Johnson's Russia List #7158 29 April 2003 firstname.lastname@example.org A CDI Project www.cdi.org [Contents: 1. Baltimore Sun: Craig Eisendrath, What hit Russia's economy? A raging war of scholars. Catastrophe or success, cause or consequence - pick your own answer. 2. Financial Times (UK): Chris Weafer, Too much oil could be bad for Russia's health. 3. Rosbalt: Russian Women Satisfy Ambitions for Power at Home. 4. RIA Novosti: ABOUT 20 SARS CASES SUSPECTED IN RUSSIA. 5. RIA Novosti: YABLOKO FACTION CONFIRMS INTENTION TO INITIATE GOVERNMENT DISMISSAL. 6. Moscow Times: Alexei Pankin, Pre-emptive Strike Before Media Holidays. 7. gazeta.ru: 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 CONSEQUENCES OF THE WAR IN IRAQ FOR RUSSIA? 12. RFE/RL: Farangis Najibullah, Turkmenistan: Local Russians Pack Their Bags 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] ******** #1 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 threat. 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 predecessor. 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. ******** #2 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 sectors. 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. ******** #3 Rosbalt 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. ******** #4 ABOUT 20 SARS CASES SUSPECTED IN RUSSIA 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. ******** #5 YABLOKO FACTION CONFIRMS INTENTION TO INITIATE GOVERNMENT DISMISSAL 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 year. ********* #6 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 Gazeta.ru 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 (www.sreda-mag.ru) ********* #7 gazeta.ru 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. ********* #8 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 ********* #9 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. NO PLANS TO RETURN 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 back. 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 elections. 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. ******** #10 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. ******** #11 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, James WHAT ARE THE OVERALL RESULTS AND CONSEQUENCES OF THE WAR IN IRAQ FOR RUSSIA? Commentary for Nezavisimaya Gazeta James Sherr (tel. 44-1865-243332/fax 44-1865-279802/e-mail: email@example.com) 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. ******** #12 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 citizenship. 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 future. "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. ******* #13 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 1914. 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 deviants. "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. ********* #14 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. ******* #15 Transitions Online www.tol.cz 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 infancy. 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 assassination. “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 Newsru.com 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. ****** #16 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 DKB. 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 force. 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 Afghanistan. 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 facilities. 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. ******* Web page for CDI Russia Weekly: http://www.cdi.org/russia Archive for Johnson's Russia List: http://www.cdi.org/russia/johnson With support from the Carnegie Corporation of New York and the MacArthur Foundation A project of the Center for Defense Information (CDI) 1779 Massachusetts Ave. NW Washington DC 20036