RUSSIAN-U.S. SUMMIT LOOMS, TENSIONS LINGER. Russian Foreign Minister Igor Ivanov's visit to Washington last week appears to have raised as many questions as it has answered about the future of relations between Russia and the United States. The most obvious positive accomplishment of Ivanov's two days in Washington--during which he held intensive negotiations with Secretary of State Colin Powell and met with President George W. Bush, national security advisor Condoleezza Rice and U.S. lawmakers--was the announcement that Bush and Russian President Vladimir Putin will hold a brief summit meeting in Slovenia on June 16. The announcement, which had been anticipated, gives further credence to the notion that a chill in bilateral relations which accompanied the Bush administration's assent to power is at an end and that Moscow and Washington may now be entering a new period of constructive engagement. The same message was suggested by the generally friendly tone of Ivanov's talks with Powell, and by the fact that the U.S. Secretary of State appeared on this occasion to soft-peddle earlier U.S. criticisms of Russia related to the ongoing war in Chechnya and the Kremlin's assault on media freedoms.

Ivanov's visit provided little evidence, however, that the two sides had narrowed their differences on what remains the biggest obstacle to improved Russian-U.S. ties: Moscow's opposition to the Bush administration's missile defense plans. That topic appears to have dominated the consultations which took place between Powell and Ivanov on May 17. It was also the subject of intensive, parallel talks conducted between Russian and U.S. arms negotiators. Few details of the latter talks were made public. That the Kremlin had not softened its opposition to the Bush administration's intention to proceed with missile defense was suggested in a message which Putin reportedly delivered to Bush. According to Kremlin sources, the Russian president used the message to reiterate Russia's opposition to missile defense and also to warn that the planned U.S. missile shield would "annul the 1972 ABM (anti-ballistic missile) treaty and all disarmament agreements linked to it." Powell, meanwhile, indirectly underlined the Bush administration's own determination to proceed with missile defense development when he warned that consultations on this subject could not go on indefinitely and that at some point the U.S. administration would act on "what we believe are our best interests at that time." The two sides did reportedly agree to a Russian proposal calling for the creation of two working groups, one of which will consult on potential threats to international security and the other of which will examine the role and future of arms control agreements (Reuters, May 16, 18-19; AFP, May 17; Washington Post, May 19).

Initial Russian commentaries on the Ivanov-Powell talks appeared in general to treat them as a positive development and one that could open the door to more constructive Russian-U.S. relations. They also suggested that the lack of progress on the missile defense issue was not unexpected, and speculated that negotiations on so difficult and divisive a topic were, in any event, likely to be a long and difficult process.

But Russian commentaries on the current state of Russian-U.S. relations tended toward caution and skepticism, suggesting that the recent upturn in ties is both conditional and dependent on U.S. motivations that over the longer term may prove unsustainable. The Russian daily Izvestia, for example, opined that the Bush administration's shift to a friendlier posture toward Russia is in many ways the product of diplomatic difficulties Washington has encountered of late in relations with countries in both Europe and Asia, and particularly in its dealings with Beijing. "Under these circumstances," the newspaper writes, "the Russian factor has is becoming more significant for the Bush administration." The Russian daily Kommersant made a similar point, arguing that Washington's European allies--who are determined to maintain partnership relations with Russia--had rebelled and demanded that Washington do more to engage Moscow. Against this background, the newspaper warned that the Bush administration's newly friendly attitude toward Moscow might be less than sincere. "It certainly seems that the Americans have decided to create an illusion of dialogue with Russia just to placate their European allies," the newspaper wrote (Kommersant, May 18; Izvestia, May 19).

The newspaper Nezavisimaya Gazeta, meanwhile, posed the million-dollar question for Moscow when it asked exactly where Russia should "seek consolation: in the fact that Russian-American dialogue is finally starting, or [in] whether it will result in what Russian diplomacy wants?" (Nezavisimaya Gazeta, May 22). The Russian Foreign Ministry would probably respond that, for the time being at least, the former is sufficient. Moscow appears to see the simple act of restarting negotiations with the United States as a significant development because it reaffirms, in Russia's view, its own importance as a major player on the world stage and provides a high-profile forum from which Moscow can expound its own ideas on arms control and international other issues. And should Russia and the United States fail to reach some sort of accommodation on missile defense and arms control, Moscow presumably hopes to position itself so that the Bush administration is blamed--by the Europeans and others--for the failure of negotiations.

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#2
NATO meeting in former Soviet Union a boost to Baltic bids

VILNIUS, May 24 (AFP) -
The first-ever meeting of NATO lawmakers in an ex-Soviet country that begins in Lithuania on Sunday will be a key chance for the Baltics to push their bids for membership, but may also further goad Russian opposition.

The NATO Parliamentary Assembly has no formal status within the alliance's structures, but analysts and officials say the meeting will be a crucial opportunity to convince lawmakers from member countries who must eventually ratify any enlargement.

The meeting of lawmakers from the NATO member states and over a dozen countries from central, eastern and southern European will come as NATO foreign ministers meet next week in the Hungarian capital Budapest and just weeks ahead of a meeting of NATO heads of state next month in Brussels.

Enlargement of the alliance is expected to top the agenda at the Vilnius meetings which last through May 31 and, given the meeting's venue, membership of the three Baltic states in particular.

All eyes will be on the Americans, as the US position is viewed as the key to whether NATO will decide in November 2002 at a summit in Prague to take in as many as nine new members.

Estonia, Latvia and Lithuania see the assembly as a key opportunity to lobby US senators, whose support will be crucial in determining the position of US President George Bush's administration.

"The Senate is so split between Republicans and Democrats that the Bush administration would like to avoid most issues where it is not assured of strong majority support," said the Estonian foreign ministry official in charge of promoting its NATO bid, Harry Tiido.

"If the Senate signals that it will endorse NATO enlargement, and the Baltic dimension, then the Bush administration will most likely move on it," he told AFP.

Their membership was considered unlikely a few years ago due to Russian opposition, but a small but steady defense build-up helped lead a group of US senators to endorse their bid earlier this year.

At a meeting of prime ministers of nine NATO hopefuls earlier this month in the Slovak capital Bratislava the Czech President Vaclav Havel passionately endorsed their bid for membership.

"Yielding to some geopolitical or geostrategic interest of Russia, or perhaps merely to its concern for its prestige, would be the worst thing the Alliance could do," he said.

Bush sent a message to the gathering saying "no part of Europe will be excluded because of history or geography," but the US has so far avoided saying whether it will support the entry of any candidates in 2002.

But Bush may use a speech on June 15 in Poland, which joined NATO in 1999 in the last wave of enlargement, to outline his views on enlargement, meaning the Vilnius gathering may be the last chance to sway the Americans.

In Vilnius NATO candidates are likely to repeat calls for a "big-bang" enlargement under which they would all get invitations next year.

That may be too much for some NATO members, but the idea of extending invitations to all nine candidates and setting strict membership criteria for them to meet before they join has been gaining steam recently.

"It would be a 'big bang' with individual tracks to membership," said Brigadier General Michael Clemmesen, the Danish commandant of the Baltic Defense College based in Tartu, Estonia.

Such a scenario would have the advantage of reassuring candidates of their eventual membership while ensuring they are fully prepared before joining.

"I know from my Baltic friends that this would not be seen as a good solution, but an acceptable one," Clemmesen told AFP in a recent interview.

Russia remains opposed to the Baltics joining NATO, and will not send a delegation of lawmakers to the Vilnius meeting, lest it be construed as tacit support.

Russian President Vladimir Putin warned last year Baltic memberhip in NATO would "destabilize" the security situation in Europe, but many believe Russia will eventually acquiesce as it did with Poland, Hungary and the Czech Republic joining NATO.

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#3
Moscow Daily Views 'Philosophical Musings' of Havel NATO Speech
Rossiyskaya Gazeta
23 May 2001
Report by Aleksey Marinin: "What Vaclav Havel Isn't Saying"

The fact that a number of East European countries are keen to join NATO is nothing new. What is new, probably, are the attempts to give this process what we could call an intellectual philosophical dimension.

At any rate, that was the approach indicated by Czech President Vaclav Havel, who devoted his hour-long report at the May conference "Europe's New Democracies: Leadership and Responsibility" in Bratislava to the problems of expanding the alliance. I would like to dwell in slightly more detail on certain provisions of the speech.

Recognizing the fact that the confrontation between a West embodying, in the Czech president's opinion, "prosperity, freedom, and order" and an East which he called the "symbol of backwardness and obtuse authoritarianism" is over, Vaclav Havel concludes that the time has come to develop major regional organizations that are becoming part of the globalization process. He includes among those organizations NATO, which "has turned from an instrument of defense against Soviet expansion into a structure for supporting the future world order." And the alliance's territorial responsibility is defined as the area from Alaska in the West to Vilnius, Riga, and Tallinn in the East.

The Czech president puts Russia's negative attitude toward NATO expansion down to two main reasons. The first is the mental inertia inherited from the Soviet period, when NATO was seen as enemy number one. But now, according to Havel, the alliance is pursuing other aims and wants to be Russia's partner, but Russia apparently is not noticing. The second serious reason, he believes, is that the Russians have not yet recognized their own new identity: "Distrust of oneself and uncertainty about one's own identity generate a distrust of the whole world, a suspicion of evil intentions, and, eventually, an aggressiveness that may result in the conquest of other people's lands or the imposition of one's own domination upon those who do not desire it."

A most important problem in NATO's relationship with Russia is said to be the alliance's eastern border, which will be defined with the admission of the three Baltic states to NATO. In the Czech president's opinion, any concession to Russian interests on this would be tantamount -- no less! -- to a return to the Ribbentrop-Molotov Pact and a recognition of the old principle of the division of the world....

But other statements of Vaclav Havel's have not yet been forgotten. Was it not he who stated just before the dissolution of the Warsaw Pact that, in the event of its liquidation, there would be no reason for NATO to exist and, the Czech president believed, it should be replaced by a new pan-European security organization uniting the efforts of both the Western and post-Communist states. So why has he changed his convictions so sharply?

Let us be so bold as to assume that the Czech president's "new ideas" have emerged in connection with the staging of the NATO summit in Prague this November. Havel has already begun preparing for it so as to ensure that he can be confirmed on his own "turf" as the alliance's leading ideologist. For the sake of achieving this goal he is keeping quiet about and failing to pay attention to the real interests of his own country, whose economy, as the president should know, has suffered notably, for instance, from the cutting back of ties with Russia and the other CIS states. So the Czech Republic's prosperity will by no means depend on its degree of participation in the activities of NATO structures but rather on the development of mutually advantageous cooperation across the board.

Vaclav Havel has enriched NATO ideology with one other idea. Speaking in Bratislava, he defined as a new task for the alliance the "prevention of local conflicts or other threats of a local nature and the fight against organized crime and terrorism." And ideology is followed by practice -- the Czech president believes that in order to implement these tasks it is necessary to have "limited peacekeeping corps ensuring swift intervention in troubled regions." You wonder why and to what purpose NATO continues to maintain and improve a powerful troop grouping capable of waging large-scale wars in several military theaters whereas Russia has reduced its own Armed Forces by several times over the past decade? Why is this grouping striving so doggedly to develop its own infrastructures in the East?

Needless to say, it is any state's sovereign right to join NATO or not. But Russia too would like to have guarantees that modern weapons types (including delivery vehicles for nuclear munitions) posing a direct threat to the country will not be deployed on its neighbors' territories.

But none of those points were explained at all in Havel's Bratislava speech. The absence of any arguments was covered up by philosophical musings, some of which were cited above. It is not even a question of their being painfully reminiscent of "memories of the future" and smacking of Cold War rhetoric -- ultimately, different eras have different attitudes, and a return to confrontation will benefit no one, above all Russia, which is persistently advocating a stable and democratic Europe with a single socioeconomic, legal, cultural, and environmental area.

This, incidentally, was discussed at the Russia-EU summit that ended in Moscow the other day and at which specific agreements were reached on this score. The main thing is that processes such as EU expansion, economic integration, and the creation of new structures in the political, law-enforcement, military, and other areas will largely determine what the continent looks like in the 21st century. It is quite obvious that Russia, as an inalienable part of the pan-European area, cannot remain aloof from these processes. Nor from the joint quest for responses to the new threats and challenges to European and international security. As far as NATO is concerned, we have to reiterate that it is in our common interest to create the kind of European structure that will ensure equal security for all of the continent's states and will be free of any kinds of dividing lines. Isn't this a sensible ideology for a peaceful future and good-neighborliness in Europe?

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#4
Chechnya war dragging on longer than expected: Kremlin aide

MOSCOW, May 24 (AFP) -
A senior Kremlin official conceded Thursday that the Chechnya war was dragging on longer than President Vladimir Putin's administration had expected.

But he reaffirmed the government's line that Moscow would not conduct peace negotiations with "bandits," but may try to hold presidential elections in Chechnya by the end of next year as part of a "political solution" to the conflict.

"I think this problem (of Chechnya) will be with us for a long time," said the well-placed Kremlin official. "Unfortunately, the situation has degenerated too far. There is no quick way out."

Putin had promised Russians a lightning "anti-terrorist" operation in Chechnya, a popular campaign that helped him win the March 2000 presidential election.

The Kremlin aide dismissed reports that Russia's generals had promised Putin an early end to the war in Chechnya, but he admitted the president had hoped the 20-month conflict would be over by now.

"The generals presented different scenarios about the potential length of the war -- no one made any promises to Putin," the Kremlin source said.

"What has resulted in the end is a conflict that dragged on a little longer than we had all expected, but I cannot say that by too much," said the official.

"Of course, we stumbled across some unforeseen problems once the main military aspect of the campaign ended."

The official also conceded that both sides have committed war crimes, although Russian military officials are hesitant to investigate the charges.

"It is clear that there have been plenty of human rights violations during the war. We do not want to say that this problem does not exist -- it is a real problem," the source said.

Earlier this year, Putin had announced the start of a troop withdrawal from Chechnya, declaring the war over and handing the campaign's command to the internal security service FSB.

However the troop withdrawal has since been halted, with the Chechen rebels stepping up their guerrilla war, continuing to ambush federal troops.

Russian government officials said more than 3,000 federal troops have been killed and another 9,000 injured since the ground offensive began on October

A committee of soldiers' mothers however estimates that the real toll may be three times as high.

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#5
Moscow Times
May 24, 2001
Leaders Scramble for Cover
By Pavel Felgenhauer

In January, the Kremlin announced a "new stage of the anti-terrorist operation in Chechnya" and transferred overall command from the Defense Ministry to the Federal Security Service, or FSB. The government declared that "large-scale military operations in Chechnya are over," that the rebels have been defeated and that the "mopping up" of residual enemy activity will be performed by the FSB through a series of special operations aimed at eliminating separatist guerrilla leaders.

It was decided to deploy small garrisons in at least 200 Chechen towns and villages to help FSB operatives establish control, defend Moscow-friendly Chechens, arrest rebel supporters and quash the insurgency. Moscow announced that it would increase financing to rebuild Chechnya and partially withdraw federal troops.

Five months later, though, none of these things has happened. Rebel attacks have increased in scope and effect, with federal forces suffering more than 50 men dead and wounded each week.

No government aid has arrived in Chechnya yet this year. Over 40 Chechen oil wells are on fire — some of which have been burning since 1999. Federal forces have done nothing to extinguish these fires, which are polluting the entire North Caucasus region. The oil from these wells could have provided much-needed money to rebuild the republic, but the authorities apparently fear that the proceeds would be hijacked by the rebels and used to finance their resistance. In any event, the permanent black clouds of oil smoke over Chechnya amply demonstrate that the Kremlin occupies, but does not control the territory.

Another indicator of the hollowness of Kremlin declarations of victory is its inability to capture leading rebel commanders after all the claims that "we know where they are," "we'll get them soon." Average Chechens genuinely hate the occupying federal troops, which continue to detain, torture and sometimes kill civilians alleged to be rebel supporters. In fact, by all accounts, life in Chechnya is worse today than it was in 1999 when unruly warlords ruled the land before the Russian intervention.

This month, the military quietly halted the previously announced withdrawal of combat units from Chechnya. In February, the Kremlin stated that only about 23,000 troops would remain in Chechnya as a permanent garrison. Of course, this was a propaganda exaggeration that deliberately did not count more than 20,000 FSB and Interior Ministry special and police units, according to Duma defense committee chairman General Andrei Nikolayev. The total "permanent" occupation force for Chechnya has always been envisaged to number from 40,000 to 50,000.

Now the federal withdrawal has stopped with some 75,000 troops in Chechnya. For some time now, the rebels have been threatening a massive counteroffensive, a general uprising that they claim will defeat the federal force and compel the Kremlin to negotiate an end to hostilities and independence for Chechnya. Apparently, the Russian military is taking such statements seriously enough to halt its troop withdrawals.

The commander of the joint task force in Chechnya, General Valery Baranov, was given leave last week until September, and the commander of the North Caucasus military district, General Gennady Troshev, has taken over command of operations in the region. This change would make it easier for Troshev to rush reinforcements into Chechnya from nearby garrisons in the North Caucasus immediately if there is an emergency.

At the same time, Moscow has been full of rumors that overall responsibility for the "anti-terrorist operation in Chechnya" will be taken away from the FSB and given to the Interior Ministry. Although such rumors have been officially denied several times, they still persist. The FSB's obvious lack of successes in recent months would seem to be reason enough to transfer control to the Interior Ministry. However, there may be another motive as well.

The war in Chechnya is unwinnable. Disaster is imminent, and officials are scrambling to get out of the line of command to avoid responsibility for defeat and the mounting casualties. The FSB is probably eager to hand the affair over to Interior, although it is less certain whether the Interior Ministry would want to accept it. Just before the Russian defeat in Grozny in 1996 that ended the first Chechen war, there were also a number of command structure changes. Perhaps the present bloody stalemate is also nearing the breaking point.

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

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#6
NTV DIRECTOR GENERAL BORIS JORDAN ON THE COMPANY'S FUTURE

WASHINGTON, MAY 24, 2001 (FROM RIA NOVOSTI CORRESPONDENT ARKADY ORLOV) --
Only journalists will determine the editorial policy of the NTV television company, its director general, Boris Jordan, said.

According to him, an editorial council is being created in the company and all information policy of the channel "will be determined by this council and not by the company's leadership." Addressing journalists in Washington on Wednesday, Jordan also declared that the shareholders will not be allowed to interfere with the editorial policy.

In Washington and New York Jordan held meetings at the committee for the protection of journalists, at the US president's administration, the Senate and House of Representatives of the Congress, and the State Department where he spoke about the approach of the new NTV leaders to the company's future. Jordan understood his task as "giving information about the real situation around the NTV". The American public and the Bush administration, he believes, are poorly informed about the real state of affairs.

Jordan reported that NTV should remain a Russian channel. The new leadership will "purchase more Russian products than the Western ones because TV viewers want it.

The NTV general director stressed that to retain the specific features of the channel he will propose that the NTV shareholders should not sell the controlling interest to foreign investors.

At the same time Jordan pointed out that when the finances of the company are put to order, the point at issue will be the "strategic" foreign investor who is necessary for the commercial development of the NTV company. But, he believes, the investor will not control the channel.

Jordan is of the opinion that the situation on the TV market of Russia where 10 major TV companies work, has its specifics. But it will ever more approach the situation in the West as the economy will grow. In the future, Russia will have, just as the US has, three main TV companies with all the rest becoming "specialized" -- cable, satellite. But this will not happen soon.

Boris Jordan will meet in New York with the leaders of the major American newspapers and magazines and in the middle of July he plans to visit Europe to explain there, too his viewpoint concerning the situation around NTV and the company's future.

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#7
New Republic
May 28, 2001
[for personal use only]
Moscow Dispatch
Starstruck
By Peter Baker
Peter Baker is Moscow bureau co-chief at The Washington Post.

The May parades on Red Square aren't what they used to be. Gone are the veterans of the "Great Patriotic War" who defeated Nazi Germany 56 years ago; this year, for the first time, the hardy survivors watched from the guest area while fresh-faced recruits marched in front of the Kremlin wall. Gone too is all the hardware, the tanks and missiles that seemed so imposing during the cold war.

The rhetoric isn't as imposing either. Sure, Russian President Vladimir Putin made a veiled jab at the United States during this month's Victory Day celebration. "One cannot build a safe world only for oneself and, moreover, at the expense of others," he declared in a dig at George W. Bush's beloved missile defense program. But, like the parade, the rhetoric seems mostly for show.

Indeed, while opponents of missile defense in the United States fret about its apocalyptic effect on Russian-American relations, the Russians themselves have made peace with its inevitability. Four months into Bush's tenure, Putin has evidently decided that nothing he says or does will dissuade George W. Bush from building (or attempting to build) a nuclear shield. And so the Russian leader is looking for a deal.

Take Bush's May 2 speech on missile defense. In Washington it was seen as a warning that the administration was ready to dump the Anti-Ballistic Missile (ABM) Treaty of 1972 and risk a new arms race in order to build an updated version of Ronald Reagan's Star Wars. But in Moscow political leaders and analysts heard a different message, one apparently calibrated for their ears. They were pleased that Bush referred to Russia as a potentially "great nation"--flattery that played to their wounded pride. They were pleased that Bush did not use the word "national" to describe missile defense, leaving open the possibility of a joint effort. And, most of all, they were pleased that Bush promised to consult with Russia before moving forward.

Within ten days, senior Bush aides were at the Kremlin to talk, and Russian Foreign Minister Igor Ivanov was headed to Washington to sit down with U.S. Secretary of State Colin Powell. In the works is a June summit between Bush and Putin in Europe. Missile defense puts Russia back where it wants to be: at the table. For most of the last decade, Russia has been in the position of a supplicant, begging for loans from the International Monetary Fund or complaining impotently as NATO expanded into Eastern Europe and bombed Belgrade. But in the nuclear arena Russia still matches the United States as no other nation in the world can. And so, for the first time since the fall of the Soviet Union, Moscow feels it has an issue on which it can deal with Washington on more or less equal terms.

This parity, of course, is an illusion. Russia may have nearly as many nuclear warheads as the United States, but it lacks the resources to keep them in silos much longer--much less the capacity to compete in a race to develop anti-missile systems. But this reality, too, favors a conciliatory approach to missile defense: Putin needs a deal so he can dismantle his aging nuclear arsenal without losing face. He has proposed that each side scale down to 1,500 warheads, a notion that seems to hold some appeal for Bush, and Kremlin advisers suggest Russia may need to go even lower, say, to 550. Indeed, a new consensus is emerging among Moscow's foreign policy elite that Russia should tie its inevitable warhead cuts into a grand bargain for a missile defense program that probably can't be stopped anyway. "I don't think Russia or anyone else should support the breakdown of the ABM treaty," says Sergei Karaganov, head of the Council on Foreign and Defense Policy. "But, if America decides to do it, let them take the heat."

And there's one more reason for Putin to seek common ground with the Bush administration on missile defense--business for Russian military contractors. Just as the U.S. defense industry has much to gain from the tens of billions of dollars to be spent developing a web of anti-missile launchers, Russia's struggling arms factories are eager to snap up any scraps that might get thrown their way. Putin's February proposal that Russia help NATO build a limited European anti-missile system was an initial bid to get in on the bonanza. The written plan Putin gave NATO suggested using Moscow's existing tactical missile defenses as the basis for further development of a broader system that could be tested at Russian facilities.

Whether for economic or political reasons, therefore, the notion of a joint missile defense effort has gained currency in Russia. While bellicose hard-liners still warn of the dire consequences that will ensue if the United States pursues a missile defense system, the more influential pragmatists see an opportunity once again to share center stage with the world's only superpower. "If they build it alone and without us, that would be bad," says Vladimir Lukin, a former ambassador to the United States. "If they build it together with Europe, us, and China, this would not be bad at all, as long as we agree on common parameters." But, of course, alone is exactly how most people in Washington plan to build it. Having convinced Moscow not to simply say no to missile defense, the new challenge for the Bush administration may be how to deal with a Russian government that says yes.

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#8
Christian Science Monitor
24 May 2001
Moscow's power struggle over the power grid
A plan to reform the state electric monopoly fits the Kremlin agenda, but risks making California's mistakes.
By Scott Peterson
Staff writer of The Christian Science Monitor

On the face of it, Californians and Russians have little in common.

But power outages that have left millions in the dark and reforms that send electricity prices soaring are bringing complaints that could ring as easily from Sunset Boulevard as from Tverskaya Street.

Russia, analysts warn, is trying to solve a severe electricity crisis with a plan that would repeat many of the same mistakes California made, with potentially far more serious consequences in an oft-frozen nation of 146 million that depends totally on its decaying electricity grid.

"This is critical," says Ben Slay, a senior economist at PlanEcon, a Washington-based consultancy. "People will scream and yell, and - let's be blunt - people might actually die, because prices will go up and things that used to work won't work.

"But if nothing is done, three years from now, all of Russia might go black. And how many people will die from that?"

Few question the need for drastic reform, after years of undercharging for electricity and a decade without investment or upkeep, which has left the world's largest power grid in tatters.

But at its heart, Moscow's sweeping reform plan for its giant electricity monopoly - tentatively approved on Saturday by the cabinet - is also a power struggle over power.

"You have to place this electricity battle in a larger political context," says Robert Orttung, editor of the Russian Regional Report for the New York-based East-West Institute. "It's a battle between [President Vladimir] Putin and the regional governors.

"Maybe the plan doesn't make sense economically, but it's rational if you are a former KGB officer and want to impose control over the regions," he says.

Mr. Putin has vowed to make reform of the state-controlled Unified Energy System (UES) a key economic aim this year. After months of controversy, a compromise plan will break up UES and its 80-odd regional subsidiaries that deliver electricity to virtually every Russian home.

In a bid to introduce competition, energy production, and marketing units are to be split off and privatized - as in California - while the fraying high-voltage transmission grid is to be consolidated and kept firmly in government hands. Prices for consumers will double, at least.

The state owns 52 percent of UES, but other shareholders - more than half of them foreign - have voiced anger that the value of assets may be undermined. UES chief Anatoly Chubais, architect of discredited, asset-grabbing privatizations of the 1990s, is the main author of this plan.

Brokers reported low investor confidence on Tuesday, as money shifted sharply out of UES.

The overall result is in line with Putin's broader political agenda of recentralizing state power while reining in regional governors, say Kremlin observers. Even so, Andrei Illarionov, Putin's economic advisor and a Chubais critic, took issue with the plan. Mr. Illarionov said it caters to a "small minority" of UES chiefs and "scarcely reflects the proposals and opinions of the president."

UES board member Andrei Trapeznikov counters that the reform plan would have been "absolutely impossible" to adopt without Putin's direct support - and that shutting out regional governors, who have for years set local energy prices to enhance their popular support - was the "main achievement."

"UES is the thread which must be pulled to untie the knot of all Russia's economic problems," Mr. Trapeznikov says. "Now the federal power is strong and can talk properly with the regional governors - and insist on the president's political line."

The "main task of reform," he says, "is to block, to stop, to not permit the regionalization of Russian energy."

Energy has been almost sacred here since Lenin declared in 1920 that "Communism is Soviet power plus electrification."

Empire in collapse

The UES utility - an $8 billion empire of 440 electrical power stations and thousands of miles of power lines - is one of the few things that, along with the rail and gas networks, ties all of Russia together.

But today, the world's largest electricity grid is collapsing. Last winter was the worst to date, with whole sections of Russia's frigid Far East experiencing severe blackouts and unprecedented cold. Worn pipes and wires buckled, indoor toilet bowls froze, and public outcry led to the firing of the energy minister.

If ever such reforms are to take place, this moment - when Russia's economy is buoyed by high oil prices - may be the one.

"Now there is a good chance to promote reform, although a high price will be paid for all the delays," says Trapeznikov. "Lost years will make the reform much more painful for consumers, who ultimately must pay."

But analysts warn that economic and political uncertainty, mixed with Russia's investor-chilling privatization history, may lead to a California-style breakdown. "Russia is making the same mistakes as California, but the stakes are much higher," says Mr. Orttung. "Most [regional] governors control the prices now, and naturally want to keep them low, to keep residents happy and businesses profitable. That's exactly what California wanted to do."

But the price cap the Golden State imposed on retail electricity sales couldn't absorb fluctuating wholesale prices that surged with the cost of oil last year and led to numerous bankruptcies. Likewise in Russia, ministers promise to set a retail price ceiling, so the expected doubling of electricity prices "will not be catastrophic."

A further lesson from California is that speedy reform, while feeling like shock therapy, can work best. Russia's approach is slow. "A long, drawn-out liberalization of prices ... can cause the whole reform to short-circuit," says PlanEcon's Mr. Slay. "A gradual liberalization is inevitable, in the sense that a Russian household that makes $100 a month can't afford a dramatic increase, nor can industries."

Still, there are success stories. East European countries such as Poland, Hungary, and the Czech Republic all had failing energy systems when the Iron Curtain fell more than a decade ago. "They were able to liberalize the system enough so that West European companies went in, built plants, and made profits," says Slay. "This is how it is supposed to work. California doesn't have to be the outcome."

Needed: $35 billion

UES chief Chubais won plaudits for boosting cash receipts to 74 percent last year - key to future investment. In the first half of 1999, only one-quarter of receipts were in cash. The rest were paid, often corruptly, with "butter, brassieres, and bottles of vodka," says Slay. The result had been that, until recently, internal investment was impossible in the UES, which needs $35 billion over nine years just to keep the lights working, by one estimate.

The current concern by investors means that electricity reform could be "doomed to failure," says Orttung. "It doesn't make sense to have a plan that will alienate all the investors."

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#9
Chicago Tribune
May 22, 2001
Deal To Lift Kursk Raises Eyebrows
By Colin McMahon, Tribune foreign correspondent

MOSCOW -- After months of planning, promises and negotiations, Russia finally has reached a deal with Western transport specialists to salvage the sunken Kursk nuclear submarine from the bottom of the Barents Sea.

The deal, however, has caused as much concern as it has relief.

At the last minute, Russia had broken off talks with an international consortium whose members have extensive experience in underwater salvage and firsthand knowledge of the Kursk. Instead, Russia on Friday signed a contract with a Dutch firm that has never lifted a sunken vessel.

Conflicting reports and secrecy have surrounded the project to raise the Kursk. The same goes for the investigation into the cause of the Kursk's demise last August. It remains officially unexplained and a source of rumors and allegations.

Time and money, or the lack of both, are at the heart of the government's decision to go with the Dutch firm.

The consortium of Dutch and Norwegian businesses wanted Russia to pay up front, which Moscow is loath to do, according to Russian media reports. The specialists also worry that, because of all the delays, salvage teams would be unable to safely complete the job before fierce storms start rolling across the Barents Sea in late September or early October.

Russia says it is determined to raise the Kursk this year. Such was the promise made by President Vladimir Putin after the nuclear-powered vessel went down Aug. 12 during training exercises.

Russian and Norwegian divers recovered 12 bodies from the Kursk during a difficult mission last fall. But the others in the crew of 118 remain locked in the submarine about 350 feet below the water's surface.

Government critics contend that cutting open the submarine last year might have weakened its structure and made salvage more complicated.

'Theater of the absurd'

"Everything that is going on around the Kursk under the guidance of that governmental commission looks like the theater of the absurd," said Yuri Senatsky, a retired rear admiral who was chief of the Soviet navy's rescue, salvage and vessel lifting operations.

Signing a contract with the Dutch firm Mammoet Transport BVT, said Senatsky, "is the peak of the show."

Russia will pay a $16 million advance to Mammoet, said company manager Frans van Seumeren.

Russian officials, who previously estimated the cost of salvaging the Kursk at $70 million to $80 million, did not say how much Mammoet is charging. Funds have yet to be allocated from the federal budget, but senior officials promised that the Russian government would assume the full costs if necessary.

For more than six months, while negotiations with Dutch and Norwegian companies dragged on, it looked as if some Western countries and Japan would pay about half of the project's cost. An outfit called the Kursk Foundation was set up to collect the money and supervise spending.

As it turned out, the foundation raised almost nothing. Donor nations wanted to tie their aid to a broader effort aimed at cleaning up radioactive sites in Russia's northern port cities of Murmansk and Arkhangelsk.

The Russians declined.

But Kursk Foundation specialists, funded by a grant from Netherlands, did manage to complete a study of the Kursk that laid out a step-by-step, monthslong project for its salvage. Preparations were to begin in February, with survey and cleaning work on the Kursk to start in April.

Already far behind according to that timetable, the Kursk Foundation recommended that the salvage operation be delayed a year. But Ilya Klebanov, the deputy prime minister in charge of the governmental Kursk commission, disagreed.

Both reactors to be raised

The first stage of the salvage operation will begin in mid-July, Klebanov said. The vessel's devastated torpedo compartment will be severed from the submarine and left for later retrieval. The remainder of the vessel, including its two nuclear reactors, is to be raised and towed to port by late September.

Officials said Mammoet would depart from the Kursk Foundation's plan and use a computer-controlled hydraulic lifting system. Yet with little experience in underwater salvage, Mammoet is expected to turn to subcontractors for part of the job, perhaps even to those other companies with whom Russia had been negotiating.

Raising the Kursk is controversial.

Some environmentalists insist that the submarine's two nuclear reactors, though they apparently were safely shut down, must be recovered. Others say moving them is too dangerous and suggest the reactors be entombed in concrete on the bottom of the sea.

Russian experts also say that without the Kursk on hand for study, they could never know for sure what triggered the two explosions that doomed the submarine.

"The submarine must be lifted, dried off, put on the table, figuratively speaking, to be examined by all specialists, shipbuilders, armaments experts, chemists, engineers, so that they could try to find out what exactly happened there, whether it was its own weapons that exploded or it was hit from the outside or it had touched some object," Senatsky said. "That's the only way to do this."

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#10
Krasnaya Zvezda
May 24, 2001
[translation from RIA Novosti for personal use only]
RUSSIA SET TO OVERHAUL ITS NAVY
By Andrei GAVRILENKO, Krasnaya Zvezda

On May 22 the Russian Federation's Defence Minister Sergei Ivanov visited the main headquarters of the Russian Navy, negotiating with its high command there. Those present discussed the state of naval strategic nuclear forces, as well as that of general-purpose naval units. The development of naval aviation, ship-repair and ship-construction issues were also examined. Moreover, Ivanov acquainted himself with specific weapons and communications networks, also visiting the central naval command post.

Talking to reporters, Ivanov stressed that he mostly aimed to find out all about the current naval reform, while visiting the afore-said main headquarters. The Russian Defence Minister doesn't intend to modify the relevant plans for developing specific fighting services of the Russian Armed Forces that had been previously examined by the National Security Council. I'm not talking about any changes at this stage; first of all, such plans must be unfailingly, steadily and rigidly implemented within the framework of available federal appropriations, Ivanov went on to say.

I would like this country to lay the keels of new ships within the next few years, Ivanov added. Our Navy must sail coastal areas (to say the least) more often, not to speak of the high seas, he stressed. However, we must be realists; besides, we must keep in mind that the state's economic potentialities are not limitless, Ivanov noted. In his opinion, some clear-cut combat-duty plans and naval development programs are required.

The current state of our strategic nuclear forces is quite satisfactory, Ivanov told his audience. We must think about the future of the strategic nuclear deterrence concept, he stressed. Consequently, we must assess possible developments during the next 10-15 years, he added. Russia's Defence Minister advocated the harmonious development of the entire strategic triad, which comprises strategic bombers, naval units and ground-based ICBMs. In his words, this country's strategic nuclear forces boast a sufficiently reliable troop-control and combat-duty system, as well as a dependable overall chain of command. We don't have any problems here, Ivanov said in conclusion.

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#11
Kiriyenko-Led Chemical Disarmament Commission's Tasks Previewed
Rossiyskaya Gazeta
22 May 2001
Report by Aleksandr Pavlov: "Not a Local Problem. Plenipotentiary Representative: Chemistry Lessons"

Vladimir Putin has issued an edict setting up the State Commission for Chemical Disarmament. Volga Federal District Plenipotentiary Representative Sergey Kiriyenko has been appointed its chairman.

The fact that the commission has been set up is a good thing. First, this means direct presidential control since the results of its work will be conveyed directly to Vladimir Putin. And that will undoubtedly speed up the resolution of the problem of chemical weapons destruction. Second, this means an opportunity to adopt decisions more promptly and in a more coordinated manner and supervise their implementation. The problem is after all complex in nature.

The commission's top-priority task is to select the destruction technologies. There are several approaches, but it ultimately has to make the choice. It is clear that if each area individually opted for different destruction methods, then there would be different technologies, and different kinds of funding. But standardization is needed here. In addition to the destruction technology, there is also the problem regarding the sequence of destruction. There are weapons whose service life has just run out and areconsidered "accidents waiting to happen [predavariynyy]," as it were. Currently they represent 1-2 percent of the total chemical weapons stocks in Russia. But the number of these weapons is starting to mushroom. Furthermore different regions and different arsenals have different percentages of unsafe weapons. And coordination of action is inevitable in this context.

Meanwhile we are a fairly long way behind in terms of carrying out the 1993 Convention pledges: By 2002 we should have destroyed 20 percent of our chemical weapons stocks, but to date the figure is far below that. This situation threatens to restrict exports of our chemical industry's output to world markets.

But Sergey Kiriyenko's charm and assertiveness will presumably play a positive role here. Even before he was appointed as the commission's chairman he met with Jose Bustani, secretary general of the world organization for the destruction of chemical weapons. Productive dialogue developed between them. Russia can count on this organization's assistance and understanding.

One must be aware that the chemical disarmament process involves very substantial outlay. The Americans estimate the cost of their destruction program (and they have only 30,000 tonnes) at $15 billion. We have 40,000 tonnes. Despite the different in the price of the various equipment it is clear that for Russia this is nonetheless a project that will run into billions. Until this year the funding situation meant that there was only enough money for safe-keeping. In 2001 around R3.5 billion were allocated for the entire program for the first time. This year it is planned to destroy all the powder charges. The bulk have already been destroyed in the presence of inspectors from the aforementioned international organization and they will be destroyed once and for all in the fall. This is substantially enhancing the level of security at chemical weapons storage depots.

In the future it will be considerably easier for Plenipotentiary Representative Kiriyenko than anyone else to tackle funding issues. This is also important for him because five of the seven chemical weapons arsenals are in the Volga Federal District. However, there is only one installation in the district in the village of Gornyy in Saratov Oblast that is more or less ready for the destruction of its chemical weapons. It is planned to start this early next year.

Realizing that the problem of public opinion in relation to these installations is an acute one, Sergey Kiriyenko has already given instructions to the chief federal inspectors to open public reception centers in the cities and settlements near the arsenals. The first of these has already opened 16 May in the city of Kombarka in Udmurtia. One of the public reception center's main tasks will be to carry out explanatory work pertaining to questions of safety in the storage of chemical weapons. Information regarding the decisions being taken in Moscow in connection with chemical disarmament will also be conveyed to the population of the region via the reception center. And environmental monitoring will also be conducted on a regular basis.

A meeting has been held in the settlement of Planovyy in Shuchanskiy Rayon, Kurgan Oblast on the plenipotentiary representative's initiative, at which problems pertaining to the construction of a chemical weapons destruction plant were discussed. Zinoviy Pak, general director of the Russian Agency for Munitions, pointed out that his department is pledging to bring the first phase of the installation on line as early as 2004. In 2001 the federal budget envisages earmarking $25 million for this program, which is six times up on last year. And a major congress of international participants in and sponsors of the construction project is expected to take place here 8 June.

The commission's first session will be held at the end of May. In addition to organizational matters the chemical weapons destruction program will be discussed.

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#12
Washington Times
May 22, 2001
Russia: The survivors
By Ron Laurenzo
Ron Laurenzo is a former editor of Defense Week and was a reporter in Russia from 1991 to 1996.

Lots of nonsense has been written about Russia over the last decade. Much of it has come from journalists trying to cram Russian events into American stereotypes, either because they underestimate their readers´ cognitive abilities or they themselves are unable to grasp Russian subtleties.

Thus, a president whose refusal to negotiate led to a mini-civil war in Moscow in 1993 and the Chechen debacle in 1994 was repeatedly dubbed a "democrat" and men who never built or invested in their country´s future, but gained obscene fortunes by carving up state assets, were compared to John D. Rockefeller and Andrew Carnegie.

The U.S. government also has added to the confusion Clinton administration officials chirped happily about the new Russia´s bright economic future, among other things, right up until the ruble meltdown of August 1998.

There also seems to be a general failure to understand Russians on their own terms as people who, on one hand, are no different than the foreigners trying to analyze them and, on the other hand, think and act in ways that baffle outsiders. In other words, Russians behave just like us, except when they don´t.

Those seeking answers to these mysteries will welcome Geoffrey Hosking´s latest work, "Russia and the Russians: A History," a massive survey that begins with the Kievan Rus in the ninth century and ends with Vladimir Putin´s arrival in the Kremlin in 2000.

Mr. Hosking, professor of Russian history at the University of London, set out to write a book useful both to newcomers to Russian history and to those already familiar with it. He has scored on both counts. The book is well-organized, clearly written and flows logically. Sections are organized by theme, so questions about, say, the origins of the Cossacks or the Bolsheviks´ ideas about culture and family are easy to find. Of course, any history that covers more than 1,000 years must sacrifice detail if it is to stay manageable. The book moves fast, but provides copious end notes for readers who wish to delve into specific areas.

The book´s title also hides one of its most impressive qualities or maybe not, depending on how you define the words Russia and Russians. Mr. Hosking emphasizes the rolls played by dozens of ethnic minorities whether citizens within Russian or Soviet borders, or foreigners on the frontiers, from the Vikings to the Chechens. Much of the book concerns how Russians´ experiences with their baffling assortment of neighbors has shaped their views of themselves and the world.

Unlike many observers who see Russia´s current crises primarily as the result of 70 years of communist rule, Mr. Hosking emphasizes that today´s Russia is the product of 1,000 years of history, much of it pretty tough. Modern Russians also face age-old questions about national identity: the tug between Asia and Europe, between empire and state, and whether citizenship should be civic or ethnic-based.

"Politically, socially, and economically, Russia is still best understood as a network of interlocking patron-client relationships. This is one reason why post-Soviet Russia has such difficulty in generating its own sense of community," Mr. Hosking writes in the opening pages. It is a theme he visits repeatedly, following it like a trail through a Russian forest. While Mikhail Gorbachev struck many foreigners as "un-Russian," Mr. Hosking sees a direct link to Alexander I, who was czar during the first quarter of the 19th century.

"Gorbachev´s enthusiastic, at times almost reckless pursuit of this vision was in a thoroughly Russian tradition of peacemaking tsars and foreign ministers, conscious of their country´s poverty and vulnerability, trying to build pan-European structures of peace." Mr. Hosking touches on just about everything, blending information about economics, politics, religion, military developments, and the arts and culture, in a way likely to spur further inquiry into specifics, as a good overview should. Aspects of daily life are not forgotten. He writes about the impact of communal apartments on Russian citizens like someone who has actually spent time in one. And lest anyone think this book was written in a library in England, there are several anecdotes from Mr. Hosking´s experiences in the USSR and Russia.

Russia´s current crises have convinced some that it is finished as a great power. But, as Mr. Hosking writes, Russia is one of history´s "great survivors." We ignore or remain ignorant of it at our own peril. Mr. Hosking has made an important contribution to those seeking to better understand a country and its people.

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