August 28, 2000    
This Date's Issues: 4480  4481

Johnson's Russia List
#4480
28 August 2000
davidjohnson@erols.com


[Note from David Johnson:
1. AFP: Moscow TV tower threatens to crash down after blaze.
2. International Herald Tribune: William Pfaff, Humiliation in 
Russia: A Force for Renewal or for Collapse?
3. Chicago Sun-Times: Martha Merritt, Putin Learns Democratic 
Ways.
4. Arnold Beichman: Re: 4477/Suzanne Thompson.
5. Patrick Armstrong: DID THE MUJAHADDIN SINK THE KURSK? THEY 
SAY THEY DID.
6. Washington Times: Arnold Beichman, Probing the depths of Kursk.
7. Euromoney: Ben Aris, DOWNGRADING OLIGARCHS.
8. the eXile: MAKE THEM STOP!!! Can Moscow's Child Psychologists 
Help RAO-UES Keep the Noise Down?
9. John Dabbar: RE: 4477-York/Decline of Navy.
10. Los Angeles Times: Robyn Dixon, Russian Navy Is Adrift in an 
Ocean of Problems. Submarine disaster points up the service's funding 
crisis and the Implications for its fleet.]


*******


#1
Moscow TV tower threatens to crash down after blaze


MOSCOW, Aug 28 (AFP) - 
The world's second-tallest structure, the Ostanskino television tower in 
Moscow, was threatening to crash down in the Russian capital Monday as a 
spectacular blaze ripped through it, knocking out national broadcasts.


There were reports that people were trapped inside the 540-metre (1,780-foot) 
tower despite a rapid evacuation via an emergency staircase, but even the 
Moscow mayor, Yury Luzhkov, who rushed to the scene, could not offer 
immediate answers about what might be going on inside.


Initial reports said that six people were hurt when three elevators in the 
structure -- second in height only to Canada's CN Tower in Toronto -- plunged 
several hundred metres after the fire broke out at around 3:00 p.m. (1100 
GMT).


Another four people -- three firefighters and a female lift operator taking 
equipment up the tower -- were said to be stuck in another, jammed elevator 
330 metre (1,100 feet) up.


But the Moscow Echo radio station reported later that rescue teams had 
managed to get to all the lifts, and they were empty.


Journalists at the scene were offered only scant details of the accident and 
advised to move hundreds of meters (yards) away from the tower in case the 
needle-point structure came crashing down.


"It's theoretically possible that the tower could collapse," said Nikolai 
Saradzhev, head of Moscow's fire department.


Experts voiced more optimistic forecasts, saying they thought the structure 
would withstand the extreme temperatures.


The blaze knocked 12 television stations off the air and disrupted radio and 
television transmissions and emergency medical radio dispatches across the 
country.


An instantly recognizable feature on Moscow's skyline, the Ostankino tower 
began belching fire Sunday evening.


A tourist attraction known for its view of the city, the tower was still 
ablaze early Monday while a rescue helicopter flew above and 40 fire engines 
were on the scene trying to douse the flames.


Reports suggested that a short circuit in the 33-year-old tower caused the 
fire, the Interfax news agency said. But the chief of Russia's FSB security 
service, Nikolai Patruchev, was on the scene shortly after 3:30 p.m.with a 
team to investigate possible sabotage.


A second fire was caused by the free fall of the three elevators, the 
ITAR-TASS news agency reported. 


In a sign of the seriousness of the effects of the television blackout, 
President Vladimir Putin met with Communications Minister Leonid Raman to 
discuss ways to put broadcasts back on the air through reserve antennas, news 
agency reports said.


The fire initially knocked out the broadcasts of only six stations, NTV, 
TV-6, STS-8, M1, TV-Centre and the cultural channel, Kultura.


But shortly afterwards, interruptions started to cut into the main channels 
such as the semi-public ORT and RTR, both of which finally blacked out 
entirely with all other stations at 6:00 p.m. (1400 GMT).


Some Moscow Echo radio station programmes were also off the air.


One official said it could be weeks before regular broadcasting is resumed.


******


#2
International Herald Tribune
August 28, 2000
Humiliation in Russia: A Force for Renewal or for Collapse?
By William Pfaff 
International Herald Tribune / Los Angeles Times Syndicate


PARIS - The Kursk affair has been widely taken in Russian opinion as one of 
those crucial events that suddenly, blindingly, reveal the condition of a 
nation. A reaction is inevitable.


The blundering and dissimulation of Russian naval authorities made a shameful 
contrast to the efficiency of the Norwegian deepwater divers. The maladroit 
response to the tragedy by Vladimir Putin dealt a blow to his new government.


Just after the sinking, ordinary Russians talked about help from the United 
States, Britain or Germany but not from neighboring Norway, a country of 4.3 
million people that is now rich because of North Sea oil but in the past was 
poor.


Humiliation can be a powerful force. The loss of the submarine Kursk and the 
humiliating circumstances that have surrounded it recall events in 1904 and 
1905.


At the beginning of the last century, czarist Russia expanded into the Far 
East with great confidence in its imperial destiny. It occupied the Chinese 
naval base of Port Arthur and was extending the Trans-Siberian Railroad to 
the Pacific and promoting Russian influence in Manchuria.


The expansion clashed with Japan's imperial ambitions in China and Korea. 
Japan only 30 years earlier had been an isolated feudal nation. A high 
Russian military official, warned of trouble with Japan, replied, ''Far 
Eastern affairs are decided in Europe.''


The Russians were wholly unprepared when in February 1904 Japan attacked Port 
Arthur, inflicted serious losses on the Russian ships there and blockaded the 
port. Then the Japanese began transporting troops to the mainland.


Stunned by Japan's success, the Russians ordered their Baltic fleet to 
reinforce what was left of the Pacific squadron. It left in October on a 
course taking it around Africa, beginning what was to become a tragicomedy, 
an ordeal and finally a national disaster.


The fleet was coal-fired and not designed for distant operations. Russia had 
no coaling stations between Europe and the Far East, and simply to fuel and 
supply the fleet caused enormous problems. Port Arthur fell to the Japanese 
while the Baltic fleet was still only off Madagascar, and the Russians nearly 
turned back.


They eventually reached the Far East, sailing for Vladivostok. The Japanese 
fleet intercepted them in the Korea Strait, off Tsushima, on May 27, 1905, 
and proceeded to win what was undoubtedly the most conclusive naval victory 
of all time. Within 24 hours virtually the entire Russian fleet was sunk or 
captured. The Japanese lost three torpedo boats.


This was national humiliation on a grand scale. The defeated Russians were 
forced to evacuate Manchuria and recognize a Japanese sphere of influence in 
Korea.


Disorder followed in European Russia, leading to an episode in which troops 
fired on a crowd of unarmed workers in St. Petersburg who, under a priest's 
leadership, had been marching to the winter palace to petition the czar. 
Strikes and riots followed elsewhere in Russia, with assassinations, peasant 
protests and mutinies in the navy.


The government tried to appease the public by promising a consultative 
Parliament, or Duma. That was not enough. A general strike was called.


More concessions failed to arrest what became a quasi-insurrection. Order was 
restored, but troubles and division persisted for another eight years - until 
August 1914, when Germany attacked.


Russia's humiliations of 1904 and 1905 not only destroyed people's belief in 
the competence of the government and the monarchy, but undermined that 
confidence in national destiny which had underlain expansion to the Pacific. 
The reform-minded Russian intelligentsia were alienated or radicalized by the 
defeat, and by the inability of the reactionary court to produce effective 
reforms. The way was opened for the Bolshevik revolution.


One sunken submarine is not a sunken fleet. Most of the Russian fleet, as it 
existed in the 1970s, has already sunk. Its nuclear submarines rot in Arctic 
waters. Its capital ships rust at their anchorages, taken out of service 
because there is no money for them. Its senior officers live on laborers' 
wages. Its divers have been rented out to industry.


The Kursk episode comes after a 1980s decade in which the Soviet state itself 
sank. It follows the 1990s, when the popular hopes invested in 
democratization and Westernizing reform were betrayed by the incompetence, 
misconduct and personal corruption of those who had taken control of the 
country.


The events surrounding the loss of the Kursk have produced profound emotion 
across Russia. It is just imaginable that Vladimir Putin's government might 
turn that emotion toward national revival.


It also is possible that the Kursk drama will, as after 1905, catalyze the 
desperation felt among the population and feed frustration and national 
self-loathing among Russia's intellectuals and nonstate elites. Russia in 
2000 has yet to emerge from the national crisis that began in 1904.


*******


#3
Date: Sun, 27 Aug 2000 
From: "Martha Merritt" <MerrittML@wwic.si.edu>
Subject: Putin Learns Democratic Ways


David, this op-ed appeared in today's Chicago Sun-Times, if you and your
readers can stand another rumination on the Kursk disaster.


Martha Merritt
Research Scholar,
Kennan Institute/Woodrow Wilson Center
1300 Pennsylvania Ave., NW
Washington, DC 20004
(202) 691-4135


Chicago Sun-Times, August 27, 2000
Putin Learns Democratic Ways
By Martha Merritt
Martha Merritt is an assistant professor of Government at the University of
Notre Dame. She is currently a visiting scholar at the Woodrow Wilson
Center in Washington, DC, where she is writing a book, Democracy without
Accountability? The Paradox of Institutional Reform in Russia.


Russian President Vladimir Putin has at last learned the chief lesson from
the deaths of 118 men trapped aboard the submarine Kursk: honor them or
else. By demonstrating presidential leadership twelve days after the
tragic loss and using words in a nationally televised broadcast
unprecedented for a Russian ruler - "I feel fully responsible and guilty" -
Putin belatedly seeks to emulate the western tradition of accountable
government. 


Citizen-centered politics in Russia nonetheless remain very frail. The
list of the deceased servicemen was published by Russian newspapers only
after being illicitly purchased from a military official. Some of those
who died were top navy brass, some were very young conscripts, but their
sad end illustrated neglect at the highest levels of Russian politics: an
unwelcome reminder of Soviet-era avoidance of responsibility. I worked at
the American Embassy in Moscow in April 1986 during the accident at the
Chernobyl nuclear plant and will never forget the sight of the western and
Soviet news wire machines next to one another that Sunday morning: the UPI
service was spilling paper all over the corridor with reports of the
disaster, while the Tass service next to it sat silent.


Putin has now done better than his Soviet Politburo predecessors, in part
because this time Russian newspapers are pouring on the vitriol. He went
to Murmansk to meet with bereaved families, though fled on Wednesday after
being confronted by furious mothers and the threat of families boycotting
the official ceremony. No one blames President Bill Clinton for the
tragedy when he visits the site of tornado or flood damage, but residents
appreciate the symbolic demonstration of presidential support (generally
followed by financial assistance from federal coffers). More difficult to
handle is a disaster that reflects human shortcoming, including, it seems
likely, the sinking of the Kursk and the failure to request timely foreign
intervention. The Russian military is now offering a one-time payment of
$7,000 - equal to ten years of pay for a submarine officer - to compensate
each family for their loss. 


Western puzzlement over Putin's reluctance to step forward immediately and
lead his mourning country reflects a failure to understand that the gulf
between state and society in Russia is only slowly being bridged by
quasi-democratic elections and a more open media. Johns Hopkins University
Professor Jeffrey Brooks is closer to the mark in his recent book, Thank
You, Comrade Stalin!, as he laments the time-honored tradition of top-down
politics in Russia. Former President Boris Yeltsin "gave" Putin to the
public as his successor like a beribboned present on January 1 of this
year, Russia's traditional gift-giving day, with the implication that it
would be inappropriate to scrutinize him too carefully. Putin took full
advantage of posing for the press but did not engage with his political
opponents because he said he was too busy as Acting President to campaign.


In contrast, accountability requires the politics of performance and
regular submission: performance in public and regular trials such as
elections so that citizens have access and the opportunity to participate.
For all that jaded western observers complain about the vacuous nature of
presidential campaigns, the two American presidential nominees were under
tremendous pressure at their party's respective conventions this summer.
Is Bush sufficiently presidential? Can Gore touch our hearts? Candidates
in established democracies are expected to address voters directly and to
take their concerns seriously. After the election, accountability in
government is assumed to be an everyday phenomenon. As current presidents,
east and west, are now all too aware, failure to demonstrate that they are
serious about earning their keep can make the public very angry indeed -
and offer an opening for their political enemies to attack.


Russian politician Boris Nemtsov, leader of the Union of Rightwing Forces,
calls Putin's conduct "immoral" and said that it would be unthinkable for
British Prime Minister Tony Blair or President Clinton to have continued
his vacation for a week while the fate of servicemen hung in the balance.
The Russian newspaper Moskovskii komsomolets last Sunday captured the
public's anger and frustration with a banner headline, "Who will answer for
the Kursk tragedy?"


At least Russia's citizens have forced their president to step up and
account for himself after 118 of their fellows met a watery grave. Though
their country has a long way to go, accountable government begins with the
demand for it. 


******


#4
Date: Sat, 26 Aug 2000 17:43:37 -0700
From: Arnold Beichman <beichman@hoover.stanford.edu>
Subject: Re: 4477/Suzanne Thompson


Suzanne Thompson's Arizona vetsher with the Russian officers was so lovely.
How I wish I could have been there and heard "pea postoy, krasavitza
maiya....radost na tibya..." accompanied by her sister-in-law's "balalaika." 
What Suzanne has done is to document one of the great paradoxes about
Russia. Its people have created a style of song that is moving and
unforgettable. Its composers from Glinka to Shostakovich are an inseparable
part of our culture, their pre-Bolshevik literature is peerless. Yet they
and their leaders screw up like no other. A Kursk is lost everyday in
post-Bolshevik Russia except this time the event was more dramatic and
tangible. Fine scientists, superb mathematicians--but their leaders
collapse before the reality of democratic governing. Imagine what a
post-Bolshevik Russia might be like if it had some of the genius of the
Swiss where different ethnicities have for centuries enjoyed a profitable
coexistence. 
Arnold Beichman, Hoover Institution


*******


#5
Date: Sat, 26 Aug 2000 
From: Patrick Armstrong <ab966@issc.debbs.ndhq.dnd.ca>
Subject: DID THE MUJAHADDIN SINK THE KURSK? THEY SAY THEY DID


In the plethora of theories about what happened to the Kursk, one
has not received much attention and that is that the mujahaddin (note I
do not say Chechens) did it. As far as I can see there has been only one
reference in passing in the JRL to this. The mujahaddin are claiming
responsibility through Movladi Udugov’s website ­ which, as JRL readers
know, is NOT the website of the Chechen government. I have not seen the
claim made on qoqaz.net, which is the other mujahaddin site.


It is of course both easy and attractive for them to claim such a
thing ­ who can disprove this boast of omnipresence? But one should
judge this claim against their other claims. They adamantly denied any
responsibility for the Pushkin Square bombing and the federal
authorities appear to be starting to see that as a “biznes dispute”.
Generally, what they claim to have happened turns out to have happened
(barring a considerable exaggeration as to effect). As to the apartment
bombings a year ago, their statements were much more ambiguous ­ a point
most of the Western press and commentators either haven’t bothered to
report in their eagerness to damn Russia and Putin or don’t know. (For
example: “The latest blast in Moscow is not our work, but the work of
the Dagestanis.” Interview with Shamil Basayev by Epicentrum news
agency correspondent Petra Prochazkova; place and date not given: Prague
Lidove Noviny 9 September 1999.)


So while the claim given in Kavkaz Tsentr may be a klyukva, it’s at
least worth keeping in mind.


Certainly, if the mujahaddin did do it, a lot of the rather disgustingly
schadenfreude Western commentary about the disaster will have to be
pulped.



Here’s the full text in English from Kavkaz Tsentr (Note capitalised
part) (http://www.kolumbus.fi/kavkaz/english/25_8.htm
Russian text at http://KAVKAZ.ORG/).


"The Chechen trace" exists on Kursk all the same?


The chief of the Russian FSB Patrushev has today made an unexpected
recognition. Onboard Kursk there were two Dagestanis, who served the
interests of a certain commercial enterprise of Makhachkala. As he said,
investigation about these two Dagestanis is now going on. Patrushev did
not give the names of the Dagestanis, referring to the interests of
their nearest. So how many Dagestanis really were onboard Kursk? To this
question the Russian authorities cannot or do not want to answer.


On 19 August late in the evening, as it became known that there is none
alive on the nuclear submarine, THE SUPREME MILITARY COUNCIL OF THE
CHECHEN MUJAHIDEEN CAME WITH A SPECIAL STATEMENT, IN WHICH IT DECLARED
THAT KURSK WAS SUNK AS A RESULT OF THE PURPOSEFUL ACTION OF A DAGESTAN
SELF-SACRIFICING FIGHTER. The Chechen council would not give the name of
the shaheed at his personal request, as he did what he did extremely for
the sake of Allah, not for any worldly purposes. After that some
information started to come up about some relative to a known Soviet
submarine sailor, Hero of USSR Magomed Gadzhiyev, having served on
Kursk. The prime minister of the Islamic government of Dagestan,
Sirazhudin Ramazanov has also spoken to Kavkaz Center that he has some
information about a relative of Magomed Gadzhiyev being shaheed. From
other sources no confirmation of this was received.


EMIR OF THE MILITARY COUNCIL OF MUJAHIDEEN SHAMIL BASAYEV REFUSED TO
GIVE THE NAME OF THE DAGESTANI, ONLY CONFIRMING THAT THE DAGESTAN
SHAHEED IS A REALITY, WHICH THE RUSSIANS HAVE TO CONSIDER. The Chechen
party continues to insist that the destruction of Kursk resulted from a
planned operation, and that the explosion of the submarine was organized
by a Dagestan shaheed. The Russian party denies such and declares that a
collision with certain "unidentified underwater object", damaged Kursk
and caused its sinking. The Americans, Englishmen and Norwegians in turn
speak about 2 powerful explosions onboard Kursk and reject possibility
of any collision. But today it is already clear that there is no
evidence to categorically prove false the Chechen version.


******


#6
Washington Times
August 27, 2000
Probing the depths of Kursk
By Arnold Beichman
Arnold Beichman, a research fellow at the Hoover Institution, is a
columnist for The Washington Times.


In his classic "Russia Under the Old Regime," Richard Pipes poses a
question which in the aftermath of the Kursk tragedy is highly pertinent:
Why in Russia, unlike in the rest of Europe, has "society been unable
to impose on political authority any kind of effective restraints"?
The Kursk tragedy raises a second question: Can the Russia of Czardom,
the Russia of V.I. Lenin and Josef Stalin, change under the new regime of
President Vladimir Putin? Do the Russian people want a change?
Here we are a decade since the overthrow of the Soviet "old regime"
and the newly elected Russian president can get away with arresting and
jailing a media owner whose records are ransacked by armed masked raiders
by saying he knows nothing about it. There is no point in listing the most
flagrant violations of democratic norms —murdered journalists, Duma
representatives and other legislators with no subsequent arrests —
violations that have multiplied under Mr. Putin, first as Boris Yeltsin's
prime minister and now as Russia's president. There is no point listing
them; there will be plenty more because there doesn't seem to be any way to
curb the power-hungry ex-KGB agent and his minions from doing as they
please. Thus far.
The sunken Russian submarine shows the power of President Putin and
his admirals in another way; it's as if they were all back in the good old
days — secrecy above all — not only in the Soviet Union but also in the
time of the czars.
Admittedly, things are a bit better than in those good old days.
President Mikhail Gorbachev took nine days to respond publicly to the 1986
Chernobyl disaster, which was first revealed by Sweden. Mr. Putin took four
days to respond to the Kursk catastrophe from the Black Sea resort of
Sochi, where he was on his uninterruptible vacation. With a controlled
media, Mr. Gorbachev was able to get away with lying about Chernobyl. But
coverage of the Kursk sinking by the semi-free Russian media and a new
phenomenon in Russia, public opinion, made lying difficult for the Putin
regime. Perhaps this new phenomenon may be an answer to Professor Pipes'
question I cited in my opening paragraph.
Contact with the submarine was lost Saturday, Aug. 12, but it took two
days before the admirals publicly admitted the disappearance of the Kursk.
They then refused not only to issue a list of the men aboard (there are
three rotating crews) but they also rejected assistance offered by the
British and U.S. navies to try to save the 118 men aboard.
The Kursk tragedy and the arrogant behavior of Mr. Putin and his
admirals are reminiscent of a tragic episode described in the travel
journals of the Marquis de Custine written in 1839 about what life was like
in Russia at the time of Czar Nicholas I.
Each summer, the czarina gave a great outdoor reception at the summer
palace at Peterhof, some 25 miles from St. Petersburg. Tens of thousands of
people came to this event by carriage or on foot or by sail from St.
Petersburg across the Gulf of Finland. On this year, an afternoon squall
burst over the Gulf. Many of the yachts capsized but no attempt at rescue
was made.
"Today 200 people," wrote de Custine of the tragedy to which he was an
eyewitness, "are admitted to have drowned; some say 1,500, others 2,000. No
one will ever know the truth, and the papers will not even mention the
disaster — that would distress the czarina and imply blame on the czar. . .
. Any mishap is treated here as an affair of state. . . . Here, to lie is
to protect the social order, to speak the truth is to destroy the state."
There was another such incident in the days of the last czar, Nicholas
II. The Moscow Times said Aug. 22 that the Kursk tragedy "clearly has the
potential to be for Putin what the Khodynka Field was for Czar Nicholas
II." On Nicholas' coronation day in 1896, thousands of people were invited
to celebrate at Khodynka Field outside Moscow with free beer and gifts. The
crowd got out of control and panicky and the resulting stampede left 1,400
people trampled to death or suffocated.
"Nicholas and Alexandra," the Moscow Times recalled, "wanted to cancel
the coronation ball, but at the advice of advisers they did not; and even
though the imperial couple toured the field later and did much to help and
comfort the families of the dead, Khodynka came to symbolize the arrogant
czar, who danced at balls while the people died."
So can Mr. Putin's Russia change?

******


#7
Date: Sun, 27 Aug 2000 
Subject: Downgrading oligarchs
From: "Ben Aris" <ben@glasnet.ru>


Dear David,
I spent most of August vox popping oligarchs and top analysts for a piece to
appear in the Euromoney IMF issue. I thought what came out of all these
conversations would be interesting for your readers.
Best Regards
Ben Aris


DOWNGRADING OLIGARCHS


"This is the end of the oligarchs in Russia," Boris Nemtsov, leader of the
Union of Right Forces Duma fraction, triumphantly announced to a room packed
with journalists at the end of July. "The oligarchs are sick of being
oligarchs. They want to be law abiding tax payers."


Yeah, right. And the weather in Siberia is nice. The era of the oligarchs is
over but not because they suddenly woke up and decided to be good guys. It
is true that they are more law abiding now than ever before, but they are
trying to change their stripes is because they had no other choice.


The so-called "oligarch meeting" between president Vladimir Putin and 21 of
Russia¹s leading businessmen on Friday July 28 marks the end of Putin¹s
first phase in his campaign to make Russia great. His enemies have been
subdued and his personal grip on power increased. He has largely
accomplished what he set out to do ­ destroy the Yeltsin system of
government. But the oligarchs were already defeated two years ago.


The meeting ended what the press had dubbed the "war on business," that
kicked off with the arrest of Vladimir Gusinsky in June, one of the seven
classic oligarchs named by Boris Berezovsky in 1997.


It should be borne in mind that Berezovsky invested the term for his own
ends. Even in 1997, when the term came into common use, there were other big
businessmen with political influence, such as Rem Vyakhirev of Gazprom and
Vagit Alekperov of Lukoil. The one thing these classic seven had that other
potential oligarchs didn¹t have was banks.


Berezovsky needed oligarchs as the more power the oligarchs were thought to
have (and they did exercise real political influence) the more power
Berezovsky could assume himself. Part of his strategy was to engineer a self
fulfilling prophesy;
every time any thing significant happened in Russia over the next two years,
Berezovsky was quick to take the credit. The more people believed Berezovsky
wielded huge political power, the more power he actually would wield.


A lot has changed since 1997 and the last oligarch meeting between Yeltsin
and the then-leading ten businessmen. Today the term "oligarch" has become a
misnomer for all, except maybe two, of the original seven.


Nearly all the 21 businessmen at the July meeting were just that ­
businessmen, albeit big powerful ones. None of the businessmen considered to
still have with real political influence with the Kremlin ­ Gusinsky,
Berezovsky, Roman Abramovich of Sibneft or Aleksander Mamut of Sobinbank ­
were there.


The crisis of August 1998 humbled all seven oligarchs; Vladimir Potanin of
Sidanko, Mikhail Khodorkovsky of Yukos and the Mikhail Fridman and Pytor
Aven team of the Alfa Group have been forced to retreat into their oil
companies. Another three have disappeared completely. And only Gusinsky and
Berezovsky still wield any real political influence.


Before the crisis all the oligarchs (except Berezovsky) had political power
as the banks they controlled were rich and the government was poor. The
whole loans-for-shares debacle of 1995 was a way for the government,
desperate for cash, to borrow from the oligarchs. Proof of the power this
money gave the oligarchs was their ability to stick the government with such
an amazingly bad deal.


These days the tables have been turned. Their banks have all collapsed
(except Alfa Bank which remains a bit wobbly), but more importantly the
government no long needs to borrow money and has been running a healthy
budget surplus since March.


One of the places this changing relationship can be seen is in the
distribution of state funds. The use of commercial "authorised" banks to
distribute state money has been replaced with a regional treasury system
that is already working in the six regions with the worst records of abusing
federal funds. It should be expanded to cover all 89 regions by the end of
the year.


With no hold over the government the oil-based oligarchs have lost their
hold over the Kremlin and they are increasingly looking at their businesses
as businesses. The fact that oil prices have remained above $30 a barrel all
year and that it is more profitable to produce than to rob has helped. In
Putin¹s Russia banks no longer wield political influence, but media does.


"Since the president campaign of 1999 media has been transformed into the
main instrument of political power," says Andrei Ryabov, a political analyst
with Carnegie Endowment in Moscow.


The attack against Gusinsky was almost certainly politically motivated
because of his powerful media interest. But it was not the start of an
offensive against the "oligarchs" as a class, which Putin promised earlier
in the year. Nor was it the start of a "war on big business." It was part of
Putin¹s drive to destroy the power centres that grew strong under Yeltsin.


It is still not clear if Putin ordered Gusinsky¹s arrest. The timing was
embarrassing as Putin was in the middle of an important state visit to
Germany at the time. But it is clear that the raids and investigations that
followed over the next six weeks were a combination of the security services
and other organs having a pop at the oligarchs because they could and
business rivals settling old scores. Both Aven and Potanin blame business
rivals for the attacks on their companies.


Putin¹s oligarch meeting was a cease-fire. Putin publicly declared (again)
that the 1995 privatisation¹s would not be undone, and presumably privately
reassured the businessmen that he would bring the organs to heel at the same
time. Even if Putin didn¹t order the war, he deftly turned it to an
impressive show of how much control he has acquired since his inauguration
in May.


The oligarchs were neatly tamed while Putin was in the middle of hard fights
to reform the upper house of parliament, push through a radical tax reform
and an effort to convince the international community he was a man to do
business with. All of this he achieved between May and the end of July.


On July 27, the day before the oligarch meeting, the charges against
Gusinsky were dropped and he immediately left the country. Neither NTV, his
flagship channel, nor the Kremlin have given any explanation as to why the
charges were dropped leading to speculation that Gusinsky has cut some sort
of deal with Putin. A few days after arriving in Spain, Gusinsky applied
for, and received, a Gibraltar residence permit. Go figure.


The last oligarch that is still in the game is Berezovsky who also controls
powerful media interests. Berezovsky finally admitted to the extent of his
control over Russia¹s largest TV station, ORT in the summer. He owns 49% of
the station, having previously admitting to only 8%, and put his
twenty-something daughter on the board of directors in June.


With Gusinsky¹s exit Berezovsky is the most politically influential man in
Russia outside of the Kremlin. He is widely credited with putting Putin in
his current job and the biggest question that Russia-watchers have today is:
how independent is Putin from the "Family," the group of insiders that
surrounded Yeltsin and is head by Berezovsky? For his part Berezovsky has
been kicking and screaming about Putin¹s reforms since June. Is it all for
show, or is the uber-oligarch really in retreat?


It is foolish to write Berezovsky off, but he does seem to be in retreat,
despite his still considerable media holdings, which he is in the process of
consolidating. Potanin explains it thus:


"Berezovsky was good at the time when all the instruments of power were just
laying on the ground," says Potanin in an interview. "Berezovsky was smart
enough to know how take them and put them in the right hands, and give
advice on how to act. But now there are no instruments for Berezovsky or
anyone else to take, as almost all the instruments are in the hands of the
president."


If this is right then Berezovsky has been downgraded to "oligarch, ordinary
class." He still has more influence than the others through his media
holdings, but has lost the power to dictate Russia¹s policy without his
previous access to the Kremlin¹s inner sanctum. The other oligarchs have
also been downgraded to "businessman, first class," who have political power
in all countries in rough proportion to the size of their businesses.


The game is still on, but the first battle was won decisively by Putin.
While there is still plenty of room of corruption and abuse in Putin¹s
Russia if he really follows through on his stated goal of building an
economy based on free market principles ­ and this is still a huge "if" ­
then the political influence of all these men will be reduced further.


******


#8
the eXile
August 17-31
MAKE THEM STOP!!!
Can Moscow's Child Psychologists Help RAO-UES Keep the Noise Down?


Are Russians’ fledgling capitalist instincts equal to a rude challenge by
anti-market forces? Or will industry suffer again when the local
infrastructure suffers a failure of will during a time of crisis? Posing as
Sergei Rubenshtein, an official at Anatoly Chubais’s RAO-UES energy
conglomerate, we tried to find out:


Call to: AOZT “Igrushka”, Moscow toy manufacturer (334-8411):


eXile: Hello.


Igrushka: Hello.


eXile: My name is Sergei Rubenshtein. I’m a public relations officer at
RAO-UES, the power company. Maybe you’ve heard of it.


Igrushka: Of course.


eXile: I have an unusual question. You see, a certain problem has arisen
for us, in Siberia among other places. We’ve been forced to turn the
electricity off in certain areas, including houses where there are a lot of
children, and children’s hospitals.


Igrushka: (silence)


eXile: You are a toy company, is that correct?


Igrushka: (suspiciously) Yes.


eXile: Well, then, I’d like to consult with you on one matter.


Igrushka: What matter?!


eXile: Well, the thing is, when we turn off the electricity, you know, the
children get scared a little...


Igrushka: Uh-huh


eXile: ...and sometimes they can be sort of loud. So my question is, what
kind of toys would you best recommend to calm them down, you know, so that
they could play quietly...


Igrushka: (interrupting) You know what? I’m going to connect you with our
director.


(Director Yelena Ivanova, comes on the phone, having already heard the story)


Ivanova: Basically, for kids of a certain age, you really need entertaining
toys that are also developmental. You’re looking at board games, for
instance. For girls, it should definitely be dolls that come with a lot of
accessories, things that can be put on and taken off.


eXile: Like a Barbie, right?


Ivanova: Right, like a Barbie, but of course with something like a little
furniture set, something along those lines... Of course there are may toy
sets that have come out lately designed around groups of interacting dolls,
as well as toys which instruct children in different things.


eXile: These would be toys for children of what age?


Ivanova: Well, the developmental sorts of toys are generally for children
between three and five. At five they can read already, of course. And it’s
at this stage that we see different kinds of games, for instance games that
combine board play with certain economic themes. These are games which the
whole family can play, and they’re interesting for that reason as well.


eXile: The grownups aren’t as afraid yet, thankfully.


(conversation continues for a few minutes longer; eXile hangs up, then
calls back ten minutes later)


eXile: Yelena Vasiliyevna?


Ivanova: Yes?


eXile: Yelena Vasiliyevna, it’s Sergei Rubenshtein again, from RAO-UES.
I’ve been talking with our people here, and they reminded me of something I
forgot to mention to you. As you know, we’ve turned off the electricity...


Ivanova: Yes, yes.


eXile: And you see, our office in Vladivostok is located right across the
street from a children’s hospital. And the kids are screeching and crying
all day and night, and it’s starting to really get on the nerves of the
people at our office.


Ivanova: Well, yes, they’re provoking you, I understand.


eXile: And I forgot to mention that these toys we need to calm them
down-things like construction sets and board games won’t work, because
these kids are in the dark. They can’t see.


Ivanova: Oh, of course. In that case, you’ll need to stick with just dolls
and soft toys.


eXile: You don’t have any special toys for the dark. Nothing glowing, or
with phosphorescence?


Ivanova: No, nothing like that.


Call to Russian Academy of Education, Psychological Institute (202-88-76)


Vadim Albertovich, child psychologist


V.A.: Of course one can give the children some kind of medicine to calm
them down, so that they are quieter, but these should desirably be, first
of all, medicines made of natural products, and they should be given not so
that the children walk around like zombies, but instead with the aim of
strengthening their overall health. By strengthening them you’re not
necessarily making them more active-on the contrary, these medicines may
have a calming effect.


eXile: Tell me, what about taking another approach-a more physical one, for
instance, involving punishments, so that they’re quieter...


V.A.: Uh... What for?


eXile: Because they’re screaming all the time. It’s really irritating.


V.A.: I don’t know. I just can’t imagine the situation. A child is
frightened, you have to be patient with him.


eXile: I see.


Call to: Municipal School of Social Psychology (308-06-42), Moscow
Committee of Education (MKO)


eXile: Do you have anything like a drug that will calm them down, you know,
so that they slept more deeply, and longer, and didn’t make so much noise?


MKO: Well, you’ve really surprised me.


eXile: Why?


MKO: Your question.


eXile: What?


MKO: Better to turn their lights back on.


eXile: Well, it’s really not in my power to do that.


MKO: (sighs) I know, I understand. No, I don’t want to participate in this
conversation.


*******


#9
From: "John Dabbar" <Dabbar@CPC.Ru>
Subject: RE: 4477-York/Decline
Date: Sun, 27 Aug 2000 


Regarding Geoffrey York's article on the present condition of the Russian
Navy: following are some quotes on sea power which may help readers put Mr.
York's words in historical perspective:


"[The role of the US Navy] is not to acquire command of the sea but rather
to utilise its command of the sea to achieve supremacy on land . . . It is
to apply naval power to that decisive strip of littoral encircling the
Eurasian continent." -- Samuel P. Huntington, 'National Policy and the
Transoceanic Navy', US Naval Institute Proceedings, May 1954 


"A modern warship is not merely a product of major industry, but at the same
time a sample of it...The country with the more developed major industry
enjoys almost a monopoly on the construction of these ships...Political
power at sea, based on modern warships, is not at all exerted directly, but
just the opposite, it is exerted indirectly through economic strength." --
Frederich Engels quoted by Admiral Sergei Gorshkov in "Voenno-Morskie Floty
v Voinakh i v Mirnoe Vremiia," Morskoi Sbornik, December 1972


"When I took office in January 1981, I was appalled by what I found ...
American ships that couldn't sail for lack of spare parts and trained
personnel and insufficient fuel and ammunition for essential training. The
inevitable result of all this was poor morale in our Armed Forces,
difficulty in recruiting the brightest young Americans to wear the uniform,
and difficulty in convincing our most experienced military personnel to stay
on." -- President Ronald Reagan, March 23, 1983


"In the service of a great nation [photograph of a Russian cruiser]" --
billboard, Krylatskoye region, Rubleyovskoye Shosse, Moscow, August 2000


*******


#10
Los Angeles Times
August 27, 2000 
Russian Navy Is Adrift in an Ocean of Problems 
Europe: Submarine disaster points up the service's funding crisis and the 
Implications for its fleet. 
By ROBYN DIXON, Times Staff Writer


MOSCOW--In May, a group of officers from Russia's Northern Fleet 
participated in an exercise that they hoped never would be needed: a 
submarine rescue operation. 
An old, decommissioned submarine was sunk on an even keel, and Russia's 
rescue submersibles went to work. Four attempts to dock with the submarine 
failed, but the official report on the exercise said that it had been a 
success. 
The rescue operation for the sunken nuclear submarine Kursk this month 
was more demanding. The submarine was resting on the seabed at an angle, and 
the weather was bad. Like the exercise, the real rescue failed. 
In the aftermath of the tragedy, Russians are searching for answers to 
why the accident happened and why the rescue failed. Was negligence, poor 
maintenance or funding cuts the cause of the catastrophe? Did 118 crew 
members die because Russia's rescue equipment and training were inadequate, 
despite the navy's insistence that its expertise was equal to that of the 
West? 
The navy's poverty has implications far beyond Russia's borders: Starved 
of funds for a decade, it has dozens of nuclear reactors in its back pocket, 
each one a potential mini-Chernobyl. 
With no evidence as to what caused the Kursk accident, it's too early to 
say whether the financial crisis in the navy since the collapse of the Soviet 
Union was a factor. But President Vladimir V. Putin and Defense Minister Igor 
D. Sergeyev are convinced that it was, as are officers with the Northern 
Fleet. 
The Kursk debacle has focused Putin's attention on the economic wreckage 
of the navy and what kind of fleet it can afford to maintain. At a time when 
even officers' families are going hungry, Putin's goal of reviving Russia's 
naval might seems distant, at best. 
After the disaster, Putin promised extra money for the military and 
announced a 20% pay increase for the armed forces and the creation of sea 
rescue centers. He said that Russia's submarine fleet might be cut from about 
30 vessels to just 10 but that the crew of each would be properly supplied. 
The navy's financial problems are dire. 
The Baltic Fleet owed so much money to the Kaliningrad bread factory 
that the plant refused to supply any more bread last summer. 
In one of the Northern Fleet's great indignities, one of its submarines 
was stripped of its missiles in 1995 and used to transport potatoes from the 
Kola Peninsula to Siberia. 
Theft is common. On Jan. 13, four desperate sailors in Kamchatka, in 
eastern Russia, stole the radioactive fuel on their submarine to sell for 
some quick cash. They were caught and jailed. 
Russian naval officers are paid $150 a month, and sailors receive $50 to 
$90--far less than the average Russian's monthly earnings of $350. Many of 
the navy's top people have left. 


Size of Fleet Has Dropped in Decade 

The navy's fleet has shrunk from its bloated numbers in the Soviet days. 
One thousand vessels were scrapped in the last decade because the navy's 
funding for maintenance and repairs was 10% of what it needed, according to a 
navy report published in December. 
"There has been growing concern as to whether the navy's present decline 
has become irreversible," noted an analysis on the Russian navy in Jane's 
Sentinel, a security assessment journal. "Crews are increasingly losing their 
basic skills. Sea duty for submarines has been cut by a quarter since 1997, 
and for ships, by fully a third." 
Russia's 11 Oscar-II class submarines have to rely on help from cities 
nationwide. 
"The Kursk got its name because the city of Kursk was taking care of the 
submarine, supplying it with food, televisions, videos," said Igor Kudrik, an 
expert on the Russian navy from the Norwegian environmental group Bellona. 
"We are talking about the submarine, which is one of the most important 
vessels in the Russian navy. And a nonstate initiative is supporting it. It 
shows the state is unable to run the fleet." 
To navy families, the shrinking of that branch of the military has only 
underscored how little clout the admirals had in the struggle for funding. 
Many naval vessels cannot put out to sea because they need repairs, and crews 
are often paid late. 
"Our navy is very poor today," said Nadezhda Tylik, who lost her son 
Sergei, 24, on the Kursk. "The Russian navy has been destroyed by numerous 
reorganizations, all of which resulted in the shrinking of the force. The 
best people had to quit. The people who knew how to use the submarines and 
vessels, and who could teach their crews to find a way out of extreme 
situations, all left. I am amazed that submarines are still capable of 
leaving their ports at all." 
Nikolai Konyashkin, 43, senior sublieutenant at the Kursk's base in 
Vidyayevo, near Murmansk, said an officer's life has become a "fight for 
survival. There's no gas in our town. There are no hot-water supplies, and we 
get paid $150 a month for handling nuclear weapons." 
Vladimir Chaikin, also a senior sublieutenant at the Vidyayevo base, 
said officers' families sometimes go hungry. 
"There have been times when I came home after a tour of duty and saw 
that my family didn't have anything to eat," he said. "My wife and I have to 
sit down every month and write down on a piece of paper how we're going to 
spend each kopeck. And we're officers. We're supposed to be the elite of the 
military." 
He complained that the navy's limited funds were often misspent, despite 
numerous reorganizations to trim the fat. 
"There are still all sorts of freeloaders in the navy. You find these 
headquarters, command groups and all sorts of bureaucratic structures that 
devour a lot of money but produce zero result," he said. "As for combat 
officers who actually do the job, our opportunities are severely restricted." 


Crews Often Assembled from Several Vessels 

Russian submarine crews, while in port, are understaffed by about 20%, 
and when they take to sea, crew members are reassigned from other vessels to 
fill the gaps. Among the Kursk victims, at least 12 officers were from 
another vessel, the Voronezh. 
"It's the wrong thing to keep throwing people from one submarine to 
another and then back. But there's simply no other choice," Chaikin said. 
"Obviously, the practice creates tensions in the crew because a submarine 
crew should be a close-knit collective of people who think and act in exactly 
the same way." 
Bellona's Kudrik says one possible cause of the disaster was the use of 
a new, cheaper type of torpedo using liquid fuel. 
According to an article in the official military newspaper Krasnaya 
Zvezda on Aug. 17, the navy had opposed the new torpedoes because they were 
difficult to store and dangerous to handle. 
Analysts say the navy's poverty compromised the rescue operation. 
The first time a Russian submersible managed to approach the submarine 
hatch, it was ordered to pull away because it had old batteries that were 
about to expire after a couple of hours' work. 
One revelation during the Kursk rescue effort was the fact that Russia 
had no deep-sea divers capable of helping. In the 1980s, Soviet divers were 
trained in France to reach depths of more than 300 feet, in order to work on 
the exploration of energy reserves in the Barents Sea. 
One of the divers, Konstantin Argelade, said that high-tech diving 
equipment was bought overseas in the 1980s but that, in the early 1990s, it 
was dismantled and dispersed, and the divers lost the regular experience they 
needed to maintain their skills. 
After the Kursk catastrophe, the navy faces a new problem: a collapse in 
morale not only among ordinary seamen but also among officers. 
"I don't want to serve in a submarine anymore," Chaikin said. "But I'm 
not given the opportunity to get a transfer to the shore. It's becoming 
impossible for me to continue in the service because the conditions are so 
disgraceful. And I can't quit because I have a family to feed." 
For Russia's top naval commanders, Putin had seemed to offer salvation. 
At last, here was a president who grasped the need to reassert Russia's naval 
might in order for the nation to reclaim its place as a real global power. 
In January, navy commander Adm. Vladimir Kuroyedov said Russia would 
retain and repair four nuclear-powered Kirov-class battle cruisers, including 
the Admiral Ushakov, which had been out of action for a decade. A public 
charity campaign was initiated to raise money for its repair. 
In late July, Kuroyedov announced "World Ocean," a plan to rebuild the 
Russian navy over 15 to 20 years and provide a counterbalance to the North 
Atlantic Treaty Organization's naval power. 
He also said the navy would return to its old Soviet playground in the 
Mediterranean--temporarily, at least. The plan was for a flotilla of vessels, 
including the navy's sole aircraft carrier, the Admiral Kuznetsov, the 
Kirov-class battle cruiser Peter the Great, and the navy's newest destroyer, 
the Admiral Chabanenko, to steam triumphantly into the Mediterranean late 
this year in a brash display of Russia's naval might. 


'Blue-Water' Strategy Meant to Send Signal 


Analysts said the aim was to send NATO a signal of Russia's intention to 
maintain a "blue-water" offensive naval strategy, which involves patrolling 
farther from one's own shores in an attempt to keep perceived or potential 
enemies as far away as possible. 
The report on Russia's navy in Jane's Sentinel noted "a pattern of 
increasing Russian naval activity that has seen attack submarines operate in 
the Cold War stamping grounds of the Mediterranean and Eastern Pacific, 
carrying out simulated attacks on U.S. naval forces." 
"According to senior U.S. intelligence analysts, the Russian navy is 
operating in a manner very similar to that of the Soviet fleet during the 
Cold War. Crucially, however, Russian naval strength has seriously declined, 
with only 20 first-class attack submarines in operating condition," the 
report said. 
Just after NATO began its bombing campaign against Yugoslavia last year, 
the Northern Fleet readied the Kursk to go to the Mediterranean. 
According to one Russian naval officer who served on the Kursk at the 
time, the vessel was in the Mediterranean from August to October. His name 
cannot be used because of the risk of serious repercussions against him. 
The Kursk disaster has cast doubt on the navy's recent attempts to 
revive Russia as a global naval power. 
"It's obvious that our presence in the Mediterranean Sea will never ever 
be what it was before. Certainly we can make a voyage, but it's only to show 
everyone that we are capable of doing it," said Vladimir Urban, a naval 
specialist at the AVN military news agency. 
Putin's comments after the Kursk tragedy have cast doubt not only on the 
plans for the Mediterranean exercise but on whether a "blue-water" strategy 
is right for Russia, given the state of its economy. 
Russia's Defense Ministry budget for 2000 is $4.5 billion, compared with 
about $268 billion for the United States. 
In an interview Thursday on the RTR state television network, Putin said 
the only way that Russia's navy can get out of its humiliating position is 
for the military to shrink. 
"Our armed forces should match our needs on one hand and the 
possibilities of the state on the other," he said, adding that the military 
must be "compact, modern and well paid." 
"We have been talking about military reform for how long? At least eight 
years and perhaps a whole 10 years, but there has been little change in this 
area," he said. 
But for the families who lost loved ones on the Kursk, it's more 
important to reform the Soviet mentality of the admirals. 
Vice Adm. Yuri Kvyatkovsky, quoted in the Vlast journal two days after 
the Kursk sank, said the reason that crew members hadn't evacuated the sub 
was because they understood the need to preserve state secrets from foreign 
spies. 
"The main thing to take care of is the preservation of state secrets. 
There are lots of different devices and communications systems on the 
submarine which can be considered state secrets," he said. "It's crucial not 
to lose the submarine." 
Later, when the entire crew was lost and officials were in desperate 
damage-control mode, Defense Minister Sergeyev took full 
responsibility--while insisting that the military made no fundamental errors 
in the failed rescue effort. 
"The old mentality is pretty much alive," said Tylik, the grieving 
mother. "Our government finds it easier to keep its mouth shut, to hush up 
the problems rather than to do something about them." 
Alexei V. Kuznetsov of The Times' Moscow Bureau contributed to this 
report. 


******


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