Johnson's Russia List
24 April 2003
A CDI Project

  1. Reuters: OECD sees Russian economic growth of 5 pct in 2003.
  2. AP: Russia's Population Declines Sharply.
  4. Yevgeny Verlin, Russia, Again at the
Fallout from the Petersburg Summit.
  5. Laura Belin: Yushenkov.
  6. BBC Monitoring: Famous Russian Lawyer Set to Defend Suspected Murderer
of Duma 
  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
Wages by Debra Javeline.
  11. Izvestia: Svetlana Babayeva and Georgy Bovt, REFORM BURNOUT. Russia's
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
  13. Kennan Institute Continues Series on Russian Cultural Influences on
  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
  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)]


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

"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

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

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.

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.

From: "Wayne Merry" 
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.
Senior Associate                 
American Foreign Policy Council  
1521 16th Street, NW             
Washington, DC 20036             
Fax 202-462-6045                 


Date: Wed, 23 Apr 2003 
Subject: Yevgeny Verlin/Russia at the Crossroads
From: Nikolas Gvosdev

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 (  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

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.  


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.


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

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. 


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
   "The investigators intend to continue investigating this case," he said. 
   Stefanov will be released around noon on Saturday, Kolesnikov said. 


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

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.

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

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?

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 ( 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

Kristin L. Reid
Marketing Assistant
University of Michigan Press
839 Greene Street 3209
Ann Arbor, MI 48106
(734) 763-0163
(734) 936-0456/fax


April 24, 2003
Russia's system of bureaucratic capitalism is in crisis
Author: Svetlana Babayeva, Georgy Bovt
[from WPS Monitoring Agency,]

     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 
     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 
     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 
     ...The president cannot afford to be tired of answering major 
questions. He is the only one to answer them.


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
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.


Date: Wed, 23 Apr 2003 
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.         


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:;;
Moscow office: 44 Bolshaya Nikitskaya Street, Moscow, Russia
Tel. (095) 290-3459, Fax (095)-291-1595; E-mail:
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

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
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
or call 202-986-6010

Forum website:


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."


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. 


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. 


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. 


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


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

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 


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