July 13th, 2000    
This Date's Issues: 4399 • 4400  • 4401

Johnson's Russia List
#4399
13 July 2000
davidjohnson@erols.com

[Note from David Johnson:
1. Jamestown Foundation Monitor: WHO IS BEHIND THE MOVES AGAINST 
THE OLIGARCHS? ("the 'Family' seems to be calling the shots")
2. The Nation: Katrina vanden Heuvel, Putin's Choice.
3. Moscow Times: Yevgenia Albats, Do We Deserve Democracy? 
4. Bloomberg: Environmentalists Urge World Bank to Stop Lending to Russia.
5. Trud: Igor Maximov, RUSSIAN ELITE OPPOSES PUTIN'S STATIST POLICIES.
6. smi.ru/NG: Tretyakov on Putin: the lustre and destitution of 
Putin's political philosophy.
7. Reuters: Olympics-Russia's Sydney winners to get 100,000 dollar bonus.] 

******

#1
Jamestown Foundation Monitor
July 12, 2000

WHO IS BEHIND THE MOVES AGAINST THE OLIGARCHS? The key question about the 
moves against Vladimir Gusinsky, Vladimir Potanin, Vagit Alekperov and 
Boris Berezovsky is whether they are proof that President Vladimir Putin 
plans to keep his promise to drive the oligarchs from the corridors of 
power, or whether they are being carried out on behalf of one group of 
oligarchs or insiders at the expense of others. Indeed, prior to today's 
news of a criminal case against AvtoVAZ, some observers saw the other 
actions of the authorities against the oligarchs as in fact serving the 
interests of the "Family," the group of Yeltsin-era Kremlin insiders which 
includes Boris Berezovsky, Sibneft boss Roman Abramovich and Kremlin 
administration chief Aleksandr Voloshin (Moskovsky komsomolets, June 12). 
The "Family" has been in a protracted war with Gusinsky and Media-Most, and 
some observers believe that Berezovsky, who controls Russian Public 
Television (ORT), would like either to take over or cripple Media-Most. An 
anonymous official in the Kremlin administration was quoted today as 
saying: "They are trying to force Gusinsky to end his business in Russia. 
For example, to sell it to someone else. Who are 'they'? I don't know. But 
someone is all the time trying to deprive Gusinsky of his business" 
(Vedomosti, July 12).

A newspaper also suggested that the letter from the Prosecutor General's 
Office to Potanin concerning Norilsk Nickel was initiated by some of his 
rivals, including Oleg Deripaska, head of Siberian Aluminum (Kommersant, 
July 11). Earlier this year, Siberian Aluminum teamed up with Sibneft to 
buy up an estimated 70 percent of Russia's aluminum market and create an 
aluminum super-holding, Russian Aluminum. In addition, both Potanin and his 
long-time ally, United Energy Systems head Anatoly Chubais, are long-time 
rivals of Berezovsky. Andrei Ryabov, a political analyst with the Moscow 
Carnegie Center, called weakening Potanin a "Family" goal. He said also 
that the challenge to the Norilsk privatization was a clearly a blow to 
Chubais' allies in the government, including Economic Development and Trade 

Minister German Gref, and Finance Minister Aleksei Kudrin (Moscow Times, 
July 12). It should also be noted that Potanin's and Alekperov's LUKoil 
jointly control Izvestia, the influential (and strongly pro-Putin) daily 
newspaper. Oneksimbank owns 51 percent of the paper, LUKoil 49 percent.

And while the criminal case announced today against AvtoVAZ would seem to 
hit at Berezovsky's interests, it should be noted that some observers 
believe that his connections with the auto giant are no longer as close as 
they used to be (Moscow Times, May 30). Indeed, while AvtoVAZ's fortunes 
improved somewhat following the August 1998 ruble devaluation, the company 
remains mired in debt and highly criminalized. Several years ago, a leading 
Western magazine called AvtoVAZ a "corporate wreck" (Business Week, August 
17, 1998). Thus there may be less to the move against AvtoVAZ than meets 
the eye, at least in terms of its effect on Berezovsky. On the other hand, 
Berezovsky allegedly set up various Swiss companies to handle AvtoVAZ's 
revenues, and later used the same companies to handle the revenues of 
Aeroflot, Russia's state airline. This means the probe into AvtoVAZ could 
help build a case against him. Both the Swiss and Russian authorities have 
been investigating these Swiss companies for alleged embezzlement and money 
laundering. No one, however, has been charged in the cases so far. In 1999, 
when Yevgeny Primakov was prime minister, a warrant was issued for 
Berezovsky's arrest in connection with the Aeroflot case, but later rescinded.

*******

#2
The Nation
July 24/31, 2000
Putin's Choice
By Katrina vanden Heuvel

Moscow
Vladimir Putin has been Russia's President for seven months, but there is
no agreement in Moscow as to who he is or what kind of leader he will be.
Indeed, after three weeks here it's clear that various Russians hope for at
least four different, conflicting, Putins: a savior of Russia as a great
state, a neoliberal strongman, an oligarchical Praetorian and a populist
who will save the people from the worst economic depression of modern
history.

The "statists"-a broad coalition of security and administrative officials
and nationalist intellectuals-hope Putin will restore Russia as a great
power or become, as a young KGB general told me, "Vladimir the Savior." The
statists see themselves as the only true patriots who can save Russia from
the collapse, corruption and weakness they see as Yeltsin's legacy.
(Although Putin was created by Yeltsin's Kremlin, this group and many
others here see him as the anti-Yeltsin.) They want him to be a modern-day
Peter the Great, taking from the West whatever Russia needs-a market
economy, technology, foreign investment-and sweeping aside all opposition
and obstacles to the nation's rebirth.

In his first State of the Nation address, to a joint session of Parliament
on July 8, Putin gave the statists reason to believe he is the leader they
want. And there are other signs. Former KGB officials are filling positions
of power in the Kremlin and the regions, declaring, as a TV commentator
anxiously observed, "All power to the President." Putin has launched a
legislative assault on the power and autonomy of Russia's eighty-nine
territorial bosses, created a new instrument of executive power in a
beefed-up Security Council and indicated a readiness to reassert state
control over the country's rich natural-resources monopolies privatized
under Yeltsin. There is an ongoing Kremlin effort to rein in what remains
of Moscow's independent media and revitalize government-owned media.
Putin's brutal war against secessionist Chechnya continues, oppositionist
citizens' groups are harassed and the influence of military and
intelligence forces grows. "The smell of revanchism is in the air,"
remarked a veteran KGB official with great satisfaction on a popular TV
talk show.

Meanwhile, Russia's neoliberal economists, as they describe themselves,
hope Putin will be their Kremlin Pinochet, imposing free-market policies
with "a strong hand." They call for "managed democracy" and "enlightened
dictatorship" and uncritically praise the former Chilean dictator. German
Gref, the new, young Minister of Economics and Trade, is the group's most
prominent representative. In late June the Cabinet seemed to endorse Gref's
economic program, which an opposition economist calls "son of shock
therapy." It is essentially the same as the policy-sponsored by the United
States and the IMF and imposed by Yeltsin in the nineties-that led to the
country's corruption and economic collapse. The Western media have
enthusiastically endorsed Gref's program-the New York Times declared it a
"bold economic blueprint"-while ignoring the fact that it calls for
slashing essential housing and utilities subsidies, making higher education
accessible only to the privileged, endangering the pension system and
adopting a regressive tax system, including a flat tax (also heralded in
the West as an ambitious reform) that will benefit only the rich and
further victimize the poor. A draconian labor code, which has received less
attention in the Russian and Western press, proposes abolishing labor
rights and permitting a twelve-hour work day.

The Gref team is boasting that its "liberal" program has been accepted by
Putin, a claim the Western media have taken at face value. But other
economists-those in the opposition and also some close to the
Kremlin-privately claim that the President actually has little sympathy for
those shock therapy ideas and that he is using Gref's proposed policies to
persuade Western financial institutions to restructure Russia's enormous
external debt and attract foreign investment. (The Communist Party and its
allies in the Duma oppose these policies, but Putin's supporters have a
commanding number of seats and, for now, are deferential to him.)
Putin's current relationship with Russia's oligarchs, who acquired the
nation's richest natural resources and other assets under Yeltsin, is even
more complex. A small group of them selected Putin-then the little-known
head of the renamed KGB-as Yeltsin's successor and protector of their
ill-gained wealth. But the Kremlin has now begun to move against the
oligarchy. In June Putin briefly jailed Vladimir Gusinsky, a leading media
tycoon. And in July federal prosecutors brought charges against former
Kremlin insider Vladimir Potanin, who was the recipient of one of the most
corrupt giveaways of the nineties, the "privatization" of the enormous
Norilsk nickel reserves. They have also seized the financial records of
several other oligarchs. On the other hand, Putin and his new Prime
Minister, Mikhail Kasyanov, have declared there will be no
"deprivatization," and the ultimate oligarch, Boris Berezovsky, continues
to exercise considerable influence.

The US media treated Gusinsky's arrest as a crackdown on Russia's
independent media, particularly the mogul's television network, NTV. But
most Moscow journalists will tell you that a truly free press was largely
lost when the tycoons carved up the national broadcasting and newspaper
properties several years ago and that Gusinsky's arrest was primarily
Putin's first move against the financial oligarchy. Certainly, that's how
the oligarchs themselves saw it. Immediately following the arrest,
seventeen signed a letter of protest, declaring, "Yesterday, we thought we
were living in a democratic country; today, we have serious doubts." Hardly
known for their democratic proclivities, the oligarchs meant: Yesterday, we
thought we had immunity; today, we are not so sure.

As for the great majority of Russians who live below or near the poverty
line thanks to the nineties "reforms"-and who voted for Putin-the new
President has shown little concern. Although Putin called for a new "social
contract" in his July 8 speech, salaries and pensions remain unpaid in many
parts of the country, and the labor and tax legislation advocated by his
neoliberal appointees can only further impoverish ordinary citizens. And
Putin has not undertaken any measures to overcome Russia's economic
depression, although he speaks emotionally about the demographic crisis. As
opposition economist Sergei Glazyev, who heads the Duma's Committee on
Economic Policy, put it in a conversation with me, "Money produced here
continues to circulate only abroad." If Putin has given ordinary citizens
any satisfaction, it was with Gusinsky's arrest. Indeed, I have yet to meet
anyone in Moscow who doesn't believe that most Russians would welcome the
arrest of all the oligarchs, particularly the majority who are Jewish.
(Nearly a decade of immiseration has strengthened anti-Semitism, always a
factor here.)

Each group hoping for its version of Putin lobbies Moscow's political
elite. It is, as was said about the czars, a struggle for Putin's soul.
Understandably, as one political analyst here has emphasized, it is a time
"when all politicians and oligarchs are living in a state of constant
anxiety about the future. Everyone's position is in doubt, and anything is
possible in the fight for power."

But this is only the beginning of the struggle-it's too early to tell which
Putin will emerge. Among other factors that may determine the outcome, the
President is clearly worried about an alliance between the oligarchs and
regional governors, which might thwart his attempt to monopolize power. For
example, he is trying to undermine Moscow's Mayor, Yuri Luzhkov, who is as
powerful as any governor and himself the head of a rich financial clan.
Moreover, the struggle over Russia's future leadership and direction is
being fought against the backdrop of two huge unresolved problems-the
economic depression and the war in Chechnya. Although there is still much
spinning about a new economic "boom"-largely from Western financial
institutions and the media-Putin punctured the bubble in his bleak address,
pointing out that "economic growth is on the brink of collapse." As for the
war, no end is in sight. Chechen fighters have stepped up their guerrilla
war, and the number of Russian casualties grows by the week. The war and
the depression helped bring Putin to power, but if unresolved, they could
undermine him.

Finally, as always in latter-day Russia, there is, for better or worse, the
American factor. Apart from Washington's decisions regarding National
Missile Defense and NATO expansion-both of which would further undermine
any chance democratization has here-Putin's Kremlin cares far less about
Washington's opinion than did Yeltsin's. Putin is focusing on Europe,
especially Germany, and Asia. But it is said that he understands that any
large steps he takes before November might influence the US election and
thus US policy. If Putin adopts the "liberal" Gref program, it might be
seen in Washington as validating the Clinton/Gore Russia policy. On the
other hand, if he undertakes the statists' "strong hand" measures or
renationalization of the oligarchs' property-no matter how much such
measures are needed for Russia's recovery-it would suggest a failure of US
policy that would benefit George W. Bush. At least in that regard, Russia
is still a world power that matters.

*******

#3
Moscow Times
July 13, 2000 
POWER PLAY: Do We Deserve Democracy? 
By Yevgenia Albats 

An older colleague of mine -- who has lived much longer under Soviet rule 
than I did f advised me that I would be better off finishing my doctoral 
thesis abroad rather than working as a political journalist in Russia. 

He gave the following reasoning to back his case: "The Kremlin is no longer 
going to tolerate open attacks from the side of the media," he said. "It 
would like to have a minimum of politics on TV, but lots of the Soviet-style 
shows where the only conflict that exists is between the good and the very 
good. And in fact, the masses will be happy [about these shows]." 

Secondly: "You are too public, too noisy, and you have been writing too much 
about them." By them, he meant the Chekists, but he would not call them by 
name. 

Thirdly, he explained, you should never forget about your (non-Russian) name. 

"And you write too much in English. Look who those in the Kremlin are going 
after: LUKoil f which is connected to the Americans; Vladimir Gusinsky, who 
is backed up by the Jews abroad." 

"You know, I myself am quite divided about the oligarchs," I replied, in an 
attempt to move the talk toward more rational grounds. "Something should be 
done to stop their power over the state. After all, both of us remember how 
the oligarchs have used the power of the fourth estate, of their media, to 
blackmail the government in order to get some more pieces of cake." 

"You want bureaucrats to get their property, do you?" he replied. "You think 
bureaucrats are going to be better managers? Are you crazy?" he said, all of 
a sudden pouncing on me and forgetting his Soviet-era rhetoric. After all, he 
himself had also created his own business, using the same methods as everyone 
else. He is not about to give up what he has gained. 

"What the Kremlin is trying to do is to force the oligarchs to bring back the 
money they spirited away offshore. You heard, [President Vladimir] Putin 
raised pensions and said he is going to raise them once again later. Where 
are they going to get money? Clearly, he wants the oligarchs to pay to make 
the elderly better off." 

My interlocutor was not the first to bring up that argument. Others no less 
well informed have also done so, arguing that the state is not going to 
eliminate the oligarchs or put them in jail, it is just trying to get at the 
money hidden in offshore havens. 

"But what are the criteria?" I asked. "Why will some be touched and others 
not? And where will it end?" 

"Loyalty is the criteria," my older colleague stated. 

For myself, I disagree with those who criticized Putin's address to the 
nation for his passionate appeal for the creation of a strong state. I do 
think that, when civil society is weak and the state is impotent, the country 
becomes a hostage to the financial-bureaucratic clans that give lip service 
to the common good. 

On the other hand, I am amazed that the president did not say a word about 
the reform of the judiciary system. I believe that making the judiciary 
system truly independent and stripping the law enforcement authorities of 
corruption is the only way to both strengthen the state and protect civil 
society from the power of the elites. 

It looks as if the question I put in one of my previous columns f is Putin 
looking for law and order or just for order without law f is being resolved 
in favor of the latter, unfortunate answer. This means civil society f 
however fragile and weak it is f is going to face this test: Is it capable of 
resisting the coming authoritarianism and preserving what has been gained 
during nine years of democracy? 

After all, Russian society did not fight for freedom back then f it simply 
was handed down from on high. Now the time comes to see whether we deserve 
the gift granted us once by Mikhail Gorbachev. Do we? 

*******

#4
Environmentalists Urge World Bank to Stop Lending to Russia

Washington, July 11 (Bloomberg)
-- Russian and U.S. environmentalists called on the World Bank to 
freeze a $60 million woodland management loan to Russia, after the world's 
most heavily forested nation eliminated its forest protection agency. 

The loan was approved in May by the bank's executive board less than a week 
after Russia abolished its national forest service and its state committee on 
ecology. It is the first loan for Russia from an international lender since 
Vladimir Putin was elected president in March. 

The 68 environmentalists, most of whom are Russian, asked World Bank 
President James Wolfensohn in a letter to halt the forestry loan and refrain 
from lending the country any money for environmental projects until the 
government restores its ecology protection agency or establishes a new one. 
They are also sending the letter to the World Bank board's 24 members. 

``The legality of a loan intended for an abolished agency must be 
questioned,'' the environmentalists wrote. Without an agency to protect 
forest ecology ``we do not believe World Bank Group projects that impact the 
environment in Russia can proceed in an environmentally, financially or 
legally sound way.'' 

Objections to the loan, approved in May, come just days before World Bank 
staff begin a visit to Russia to consider the government's request for more 
than $1 billion in loans to support Putin's new economic program. Bank staff 
are due to arrive in Moscow on July 17 for a mission that could last up to 
three weeks, said Gina Ciagne, a World Bank spokeswoman. 

The environmentalists' attempt to stop the World Bank's loan also comes just 
days after China was forced to withdraw its request for a loan to resettle 
farmers onto land inhabited by Tibetan and Mongol herders. The $40 million 
loan was the subject of international opposition spearheaded by supporters of 
Tibetan rights. 

``There's a growing awareness of the need to integrate human rights and 
environmental concerns into projects,'' said Doug Norlen, policy director the 
Pacific Environment and Resources Center in Washington, an environmental 
group that monitors forestry, oil and gas production and mining in Asia. 

Environmental Oversight 

The Russian government appears to be leaving environmental oversight to the 
natural resources ministry, an agency that licenses mining and oil drilling, 
according to the environmentalists who sent the letter. 

The bank and Russia's representative to the bank's board had no immediate 
comment on the abolition of the government's environmental protection 
service. 

Both the IMF and World Bank have said that Putin is in the best position of 
any leader since the collapse of the Soviet Union to push free-market 
reforms. The forestry loan was the first tangible sign that the lenders will 
back their verbal support with new money. 

`Amazon of the North' 

Russia has more acres of forests than any other country, amounting to more 
than one-fifth of the world's forest cover. The project will concentrate on 
three forests: one near St. Petersburg, another in central Siberia and a 
third in the country's east. 

``It's the Amazon of the North,'' said Norlen, who was one of the 
environmentalists who signed the letter. The end of the forest service will 
``lead to lawless logging,'' he said. 

With the money from the loan, Russia is supposed to improve its forest 
regulations, including clarifying whether companies can lease forest lands; 
improve its fire and pest protection; and increase training for companies in 
how best to use the forest. 

Training will focus on how to tap forest products, including the processing 
of berries, mushrooms, honey, cedar nuts and pine resin, according to bank 
documents. 

Since Russia joined the bank in 1992, following the collapse of the Soviet 
Union, loan commitments to the country have reached about $11 billion for 45 
projects. 

In 1998, the bank agreed to lend Russia $1.5 billion to improve tax 
collection and improve the efficiency of state-owned monopolies in power, 
railways and other businesses. The project was part of a larger $22 billion 
bailout of the country by international lenders, and was the largest single 
loan ever made to Russia. 

Lending under that program has been stalled since last year, largely because 
the IMF suspended new loans for Russia. The World Bank follows the IMF lead 
in lending to support government finances. 

******

#5
Trud
July 12, 2000
[translation from RIA Novosti for personal use only]
RUSSIAN ELITE OPPOSES PUTIN'S STATIST POLICIES
By Igor MAXIMOV

The current federal policy, which aims to cement the 
Russian state, is being opposed by a rather motley group, which 
comprises numerous senators, oligarchs, as well as members of 
the Russian Federation's Communist Party.

The 2000 political-summer season, which is marked by a 
struggle around the projected state-power reform, poses some 
issues, which are linked with the new configuration of 
partisan-oligarchic forces along the "government -- opposition" 
axis. One can see clearly that the present-day situation 
differs completely from that, which had existed under Boris 
Yeltsin. Russia's first president, who had tried hard to 
bolster his own power, used to play games with all national 
political and financial structures, as he kept creating his 
favorite system of checks and balances. However, that concept 
tended to reflect the ancient "Divide and Rule" principle. 
Besides, Yeltsin used to perceive any alliance with the 
Communists as something utterly impossible in line with 
personal, rather than political, considerations. Nonetheless, 
Yeltsin was ready to strike a deal with others, even at the 
price of some really impressive concessions. Consequently, 
Yeltsin used to have his favorite and unloved governors, also 
displaying his sympathies toward some oligarchs and distancing 
himself from the rest.
However, Vladimir Putin became president in an entirely 
different situation, asserting a completely different system of 
values. First of all, I'd like to note that Putin is unable to 
govern Russia in accordance with the afore-said "Divide and 
Rule" principle. As a matter of fact, he would fail to attain 
this goal, even he wanted to. This can be explained by the 
simple fact that there is nothing more to divide at this stage. 
The most luscious slices of Russian property have already been 
divided. Consequently, it's no longer possible to put various 
financial-industrial groups at logger-heads and to watch their 
boxing bouts. Apart from that, it's no longer possible to allot 
additional sovereignty to regional leaders just because 
Russia's "confederalization" has already reached such mammoth 
proportions that the federal center is largely unable to run 
the state. That's why elementary considerations of preserving 
this country's territorial integrity have induced Putin to 
start restoring law and order and to strengthen the so-called 
state-power vertical, for openers.
Quite a few governors were taken aback by Putin's move.
Frankly speaking, they knew only too well that some changes 
couldn't be avoided, nonetheless falling prey to their own 
conservative attitudes. They evidently expected Putin to copy 
Yeltsin's example and to ask them to struggle for his 
benevolent attitude, and Putin was supposed to choose the 
winners and the losers. Everyone could count on success as a 
result of such behavior.
Regional leaders eventually realized that the new Russian 
President, who doesn't crave for personal devotion, intends to 
fight the entire corrupt system, rather than separate unruly 

administrators. As a result, the Federation Council turned into 
a sort of political party, which advocates Russian 
confederation, virtually overnight. The party's economic 
platform stipulates the omnipotence of regional governors' 
supporters.
The anti-state opposition was then joined by oligarchic 
financial-industrial groups. Such groups, as well as regional 
governors, were ready to vie for the Kremlin's benevolence some 
time ago. However, it soon became clear that any state, which 
is determined to create a normal economy, can't tolerate 
commercial organizations, whose success depends on their 
special relations with people in high places.
The "new opposition's" oligarchic sector is dominated by 
Boris Berezovsky. First of all, this can be explained by the 
fact that Berezovsky, who can fish in murky waters of anarchy, 
can also profit from his friendship with various big shots.
Apart from that, Berezovsky views all-out chaos as the most 
favorable "habitat" of them all. And now Berezovsky is doing 
his best to play the part of a smart Jew under the governor (to 
quote Saltykov-Shchedrin). Federal actions aimed at reinstating 
nationwide law and order would wreck Berezovsky's business 
operations completely. Besides, a refusal to heed his advice 
would sorely wound Berezovsky's pride.
At first glance, the alliance of Russia's oligarchs and 
governors with Communists seems to be completely weird. Putin, 
who doesn't seem to have special liking for the Communist Party 
of the Russian Federation, doesn't display that Yeltsin-style 
animosity toward the Communists either. However, this paradox 
can be explained rather easily. The Communist Party's main 
enemy and rival has now vanished into thin air, what with the 
President adopting many statist Communist slogans and regarding 
them as his top-priority tasks.
Consequently, Gennady Zyuganov and his associates are now 
facing a rather serious political crisis.
Meanwhile the Communist Party of the Russian Federation 
has found itself in a situation when it has nothing to fight 
for and no enemies to fight against. CPRF leader Gennady 
Zyuganov is afraid that he might lose his job already this fall 
(that is, during the projected party congress), unless the 
situation changes by that time. Therefore Zyuganov has found 
nothing better than to pose as a die-hard oppositionist, 
rejecting presidential initiatives. However, the CPRF boss has 
thus aggravated his own situation because quite a few 
rank-and-file Communists, who sincerely believed that their 
party keeps struggling for a more powerful state, won't forgive 
such maneuvers on Zyuganov's part.
Therefore it turns out that federal efforts to restore 
nationwide law and order and to guarantee equal rights for all 
citizens and commercial organizations are now encountering 
really serious resistance.

******

#6
smi.ru
July 12, 2000
Tretyakov on Putin: the lustre and destitution of Putin's political 
philosophy 

Vitaly Tretyakov gives a detailed analysis of Vladimir Putin's address to the 
Federation Council which he delivered last Saturday (shortened translation): 
[Nezavisimaya gazeta's editor-in-chief] 

Putin's speech in the upper house on Saturday was an address in which the 
President set forth in a concise manner his political philosophy for 2000 and 
the entire term of his presidential rule. This philosophy contains nothing 
new for those who have been following Putin's words and actions since he 
became the head of state and who have also been objectively analyzing the 
events that were taking place around them without flattering oneselves or 
giving any intentionally preconceived interpretation. 

It seems that the question "Who is Mr. Putin" should be clear even to the 
most stupid. 

First, I would like to sum up the most fundamental ,in my view, points of 
this philosophy by using some of the definitions from my previous articles on 
Vladimir Putin. Then, I will try to show the lustre and the destitution of 
this philosophy for it is loaded with both not only for the reason that any 
political philosophy is objectively one-sided but because some of its 
underlying principles are creating political tensions which are accompanying 
Putin's "federal reform" package through the corridors of the two chambers of 
parliament. 

The quintessence of Putin's philosophy is clearly expressed in the working 
name of his address which the president must have thought of himself. In a 
broader sense it means the following: Russia's revival as a great country, a 
strong state (power) and a prosperous nation.This goal is primary. All the 
rest is secondary, and can be accepted only if it can contribute to the 
implementation of the main goal. 

The past experience which cannot be used in achieving the set goal should be 
renounced not for the sake of morale or ideology but for the sake of 
pragmatism. The communist economy should be abandoned because it has lost 
competition against the market. The Soviet system should be abandoned because 
it will demand the abolition of democracy to which the people, the elites and 
Putin himself have got accustomed to and which has prevented the country's 
disintegration. The anarchism of Yeltsin and the rule of the oligarchs should 
be renounced because they have made Russia dependent on the West, do not 
guarantee the country's territorial integrity and are depriving the central 
authorities of the very meaning of existence. 

On the other hand, there will be no scoffing at the country's past (be it 
tsarist, Soviet or Yeltsin's). Those were the objectively inevitable stages 
of Russian history. Putin harshly criticized the nine years of Yeltsin's rule 
but his criticism did not contain a sign of mockery. On the contrary, he even 
justified the former president, although apparently not quite sincerely. 

Living in the world means a tough struggle for survival and prosperity of 
your people (which can also be done through cooperation). The weakest lose. 
No one respects them (they lose even quicker because of that). Finally, the 
weak bend to somebody else's will. 

The territorial size is the first visible measurement of weakness. In this 
context, Putin stopped over Chechnya, although very briefly. He regards all 
the other knots of the Chechen dilemma just as secondary or third-tier 
problems. The question of the territory is beyond discussion for there can be 
no country without a territory. Nor can a country exist without a people or 
the population. 

The first problem which Putin raised in his speech (perhaps even more 
carefully and emotionally than that of Chechnya) was Russia's depopulation. 
This process has been going on for several years. But none of the previous 
heads of state before Putin, including his predecessor, Boris Yeltsin, has 
ever dared to touch upon this subject. 

The key to reviving the country and making it prosperous is market economy 
and a strong (efficient) state, which sets the priorities of development and 
also controls and corrects them. Democracy and civil society should exist 
within a limit not to hinder the achievement of the main goal. 

Politics is the prerogative of the state. It is not the self-activity of the 
masses, the less so of some individual territories or participants in the 
economic activities who have political interests. This proves once again the 
old-standing need to create parties which, supposedly, will nominate 
presidential candidates. Everybody should cooperate with the state. No one 
should oppose it. 

Putin, who is a patriot of the Russian-Soviet mould and the president with a 
secret service background, does not see the state as an assembly of 
bureaucrats. For him, the notion of a state is synonymous to that of a 
country. A state is the country's symbol, its leader and the measurement of 
its well-being. A country is prosperous if the state is prosperous. 
Consequently, a prosperous state, including efficient government staff, is a 
way to achieve prosperity of the country as a whole. 

As for the democratic freedoms - anything within the law is permitted if (the 
second precondition) it does not contradict the main goal. If the media are 
free from state censorship, they should also be free from purposeful 
censorship (or political control) on the part of other subjects, especially 
if it results in activities, which the state (and sometimes the people) 
regard as anti-government. 

"The zero option" (with regards to property and political activities) should 
be preserved de facto, but on three mandatory conditions: 1) if it does not 
contradict the implementation of the main goal; 2) if property management is 
effective; 3) if a property owner is loyal to the state both as owner and 
politician. 

The final point, which Putin implied but did not articulate, was that 
Leviathan (the government bureaucracy) should yield to Goliath (the 
president). Why? Because the president is appointed by the people. And also 
because otherwise the diverse and egoistic bureaucracy will tear the country 
apart. In this sense, Putin divides between the bureaucracy and the state. 
Moreover, he contrasts them with each other. 

Putin wants to build an ideal state that will embody and implement the basic 
interests of the nation and the country. If there is a state, there will be a 
country and there will be a nation. There will be happy and well-off people 
in this country. There can be no happy and well-off people (at least of this 
nationality, i.e of all citizens of Russia and not only ethnic Russians in 
this context) without a nation. And a nation cannot exist without a country, 
which, in turn, cannot exist without a state, which alone can guard and 
protect itself from internal and external encroachments. 

Putin regards the state as a watchdog for the country and the nation. 
Consequently, it is also the watchdog of democracy and the market if the 
country has chosen in favour of this form of political and economic polity. 

Besides, Putin, like 19th-century Russian poet Alexander Pushkin, believes 
that the government (i.e the federal authorities) as most European-like both 
in terms of its democratism and in understanding, formulates and defends the 
interests of the nation. 

Everything seems logical, but not quite convincing in Putin's political 
philosophy. This also concerns the realities of contemporary Russia. Many 
feel that Putin is unpersuasive. Some criticize him and others openly brand 
him for it. Putin judges by precedent: Russia's democratic chaos has produced 
something else than democracy; the hand of the market has not so much 
strengthened than destroyed the country's economy, etc. 

Hence, a controllable but not manipulative democracy is needed. Therefore, 
the hand of the market should be guided by one head - not by dozens or 
hundreds of them. One head means power (or the state according to Putin's 
concept). 

Moreover, Putin knows how actively the state interferes in everyday life in 
Western countries (let alone in the thriving countries of the East). Putin's 
critics proceed from two major premises, which are also realistic. 

First, they believe that since they have managed to achieve prosperity within 
the framework of Yeltsin's system, i.e without a strong state, others can 
also do it. As a result, they conclude that the system is correct in 
principle and is just slightly unbalanced. 

Second, they consider themselves to be more European than Putin, let alone a 
state of which he is talking about. 

Putin objects to them (straight in his speech): this state (Yeltsin's state) 
has corrupted the nation and has devastated the country and its people due to 
its weakness and inefficiency. Therefore, hindrances like weakness and 
inefficiency should be removed. Putin did not pronounce the next objection 
although he definitely meant it: you have been made rich and happy by this 
state and its generosity while others have never had and will never have this 
opportunity. Consequently, other people cannot follow your example. As an 
adage goes, everybody is right in Russia but happiness is nowhere in sight. 

Unlike Yeltsin, Putin realizes the acuteness of vital problems facing Russia. 
He can also see all the contradictions and setbacks of the Yeltsin period. 
Putin is extremely purposeful. He is determined to take Russia out of the 
crisis at any cost. The apathy and sybaritism of "the Yeltsin era" are 
passing away. 

Putin is well oriented in the flaws of the state polity that took shape under 
Yeltsin. He seeks to use the voters' goodwill reserve next year to force the 
correction of the previous mistakes. 

Putin demonstrated that his election pledges are not absolute. They end 
wherever effective work ends or whenever a disloyalty to the president's 
strategy is revealed. 

Putin categorically declares his adherence to the basic principles of 
democracy, making one inconspicuous reservation: if that does not contradict 
the restoration of Russia's might and prosperity. 

Putin correctly defines a vital by-side aim of his presidency - to conquer 
bureaucratic leviathans, to bend them to the will of the state, or the 
central power, on the one hand. To increase the level of legal incomes for 
the bureaucrats to prevent them from being tempted into corruption and also 
to have the moral right to punish them for corruption, on the other hand. 

Finally, it goes beyond any doubt that Putin is a staunch supporter of a 
radical market reform in order to settle the country's economic problems once 
and for all. 

Putin is mostly criticized (also in connection with his address to the 
Federation Council) for specific actions. For instance, those, who were 
persuading him into talks with Aslan Maskhadov, do not approve the 
appointment of Kadyrov - a field commander during the 1994-1996 Chechen war - 
as the head of Chechnya's interim administration. 

Or: Putin is discontent with "the anti-state policy" of some of the media. 
But, what he defines as being an "anti-state policy" is exactly the state 
policy, T.V commentator Yevgeny Kiselev says. Simply, the president finds it 
hard to perceive that with his brain of a security agent. 

Another grudge against Putin is his unfair decision to evict the governors 
from the Federation Council. Who can represent the interests of territories 
better than the governors and who can better than them damp the frenzy 
swaying of the Duma and the Kremlin with healthy conservatism? Meanwhile, 
Putin's new phantasmagoric scheme of forming the Federation Council opens the 
way to parliament's upper house to the current governors after their 
senatorial term officially expires. 

Everybody who has been carried away by the struggle against "Putin's 
dictatorship" have immediately forgotten about their own recent critical 
remarks against "the dictatorship of the governors". When several dictators 
fight against one, one should look deeper into the matter: 89 dictators would 
mean pluralism and democracy, while one dictator means a dictatorship. 

Meanwhile, Putin's political philosophy has real flaws, to which Boris 
Berezovsky pointed distinctly in his open letter to the president. It is only 
after this letter that the senators grew bold. In fact, Boris Berezovsky 
seems to have turned into the chief ideologist of an informal party, which is 
trying to harmonize democracy and Putin's state interests in one platform, 
contrary to the governors who draw a distinction between them and democracy. 

Berezovsky is not like the Rightist Forces, who claim that democracy equals 
state interests. He is not like the NTV which has been regarding Putin's 
actions through the mirror of convergence with its own views: what converged 
with its views was good and democratic, while what diverged from its views 
was bad and undemocratic. 

However, Berezovsky is not the pillar of truth. Putin's political philosophy 
has some flaws which have never been mentioned publicly. That concerns 
Putin's political reform in the first place. Its concept and major guidelines 
are positive and logical and are aimed at correcting the flaws of Yeltsin's 
model of state polity. 

But a reform can either be pursued revolutionary, by changing the laws and 
the Constitution, or smoothly by means of amendments and mild corrections. 
The first option will inevitably create tensions, at least among the elites. 
The second way which does not undermine political stability is, by and large, 
more effective. 

Furthermore, fairly speaking about the need to consolidate and increase the 
efficiency of a state, Putin, as earlier noticed, has a kind of ideal state 
in his mind, which is simultaneously effective, fair and humane. But such 
states only exist in schemes or dreams but never in real life. One cannot 
build an ideal state, especially in Russia. Such a goal should not even be 
set. The more so, that it sounds like a utopia for the bureaucrats, and has a 
smack of totalitarianism for the democrats. 

One should be more careful in using terms and expression in general, 
especially if they are pronounced by the president and not the Federal 
Security Service chief. Putin's attitude to "some media" is understandable, 
but it is not at all necessary , and even contra-indicated, to express it 
openly. The president should only praise the press. This is a rule which, in 
fact, has no exceptions. 

This is in form. In essence, the press really has a right to write about 
everything it deems necessary. That can create problems for the power and the 
country. But, on the whole the freedom of speech is of more benefit than its 
restriction. 

Judging from all, Putin understands the difference between a civil society 
and formal democratic institutions like parliament, elections, political 
freedoms, etc. It seems that he does not quite understand or is pretending 
not to understand that both the governors and the oligarchs are participants 
in political activities only in half-true, they often act illegally, they can 
be excessively autonomous from the central government or partially replacing 
its functions. But, on the other hand, the governors and the oligarchs are 
representatives and active members of a civil society, which shares one 
territory with the state but is totally independent of it in everyday and 
non-political life. It is absolutely clear that the Media-Most employees, 
whose well-being depends on Gusinsky rather than the Kremlin, consider the 
attack on his freedom to be an encroachment on their personal freedom. 
Another question is that these employees should understand that if Gusinsky 
and his Media-Most empire claim to be participants in the political life, 
their private lives (let alone their work) fall into dependence on the 
political struggle. 

It is also clear that the governors who are demanding democracy for 
themselves do not want to grant it to the people living in territories under 
their control. They harass and crack down on any manifestations of local 
self-government. Therefore, the oligarchic and gubernatorial autonomies are 
quasi-civilian, but we do not have anything except abandoned people at the 
bottom of society who are independent of the state only because the state 
does not care for them. 

Just as before, Putin did not drop a word about the specific ways of building 
his ideal state and forming a real civil society whose members named "the 
people" are apparently perceived to be his reliable allies. So far, this 
union has not gone father than the negation of the "charms" of Yeltsin's era. 

Of course, the oligarchs and the governors should be put in their places. But 
why losing them as allies en masse? Undoutedly, a considerable part of them 
will always remain feigned allies, but reforms should not only be pushed 
through the Federal Assembly. They should also be carried out. And this is 
where Putin's "ideal state" will have to go into collision with the real 
Bureaucracy, Governors and the Oligarchs who can hardly be convinced or 
defeated by "ideals". 

Putin has proclaimed a wonderful aim of fighting for the nation's survival. 
He also identified the danger - the country's depopulation. Ways of waging 
this struggle is another question. An effective state will not increase the 
country's birth rate. Having proclaimed such an aim Putin failed to set forth 
a state program aimed at increasing the birth rate. In this way Putin 
demonstrated the declarative nature of his statement. 

Putins suggests an effective state as an instrument of quick restoration of 
Russia's might and prominence. Being essential, this instrument is 
insufficient in the first place. Second, by worshiping this instrument and 
its merits, the president is risking to spend two presidential terms on 
perfecting it, and may still not succeed in making it ideal. Meanwhile, real 
politics will continue to be made by conventional methods. 

Delivering his address in the Kremlin in front of the most prominent Russian 
"leviathans", Putin the Goliath made another attempt to fix the boundaries of 
the presidential power. This is normal for a Kremlin's newcomer. Anybody 
would have acted like him in his place. 

Putin's political philosophy scared everybody whom he had intended and not 
intended to scare. In doing so, he assigned a new life meaning to the Yabloko 
party and the Union of Right-Wing Forces which have been hanging in the air 
since the presidential elections. Putin also instilled new inspiration to the 
NTV political programs. The only thing now is to transform the political 
philosophy into specific political deeds. 

But one should bear in mind that only ideas that will be welcomed and 
accepted by society, including the governors, will be a success.


smi.ru Comment: Tretyakov's analysis appears to be thorough and realistic. 
Nezavisimaya gazeta's editor-in-chief seems free from most of the biases that 
haunt the Russian press today and, rather than relying on emotions and 
pre-formed opinions, seeks to provide us with a discription of Putin's 
philosophy that is both true to the facts and well-developed. 

Tretyakov justly mentions most of the pluses of Putin's platform, but, when 
it comes to minuses, he is not always fair. He is absolutely right in 
pointing out that the President should not be expressing his attitude toward 
"some media" publicly. By doing so, he makes himself vulnerable to attacks 
and criticism for "violating the freedom of the press". Yet, pointing out 
that the President in his federal reform has some utopian ideal state in mind 
is not entirely accurate. True, building a state that is simultaneously 
humane, effective, fair and free of corruption may seem awfuly unrealistic, 
but it does not mean that it cannot be made Russia's goal. Putin is pragmatic 
and realizes that Russia, just like any other country, will never be free of 
problems, but he also understands that it is his duty to attempt fixing most 
of these problems.

*******

#7
Olympics-Russia's Sydney winners to get 100,000 dollar bonus

MOSCOW, July 12 (Reuters) - Russia's individual Olympic gold medal-winners at 
the Sydney Games in September can expect a 100,000 dollar bonus, the 
country's leading sports official announced on Wednesday. 

``We had a meeting with President Vladimir Putin on Tuesday where he promised 
our athletes 50,000, 20,000 and 10,000 dollars respectively for a gold, 
silver and bronze,'' Vitaly Smirnov, the president of Russia's national 
Olympic committee, said. 

``In addition, our Olympic committee will pay each individual gold 
medal-winner in Sydney an extra 50,000-dollar bonus. We're also promised by 
the government that this money will not be taxed.'' 

While the 100,000-dollar bonus for an individual gold medal remained 
unchanged from the previous two Games, in Atlanta in 1996 and Nagano in 1998, 
the rewards for lesser medals have been reduced. 

``It wasn't easy for our government to find the funds to pay our Olympic 
medal-winners, taking into account a difficult economic situation in our 
country,'' Smirnov said. 

``But we were able to convince them of the importance of such bonuses to many 
of our top athletes, especially if you know how much money other countries 
are paying their athletes.'' 

Smirnov said his country hopes to win up to 37 gold medals in Sydney. Russia 
won a total of 26 golds in Atlanta, finishing a distant second in the medals 
table behind the United States. 

Earlier this year, other former Soviet republics - Kazakhstan, Uzbekistan, 
Belarus and the Ukraine - approved incentives for their Olympic medal winners 
involving similar amounts of money or free housing for their champions. 

******