Johnson's Russia List
29 April 2003
A CDI Project

  1. Baltimore Sun: Craig Eisendrath, What hit Russia's economy? A raging war 
of scholars. Catastrophe or success, cause or consequence - pick your own
  2. Financial Times (UK): Chris Weafer, Too much oil could be bad for
  3. Rosbalt: Russian Women Satisfy Ambitions for Power at Home.
  6. Moscow Times: Alexei Pankin, Pre-emptive Strike Before Media Holidays.
  7. Strasbourg last hope for Nord-Ost victims.
  8. Anne Applebaum: book presentation in Washington for Gulag: A History.
  9. Reuters: Aid group says Chechens too scared to go home.
  10. Moscow Times: Boris Kagarlitsky, Lenin's Entombed Ratings.
  11. Nezavisimaya Gazeta: James Sherr, WHAT ARE THE OVERALL RESULTS AND 
  12. RFE/RL: Farangis Najibullah, Turkmenistan: Local Russians Pack Their
As Dual Citizenship Nears End.
  13. Wall Street Journal Europe: André Glucksmann, West Versus West.
  14. Asia Times: John Helmer, Goldminers play Russian roulette.
  15. Transitions Online: Vladimir Kovalev, No More Suspects Emerge in Murder 
of Russian MP.
  16. UPI: Anthony Louis, Russia takes aim in Central Asia] 


Baltimore Sun
April 27, 2003
What hit Russia's economy? A raging war of scholars
Catastrophe or success, cause or consequence - pick your own answer 
By Craig Eisendrath
Special To The Sun
Craig Eisendrath is a senior fellow at the Center for International Policy 
and the author of National Insecurity: U.S. Intelligence After the Cold War 
and The Phantom Defense: America's Pursuit of the Star Wars Illusion. His At 
War with Time: Western Thought From the Sages to the 21st Century will be 
published by Allworth Press this October. 

Today, a little over a decade after the fall of the Soviet Union in 1991, the 
gross domestic product of Russia, the major heir of the Soviet Union, is 
roughly that of Brazil or the Netherlands. What happened? Few topics have 
resulted in more controversy among international economists and scholars.

Some claim that the decline was predictable because of the marked 
inefficiencies of the Soviet economy, and that blame can be laid entirely on 
the Russians themselves for "losing" their own economy. Others believe that 
the United States, and the International Monetary Fund (IMF) under its 
control, vastly exacerbated the problem by rigidly doctrinaire policies, 
which imposed "shock therapy" on Russia. Still others deny that a major 
economic decline occurred at all.

There is also marked disagreement over whether Russia has emerged or is still 
stuck in the quagmire of the last decade. What makes the discussion more than 
academic is the danger that Russia, under stress, could revert to some form 
of totalitarian government and once again constitute a major international 

Anders Aslund, a senior associate at the Carnegie Endowment for International 
Peace, argues that the "decline" of the Russian economy is more a matter of 
unreliable statistics than of economic fact. In an article in the July/August 
2001 issue of Foreign Policy (see also his Building Capitalism: The 
Transformation of the Former Soviet Bloc, Cambridge University Press, 550 
pages, $27), he writes: "According to official statistics, gross domestic 
product (GDP) plummeted 44 percent from 1989 to 1998. However, this figure is 
grossly exaggerated because of the peculiar quirks of communist and 
post-communist statistics." If the Russian economy is roughly on a par with 
Brazil, Aslund says, that's where it was before the fall.

As for the charges of widespread corruption and bribery that other analysts 
see at the very core of a disastrous privatization policy, Aslund 
disingenuously argues that "privatization permanently deprives public 
servants of public property, so they can no longer charge money for the 
privilege of using it. Today, the bribery that plagues Russia is not related 
to privatization but is overwhelmingly connected with law enforcement, tax 
collection, and state intervention." In other words, you can no longer steal 
something that has already been stolen.

What Aslund argues away, others see at the heart of the problem. In The 
Oligarchs: Wealth and Power in the New Russia (Public Affairs, 576 pages, 
$30), David E. Hoffman, head of the Moscow bureau of The Washington Post 
between 1995 and 2001, provides a detailed picture of corruption whereby the 
former Soviet Union's vast, publicly owned economy disappeared into private 
hands, at a small fraction of its real value.

Focusing on a small group of oligarchs, Hoffman provides convincing detail 
showing how they corrupted the system to their benefit, by bribing officials 
to gain control of public assets, and how they managed to ship much of their 
money overseas.

A far racier account is provided by Matthew Brzezinski, a reporter for The 
Wall Street Journal, in his Casino Moscow: A Tale of Greed and Adventure on 
Capitalism's Wildest Frontier (Free Press, 317 pages, $25.) Both books 
emphasize not only the almost-unimaginable venality of oligarchs and public 
officials, but also suggest that this venality must have had a long 
incubation period during the Soviet years.

Officious bureaucracies breed corruption. In addition, the long years of 
centralized planning ill prepared the country for a precipitous conversion to 
a free-market economy. The U.S.S.R. had banks, but not banks that knew how to 
loan money and insist on prompt payment. It had manufacturing enterprises, 
but not ones that knew how to secure the capital and materials to manufacture 
goods nor operate in a competitive market to meet shifting consumer demands.

Where other countries, like Poland or Hungary, innovated during the 
post-World War II period in using new economic methods and mixed forms of 
public and private ownership, the Soviet Union remained tied to a centralized 
planning system that rigidified to the point of extinction.

A convincing explanation of the decline of the Russian economy in the 1990s 
is provided by Nobel laureate Joseph E. Stiglitz in his Globalization and Its 
Discontents (W.W. Norton, 192 pages, $24.95). The decline in Russia, 
according to Stiglitz, is real. "The middle class," he writes, "has been 
devastated, a system of crony and mafia capitalism has been created, and the 
one achievement, the creation of a democracy with meaningful freedoms, 
including a free press, appears fragile at best, particularly as formerly 
independent TV stations are shut down one by one." Where does he place the 
blame? "While those in Russia must bear much of the blame for what has 
happened, the Western advisers, especially from the United States and the 
IMF, who marched in so quickly to preach the gospel of the market economy, 
must also take some blame." It was the IMF, accordingly to Stiglitz, that 
insisted on Russia maintaining an overvalued currency, and supported it with 
billions of dollars of loans which "ultimately crushed the economy." While 
China, which ignored the IMF and privatized slowly, enjoyed double-digit 
growth in the 1990s, Russia floundered.

Stiglitz's views on the IMF's "shock therapy" of instant privatization are 
supported by another distinguished economist, Glenn E. Schweitzer, director 
of the Office for Central Europe and Europe at the National Academy of 
Sciences and the National Research Council.

In Swords into Market Shares: Technology, Economics, and Security in the New 
Russia (Joseph Henry Press, 160 pages, $29.95), Schweitzer writes: 
"Historians already underscore that the United States missed a one-time 
window of opportunity to influence Russian economic development in a positive 
and sustained direction in the early 1990s. Russian reformers who put their 
faith in American textbook models are now bearing the brunt of responsibility 
for Russia's economic mess - a 73 percent inflation rate in 1998, a 40 
percent drop in gross domestic product from 1991 through 1998, and a loss of 
real money income of 40 percent from 1991 through 1998."

Exactly the opposite, insists Anders Aslund. "Virtually all the problems in 
Russia today - excessive state intervention, corruption, high tax rates, 
lingering inflation, and limited rule of law - are indications of 
insufficient reform efforts" ("Russia" in Foreign Policy, July/August 2001).

While there have been increases since the 1998 crisis, incomes and health 
standards are still considerably lower than they were a decade ago, and 
poverty is much higher. In particular, as Stiglitz points out, the floor of 
public services provided by the former Soviet state has been taken away, and 
the distribution of wealth has been skewed in favor of wealth at the top. 
Stiglitz also discounts Russian economic growth after 1998, asserting that it 
was based on the short-term benefits of high oil prices and devaluation, and 
has since slowed down.

Former KGB agent Vladimir Putin, hardly a democrat, while disposing of some 
of the oligarchs, has, for the most part, not instituted policies designed to 
rectify the economy's problems. Rather, as journalist David E. Hoffman points 
out, Putin has simply gained personal control of a system as corrupt as its 

Daniel Treisman at the University of California at Los Angeles, concurs: 
"Putin's Russia is rather less stable and reformed than its supporters 
believe. ... Robust economic growth ... owe[s] more to the high price of oil 
and other unpredictable economic factors than to Putin's policies" (Foreign 
Affairs, November/December 2002).

According to Aslund, however: "Growth continues today. While many systemic 
problems remain, Russia appears to have attained a critical mass of market 
reforms and privatization. ... Considering the enormous distortions left 
behind by communism, that is a splendid achievement" (Foreign Policy, 
July/August 2001). The battle of who lost Russia, and if it was lost at all, 
goes on.


Financial Times (UK)
April 29, 2003
Too much oil could be bad for Russia's health 
By Chris Weafer 
The writer is chief strategist at Alfa Bank 
As the world looks for ways of reducing dependency on increasingly volatile
Middle East oil supplies, Russia, currently the second largest oil
producer, is actively debating how to raise export capacity.
The government is being pushed by Russia's oil companies and western
consumer countries to allow massive expansion in the capacity of its oil
export pipelines. Since growth in oil exports has been the main reason for
Russia's recovery from the 1998 crisis and the relatively high growth rates
seen since, one would assume that supporting a large, and immediate,
expansion in oil export capacity should be an easy decision. Far from it.
Such a move could be disastrous for the government's economic growth plans.
Instead of catching up with Portugal in terms of per capita wealth
(President Vladimir Putin's stated goal), failure to balance expansion in
the hydrocarbon sector with broader-based growth could mean that Russia
catches up with Venezuela instead.

The oil sector is now largely in private hands, and while the government
has almost no control over plans for production development, it does
control the 30,000 miles of oil pipelines that are the gateway to exports.
By controlling the rate of pipeline expansion, the government can slow, or
spur, the rate of production growth to match broader economic objectives.
However, the big oil companies want a quick fix, including permission to
fund pipeline development privately. While it is clear the government will
not cede operational control of the pipelines quickly or easily, there is
growing evidence it may give ground on the principle of private funding for
pipeline expansion.

The temptation is understandable. The combination of a high average price
per barrel and rising export volumes has earned Russia $160bn in export
revenues from oil and gas sales over the four years since the 1998
financial crisis, about $70bn more than in the four years prior to that.
Last year, such exports accounted for slightly more than 40 per cent of the
country's total exports and contributed 38 per cent of federal tax
receipts. The liquidity that oil and gas exports have injected into Russia
has also been one of the main drivers of growth in the service and consumer

Recognising this, the Putin government has encouraged an aggressive push to
restore some of the production and export volumes lost during the chaotic
first decade of Russia's post- Soviet existence, a push funded - to the
tune of about $13bn annually - by the high internal cash flows of Russian
oil companies. Today, Russia produces just over 8m barrels per day and
exports an average of 4m barrels a day, or roughly 25 per cent and 60 per
cent more than in 1998, respectively.

It could produce much more. BP's decision earlier this year to invest
$6.75bn, plus some assets, into a 50:50 joint venture with TNK (Russia's
third largest oil company by reserves) and the recently announced merger of
Yukos and Sibneft to form a new oil company - with reserves and production
almost equal to those of the world's largest, ExxonMobil - reflect this
potential. The country has considerable scope to develop reserves estimated
at about 100bn barrels, or almost 50 per cent of those available outside
the Organisation of Petroleum Exporting Countries and North America. By
2010 Russian oil companies could easily increase their exports to 7m
barrels per day - if the government will allow the extra pipeline capacity.
The improvements currently planned will add only about an extra 500,000
barrels this year.

So far the government has resisted the producers' lobbying because it has a
different economic agenda, one that calls for increased investment in
non-commodity sectors. The aim is to achieve balanced growth so the economy
is less vulnerable to the vagaries of commodity prices and wealth is
distributed more evenly. Continuing high oil and gas export revenues have
supported the rouble at too high an exchange rate and directly led to
strong real growth in costs. Over the medium term, this has reduced
competitiveness in the manufacturing sectors.

In the longer term, an economy seen as dependent on one sector will be
regarded as riskier for investors, slowing growth in direct investment flows.

Oil development is the "easy money" option for Russia. It allows a
continuation of economic revival based on oil cash and ensures the country
can still occupy a seat at the top table of global politics as an important
energy supplier to the US, Europe and Asia. However, it makes the economy
unduly reliant on hydrocarbons and increases the concentration of wealth in
the hands of the few industrial groups based in this sector.

That Russia could increase daily oil production to more than 11m barrels by
2010 is not in question. For its own sake, it must resist the temptation to
do so without also ensuring the success of its broader economic agenda.


April 28, 2003
Russian Women Satisfy Ambitions for Power at Home

ST. PETERSBURG, April 28. 'Russian women don't go into politics because they 
completely fulfil their ambitions for power at home in their families,' said 
St. Petersburg State University Professor Zinaida Sikevich at a round table 
entitled 'Women's Face of St. Petersburg' at Rosbalt on Monday. She said that 
'if a woman is successful at home and at work, the social roles which she 
fulfils intersect.' As a result, 'women struggle with a psychological 
conflict, which increases their level of anxiety,' said Sikevich. In this 
situation, women always give their preference to their family, she said.

Director of the Leontievsky Center Irina Karelina agreed with Sikevich and 
said that Russian men 'are not prepared and do not want to be the head of the 
family and take on themselves added responsibility.'

Popular St. Petersburg sociologist Roman Mogilevsky said that according to 
social research, conducted by the Agency for Social Information, love is the 
main value in life for women who consider themselves happy. For women who 
consider themselves unhappy, the main value is material things. 



MOSCOW, APRIL 28, 2003 /RIA NOVOSTI/ -- As Prime Minister Mikhail Kasyanov 
met Monday with vice-premiers and key ministers, mention was made of about 20 
SARS cases suspected in Russia, none of which has proved positive. Health 
Minister Yury Shevchenko and Chief Sanitary Doctor Gennady Onishchenko said 
that the SARS virus was registered in 26 countries led by China. Physicians 
have revealed the SARS virus while in Vietnam the disease has been already 
curbed with no signs of new cases. 

Shevchenko and Onishchenko also reported about the measures taken to prevent 
SARS cases in Russia, that is the establishment of a monitoring centre and a 
special group to research into the phenomenon. Special attention has been 
paid to the training and instructing of general practitioners as well as to 
sanitary measures at airports and railway terminals. Preventive medical 
activities have been carried out in frontier areas bordering on China. 



MOSCOW, April 28, 2003. /from a RIA Novosti correspondent/ -- The Yabloko 
faction in the State Duma intends to raise the issue of dismissing the 
government, the faction's apparatus told RIA Novosti. According to it, this 
will likely happen at the first May session of the lower house of the Russian 
parliament to be held May 14th. 

The faction intends to start collecting signatures in support of its demand. 

On Saturday, the Yabloko faction instructed its Duma faction to initiate the 
dismissal of the government in parliament. The party accuses the government 
of "failing to cope with the tasks it has been charged with." The government 
links the statement to the launch of the struggle for the seats in 
parliament, the regular election to which is due to take place late next 


Moscow Times
April 29, 2003
Pre-emptive Strike Before Media Holidays
By Alexei Pankin   

Everyone looks forward to the two national holidays that fall in the first
third of May. But the Russian press has three more reasons to celebrate. 

World Press Freedom Day comes first, on May 3. May 5 is Press Day, a
traditional holiday left over from the Soviet era. It was on May 5, 1912,
that the first issue of Pravda came off the presses. There is no official
celebration, but a glass or two will certainly be raised in editorial
offices across the country. And last but not least comes Radio Day on May
7, highlighted by the awarding of the prestigious national Radio Mania prize.

It's a safe bet that on World Press Freedom Day much will be said here and
abroad about the stifling of free speech in Russia, and about the
difficulties and dangers that journalists face here. I'd like to chime in
on that score in advance.

"My program has been around for 10 years," Vladimir Kara-Murza, the most
staunchly opposition-minded news anchor on Russia's most staunchly
opposition-minded television station, TVS, remarked in an interview. "I'm
still on the air, and all of the general directors I've had to work with
have retired for health reasons."

"The dangers faced by journalists have been blown out of proportion,"
investigative reporter Andrei Konstantinov told the Vecherny Peterburg
newspaper. "Journalists are very rarely killed for telling the truth. At
most you might get beaten up in the entryway [of your building]. People get
killed when they get involved in negative campaigning, when they stoop to
personal insults. It's very rare that a journalist is snuffed just to keep
his mouth shut about some terrible secret he has uncovered."

Doesn't this mean that journalists are more of a threat to those around
them than the other way around?

The run-up to the May holidays has been marked in the media community by an
air of paranoia. First, the news site reported that the leaders
of the Communist Party had turned up at the headquarters of the state-owned
VGTRK media holding and complained that they weren't getting enough air
time on the Rossia station. "Your presence on the air reflects our
reporters' feelings about you as a political party," a VGTRK executive told
the leaders of the largest faction in the State Duma. "What's more," the
executive added, "our state-owned station does not run on taxpayers' money,
but on advertising revenue." 

Then members of the Media Industry Committee, which brings together the
heads of the country's biggest Moscow-based media companies, drafted a new
law on the mass media and asked President Vladimir Putin to introduce it in
the Duma with his backing. Only one problem: Putin had already given his
backing to a package of amendments to the existing mass media law.

In the meantime, the Moscow Arbitration Court overruled a Press Ministry
order to shut down TV6 -- an order based in turn on another court ruling.
As you may recall, Yevgeny Kiselyov and his team of journalists, including
Kara-Murza, moved to TV6 after leaving NTV. The ministry annulled the
order, but subsequently received a new court ruling that forbade it to pull
the plug on TVS, which broadcasts on the frequency vacated by TV6. Kiselyov
and his team now work at TVS. Boris Berezovsky, the owner of TV6, has been
making noises about getting his station back on the air, and has called on
Kiselyov and his team to return to TV6.

Finally, the owners of TVS announced their intention to hire a new general
director -- the fourth in a year. The latest director fell out with the
Kiselyov team, and particularly with Kara-Murza. But they still haven't
made the switch. Web sites devoted to the mass media are already taking
bets on who will be next in line.

As you can see, the Moscow media are capable of ruining not just their
bosses' health, but the health of media watchers as well. 

Alexei Pankin is the editor of Sreda, a magazine for media professionals

April 28, 2003
Strasbourg last hope for Nord-Ost victims
By Lera Arsenina  

A higher court has upheld an earlier ruling by a Moscow court, which on
January 23 rejected the first three suits filed by survivors and relatives
of victims of the Nord-Ost hostage drama. The lawyers had asked the Moscow
City Court to annul the ruling and to order a repeated examination of the
suits, brought by the Khramtsov and Karpov families and by Zoya
Chernetsova, who sought $4 million in compensation for moral and material
damages from the Moscow government. 

On Monday the Moscow City Court reviewed the appeal filed by the lawyers
representing the survivors and relatives of victims of the terrorist attack
on a Moscow theatre in October last year. 129 hostages died during and
after the theatre siege, most of them killed by the knockout gas used in
the storming of the theatre building. At the end of last year a group of
former hostages filed suits against the Moscow government, claiming
multi-million dollar compensation in moral and material damages. 

Lawyer Igor Trunov, who is representing the claimants, has based his case
on Article 17 of the anti-terrorism law, which states that the region where
a terrorist act is perpetrated should pay compensation to the victims of
the attack from its budget means, with further compensation then being paid
from the inflictor in line with Civil Procedure laws. 

In January the Tverskoi inter-municipal court of Moscow examined the first
24 claims. After a week of hearings Judge Marina Gorbacheva rejected the
first three suits brought by the Khramtsov and Karpov families and Zoya
Chernetsova, and postponed examination of all others, ruling that the law
contained no provision directly obliging the region’s authorities to pay
compensation to the victims of a terror attack perpetrated on its
territory. That decision meant that all the other suits, too, would be
rejected for the same reason. 

The lawyers then decided to suspend examination of the other lawsuits, and
filed an appeal to the Moscow City Court. The appeal was to be reviewed at
the end of February but was postponed at the request of the defendant,
Moscow’s Finance Directorate. 

Igor Trunov perceived the pause in proceedings as an attempt by the Moscow
authorities to strike an amicable accord and addressed the mayor’s office
in a letter suggesting an out-of-court settlement, agreeing to scale down
the compensation claims from the initial $1 million to $50,000 per person.
But at the beginning of April city officials rejected Trunov’s proposal
saying they saw no legal grounds for paying compensation. 

From the very beginning Trunov never doubted that the Moscow City Court was
unlikely to satisfy his appeal, since, he said, just like any other court
in the capital, the City Court is partially financed from the city coffers,
and therefore, could not be considered completely impartial when judging a
case against the city government. 

Earlier, Trunov said that if the Moscow City Court rejected his claim he
would take the case to the Supreme Court, and then to the European Court of
Human Rights in Strasbourg. On the eve of the Monday hearing the lawyer
told Gazeta.Ru that his plans had changed. Trunov is not going to send the
appeal to the Supreme Court, as there is a risk that the Moscow City Court,
and later the Supreme Court will deliberately protract the examination,
''so that we lose time''. According to the lawyer, a complaint to the
European Court of Human Rights in Strasbourg has to be filed within 6
months of the ruling by a court of the first instance – i.e. the Tverskoi
inter-municipal court – coming into force. 

The lawyer hopes to attach more weight to the complaints lodged by the
Russian nationals by adding the claims of foreigners who also suffered
during the hostage drama and who have also become his clients. They are two
US citizens, an Austrian, a Ukrainian and a Kazakh national. ''After all,
in Europe the attitude towards Americans is different from that towards
Russians,'' believes Trunov. 

He plans to file the foreigners’ claims to the Tverskoi inter-municipal
court, to have them rejected, and then to send them to Strasbourg together
with the lawsuits of Chernetsova, and the Khramtsov and Karpov families.  


Subject: Gulag
From: "Anne Applebaum" 
Date: Mon, 28 Apr 2003 

To All JRL readers in Washington DC: You are cordially invited to a book
presentation for my new book, Gulag: A History, on Sunday, May 4th, at
Politics and Prose bookshop, 5015 Connecticut Avenue, NW - Anne Applebaum


Aid group says Chechens too scared to go home
April 28, 2003
By Oliver Bullough

MOSCOW (Reuters) - The vast majority of refugees who have fled fighting in 
Russia's Chechnya province are too scared to return home, a survey by an 
international aid group showed Monday.

The findings of the Medecins Sans Frontieres (MSF) survey, which was obtained 
by Reuters, contradict officials in Moscow, who say Chechnya is returning to 
normal and that the decade-long military campaign against separatist rebels 
has worked. They have trumpeted the return of refugees as proof.

"It is obvious that people have been returning to Chechnya against their 
will, giving up under tremendous pressure and without other choice," said the 
conclusion to the MSF survey, due to be published soon.

The United Nations and other organizations criticized Russia in December for 
forcing refugees to return to Chechnya, where buildings and public services 
have been shattered by the war between Russian forces and rebels.

The MSF survey was conducted in February and March, with MSF workers 
interviewing 3,209 families, totaling 16,499 people from eight official and 
unofficial encampments in the neighboring province of Ingushetia.

It was partly funded by ECHO, the European Union humanitarian aid office.     

More than 98 percent of the families said they had no plans to return to 
Chechnya, with 93 percent of those families saying they were worried for 
their safety if they did go back to the mountainous, mostly Muslim region.

They gave reasons including fear of arrest, continued violence by rebels and 
Russian forces, as well as concerns about where they would live when they got 

The U.N. High Commissioner for Refugees estimates there are 91,700 Chechen 
refugees in Ingushetia. In January, it put the figure at 102,000.

Shortly after the MSF survey was conducted, Chechens overwhelmingly approved 
a new constitution tying the region to Moscow in a vote dismissed by 
separatists as a farce.

Moscow said the vote made the rebels irrelevant and showed overwhelming 
support for Moscow's peace plan, including local presidential and assembly 

But insurgents have pursued a campaign opposing the Russian presence, with 
eight workers and five police killed in the most serious attacks this month.

MSF said authorities in Ingushetia were trying to force refugees to return by 
depriving them of aid or saying they would get no compensation for destroyed 
property unless they left.

The survey said 74 percent of Chechen families feared having nowhere to live 
if they returned to Chechnya, even though they are currently housed in tents 
and shelters.

MSF, with money from Norway and the EU, built about 180 shelters at the camps 
to house refugees, but said the local administration was trying to force 
their demolition.

Moscow Times
April 29, 2003
Lenin's Entombed Ratings
By Boris Kagarlitsky   

Traditionally, April is the month that we remember Vladimir Lenin. In
Soviet times, however, April was not so much the month of Lenin's birthday
as it was the time of the communist subbotnik. For those who never lived in
the Soviet Union, let me explain: At the height of the Civil War, a group
of revolutionary workers went to work on their day off and mended a few
steam-engines for free. Lenin, in an article, called it an act of "great
initiative" and, while he was about it (in the same article), he expounded
his interpretation of Karl Marx's sociological theory. 

After Lenin's death, his thoughts were immortalized in Soviet philosophy
textbooks. As for working unpaid on Saturdays, that was soon forgotten when
Stalin introduced labor camps, which provided the country with free labor
all the year round.

After Stalin's death, life became less brutal and the surviving victims of
political repression were allowed to return home. However, people started
to notice that with the departure of Stalin's totalitarian regime, communal
services ceased to function properly. Under Stalin, courtyard-sweepers
spied on residents, but at least they cleaned as well. 

Suddenly the Soviet authorities remembered the "great initiative." And here
you have to acknowledge that the Bolshevik leader's birthday was
well-timed: After the snow melts, the city's streets are covered in filth.
In short, the city needs a good spring-cleaning. It is instructive that
although Lenin's birthday has not been properly celebrated for years, the
subbotniki, which were tied to his birthday, have survived. Democratic
reforms killed off what was left of our communal services. And so, once a
year we have to do battle with garbage and filth. Of course, these days the
whole activity has become decentralized -- different neighborhoods and
organizations conduct subbotniki at different times, and some not at all.

But what is Lenin's name associated with today besides cleaning the streets
and putting out the trash? According to a survey conducted by the Public
Opinion Foundation, the name still means a great deal to the majority of
us. Sixty-three percent of Russians still remember his date of birth (51
percent among the younger generation). 

Mention of Lenin's name evokes positive emotions among 16 percent of those
polled ("something bright," "memories of youth," etc.). Fourteen percent
associate the name with revolution, uprising and strikes; while 11 percent
are reminded of the Communist Party, the Komsomol and pioneers' red neck
ties. Nine percent are reminded of "free education and health care" and
"the good life." And the same number are reminded of Soviet-era slogans
("All Power to the Soviets," etc.).

Only 5 percent of the population has negative associations, such as
poverty, hunger and lines. This is incredible considering that for the past
decade, many newspapers -- and in particular, the main TV channels -- have
been telling us regularly what an evil man the Bolshevik leader was.
Comparing the poll with those from five years ago, one thing is clear:
Despite the negative campaign (or perhaps because of it), Lenin's rating
has been on the rise. This goes for evaluations of the Soviet past as well.

However, it would be naive to conclude from this that Russians are in a
hurry to return to the Soviet Union. In fact, more likely the opposite is
true: The Soviet Union has irretrievably entered the annals of history, and
for this reason people are increasingly able to make an unbiased assessment
of the experience. In this situation, full-frontal assaults on Bolshevism
lose their effectiveness.

Throughout the 1990s, Soviet history was portrayed as one huge nightmare.
However, neo-liberal culture has proved incapable of creating its own role
models. Soviet history was a tragedy but not a catastrophe, and that is why
it continues to be appealing. Again and again we return to our Soviet past:
Film tastes were formed on a diet of Soviet films; Soviet children's books
gave us our penchant for reading.

However, we should not overestimate the depth of people's historical
awareness. Only 5 percent of respondents associate Lenin's name with the
history of the country and the social changes it underwent. Ultimately, the
poll only captured the emotions and associations evoked by Lenin's name,
not people's opinion of him.

Public opinion in Russia is still at a formative stage. If as a society we
were able consistently to formulate a clear position and defend it, then we
would be living in a very different country today.

Boris Kagarlitsky is director of the Institute of Globalization Studies.


From: "James Sherr" 
Subject: Nezavisimaya Article
Date: Mon, 28 Apr 2003 1

Dear David,

I am attaching a commentary on RF & Iraq which Nezavisimaya Gazeta published
in full in their 'Carte Blanche' column on 25 April.

Hope it's of interest!

All good wishes,

Commentary for Nezavisimaya Gazeta
James Sherr
(tel. 44-1865-243332/fax 44-1865-279802/e-mail:

For Russia, the game is not over.  The truly optimistic scenario - that
gambled upon with reason but rashness by President Putin and his advisers -
has already evaporated, but there are several alluring and exploitable
opportunities that lie between this outcome and the 'catastrophe' feared by
many now that the coalition has so swiftly and conclusively accomplished
its military objectives. For, like many a Western pessimist, Russia's
optimists calculated that the military obstacles would be greater than the
Pentagon planners assumed and that the ensuing political problems - Iraqi
popular opposition, Turkish and possibly Iranian intervention,
destabilisation of neighbouring countries - would far exceed anything that
the United States could cope with on its own. As a result,  the United
States would be reduced to asking for help - and, in so doing, cede the
initiative to Russia and other states interested in producing a very
different sort of regional and global order than that which the United
States has so aggressively championed.  That will not be.

Unless radical conclusions are drawn, it is safe to predict that Russia
will now wage a more subtle struggle with the United States and its allies,
rather than take deliberate and consistent steps to restore the atmosphere
and substance of post-11 September partnership.  This struggle will be
waged on at least four fronts.  First, efforts will be made, alongside
those of France and Germany, to put the UN back into the centre of the
picture - or as close to the centre as possible - in the knowledge that the
UN is Russia's most secure international sphere of influence and the arena
where the United States is most lacking in nimbleness and skill.  Second,
the Kremlin's vast army of posredniki will exploit the natural partiality
towards Russia that exists in much of the US and British foreign policy,
not to say financial establishments.  Not only will these establishments be
reminded, for the nth time, of the perils of 'isolating' Russia, it will be
easy to show them that energy partnership with Russia - and with Russian
energy contractors in Iraq - will be highly valuable to the United States
during the lengthy and complex period of transition before Iraq's oil
resources are brought back on stream.  The third front will be Iraq itself,
where Russia, unlike the United States, has abundant knowledge of, and
contacts within, the professional and technical elite whose services will
prove vital in reconstruction.  Finally, many tactical 'targets of
opportunity' will be sought and found, including 'evidence' showing that
Ukraine and Bulgaria are the real sanctions busting entrepreneurs - though
it should be plain by now that these gambits and 'active measures' are
wearing thin.

Once again, it will be tempting to overlook the obstacles, although they
surely have grown.  The first, congenitally discounted in Moscow, is the
force of public opinion (and the US Congress), which simply will not accept
that Russia should be rewarded for its perceived duplicity and 'betrayal'.
Even if the Bush administration tries to put relations 'back on track', it
is unlikely to try very hard, and it certainly will not invest costly
political resources in opposing this body of opinion. Second, it would be
perilous to discount the growing body of elite opinion - in the National
Security Council, State and Defence departments and the CIA - who believe
that the time is past where Russia should be treated as a 'special case'
and transcendental cause, rather than a country like any other - to be
judged on the basis of its real national interests and conduct.  Not only
will a subtle, complex struggle fail to beguile this elite, it will swell
its numbers and convictions.  Third, on matters profoundly important to
Russian interests - Kaliningrad, Schengen, the WTO - Russia is likely to
find that its apparent alliance with France and Germany is devoid of
meaning and substance.

The strength of Russian policy - and Russian political culture - is living
with contradictions and exploiting them.  Today, as in the past, this
talent is likely to secure a number of short-term tactical gains, but it is
also likely to damage Russia's long-term strategic and economic interests.
These interests demand a course that is unnatural and difficult:  making
real choices.  The first signal that such choices have been made will be
the private abandonment of  absurd public positions, t.e. that Russia (in
the words of Igor Ivanov) has done nothing to violate UN sanctions 'for the
last twelve years'.  The more meaningful signal will be to replace the
circle of advisers who have led President Putin into the current impasse.


Turkmenistan: Local Russians Pack Their Bags As Dual Citizenship Nears End
By Farangis Najibullah

Thousands of Russian-speakers in Turkmenistan are leaving the country as a 
result of a Turkmen presidential decree abolishing dual citizenship with 
Russia. Russian-speakers say the decree -- issued only last week -- does not 
leave them enough time to properly dispose of their property. Human rights 
activists condemn the action, saying it is another step by the country toward 
complete isolation.

Prague, 28 April 2003 (RFE/RL) -- Prices for apartments and houses in the 
Turkmen capital Ashgabat are falling rapidly. An apartment that would have 
cost $9,000 a month ago now goes for less than $3,000. 

The prices are dropping as thousands of Russian-speakers quickly sell off 
their property in order to leave the country in line with a new presidential 
decree abolishing dual citizenship. Residents who hold both Turkmen and 
Russian citizenship have been given two months to choose one or the other. If 
a person cannot meet the deadline, he or she automatically becomes a Turkmen 
citizen. Around 100,000 Russian-speakers are believed to hold dual 

The decree -- signed only last week and with a relatively tight deadline -- 
caught many by surprise. Russian-speakers gathered around the Russian Embassy 
in Ashgabat say they are left with almost no time to decide about their 

"How can we make such a crucial decision in a matter of 1 1/2 months?" asked 
one. "We have families, homes here, we cannot just drop everything and leave 
with a rucksack."

"My mother lives here, and my children live there in Russia," another 
explained. "My mother is very ill. What should I do?"

Vyacheslav Mamedov, the head of "Flamingo," a nongovernmental organization in 
the town of Krasnovodsk, told RFE/RL that the situation is the same in other 
cities. "The reaction of the Russian-speaking population is very, very 
negative," he said. "Many people are gathering at the Russian Consulate here 
in Krasnovodsk. They want an explanation for the decree that was signed by 
President [Saparmurat] Niyazov, Turkmanbashi, on 22 April." 

The decree follows a reported agreement between Turkmen President Niyazov and 
his Russian counterpart Vladimir Putin in Moscow on 10 April. It would revoke 
a dual-citizenship agreement signed in 1993. 

Niyazov's motive for issuing the decree is not clear, but Russian newspapers 
speculate that officials in Moscow agreed to it as a condition for being 
allowed to buy Turkmen gas. Moscow has been trying for years to obtain a 
long-term gas contract with Ashgabat.

Russia, for its part, says the Turkmen decree will not become valid until the 
Russian Duma formally abolishes the dual-citizenship agreement. The Turkmen 
parliament has already ratified a protocol revoking the dual citizenship.

Foreign observers say the Turkmen action may be connected to a wider campaign 
to clamp down on foreigners following a purported assassination plot against 
Niyazov last November.

Since then, some 60 Turkmen citizens have been sentenced to long periods in 
jail. Turkmenistan has also appealed to the Russian and Swedish governments 
to hand over Turkmen citizens who according to Ashgabat were involved in the 
assassination bid. 

Erika Dailey, the director of the Turkmen Project at the Open Society 
Institute, based in Budapest, explained the link: "The people who are alleged 
to have been behind an assassination attempt on Niyazov in November 2002, 
some of them were dual citizens. Some of them had foreign passports; they 
were Turks, Georgians, U.S. citizens, Russian citizens, etc. They remain 
beyond the grasp of Turkmen authorities. [Abolition of dual citizenship] 
would provide the basis for weakening any Russian resistance to an 
extradition request."

The decree is only the latest in a series of measures to rein in foreigners. 
In February, the Turkmen government set up a special state service to 
register foreigners traveling to and from Turkmenistan.

A special resolution on Turkmen citizens studying abroad was adopted at about 
the same time. According to the resolution, Turkmen students studying in 
foreign countries at their own initiative -- without permission from Turkmen 
ministries -- were forbidden from purchasing foreign currency from the 
Turkmen National Bank at subsidized rates.

Russian media say many teachers who graduated from foreign universities have 
now been fired from schools throughout Turkmenistan. Those who want to retain 
their jobs must first pass a test on the "Rukhnama" -- Niyazov's book on 
Turkmen history and culture.


Date: Mon, 28 Apr 2003 
Subject: West Versus West
From: Andre Glucksmann 

Cher David, si cela vous interresse... Wall street Journal. This morning
page 10. Amitié. (et pour votre information personnelle, un article plus
ancien publié dans International herald Tribune 22/2/03. Mes hommages à
votre épouse.

Wall Street Journal Europe
April 28, 2003
West Versus West
By André Glucksmann
Mr. Glucksmann, a philosopher, is the author of  "Dostoievsky à Manhattan"
(Robert Laffont, 2002).

PARIS -- Europe is paralyzed. The diplomatic catastrophe of the Iraq
conflict has left it uncertain which way to turn, which demons to exorcise.
It would be futile to conceal this identity crisis. Even the marvelous
success of monetary unification cannot make us forget the intellectual
breakdown of the largest economic union in the world. In order to speak
with a single voice, Europe soon plans to inaugurate a sort of Minister of
Foreign Affairs for Europe. But what exactly could such a figure accomplish
in this conceptual desert?
The altercation that enraged European ministers and mobilized the street
created two "camps", quickly baptized  as of the "peace" and of the "war".
On the side of "peace" stood a minority of governments and the majority of
public opinion; for those who proclaim themselves pacifist and advocate the
creation of a powerful Europe, George W. Bush became the principal enemy.
On the side of "war" were a majority of governments and a handful of
intellectuals, loyal to the Atlantic alliance or standing in solidarity
with the Western democracies: Their principal enemy was Saddam Hussein. 

Far from being minor, this disagreement promises to be long-lasting; what
France's Foreign Minister Dominique de Villepin calls "two visions of the
world" are facing off against each other. Put more directly, these camps
diverge in their evaluation of the great threats and challenges in the
world today.

France and Germany propose what amounts to a declaration of independence
for Europe. In their view, the Europeans must break with the American
empire and become the harbingers of a "multi-polarity" that balances this
superpower. Russia, China, the mythical "Arab World", India and Latin
American would join this anti-hegemonic coalition. One finds here a
familiar analytical grid: this "multi-polar" balance echoes the old
European balance of powers that brought good and evil both between 1648 and

The credo of this European power unites the slogans of anti-imperialism and
the Communist International of old with the hostile rivalry that the Quai
d'Orsay diligently nurtures toward perfidious Albion and the all-pervasive
Uncle Sam. Old caricatures of Wall Street and Hollywood are refreshed,
coupled with slanders against CNN, McDonald's or the IMF. Academics curse
the Yankees' lack of culture while the poor are called on to demonstrate
against the "system," capitalism, imperialism and globalization. The old
world and its tired ideas are with us again!
So what is new under the sun of the 21st Century? Nothing for the
pacifists. Nothing for the partisans of a powerful Europe. All reject the
arguments of Washington. For them, the challenge of terrorism requires,
when they consider the problem, the kinds of means used to fight organized
crime. In the short term, Interpol and cooperation among national police
forces can eradicate the supporters of suicide attacks. For them, the
collapse of the Twin Towers passed merely as a news item, albeit inflated
in importance by the images broadcast world-wide. To call this event,
nearly two years later, a major turning point in world politics reveals the
hallucinations of a deranged country.

But if the more horrific terrorist attack in history has revealed an
essential change in the use of force by terrorists, the very notion of who
wields power in the world has changed as well. By intuition, we immediately
baptized Manhattan's devastated area "Ground Zero." 

Spontaneously one made a parallel between the use of kamikaze planes and
the last atomic test before Hiroshima (the desert of New Mexico, an area
designated "ground zero.") September 11, 2001  experimented  the
possibility of a second Hiroshima, as the emergence of a devastating
capacity, dangerous and perilous like nuclear energy. 

During the past half-century, apocalyptic weapons stayed the monopoly of a
handful of great and super-great; the American umbrella protected our bit
of Europe. From now on devastating power has "democraticized" itself. With
a box cutter and a couple of airplane tickets, the salami destruction of
the world is within the realm of capability of the world's innumerable

"Time is not on our side", George Bush dared to unveil that sacrilegious
formula in his State of the Union speech on "Axis of Evil". Destiny is not
in our hands. Before September 11, the United States advanced "with God on
our side," as Bob Dylan sang ironically. Modern sanctuaries of piracy,
these rogue states cultivate, without law or limits, unbridled terrorism, a
do-it-yourself arsenal of annihilation, and the totalitarian science of
massacres. Often rivals, sometimes associates, Bin Laden, Saddam Hussein,
Kim Jong Il are at the head of the newly "possessed". Their networks cross
borders, ideologies, religions. Between fundamentalism, narco-Marxism, the
arms traffic, money laundering exist footbridges and viaducts. There's
nothing there that permits the return to the kind of balance of power of
the classical European type, where each state affirms its sovereignty based
on inviolable frontiers. 

More seriously, a gray-zone is spreading, as Godfather countries discreetly
comfort the rogue regimes and the various terrorist cells. Behind Iran,
North Korea and the old Iraq of Saddam stand Russia, China, Saudi Arabia
and Pakistan. The holy alliance of all the states engaged in the fight
against terrorism is a naive myth: Russia terrorizes the Chechen population
and its army gives free rein to its genocidal impulses. In Tibet, as in the
land of the Uighirs, China is out of control. Gradually, it is the very
notion of force that changes meaning. The balance of power has become the
balance of nuisance.

The "camps" that divide Europe aren't at all "of peace" and "of war." The
real camps group those stuck in the world of September 10 and those
awakened by the events of the 11th. The first camp, France-Germany-Russia,
dreams of a "multi-polarity" of sovereign powers: an Englishman's home is
his castle, the shepherd leads his own flock, and to Saddam Hussein are
left his people. On the other side, with Britain at its head, stands the
group that understands that a tyranny far away can strike at the heart of
New York, with the power to do great harm with no respect for frontiers or
limits. The question of questions is not multilaterality or unilaterality,
but nihilism or civilization.


Asia Times
April 28, 2003
Goldminers play Russian roulette
By John Helmer 

MOSCOW - Since the end of the Soviet Union more than a decade ago, there 
hasn't been a better time for Russian goldmining than now. Only the domestic 
goldminers don't intend to let the opportunities slip out of their hands into 
foreign ones if they can possibly help it. 

The international gold price is likely to move between US$330 and $400, 
driven by the volatility of the US dollar. So long as this uncertainty 
persists, gold is an attractive safe haven for investors deterred by falling 
stock prices and the lack of alternative assets. 

At the same time, the major Western goldminers are rapidly running out of 
mineable reserves; in large measure this reflects the failure to spend on 
exploration over the past five years. Barrick Gold Corporation, the third 
largest goldminer in the world, warned recently that existing gold reserves 
will be depleted within a decade unless there is a rush of money into new 
exploration. And even if the rush materializes this year, it takes a long 
time to bring virgin discoveries into production. 

In the meantime, the world's central banks have agreed to cap annual sales of 
gold out of their massive stocks to 400 metric tons, and producers have all 
but liquidated their hedgebooks - their forward commitments to sell new gold 
at predetermined prices. Nothing but global demand stands in the way of 
rising gold prices - and most industry experts project demand will 
comfortably outstrip supply for the next five years. 

Russia and China remain the largest unexploited regions for goldmining in the 
mining world. But compared to China, Russia has two immediate advantages. 
Much of the country's gold reserves have already been identified; and at a 
current cash cost of production of between $120 and $150 per troy ounce, 
Russian production can be managed on one of the lowest - and most profitable 
- cost bases in the world. In theory then, with low geological risk and 
manageable economic risk, Russian gold should be attracting a rush of mining 
capital to stimulate production. 

Indeed, with mine output of gold rising by more than 12 percent per annum, 
and Russia challenging Indonesia for fourth place on the world producers' 
table, the pace of development here is moving much faster than in the world 
at large, where total mine output is falling, and will continue to fall for 
the foreseeable future. 

There's one catch - the Russian goldmining sector has been a disaster zone 
for foreign investors, many of whom have lost their entire investment, as 
well as their mining licenses. These include Pan American Silver (Canada), 
Star Mining (Australia), Johannesburg Consolidated Industries (JCI) (South 
Africa), and most recently Troy Resources (Australia). 

It is worth noting that most major international goldminers, including Rio 
Tinto, BHP, Anglo American (AngloGold), Normandy, Goldfields, Barrick and 
Placer Dome have conducted exploration, project studies, drilling and other 
investment work, only to decide against proceeding with Russian projects. 

For example, Anglo American considered Nezhdaninskoye (Sakha republic) and 
several other deposits, but decided against proceeding. Placer Dome assessed 
the Ozernovskoye (Kamchatka) deposit, and decided not to go further. Barrick 
has maintained a Moscow office for several years, and is conducting minor 
exploratory activities, but for the time being, has withdrawn from active 
pursuit of proven deposits like Sukhoi Log, near the Chinese border. 

Kinross has fared better, and for longer than most foreign mining investors, 
in part because it took up-front management fees for itself, at the same time 
as it paid off the project's international creditors. Kinross thus did much 
better than the Russian shareholders and the Russian lender to the project - 
the federal Finance Ministry through the Magadan regional government - who 
received next to nothing. As a result, Kinross has been facing regional court 
and other challenges to its management of the near-depleted Kubaka deposit, 
with claims of more than $60 million from the Russian shareholders in the 
venture company, Omolon. A settlement of $45 million was proposed by Kinross 
last November, in the week before the assassination of Magadan governor 
Valentin Tsvetkov; this was double Kinross's original offer, but still less 
than the Russian claims. 

In parallel, in the Sakha republic, a challenge has been mounted by the 
regional government, in alliance with commercial interests, to remove 
London-based Celtic Resources as operator of the Nezhdaninskoye goldmine, and 
dilute Celtic's stake in the project to a minority of around 20 percent. 

An overview of the sector's potential must start with the negative record, 
and the reasons for the distrust of Russian mining partners which the record 
reveals. But there is a recent, positive story to be considered also: Bema 
Gold's Julietta mine; High River Gold's stake in Buryatzoloto; Highland 
Gold's acquisition of the Mnogovershinnoye deposit; and the Peter Hambro 
group's operations at Pokrovsky Rudnik all indicate rising production, rising 
profitability, and at least for the time being, solid tenure. It is too early 
to make a confident conclusion on whether these positives are likely to 
outweigh the negatives in the gold sector's short and medium-term future. 

For one thing, the level of concentration in the sector is still low compared 
to other Russian metal and mining industries. At the end of the year 2000, 
the government in Moscow counted 566 mining companies licensed to explore for 
and produce gold, scattered over 26 of Russia's federal regions. Out of this 
total, 389 (69 percent) produced just 11 percent of the annual goldmine 
output, while 78 (14 percent) produced 74 percent. Another way of describing 
this is to note that the top five gold producers in 2001 accounted for just 
30 percent of the gold mined; producers with output of more than 1 metric ton 
produced just 46 percent of the aggregate output. Yet another way of gauging 
the concentration of the sector is to note that in 2001, 56 commercial banks 
contracted with miners to supply 130 tons of gold; in 2002, 48 of the banks 
contracted for 178 tons. 

In a rising gold price environment, the relative smallness of the individual 
producers makes it likely that Russian entrepreneurs will see the arbitrage 
opportunities in consolidations of the smaller mining units, or in takeovers 
of the mid-size to larger ones. The capital required for exploration and 
proving deposits, and for the switch from alluvial mining to hard-rock 
operations, has been a deterrent to this process until now for Russian mining 
companies, and also for Russian banks, which demand high rates of interest, 
substantial discounts in the price of gold accepted for loan repayment, and 
six to 12-month cycles of financing. 

If a foreign investor introduces this capital, then he risks lowering the 
deterrence, and raising the profitability of a raid on his license. In these 
circumstances, the selection of a small Russian partner is no guarantee of 
security of tenure, if and when a significant deposit is found, and the 
likelihood of a raid grows. This has been the experience of Troy Resources, 
an Australian junior which had its license to the Chita region deposit of 
Taseyevskoye revoked more than a year ago. Picking a bigger Russian partner, 
capable of riding out the consolidation process, may offer more security of 
tenure in both the short and long term, but such a partner is unlikely to 
grant a foreign investor the management control he may insist on. 

Most Russian gold producers are so small, their annual profit amounts to less 
than the price of a Western-made bulldozer. As noted already, there are 
hundreds of them. Like the fauna of their regions, they migrate with the 
seasons and the depletion of their pickings. They have a unique culture of 
their own, and like prospectors in North America, they don't make easily 
manageable partners of established mining companies. The traditional 
prospectors are loosely organized in units known as artels, which 
collectively form the Association of Starately, headed by Victor 
Tarakanovsky. He claims his membership produces just over half of the 
sector's output each year. The association says it ranks its member artels in 
terms of the size of their annual gold production, but does not keep 
systematic data on the size of their exploration territories, or their 
spending on exploration and non-production activities. Some of this spending 
is done in conjunction with larger enterprises, the so-called zolotos, with 
which the artels are united in various forms of partnership. 

It is worth noting that the active commercial banks in the gold sector have 
developed the view that the risk of Russian mining ventures differs
considerably from one region to another. This in turn compounds the trend 
towards accelerating growth in some regions - Krasnoyarsk, Khabarovsk, Amur, 
Khakassia, Buryatia, Sverdlovsk and Magadan - and declining production in 
other regions, such as Sakha and Chukotka. Concern about Sakha has 
accentuated among Russian banks recently, following the accession of the new 
republic president Vyacheslav Shtirov, formerly the chief executive of 
diamond-miner Alrosa, and his decision to put Alrosa Invest - a unit linked 
to Shtirov and indirectly to Alrosa - in overall charge of state stakes in 
the Sakha gold-mining companies, and the deposits they are working. Alrosa 
Invest is leading the attack on Celtic at Nezhdaninskoye. 

According to data of the Russian Union of Gold Producers, in 2002 Russia 
produced a total of 170.9 tonnes of gold, up by 11 percent year on year. Out 
of that aggregate, gold production from ore and alluvial mining amounted to 
158.6 tonnes, a gain of 12 percent compared to the year before. According to 
Valery Braiko, head of the gold producers union, last year's performance was 
the best by the local goldminers since the collapse of the Soviet Union. Most 
of the increase, however, was concentrated in Krasnoyarsk, where the 
country's leading miner Polyus entered an acquisition agreement with Norilsk 
Nickel that will combine their resources, and shift the requirement for 
capital spending to sustain output on to Norilsk Nickel's balance-sheet. 
Magadan also showed a significant increase, along with Khabarovsk, where 
Mnogovershinnoye (MNV), a property controlled by Roman Abramovich and his 
associates, was transferred for a London listing to Highland Gold, a venture 
managed by Fleming Family & Partners. 

That London listing late last year was curious, because it generated 
considerable positive publicity for the Western investors involved, but 
little information about the Russian deposit, its development history, or its 
vulnerability to a raid. As late as last October, six months after Highland 
claimed to have acquired the controlling interest in the deposit, the 
Khabarovsk regional government issued an ambiguous statement claiming there 
had been no sale of the deposit, and that its shareholders had not changed. 
Debt recovery claims, and settlement of the ownership of related mine 
property, held by the Khabarovsk administration, were pending at the time. 

Asked to say what the Khabarovsk region plans to do with mine-related 
property at the deposit, the local official in charge of mining, Gennady 
Pocherevin said, "Some of the property that is used by MNV is regional 
property. But the governor [Viktor Ishayev] has signed a resolution that this 
property should be offered for sale through a tender. We expect that MNV will 
buy it." However, there is growing evidence that governor Ishayev is in no 
hurry to see that happen. 

Industry sources caution that for the time being projects like Polyus's 
Olympiada deposit, and Highland Gold's MNV do not require large-scale 
investment to assure rising output, and rising profits. But they also note 
that Olympiada's grades are forecast to fall sharply, while the costs of the 
mine will rise inexorably. Highland Gold's other deposits, Darasun and new 
deposits in the Chita region, will also require much more investment than has 
been invested to date, and payback will be slower than their Russian owners 
like to demand. 

Local miners point out that, as has been the case with the Russian oil 
industry, almost all of the recent gains in production have come from 
deposits that were discovered and proven in the Soviet period. Unlike the oil 
sector, however, Russian goldminers, large and small alike, have been 
pocketing their profits, and investing for payback just one season at a time. 
This makes the future for capital intensive projects, like the still 
unexploited Sukhoi Log deposit in Irkutsk region, extremely doubtful, despite 
the interest which Polyus and Polymetal of St Petersburg are publicly showing 
in bidding for it. 

According to Braiko, "The main problem of the industry remains one of finding 
new gold reserves to replace those that have been mined. Over the past five 
years that gold production in Russia was on the increase, the level of the 
mineral reserves base continuously deteriorated. The companies worked on 
deposits that were discovered in Soviet years, and no new deposits were 
found. The problem became worse after the government abolished its payments 
on restoration of the mineral reserves base, which were used for financing 
state geological research. Geological exploration has become a business to be 
financed by the mining companies with their own resources." 

This then is the fork in the road for Russian goldmining. In the next five 
years, the local miners see no need for foreign mining expertise, finance, or 
management to sustain the current momentum of rising output, or to pay for 
the consolidation of mining firms that is bound to occur. It remains to be 
seen whether the accommodation shown toward junior foreign miners like Bema 
Gold and Highland Gold will last so long. On the other hand, the 
billion-dollar investments required for projects like Sukhoi Log, and slow 
payback on spending for geological exploration, are conditions that favor the 
reentry into Russia of the global miners. While many Russian miners say that 
will only come over their dead bodies, the experience of the oil sector 
suggests that some of them will only be too happy to play dead, and sell out. 


Transitions Online
April 28, 2003
No More Suspects Emerge in Murder of Russian MP
Byy Vladimir Kovalev

ST. PETERSBURG, Russia--An investigation into the 17 April murder of
parliamentarian Sergei Yushenkov has stalled after an initial suspect
provided an alibi. Moscow student Artyom Stefanov, 20, was arrested on 24
April but released the next day on the condition that he not leave the city. 

Yushenkov was shot four times on his way home, outside a building
neighboring a local District Administration Department.

Stefanov was arrested after investigators uncovered a past conflict between
Yushenkov and Stefanov’s father, Alexander. In 1995, Alexander Stefanov
sent a threatening letter to Yushenkov and was then imprisoned for six months.

The Prosecutor’s Office said the younger Stefanov resembled the police
sketch of the suspect and ascribed revenge for his father’s imprisonment as
the motive. However, a number of Stefanov’s friends placed him in a sports
complex at the time of the murder.

The Prosecutor’s Office has said that all possible motives are now under
investigation in relation to the killing, which many of Yushenkov’s
colleagues in the Liberal Russia party have called a political
assassination. The Liberal Russia party has been at the forefront of a
campaign advancing the theory that the Russian government was involved in
the September 1999 explosions that hit several residential buildings in
Moscow, killing 228.

Last year Liberal Russia distributed a documentary—financed by exiled
financial tycoon and former Kremlin insider Boris Berezovsky—which
suggested that the Federal Security Services (FSB) organized the explosions.

FSB officials strenuously deny the allegations.

Some opponents of the controversial Berezovsky have accused him of
involvement in Yushenkov’s death due to disagreements that have appeared
within the Liberal Russia party, which Berezovsky was financing in its

Berezovsky was expelled from the party in October 2002, but he later said
that had been done to make it possible for the party to be registered with
the Judicial Ministry.

The party succeeded in registering on the day Yushenkov was killed.

At Yushenkov’s 22 April funeral, Victor Pokhmelkin, the head of the Liberal
Russia party, said that Russia had lost “a significant member of the
democratic movement.”

“Yushenkov had been doing many things to make Russia into a democratic
country. Very unfortunately we can’t promise that we will find those who
ordered and executed this crime. But we will be following this line and we
have to do everything to find the killers,” Pokhmelkin was quoted as saying
by the RIA-Novosti agency.

Shortly after the assassination, Russian President Vladimir Putin said he
had taken the case under his personal control. At the same time, Berezovsky
indirectly but publicly suggested the president could be linked to the

“There’s an absolutely clear goal, among others, that I don’t want to talk
about now. … [It is done] to scare everybody, all of society, to make them
calmly sit and then silently come to the elections and vote for those they
are told to vote for,” Berezovsky said in an NTV interview a few hours
after the killing.

“I have a news agency report here that says President Putin was informed
about the assassination. Here I have just one question in connection to
this: Was he informed about the assassination or was he informed about the
execution [of the assassination]? It would have been more precise, I
think,” Berezovsky said.

Meanwhile, a former aide to Yushenkov and a member of the commission to
investigate the 1999 Moscow residential building explosions on 20 April
filed an appeal for political asylum with U.S. authorities. Alena Morozova
said she has no doubt that Yushenkov’s death is linked to the activity of
the commission.

“A year ago, Sergei Yushenkov and I met in New York at a presentation of
[Berezovsky’s] documentary. After we watched the documentary, he said that
our activity would clearly lead the FSB to fly into a rage and that they
would remember us sooner or later,” Morozova said in an Echo Moskvy radio
interview on 20 April.

“After Yushenkov’s assassination, I am afraid to come back to Russia,
that’s why I have asked the American authorities to give me political
asylum,” she said.

Morozova is currently studying at a U.S. university.

The FSB has not commented on the situation.

Meanwhile, the website reported on 28 April that Shamil Basaev,
a Chechen rebel who is the subject of a federal manhunt in connection with
a number of terrorist acts, said that a letter he sent to Yushenkov
describing plans to take hostages in Moscow could have been a reason for
Russian special forces to liquidate the parliamentarian.

He said he had informed Yushenkov that the original plan was to capture the
State Duma and the Federation Council, but after some of the rebels were
killed, the plan was dropped and the Nord-Ost theater was chosen instead.

In the letter he promised to send some additional information later.


Analysis: Russia takes aim in Central Asia 
By Anthony Louis

     MOSCOW, April 28 (UPI) -- The leaders of six former Soviet republics,
gathered in the Tajik capital Dushanbe for a two-day security summit,
agreed Monday to establish a joint military command that will manage a
rapid reaction force in Central Asia.      The decision itself -- reached
by Russian President Vladimir Putin and his counterparts from Armenia,
Belarus and three of the five Central Asian republics, Kazakhstan,
Kyrgyzstan and Tajikistan -- was expected. A command structure had already
been outlined by the charter of the Collective Security Treaty Organization
of which the six states are members. 
     The timing of the announcement and the comments made by Putin and
other officials attending the summit were more interesting. 
     Frustrated by the fact that the Collective Security Treaty, known as
the DKB, has been little more than a paper document since its birth back in
1992 on the ruins of the Soviet Union, Putin has over the past two years
pushed to re-establish a military presence in the Central Asian region,
seeking to open bases and re-establish military cooperation with the small
republican armed forces. 
     "The aim of the Collective Security Treaty is to ensure security,
territorial integrity and sovereignty of member countries," Putin declared,
while ensuring Moscow would continue to have the final say in regional
security affairs by pushing through the appointment of Gen. Nikolai
Bordyuzha, a former head of Russia's Security Council as secretary of the
     Putin made clear his intention to revitalize the DKB by pushing
through organizational and financing decisions at the summit. 
     One official close to the talks, speaking on condition of anonymity,
told United Press International that "at last, the carriage is moving." As
he explained: "We have agreed on the structure for a joint military
response to a security threat, and it looks like the financing will be in
place, which will help improve combat readiness of all forces." 
     Kazakh President Nursultan Nazarbayev, impressed with the results of
talks he called a "turning point" for the organization, said, "We now have
a joint general staff of the armed forces." 
     While no one made any specific mention of the U.S.-led war against
Iraq, Putin clearly remains concerned with the continuing expansion of the
U.S. military presence in the region and Washington's willingness to use
     Belarus's hardline leader Lukashenko, known for his anti-U.S.
statements, bluntly pointed out that "certain forces within the United
Nations are trying to break the world order and its main structure, the
United Nations," adding that the six former Soviet republics had to improve
military coordination in "critical periods in various world regions." 
     With U.S. forces using bases in Uzbekistan and Kyrgyzstan to conduct
operations in Afghanistan, the Russian military has displayed an increasing
urgency in demanding Russian bases be re-established in the region as a
check on expanding U.S. influence in Central Asia. 
     Moscow has viewed Central Asia as its own backyard and Putin
grudgingly accepted a limited U.S. military presence there in the immediate
aftermath of the Sept. 11, 2001, attacks on the United States, as
Washington prepared to launch a war against the Taliban regime in
     But with the war in Afghanistan largely over and no sign of a U.S.
withdrawal from these bases, and while U.S. forces poured into the region
to topple the regime in Iraq, Putin felt he had to act if Moscow was to
maintain its already weakened positions and sphere of influence. 
     First, Putin moved to re-establish a Russian military presence to
counter U.S. forces in Kyrgyzstan by getting Kyrgyz President Askar Akayev
to agree to open an air base for Russian fighter jets in his country. 
     Following talks with Tajik President Emomali Rakhmonov, Putin admitted
to reporters that "we are planning to strengthen our presence here." 
     Officials close to the talks say Putin and Rakhmonov discussed an
increase in the number of Russian officers and servicemen deployed in
Tajikistan, where a division numbering some 11,000 already serves as the de
facto border guard on most of the Tajik-Afghan border, while several
thousand officers provide training for the Tajik army and patrol strategic
     Putin argued that smuggling of drugs and arms from Afghanistan through
Tajikistan posed a serious security threat to Russia. "The situation
remains complicated in Central Asia, especially with regard to Afghanistan,
where our special services have noticed increased activity from the Taliban
and al-Qaida," he said. 
     However, while supporting a growing Russian presence in his country,
Rakhmonov has so far balked at establishing new, permanent Russian bases in
Tajikistan. The Tajik president also stalled on signing a document that
would outline the legal status of Russian forces in Tajikistan, which
irritated Russian generals. 
     According to Russian military sources, Putin said he hoped to have the
document signed within a month, pressuring the Tajiks to formally agree on
base status for the Russian forces. As an incentive, it is understood that
Russia will throw in generous supplies of arms that Tajikistan will never
have to pay for, with their cost written off at some later date. 
     Seeking to head off growing ties between some former Soviet republics
and NATO, Putin sought to offer a limited carrot in return for loyalty from
members of the DKB organization, which is dominated by the sheer size of
Russia's armed forces. Putin used the summit to assure the Kazakh and
Kyrgyz leaders, as well as the presidents of his impoverished southern and
western neighbors Armenia and Belarus, that Moscow would give its military
allies preferential treatment in arms supplies, selling weapons at rates
offered to the Russian military. 
     But Russian offers of military support and unlimited arms supplies on
preferential terms have proven to be of little interest to Uzbekistan, the
regional superpower in Central Asia. Uzbekistan withdrew from the security
treaty in 1999 and is now firmly allied with the United States, while two
other former members of the DKB, Azerbaijan and Georgia, have openly
flirted with NATO by stating they would like to be considered for
membership in the western military alliance. 
     Georgia has already opened its skies and air bases to U.S. forces,
alarming the Russian military establishment and ensuring a now inevitable
military alliance between landlocked Armenia and Russia. 


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