April 24, 2000    
This Date's Issues: 4265

Johnson's Russia List
#4265
24 April 2000
davidjohnson@erols.com

[Note from David Johnson:
1. Christian Science Monitor: Fred Weir, Putin looks for a Chechnya exit.                                Russia's new president takes on war but may have trouble finding 
credible Chechen leaders. 
2. New York Times: Igor Ivanov, A Challenge From Russia.
3. Washington Post: Graham T. Allison and Sam Nunn, Chance for a Safer World.                        We must embrace Russia's new willingness to fight nuclear
terrorism.
4. Igor Khripunov: a brief comment re new defense doctrine.
5. Stephen Blank: nuclear doctrine.
6. Moscow Times: Jonas Bernstein, Bittersweet Memories of '97.
(re reform optimism)
7. Jonathan Mueller: RE: 4262-Taibbi/Mueller and IKEA.
8. AP/Harriman Conference in New York on Russia After Yeltsin.
9. smi.ru: Russians for Putin's Unlimited Power? 
10. BBC MONITORING: RUSSIAN ECONOMIST ON MAIN POINTS OF PUTIN'S PROGRAMME FOR RUSSIA.
11. The Boston Globe: Brian Whitmore, Russian Criminal Justice.
12. gazeta.ru: Chubais Resigned to Aluminium Monopoly.
13. Financial Times (UK): Russian energy boss lays down challenge to Putin:                                     Anatoly Chubais says that the president-elect must show 
courage and back liberalisation of the vast energy market, reports 
Arkady Ostrovsky.]

*******

#1
Christian Science Monitor
24 April 2000
Putin looks for a Chechnya exit
Russia's new president takes on war but may have trouble finding credible 
Chechen leaders. 
By Fred Weir, Special to The Christian Science Monitor

Russian President-elect Vladimir Putin is searching for a political exit from 
the deepening quagmire of Chechnya. But analysts warn that the seven-month 
war may have hopelessly undermined his only credible negotiating partner, 
elected Chechen President Aslan Maskhadov. 

Both sides have been putting out peace feelers. On Friday, Mr. Maskhadov 
announced, from his hiding place somewhere in the southern mountains of 
Chechnya, that he has ordered rebel forces to cease operations while he 
negotiates with the Kremlin. 

"The relative calm which has broken out on the front line came about because 
I gave the order unilaterally to suspend military action," Maskhadov said in 
an interview with the Moscow daily Kommersant. "This was part of a plan for a 
peaceful settlement, proposed by me to Moscow." 

Reports from Chechnya suggested fighting has indeed diminished over recent 
days, despite sporadic clashes. 

"We are obeying the president's orders, but if the aggressors are attacking 
we are forced to defend ourselves," Shamil Basayev, a leading Chechen field 
commander, was quoted saying Saturday on a rebel-run Web site, 
www.kavkaz.org. 

"The rebels are licking their wounds, summoning strength and gathering the 
bandit breed from all over Chechnya," the commander of Russian troops in the 
North Caucasus, Gen. Gennady Troshev, told the official ITAR-Tass agency. 
"The bandits are dispersed, but some of them are trying to concentrate." 

On Friday, Mr. Putin told a meeting of the Kremlin Security Council that he 
had sent a letter to Maskhadov a month ago, outlining his ideas for a 
political solution. The message, relayed through President Ruslan Aushev of 
neighboring Ingushetia, went unanswered. "Maskhadov disappeared," Putin said. 
"We have had neither sight nor sound of him. We will not be involved in idle 
words." 

It is extraordinary that Putin claims to have made this attempt to reach the 
rebel Chechen leader even before Russia's March 26 presidential elections, 
which saw him win a solid first-round mandate. Much of Putin's popularity was 
based on his uncompromising conduct of the war to crush Chechnya's decade-old 
independence drive. 

Although polls continue to show almost two-thirds of Russians support the 
military campaign to some extent, there is a growing feeling in Moscow that 
the operation has outlived its political usefulness and could become a 
serious liability for the Kremlin. 

"This may sound cynical, but the war has already achieved all its main 
purposes," says Alan Kasayev, a Caucasus expert with the daily Nezavisimaya 
Gazeta. "A year ago Russian society was dazed, and our leadership was in 
disarray. Today society is consolidated, and we have elected a strong popular 
leader." 

The same surveys that show the majority of Russians backing the military 
operation, also reveal that half of them doubt repeated Kremlin assurances 
that the war is almost over and won. 

It is "sinking in that this conflict is just beginning," says Sergei 
Arutyunov, a specialist on North Caucasian politics at the official Institute 
of Ethnology in Moscow. "Spring has arrived in Chechnya.... The rebels will 
become highly mobile.... The war is about to go into a much more intense 
guerrilla mode." 

If the Kremlin is hoping for a political route out, the problem is where to 
find reliable and credible Chechen negotiating partners. Maskhadov, elected 
the republic's president with a comfortable majority in 1997, remains the 
only obvious choice. Moscow is trapped by its wartime rhetoric that vilified 
the Chechen president as an "illegitimate leader," a "war criminal," and 
"terrorist accomplice." Maskhadov was never able to assert his authority over 
Chechnya's fractious clans, and the war may have fatally weakened his 
position. Russia's relentless assault, using air power and heavy weapons, has 
broken up Chechnya's armed forces into small, locally based groups. That may 
make for effective guerrilla warfare but, as even Maskhadov admitted in his 
Kommersant interview, centralized command becomes difficult. Russian military 
experts estimate Maskhadov controls no more than 500 of the 2,500 guerrillas 
thought to be holed up in Chechnya's rugged southern districts. 

The Chechen president has tried hard to project himself as an indispensible 
element of any peace plan. He has distanced himself from Mr. Basayev and the 
Arab-born warlord Khattab, the Chechen field commanders most hated by the 
Russians. He has pledged to release Russian prisoners of war and declared a 
unilateral cease-fire. 

"There is no alternative to Maskhadov," says Mr. Kasayev. "No one else has 
even a hint of the legitimate authority ... over the whole Chechen nation 
that would be required if any genuine peace process is to take place." 

But the truth may turn out to be that opportunities for a negotiated 
settlement were buried months ago, under the smoldering ruins of Chechnya's 
capital city of Grozny. "During these months of war Maskhadov has lost his 
strength and credibility," says Sergei Kazyennov, an analyst with the 
pro-government Institute of National Security in Moscow. "There is no other 
way but to go on fighting and show the Chechens, as many times as necessary, 
that their only possible future is as part of Russia." 

******

#2
New York Times
April 24, 2000
A Challenge From Russia
By IGOR IVANOV
Igor Ivanov is foreign minister of Russia. 

MOSCOW -- The ratification of the Start II weapons agreement and the 1997 
package of antiballistic missile agreements by both houses of the Russian 
parliament, followed by the passage on Friday of the Comprehensive Test Ban 
Treaty by the lower house, clearly signal the course of action that, in 
Moscow's opinion, should be pursued in the complicated world situation that 
is emerging. 

Strategic offensive arms have always occupied a special place in the range of 
disarmament treaties created over recent decades; and they play an important 
role in Russian-American relations and are of course directly linked to 
Russia's security. 

The Russian leadership, military and diplomatic experts, and members of the 
parliament have studied these issues for almost four years because they have 
no right to make a mistake on such matters. And if Start II was not ratified 
earlier, the reasons for that are known: it was put aside by parliament in 
connection with the bombings in Iraq in late 1998 and then again because of 
the NATO military action against Yugoslavia last year. 

Having ratified the package of Start II and the ABM agreements, Russia has 
done its part. The ball is now in the court of the United States. An exchange 
of ratification documents for these agreements would make it possible to put 
them into effect and continue the process of reducing strategic arms. And 
there is another important issue: the close connection between Start II and 
the 1972 Anti-Ballistic Missile Treaty, which bans the signatories from 
deploying national antiballistic missile systems. The United States is 
considering the creation of such a system, which would be an open violation 
of the treaty. 

Everyone should be aware that the collapse of the ABM treaty would have a 
destructive domino effect for the existing system of disarmament agreements. 
The terms on which Start I and II were agreed would change. Even from the 
formal point of view, if the United States withdrew from the ABM treaty, 
Russia would not be bound by its strategic arms reduction obligations. The 
further question of the fate of agreements on medium- and shorter-range 
missiles would arise. Finally, the development of Start III would be 
disrupted. We would be back in an era of suspicion and confrontation. 

I am sure that this is not a prospect to be relished by anyone, especially in 
Russia or the United States. 

Our countries have expended too much effort and too many resources toward 
ending the cold war and confrontation. 

At the same time, Russians are closely following the debate in the United 
States on the dangers from missiles and possible countermeasures. The view 
that prevails here -- and is reflected in the decision of the Russian 
parliamentarians -- is that this threat (which, by the way, our specialists 
think is at least exaggerated) should not be counteracted in a destructive 
way. There are other ways that would be far more effective in terms of 
international stability. For instance, the start of direct dialogue between 
America and North Korea has brought a very positive reaction in the world 
because it may help clarify many of the issues, including those connected 
with missile challenges. 

Russia proposes to the United States that we jointly develop a program that 
would prevent the proliferation of missiles and missile technologies or 
remove incentives for acquiring them. Another path is to continue efforts to 
strengthen the control of rocket technology and to create a global control 
system to prevent proliferation of missiles and missile technology. In March, 
Moscow hosted an international meeting of experts on such a system, at which 
representatives of 50 countries exchanged ideas on practical steps. 

Russia is prepared to cooperate with America and other countries in creating 
systems of nonstrategic antimissile defense that are not banned under the 
1972 ABM treaty. The basis for this is provided by the Russian-American 
agreements on the delimitation of strategic and nonstrategic ABM systems of 
1997, which are awaiting ratification by the Congress. 

And finally, further cuts of strategic weapons -- and Russia is ready to 
bring the total ceiling of nuclear warheads to 1,500 under Start III, 
reciprocally with the United States -- provide an additional stimulus for the 
strengthening of the regimes of nonproliferation of weapons of mass 
destruction and means of their delivery. 

In short, the Russian side offers a constructive alternative to the 
disruption of strategic stability. And we are also open to positive ideas of 
the American side aimed at further cooperation in the disarmament field. The 
decision of the parliament on the Start-ABM package is, in effect, our 
invitation.

*******

#3
Washington Post
24 April 2000
[for personal use only]
Chance for a Safer World
We must embrace Russia's new willingness to fight nuclear terrorism.
By Graham T. Allison and Sam Nunn
Graham T. Allison is director of the Belfer Center for Science and 
International Affairs at Harvard's John F. Kennedy School of Government. Sam 
Nunn is a former Democratic senator from Georgia. 

The Russian Duma's ratification of the START II nuclear arms treaty, 
following president-elect Vladimir Putin's calls for even deeper cuts in 
Russia's nuclear arsenals, presents a major opportunity for the Clinton 
administration to advance American national security interests. On the basis 
of conversations with Russian experts and officials in Moscow, we are 
confident that Putin would be receptive to a bold proposal for a joint 
Russian-American initiative to prevent terrorist theft of Russian nuclear 
weapons and weapons-usable nuclear materials.

In a speech at a nuclear weapons center on March 31, Putin said that his 
government should work to "free the world from piles of excess weapons." 
Calling for further cuts and stepped-up efforts to streamline Russia's 
nuclear capabilities, he said: "Our aim is to make our nuclear weapons 
complex more safe and effective." 

We recently served as members of a task force that engaged 100 experts in a 
review of nuclear security today--after a decade of vigorous engagement 
supported by the Nunn-Lugar program and related legislation. Despite a decade 
of effort, the risks of "loose nukes" are larger today than they were when 
these efforts began. U.S. programs have had positive results, but declines in 
Russia's economy and in the government's ability to control anything--from 
money to nuclear materials--has had larger negative consequences. The good 
news is that Russians are ready to engage in more joint efforts to secure 
Russia's nuclear materials.

Russians' awareness of their vulnerability to terrorism has been raised 
dramatically by recent experience. Last summer's attack upon Russian 
territory in Dagestan by rogue warlords operating from Chechen territory; the 
bombings of apartment buildings in Moscow and other cities that killed more 
than 300 people; and threats by fighters in Chechnya to attack nuclear power 
plants and other facilities in Russia--all have given terrorism a terrifying 
face for ordinary Russians. Polls from last November find that 90 percent of 
Russians surveyed fear a terrorist attack on nuclear facilities, and 86 
percent fear that a nuclear weapon in the hands of a terrorist could be used 
against Russia.

The American public also recognizes the threat. A September Wall Street 
Journal-NBC News poll showed that the threat of terrorist acts on U.S. soil 
ranks second among Americans' biggest fears. 

Our task force identified a number of serious initiatives that can reduce 
this danger. At the top of our recommendations are:

* Buy and take all the nuclear weapons material Russia is prepared to sell. 
In addition to highly enriched uranium (HEU) purchases, the U.S. government 
should buy all available Russian HEU, which, when blended with low-enriched 
uranium, becomes proliferation resistant and commercially valuable. Under the 
current agreement, less than half of Russia's HEU would be blended over the 
next 20 years. Plutonium also should be purchased, but that will require more 
substantial public subsidies since it currently has no commercial use.

* Remove potential bomb material from the most vulnerable sites in Russia. 
Caches of highly enriched uranium and plutonium, sufficient for making dozens 
of bombs, still can be found at many facilities across Russia. As part of a 
renewed "buy and secure" campaign, potential bomb material should be 
consolidated in central, more secure storage facilities.

* Accelerate the blending down of highly enriched uranium. The United States 
should provide the capital investment and financial incentives for Russia to 
blend down all excess HEU in the next four years. For an investment of 
approximately $500 million, we could get all of the excess Russian HEU 
blended to nonweapons-usable forms within Putin's first term.

These deals should be accompanied by Russia's agreement not to produce 
additional nuclear materials. Also, given Europe's proximity to Russia and 
Japan's experience as a target of terrorism, our allies should share the 
costs. July's G-8 summit in Okinawa provides a setting in which these deals 
could be done.

Mutual concern about terrorism and a new, energetic leader in Moscow who 
seems to be willing to address his nation's nuclear reality present a rare 
opportunity for sharply reducing dangers to Americans, Russians and the world.

******

#4
From: "Igor Khripunov" <igokhrip@arches.uga.edu>
Subject: a brief comment [re new defense doctrine]
Date: Sun, 23 Apr 2000 

Numerous comment in the Western media about Russia's new defense doctrine
may warrent a clarification.The no-first use of nuclear weapons was dropped
by the 1993 defense doctrine.This principle was declared in early 1980s
but it was mostly a propaganda gimmick. The new draft defense doctrine was
developed in 1998 and 1999 but its publication was delayed by the bombing
of former Yugoslavia.MOD decided in April 1999 that the text needed changes
to reflect the "new harsh reality". The changes were suggested mostly by
the General Staff and made the text really tough.The draft was published
in October 1999 for "public discussion". In January 2000,the national
security doctrine was adopted which again authorised the first use of
nuclear weapons under specified conditions. In this respect it was largely
similar to the NATO Declaration of April 1999. It was understood,however,
that Russia' nuclear threshold was somewhat lower because gaps and
weaknesses in the coventional derrence.My impression is that in the period
after the draft defense doctrine was considered at a Security Council
meeting in January 2000, Putin insisted to water down most of its
confrontational provisions.Some pronouncements of MOD leadership in
February tend to confirm it. Some high ranking Security Council officials
went even as far as characterizing this document as heralding a new level
of cooperation with the West. It is hard to make jugements before the
final text is published. Clearly, Putin has to deal with the hawks in the
General Staff,appease the armed forces against the background of
intensifying warfare in Chechnya and continue to stretch out an olive
branch to the West.It would make sense to evaluate the new doctrine in
terms of Putin's limited space for strategic and negotating manoeuvre. 

Igor Khripunov 
Center for International Trade and Security
University of Georgia in Athens. 

*******

#5
Date: Mon, 24 Apr 2000 
From: "Stephen Blank" <BlankS@awc.carlisle.army.mil> 
Subject: nuclear doctrine

Marko Beljac is in error in JRL 4264 (23 April) when he states that Russian
nuclear doctrine applies only to Russia itself and perhaps to Belarus.
Countless Russian articles and statements going back to 1997 when Yuri
Baturin started the work on a new doctrine to replace the 1993 doctrine make
it clear that Russia has unilaterally extended deterrence to the rest of the
CIS . This was probably the case in 1993 as well. INasmuch as in practice
Russia has not fortified its frontiers with the CIS Russia's actual military
boundaries are those of the CIS with those governmetns' members and given
the staunch oppostioin to any foreign military presence in the CIS it is
hardly surprising that in practice the Russian military thinks of the CIS as
being in strategic terms Russian, especially as there are many Russian bases
and formatinos throughout those states.

********

#6
Moscow Times 
April 22, 2000 
PARTY LINES: Bittersweet Memories of '97 
By Jonas Bernstein
Special to The Moscow Times

This week's warm weather, combined with the renewed optimism in the air, 
reminded me of sitting in a local watering-hole one day during the summer of 
1997, listening to a top Western fund manager waxing poetic about Russia's 
future. He pointed to Deputy Prime Minister Boris Nemtsov as economic 
reform's greatest hope. Nemtsov, he stated, would build Western confidence, 
which would in turn stimulate foreign investment, which would help the 
country survive until real economic growth began. Then, he predicted, the 
young reformer would be able to ride the rising economic wave into the 
presidency in 2000 f or even earlier, depending on the health of President 
Boris Yeltsin. 

This was the mood in 1997, when Euromoney magazine named Anatoly Chubais 
"Finance Minister of the Year," and the country's gross domestic product was 
reported to finally be in the black f growing 0.4 percent, according to the 
State Statistics Committee. 

True, the credibility of both these claims would subsequently be battered 
somewhat. In June 1998, just a few months after the State Statistics 
Committee issued its cheery report on the previous year's GDP, its entire 
leadership was arrested for faking economic data in order to lower the tax 
bills of certain "commercial structures" (in return for "commissions"). And 
in August 1998, only 11 months after Chubais was crowned the world's greatest 
finance minister (the Finance Ministry, said Euromoney, had acquired a "new 
dynamism" under Chubais), the ruble lost 66 percent of its value in three 
weeks. 

Well, never mind. As they say, hope dies last. Indeed, Euromoney was back at 
it this week, this time naming Mikhail Kasyanov, the first deputy prime 
minister who doubles as finance minister, the best finance minister in 
Central and Eastern Europe. Kasyanov (whose moniker in some Russian 
journalistic circles is Misha, followed by a certain percentage) is widely 
believed to be the front-runner in the race to become President-elect 
Vladimir Putin's next prime minister. 

The irrepressible Chubais was also back at it this week. The electricity 
chief was in London as one of the participants in an international forum 
called "Russia 2000: New Realities-New Possibilities." Among other things, 
Chubais declared that the August 1998 crisis had "exerted a positive 
influence on Russia's economy" (this, at least, is how Itar-Tass reported 
it). 

On one level, Chubais's claim may be true, given import substitution and 
other factors. It's not clear, however, that the millions of Russians who as 
a result of the ruble crash and debt default saw their bank savings wiped out 
and/or their real incomes cut by a third would agree with his assessment. 
Chubais's comment was a little like a doctor looking back on a near-fatal 
illness that he had failed to diagnose and saying that it had provided a good 
opportunity to lose weight. 

Judging by the news reports, the London forum included moments bordering on 
the surreal, like the speech by Pyotr Aven, the Alfa Group founder and a 
leading oligarch. Aven, who admitted in 1994 that millionaires in Russia were 
"appointed," condemned the Russian mentality, the state bureaucracy's 
tradition of lying and the country's lack of reverence for contracts or 
understanding of private property. Pointing to fellow oligarch Mikhail 
Khodorkosvky, Aven complained they spent half their energy trying to protect 
what they had. It was a performance that called to mind Johnny Caspar, a 
character in the film "Miller's Crossing," complaining about how one of his 
partners f Bernie Bernbaum, a.k.a. "the Shmatte" f lacks "ethics." 

Meanwhile, kudos should go to yesteryear's great reform hope, Nemtsov. 
According to the newspaper Vedomosti, he was the only participant in the 
London conference to point out the 360-kilogram gorilla that has lumbered on 
stage during this latest round of reform enthusiasm but which everyone is 
pretending not to see f Russian Aluminum, the country's newest monopoly. 
Nemtsov criticized Putin for failing to head off the "conspiracy" between 
Siberian Aluminum's Oleg Deripaska and Sibneft's Roman Abramovich, who 
recently merged their aluminum holdings to form the new metals giant. 

Despite the large and growing gap between Putin's promises to level the 
economic playing field and reality, the economy may be able to maintain the 
dynamism Putin insists it is exhibiting (the president-elect claimed this 
week that GDP grew 8 percent during the first three months of the year). 

One can be forgiven, however, for remembering 1997 with a strong sense of 
deja vu. 

*******

#7
Date: Mon, 24 Apr 2000 
From: "(RIA) Mueller, Jonathan D" <j.mueller@state.gov> 
Subject: RE: 4262-Taibbi/Mueller and IKEA

Dear David,

Thank you for publishing my comment on the IKEA press review. I have
received several kind comments from other readers agreeing with me. It is a
pleasure to get such a positive response.

I am also flattered that Matt Taibi would fill about ten times as much space
responding to me as I took up in my original comment. It seems, though,
that I was not clear, as he has devoted considerable effort to responding to
points that I did not intend to make. I would like to set the record
straight here (in no particualr order):

* I did not mean to see any affirmation of Putin's reform credentials
in the IKEA case. As far as I know he has no connection with it. I meant
to contrast the statements about Putin's reform credentials coming from
western government and IFI leaders with IKEA's actions, which I believe are
significant whatever their motives.

* To my knowledge IKEA never used the word 'bribery'. They merely
said they couldn't reach a lease agreement with the city. It is we, the
commentators, observers, and readers of JRL, who saw bribery rejected. We
don't know anything about IKEA's negotiations with the city. They may have
considered paying but found the price too high. They may not. They are not
Sunday school teachers; they are in Moscow to make money. But if they
conclude the best way to make money is without the mayor's blessing then
others might, too.

* Moscow is not Anytown, USA. When IKEA opened in Warsaw, it
immedaitely attracted nouveau riche Poles with its combination of value,
selection, and service, all previously unavailable there. IKEA is perhaps
relatively a later entrant to the Moscow market, but there is still lots of
room for them to raise the standard of service and competitiveness in
retailing. Also, contrary to Taibi's inuendo about IKEA's suburban
warehouses, their first store in Warsaw was in the center, and it appears
that their first choice in Moscow was a more central location.

* Regarding the level of attention to this story, if Taibbi feels so
strongly about it why does he not also pillory the Independent and Patrick
Cockburn (or you, David, for re-printing the Independent story)?

* I cannot comment on the quality of the New York Times story as I
have not read it, only the Cockburn/Independent story. It may be as flawed
as Taibbi says, I just cannot say.

* Finally, and perhaps most importantly, Russian views on the
Memorial/overpass issue. There may well be many Russians who oppose the
overpass; since Taibbi is in Moscow he would know better than I. However,
from the Cockburn story it is clear that the Russians are divided, with the
oblast, on whose territory store, highway, and memorial stand, requiring the
overpass and the city blocking it. So lets knock off the high moral dudgeon
about Russian views on preserving the Russian heritage.

The exile press review is an entertaining piece which regularly challenges
the Moscow press corps to raise its standards. If memory serves, when you
wondered whether you should continue to publish it in JRL, I was one of
those who spoke up for keeping it. But this time I, and I believe other JRL
readers, see a point to the story which Taibbi has missed.

*******

#8
Date: Thu, 20 Apr 2000 
From: Gordon N Bardos <gnb12@columbia.edu> 
Subject: AP/Harriman Conference in New York 

Dear Colleagues,

Your are cordially invited to:

The Seventh Annual Associated Press/Harriman Institute Conference

"Russia After Yeltsin"

Friday, May 5th, 2000
Kellogg Conference Center
International Affairs Building
Columbia University

9:00-9:30--Registration and Coffee

9:30--9:45--Welcome and Introductory Remarks: Catherine Nepomnyashchy, 
Associate Director, Harriman Institute, Amb. William Luers,
President and Chairman, United Nation Association of the US, Chairman of
the National Advisory Council of the Harriman Institute;
Thomas Kent, Deputy Managing Editor, Associated Press

9:45-11:45--Panel I: Russia's Changing Political Scene

Chair: Amb. Jack Matlock, Institute for Advanced Studies, Princeton, NJ,
and former US Ambassador to the USSR

Panelists: Stephen Cohen, New York University

Alexander Motyl, Rutgers University 

Kathryn Stoner-Weiss, Princeton University

12-1:45--Luncheon and Keynote Address: Thomas Graham, Carnegie Endowment
for International Peace

2-3:45: Panel II: The Future of Economic Reform: Progress or Stagnation?

Chair: Allen Sinai, President and Chief Global Economist, Primark Decision
Economics 

Panelists: Rose Brady, Business Week 

Padma Desai, Harriman Institute 

Richard Ericson, Harriman Institute 

4-5:45--Panel III: Western Media Coverage of Russia

Chair: Thomas Kent, Associated Press 

Panelists: Jim Heintz, Associated Press Moscow Bureau 

David Johnson, Center for Defense Information, and Editor, Johnson's
Russia List 

Serge Schmemann, Deputy Foreign Editor, The New York Times 

6:00-7:00--Reception

The registration fee for the conference is $85. For more information or to
register, please contact Gordon N. Bardos at 212-854-8487, or by email at
gnb12@columbia.edu

*******

#9
smi.ru
April 24, 2000
Russians for Putin's Unlimited Power? 

The number of those who advocate limiting the President's power is gradually 
reduced, according to "Ekho Moskvy" radio. The tendency was evident after 
Vladimir Putin's victory in the elections, concludes the "Public Opinion 
Fund" on the basis of the polls taken. Thus, in particular, 70 percent of 
those asked in October last year opposed an amendment granting the president 
the right to oust the cabinet without reference to the Federal Assembly, 
whereas in April this year there were just 54 percent. However, Russians are 
expressly against an augmentation of the President's power. Besides, 65 
percent Russian are against the prolongation of the presidential term in 
power from the current 4 years to 7 years. 

Comment: A belief in a powerful leader is a traditional one in Russia. 
Especially when the country is a big mess. In this sense, it is symptomatic 
that ahead of the elections even the monarchists who saw in him a prototype 
of a new czar backed Putin. Worth noticing, too, are the tendencies marked by 
the POF ahead of the inauguration. In principle, it is quite enough for the 
president-elect that the public opinion at this moment clings to the idea of 
augmenting his powers. When the powers are in hand, the public opinion - on 
how long a president can stay in power - may become dispensable. 

*******

#10
BBC MONITORING
RUSSIAN ECONOMIST ON MAIN POINTS OF PUTIN'S PROGRAMME FOR RUSSIA
Text of report by Russia TV on 23rd April 

[Nikolay Svanidze, presenter] Correspondent Aleksandr Parkanskiy reports from 
a special dacha near Moscow where [head of the Centre for Strategic Studies] 
German Gref's team is shaping the future economic policy. 

[Correspondent] The information made available to the press suggests that 
several dozens or maybe hundreds of experts and specialists are working on 
this economic programme. But this doesn't happen in real life. After all, 
this work is usually done by a close-knit group of people where one, two or 
three people outline general strategy and general technical tasks on which 
many experts subsequently work. Who are the real authors of the economic 
programme that is being currently developed? Who is determining its strategy? 

[Aleksey Ulyukayev, head of a sector at the Centre for Strategic Studies] 
>From the point of view of technology, there are three layers of work. We have 
counted that there are about 200 experts taking part in reviewing and 
preparing material. There are working groups in the ministries and 
departments with which we are keeping in touch. There are, it seems, about 14 
working groups, which include about 40-50 representatives of ministries and 
departments. Finally, there is a close-knit group of people indeed. I can 
tell you that yours truly as well as Oleg Vyugin, (? Mikhail Dmitriyev, 
Sergey Sinelnikov, Arkadiy Dvakovich) and a number of other highly skilled 
specialists who can develop fundamental principles of an economic programme 
are working under German Gref's guidance. 

As regards priorities - I will speak only about the economic part of it, 
naturally - they include strong and consistent economic growth which would 
resolve the problem of strengthening our national independence, preserving 
our culture and raising our prosperity. In very crude terms, our task is to 
build yet another Russia within these 10 years, that is to actually double 
its gross domestic product and keep the annual average growth at about 6 per 
cent which will give us this doubling in 10 years. And the population's 
income will grow even somewhat faster and will increase approximately 2.2 
times in these years. 

[Q] How large a part will the state play in the economy? 

[A] We believe that the state is an inefficient owner. The state is an 
inefficient organizer of demand and a poor entrepreneur. On the whole, the 
state's direct role in the economy should diminish, except in the industries 
where the state has great responsibility which are, first of all, 
infrastructure as well as a range of institutions linked with social 
guarantees, education, health care and so on. On the other hand, the state 
should raise its profile sharply in monitoring and controlling functions, 
guarantees for business deals, credits, contracts and the observance of law. 
The law and the right to apply it is the sacred duty of the state, and here 
we must feel that the state has muscles. 

[Q] What about ownership of land? 

[A] You see, of course there are opponents of the selling and buying of land. 
People can be opponents of winter with equal success. For instance, I may 
dislike snow, therefore I will oppose snow. It's already a fact. There is a 
market of plots of land but it's illegal. And an illegal market means that 
prices there have nothing to do with supply and demand. We must legalize 
normal deals, we must allow rural producers to finance their land legally by 
obtaining funds for developing its production. Therefore this is absolutely 
necessary. 

[Q] You said that you are counting on 6-per cent annual growth and that the 
population's income will grow even faster. What will be the average income of 
an average Russian in 10 years? 

[A] As I have already said, the real income per person will more than double, 
and the national currency exchange rate to the dollar is likely to become a 
bit more stable. The purchasing power of an average family in dollars will 
increase 2.5 or three times, perhaps. Whereas now it amounts to about 100-120 
dollars for an average Russian family, by the end of this period we expect it 
to reach the level of 250-300 dollars. 

[Q] Thank you. 

******

#11
The Boston Globe
18 April 2000
[for personal use only]
Russian Criminal Justice
By Brian Whitmore (brian_whitmore@hotmail.com)
Globe Correspondent

MOSCOW - In Moscow City Courtroom No. 329, two teenage defendants sat 
glumly in a little red cage.
They were on trial for the grisly murder of an elderly woman. After their 
arrest, police had beaten both young men until they confessed. The 
detectives wrapped one young man's head in cellophane and savagely flogged 
him with a truncheon.
This is criminal justice, Russian-style. You have the right to remain 
silent - but using it could land you in the hospital. Police, under pressure 
to fulfill monthly arrest quotas, routinely use torture to gather evidence. 
Prosecutors win convictions at near-perfect rates. A trial is usually a 
formality, a guilty verdict a foregone conclusion.
But these defendants were luckier than most. Judge Sergei Pashin was 
hearing their case. Innocent or guilty, they at least stood a chance of 
receiving a fair trial.
Pashin quizzed the accused, Andrei Mazayev and Pavel Sabadash, about the 
police beatings. He offered them an opportunity to retract their 
confessions, but neither did. Later, in his chambers, Pashin said he would 
throw out the confessions anyway, but conceded that even without them, the 
case against the two was strong.
Pashin, 37, has spent his career trying to turn Russia's courts into 
something more than a rubber stamp for prosecutors. His one-man quest, 
partially inspired by a visit to a Boston courtroom eight years ago, has 
earned him the hostility of his colleagues, and almost cost him his job.
Russia's judicial system remains mostly unchanged since Soviet times, 
when crime rates were low and it was assumed that the state never made 
mistakes. But over the past decade, crime has mushroomed and police and 
prosecutors have come under pressure to show results.
President-elect Vladimir V. Putin has promised a ``dictatorship of law'' 
for Russia. But whether the emphasis will be on ``dictatorship'' or on 
``law'' depends largely on what happens to the country's courts.
After a decade of fighting unsuccessfully for change, Pashin himself is 
skeptical. Against stiff resistance, he has, pushed for jury trials, fought 
for independence for the courts and tried to prevent prosecutors from 
dictating judges' decisions.
``In the confines of our judicial system it is nearly impossible to 
accomplish anything,'' Pashin said in an interview in his chambers last 
week. ``With the police and prosecutors, everything is possible - torture, 
falsification of evidence, misconduct, pressure on judges.''
A recent report by the New York-based Human Rights Watch found widespread 
evidence that Russian police regularly use electroshock, asphyxiation, and 
sustained beatings to extract confessions. An independent judiciary might be 
able to confront such practices, but Russia's courts are dependent on local 
authorities, who want to appear tough on crime.
The cage in every Russian courtroom, where defendants sit during their 
trials, is indicative of the ``guilty until proven innocent'' mentality.
``Our courts are simply agents of punishment. Prosecutors regularly 
pressure judges into reaching guilty verdicts,'' said Rustem Maksudov of the 
Moscow-based Center for Judicial Reform.
Russian judges are appointed for life terms by the president. Their 
salaries, about $130 a month, come from the federal budget. Local 
authorities, however, dole out benefits like housing and healthcare, which 
judges rely on to make ends meet.
Pashin said prosecutors and other officials often call judges and impress 
upon them the importance of making ``the right decision'' - and the 
consequences of making the wrong one. The best he can do under the 
circumstances, he said, is to make his own courtroom as fair and just as 
possible.
He routinely throws out confessions obtained by torture and meticulously 
reviews evidence for signs of falsification. As a result, in a country where 
prosecutors boast a 99.65 percent conviction rate, Pashin acquits about one 
out of every ten defendants who walk into his courtroom.
``Pashin is the only real judge in Russia,'' said Maksudov. ``In terms of 
professionalism and independence, I don't know of anyone else like him.''
Infuriated by Pashin's perceived leniency, prosecutors got him thrown off 
the bench in 1998. He sued to get his job back and, after an outcry in the 
media, was reinstated.
With his short blonde hair, pinstriped shirt, and dark tie, Pashin hardly 
looks like a radical. But in a country that is burdened by rampant crime and 
fond of doling out draconian punishments, his ideas are considered 
revolutionary.
Former President Boris Yeltsin appointed Pashin a judge in 1996, when he 
was an adviser to the Kremlin on legal reform.
It was a trip to the US District Court in Boston in 1992 that helped 
inspire Pashin's desire for change. There, he watched a criminal trial 
presided over by William Young, now the court's chief judge.
What Pashin saw in Young's courtroom made a deep impression.
``It was clear that the court was honest, interested only in finding the 
truth. Judge Young was just brilliant. He was obviously in love with the 
law,'' Pashin said.
Young was also impressed by Pashin, whom he described as ``professional, 
personable and filled with intelligent and perceptive questions.''
Young said Pashin was particularly interested in how jury trials work. 
Tsarist Russia used jury trials, but Communist authorities, calling the 
practice a remnant of ``bourgeois justice,'' abandoned them.
Today, Russia's post-Soviet constitution guarantees the right to trial by 
jury. But fierce opposition from prosecutors has meant that jury trials are 
rare. Just nine of Russia's 89 regions use them.
Of the 600 or so cases heard by juries each year, about 20 percent result 
in acquittals.
``In a jury trial the prosecutor must prove his case. He can't be certain 
in advance that he will win. Juries have more respect for honest procedure 
and individual rights,'' Pashin said.
Prosecutors, accustomed to being the arbiters of guilt and innocence, 
disagree.
``Juries are an archaic institution from the 19th century. They tend to 
make their decisions based on emotion,'' said Yury Sinelshchikov, a Moscow 
prosecutor.
In a bid to educate the public on the issue, Pashin recently teamed up 
with privately-owned NTV television on a program called ``Court is In 
Session.'' The show gives convicted criminals a chance at televised jury 
trials, with real judges and prosecutors. The verdicts, however, have no 
legal force.
In the show's premiere, Pashin presided over the ``trial'' Maxim 
Shamarin. In 1995, a judge convicted Shamarin of double murder. The jury, 
however, found the prosecution's evidence flimsy, and it acquitted him.
But it won't help Shamarin, who has spent the last five years in prison.

********

#12
gazeta.ru
April 24, 2000
Chubais Resigned to Aluminium Monopoly
By Leonid Sborov

Anatoly Chubais is opposed to the creation of ‘Russian Aluminium’. One of 
the founders of the newly formed concern is Oleg Deripaska, an old ally of 
Chubais. The Berezovsky-Abramovich group opposing Chubais is growing 
significantly stronger. However Chubais still controls the financial 
instruments that could help him to restore parity. 
As we reported a few weeks ago, the new owners of Bratsk and Krasnoyarsk 
smelters and a number of several major enterprises of aluminium industry 
Roman Abramovich and Boris Berezovsky joined forces to implement a joint 
project with the president of Siberian Aluminium Group Oleg Deripaska. 
Together they announced the foundation of a new company, ‘Russian Aluminium’, 
in effect a monopoly of the Russian aluminium industry. 
Hitherto, Oleg Deripaska had been considered a member of Chubais’ 
political clan and consequently an irreconcilable rival of the 
Berezovsky-Abramovich alliance. Both tycoons [Chubais and Deripaska] shared 
not only common political views, but also businesses. On the basis of 
Sayano-Shushenskaya Power Station and Sayansk smelting works Chubais and 
Deripaska founded the energy-metallurgical producer Sayany. However after 
Deripaska’s decision to join forces with Chubais’ enemies, further 
cooperation between the two became doubtful. 
On Monday Chubais eventually announced his position. When asked in an 
interview with the Financial Times how he felt about the creation of Russian 
Aluminium, Chubais said: “The fact is that they [Berezovsky and Abramovich] 
say the merger does not violate the anti-monopoly law, however, this does not 
mean that the decision was right, it means that the anti-monopoly legislation 
is poor.” Chubais’ claims the merger would allow three Russian oligarchs to 
control over 75% of gross metal yields: “We have never seen anything like it 
before. It is an unprecedented concentration of capital and mass media in the 
hands of a small group of people.” 
However, in order to smooth the impression of an attack upon Deripaska 
and his new friends, Chubais admitted that the creation of a new concern 
would increase the competitiveness of Russia on the world market. 
Our correspondent contacted Anatoly Chubais’ spokesman Andrei 
Trapeznikov for comment. Mr. Trapeznikov also asserted that there has been no 
cooling of relations between his boss and Deripaska due to the latter’s 
cooperation with Berezovsky. “Chubais and Deripaska first of and foremost are 
connected through business. Smelters are the largest consumers of energy, and 
the first thing we are interested in is the situation with payments. In this 
context Chubais is genuinely preoccupied with the fact that such a powerful 
monopoly has emerged in the aluminium industry.” 
According to Trapeznikov, Chubais is worried because he is not sure 
whether the smelters –members of the new concern – would pay on time for the 
energy they use. And he has reason to be concerned. Almost all smelters owe 
huge amounts to RAO UEA. An example of (non) payment disputes was the court 
case between KrAZ (Krasnoyarsk smelter) and Krasnoyarskenergo (a local 
subsidiary of RAO UES) concerning tariffs. In the end the court ordered the 
smelter to pay over 3 billion rubles to the energy supplier. It turns out 
that KRAZ does not have the necessary funds to pay, thus RAO UES might 
initiate a bankruptcy case and, in doing so, influence the new owners of the 
smelter. 
The question remains as to whether Chubais will be able to give a 
purely economic twist to this struggle. It was no accident that in his FT 
interview he mentioned the negative consequences of concentrating not only 
industrial capital, but also the media in the hands of a single oligarch. If 
properly controlled, the newspapers and TV in Russia can effectively ruin a 
businessman’s reputation or cause the downfall of a government official. 
Chubais knows this better than anyone else. 

********

#13
Financial Times (UK)
24 April 2000
[for personal use only]
Russian energy boss lays down challenge to Putin: Anatoly 
Chubais says that the president-elect must show courage and back 
liberalisation of the vast energy market, reports Arkady Ostrovsky

Anatoly Chubais, chief executive of Unified Energy Systems (UES), Russia's 
electricity monopoly, says he is hoping to win the support of Vladimir Putin, 
the president-elect, for ambitious steps to liberalise the country's vast 
energy market. 

The reforms would require a change in Russian legislation and could have a 
long-lasting impact on the domestic economy, which grew strongly in the first 
quarter of 2000. They would also represent an important test of the economic 
policies of Mr Putin's new government. "I would not have suggested such a 
programme one or two years ago, but now I think it is realistic," Mr Chubais 
said in an interview in London. Mr Chubais said he was also hoping to gain 
support from foreign shareholders who own 33 per cent of UES, which employs 
almost 700,000 people. 

At the centre of his plan is the liberalisation of the power generation, 
distribution and sales networks, which would be demerged from the energy grid 
and partially sold to investors. 

"That does not mean we'll sell our stock in power generation completely, but 
it means that we plan to attract additional investments into the power 
plants, which could lead to the diminishing of our share (in power 
generation) from the current level of 85-90 per cent to 30-35 per cent. 

"The grid is the low risk and low profit natural monopoly and should be 
preserved, but power generation, sales and distribution of energy should be 
taken out of total state control." 

He said only that way would Russia get the funds to modernise power plants. 

Mr Chubais said UES was hoping to attract Dollars 30bn-Dollars 60bn 
(ś19bn-ś38bn) in investment to its power plants over the next 10 years. 
"There is no comparable restructuring anywhere in the world. But everything 
we do in Russia is unprecedented." Mr Chubais said he expected most of the 
money to come from foreign investors. "Mr Putin very well understands the 
importance of attracting foreign investments to Russia." 

The chief executive said UES was working on a comprehensive restructuring 
programme, which included developing proposals for legislative changes that 
would be submitted to the government by the end of June. "If the government 
and the Duma approve our programme, we could start restructuring in the 
spring of next year." 

However, Mr Chubais' programme is likely to meet fierce opposition from the 
Communist party, which has about one fifth of the seats in parliament, as 
well as from some of the Russian regional governors. 

UES also needs to solve some of the more immediate problems concerning its 
debts and the reduction in fuel supplies before pressing on with the 
restructuring. 

Mr Chubais expressed some trepidation over the recent creation of Russia's 
largest aluminium concern, Russia Aluminium, which would give three Russian 
"oligarchs" control over more than 75 per cent of domestic production. 

"We have never seen anything like this before," he said. "This is an 
unprecedented concentration of capital and media interests in the hands of a 
small group of affiliated people." 

Mr Chubais said while this could boost Russia's competitiveness in the 
international market, it could also lead to a considerable political force 
inside the country. "The fact that this merger does not contradict the 
anti-monopoly rule, as they say, shows not that the decision is right, but 
that the anti-monopoly legislation is too weak." 

Gazprom 'set to reduce supplies' 

Gazprom, Russia's gas monopoly, is expected further to reduce supplies to 
Russian domestic consumers as a result of diminishing gas reserves, according 
to Anatoly Chubais, head of the country's UES electricity utility. 

Mr Chubais said Gazprom's chairman, Rem Vyakhirev, had acknowledged the 
shortfall in domestic gas supplies in 2000 would reach 11bn cubic metres, 
rising to 36.6bn cu m in 2001 and peaking at 67bn cu m in 2003. Some regions 
were threatened with power cuts this month after a dispute between UES and 
Gazprom over gas supplies. 

"Gazprom's old fields are exhausted while its new fields are not going to be 
operational until 2002," said Mr Chubais. "But having the same volume of 
exports, it had to cut production domestically." 

*******

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