CDI Russia Weekly-#178 2 November 2001 Edited by David Johnson Center for Defense Information 1779 Massachusetts Ave. NW Washington DC 20036 phone: 202-332-0600; fax:202-462-4559 djohnson@cdi.org The CDI Russia Weekly is an e-mail newsletter that carries news and analysis on all aspects of today's Russia, including political, economic, social, military, and foreign policy issues. With support from the Carnegie Corporation of New York and the MacArthur Foundation, CDI Russia Weekly is a project of the Washington-based Center for Defense Information (CDI), a nonprofit research and education organization. CDI Russia Weekly web page (with archive): http://www.cdi.org/russia/ Visit CDI's web site: http://www.cdi.org Contents: 1. Moscow Times: Pavel Felgenhauer, Putin Flying in Face of Elite. 2. Kommersant: Andrei Ivanov and Oksana Alekseeva, IGOR IVANOV PREPARES PRESIDENTS...for peace in a time of war. Hoping to resolve some old problems and find some new agreements. 3. UPI: Pamela Hess, U.S., Russia preparing new relationship. 4. Russian AVN Military News Agency: Russian experts call for cut in number of nuclear warheads in high readiness. 5. Izvestia: Alexander Khokhlov, SLIPCHENKO: GUIDED MISSILES ARE FUTILE AGAINST TERRORISTS. The terrorist threat and a new form of warfare. 6. AFP: Terrorist nuclear threats focus on Pakistan, ex-Soviet Union. 7. Chicago Tribune: Stansfield Turner, A great nuclear opportunity. 8. THE JAMESTOWN FOUNDATION Prism: Aleksandr Tsipko, WHAT HAS PUTIN GAINED FROM HIS FRIENDSHIP WITH AMERICA? 9. Moscow Times: Matt Bivens, U.S. Closing Eyes to Uzbek Rights Record? 10. RFE/RL: Francesca Mereu, Latvia: Is Russia Still A Security Threat? 11. The Russia Journal: Jim Balaschak, Opportunity knocks for foreign investors in Russia. ******* #1 Moscow Times November 1, 2001 Putin Flying in Face of Elite By Pavel Felgenhauer After the Sept. 11 terrorist attacks, Russia and the United States have obviously become closer than they were before. But will this alliance hold? Is this a truly long-term affair, or just a marriage of convenience for the purpose of fighting a common enemy in Afghanistan? It seems that President Vladimir Putin may be indeed trying to change Russia's long-term foreign and defense outlook. Putin has announced he is closing one of the last vestiges of Russian global might: a strategically important eavesdropping outpost in Cuba. Russian military intelligence, or GRU, is today still keeping a special communications brigade of some 1,600 men in Cuba, despite the Cold War being over for more than a decade. This brigade intercepts hundreds of millions of radio, telephone and other electronic communications — government and private — from the United States. The staff of the brigade works to decipher and sort out important information from the mass of data gathered. The GRU has other electronic listening posts on Russian territory. Planes and satellites also gather electronic intelligence data. However, the Cuban base was always considered a jewel in the crown of Russian military intelligence. Satellites simply cannot gather all the important signals. The United States, with the most advanced electronic eavesdropping program in the world, does not rely fully on satellites. Last spring, a mid-air collision between a U.S. spyplane and a Chinese fighter caused a serious international crisis. But the United States still continues to fly electronic intelligence-gathering missions to foreign shores and keeps listening posts in foreign countries. After the collapse of the Soviet Union, the Russian military secured the ongoing use of the base in Cuba. The lease cost $200 million a year, but a deputy defense minister told me in 1993 that this was a sound investment. The Cuban base gathered not only military-related data, but also lots of commercial and private secrets. Moreover, the $200 million was paid not in cash, but in barter: military equipment, spare parts for Soviet-made armaments, oil, etc. Some of these barter goods could only be sold to other customers as scrap. Russia was not bound to pay any rent until 2004 for its naval and air base in Vietnam, which will be closed in January 2002, at the same time as the base in Cuba. The official Kremlin spin that the overseas bases are being closed to economize and free up more money for other defense projects is not taken seriously by anyone in Moscow. In 2000, Russia reportedly had a trade surplus of some $46 billion. The Kremlin could surely find the money to pay for the Cuban base, if it really wanted to. The Cuban government, which received some shared intelligence information, has strongly protested the closure of the Russian eavesdropping installation and has accused Moscow of trying to appease Washington. Many influential figures in Moscow are also openly questioning Putin's decision. Military leaders, diplomats from the Foreign Ministry and people connected to the intelligence community are for the first time freely challenging Putin's decisions. There is open talk of "grave mistakes" made by Putin in his attempt to move closer to the West, of the Kremlin unilaterally surrendering strategic assets, and of sacrificing Russia's true national interests in a fatal attempt to integrate with the corrupt West. The opposition is almost unanimous and Putin's authority may be challenged even more brazenly, if, as it has been rumored, Moscow and Washington are on the verge of finding a formula to jointly abandon or seriously modify the 1972 ABM Treaty, in order to allow the United States to develop missile defense. If Putin, along with the base in Cuba, abandons the ABM Treaty and with it Moscow's opposition to NATO enlargement, while continuing to support the war on terrorism, Russia may indeed become a close long-term ally of the West. Ongoing economic reforms that have already drastically improved the local business environment make Russia ready to undergo a much needed revolution of modernization by absorbing a lot of Western capital and technologies. To make this come about, Putin will have to replace a large part of his elite and intimidate the rest into total submission. Show trials, arrests and the ouster of high officials are inevitable, as has happened many times before in Russia when the country made a sudden U-turn and the existing elite was dismissed. Pavel Felgenhauer is an independent defense analyst. ******** #2 Kommersant November 1, 2001 IGOR IVANOV PREPARES PRESIDENTS ... for peace in a time of war Hoping to resolve some old problems and find some new agreements Author: Andrei Ivanov, Oksana Alekseeva [from WPS Monitoring Agency, www.wps.ru/e_index.html] FOREIGN MINISTER IGOR IVANOV FLEW TO WASHINGTON YESTERDAY TO COMPLETE PREPARATIONS FOR THE RUSSIAN-AMERICAN SUMMIT SCHEDULED FOR NOVEMBER. THE KREMLIN HOPES THAT THE JACKSON-VANIK AMENDMENT WILL BE ABOLISHED AND THE UNITED STATES WILL RECOGNIZE RUSSIA AS A STATE WITH A FREE MARKET ECONOMY. The agenda of Ivanov's talks with his opposite number Colin Powell includes abolition of the Jackson-Vanik amendment to the law on trade (it connects the most favorable regime status for Eastern bloc states with freedom of immigration). The amendment was adopted at the demand of American human rights activists in 1974. The US Administration began consultations with the Congress over abolition of the amendment with regard to Russia two days before Ivanov's visit. The Kremlin hopes that the amendment will be abolished and the United States will recognize Russia as a state with a free market economy. Missile defense and America's withdrawal from the ABM treaty of 1972 will be on the agenda as well. Ivanov was quoted as saying not long before the visit: "A key element of global strategic stability, the ABM treaty should remain untouched while strategic cooperation between the United States and Russia is discussed." US Secretary of Defense Donald Rumsfeld has announced more than once that Washington does not plan to withdraw from the treaty for the time being. The United States has even cancelled some planned tests of the national missile defense system. On the whole, however, Washington's position remains unchanged - the treaty is outmoded. As the US Ambassador Alexander Vershbow put it the other day, Moscow and Washington need "a common approach in the matter of a transition from the ABM treaty to a new strategic stability agreement." All the same, Russia wants guarantees from the United States that this alliance is not strictly temporary, and that the United States will not turn its back on Russia as soon as things get better. A letter was sent to President George W. Bush yesterday by Russia's Chief Rabbi Berl Lazar. A member of the presidential council for cooperation with religious organizations, Lazar asks Bush to facilitate abolition of the Jackson-Vanik amendment, adopted to a considerable extent in response to the Soviet policy of state anti- Semitism. Here are some excerpts from the letter: "Episodes of anti-Semitism have become less frequent thanks to the new administration under President Vladimir Putin. His government firmly stands against those who incite anti-Semitic violence. Whenever such episodes occur, the authorities' response is instant, and those responsible are brought to account. In the light of Putin's goodwill acts with regard to the Jewish community in Russia and all ethnic minorities, in the light of removal of all restrictions on free emigration and his wholehearted support of the Jews' right to emigrate and travel abroad and have dual citizenship, in the light of his desire to improve the life of the Jewish community, I urge you, Mr. President, to put Russia on the list of the states enjoying normal trade relations with the United States." ******* #3 U.S., Russia preparing new relationship By PAMELA HESS, Pentagon correspondent WASHINGTON, Oct. 31 (UPI)--U.S. and Russian officials are preparing for a series of meetings in Washington in anticipation of a summit between their two leaders in November that may mark the start of a new "strategic framework" to replace old Cold War treaties, a State Department official said Wednesday. "We have conducted intensive consultations of the new strategic framework" since the G-8 summit in Genoa, Italy, in July, said John R. Bolton undersecretary of state for Arms Control and International Security. Defense Secretary Donald Rumsfeld travels to Moscow this weekend, and Russian Foreign Minister Igor Ivanov is coming to Washington Wednesday night. Lower-level officials are meeting in Russia Wednesday to discuss the ongoing campaign in Afghanistan, which is being bombed by U.S. and British planes in retaliation for the Taliban regime's refusal to hand over Osama bin Laden, the man Washington says was behind the Sept. 11 terrorist attacks that killed some 5,000 people. Top on the list of issues at the Washington-Crawford, Texas, summit between President Bush and his Russian counterpart, Vladimir Putin, will be whether and by how much to reduce each nation's nuclear arsenals. Bush wants to reduce the U.S. arsenal of about 7,000 nuclear warheads to as low a figure as possible consistent with national security. For financial reasons, Russian leaders have privately nursed hopes of reducing their arsenal to around 1,500, well below the START III target of 2,000. In the past, Ivanov has publicly linked arms reductions to the maintenance of the 1972 Anti-Ballistic Missile Treaty. Bush, however, is determined to scrap that treaty, either by mutual consent or by withdrawing from it unilaterally, in order to deploy a missile defense system to protect the United States. But Tuesday, the U.S. ambassador to Russia indicated the impasse over ABM could be shifting. "I am more confident that we will find a mutually advantageous solution to the issue of missile defense because we now have a stronger commitment to meeting new threats together," Ambassador Alexander Vershbow said in Moscow. Indeed, the United States has adjusted a number of ballistic missile defense tests that would have violated the strictures of the treaty, delaying one that had been scheduled to take place while Putin was visiting Washington and Bush's ranch in Texas. "We don't want people to think we are playing fast and loose with the treaty," Bolton said. What form the framework takes still remains to be worked out, but may not be binding on both parties like a traditional treaty is, Bolton said. "If you are talking about a new relationship ... you don't necessarily have to follow the same structures and recordations" of the Cold War, Bolton said. "It might well be advantageous to both sides not to be locked into very detailed commitments. We are open as the form. "What we are really interested in now is the substance of the agreement," he told reporters at a breakfast in Washington. The new strategic framework is expected ultimately to encompass new arrangements on the issues of nuclear arms and missile defense as well as counter-terrorism and keeping weapons of mass destruction out of the wrong hands -- known in diplomatic circles as counter- and non-proliferation. The United States regards Russia as one of the world's worst proliferators of both ballistic missile technology and advanced conventional weaponry, particularly to Iran. Iran is on the U.S. State Department list of state sponsors of terrorism. In early October, Moscow agreed to sell Tehran conventional arms worth $300 million a year, reversing a 6-year de-facto moratorium on such sales. Since 1995, under pressure from the United States, Russia had declined to trade in with Iran. "The activities the Russians have been engaged in the proliferation area are things we think overall contribute to strategic instability in the world," Bolton said. "What we would like to see is adherence to the same kind of restraints we show." Bolton said U.S. negotiations have told Russia, "'Iran is a lot closer to you than it is to us.' That argument has had resonance in the Russian government." The United States is not offering any inducements to Russia to get it to restrain its proliferation, he said. "I think this is a more mature relationship. It is not a quid pro quo. It is a question of them acknowledging ... self-imposed restraints," he said. ******** #4 Russian experts call for cut in number of nuclear warheads in high readiness Russian AVN Military News Agency Moscow, 31 October: Russia and the United States have 6,000 strategic weapons each, a report entitled "Reduction of combat readiness of Russian and US nuclear forces is a way to step down nuclear threat" says. The report was elaborated by the armament non-proliferation and reduction sector of the Political and Military Forecast Centre under the Russian Academy of Sciences' Institute of Global Economy and International Relations. A deputy director of the institute, Vladimir Baranovskiy, a co-author of the report, said a major share of nuclear munitions was permanently in a high degree of combat readiness. It means that Russian and US intercontinental ballistic missiles (ICBMs) can be launched several minutes after the order, and ballistic missiles deployed on patrolling submarines 15 minutes after the order. The total number of Russian and US warheads in a high degree of combat readiness makes 3,500 to 4,000. The report's authors believe that stepping up combat readiness of strategic nuclear forces and extending the term of nuclear strike authorization is the most obvious way of preventing a mistake or incorrect interpretation of data from missile launch early warning systems. Reduction of combat readiness would also contribute to the strategic nuclear weapons cut without affecting the containment potential, Baranovskiy stressed. The report will soon be forwarded to Presidents Vladimir Putin of Russia and George W. Bush of the United States, as well as to interested federal and legislative bodies of the two nations. The research director of the Strategic Nuclear Forces Centre under the Russian Academy of Sciences, Vladimir Dvorkin, told Interfax-Military News Agency that "a consolidated agreement and decision of all nuclear nations, not only Russia and the United States" would be a real contribution to the problem's solution. The parties have even discussed the possibility of reducing the number of Russian and US nuclear warheads in a high-degree of combat readiness to 300 to 350 units, as in the inventory of France, Great Britain and China, Dvorkin said. "This measure is possible, but it will have no effect on theoretical risks of accidental launchers if a part of nuclear missiles is in the combat-ready mode," he said. "The making of such consolidated decision is possible as a small step towards strengthening of general trust, but it will not have a serious effect at once," Dvorkin stressed. ******** #5 Izvestia November 1, 2001 SLIPCHENKO: GUIDED MISSILES ARE FUTILE AGAINST TERRORISTS The terrorist threat and a new form of warfare Author: Alexander Khokhlov [from WPS Monitoring Agency, www.wps.ru/e_index.html] AN INTERVIEW WITH MAJOR GENERAL PROFESSOR VLADIMIR SLIPCHENKO, PROMINENT MILITARY ANALYST, WHO SAYS AN ERA OF UNPRECEDENTED WARFARE HAS BEGUN. THIS ASYMMETRIC WAR IS GOING TO FOLLOW THE RULES ENFORCED BY INTERNATIONAL TERRORISM, AND MAY EVEN SPREAD BEYOND THE TERRITORY OF THE UNITED STATES. Question: What kind of wars will we face from now on? Vladimir Slipchenko: They will not be waged by armies or weapons systems. Actually, the first such war is already underway. Terrorism delivered an unprecedented strategic strike... America is paralyzed with fear. Question: What's new? Terrorism has been around forever. Vladimir Slipchenko: There is more to it than a strategic terrorist act. The fact is that an entirely new form of asymmetric warfare has been attempted by international terrorism. I'm not talking about a revolution in warfare; rather, this is the international terrorists' response to the revolution in warfare seen in the no- contact wars of the past decade. I mean the wars in which the Americans forced Iraq and Yugoslavia to their knees with air-strikes alone. Question: How do these new wars differ from classic warfare? Vladimir Slipchenko: It takes just a few non-military strikes to accomplish some truly amazing results. Question: Who do you think planned and organized the attacks against the United States? Vladimir Slipchenko: Trapped in Afghanistan, as he has been in recent years, Osama bin Laden could not have organized this alone. Entire countries and international organizations, with substantial financial backup, could have been behind the terrorist attacks in the United States on September 11. Question: Why then did the United States find the "enemy" so fast and begin air-strikes? Vladimir Slipchenko: The United States got confused, not knowing what to do. Any further delays were impossible because American taxpayers, voters, would have viewed it as weakness by the administration and the president. It is also perplexing that powerful secret services of the United States and other states missed preparations for such a war. It only reinforces the assumption that this asymmetric war is going to follow the rules enforced by international terrorism, and may even spread beyond the territory of the United States. Question: Do you think the terrorists have achieved what they set out to achieve? Vladimir Slipchenko: Undoubtedly. The unexpected methods and forms of violence in the terrorist attacks are evidence of substantial preparation, something only a general staff is capable of. The war was arranged and executed in such a manner that virtually all world media all but complimented international terrorism on its successes. Question: Are there any blind spots left in the terrorist attacks? Vladimir Slipchenko: I cannot understand the idleness of the NORAD system. Or the inaction of the Pentagon's air defenses. Was it treason? Question: Your opinion of the American retaliatory strikes? Vladimir Slipchenko: They are primitive. The methods used are copied from contact or no-contact warfare manuals. It turns out that nobody in the world, or in the United States for that matter, has worked out any effective anti-terrorism methods. It means there are no guarantees that similar attacks won't be undertaken against storage facilities with nuclear fuel or spent nuclear fuel, nuclear power plants, or chemical plants. Neither can we rule out the possibility of the use of chemical or biological weapons against civilians. Question: How do you think global terrorism should be fought? Vladimir Slipchenko: Adequate asymmetric methods are needed in the asymmetric war forced on the international community. The American example shows plainly that conventional weapons or high-precision weapons systems are useless against global terrorism. Effective defense from asymmetric global terrorism requires immediate creation of an entirely new "shield" and "sword". The "shield" may imply establishment of a "civilian branch of the military service", for want of a better term. That means forces of civilian defense of a state against all sorts of terrorist acts and emergencies, both natural and technocratic. This "branch of the service" needs a reliable automatic control system, its own special and financial intelligence in the country and abroad, counter- terrorism forces and means, rescue services, etc. In my view, this structure should control all visa, passport, and customs control services, air transport, and air defense in peacetime. Besides, I think NATO in its current form should be disbanded in order to fight an effective war on terrorism. The Alliance has outlived its usefulness. Instead of NATO, a new alliance - counter-terrorism alliance, European alliance - is needed, including Russia. This new alliance should use entirely new forms and methods of combating terrorism. What really counts is that we should abandon old political cliches and initiate a coordinated and effective war on terrorism, which has already proved itself an inventor of asymmetric warfare. ******* #6 Terrorist nuclear threats focus on Pakistan, ex-Soviet Union AFP November 1, 2001 Pakistan could become a source of hardware for Islamic terrorists planning to build a nuclear bomb, while impoverished scientists from the former Soviet Union could provide the required know-how, the UN's atomic watchdog fears. The International Atomic Energy Agency (IAEA), due to discuss nuclear terrorism in Vienna Friday, has called on the world's nuclear powers to urgently review the safety of nuclear material in their arsenals. The IAEA message was sent to the five formally declared nuclear powers -- China, France, Russia, Britain and the United States -- but also to India, Pakistan and Israel, all of which are either known to possess nuclear weapons technology, or believed to. Pakistan, which staged tit-for-tat nuclear weapons tests with its long-time foe India in 1998, is struggling to contain public discontent at its government's support for US-led attacks on neighbouring Afghanistan. "Security is good as long as there is a government in control," said IAEA head Mohamed ElBaradei. "Hopefully I think they are under proper control," he said, referring to Pakistan's nuclear facilities. But he added: "If there were a breakdown in the civil order of course you have worries. But so far I think they are under proper control." While stressing that the IAEA's mandate does not specifically cover atomic weapons, ElBaradei called openly on all states with nuclear capabilities to tighten security. "I hope that all of these countries are urgently reviewing the safety and security of their nuclear weapons," he said. In a report prepared for the Vienna meeting Friday, the IAEA said it was worried by reports that Osama bin Laden's al-Qaeda network, which has support in Pakistan, has sought to buy nuclear technology. ElBaradei added: "Any such materials in illicit commerce and conceivably accessible to terrorist groups is deeply troubling." The IAEA added that, even if terrorists got their hands on Pakistani nuclear hardware, they would not necessarily be able to use it. "There are safety measures with weapons to be activated in case of theft and I'm sure the Pakistani program is no different," he said. In terms of expertise to put a bomb together, the former Soviet Union could provide a source, said an IAEA report. "When the Cold War ended, thousands of highly knowledgeable scientists and engineers previously involved in the Soviet Union's weapons program were laid off or found their incomes drastically reduced. Overall ElBaradei played down the chances of terrorists being able to produce a nuclear bomb, pointing out that it would require 25 kilograms of high enriched uranium or eight kilograms of plutonium. "While we cannot exclude the possibility that terrorists could get hold of some nuclear material, it is highly unlikely they could use it to manufacture and successfully detonate a nuclear bomb. But he added: "Still, no scenario is impossible." "Another legacy of the Cold War are the disturbing reports, albeit unsustantiated, of missing nuclear weapons," the report said. ******* #7 Chicago Tribune October 31, 2001 A great nuclear opportunity By Stansfield Turner. Retired Adm. Stansfield Turner, a former director of the CIA, is the author of "Terrorism and Democracy" It could have been much worse. On Sept. 11, the terrorists could have detonated a "small" nuclear weapon inside the World Trade Center. Not only the two towers and their adjacent buildings would have collapsed, but many more to a radius of more than a mile; perhaps 100,000 people would have lost their lives immediately and many more over time as a radioactive cloud would sail downwind depositing lethality hundreds of miles away. Preventing nuclear weapons from falling into the hands of rogue states and terrorists groups have been only an academic matter for most Americans. It now must become a matter of grave concern. If we are to lead the world away from further proliferation of these weapons, we must drastically reduce the roughly 12,000 nuclear warheads we now have. We, the most powerful nation by far, cannot insist on weaker nations forgoing these weapons entirely if we need anything like 12,000 of them. Fortuitously, President Bush and Russian President Vladimir Putin have agreed to look at reducing nuclear warhead inventories in the range of 1,500 to 2,000 each. That would be considerable progress, but with two reservations. The first is that the numbers 1,500 and 2,000 do not include all warheads. Under the traditional counting rules, each side may retain any number of "spare" warheads, that is warheads not mounted on delivery vehicles, plus any number of smaller "tactical" warheads. Setting a number of 2,000 for instance, would likely result in an inventory of 5,000 total warheads. The second reservation is that just pledging reductions to 1,500 to 2,000 is not enough. The U.S. can demobilize only about 2,000 warheads a year and the Russians probably less. We need to demonstrate a greater sense of urgency. Only if we do can we persuade the world that we are serious about downgrading nuclear weapons and that, hence, others do not need them. Even more important, one likely source of proliferation is Russia. Nuclear components and even weapons there are inadequately guarded. And we just cannot forecast what economic and political conditions within Russia will be like in the years ahead. It is very much in our interest that as many Russian weapons as possible be demobilized as soon as possible in order to reduce the risks of weapons being stolen, sold, fired accidentally, or fired by rogue officers without authorization. We should certainly, then, agree to the 1,500 number the Russians proposed and set a date of only 18 months for neutering all other warheads. We could do that by separating the warheads from their delivery vehicles and removing them to storage sites at least 300 miles away to await demobilization. Doing this in 18 months would take a major effort, as sufficient storage space may not exist. Concrete bunkers on remote military bases are all that is needed. Each side would invite the other to place observers at the storage sites. Thus, any moves to return warheads to their delivery vehicles before they are demobilized would be detected. This process, known as "strategic escrow," would be a big step forward, but not nearly enough. We have no conceivable need for 1,500 ready warheads and we definitely do not want an unstable Russia sitting on any more of these than we can talk them down to. Thus a second step we should take is to engage the Russians in negotiating a treaty to carry both sides to 750 ready warheads. At that level, whether we really need it or not, we would want the assurance of a treaty with provisions for verification. We have found over the years that such treaties are painfully slow to negotiate. We should, then, commence these negotiations almost simultaneously with the discussions on going down to 1,500 ready warheads. Finally, at the point of 750, we would need to deal with the other six nuclear powers, all of which are believed to have less than 750 warheads each. Surely the present crisis has focused our attention on the grave dangers of nuclear weapons in the hands of Pakistan and India. It is in everyone's interest that all nuclear weapons of these six other powers be neutered by being placed in escrow. A third simultaneous negotiation should be started with that objective, plus a reduction of all nuclear arsenals to some number like 200 warheads. This could lead to a world in which, although there would be eight powers with nuclear weapons and all others without, there would be no weapons immediately ready to fire, and there would be international observers to warn of any preparations to fire. These three steps are a big order. The World Trade Center and Pentagon bombings tell us the world faces a great challenge. As a result of those bombings, however, we are witnessing an unprecedented cohesiveness of the responsible nations of the world. We need to take advantage of this and move rapidly to ward off the most ominous threat terrorists could pose. ******* #8 THE JAMESTOWN FOUNDATION Prism A monthly on the post-Soviet states October 2001 - Volume VII, Issue 10, Part 3 WHAT HAS PUTIN GAINED FROM HIS FRIENDSHIP WITH AMERICA? By Aleksandr Tsipko Aleksandr Tsipko is senior associate at the Russian Academy of Sciences' Institute for International Economic and Political Research and a columnist for Literaturnaya Gazeta. After the Republican victory in the U.S. presidential elections in autumn of 2000, many experts forecast a rapprochement between Russia and the West. Their optimism was reinforced by a whole raft of weighty arguments. Both Putin and Bush Junior came to power on the same wave of conservative patriotism, at a time when the need for firm national authority was particularly keenly felt. Both leaders stand for commitment to the traditional values of the state, family and religion. See how Putin, like Bush, uses any occasion he can to stress his commitment to religious traditions. And it should not be forgotten that it has ultimately always been easier for Soviet leaders to find a common language with Republican presidents than with Democrats. Look, for example, at the friendships struck with Nixon and Reagan. In just the same way that the Americans tired of the liberal missionary zeal of the Clinton administration and Madeleine Albright, the Russians grew weary of the reforming zeal of their own domestic democrats. The new regime in Russia and the Bush administration have both propelled men in uniform, products of the army and security forces, to the forefront of political life. Even during the Cold War, Russian and American generals were known to have no trouble finding a common language, based on mutual understanding. And as early as in Ljubljana, it could be seen that these objective elements of rapprochement were having their effect, that Putin and Bush too were finding a common language, and that their psychological make-up had common foundations. Interviewed at Ljubljana, Bush said several times that he trusted Putin above all because he was a patriot, committed to his family and to his country. AN UNEXPECTED PACE Even so, Putin has pushed his way into the Western community, dragging Russia behind him, at a much greater pace than we in Russia had expected. And this is chiefly because of the tragedy of September 11. It is not only that, confronted with this crisis and asked point-blank where Russia stands, Putin was obliged to take the side of the civilized Christian world. On top of this, since we already consider the task of tackling international terrorism to be on our own national agenda, western and Russian interests in this issue are very closely linked. This is all the more so since the autumn of 1999, when Russians were the first to fall victim to terrorist attacks against civilians, in Moscow and Volgodonsk. It is significant that there is not a single serious political party in Russia, nor any serious political force, who will speak out openly in favor of bin Laden's extremist organizations. Joining the antiterrorist coalition has been made easier by the fact that U.S. leaders have from the very outset stressed that the struggle against Islamic terrorism is neither a struggle with the Arabs, nor a struggle between the Christian and Islamic worlds. This interpretation of the situation has been of the utmost importance for Russia, 20 percent of whose population is Muslim. While supporting American operations in Afghanistan, we are certainly not declaring ourselves to be the enemies of Islam or Islamic civilization, particularly in view of the fact that, given certain domestic considerations, we decided not to participate directly in the action in Afghanistan, limiting our role instead to one of assisting the operation. The state of the world since the terrorist acts on New York and Washington has clearly given a new legitimacy to our own antiterrorist operations in Chechnya. In reality, our struggle for Russia's territorial integrity and the battle against extremism and separatism in the Caucasus needs to be seen as part of a worldwide struggle against extremism and terrorism in all their forms. It was clear that in standing side by side with the United States in its time of trouble, we could expect a better appreciation of our own problems and a more objective assessment of the efforts of our army to safeguard Russia's integrity. Since our entry into the antiterrorist coalition, it is noticeable that Western leaders have spoken publicly on several occasions in recognition of Russia's territorial integrity. And it should be appreciated that, since the start of US military operations against Afghanistan, Putin has been given a free hand to take more effective measures to deal with the terrorists in Chechnya, particularly as the Chechen rebels rejected his proposed peace plan, which gave them a seventy-two-hour deadline to lay down their arms in return for a general amnesty. So Putin is now fully entitled to give the go-ahead for a complete blockade of Chechen territory, without which it will be impossible to neutralize the rebels. To achieve this, it is proposed to divide Chechnya into zones between which communication should be cut off during military operations. At the same time it will be necessary to put a stop to road movements throughout Chechnya, whether by imposing direct bans, confiscating vehicles or cutting off fuel supplies. Introducing a curfew will, of course, be essential. Only when these measures are taken, according to the military, will they be able to deal effectively with the terrorists without sustaining civilian losses. The blockading of Chechnya's four mountainous regions achieved to date is only the first step towards achieving this aim. It was also important for us that the United States, in turning to Russia for military assistance, showed that it respected our national worth, talking to us as to an equal partner and a world power. Recent world events have shown conclusively that no serious geopolitical problem can be resolved without Russia's participation, and that we can no longer be cast in the role of repentant student of democracy which we were landed with in 1991 after the collapse of the Soviet Union. In many respects, the rapprochement between Putin and the West has helped accelerate change in the moral and political situation in the world in the aftermath of the tragedy of September 11. The fact that security problems have come to the fore for the West, and that it now needs to strike a balance between freedom and the need for personal and public safety, has prompted it to draw closer to our country. The key thing is that since the collapse of the Soviet Union and the profound economic, moral and political crisis caused by the shock therapy, we find ourselves in the same state of depression and anxiety as the West is now experiencing. It is therefore very easy for us to understand American feelings, but now at last the Americans will also begin to understand us, and to understand that the problems of human life cannot be reduced to issues about the rights of sexual minorities or the right to participate in presidential elections. THE NEW CIRCUMSTANCES Here it is important to recognize that in recent weeks the West and Russia have been moving simultaneously towards each other, and that the question of security is our common concern. Under these new circumstances, it was vital for Russia to affirm that she is and has always been a European power, an inalienable part of the landscape of European civilization. The fact is that Russia, by virtue of its history, is closer in spirit to conservative, traditional Europe than to the neo-liberal Europe of the "greens" or various other exotic minorities. It was no coincidence that, in his Bundestag speech, Putin alluded to the indissoluble links between Russia's history and that of Germany, and referred to the close ties between Russia's pre-revolutionary ruling family and the royal houses of Germany and the rest of Europe. This was a way of declaring our "European-ness" without forfeiting our status. Putin's current active role in European and world politics, both personally and as Russia's President, is having a positive effect on Russia's internal political situation. It is important to recognize that Putin's clear and outspoken identification with Europe and the European way forward has both reinforced his legitimacy as leader and increased his popularity in Russia. This was not what might have been expected. After all, Gorbachev and Yeltsin were castigated by the Russian people for their own excessive rapprochement with the US and the West, which was seen as damaging to the country's independence and autonomy. Yet Putin has only increased his authority and popularity by becoming 'Bush's friend'. Putin now has the opportunity to drop the populist policies he was formerly obliged to adopt in order to curry favor with the supporters both of the nationalist Communist Party and of the pro-Atlantic, pro-American Union of Right Forces (SPS). Paradoxically, now that he has taken an overtly pro-Western stance, Putin is able to adopt a more independent and considered political agenda with respect to Chubais, Gaidar and the SPS, who have latterly been trying to blackmail the President by accusing him of abandoning western democratic values. It should not be forgotten that Yeltsin carried out numerous market reforms, notably a program of rapid privatization, and sought to win over the reformers not so much because he was guided by the interests of the country, but because he wanted the West to like him and wanted to appear a "friend of democracy." Meanwhile, having become one of the popular leaders of the international democratic community, Putin no longer needs to find intermediaries between Russia and the democratic world, or to make token moves of the sort that have in the past cost Russia so dear. It should be noted that since the tragedy of September 11 in New York and Washington, general anti-American sentiment in Russia has diminished significantly. In this respect, we are approaching a situation similar to that of 1991, when there was a unique opportunity for a rapprochement between our two peoples. Interestingly, according to a recent television poll, over 60% of the population supports the American and British bombing of Afghanistan. This is because the retaliatory operations against the terrorist infrastructure in Afghanistan are regarded by a majority in Russia as consistent with our own national and state interests. It is also linked to the fact that the Taliban movement represents a threat to our own national security, both as the main source of drugs entering Russia and as a breeding-ground for religious extremism in the Central Asian republics of the former Soviet Union. The people of Russia were also aware of links between the Taliban and the Chechen separatists. We are hopeful therefore that the military operation in Afghanistan will also result in a weakening of the position of the Chechen terrorists. It is worth noting that, since Russia has joined the antiterrorist coalition, Putin has also had a freer hand in his dealings with the "family." He clearly no longer needs to fear either being "exposed" by Berezovsky or being blackmailed by Gusinsky. In recent weeks, Putin has begun to take action against the family's financial backers, Abramovich, Mamut and others. Fresh rumors have begun to circulate that Putin has decided to get rid of the chief "family supervisor," Aleksandr Voloshin. Thus it may be said that Russia's active involvement in the antiterrorist coalition and her rapprochement with the West have brought about a striking convergence of the interests of the civilized world with the interests of Russia and also with the personal interests and ambitions of our president. ******* #9 Moscow Times November 1, 2001 U.S. Closing Eyes to Uzbek Rights Record? By Matt Bivens Special to The Moscow Times TASHKENT, Uzbekistan -- As Mirza Khalmohamedo, a short, thickset man in his 50s, stood outside the courthouse and talked of his son's torture, his relaxed manner was jarring. He could have been remarking on the day's pleasant weather, or on the schoolchildren walking past, and not recounting how police alternated beatings and salt rubdowns on his 27-year-old son, Khidhir. "They tied him naked to a table and sodomized him with a bottle," he said, and finally offered a sign of emotional involvement: a barely perceptible shake of his bald head under its square Uzbek cap, which may have indicated disgust; an ever so slight I-can't-believe-it-either shrug. Since March, Khidhir has been serving a 12-year sentence for association with a non-approved religious group; his father was at the courthouse again this week to follow the trial of Khidhir's older brother, who is facing the same charges. Stories like these -- and there are thousands of them -- are being re-evaluated in light of a "qualitatively new relationship" between the United States and Uzbekistan, announced three weeks ago in Tashkent by Uzbek President Islam Karimov and U.S. Defense Secretary Donald Rumsfeld. Uzbekistan has agreed to provide an air base from which U.S. forces could send planes into Afghanistan; the United States is promising as yet unspecified amounts of cash, and has agreed to defend Uzbekistan from fuzzily defined future foes. Karimov ended that Oct. 5 press conference by pouncing enthusiastically on a startled USA Today reporter in cowboy boots, shaking his hand and praising America. U.S. officials have been equally complimentary, and over the weekend, the State Department handed Karimov another triumph: It released its annual report on international religious freedom, and failed to list Uzbekistan, Turkmenistan and Saudi Arabia as "countries of particular concern." All of those countries are described by the White House as allies in U.S. President George W. Bush's campaign against international terrorism. Had they been listed as states that deny their people religious freedoms, they could have faced U.S. diplomatic criticism or even economic sanctions under the 1998 International Religious Freedom Act. "Clearly, the administration doesn't want to offend key allies in the coalition through excessive truth-telling," said Tom Malinowski, Washington advocacy director for Human Rights Watch, in a press release. "By not designating Uzbekistan a 'country of particular concern,' the administration missed an easy opportunity to show that the war on terrorism cannot be a campaign against Islam." The State Department recognizes that Turkmenistan has harassed its citizens for their religious beliefs, and that it is also the only post-Soviet state to actually confiscate and destroy mosques and churches. For good measure, Turkmen President Saparmurat Niyazov last month also outlawed all opera, ballet and theater, noting that the "semi-nudity" of ballet offended the strong morals of his people. As to Saudi Arabia, where Christians are forbidden to conduct any form of public worship, State Department spokesman Richard Boucher conceded last week that "there is essentially no religious freedom" there. But perhaps most striking is the omission of Uzbekistan. The State Department report acknowledges that Uzbekistan has committed "abuses against many devout Muslims for their religious beliefs," including torturing them. International and local rights activists say there are already more than 7,000 "independent" Muslims in jail, none of whom stands accused of advocating or participating in any sort of violence. Rights groups have documented the systematic and horrific tortures of such people, both pretrial and post-sentencing, and even harassment of their extended families -- a policy endorsed by President Karimov, who warned two years ago that "the fathers who have raised [perceived enemies of the state] will be brought to account together with their children." Nor has it slackened since the Americans arrived. Not two weeks after Karimov and Rumsfeld announced their new honeymoon relationship, Uzbek police returned Ravshan Haidov's body to his family on Oct. 18. They explained that they'd arrested him the night before as a rogue Muslim, but he'd had "a heart attack." Those who viewed the corpse of the 32-year-old father of two say the neck was broken, one leg was broken below the knee and there were bruises everywhere. Haidov's 25-year-old younger brother, police added, was still in custody, in a hospital. Officially, this is all done in the name of battling Islamic fundamentalist terrorists. But rights groups say the policy of arbitrary arrests, extrajudicial killings and systematic torture has done more to manufacture terrorists than to bring them to heel. The first known major terrorist act was a series of Tashkent car bombs in 1999 that killed 16 and wounded more than 100. But persecutions of thousands of non-violent Muslims goes back for years here, and often has gone hand-in-hand with persecutions of pro-democracy or anti-Karimov political movements. It is in this context that Acacia Shields, a Human Rights Watch researcher in Tashkent, worries about the vague new security guarantees from Washington. "President Bush said we'd make the distinction that [America is pursuing] a war on terrorism, not a war on Islam," says Shields. "But the Uzbek government has proven time and again it's not able to make that distinction. "So now we have security guarantees. Are we talking about protecting [Uzbekistan] from the Taliban or the IMU [Islamic Movement of Uzbekistan]? If so, fine. But my fear is that the Uzbek government will turn to the United States and say: Help us in countering our 'internal threat.' And that means: Help us continue this horrific campaign against peaceful independent Muslims." Eighty percent of Uzbekistan's 24 million people are Muslims, and many worship in state-approved mosques, where the government's Spiritual Board certifies imams and vets their sermons. But citizens who have even the slightest association with non-approved peaceful Muslim organizations -- whether that is possession of a single leaflet from such a group, or passing association with relatives or friends who once attended the wrong mosque -- have been getting from 12 to 20 years in jail. Many report that in jail they are beaten if they even look like they might be praying. Until now, one of the few brakes on this has been the U.S. State Department, which has quietly supported some Uzbek rights activists with money and computers, and has brought behind-the-scenes pressure on Tashkent to ease up. American pressure has over the years been credited with freeing prominent human rights activists who say they were framed as extremists to silence them, and with persuading Tashkent in 2000 to let the International Committee of the Red Cross have access to prisoners in Uzbek jails. Without Western pressure, rights activists say Uzbekistan will continue to churn out stories of broken lives like that of Kabul Makhamov, a 51-year-old professor who teaches automobile engineering, and another of the parents standing forlornly outside the Tashkent court house. Makhamov says his 27-year-old son was arrested because "he went to the mosque." He says his son was held for 43 days without a lawyer, and confessed after security officers tore out his fingernails and inserted needles in their place. He says his son renounced that confession in court as the product of torture only to be given six years by a judge who replied, "as long as it is written, it is so." Makhamov nevertheless believes that President Karimov would stop such abuses if he only knew of them. "The president doesn't know," he said firmly. ******* #10 Latvia: Is Russia Still A Security Threat? By Francesca Mereu NATO's further enlargement is expected to proceed at next year's alliance summit in Prague. Among those nations seeking entry are the three Baltic countries, which generally view NATO membership as a chance to move away from Russia's sphere of influence. But in Latvia, some politicians are beginning to soften on the issue. While right-wing officials are still pushing to escape the domination of their so-called "big neighbor" to the east, some liberal Latvian politicians no longer see Russia as much of a threat. Riga, 1 November 2001 (RFE/RL) -- Last month (4 October), Bulgaria hosted a summit of heads of state from Eastern European countries hoping to join NATO. The Baltic nations of Lithuania, Estonia, and Latvia are among those countries aspiring to membership in the security alliance. In Latvia, the issue of NATO membership has been receiving its fair share of attention in the Latvian-language media. Most media outlets appear optimistic that the country will benefit from continued NATO enlargement, and that Latvia -- by joining -- will only succeed in reinforcing its security and forever ensuring its independence from Russia. Lawmakers in Latvia agree that NATO enlargement will bind Riga to an alliance of democratic countries that share and defend common ideals. But if many of them look at NATO membership as indispensable to ensuring Latvia's independence and security from Russia, others on the left are softening their thinking. They believe Russia's journey down the path of democracy means that it simply is not the threat it once was. Antons Seiksts is a Saeima (Latvian parliament) deputy for the centrist Latvia's Way party and the chairman of the Saeima Committee for Human Rights. Seiksts says Russia must come to terms with its history if it wants to be trusted. "Since Russia is unable to look at its history objectively, neutrally, it cannot understand the reason why Latvia is so eager to join NATO. Our big neighbor never promised that it wouldn't have claims towards us and the land of the Baltic Sea countries." Seiksts points out that Russia hasn't apologized for Soviet leader Josef Stalin's treatment of the ethnic Latvian population. Seiksts says that many people in Latvia were accused of being potential Nazi allies and deported to Siberia. This, he says, "is a wound that still hurts." When Czarist Russia collapsed in 1917, Latvia, Lithuania, and Estonia restored their independence from Russia and signed a peace treaty in 1920 with the Soviet Union. According to the treaty, the Soviet government recognized the independence of the Baltic countries and renounced all rights of sovereignty over Baltic territory. In 1940, however, the Soviet army invaded and occupied the Baltic countries, installing a new Soviet-controlled government. Seiksts remembers the historic event and says that because of it, it is impossible to trust Russia again. "Is it possible to trust a neighbor of this kind? Soviet Russia on 11 August 1920, promised that it wouldn't have any claims over our country. A peace treaty sealed that promise. But 20 years later, [Soviet Russia] occupied our country. Taking into account this historic event, my party -- a centrist party -- always asks itself, 'Where would we be safe?' And the answer is under NATO's protection." The left-wing Popular Harmony party's program contains three basic elements: the reconciliation of domestic policy, the merging of individualism and solidarity, and the necessary improvement in relations with Russia. Janis Jurkans is the party's leader and the former foreign minister of the first Latvian government following the collapse of the Soviet Union. Jurkans says the terror attacks of 11 September have altered 21st-century security arrangements, resulting in new security alignments that no longer resemble the Cold War model. But he points out that there are still people living in Latvia in accordance with past prejudices. "There are many people in Latvia who still live [with] a historic hangover. For many people of the old generation, of course, it is very difficult to understand that there is no more a Soviet Union, that today Russia is a strategic partner of the United States and that today Russia has joined the world in its fight against terrorism." Jurkans says Latvia has to join the Northern Atlantic Treaty Organization in order to feel joined to the countries of Europe. But he points out that Latvia will only be secure with a truly democratic Russia as a neighbor. "The advantages [of joining NATO] for Latvia would be to live in a security atmosphere in Europe and in the world. NATO today is not what NATO was one year or two years back. So today we have to speak about the new arrangements and how they would look like and who will be included or would be excluded. My political understanding is that Latvia could be really secure, provided that it lives next to a democratic Russia." Jurkans says Russia is on the path to full-scale democracy and notes that neither the Latvian nor Russian democracies are without flaw. "I understand that Russia is as new a democracy as Latvia is. I understand Russia's and our democracies are incomplete. But there are all the trappings of a democracy developing in those countries. The main thing is that we live next to a friendly neighbor." Jurkans believes that, after the events of 11 September, Russia is not as worried as it once was about Latvia joining NATO. But he believes it is still crucial for NATO and Russia to build a good relationship. "Russia is a strategic partner of the United States. I don't think Russia cares much about [Latvia] being in NATO or not. If the relationship between Russia and NATO will be hostile, that could create problems and Russia would have to strengthen its borders with the Baltic countries. That will not [be] good to our economy, Russia's economy, and to the overall atmosphere." Russia has consistently opposed the enlargement of NATO to include the Baltic states. But in Brussels last month (3 October), Russian President Vladimir Putin said that if the alliance becomes a political, rather than a military, organization, and if Russia were to "feel involved in such processes," it would reconsider its opposition to expansion. ******* #11 The Russia Journal October 26-November 1, 2001 Opportunity knocks for foreign investors in Russia By JIM BALASCHAK (The writer is chairman of AmCham in Russia and a partner in charge of consulting for Deloitte & Touche C.I.S.) For the American business community, now is the time to start investing in Russia. The Communists are no longer a force, the Yeltsin system of oligarchs controlling the government has been dismantled, and President Vladimir Putin is further consolidating power through the broad coalition of centrist parties in the Duma. The spring session of the Duma passed 140 bills, which is more than any session since its creation. In face of market realities, the government took practical steps this year to back and enact market reforms, and this can be seen as a vital signal to investors to return to the Russian market. These new laws covered, to mention a few key areas, tax, pension and legal reforms, a new labor code, laws on currency control, money laundering and investment, and at last a start on banking regulation. Of course, we are all greatly pleased by the reduction in the corporate profit tax from 35 percent to 24 percent. Are all the reforms perfect? No, but we have a momentum in the right direction, demonstrating that the administration’s policies are more than idle talk. Economic and Trade Minister German Gref has been busy as well, and real transformation is beginning to take place in the state-owned monopolies. The move to break up and privatize state assets reaffirms the pragmatic, steady course pursued by the Putin team. Putin has approved long-term restructuring and privatization plans for RAO UES, one of the world’s largest power systems, and MPS, the railways monopoly. Moreover, the government is slowly starting to exert its control over Gazprom, the state-owned company that is a government within a government and dominates the Russian economy. The appointment of Alexei Miller as president of Gazprom is a positive sign, and I believe we can see Gazprom added to the list for reform next year. The economic program submitted by Gref almost two years ago is well under way and is proceeding better than expected. Currently, the land code is sitting on the president’s desk for signature. This has been the most controversial of all the measures, and the fact that it has proceeded is noteworthy in itself. Although it does not deal yet with farmland, the mere reality that land can be bought and sold in Russia is monumental, and Gref plans to submit legislation on farmland early next year. Of course, the Communists opposed land reform emotionally, but were not a factor. Work also continues on judicial reform, and the Federal Securities Commission is issuing new guidelines on corporate governance. For all the criticism of Central Bank head Viktor Gera-shchenko, he has done fairly well at managing liquidity and the money-supply growth in the period since the August 1998 financial crisis. Through ruble-strenghening policies (taking into account inflation), and using deposits and bonds as a substitute for open market transactions, the Central Bank has managed the money supply with not too much restriction, matching the continued improvement of the internal economy. In addition, the bank has built up nearly $40 billion in hard-currency reserves – or 300 percent more than three years ago. The Federal budget for 2002 is going through its final changes, and it appears that 2002 will again result in a balanced budget for the third straight year running, although the surplus next year will be smaller than this year. The only troubling factor here is that on the spending side next year there seems to be less strict control. But it does demonstrate that reduction in personal (Russia has a flat personal tax rate of 13 percent) and corporate tax rates leads to more compliance and more revenues; and tax revenues again exceeded government targets this year. So where are we now? Economic performance in 2001 will see GDP growth of about 5.5 percent after growth of 8.3 percent in 2000. The effects of the structural "bounces" due to the devaluation of the ruble in 1998 and the export growth due to high commodity prices have run their course. We are at another stage of development of the Russian economy. Domestic consumption and internal demand continue to become a larger part of the GDP. Because of this internal position, external factors are becoming less influential on the Russian economy. The near-term outlook is for continued and sustained growth, most importantly since the internal market economy has developed. While the decline in the 1990s was due to the destruction of the old system, a real market has emerged today where there are choices, demand/supply decisions are made and capital is free to move. Capital flight has been reduced and barter is now less than 5 percent of trade. So what should the budding foreign investor do? To get started, you need to learn as much as possible about the environment – including guidance in the legal framework – for operating in Russia. The environment is, and will continue to be, difficult for the near term. Bureaucracy and corruption exist. Learn as much as possible from your contacts, partners, and distributors. Do your homework, understand your market and speak with those with experience and a deep understanding of Russian business culture. There are numerous investment prospects in Russia, and the window of opportunity is currently wide open. *******