CDI Russia Weekly-#109

7 July 2000

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 funding

from the Carnegie Corporation of New York, 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. AFP: Putin committed to Chechen campaign, blames lax discipline for casualties.

  2. Moscow Times: Pavel Felgenhauer, DEFENSE DOSSIER: Potemkin

'Anti-Terrorism'

  3. AFP: Russia ready to reduce nuclear warheads, Putin tells

Hiroshima.

  4. Global Beat Syndicate: Joseph Cirincione and Joshua Hanson,

The Incredible Shrinking Russian Nuclear Force.

  5. Interfax: RUSSIAN COMMANDER IN FAVOUR OF OWN ANTI-BALLISTIC SYSTEM.

  6. Jamestown Foundation Monitor: RUSSIA'S LATEST SURPRISE: AN INVESTMENT BOOM and CAUSES: LESS CONSUMPTION, SMALLER DEFICITS--AND LOTS OF "USELESS" CAPACITY.

  7. Boston Globe: Marshall Goldman, Putin Goes Back to His Roots.

  8. Rossiyskaya Gazeta: Russian S-400 'Will Be Best Defensive Weapon in World in Next 20-50 Years' 

  9. BBC MONITORING: US AMBASSADOR TO RUSSIA UNVEILS EMBASSY BUILDING, SAYS SPY SCANDAL OVER.

  10. BBC MONITORING: RUSSIA WILL NOT MEET ITS CHEMICAL WEAPONS OBLIGATIONS - OFFICIAL.

  11. Moscow Times: Peter Ekman, COMMENT: When It's Your Own Fault you Got Killed.

******

#1

Putin committed to Chechen campaign, blames lax discipline for casualties

MOZDOK, Russia, July 6 (AFP) -

Russian President Vladimir Putin stressed his commitment to the

anti-terrorist operation in Chechnya early Thursday after calling an urgent

meeting to discuss Russia's casualties.

"Many of the losses could have been avoided in Chechnya with better

discipline, professionalism and responsibility," Russian television showed

Putin as saying during a late-night meeting in Mozdok, North Ossetia.

Putin reminded the top military and civilian officials that they should

"strictly and rigorously" carry out orders issued by Defence Minister Igor

Sergeyev, private NTV television showed.

At the meeting with Sergeyev were Security Council Secretary Sergei Ivanov,

Interior Minister Vladimir Rushailo and the military commander for the North

Caucasus, General Gennady Troshev.

Putin conceded that the process of returning order to the republic was

"difficult and multi-layered" but reaffirmed his commitment to stamping out

the rebels.

"We are completely convinced that if we do not stop this seat of terrorism

and extremism in Chechnya, then we will be faced with it again elsewhere in

the country," he said.

The current conflict was sparked last August when Chechen fundamentalists

broke into neighbouring Dagestan declaring the creation of a united Islamic

state.

Describing the meeting as "principled, open and honest", Putin thanked the

Chechen population for "restoring the good reputation of the Chechen people

by helping in the freeing of hostages at the cost of their own lives".

"Russia cannot permit the Chechens to be mocked any longer or allow the use

of the territory as a beachhead for attacks on other territories of the

Russian Federation," Interfax quoted him as saying.

"There will not be a return to this again. This is our land, these are our

people. We are obliged to bring order to the republic. This can and

definitely will be done," he affirmed.

Also attending the meeting were Akhmad Kadyrov, head of Chechnya's pro-Moscow

administration, the Kremlin's representative for the Caucasus, General Viktor

Kazantsev and various heads of Russian republics surrounding Chechnya.

Putin said the Chechen leadership was faced with two complex problems -- the

battle against crime and rebuilding the economy.

"Destroying the bandits is only half the job," he said.

"The Chechen people have been living in violent conditions for a long time

and they need our support. We have to work together in the interests of

Chechnya and the whole of Russia."

*******

#2

Moscow Times

July 6, 2000

DEFENSE DOSSIER: Potemkin 'Anti-Terrorism'

By Pavel Felgenhauer

Just a week ago the military commander in the North Caucasus, General Gennady

Troshev, announced that the war in Chechnya was practically over. Today,

after a series of spectacular Chechen attacks that left more than 100

servicemen dead or wounded, Troshev's "end of war" declaration has been

exposed as a gross delusion.

Actually, the day Troshev made his statement it seemed to be only somewhat

exaggerated. Russian control of Chechnya appeared all but complete. The newly

appointed head of the pro-Moscow administration, Akhmed Kadyrov, announced

that "important" Chechen warlords were ready to lay down arms. The resistance

in turn looked inept, fractured and unable to fight back effectively. But

when the rebels did hit back, it turned out that Russian forces were not

ready to defend their own barracks against a suicide terrorist driving a

truckload of explosives.

The authorities have been saying for months that the war in Chechnya is an

"anti-terrorist operation," that Chechnya has become a haven for

international terrorism and that Chechen rebels are supported by radical

Moslem terrorist groups. But in their field operations in Chechnya, Russian

forces have acted as if they did not believe their own government's

statements.

Suicide truck bomb attacks have been for years a trademark of radical Moslem

terrorists. In 1983, 63 U.S. Marines were killed by a truck bomb in Lebanon.

Israeli military headquarters in southern Lebanon were later also destroyed

by a suicide bomber. In 1996, a U.S. military residence complex in Saudi

Arabia was demolished by a truck bomb, killing 19 servicemen. After a series

of small car bomb attacks in Chechnya last month, Russian troops should have

been ready to meet the suicide truck bomb threat. But they were not.

Up to now, the Chechen rebels have in fact mostly refrained from using

genuine terrorist tactics. Unruly Chechen warlords in the past have been

involved in kidnapping and smuggling, in extortion and in selling illegally

produced gasoline. But at the same time they have pretended to run an

"independent" Chechen state, equal to any other UN member nation, with a

regular army, a police force and so on. Chechen warlords promoted themselves

to be divisional or brigade generals and would call their guerrilla posses

"regiments" and "brigades." When the Russians invaded last September, the

Chechen warlords tried to fight as a regular army, not as a clandestine

terrorist cabal.

The ruthlessness of the Russian offensive broke the conventional Chechen

defense. Without tanks, guns and war planes the rebels did not have a chance

to win a regular battlefield victory. But the Russian conquest of Chechen

territory turned out to be self-defeating.

Russian troops call the Chechen fighters "Czechs" in the same fashion as U.S.

soldiers nicknamed the enemy "Charlie" during the Vietnam War. But if the

real Czechs refrained from violence for more than 20 years, waiting for the

Soviet proxy regime to collapse before they staged their 1989 "Velvet

Revolution," the Chechens will not bide their time under an occupation. Too

many civilians have been killed; too many homes destroyed; too many war

crimes committed; there is too much hatred today in Chechnya f enough to

recruit scores of suicide bombers.

Defense Minister Igor Sergeyev has already dismissed the latest Chechen

attack as an act of desperation. But the truck bomb explosions were well

coordinated. Wounded Russian soldiers say that in Argun their wrecked

barracks came under Chechen mortar and sniper fire for more than an hour

immediately after the truck bomb exploded. Such a combined attack was

obviously not an act committed by some small fringe group. The Chechen

resistance seems to be an organized, motivated force that in the future can

be expected to use a combination of terrorist and "conventional" guerrilla

tactics against Russian forces.

Chechen spokesman Movladi Udugov claims that there are today 500 dedicated

suicide bombers ready to deliver death and destruction all over Russia.

Udugov's numbers are most likely exaggerated, but the threat is real. Russian

forces in Chechnya are today fortifying themselves against truck bombs, but

in Moscow alone there are hundreds of military and governmental targets

almost fully open to possible future terrorist bomb attacks, while the highly

undisciplined, rampantly corrupt Russian police and security forces are not

ready at all to deal with a real f as opposed to a propaganda-invoked f

terrorist threat.

Pavel Felgenhauer is an independent, Moscow-based defense analyst.

*******

#3

Russia ready to reduce nuclear warheads, Putin tells Hiroshima

MOSCOW, July 7 (AFP) -

President Vladimir Putin has promised the mayors of the Japanese cities

Hiroshima and Nagasaki that Russia is committed to reducing the number of its

nuclear warheads, ITAR-TASS reported Thursday.

"We are firmly committed to gradual and comprehensive disarmament by the five

leading nuclear powers," the Russian leader wrote in a letter addressed to

mayors Tadoshi Akibe and Itte Ito, according to the Kremlin press service.

"Russia is ready to consider reducing its nuclear arsenal to 1,500 warheads,"

said Putin.

The five established nuclear powers are Britain, China, France, Russia and

the United States.

Putin expressed support for nuclear-free zones being set up around the world,

saying "Russia is a signatory to most international agreements on the

creation of such zones.

"We also support efforts towards new regions of nuclear non-proliferation

being created on the Korean peninsula, in the Middle East, in Central and

Eastern Europe, and in Central Asia," he said.

The mayors of Hiroshima and Nagasaki -- the two Japanese cities to be razed

to the ground by US atomic bombs in 1945 -- had written to Putin in May after

Russia ratified the 1996 Comprehensive Test Ban Treaty, which had earlier

been rejected by the US Senate.

Putin referred to US insistence on pursuing a plan to build a National

Missile Defence (NMD) shield which would violate the key 1972 Anti-Ballistic

Missile Treaty.

Russia has repeatedly appealed for the preservation of this treaty, which is

"a cornerstone of strategic stability and is an indispensable precondition

for the reduction of nuclear weapons," he said.

"Unfortunately, our efforts would be shattered if America decided to deploy

the NMD," said Putin, who had earlier threatened to rip up all arms control

agreements in the event.

The United States was due to carry out a third testing of the NMD shield on

Friday.

Russia and the US agreed to conduct negotiations on the strategic arms

reduction treaty, START III, on the basis of reducing their warheads to

2,000-2,500 each.

However, Moscow has called for even deeper cuts, suggesting a ceiling of

1,000-1,500 warheads, which US military leaders have rejected.

On August 6, 1945, the US B-29 bomber Enola Gay dropped the "Little Boy"

atomic bomb on Hiroshima, killing 140,000 people by the end of that year.

A plutonium-239 bomb, almost twice as powerful, was dropped on Nagasaki three

days later. Japan surrendered six days after that, ending World War II.

*******

#4

Global Beat Syndicate

The Incredible Shrinking Russian Nuclear Force

By Joseph Cirincione and Joshua Hanson

Joseph Cirincione is Director of the Non-Proliferation Project, and Joshua

Hanson is a consultant for the Project at the Carnegie Endowment for

International Peace.

June 29, 2000

WASHINGTON -- The rationale for the United States keeping thousands of

nuclear weapons on hair-trigger alert is decreasing every day. Whether by

treaty or unilateral action, President Bill Clinton could agree today to

dramatic nuclear arms cuts for one simple reason: Russia's forces are

declining rapidly. Economic and physical limitations will reduce Russia's

strategic nuclear weapons from thousands to hundreds over the next ten years.

The START II treaty limits each side to 3000-3500 deployed strategic

warheads. In 1997, Clinton and former President Boris Yeltsin agreed that

the next treaty's limits should be 2000-2500 warheads. Now, Russia is

proposing even deeper reductions, to 1000-1500 warheads. Why? Because,

absent a sudden and costly military buildup, that is the likely future size

of Russia's strategic forces.

In 1985, the Soviet Union deployed 10,000 strategic nuclear weapons. Today,

Russia has fewer than 6,000. By 2010, it will likely have just over 1,000.

The size of Russia's future nuclear arsenal depends primarily on two

factors: the production rate of its new missile, the SS-27 Topol-M, and the

attrition rate for its submarine and bomber fleets.

Russian intercontinental ballistic missiles, or ICBMs, have operational

lifetimes that rarely exceed 20 years. Without proper maintenance, a

missile's lifetime may be as little as 10 years. Although sub-systems, like

batteries and gas reservoirs, are relatively easy to repair, major

components like rocket engines are simply too difficult and costly to

replace. Compounding Russia's maintenance problems is the fact that key

Ukrainian manufacturing plants have closed. Given that the last Soviet-era

ICBM was deployed in 1991, it is anticipated that few if any of these older

models will be operational by 2010.

Ten years from now, the SS-27 will likely be the only deployed ICBM in the

Russian arsenal. Russian leaders originally planned on producing 30-40 of

these missiles annually. But only 20 have been deployed over the past two

years. Even assuming Russia is somehow able to slowly increase the rate of

production to 20 missiles a year, it would still be able to field only

about 200 ICBMs by 2010.

Meanwhile, Russia's ballistic missile nuclear submarine (SSBN) fleet is

also aging. Budget constraints have decreased the frequency of routine

maintenance on nuclear submarines, thereby reducing their 20-year lifespan.

Because of these trends, it is likely that only the relatively new Delta IV

fleet will be operational by 2010.

Each of the seven Delta IV SSBNs carries 16 SS-N-23 sea-launched ballistic

missiles (SLBMs), for a total of 112 missiles. Each SS-N-23 has four

multiple independent reentry vehicles (MIRVs), for a total of 448 sea-based

warheads.

If Russia is able to resume construction of its new Borey-class submarine

-- which lays unfinished at the Severodvinsk Sevmash shipyard -- Russia may

be able to deploy it by 2010. The Borey class will probably carry twelve

SLBMs, each with four warheads. By 2010, Russia's sea-based strategic

nuclear force will likely be 124 missiles on 8 subs with 496 warheads.

Russia has two types of strategic bombers, the Tu-95 Bear H and the Tu-160

Blackjack, both of which have 30-year operational lifetimes. Although

production of the Bear H bomber stopped in 1991, production of the newer,

Blackjack bomber has partially resumed. Several partially completed

Blackjacks are at Russian production facilities and the first new bomber

since 1991 rolled off the production line early last month. Nevertheless,

the lack of routine maintenance for Russia's bomber fleet has significantly

reduced its lifespan. By 2010, Russia is likely to have roughly 480

air-launched cruise missiles, carried on only 30 Bear H bombers and 10

Blackjack bombers.

In sum, attrition and limited operational lifetimes will increasingly take

their toll on Russia's strategic nuclear forces. By 2010, in all

likelihood, Russia will have between 290 and 464 missiles and bombers

carrying 1100 to 2180 warheads.

The Soviet threat was the main incentive for the size, sophistication and

alert status of the U.S. nuclear force. With its steady decline, the United

States could quickly reduce the size and alert status of its weaponry

without any degradation in national security. Formal treaties could then

lock in these substantial gains in nuclear safety and security.

*******

#5

RUSSIAN COMMANDER IN FAVOUR OF OWN ANTI-BALLISTIC SYSTEM

Interfax

Moscow, 6th July: Vladimir Yakovlev, commander-in-chief of Russia's

Strategic Missile Troops, has said he is convinced that Russia has created

a sufficient scientific and technological basis for the creation of a

pan-European non-strategic anti-ballistic missile system.

There is "a basis on which tests and modelling can be carried out, there

are scientific developments, but as usual there is not enough money,"

Yakovlev said.

"In case the political decision is made, which should be considered within

the framework of the potential threats Russia and Europe may face, about

which we have a clear concept, we are ready for dialogue on this matter,"

Yakovlev said in an interview carried in the Thursday edition of 'Pravda'.

Yakovlev spoke about his plans for rearming the strategic missile forces.

"The primary direction of the strike force is transition to a unified

Topol-M complex that can be both mobile and stationary," he said.

"This is a missile that can compensate for losses caused by removing [from

service] the ageing group of heavy and medium missiles," Yakovlev explained.

Furthermore, "as far as the orbit group is concerned, the military together

with the Russian aeronautics-space agency have decided to launch

dual-purpose space vehicles, to increase the active term of the creation of

a unified land complex, and to go from 3-8 carriers to three basic carriers."

*******

#6

Jamestown Foundation Monitor

July 6, 2000

RUSSIA'S LATEST SURPRISE: AN INVESTMENT BOOM. Sharp growth in investment

spending is one of the more surprising aspects of Russia's economic

recovery. After dropping by more than 75 percent during 1992-1998, gross

investment in fixed capital--spending by businesses and households on new

dwellings, factories and equipment, as well as on replacing worn-out

capital--registered a 4.5 percent increase over last year. And according to

the most recent official data, investment was up a stunning 14 percent

during January-May 2000, relative to the same period in 1999 (Goskomstat,

Sotsialno-Ekonomicheskoye Polozhenie Rossii, January-April, May 2000).

Russia's investment boom is puzzling in at least two respects. First, it

flies in the face of the near universal conviction that Russia's investment

environment is bleak or worse. Investment growth is difficult to reconcile

with the seemingly endless litanies of everchanging tax regulations,

capricious bureaucrats and mob shake-downs. Second, investment in

transition economies is typically a lagging indicator. That is, investment

spending typically does not grow in the first year in which a transition

economy reports economic growth. Increased spending on consumer goods is

usually the driving force in the first year or two of recovery, though

government budget deficits and (sometimes) growth in net exports can also

provide additional spending. When investment begins to grow, it is often

driven by residential construction, as households attempt to use their

growing incomes to improve their housing situation. Companies generally do

not commit to large investments until evidence of a stronger recovery

becomes clear, and once excess production capacity created by the

transition recession is used up.

Russia seems to represent an exception to this pattern. The 4.5 percent

investment growth registered in 1999--Russia's first year of economic

recovery--exceeded the 3.2 percent increase in GDP, and the 14 percent

increase recorded during the first five months of 2000 suggests that

investment will almost certainly grow faster than GDP this year as well.

The investment collapse of 1992-1998 left Russian enterprises with a great

deal of excess capacity, which would seem to reduce the need for spending

on new plant and equipment. Moreover, residential construction in Russia

has apparently grown more slowly than investment spending. Growth in the

cubic metrage of new housing constructed rose by 4.3 percent last year, and

was up "only" 12 percent during the first five months of 2000. Residential

construction counted for only 12 percent of total investment spending

during the first quarter of 2000, down from 16 percent during the first

quarter of 1999.

CAUSES: LESS CONSUMPTION, SMALLER DEFICITS--AND LOTS OF "USELESS" CAPACITY.

How can this case of "Russian exceptionalism" be explained? A number of

possible causes present themselves. A sizable chunk of the capital stock

inherited from the Soviet period turned out to be redundant in the market

economy which took hold after 1992. Much of Russia's unused production

capacity therefore turned out to be "useless" rather than "excess." Some of

Russia's most valuable assets were stripped and exported during

privatization. And the large declines in investment spending since 1992

suggest that much useful machinery and equipment has simply worn out. A

need to invest in new plant and equipment is greater than might appear to

be the case.

A second set of explanations for Russia's investment growth lies in changes

in the composition of Russian GDP. Before the August 1998 financial crisis,

spending by consumers and the government claimed relatively large shares of

total output. But personal consumption dropped 9 percent in the second half

of 1998, and another 5 percent in 1999. Shorn of its ability to borrow, the

general government's budget deficit went from 8 percent of GDP in mid-1998

to only 3 percent of GDP in the first quarter of 2000. In effect, workers

and machines who and which used to make consumer goods or provide

government services are now working on construction sites or making new

equipment.

A third set of explanations lies in post-August 1998 changes in the

enterprise financial environment. The Central Bank of Russia tightened the

money supply and jacked interest rates up to 150 percent in the midst of

Russia's financial crisis. Russian banks lost all interest in providing

companies with commercial credit, as banks, though, they tried instead to

make a killing buying government treasury bills. Foreign banks and

investors stopped providing Russian companies with capital, and government

agencies tried to reduce their budget deficits by not honoring many of

their obligations. Shorn of cash flow, companies were unable to maintain

output and profit levels. By November 1998, enterprise net profits had

dropped to some US$940,000, down from US$3.2 million in November 1997.

Obtaining investment capital from internal or external sources was for most

Russian companies simply out of the question.

After August 1998, however, the CBR brought interest rates down and let

money supply growth accelerate, while inflation rates took off. At present,

Russian banks are offering twelve-month commercial loans at 29 percent,

while yearly inflation rates are in the 20-50 percent range. In real terms,

interest rates are negative. While many corporate borrowers do not have the

financial and political moxie to gain access to these cheap credits, some

do. Meanwhile, the salutary effects of the ruble's sharp devaluation and

higher export prices boosted enterprise profits, which stood at US$3.1

million in March 2000. Because retained earnings were financing more than

half of the investment spending undertaken in the first quarter, this

improvement in enterprise profitability has played a key role in Russia's

investment boom.

********

#7

Boston Globe

July 5, 2000 (?)

Putin Goes Back to His Roots

By Marshall I. Goldman

Kathryn. W. Davis Professor of Russian Economics, Wellesley College

Associate Director, Davis Center for Russian Studies, Harvard University

Ever since it became clear that Vladimir Putin would become Russia's

president, both the Russians and we have been wondering what kind of

policies he would adopt.  Since he had worked closely with the economic and

political reformers in St. Petersburg, there was hope that he would adopt

the same policies on a national level.  However, he had also served a

decade and a half as a field agent and eventually as the director of what

used to be the KGB.  Could he break out of that mold?

Whatever his intentions, after the arrest, jailing, and eventual release of

the media oligarch, Vladimir Gusinsky, President Putin now finds himself

identified as a neo-Stalinist intent on intimidating, if not suppressing,

dissident voices, even if they come from the super rich "New Russians".  To

give him the benefit of the doubt, Putin and those around him may have

assumed that the government's harassment of Gusinsky was a necessary step

to show that Putin meant it when he said that he would show no special

favors to the oligarchs.  This would (and did) win him applause from the

general public, which has little sympathy for these newly rich oligarchs

(especially if they are Jewish) and the lack of respect for authority that

developed under Boris Yeltsin.

In fairness to Putin, the oligarchs as a group have acted like pirates as

they helped themselves to the country's richest deposits of petroleum, gas,

and metals.  If Putin could find a way to reclaim some of the assets seized

at bargain prices from the state, so much the better.  Had he started by

challenging oligarchs like Vladimir Potanin or Boris Berezovsky (both of

whom made the 1998 Forbes list of the richest 200 in world) there probably

would have been less of an outcry, both in and outside of Russia.  After

all, with a bid of only $200 million, Potanin had managed to gain control

of the $2 to $4 billion Norelsk Nickel Smelter, which produces 20% of the

world's nickel and most of its palladium.  As for Berezovsky, among his

loot he gained control of the $2 billion Sibneft oil fields and refineries

for a similar outlay of $200 million.  Moreover, when charges were leveled

against Berezovsky in 1999, there seemed to be more applause than anger.

So why the upset over Gusinsky?

Since Gusinsky once instituted a libel suit against me in a London court, I

should have greeted the news of his arrest with a certain satisfaction.  On

the contrary, I was deeply angered.  Whatever differences he and I might

have had, in recent times he has been on the side of the angels and one of

the true products of what seemed to be the newly developing democracy in

Russia.  His television network (NTV) and his newspaper and radio station

were among the very few to raise questions about Russia's behavior in

Chechnya.  He had also provided an unbiased platform for parties and the

candidates in the 1999 and 2000 elections who were willing to challenge

Putin.  Putin and his aides were particularly angered by NTV's satiric

puppet show, Kukli, which mercilessly mocked Putin as well as the

opposition, just as it had Yeltsin and his opposition.  By contrast, ORT,

the official channel controlled by Berezovsky, manipulated the news

broadcast, presenting false rumors as fact, which effectively trashed the

other viable candidates.

While not all of Gusinsky's business deals would pass as models of ethical

behavior, unlike all the other oligarchs, he at least built his empire by

creating new entities.  All the others profited by simply gaining control

of existing state assets.

There seems to be little doubt that Putin supports curbs on the press.  We

do not know if he actually signed the decrees, but given his KGB

background, Gusinsky's unwillingness to toe the line clearly upset him.

>From Putin's public comments, it is clear that he is not comfortable with a

free and critical press, "Democracy is a dictatorship of law".  "Our land

is rich, but there is no order in it".  "The stronger the state, the freer

the individual".

To silence Gusinsky, Putin's staff first tried bribes, offering Gusinsky

$100 million.  Then they tried to lure leading members of his staff away

(Gusinsky had used similar tactics when he initially set up his newspaper

and television network).  They topped this off with the May 11th raid on

his offices by masked tax and special police.  When none of that worked,

the chief prosecutor's office summoned Gusinsky for interrogation,

ostensibly about another matter.  In mid-stream, they switched their focus

and ended up charging that Gusinsky had swindled state property worth $10

million.  Rather than just announce that they had instituted charges

against him, they instead immediately threw Gusinsky into Moscow's worst

prison, saying they would keep him there while they pursued their

investigation.  That could last as long as two years.

The arrest of Gusinsky was but one sign of Putin's KGB proclivities.  Since

his appointment as acting president, other newspapers have also been warned

that they would be closed down if they continued to report challenges to

the government.  This past week, Grigory Yavlinsky the head of Yabloko, one

of the most democratically oriented political parties, reported that two

university students in St. Petersburg had been ordered to spy on Yabloko.

When they refused, they were told they would be sent by the Army to

Chechnya and were immediately expelled from the university.  This

presumably suits Putin, who had commented earlier that "you can't get

anywhere without secret agents."

Whether or not Putin personally issued the specific orders for each one of

these incidents, we don't know.  But we do know that even when pressed

about Gusinsky's arrest, initially he saw nothing especially wrong.  Nor

was Putin upset by the tax police raid or the spying on Yabloko.  Those

around him evidently regarded this as a sign of approval, which might also

explain the Kremlin's effort to cause divisions within the Jewish

community, again a practice reminiscent of the Soviet era.  This was part

of an effort to undercut Gusinsky, who had set up and funded the recently

reconstituted Russian Jewish Congress.  While his motives were not entirely

altruistic (he did, after all, use his position as president of the group

to enhance his influence outside of Russia), nonetheless he did devote

constructive energies to the rehabilitation of Jewish communal and

religious groups.  For example, when a Jew was stabbed in the main Moscow

synagogue, Gusinsky personally hired a security force to prevent any such

re-occurrence.

Realizing how embarrassing it might be outside of Russia if the president

of the main Jewish organization in Russia were arrested, this past

November, the Kremlin, with the help of Boris Berezovsky, hastily formed a

new Jewish umbrella group, the Russian Jewish Federation.  Five hours after

Gusinsky's arrest, this new federation announced that it had appointed a

new Chief Rabbi for Russia.  The former Rabbi, who had worked with

Gusinsky, had earlier rejected bribes to resign.  In any event, it was not

the old rabbi but the new one who has invited to Putin's presidential

inauguration ceremonies.  It seemed not to matter that this new rabbi only

received his Russian citizenship a month ago.  An American, he had just

been sent by the Chabad-Lubavitcher movement.  Representing only 5% of

Russia's Jews, Chabad has shamefully allowed itself to be used for this

divide and conquer task.

For those who hoped that Russia had turned a corner once and for all, all

of this is a most unfortunate reminder of how hard it is for Russians to

rid themselves of the totalitarian thought processes of the past.  It seems

as if Putin likes it that way.  Western leaders should make it clear to him

that they don't.

*****

#8

Russian S-400 'Will Be Best Defensive Weapon in World in Next 20-50

Years' 

Rossiyskaya Gazeta

June 30, 2000

Article by Colonel (Ret.) Anatoliy Petrov:  "S-400 -- Extraordinary

Protection"

   The latest Russian air defense system provides

over-the-horizon protection from any aerial attack.   Some people do not

like this.

    Coincidentally, both Russia and the United States are currently

testing the latest generation of surface-to-air missile systems.   The

Pentagon is completing its evaluation of the widely touted Patriot-3

while Russian military personnel, scientists, and producers are carrying

out live firings on the test range under the program of state trials of

the S-400 surface-to-air missile system.   All 10 launches of the Russian

system's missiles culminated in aerial target kills.   The Americans'

results were much more modest.   Despite vast financial injections into

research and development, the United States has not yet managed to make

the Patriot-3 destroy tactical missiles or hit low-flying targets.

    Tests of new models of weapons which are destined to become weapons

of the 21st century arouse not only special services' heightened

interest.   They also worry producers of military output and its

potential purchasers.   Here many of the world's countries have turned

their attention to the output of Russian defense complexes and above all

of the Almaz [Diamond] Central Design Bureau -- leader in the development

of surface-to-air missile systems.   In the opinion of Army General

Anatoliy Kornukov, commander in chief of the Russian Air Force, the S-400

system will be the best defensive weapon in the world in the next 20-50

years.   Series production will begin once the state trials have been

completed.

    The S-400 could become a powerful battering ram capable of breaching

the trade blockade in countries of the Asia-Pacific region.   The U.S.

military-industrial complex' output has dominated for many decades here

but the situation is changing and it cannot be ruled out that after the

impending unification of North and South Korea it will be not Patriots

but Russian S-400 systems that will be on alert status on the peninsula. 

 This could be a subject of the talks during President Vladimir Putin's

forthcoming trip to P'yongyang and Seoul.

    The S-400 could quite possibly also become the main weapon of the

incipient common-European security system.   Vladimir Putin's proposal to

create a nonstrategic European air defense system struck a chord in

France, Germany, and other European countries, which have become tired of

U.S. hegemonism over the postwar decades.   After the missile and bomb

strikes on Yugoslavia the Europeans became interested in strengthening

their own security system and Russia could play in its formation the role

of a leader who possesses the ideas, the scientific developments, and the

latest technologies to produce ideal models of weapons.

    Almaz is annoyed by intermediary structures which produce nothing but

which merely sell its output.   The Defense Systems Open Joint-Stock

Company was one such "benefactor."   Back in 1999 the Defense Ministry

refused to issue it a license to carry out work under the state defense

order but who would surrender such monetary positions without a fight?  

It is therefore entirely natural that its troubles started when Almaz

claimed its rights to the weapons it had developed.   There followed all

kinds of checks to find improper behavior, and although they uncovered

nothing they are disrupting the creative collective's entire routine.

*******

#9

BBC MONITORING

US AMBASSADOR TO RUSSIA UNVEILS EMBASSY BUILDING, SAYS SPY SCANDAL OVER

Source: Centre TV, Moscow, in Russian 1000 gmt 06 Jul 00

[Presenter] The head of the USA's diplomatic mission James Collins today

presented the new US Embassy to journalists. The building is not far from

the old one on Novinskiy Boulevard. Almost all the Embassy's departments

will be located on an area of 20,000 square metres, apart from the consular

department and the press service.

[Correspondent] After the perestroyka spy scandal, vigilance became the

watchword of the American mission in Moscow. Almost two months went by

between the flag being raised here and the first visit by journalists.

Journalists were originally invited to the official opening 12th May but it

was decided not to let them in at the last minute. US Ambassador to Russia

James Collins explained that the interior of the building on Devyatinskiy

Street was being finished until the last moment and final checks were being

made.

The financial and personnel sections have already moved to the new

building. The American School and quarters for some employees are also

located in the complex. Like his predecessors, Collins does not live in the

Embassy building. His residence is located in Spasa House.

The epic surrounding the fourth American diplomatic mission complex has

been dragging on for over 20 years. The famous scandal blew up in 1985,

when it turned out that the brick building was packed full of listening

devices. The then-head of the KGB, Vadim Bakatin, handed Ambassador Robert

Strauss a map of the bugs six years later in 1991, soon after the coup.

Nevertheless, the matter dragged on for another five years. Then rebuilding

took another four years. Finally, the new complex cost the Americans 15

years of investigation and 240mn dollars.

James Collins diplomatically sidestepped discussion of the scandal

involving the secret services.

[Collins, talking to journalists in English with interpreter next to him

translating into Russian] To be frank, I would not really like to get into

all the details of the intelligence aspects of construction. All I can say

is what I have already said: we have finished construction of this building

and we are totally sure that it corresponds all possible requirements that

can be made of such a facility from the point of view of structural

soundness, security and providing access.

[Correspondent] The Embassy personnel have thought out the security system

to the minutest detail. Journalists saw for themselves. After multi-level

checks, x-rays and bodysearches, the guests were quickly led to the

conference hall accompanied by Russian embassy employees - they account for

about half of the US Embassy staff. All that they were allowed to film even

as part of the presentation was the atrium, staircase and foyer, which, as

Collins put it, was decorated in the Russian style.

In contrast to journalists' expectations, the attributes of Russian style

were not matreshki, but portraits of 18 Russian cultural figures with some

connection or other to the United States.

More departments are supposed to move into the Embassy building soon, apart

from the consular section and press service. They will remain in the

building on Novinskiy Boulevard - which, by the way, still faces

reconstruction.

*******

#10

BBC MONITORING

RUSSIA WILL NOT MEET ITS CHEMICAL WEAPONS OBLIGATIONS - OFFICIAL

Text of report by Russia TV on 6th July

[Presenter Sergey Fonton] Hello. In January 1993 Russia signed an

international convention banning the development, production, storage and

use of chemical weapons, and on their destruction.

Production has stopped. What is to be done with the reserves already on

hand? Experience has shown previous burials to be dangerous. Thousands of

tonnes of so-called first generation poisonous substances buried on land or

dumped at sea constitute a delayed-action mine. How should existing stocks

be destroyed?

[Correspondent Aleksey Overchuk] Until recently this was one of the most

secret places in Russia. Even today it is practically impossible to get

here. The Ministry of Defence facility in Gorlyy, Saratov Region. Barbed

wire all around, with watchtowers and TV cameras and permanent

fortifications. This is where chemical weapons are kept.

Anybody entering the store has to be smoked, as they call it - that is,

adjust a gas mask to fit and then test it in a special chamber filled with

irritant gas. We are still not allowed to film long shots or the layout of

the facilities, for security reasons.

An officer opens the store for checking. Before going in, chemical

specialists always test the air in order to determine whether it contains

any poisonous substances. If it gets onto your skin or into your

respiratory tract it will have very unpleasant consequences for your health.

Nearly all the cisterns contain 40 tonnes of blister agents - mustard gas,

lewisite, and mixtures of the two.

The instruments show it is safe to go in, and the chemists test the

thickness of the walls of the cistern with this special instrument. If

there is any danger, the substances are immediately pumped through these

pipes from the dangerous cistern to a holding tank.

This hangar contains barrels. They too are regularly checked to see whether

they are sound.

[Presenter] Today we can get information from the horse's mouth. Our guest

is a consultant to the commander of the nuclear, biological and chemical

(NBC) defence troops, Col (ret) Vyacheslav Solovyev. Hello from our

viewers, Vyacheslav Konstantinovich.

[Solovyev] Hello.

[Q] First of all, naturally our correspondent Aleksey Overchuk was at a

modern high-technology facility. But there are a lot of places where

chemical weapons are stored. How many of them are there, and what are the

storage conditions like?

[A] The Russian Federation's reserves of chemical weapons consist of 40,000

tonnes by weight of poisonous chemicals. The reserves are concentrated in

the following regions: Gorlyy in Saratov Region as you first showed, then

the town of Kambarka in the Udmurt Republic, where similar substances are

stored, previous generation blister agents. Then there are facilities where

artillery munitions are stored with poisonous substances. That's in the

town of Kizner in the Udmurt Republic and in the town of Shchuchye in

Kurgan Region. And aviation munitions with poisonous substances are

concentrated in the village of Leonidovka in Penza Region, the town of

Pochep in Bryansk Region and in the village of Marodykovskaya in Kirov

Region.

[Correspondent] These poisons are no longer of any use in combat, since

many of these reserves were established as long ago as the Second World War

- that is, they're past their sell-by date. Besides which, it's impossible

to use chemical weapons in this form. You need to set up a production line

for filling munitions with them.

And even in the case of the most fantastic accident anybody can think of,

it is only the local area out to 200 m that would be contaminated. The

officers and other ranks here not only know how to repulse sabotage attacks

by the enemy, but also in a matter of minutes to resolve any irregular

situation. You can see for yourself.

It might sound odd, but everybody from general to private in the NBC

defence troops just wants to get rid of these weapons as quickly as

possible. Next to the store a factory for destroying chemical weapons

reserves is quickly being built.

[Presenter] Can you then say that an accident at a facility like that would

not turn into a second Chernobyl?

[Solovyev] Well, you know, I will never agree with that, forgive me,

dilettante's approach of comparing a facility like this with Chernobyl.

[Q] But people draw that parallel.

[A] They do indeed, but there is a difference. Poisons only become poison

weapons when they are brought into combat condition. In order to bring them

into combat condition, you need a number of initiators. One is temperature.

The second is an explosion, so temperature again, but also with the

condition that you have to be able to open up the casing of the munition.

Then comes the dispersal of the poison over the populated area. Speaking of

artillery and aviation, our munitions are stored without charges or

breaching devices, unlike the Americans. So we are storing, let's put it

this way, specific containers filled with poisons. But the breaching

charges and propellant are stored separately.

[Correspondent] This unique factory was developed by a large group of

Russian scientists. Its plans surpassed all imaginable ecological tests and

was approved by the government and the president. According to the plans of

its creators, the factory will start work in 2001. As soon as construction

is complete, special equipment will be installed, delivered from Germany

among other places.

In fact the Germans have already supplied some things, for example this

chemical ecological monitoring vehicle, with the latest laboratory on

board. It monitors the ecology along the whole perimeter of the facility.

There is a stationary laboratory, also a gift from Germany, not far from

the chemical arsenal.

Local inhabitants think that these cows grazing near the facility are the

most reliable indication of ecological purity. You can't fool animals and

you can't bribe them.

[Presenter] In the end there are two things that are the most important:

cost and safety. If we are to compare the American technique of burning

with our own chemical process, how do these two factors compare?

[Solovyev] I wouldn't even bother comparing our technology with the

Americans. From the point of view of safety, yes, I can argue with anybody.

I have met our American colleagues in destruction several times, where we

proved several times that their approach to safety was a little, let's put

it gently, weaker than what we do in Russia.

[Q] Have I understood you correctly that our technology may be cheaper but

it is certainly safer? Is that it?

[A] That's it. I absolutely agree with your proposal that yes, we really

can guarantee that our technology is safer. Our scientists developed this

technology over a long period, technology which does not consist of burning

the poisons, but in destroying them using chemical components, to use

layman's language. In other words they take the poison, and they add to it

specific chemical compounds which neutralize the compound and turn it into

a purely technical product.

[Q] So it's a laboratory method?

[A] No, it's an industrial method.

[Correspondent] The destruction of chemical weapons will take place under

full monitoring. The maximum number of levels of safety have been

developed. For example, the walls, ceiling and all the equipment are

covered with special chemical-resistant materials and paints. And the staff

will be issued special first-aid kits. If they open them, a signal is sent

immediately to the central control panel. So it will be impossible to

conceal even the most insignificant accident either from the management or

from international observers.

The scientists have thought of everything, even the most improbable

possibilities and irregular situations. The foreign specialists come here

very often to check the progress of the construction. And when the factory

starts working at full capacity, they will come here on a permanent basis.

They will be living like Russian officers, in these cottages. According to

the specialists' plans, the factory should in five years process all the

chemical reserves into especially pure arsenic. This is a very valuable

substance. Industry uses it to make radioelectronics, semiconductors and

solar batteries.

The next four years are devoted to degaussing and decontaminating the

equipment. Then the factory will be adapted to produce civil products, and

the inhabitants of Gorlyy will keep their jobs.

[Presenter] We will destroy it, using our technology, based on our own

scientific and technical potential. Perhaps the most difficult question:

bearing in mind all Russia's unpredictability, when do you think these

weapons will be destroyed?

[Solovyev] Well, we have taken the obligation on ourselves that the weapons

should be destroyed by 2007. It should be pointed out that we are taking

all possible efforts so that the weapons can be destroyed, but Russia will

not meet the periods which were laid down by the convention. So there will

be a slippage. Exactly what slippage it is currently very difficult to

predict. Everything depends on how the situation develops.

[Q] Vyacheslav Konstantinovich, being a wise man, did not name the specific

year when the weapons should be destroyed. But nonetheless the fact that

the obligations have been undertaken is already enough. It only remains to

carry them out, and I sincerely wish you success in this.

*******

#11

Moscow Times

July 7, 2000

COMMENT: When It's Your Own Fault You Got Killed

By Peter Ekman

Chelyabinsk is a city of monuments. Arriving at the railway station, you can

see a plaque stating that "Lenin changed trains here" on his way to Siberian

exile. A restored armored railway locomotive from the Civil War is on

display, and there is a monument to the tank soldiers of World War II.

After Sunday's suicide bombing in Argun, which killed at least 26 soldiers

from Chelyabinsk, I should have thought about the Mourning Mother monument in

the World War II cemetery. Instead, I thought about Chelyabinsk's monument to

railway workers, which depicts a switchman in overalls straining every

muscle, bending back almost 45 degrees, in a desperate struggle to close a

switch to keep an oncoming train from derailing.

"Who is that?" I asked on my first visit to Chelyabinsk, trying to find out

the Russian word for switchman.

"Strelochnik," my friend answered. "He's the person who is blamed for

everything."

Yes, the switchman is the perfect person to blame. In any railway accident

there is always some switch that might have been improperly set; no

higher-ups need to accept responsibility. If the switchman dies in the

accident f as was common f so much the better. He won't be able to defend

himself.

Immediately after the news of the Argun bombing, Kremlin spokesman Sergei

Yastrezhembsky was at a press conference, passing the blame before the bodies

were even cold.

Poor local security measures, Yastrezhembsky said, adding that the soldiers

had been informed of the possibility of an impending attack. The public is

left to conclude that the soldiers are to blame for their own deaths.

"Who's to blame?" and "What is to be done?" are the standard questions. The

higher-ups have the perfect answer for the first question in the case of

Chechnya f it's the soldiers' fault. Even though many soldiers in Chechnya

were drafted only six months before being sent to fight, even though they are

poorly trained and poorly armed.

Perhaps the soldiers in Argun did ignore an order to increase security f

we'll never know for sure. If they did make a mistake, they have paid for it

many times over. More likely, however, is that they received orders but not

the means to carry them out, or they received contradictory orders. Or they

were never told what they needed to accomplish in Chechnya and how they were

to go about doing it.

What is to be done? Russian leaders don't seem to have any ideas on how to

end the war, except to declare that they have already won it. If it keeps on

its current path, the war could last several more years. Many more Russians

and Chechens will die until either Chechnya is completely depopulated or

until both sides quit from sheer exhaustion.

What is to be done? The first step is for the leadership to accept

responsibility for what is happening there. Next, it needs to articulate what

it's trying to accomplish in Chechnya and how.

Let Russia's leadership accept the blame for once. There is no shame in

accepting responsibility for an honest mistake. There is shame, however, in

blaming the soldiers from Chelyabinsk for their own deaths. There is shame in

continuing a war without a plan to end it.

Peter Ekman is a professor of finance at the American Institute of Business

and Economics. He contributed this comment to The Moscow Times.

*******