of the assassin which was constructed from detailed eyewitness testimony, said sources inside... etc. (Newspaper reproductions of the photofit show a generic young face void of distinguishing features.) One thing: the day after the murder, Vladimir Pronin, the chief of Moscow police said: "We did not manage to get any witnesses". He also said that eyewitness reports in newspapers were "the inventions of journalists". Where, I wonder, did these journalists get their sources? ******** #10 Date: Wed, 23 Apr From: Kristin Reid Subject: UMP Announces, Javeline: Protest and the Politics of Blame - Russian Response to Unpaid Wages Protest and the Politics of Blame: The Russian Response to Unpaid Wages by Debra Javeline How to explain the absence of wide-scale protest over unpaid wages in Russia? At its peak, Russia's wage arrears crisis involved some $10 billion worth of unpaid wages and has affected approximately 70 percent of the workforce, adding up to one of the biggest problems facing the country. Yet public protest has been puzzlingly limited. Debra Javeline, the author of Protest and the Politics of Blame one of the University of Michigan Press' newest title, shows that to understand the Russian public's reaction to wage delays, one must examine the ease or difficulty of attributing blame for the crisis. Testing conventional wisdom with data from an original nationwide survey, Javeline shows that understanding causal relationships drives human behavior and that specificity in blame attribution for a problem influences whether people address that problem through protest. I believe the audience of the Johnson's Russia List would find this book of great interest. Would you be willing to link your site to our webcatalog description of the book (http://www.press.umich.edu/titles/11306.html)? If within your scope, would would you make an announcement about this new release or review the book? If you decide to link, announce or review the book, please let me know. Thank you, I look forward to hearing from you. Protest and the Politics of Blame: The Russian Response to Unpaid Wages by Debra Javeline 0-472-11306-2 Kristin L. Reid Marketing Assistant University of Michigan Press 839 Greene Street 3209 Ann Arbor, MI 48106 (734) 763-0163 (734) 936-0456/fax ******** #11 Izvestia April 24, 2003 REFORM BURNOUT Russia's system of bureaucratic capitalism is in crisis Author: Svetlana Babayeva, Georgy Bovt [from WPS Monitoring Agency, www.wps.ru/e_index.html] THE PRESIDENT WILL DELIVER HIS ANNUAL ADDRESS TO THE FEDERAL ASSEMBLY IN MID-MAY. HE WILL LIST THE ISSUES ON RUSSIA'S AGENDA, AND OFFER A FORMULA FOR DEVELOPMENT OVER THE NEXT SEVERAL YEARS. WHAT QUESTIONS SHOULD PUTIN ANSWER - AND IS EVERYTHING REALLY GOING WELL? For the Russian political elite, these last few weeks have been marred by squabbles within Mikhail Kasianov's government. They actually became scandalous when a month ago the president ordered changes in the security bloc of the government, abolishing the Federal Tax Police Service and replacing it with a number of bodies, a drug- trafficking control agency being the most significant of them. Kremlin sources aren't answering the logical question about whether all this will be followed by staff changes in the economic bloc of the government. Sources and analysts report that the prime minister is nervous. There are rumors that the president has not explicitly told Mikhail Kasianov (and other key figures) to relax and keep working until the end of his own first term in office. Informed sources are now naming Viktor Khristenko, not Alexei Kudrin, as the most likely candidate for prime minister. It would be much too easy to attribute the squabbles to the traditional rivalry between "the people from St. Petersburg" and the "Yeltsin's Family" team. There is actually more to the problem than rivalry between the elites or conflicts between prominent individuals. It's a matter of a growing systemic crisis in the model of a capitalist economy which began to form under Yeltsin and continued under Putin. A crisis of bureaucratic capitalism. There is more to bureaucratic capitalism than 10,000 or more state-owned unitary enterprises operating in the market according the laws of corporate inefficiency and greed. This is a complex system of bogged-down bureaucratization of the economy and suppression of private economic initiatives by endless requirements for approval, endorsement, and so on. The matter also concerns the colossal role played by the state in redistribution of the GDP. Presidential economic advisor Andrei Illarionov warns that Russia has to cut state spending in order to increase the rate of economic growth. According to Illarionov, overall government spending other than interest payments (federal and regional budgets plus extra-budget funds) increased by 28% between 2000 and 2002, while the GDP grew by 19%. "Spending may increase by 20% more this year, while the GDP will not grow by more than 5%," Illarionov said. Illarionov: The growth of non-interest-payment spending in excess of GDP growth is a prelude to a serious budget crisis. It's impossible to restore the macroeconomic balance without reducing state spending. By postponing that, we could return to the situation we faced in 1998. All this is taking place against the backdrop of clan power- struggles for control over state resources. The policy of bargaining is all the more dangerous because most of the citizenry is excluded from the process and becoming marginalized. The only question is who will turn up with some new idea to lead the masses - lead them in the wrong direction. For a number of political reasons, there is no alternative available to bureaucratic capitalism in Russia. There are no political forces or political will to challenge absolute dominance of this model of development, or rather model of the existence of society. Pluralism of opinions within a single (by basic values) team has to be paid for with the loss of growth rate. Searches for compromises and constant personnel reshuffles prevent a successful debut from evolving into a new quality of the game. Professor Stephen Blank, Institute of Strategic Surveys (USA): Russia has a very poor-quality government. Few people in it are concerned about national interests. Most promote their own interests only. The Russian economy has not been able to compete with the West for the past 40 years. Remember Putin saying that in order to reach the level of Portugal, the Russian economy has to grow by 8% a year for fifteen years in a row? He said it in 1999. The economy did grow by 8% in 2000, but 29% inflation is expected in Russia in 2003. The major threat is weakness of the government generated by a lack of true democracy or an effective economy. Russia has to restore the balance between the center and the periphery. The country needs more self-rule and less centralization... Reforms to local government encounter resistance from the federal center, disinclined to give up control over finances. The prime minister's public quarrel with Kudrin, his deputy and finance minister, over taxes indicates that Russia lacks analysis of the consequences of strategies. For any particular economic policy, no one can say what will happen to the national economy after a decade. In his address to the Federal Assembly last year, Putin proposed a three-year moratorium on inspections by regulatory bodies of newly- established small businesses. He wished to see pressure on small business reduced. It was not reduced. Kasianov and Kudrin finally reached an agreement on the future of the tax reforms. The prime minister wanted the tax burden reduced by 2% of the GDP. As a result, VAT alone will be reduced by 2%. The pensions reforms are bogged down by bureaucracy. "We have to analyze current functions performed by the state apparatus and leave it with only the essential functions only." "The number of functions currently performed leave the state incapable of handling strategic tasks." These are excerpts from last year's presidential address to the Federal Assembly, dealing with the administrative reforms. These reforms have been scuttled by the state apparatus. It cannot be relied on to reorganize itself. The president also mentioned membership of the World Trade Organization as a priority. "This is an instrument. He who can use it becomes stronger. He who cannot or does not want to... is strategically doomed," Putin said. Well, negotiations over joining the World Trade Organization have failed. The failure is apparently attributed to Russia's inability to come up with adequate teams of negotiators for competent consultations on a number of matters at the same time. A year ago, the president talked about restructuring programs for the natural monopolies. Battles over restructuring Russian Joint Energy Systems, the Railroads Ministry, and Gazprom lasted all year. They ended in what could have been predicted, and actually was predicted - in a victory for the policy of strengthening state control over the economy and bureaucratic capitalism over principles of free- market economy and private enterprise. A high-ranking Kremlin source indirectly explained "delays" with restructuring natural monopolies. "It would have been much better if the government said what was to be done with the natural monopolies," he said. "But the monopolies themselves are permitted to draft plans for their own reorganization... But when Russian Joint Energy Systems may be restructured one way, and the Railroads Ministry in an entirely different way, Gazprom raises questions of its own." In 2001, the Economic Development Ministry merely suggested withdrawing the transport component from Gazprom. It did not propose splitting the company; it only demanded transparency in decision- making. Gazprom CEO Alexei Miller was allowed to have his way. As for Herman Gref, author of the "gas reforms", he is away on vacation; there are rumors that he has resigned and will not come back. That would be a pity, if true. Gref was (is) one of the few people in the government who constantly proposes new ideas. The nation is crawling into the parliamentary and presidential election campaigns. The regime's top priority is to prevent the Communists from scoring a victory. A great deal of PR effort and money has been invested in United Russia, which is supposed to be the Communist Party's major rival in the elections. It was decided that in order to defeat the Communists, United Russia should be more critical of the government than the Communist Party could ever be. In theory, the technique of winning votes by stealing the opposition's policies can be effective - in the American two-party system, for example. But the tactic looks dubious in modern Russia; at least, until we have the parliamentary majority form the government and thus enable the opposition to criticize it. As things stand, however, Boris Gryzlov (interior minister and United Russia leader) criticizing his own boss (the prime minister) - that looks somewhat quixotic. Moreover, Russia is accustomed to individualizing the authorities, and games of this sort therefore appear risky. Who can guarantee that criticism of the government will not eventually evolve into criticism of the president? Transition to a new phase of settlement in Chechnya is a success - even traditional critics of federal policy in Chechnya do not challenge the necessity and legitimacy of the referendum there. Generally speaking, Russian companies have consolidated their positions and improved their image abroad. More and more Russian companies are switching over to international business standards. The $7 billion alliance between Tyumen Oil Company and British Petroleum only confirms the trend towards a reduction of capital flight. All the same, problems are numerous. And there is another detail: the regime no longer appears homogeneous. Power is an object of bargaining and intrigues once again. It is not a political condition. All players sense it. Fear is giving way to considerations of profit. Regional leaders demand additional subsidies (a reward for loyalty) and get them. The Prosecutor General's Office, which had been keeping quiet until recently, is now demanding some answers from Kasianov... Certain state officials previously considered intelligent have suddenly come up with some strange ideas, mostly supporting anti- American trends and sentiments. Aware that Iraq is not worth wrecking relations with America, part of the elite is fascinated by the prospect of an alliance with the French and German "Fronde"... The protest rallies organized by United Russia looked odd for a "pro-presidential party", compared to the president's own foreign policy agenda. The president himself retreated from the limelight during the Iraq crisis - he neither challenged anti-American sentiments in society nor voiced his own position. ...The president cannot afford to be tired of answering major questions. He is the only one to answer them. ******* #12 The Globe and Mail (Canada) April 23, 2003 A modern crime and punishment Who killed Russia's leading liberal? The evidence points to the President's pals, says security specialist AMY KNIGHT By AMY KNIGHT Amy Knight, a specialist in Russian security affairs, is the author of several books, including, most recently, Who Killed Kirov? The Kremlin's Greatest Mystery. Don't even think about it -- that last week's murder of Sergei Yushenkov, Russian Duma deputy and co-chairman of the pro-democracy Liberal Russia party, was politically inspired. Because when you start considering motives, it leads you straight to President Vladimir Putin's security police. Mr. Yushenkov, who was shot to death April 17 outside his Moscow apartment house, had long been a fierce critic of the Kremlin's war in Chechnya, orchestrated by the Russian security service, the FSB. Mr. Yushenkov also took a leading role in the Duma's ongoing investigation of the 1999 apartment bombings in Russia that killed more than 300 people. Vladimir Putin, who was prime minister at the time, blamed the Chechens for the bombings, and then used the tragedy as an excuse to invade Chechnya. But when FSB employees were caught red-handed planting a bomb in the basement of an apartment in the city of Ryazan, suspicions about the Moscow bombings were directed at their agency. Although FSB officials claimed that the whole thing was a hoax and that the explosive powder was just sugar, they never offered convincing proof. As if that were not enough to raise the ire of the FSB against him, Mr. Yushenkov had connections with business tycoon Boris Berezovsky, a fierce enemy of the Kremlin and Liberal Russia's chief financial backer when it was founded last year. The party later expelled Mr. Berezovsky, who lives in exile in London, for courting former Communists, and Mr. Yushenkov broke off relations with him. But the FSB probably never forgave Mr. Yushenkov for distributing Mr. Berezovsky's film alleging that the FSB was behind the 1999 bombings. Mr. Yushenkov was aware that his politics had made him enemies. After fellow Duma member and Liberal party co-founder, Vladimir Golovlev, was shot to death last August, Mr. Yushenkov, according to one source, was "clearly frightened" that he would be the next victim. But that did not deter him from furthering his democratic political goals. Just hours before he was killed, Mr. Yushenkov announced that Liberal Russia had managed to achieve the crucial registration necessary to run in the parliamentary elections next December. Imagine what a thorn in the FSB's side Liberal Russia could be during the election campaign, especially if its members continue to harp on the FSB's possible involvement in the 1999 bombings. What better way to intimidate Liberal Russia's supporters than to have one of their leaders knocked off? No, don't even go there. Because if you suggest that the FSB was behind the Yushenkov murder, then you can't ignore the question of where Vladimir Putin stands in all of this. President Putin is one of the FSB's staunchest advocates. Just last month, Mr. Putin announced that he was strengthening the FSB's already substantial powers. As of this July, the Federal Border Guard Service, which commands over 100,000 troops, will be placed under the FSB's authority. In addition, Russia's powerful Federal Agency for Government Communications and Information, known by its Russian acronym as FAPSI, is being disbanded. The FSB will inherit all its domestic electronic-intelligence functions. (As one observer noted, it is like the FBI taking over the operations of the U.S. National Security Agency.) In transferring the border guards and key FAPSI functions to the FSB, the Russian President is transforming this agency into a suprasecurity body, much like the former KGB. Why does President Putin continue to give the FSB so much power, especially considering its reputation for corruption and organized-crime connections? Because this agency is a crucial base of support for him. When Mr. Putin himself headed the FSB in 1998-1999, he brought in many of his former KGB colleagues from St. Petersburg, including the current director, Nikolai Patrushev, to serve under him. These men can be counted on to help preserve Mr. Putin's authority in the face of political challenges, including those that could arise in the upcoming parliamentary and presidential elections. The fact that Mr. Yushenkov is the third liberal lawmaker to be killed in less than five years suggests that politics in Russia can be a dangerous business, particularly if you are a critic of the Kremlin. The FSB is supposed to help solve these killings, along with a host of other apparent contract murders of politicians and journalists. But no one expects this to happen. Ironically, Vladimir Putin was head of the FSB when Duma deputy and human-rights activist Galina Starovoitova -- another harsh critic of the security services -- was gunned down outside her St. Petersburg apartment in November, 1998. Although Mr. Putin vowed to find the killers, and the FSB detained hundreds of suspects in the immediate aftermath, Ms. Starovoitova's murder has never been solved. Unfortunately, the same scenario will probably be repeated with the investigation of Mr. Yushenkov's killing. Despite the FSB's awesome powers and the vast arsenal of forensic expertise at its disposal, this agency has a dismal record of protecting Russian citizens from the violence and lawlessness that pervade their country. On Friday, Sergei Kovalev, a former dissident who was imprisoned by the KGB for his political beliefs and who is now a prominent Russian parliamentarian, sent an open letter to the Russian President in which he dared to express the unthinkable: "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." Although Mr. Kovalev was careful to say that he had no reason to suspect current FSB officials, this possibility cannot have been far from his mind. ******** #13 Date: Wed, 23 Apr 2003 From: "JOSEPH DRESEN" Subject: Event announcement News Release Release No. 13April April 21, 2003 Kennan Institute Continues Series on Russian Cultural Influences on America WASHINGTON--On May 5, the Woodrow Wilson Center's Kennan Institute will hold the second in a four-part series of programs on Russian culture, titled, "Culture/Kultura: Russian Influences on American Performing Arts." The program on May 5 will focus on Russian dance and its influence on America. The remaining programs, to be held later in the year, will focus on theater (in October) and film (in December). The first program on music was held in February. "When we think of Russian influences on American dance," said Kennan Institute Director Blair A. Ruble, "we think almost exclusively in terms of classical ballet--from individuals such as choreographer George Balanchine and dancers Alicia Makarova, Rudolf Nureyev, and Mikhail Baryshnikov; to theaters such as the New York City Ballet and the American Ballet Theatre. And, while American ballet has been enormously shaped by Russian influences, those influences extend to Hollywood and Broadway as well." The May 5 seminar will feature expert commentary, video, and photographic presentations documenting the historic and pervasive Russian influences on this aspect of American culture. Panelists will include Suzanne Carbonneau, professor of performance and interdisciplinary studies in the arts at George Mason University; Suzanne Farrell, of the Suzanne Farrell Ballet Company at The John F. Kennedy Center for the Performing Arts; and Camille Hardy, principal researcher of the Popular Balanchine Project in New York and senior critic for Dance Magazine. The program will take place from 5:30 p.m. to 7:30 p.m. in the Joseph and Claire Flom Auditorium (6th Floor) of the Woodrow Wilson Center, located in the Ronald Reagan Building and International Trade Center, followed by a reception. Reservations are required to attend this event. To R.S.V.P. and request directions or more information on the program series, please contact the Kennan Institute at 202-691-4100. The Kennan Institute was founded as a division of the Woodrow Wilson International Center for Scholars in December 1974 with a mission to improve American expertise and knowledge about Russia and the other successor states of the former Soviet Union. The Woodrow Wilson International Center for Scholars is the living, national memorial to President Wilson established by Congress in 1968 and headquartered in Washington, D.C. The Center establishes and maintains a neutral forum for free, open, and informed dialogue. It is a nonpartisan institution, supported by public and private funds and engaged in the study of national and world affairs. ******** #14 From: Edward Lozansky Date: Wed, 23 Apr 2003 Subject: Russian Forum Edward D. Lozansky President, American University in Moscow & Media Group Kontinent, USA 1800 Connecticut Avenue, NW Washington, DC 20009 Tel. 202-986-6010, Fax 202-667-4244; E-mail: Lozansky@aol.com www.RussiaHouse.org; www.Kontinent.org; Moscow office: 44 Bolshaya Nikitskaya Street, Moscow, Russia Tel. (095) 290-3459, Fax (095)-291-1595; E-mail: Russia@RussiaHouse.org You are cordially invited to participate in the annual World Russian Forum to be held April 28 - 29, 2003 in the Russell Senate Office Building, Room 325 on April 28 and Dirksen Senate Office Building, Room G50 on April 29 with the Russian Embassy reception on April 28. The Forum is organized by the American University in Moscow, Media Group Kontinent USA and Free Congress Foundation in cooperation with many business and media companies and its main goal is to explore the current status of US - Russian relations and to discuss and generate new ideas for the development and broad expansion of US - Russian cooperation in business, finance, military, coalition in the war on terror, nuclear nonproliferation, science & education, etc. Preliminary Forum Agenda and the list of speakers can be found on www.RussiaHouse.org/wrf Among confirmed Forum speakers are: Yuri V. Ushakov, Russian Ambassador to Washington, Congressman Curt Weldon (R-PA) Trevor Gunn - Director of BISNIS, U.S. Department of Commerce Bruno Balvanera - Head of Business Development, EBRD Sarah Carey - Squire, Saunders & Dempsey; Chairman, Eurasia Foundation Ariel Cohen, Research Fellow in Russian and Eurasian Studies, Heritage Foundation Garegyn Tosunyan, President, Association of Russian Banks Alexander Braverman - First Deputy Minister of Property Relations of the Russian Federation Pat Cloherty - Chairman, U.S. - Russia Fund Igor Makarov - President, ITERA Katrin Kuhlman - Trade Representative, USTR office Esther Dyson, Chairman, EDventure Holdings Sergey Kravchenko, President, Boeing Russia Rose Gottemoeller - Senior Associate of the Carnegie Endowment for International Peace John Holdren - Chair of the Committee on International Security and Arms Control of the National Academy of Sciences Norman Neureiter - Science Advisor to Secretary of State Colin Powell Nikolai Zlobin - Editor-in-Chief, Washington Profile Bruce Blair - President, Center for Defense Information John Bolton - Undersecretary for Arms Control, U.S. State Department Celeste Wallander - Director, Russia and Eurasia Program, Center for Strategic and International Studies Paul Weyrich - Chairman, Free Congress Foundation Martin Sieff - Senior Foreign Correspondent, UPI Abdul-Khakim Sultigov- Special Rep. of President Putin to Chechen republic Several Members of Congress are invited to offer their views on the current status of US - Russian relations Those interested in attending should send an e-mail to Forum@RussiaHouse.org or call 202-986-6010 Forum website: www.RussiaHouse.org/wrf ******** #15 Russia: Debate Over Slain Lawmaker Not Expected To Affect Politics By Gregory Feifer Last week's killing of liberal legislator Sergei Yushenkov has drawn a wave of protest from a broad range of politicians calling for reform of what they see as Russia's lawless society. But as debate over the motives rages, it is unclear what -- if any -- lasting impact the assassination will have. Some say the killing will serve to silence other Kremlin critics. Others say the current political unity over the crime will quickly dissolve as different theories for the murder are put forward. Moscow, 23 April 2003 (RFE/RL/) -- The assassination last week of Liberal Russia party co-Chairman Sergei Yushenkov continues to reverberate within Russia's political establishment. In the days after the vocal Kremlin critic was gunned down outside his Moscow apartment, liberal deputies lashed out at Vladimir Putin. They said Russia's self-described law-and-order president had done nothing to improve security since coming to office, and in fact had only succeeded in chipping away at civil liberties. A so-far unanswered call for resignations went out. A Duma vote demanding Interior Minister Boris Gryzlov step down likewise failed. Complaints are now focusing on the deputies themselves, saying they are using the killing to advance their political causes. The Duma today discussed the issue in a closed session with Prosecutor-General Vladimir Ustinov and Federal Security Service Director Nikolai Patrushev. In televised comments from the Duma floor, Liberal Russia co-Chairman Viktor Pokhmelkin called for the discussion to be closed to reporters so that deputies would not be able to turn the event into a "political show." "If you really want to find out [what happened] and to help the investigation, then you will vote for the discussion to be closed and for not a drop of information to be released from here -- and especially for the faces of those whom Sergei Nikolaevich [Yushenkov] often confronted and fought with not to flicker on television," Pokhmelkin said. The discussion comes as police today made their first detention in the case. Police are holding 20-year-old Artem Stefanov for questioning in the case. They say he is suspected of acting alone in Yushenkov's killing, which was meant to avenge the arrest of Stefanov's father. Interfax quoted an unnamed source as saying Stefanov's father sent Yushenkov a letter in 1997 accusing him of stealing government goods earmarked for Chechnya. Yushenkov passed the letter to the Prosecutor-General's Office, saying he was the subject of an extortion campaign. Stefanov's father was then arrested and served six months in pretrial detention. Police say Stefanov resembles a composite sketch of the suspect released yesterday. But Liberal Russia member Yulii Nisnevich told Ekho Moskvy radio he doubts Stefanov -- whom police describe as "unstable" -- is in any way linked to last week's killing. Yushenkov's slaying -- which was a contract-style hit, with the assassin leaving behind a pistol fixed with a silencer -- is widely seen as having been politically motivated. The lawmaker's colleagues say he was not involved in business dealings and that he resolutely opposed corruption. Many have said the assassination was a blow to the country's democratic values and will make oppositionists like Yushenkov -- who often spoke against the war in Chechnya and government corruption -- less likely to criticize the Kremlin. But a slew of different motives -- including theft of large amounts of money and internal party squabbling -- have been making the rounds of the Russian press. Dmitrii Orlov, deputy director of Moscow's Center for Political Technologies think tank, said observers are questioning whether Yushenkov's killing was purely political. He said relentless speculation about the case is quickly eroding what he calls the "political consolidation" among opposition figures over Yushenkov's killing. "The initial wave of unhappiness with the power structures, unhappiness with Putin's general political regime, will quickly subside, especially if prosecutors and the Interior Ministry put forward a realistic hypothesis for Yushenkov's murder," Orlov said. Yushenkov's Liberal Russia party was founded in 2001 with the financial support of exiled tycoon Boris Berezovskii. Yushenkov later turned him out of the group after Berezovskii began courting figures associated with the Communist Party, saying he wanted to create a broad opposition group. Former parliamentary speaker Ivan Rybkin told reporters yesterday that he and Yushenkov held a "friendly" meeting with Berezovskii in London last month. Berezovskii yesterday said that he had sent Russian prosecutors a copy of a deposition made by Yushenkov last year indicating the legislator thought he was in danger from the Russian security services. Yushenkov and Berezovskii had both accused the security services of organizing a series of apartment bombings in 1999. Officials blamed the blasts on Chechen rebels and used them as part of the justification for launching a second campaign in the breakaway region of Chechnya that year. Speaking of growing intolerance in the country, Rybkin said Yushenkov was killed by "Russian fascism," Interfax reported. He added that Yushenkov was a man who "spoke as he thought and he acted as he spoke." Yushenkov is the latest in a series of legislators to have been killed over the past decade. His is also the highest-profile killing of a legislator since the assassination of pro-reform campaigner Galina Starovoitova in November 1998. Unlike Yushenkov's, most killings of politicians over the past decade are seen to have been directly linked with some form of business dealings. Vladimir Golovlev, another Liberal Russia member, was gunned down last year in what many said was a result of his previous work heading the murky privatization of state property in the Chelyabinsk region in the early 1990s. Some law enforcement officials have meanwhile bucked popular opinion by saying Yushenkov's slaying is likely tied to "economic reasons," Interfax quoted unnamed sources as saying. Yurii Korgunyuk is director of Moscow's Indem research group. He agreed that while Yushenkov's killing "doesn't help authorities," it does not significantly damage their reputation. Far worse, he said, was the hostage crisis last year staged by heavily armed Chechen rebels who snuck into the capital and took control of a theater. "Neither the police nor the Federal Security Service -- nor any other law enforcement organ -- can in fact guard every politician. It's essentially impossible to avert such killings. So I don't think this does much discrediting," Korgunyuk said. Korgunyuk said Yushenkov's killing will have little long-term impact -- unlike Starovoitova's. Her assassination provided the impetus for a group of liberals to merge their disparate movements into the Union of Rightist Forces bloc, which today is one of the country's two main liberal parties. By contrast, Korgunyuk said, "Yushenkov's murder won't affect political forces in any way." ******* #16 Russia Bids to Create Its First Global Company: Matthew Lynn By Matthew Lynn London, April 23 (Bloomberg) -- The numbers are eye-catching. Created yesterday out of the combination of AO Yukos Oil Co. and OAO Sibneft, YukosSibneft will pump about 2.3 million barrels of oil a day, more than Kuwait and as much as Iraq. The new company will have 19 billion barrels of oil and gas in reserves, 150,000 workers and a market value of about $35 billion. Yet the numbers only scratch the surface of the story. YukosSibneft is the first of what is likely to become a handful of Russian companies too big for global equity investors to ignore. It forces consideration of the identity and nature of Russian companies bidding to compete worldwide. It poses three questions. Will YukosSibneft take its place alongside U.S. and European rivals, or will it remain an oversized local company? What does the creation of YukosSibneft say about its Western rivals? Will the new company be a modernizing or reactionary force in Russia? YukosSibneft has some of the attributes of its U.S. and European rivals. It is either the fourth- or seventh-biggest oil company in the world depending on how you count -- by reserves, output or market value. Yukos and Sibneft were the two fastest-growing Russian oil companies and the two lowest-cost producers. The combined business is set to become the class act of the Russian petroleum industry. Rockefeller The company is heading down the trail blazed by its Western rivals. Mikhail Khodorkovsky, the chief executive of the merged businesses, has said repeatedly he wants to build a retail business outside Russia. In pursuing this goal he places himself in the line of oil barons originating with John D. Rockefeller who have sought control over distribution as well as production. Placing himself in the tradition of Rockefeller means that Khodorkovsky almost certainly will sink cash into European and American refineries and gas stations. YukosSibneft will probably also try to become a global brand name in some form. Expect in the next decade to pick up a free Cossack toy for the kids as you fill up your car with tank of Yukos unleaded. The news yesterday makes the established oil majors look different. It makes Lord Browne, chief executive of BP Plc, look like the smartest oilman in the world. In February, Browne paid $6.75 billion for a joint venture with Russia's OAO Tyumen Oil Co. That just might turn out to be the last big foreign investment in the Russian oil industry. Rumors Before the merger announcement yesterday, the market was awash with rumors that Royal Dutch/Shell Group would take control of Sibneft. Sibneft executives said they talked to foreign companies before striking their deal with Yukos. Now Yukos has trumped Western oil companies. Other opportunities may arise, though the inaction of oilmen other than Browne may prove to have been a massive misjudgment. Russian oil companies that could have been turned into thriving subsidiaries a few years ago may instead become ferocious competitors. Historians may interpret this inaction as a failure of nerve. The merger yesterday brings Russia a step closer toward defining itself in the aftermath of communism. Russia could go one of two ways. It may become the next Argentina -- a country rich in natural resources stumbling from crisis to crisis. Dictatorship Or it may become the next Spain -- a country emerging from a long period of dictatorship to create a modern, vibrant economy. Which kind of country Russia becomes depends a lot on its oil industry. Russia is an oil economy. ING Groep NV estimates oil accounted for 30 percent of its gross domestic product in 2002 and half its exports. History shows that oil has the potential to propel nations into the modern age -- or to entrench corrupt elites standing in the way of modernization. In most of the Middle East and Latin America, oil has been a reactionary force. It has created an interlocking class of businessmen and politicians concerned with splitting up the wealth that gushes from the ground -- not with using petrodollars as the foundation for economic development. At times, Russia has looked to be going that way. But there is another model. Oil was crucial in helping the U.S. become a superpower. Aside from supplying energy, U.S. oil companies pioneered modern management. They invented techniques allowing big companies to resist bureaucratization and to stay entrepreneurial. Managerial Talent Aside from creating capital, U.S. oil companies such as Exxon Mobil Corp. fostered learning in marketing, finance and management. The same could be true of YukosSibneft. The new company may become a seedbed of Russian managerial talent. That model is not restricted to North America. British oil companies have played a big role in the U.K.'s economic development. Norwegian oil has spurred the Norwegian economy. It could happen in Russia as well. Which way will YukosSibneft go? It's too early to say. Still, we won't have to wait long for indications. One of the first will be the treatment of small shareholders in Russia's first entrant in the big league of global companies. ******* #17 BBC Monitoring US Envoy Notes Improvement in Relations with Ukraine Source: Holos Ukrayiny, Kiev, in Ukrainian 23 Apr 03, p 5 The improvement in Ukrainian-US relations started before Ukraine sent its decontamination battalion to Kuwait, although the USA greatly appreciated it, the US ambassador to Ukraine, Carlos Pascual, has said in an interview. There is little prospect of reaching understanding on the question of Kolchuga radar systems that Ukraine allegedly supplied to Iraq, according to the ambassador. Ukraine has a chance, but no guarantee, of taking part in post-war reconstruction of Iraq, Pascual said. The following is an excerpt from an interview Pascual gave to Anatoliy Martsynovskyy, published in Holos Ukrayiny on 23 April. Subheadings have been inserted editorially: Newspaper intro: Despite the anti-American sentiment following the Iraqi campaign, experts and the media say there have been a notable improvement in US-Ukrainian relations. No-one is talking now about the Kolchuga scandal, which had triggered an unprecedented crisis in bilateral ties. "Should we assume that the critical period in relations between Kiev and Washington is over?" That was our first question to US Ambassador Extraordinary and Plenipotentiary Carlos Pascual. Pascual: There has indeed been a certain improvement in relations, and both sides are striving to develop this. In December last year, I proposed a so-called strategy of small steps, consisting of continuing interaction and defining concrete possibilities for mutually beneficial solution of a number of questions. This in turn might open the doors to further progress. We started to implement that strategy, and there have already been some positive results. Ukraine took serious measures to improve the system of combating money laundering, which led to the lifting of FATF sanctions. We achieved certain results in talks about Ukraine's accession to the WTO and resolving some bilateral trade issues. We are deepening cooperation in the area of export control. Ukraine has agreed to send its radiation, chemical and biological protection battalion to Kuwait. We are also continuing to cooperate in the development of a civic society in Ukraine and independence of the media. Small steps in improving relations Martsynovskyy: There is however, a view that the change in Washington's attitude to Kiev was caused primarily by the decision of the Ukrainian authorities to send the battalion to Kuwait. Pascual: No, that's not right. Of course, we viewed very positively and with gratitude the fact that President Leonid Kuchma, the National Security and Defence Council and a number of parliamentary political parties approved the dispatch of the battalion. But our cooperation in those specific directions that I already mentioned started before that. For example, the FATF decision to rescind its recommendations on applying sanctions was taken in the middle of February. Our common actions regarding the WTO started at negotiations in Geneva at the end of February. Mind you, the question of the battalion was, of course, another very concrete example of how work can be conducted jointly in solving serious international problems and strengthening peace and security in the region. But, I repeat, this was far from the only factor leading to the improvement in our relationship. Martsynovskyy: So, is the previously declared review of American policy regarding Ukraine fully completed? Pascual: Its completion was officially announced back in January. The process again confirmed the long-term strategic goals that we were pursuing from the very start of our bilateral relations. The USA supports the transformation of Ukraine into a democratic market country, fully integrated with the Euroatlantic community. As for the question of the Kolchugas radar systems allegedly supplied by Ukraine to Iraq , we have recognized that it is highly unlikely that Ukraine and the USA will find mutual understanding here. And for this reason, it is better to draw constructive lessons from this situation and apply them in practice. It was precisely in this context that we proposed to Kiev to expand our cooperation in the area of non-proliferation and export control. And we are managing to make certain positive steps in this direction. Kolchuga issue Martsynovskyy: Kolchugas were not found in Iraq. Is the USA still convinced that their supplies were approved by the highest Ukrainian leadership? Pascual: We have always said that there are two separate issues here. First, was approval given to sell Kolchugas, and second, were they delivered. As far as the latter is concerned, the USA has stressed that we do not know whether that took place, since we do not have sufficient information. As for the first question, differences of view with the Ukrainian side remain. Martsynovskyy: Have the American authorities changed their attitude to President Kuchma? Pascual: The USA has always recognized Leonid Kuchma as the president of this country, elected by its people. We recognize and respect the constitutional role of President Kuchma in leading the state, in particular in leading policy in questions of international security. And we believe that the line regarding Ukraine must be oriented at the long-term strategic goals I mentioned earlier. I think that the USA and Ukraine see that the strategy of small steps is already producing concrete results, and it is precisely along this road that we should move ahead. Martsynovskyy: Is a meeting between the US and Ukrainian presidents possible in the foreseeable future, say within the next 12-18 months? Pascual: That question is not currently under discussion. Reconstruction of Iraq Martsynovskyy: It was announced that through Ukraine's participation in the coalition to disarm Iraq (although the Ukrainian authorities publicly avoided the use of the term "coalition membership") our companies might take part in the reconstruction effort in Iraq. Is this a guaranteed participation, or merely a possibility? Pascual: There is a chance, but no guarantee. The basic funding for the reconstruction of Iraq today is being allocated precisely by the USA. In effect, the relevant contracts will be funded by American taxpayers. Therefore, naturally, they will be carried out through our general contractors. However, our legislation contains points making it possible to bring in non-American subcontractors in this case. Serious competition is now developing between firms of various countries, primarily those that were participants in the coalition. In Ukraine we are making every effort to inform interested structures and companies about the relevant possibilities. As far as Ukraine's membership of the coalition is concerned, I stress once again: before President Bush named your country in his speech at the end of March, we contacted the Ukrainian side and asked whether Ukraine would like that or not. Ukraine replied positively. And if later on it was decided that there had been some sort of misunderstanding, then either I should have been informed here, or the State Department in Washington should have been informed. Martsynovskyy: Is it not paradoxical that a country suspected of illegally arming the Husayn regime at the same time should join a coalition to disarm that same regime? Pascual: We gave all countries the opportunity to make their contribution to strengthening global and regional security. And if a state acted in that way, then that can be viewed only positively. This does not mean that we cannot have differences of opinion on certain things. But if we are capable of finding constructive ways of resolving those differences (in the case of Ukraine this is the above-mentioned cooperation on issues of export control for ensuring the security of leading Ukrainian technologies and materials), then such a development of events is satisfactory to us. Passage omitted: US policy on Iraq ******* 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