CDI Russia Weekly-#110

14 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 vows to impose economic order, puts oligarchs on notice.

  2. Stratfor.com: The Dilemma of Russia's Anti-Corruption Campaign.

  3. Moscow Times: Pavel Felgenhauer, DEFENSE DOSSIER: Corruption Fuels Chechnya.

  4. CDI's Weekly Defense Monitor: Tomas Valasek, The Changing Face of the Chechnya War.

  5. Interfax: THERE IS NO TRULY FREE, INDEPENDENT MEDIA IN RUSSIA - INTERNATIONAL FREE PRESS ORGANIZATIONS.

  6. RFE/RL: Andrew Tully, U.S/Russia: Panel Urges Friendly Ties Between Two Countries.

  7. Jamestown Foundation Monitor: STRUGGLE IN RUSSIAN DEFENSE MINISTRY BURSTS INTO OPEN.

  8. MOSKOVSKIYE NOVOSTI WEEKLY: ARTICLE BY SERGEI KARAGANOV,

FOREIGN AND DEFENSE POLICY COUNCIL CHAIRMAN, REGARDING THE UPCOMING OKINAWA G-8 SUMMIT.

  9. The Globe and Mail (Canada): Geoffrey York, Iron fist squeezes democracy in Ukraine .Soviet-style repression is back, critics warn.

*******

#1

Putin vows to impose economic order, puts oligarchs on notice

MOSCOW, July 13 (AFP) -

President Vladimir Putin vowed to impose order in Russia's chaotic economy

Thursday "whether it's popular or not," his clearest warning yet to the

country's powerful business tycoons.

In an interview with the Izvestia daily, Putin said the state was partly to

blame for the disorder that accompanied the helter-skelter dash to the market

economy which followed the demise of the Soviet Union in 1991.

The president, who has made the restoration of strong central control the

touchstone of his rule, also vowed to end crony capitalism which allowed

business barons amass vast wealth by playing on their political connections.

Only consistent law enforcement and a level playing field for business would

guarantee sustainable economic growth, said Putin, the third time he has

raised the theme in six days.

"The authorities have said they would act in a more energetic manner in

business, I mean in the area of taxes, and restore order to the economy, and

they are doing that, whether it's popular or not," Putin told Izvestia.

Extracts of the interview with Izvestia's editor Vladimir Kozhokin were

broadcast on all national evening news programmes.

The stark warning came less than 24 hours after Putin vowed to bring to

justice business barons who had made fortunes in the "muddy waters" of

post-Soviet Russia's dash towards the market economy.

"While the state was loosening the reins on the economy, tax-dodging and

other abuses assumed a massive scale, so numerous businessmen risk strained

relations with the law," Putin told Izvestia.

"How could they not be nervous?" he asked in the interview, of copy of which

was sent to AFP.

At least 80 billion rubles (2.8 billion dollars, three billion euros) had

been hidden from the tax authorities last year, a sum which compared with the

140 billion rubles spent on defence, he said.

The Kremlin chief said the state must share the blame for the current state

of affairs: "Constant changes in the rules, the unstable status of private

property, contradictory laws -- all of that prevents the country's economy

from developing in a normal way."

Putin's comments came amid a "blitzkrieg" by tax police on Russia's business

elite including oil major LUKoil, Media-MOST, Russia's leading independent

media group, natural gas giant Gazprom and carmaker AvtoVAZ.

However Putin denied ordering the stunning wave of raids.

"We all want to live in a state governed by the rule of law. Why do you want

to imagine that I would act outside the law and put pressure on the public

prosecutor's office, which is independent?" he said.

The Russian president also dismissed suggestions he was a budding dictator,

saying: "The building of a strong effective state cannot and must not lead to

violations of civil rights.

"It would be an abuse of authority if law enforcement is regarded as an

excuse for arbitrary, bureaucratic rule.

"Russia must not, and will not, be a police state," said Putin, a former head

of the FSB domestic intelligence agency, the main successor to the Soviet-era

KGB for which he also worked.

Critics have accused Putin of seeking to muzzle media critical of his

policies, notably the nine-month war in Chechnya, but the president told

Izvestia the debate was a red herring.

"People are trying to impose this idea on us in order to distract our

attention from the legal aspects of the affair," he said in an apparent

reference to the Media-MOST case.

Russia's media magnates "are more worried about maintaining their influence

of the state than freedom of the press," he said, adding: "We must make the

media really independent."

Putin also defended his plans to rein in Russia's powerful regional

governors, who have bitterly attacked his plans to strip them of their seats

in the Federation Council upper house of parliament.

People living in Russia's 89 provinces had become "regional subjects" rather

than citizens of a united country, he said.

*******

#2

Stratfor.com

July 13, 2000

The Dilemma of Russia's Anti-Corruption Campaign

Summary

Russian President Vladimir Putin's campaign to wrest control of the

economy away from the oligarchs is moving along briskly, propelled

by a series of corruption investigations. But this campaign is at

least rhetorically rooted in the rule of law and as a result, the

president's efforts may ultimately snare his own allies in the

government. Soon, the Russian president will confront a choice:

temper his campaign or be labeled a fraud.

Analysis

With tax, corruption and embezzlement investigations against top

Russian corporations proceeding at a blistering pace, President

Vladimir Putin is making great strides in his efforts to rein in

Russia's oligarchs. So far, the government has launched

investigations or filed charges - ranging from fraud to tax evasion

- against 13 major business leaders whose companies include Media-

MOST, LUKoil and Gazprom.

However, as these investigations widen, they are beginning to take

in some of Putin's own associates. The president may be dangerously

close to compromising key political allies in his widening

crackdown on the oligarchs. Putin's own prime minister, Mikhail

Kasyanov, has been under scrutiny for alleged ties to organized

crime. If Putin spares allies like Kasyanov, the president will

lose political legitimacy and be branded an autocrat.

On July 12, investigators from the Russian Federal Tax Police

Service (FSNP) announced the launch of a criminal case against auto

giant AvtoVAZ. Vyacheslav Soltaganov, director of the tax police,

told ITAR-Tass that the company, headquartered in the central

Russian city of Togliatti, had concealed hundreds of millions of

dollars from taxation by producing multiple vehicles with the same

serial number - and then reporting the manufacture of a single

automobile.

With this case, investigators can snare more than a company set on

a bold scheme; they can also snare two of Russia's most powerful

businessmen. One is Boris Berezovsky, director of LogoVAZ,

AvtoVAZ's sales arm, and most recently a detractor of the

president's. Berezovsky has been named in the most recent criminal

charges. The second man, AvtoVAZ Director Vladimir Kadannikov, said

that the company would appeal the decision and the charges would

not impact a joint production deal to be signed with the American

auto giant, General Motors.

The tax police have simultaneously opened criminal charges against

Russian oil giant, LUKOil, and its director, Vagit Alekperov. Tax

Minister Gennadiy Bukayev told Interfax that the company had

concealed revenue in "especially large amounts." Ironically, the

tax minister himself had praised the company in May, handing it an

award for being a conscientious taxpayer. Bukayev told Interfax

that the company had won the award based on its own tax reports.

Evasion was only discovered in a subsequent investigation.

The sweep of the government's investigation is now expanding

exponentially, snagging the largest names in Russian business. The

Media-MOST empire, which owns banking, broadcasting, satellite

communications and banking interests, has been raided repeatedly.

Gazprom, the country's natural gas giant, and its director, Rem

Vyakhirev, are under investigation for questionable loans to Media-

MOST. The director of LUKOil, Vagit Alekperov, the country's

largest oil concern has been charged with tax fraud.

After years of corruption and crony capitalism, Putin is attempting

to regain control of the Russian economy by imposing the rule of

law. Successful investigations will allow the government to recover

assets that were pillaged while at the same time reassuring nervous

foreign investors that there corruption won't be tolerated in the

Russian economy.

But the success of the crackdown will generate its own logic - and

a dilemma for the president. All the same allegations that are

befalling Berezovsky, Alekperov and Gusinsky could be pinned on

Putin's allies in the Duma. Kasyanov, for one, is under attack in

the Duma for alleged ties to organized crime.

Putin will soon privately grapple to build a firewall between his

allies and his foes. The web of oligarchs extends right to the door

of the president. Putin must now decide whether to let his allies

fall in the name of the law - or protect them and undermine his

campaign and his own authority.

*******

#3

Moscow Times

July 13, 2000

DEFENSE DOSSIER: Corruption Fuels Chechnya

By Pavel Felgenhauer

Last week, two days after a series of rebel truck bomb attacks killed and

wounded more than 100 servicemen in Chechnya, President Vladimir Putin

visited a strategic airbase in Mozdok near the Chechen border to scold

military commanders, including Defense Minister Igor Sergeyev and Interior

Minister Vladimir Rushailo, for negligence. "Many of the losses could have

been avoided in Chechnya with better discipline, professionalism and

responsibility," Putin said.

The severe public reprimand received by Sergeyev and Rushailo is a clear sign

that the Kremlin may use any new serious setback in Chechnya to oust these

"power" ministers that Putin inherited from his predecessor, Boris Yeltsin.

If ousted, the disgraced ministers would carry the blame for policy blunders

in Chechnya while at the same time giving Putin an opportunity to appoint his

own men into key positions.

The unprecedented publicity with which Sergeyev and Rushailo were

tongue-lashed may well be a reflection of Kremlin intrigues. Yet, at the same

time, Putin's overall assessment seems to be accurate: Federal troops and

their commanders in Chechnya are undisciplined, unprofessional and

irresponsible. And, Putin could have added, rampantly corrupt.

RTR state television recently showed footage of the arrest of a Chechen drug

dealer who was selling heroin to soldiers in exchange for weapons and

ammunition at the Russian military's main base and high command headquarters

in Chechnya, located in Khankala, east of the capital, Grozny. While officers

were apprehending him, the Chechen pusher began to yell: "I'll pay you

$1,000! I swear!"

There have also been reports of servicemen in Chechnya as high-ranking as

colonel being involved in selling arms and ammunition to the rebels. There

have been also numerous reports that Russia security forces have been

arresting scores of Chechens as "suspected terrorists." Many of these

suspects say they were severely tortured during interrogation and released

only after their relatives paid bribes ranging from $300 to $2,000.

The top military commander in the North Caucasus and Chechnya, General

Gennady Troshev, told journalists last week: "We apprehend from 30 to 100 men

a day. þ Some of them we later release."

Russia's "anti-terrorist operation" in Chechnya has lasted some 300 days.

Troshev's comment suggested that more than 10,000 Chechens have been seized

and "interrogated" by Russian forces during this period.

The abuse of civilians in Chechnya by federal troops is so widespread that

loyal pro-Moscow Chechen officials have recently began to publicly criticize

the military authorities. Subian Makhchayev, the Moscow-appointed mayor of

Grozny who was injured last May when rebels attacked his car, told

journalists last week: "They [the military authorities] arrest some innocent

herdsman and even I cannot get him released for three weeks; but true bandits

are freed next day."

Makhchayev's comment makes sense: The Chechen rebels have an organization

with the resources to bribe Russian soldiers to release captured comrades,

while "innocent herdsmen" are less resourceful. Such a situation puts

pro-Moscow Chechen leaders in a ridiculous position: To win any serious

support within from the Chechen population, the pro-Moscow leaders should try

to curb the most outrageous human rights abuses, but to do that they must try

to control the same forces that promoted them into power as proxies.

At the meeting with Putin in Mozdok, Akhmed Kadyrov, the newly appointed head

of the pro-Moscow administration, said rampant "human rights violations" and

bribe taking by federal troops in Chechnya are helping the resistance to

recruit more supporters. Kadyrov proposed joint patrols of pro-Moscow Chechen

policemen and Russian servicemen to curb the abuses.

Putin has endorsed recruiting more Chechens into the pro-Moscow police force,

but Russian commanders privately oppose the idea. Most Russian generals

believe (not without reason) that many pro-Moscow Chechen policemen are in

fact rebels in disguise, ready to shoot Russian servicemen in the back.

In addition, the pro-Moscow Chechen policemen are hardly less corrupt than

their Russian counterparts. Its doubtful that giving them a bigger role in

security operations in Chechnya will seriously constrain the resistance or

stop revenge attacks by Chechen rebels against Russian bases.

*******

#4

From

The Center for Defense Information

The Weekly Defense Monitor

VOLUME 4, ISSUE #28 July 13, 2000

The Changing Face of the Chechnya War

By Tomas Valasek, Senior Analyst, tvalasek@cdi.org

Things seem to be going well for Russian forces in Chechnya. Most of the

republic is in Moscow's hands, the artillery assaults against Chechen

towns and villages were all but suspended, and the military feels so

confident it sent nearly half its troops back home. Russian generals

declared victory on at least half a dozen occasions.

But the war may be far from over. In fact, it appears that the Russians

may have won a battle but lost the war.

What the Russian invasion accomplished is turning a war for independence

into jihad, a religious war. There was not one but two conflicts in

Chechnya. The one that the world heard the most about pitted the Russian

military against virtually everybody in Chechnya, civilians

notwithstanding. But among the troops fighting on the Chechen side,

another conflict raged: a war over the republic's identity, its religion,

and its ties to radical Islamic states. On the one side were people like

the Kremlin's recently appointed representative in Chechnya, former mufti

(religious leader) Akhmad Kadyrov. Kadyrov fought for Chechnya's

independence in 1994-96 but opposed the harsh form of Islam propagated by

some clerics and fighters in Chechnya. On the other side were commanders,

many of who started as pro-independence, essentially non-religious figures

but increasingly turned to radical Islam for money, troops, and the moral

boost needed to sustain their fight.

Russian actions have made the relatively moderate personalities

politically irrelevant. Chechnya's president, Aslan Maskhadov, is indicted

by Russian courts and is being ignored by his own commanders. Others have

chosen to cooperate with Russian troops, which will likely discredit them

in the eyes of ordinary Chechens. It is possible that Kadyrov may yet

succeed in convincing the war-weary population of Chechnya to cooperate

with Moscow. The Chechens have suffered unspeakably in this decade, and

most are ready for the war to end. More likely, however, Kadyrov's efforts

will be frustrated by the remaining fighters.

The rhetoric of the most influential commanders reflects the changed

nature of the war from a fight for independence to a religious struggle.

Writing about the 1994-96 war, a former Financial Times correspondent in

Chechnya and one of the foremost experts on the region, Anatol Lieven,

noted that "the Chechen struggle of the 1990s began as overwhelmingly a

national or nationalist one." Religion, always a factor in the Muslim

Chechnya, served to support the drive for independence rather than as an

end to itself.

But religious radicalism began creeping in even before the current war.

Its simple, clear message resonated among hordes of displaced fighters

with no economic opportunities in a country where very little was rebuilt

after the first war. Religion launched the second war in Chechnya after

three years. The August 1999 invasion of Dagestan by fighters from

Chechnya (most of who, contrary to press reports, were Dagestanis trained

in Chechnya rather than Chechens themselves) precipitated the Russian

intervention in Dagestan and later in Chechnya proper.

As Russian tanks and jets forced Chechen fighters into increasing

isolation in the republic's mountainous south, the relative importance of

religion and religious organizations grew. They provided hope as the odds

of success grew longer and longer. Islamic schools outside Chechnya

provided moral support and, apparently, troops and weapons as well. As

even the Chechen fighters admit, dozens of foreigners have fought and died

in their ranks. "During the fighting, three foreign Mujahideen, Halil of

Turkey, Zakariyah of Turkey and Al Muthana of the Arabian Peninsula,

protected the retreat of their brothers and fought off the hordes of

Russian troops," wrote Qoqaz.net, a Chechnya support site, on July 10.

"Halil was the first to be martyred after being killed by a mine;

Zakariyah was also martyred."

The rising influence of Islam was dramatically demonstrated on June 6 when

the first of the Chechen suicide bombers struck a Russian army barracks.

Suicide bombers a staple of the fighting in Lebanon and Palestine - were

unheard of in the 1994-96 Chechnya war. Since June 6, more such attacks

have followed, including a coordinated strike on July 3 involving at least

three separate bombers. Qoqaz.net reports that at least 500 volunteered

for martyrdom on these suicide missions.

The guerilla warfare to which the remaining fighters resorted requires few

supplies. New recruits from abroad are making up losses among the fighters.

The ever-shrinking Russian presence in Chechnya is unlikely to stop the

flow of people and arms. Nor will the fighters be stopped by the prospect

remote at best - of Russo-Chechen accommodation. Their goals have shifted

from gaining independence for Chechnya to establishing an Islamic state on

the territory of not only Chechnya but also neighboring Dagestan  a goal

unacceptable to Russia, not to mention the Dagestan government.

The war, proclaimed to be over weeks ago, is thus likely to continue at a

lower intensity until the Russian forces are worn down. The war in

Chechnya has awakened forces that will neither compromise nor shrink from

utter self-destruction.

*******

#5

THERE IS  NO TRULY  FREE, INDEPENDENT  MEDIA IN RUSSIA - INTERNATIONAL

FREE PRESS ORGANIZATIONS

     MOSCOW. July  13  (Interfax)  -  There  are  no  truly  free  and

independent media in Russia at the present time, Chairman of the World

Press Freedom Committee John Ottaway has said.

     At the  moment, Moscow government officials actively intrude into

the media's  affairs, and  the situation in the regions is even worse,

Ottaway charged at a Thursday press conference in Moscow.

     A  delegation   of  international  organizations  advocating  the

freedom of  the press  has been  visiting Moscow  since July 11 at the

invitation of  the Russian  Journalists Union  and Foundation  for the

Protection of  Glasnost. The  visitors have met with prominent Russian

politicians, government and presidential staff officials.

     Ottaway identified four major threats to the freedom of the press

and independent journalism in Russia.

     He called the first danger the government's attempts to establish

control over  the press by means of a new information security policy,

intimidating opposition  media with  selective persecution  that has a

clear political  background and  tax agency raids on media outlets who

question government policy.

     According to Ottaway, the second danger comes from the government

and those  media owners  and oligarchs  who make  use of  their  media

outlets to  attack their  rivals and  competitors and  represent those

politicians they like in a favorable light.

     Ottaway  named   the  lack   of  high   ethical   standards   and

professionalism in  the media  environment itself  the third danger to

the  freedom  of  the  press  and  independent,  honest  and  unbiased

journalism in Russia.

     The lack  of economic  conditions that would make it possible for

the Russian  media to  achieve financial  independence is  the  fourth

danger, Ottaway concluded.

     The international  delegation  included  representatives  of  the

World Press  Freedom Committee  (Washington  D.C.),  the  Journalists'

Protection Committee  (New  York),  the  Federation  of  International

Journalists (Brussels), the International Federation of the Periodical

Press (London),  the International  Press Institute  (Vienna) and  the

World Association of Newspapers (Paris).

*******

#6

U.S/Russia: Panel Urges Friendly Ties Between Two Countries

By Andrew F. Tully

Despite the fall of communism, relations between the U.S. and Russia are not

as friendly as some had hoped for. A group of American legislators, scholars

and former national security officers say it is time for Washington to take a

more positive -- yet cautious -- approach to post-communist Russia. In

Washington, RFE/RL's correspondent Andrew F. Tully reports.

Washington, 13 July 2000 (RFE/RL) -- An independent commission made up of

experts in international relations says that the U.S. would benefit from

being less adversarial toward Russia.

At a Washington news conference on Wednesday (July 12), the Commission on

America's National Interest issued the second in what it says will be a

series of reports defining what its members believe the U.S. should set as

its goals in the new century.

The bipartisan panel is made up of leading members of Congress, retired

national security officers and academic authorities on foreign relations. It

issued its first report in 1996. Its recommendations are offered during

American election years in efforts to guide the candidates for president, the

Senate, the House of Representatives, and other U.S. political leaders.

In its first two reports, the commission listed America's vital interests,

extremely important interests, important interests and less important or

secondary interests.

In the current report, the vital interests are listed as follows: preventing

nuclear, chemical and biological attacks on the U.S. and its armed forces

abroad; ensuring the survival of U.S. allies and their continued cooperation;

preventing neighboring nations from becoming powers hostile to the U.S.;

ensuring the stability of global trade, energy and financial systems; and

establishing productive relations with Russia and China.

One of the directors of the report is retired U.S. Army General Andrew

Goodpaster, once the supreme commander of NATO forces and a White House

national security adviser. At the news conference, Goodpaster essentially

reduced America's vital interests to four. He called them "four long poles in

the tent."

"I identify four long poles in the tent that will tell in large measure

whether we succeed or whether we fail: Our relationships with our allies, our

relationships with Russia, our relationships with China, and what we do about

nuclear weapons," he said.

Another director of the study is Graham Allison, president of Harvard

University's Belfer Center for Science and International Affairs. He says it

is important for the next president -- who will be elected in November and

inaugurated in January -- to set well-defined goals for America. Not to do

so, Allison says, would be a sign of irresponsible complacency.

"The danger in the current situation comes from the fact that the U.S. now

inherits a position so powerful, with so few adversaries, with so many

opportunities, that the temptation is sort of a politics of illusion," he

says.

Allison said the chief difference between the 1996 report and the "updated"

version issued Wednesday is that the researchers wanted to address America's

relationships with its allies -- and with Russia and China -- in more

positive language.

For example, the previous document said one vital interest was to "prevent

the emergence of a hostile hegemon [regional power; eds: as written in the

report and spoken at the news briefing] in Europe or Asia." This was an

obvious reference to Russia and China. The current report takes a more

positive tone by urging that the U.S. pursue "productive relations" with the

two nations.

The updated report also urges the American government to try to prevent what

it calls "Russia's reversion to authoritarianism." After the news briefing,

two directors of the study gave RFE/RL their views on how the U.S. could

accomplish that.

One is James Thomson, the chairman of the RAND Corporation, a California

think tank. He said Washington can demonstrate preferable alternatives to

authoritarian rule. He said this is best accomplished if American companies

invest increasingly in Russia.

"Americans have more or less fled the Russian market, and the consequence of

that, I think, has been [that] the relationship between the United States and

Russia has unfortunately deteriorated back to the security issues, where --

arms-control issues and so forth, which are not entirely friendly and

productive," Thomson said.

Thomson conceded that corruption in Russia is the primary force that is

repelling American businesses. And he said there is little the U.S. can do

about it except to emphatically point out its consequences.

"Those consequences are severe, because American and German and other Western

countries don't want to invest in areas where they have to pay people on the

side [be forced to pay bribes], where they have to buy protection for their

folks [employees] -- including physical protection," Thomson said.

Goodpaster, the former NATO commander, said the U.S. government also can make

Russia a full partner in security decisions -- in other words, to treat

Moscow like an ally, not an adversary. For now, the retired general said,

Russia feels like an adversary.

"I think that the [U.S.-Russian] relations have been worsened in a very

unnecessary way, that they [Russians] have had the feeling of being excluded

or consulted after the fact. There are ways of overcoming that. We did it

with Germany, we did it with Japan after World War Two. Those are great

successes. The same opportunity, I think, exists [in Russia]," Goodpaster

said.

But both Thomson and Goodpaster stressed that Washington cannot dictate how

Russia evolves politically.

*******

#7

Jamestown Foundation Monitor

July 13, 2000

STRUGGLE IN RUSSIAN DEFENSE MINISTRY BURSTS INTO OPEN. A long-smoldering

conflict within the Russian military high command appears to have come to a

head in recent days, and its resolution could force President Vladimir

Putin to make some difficult and potentially unpopular decisions regarding

military policy and personnel. According to Russian news sources, General

Staff Chief Anatoly Kvashnin used a meeting today of senior Defense

Ministry officials to offer a radical and even--as one Russian agency put

it--"sensational" plan for reorganizing the Russian armed forces; namely,

to eliminate the country's Strategic Missile Troops (SMT) as a separate

service branch and to resubordinate the SMT's assets to the Russian Air

Force. Kvashnin apparently justified the proposal with the argument that

the armed forces as a whole would be best served by shifting scarce

resources from the SMT to the country's conventional forces. If adopted by

the Kremlin, Kvashnin's proposal would represent a radical restructuring of

the armed forces and the demise, apparently, of the strategic rocket

forces, long the chief symbol of Moscow's military might and of its status

as a superpower.

Although yesterday's events were something of a sensation, they in fact

reflect a struggle within the Defense Ministry leadership which has been

going on for at least the past two years. At the center of this struggle

are Defense Minister Igor Sergeev, the number one man in the Russian

military's leadership hierarchy, and Kvashnin, who as General Staff chief

is subordinated only to Sergeev. Both men were appointed to their

respective posts in May of 1997 by then Russian President Boris Yeltsin;

the antagonism which existed from the start between them was reportedly

seen by the Kremlin as a useful tool to ensure its control of the armed

forces. That antagonism only grew with the passing months as Sergeev, a

former strategic missile forces commander-in-chief, embarked on the

implementation of a military reform program which saw the country's already

troubled conventional forces reduced in number while increasingly scarce

resources were devoted to maintaining Russia's strategic deterrent.

Given the Russian government's dire financial straits and the diminution of

military tensions which followed the end of the Cold War, that policy

probably made sense--even to Kvashnin. But the move which really set the

Defense Minister against the General Staff chief was apparently a proposal

delivered by Sergeev to Yeltsin in late 1998 that, in effect, would have

placed operational command over all of Russia's strategic nuclear

forces--including those belonging to the navy and air force--in the hands

of Russian SMT commander (and Sergeev protege) General Vladimir Yakovlev.

Kvashnin and the other service chiefs were reported to have been incensed

by Sergeev's proposal because they saw it as an effort both to increase the

authority of the SMT vis-a-vis the General Staff and the other service

branches, and because it would undermine the claims of the latter group for

budget resources. Yeltsin never implemented Sergeev's proposed

reorganization, however, but the issue remained a point of friction within

the high command following Yeltsin's resignation and the accession of Putin

to the presidency.

Last year's NATO air campaign against Yugoslavia and the start of Moscow's

current war in the Caucasus helped propel the broader struggle between

Russia's strategic and conventional troops--and between Sergeev and

Kvashnin personally--back to the forefront of Russian defense politics. The

NATO air war tended to strengthen the hand of those Defense Ministry

hardliners who were grouped around Kvashnin. Their position was further

reinforced, moreover, when Russian paratroopers unexpectedly seized the

Slatina airport in Kosovo in June of last year. That move, which was very

popular in Russia, is believed to have been orchestrated by Kvashnin and

his supporters.

This same group, not surprisingly, is thought to have been the driving

force behind the hardline strategy which Moscow adopted in the Caucasus.

The difficulties which Russian troops faced early in the campaign,

moreover, afforded Kvashnin and others the opportunity to complain that the

existing policy of favoring the country's strategic missile troops had left

Russia's conventional forces poorly equipped and ill-prepared to do battle.

As the conflict in the Caucasus wore on and Putin began to consolidate his

political authority, in part by promising to rebuild Russia's military

might, there were indications that spending priorities within the Defense

Ministry would be reordered so as to give greater attention to the

conventional troops. That decision appeared to reflect the belief that

Kvashnin and others connected to the Caucasus war effort were riding high,

and that they would profit by Putin's election as president and by what

many believed would be a subsequent housecleaning atop the Defense Ministry.

That housecleaning never came, however. Following Putin's inauguration the

Russian president chose instead to retain the services of Sergeev as

defense minister. This decision suggested that Putin was hesitant to shake

up the military leadership so soon after his election. It may also have

reflected the fact that Russian troops fighting in Chechnya had lost

momentum and that the operation's commanders were no longer in favor.

Indeed, recent weeks seem to have seen the pendulum swing back against

Kvashnin. One Russian daily suggested late last month that the deepening

rift between Moscow and Washington over missile defense and other arms

control issues has helped to restore the political influence of Sergeev and

the strategic rocket forces more generally. That newly recovered influence

was said to have been behind the very public and high-profile criticism

which Sergeev and, especially, SMT commander Yakovlev leveled at the United

States in late June over Washington's apparent intentions to proceed with

the deployment of a national missile defense system (see the Monitor, June

28).

But yesterday's Defense Ministry meeting suggests that Kvashnin and those

behind him may not be quite dead yet. Indeed, the Russian General Staff

chief appears to be trying to hoist Sergeev on his own petard. The Russian

defense minister had argued for the establishment of a single strategic

forces command on the grounds that it would streamline command structures

and thus make better use of scarce financial resources. But Kvashnin's

plan, which was apparently drawn up by the General Staff, reportedly argues

that eliminating the SMT and folding its assets into the air force would in

fact better serve efficiency and cost-cutting. Details of Kvashnin's plan

remained sketchy, but Russian reports suggested that it was based on the

notion that Russian-U.S. arms control agreements will lead over the next

few years to radical reductions in Russia's strategic missile arsenal and

thus will eliminate the need for a separate missile forces service. Some of

these same reports suggest, however, that the logic underpinning Kvashnin's

argument has little in common with Russia's recently approved military

doctrine, and that it may also presuppose a rate of retiring Russian

strategic missiles that exceeds the terms set out in the amended START II

arms reduction treaty (AFP, Reuters, Vremya MN, Russian agencies, July 12;

NTV, July 11; Itogi, July 4).

All of this suggests that Kvashnin's most recent moves may be motivated far

more by politics than by Russian security considerations. If so, that would

be no surprise. Kvashnin has long been described by Russian sources as a

supremely political general, a man who is ruthlessly ambitious and who has

long had his sights on the defense minister post. Some have also suggested

that he has Putin's favor. Kvashnin's unexpected appointment to the

influential Russian Security Council last month--the Defense Ministry is

now the only Russian ministry with two representatives on the council

(Izvestia, June 14)--suggests that the General Staff chief may be operating

from a position of strength. His apparently naked challenge to Sergeev

yesterday could test this assumption. It could also force Putin to choose

between the two men, and to at last make clearer his own priorities

regarding the future development of Russia's armed forces.

*******

#8

ARTICLE BY SERGEI KARAGANOV, FOREIGN AND DEFENSE POLICY  

COUNCIL CHAIRMAN, REGARDING THE UPCOMING OKINAWA G-8 SUMMIT

(MOSKOVSKIYE NOVOSTI WEEKLY, P. 5, 13, NO. 27, JULY 11-17,

2000)

SOURCE: FEDERAL NEWS SERVICE

REFLECTIONS ON THE EVE OF OKINAWA

     I remember the first memorandum I wrote when Mikhail Gorbachev

was first invited to a meeting of the G-7 held in London in 1991.

If my memory doesn't fail me, its main thrust was as follows: we

shouldn't seek full membership, otherwise we would be turned down.

First, we should revive the country economically and embark firmly

on the road of democracy. And then they would invite us themselves

and give us a full rather than a non-casting vote. I knew, although

I didn't write it in my memorandum, that the level of our economy

or the prevailing ideology would not be the only reasons why we

would be admitted. But the Soviet leadership was not ready to speak

the language of the advanced powers of what was then a totally

different world. The Newspeak of "new political thinking" resembled

the language of the developed West only superficially, but not in

substance.

     I was told that "my memorandum had made a good impression," a

big morale booster for a beginning scholar that I was at the time.

     Now, almost ten years on, I will stick my neck out and submit

some of my thoughts on how to develop relations with the G-7 or

G-8.

     I won't try to guess what the real agenda of the G-8 meeting

no Okinawa will be.

     In recent months thick files have been prepared for President

Putin by authoritative sherpas -- negotiators on the affairs of the

G-8, Alexander Livshits, until recently, and Andrei Illarionov in

recent months, top professionals at the Foreign Ministry and the

Presidential Administration.

     Let me begin by comparing the conditions in which Gorbachev

began and in which Putin continues the work now.

     In terms of international development Russia almost missed out

on a decade and a half. Gorbachev still had a super power behind

his back. Now our economy has shrunken by more than half and we

will continue to diminish for some time yet even, as we hope, we

finally adopt an effective long-term strategy of national economic

development. The annual growth of the American economy which,

thanks to the breakthrough in information technologies, has built

up a huge lead over the rest of the world, exceeds the whole of

Russia's GDP.

     There is much more skepticism than before about the future of

our country. Fifteen years of unsuccessful reform have contributed

to the image of a country without a future which should be reckoned

with not so much because of its present or future potential as

because of its historical strength, its vast territory, a huge

population, its nuclear weapons which still survive, its

geo-strategic position and its natural resources. Most importantly,

perhaps, Russia has missed out on another revolution, this time not

a post-industrial but an information revolution. We are losing at

a growing pace not only our technological potential remaining from

the past but what seemed to be immutable -- the standard of

education, the quality of human resources, and yet it is this and

not as in the remote past, natural resources, or in the more recent

past, the production potential, that determines the level and

prospects of the development of countries and regions.

     The educational standards and the awareness of the trends of

world development on the part of our elite are stuck where they

were in the 1970s-1980s.

     But enough stirring the wounds by speaking about our

backwardness.

     Indeed the other seven too have their problems, even though

they are problems of a different kind.

     Vladimir Putin will not be attending a "congress of victors."

And this despite the fact that the developed countries are enjoying

an unprecedented period of sustained growth to which there is no

end in sight, in spite of all kinds of upheavals and perturbations.

     Although the world GDP is growing rapidly, inequalities in its

distribution are growing even faster. One billion people survive on

less than a dollar a day, and another million on less than 2

dollars a day. The gap in terms of per capita GDP between the rich

and the poorest nations is increasing. Almost the whole of Africa

and much of Central Asia are continents and regions which face a

dismal future.

     The state and the nations are growing comparatively weaker

robbed of power and the levers to govern not only their citizens

but global processes by the globalization of financial, economic

and financial flows.

     Globalization seems to wrest the much-celebrated victory from

the hands of triumphant democracy. Democracy itself is being

eroded. The weakening of the state which at least in theory is

responsible to its own citizens diminishes the ability of the

citizens to influence the policy and determine their own future.

     The international community is fast becoming less governable

and international relations are becoming less and less stable. It

is the growing instability and unpredictability and not the growing

trend toward "unipolarity," still less American "hegemonism" that

forms the prevailing trend in international relations.

     Nuclear proliferation has not been stopped. The acquisition of

nuclear weapons by India and Pakistan has shown that should North

Korea, not a phantom but a major state, want to acquire it,  nobody

is prepared to prevent it. The argument today may be not whether

proliferation will continue, but how many states will possess

nuclear weapons in 10 or 20 years time.

     The UN, the OSCE and the majority of other global and

international security systems are becoming weaker and less

effective. Against this background NATO's role is artificially

sustained through its enlargement. But it too has been proved to be

ineffective. Having decided -- also largely in order to prove its

usefulness -- to go beyond its statutory goals by implementing a

so-called humanitarian intervention in Yugoslavia, it has failed

dismally. First, it paved the way for ethnic cleansing against the

Kosovars, then destroyed the civilian infrastructure in Yugoslavia

and now it watches helplessly the ethnic cleansing of non-Kosovar

ethnic minorities and the movement towards the secession of Kosovo

and the creation of Great Albania, the first Muslim state in

Europe, a state which is extremely backward and crime-ridden.

     The situation in the domain of reforming international

finances is no better. Attempts to modernize it have failed

although it is functioning in a very different world than the

post-war world when its foundations were laid at Bretton Woods.

     Against this background, what should a Russian President do?

Especially a new Russian President?

     First. To remember that in spite of its weakness Russia, in

this context, has some clout and the possibility to make its voice

heard. Besides, in spite of all the losses our state is not the

weakest member of the G-8.

     Second. Not to go for spectacular gestures or to come up with

high-profile initiatives, but to concentrate on building up his

own, hence his nation's, political capital by taking an effective

and constructive part in the discussions, building up contacts and

trust. There are prerequisites for that. Almost all the comments of

foreign leaders on their contacts with Putin boil down to this, for

the first time in recent years instead of "talented Russian

peasants" or simply pleasant clowns we have a leader who knows what

he is saying and who has the ability to listen. That impression

should be consolidated and developed. It is good for the nation.

     Third. He should try, as far as possible, avoid reporting to

the G-8 on the state of his country and reform as a separate issue

on the agenda. Otherwise, Russia will from the start be put in an

unequal position: one country reporting to seven countries. And to

cap it all, the seven have little to offer Russia by way of advice.

So, an effort should be made to leave accounts of Russia outside

the official negotiations.

     And fourth and last. I would hazard suggesting two topics

which may be raised on Okinawa and perhaps discussed at the next

meeting which may be held in Moscow.

     No expert knows exactly what the world will be like with 8-10

nuclear powers, and with a US national missile defense of very

limited effectiveness. Russia for which nuclear weapons, if it

preserves them, will in the foreseeable period remain the main

lever of political influence would stand to gain if it raised the

issue of the future of nuclear weapons in the system of

international relations and put it at the focus of discussion by

the most influential countries of the world.

     And I should mention one more topic. About four years ago we

and our friends in the non-governmental Foreign and Defense Policy

Council launched a campaign to stimulate the awareness of the

public and the elite in the pandemic of drug addiction which was

beginning in Russia. We managed to quicken interest in the issue.

But then as now I was surprised about the lack of any effective

international organization to combat the narco business and drug

addiction. One got an eerie impression that the narco barons had

bribed national governments into fighting international drug

trafficking alone and not together.

     I could go on and offer still more exotic topics.

     But the President should not seek to astonish his colleagues.

He should complete the business begun by Gorbachev but not brought

to a successful conclusion by Yeltsin. Russia, in spite of its

weaknesses, should try to become a regular full-fledged member of

the G-8. Our participation and influence within that group will

save us a lot of costly actions to maintain the national prestige.

And the cost of that influence may be comparatively low --

intellectual training, a little flexibility, a lot of realism and

a demonstration of political will.

*******

#9

The Globe and Mail (Canada)

Iron fist squeezes democracy in Ukraine

Soviet-style repression is back, critics warn

By GEOFFREY YORK

Kiev, Ukraine -- Alexei Podolsky was arrested twice for distributing leaflets

for a Ukrainian opposition party last month, but he ignored the warnings. So

the next message was delivered more brutally.

Late one night, as he left the plant where the leaflets were printed, two men

grabbed him and stuffed him into their car. They drove him to a remote forest

about 100 kilometres from Kiev, clubbed him with truncheons, kicked and

punched him, then ordered him to dig a grave for himself.

Left unconscious in the forest, he awoke the next day and staggered out to

find help. His attackers have not been found, but Mr. Podolsky feels the

message was clear: Don't mess with the Ukrainian authorities.

Until recently, Ukraine was a rare success story, one of the few former

Soviet republics where democracy seemed entrenched. Elections were generally

free and fair through most of the 1990s, and everyone seemed to accept the

will of the people.

But recently Ukraine has lurched toward a new authoritarianism. President

Leonid Kuchma is expanding his power. Opposition leaders have been harassed.

Elections have been rigged, and independent media outlets silenced.

Now Mr. Kuchma wants to weaken his parliamentary rivals by revising the

constitution on the basis of a referendum that was widely criticized as a

sham.

His officials orchestrated the results by going door-to-door with ballot

boxes, threatening to punish voters who failed to support the President.

If Ukraine's fragile democracy is crushed by a new autocracy, it will be an

ominous warning for other newly independent nations in the region, including

Russia.

Most former Soviet republics have already fallen under the control of

iron-fisted dictators who announce victories in tightly controlled

referendums. Ukraine, with its population of 50 million near the heart of

Europe, was one of the last remaining hopes for democracy in the region. But

for some opposition leaders, that hope is fading fast.

"In Ukraine there is no longer a system of free elections," said Yuri

Orobets, a colleague of Mr. Podolsky in an opposition coalition.

"We've returned to the Soviet system, where the votes are organized according

to the orders of the authorities. The essence of power is the same in all the

ex-Soviet republics: A tendency toward authoritarian rule."

The story of Mr. Orobets, a former member of parliament, is an example of how

the opposition is marginalized. He was the clear winner of three elections in

his Kiev constituency in 1998, but each victory was disallowed by judges. The

election was then postponed 18 months, allegedly to save money. After an

election on June 25, the government announced that its preferred candidate

had won.

Mr. Orobets says he will challenge the results in court. "The violations were

terrible. One of the voting stations was visited by 220 voters, but in the

box there were 560 ballots . . . They prove the axiom that it doesn't matter

who votes, it only matters who counts the votes."

He accuses Mr. Kuchma of following the model of authoritarian regimes such as

Turkmenistan and Uzbekistan. The result, he says, will be a "Kuchmenistan."

Mr. Orobets and his reformist colleagues, including Mr. Podolsky and former

Ukrainian justice minister Serhiy Holovaty, have been repeatedly harassed. A

mysterious fire damaged the printing plant where they published their

leaflets. Fake leaflets under their names were distributed. Election

observers found ballot-stuffing and falsified reports. When they won

elections, the results were disallowed.

Mr. Holovaty, who has high-level connections from his cabinet days, says two

sources told him that the brutal beating of Mr. Podolsky was approved by top

officials in the Ukrainian government. "It was not the initiative of

low-level people. It was an initiative of the interior minister or the

President."

Mr. Holovaty is convinced that Ukraine is enduring a "creeping coup" that

will concentrate power in the President's hands. "Most ordinary people are

completely cynical and hopeless. They don't care about democracy and reforms.

They only care about getting a few pennies for bread. People don't feel that

their voting makes any difference any more."

Ukraine's slide into autocracy began with the presidential election last

November, in which Mr. Kuchma was re-elected. The campaign was "a disgrace,"

according to a report by observers from the Council of Europe, the leading

human-rights group of the European democracies.

The Ukrainian media was "grossly biased" in favour of Mr. Kuchma, and many

voters were threatened with punishment if they failed to vote for him, the

report said. State officials were required to campaign for the president.

Regional governors were forced to resign if their regions voted against Mr.

Kuchma. And top officials of hospitals, universities and military units were

made "personally responsible for 'correct' voting by their subordinates," the

report said.

After the election, Mr. Kuchma cobbled together a majority in parliament, but

dozens of left-wing deputies refused to recognize it. They occupied the

parliament building for two weeks, while the pro-presidential group held

sessions in another building, leaving Ukraine in the embarrassing situation

of having two parliaments, until the President's group muscled its way back

into control of the old building.

Mr. Kuchma, anxious to tighten his grip on power, called a referendum on

April 16 to seek support for a smaller parliament and the presidential

authority to dissolve parliament.

His strategy immediately set off alarm bells at the Council of Europe, which

has watched dictators in Belarus and Central Asia use rigged referendums to

extend their rule.

The Strasbourgh-based council, a 41-nation human-rights and democracy group,

refused to recognize the vote and now threatens to suspend Ukraine's

membership if Mr. Kuchman amends the constitution on the basis of the

referendum.

Officially, 80 per cent of eligible voters cast ballots, and more than 80 per

cent supported the President on each question. But almost nobody believes the

official results. The Council of Europe still refers to it as "the so-called

referendum." Most analysts believe that, at best, 30 per cent of voters took

part.

Not surprisingly, many ordinary Ukrainians are cynical about the referendum.

Vladimir Shadrin, a 50-year-old engineer at an aircraft factory, said that

the referendum results were "a fairy tale" and that he cannot understand how

Mr. Kuchma keeps winning elections.

"All of my acquaintances voted against him. Who voted for him? I can hardly

guess."

*******