Washington, 7 June 2001 (RFE/RL) -- U.S. President George W. Bush's national security advisor says there is no reason Russia should re-emerge as America's strategic adversary.

Condoleezza Rice said last night that Washington seeks constructive and positive relations with Moscow. She said Bush is looking forward to a summit in Slovenia later this month with Russian President Vladimir Putin so Bush can explain his vision for security in the 21st century.

Rice told reporters Bush will talk during the 16 June meeting about areas of cooperation, such as trying to bring peace to Nagorno-Karabakh, as well as about areas of differences such as Chechnya and freedom of the media in Russia.

Earlier, Bush said in a speech commemorating the 57th anniversary of the Allied invasion of Normandy:

"When I go to Europe next week, I will reaffirm the ties that bind our nations (with the European democracies) in a common destiny. These are the ties of friendship and hard experiences. They have seen our nations through a world war and a cold war."

Bush is scheduled to arrive in Spain on 12 June on the first leg of a trip that will also include Belgium, Sweden, and Poland.

The U.S. also urges harmony with Russia on Central Asia.

A State Department official who specializes in the Central Asian states has called on the United States and Russia to work more harmoniously in their respective dealings in Central Asia.

Christopher Bond told a U.S. House of Representatives panel yesterday:

"Where our interests coincide, such as on Afghanistan and regional security, we look to active cooperation with the Russian government. Where we have diverging interests, such as energy policy, we want to discuss our differences openly and respect our varying perspectives. My point is that neither side should seek to exclude the other from the region."

Bond is the acting principal deputy special adviser to the U.S. secretary of state for the Newly Independent States. His area includes Azerbaijan, Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, and Turkmenistan.

In a report, the international advocacy group Human Rights Watch says the governments of these countries have made only limited progress in democratic reform in the 10 years since the breakup of the Soviet Union. The group said religious repression in Turkmenistan and Uzbekistan is reminiscent of Soviet rule.

Responding to the report, Bond said the U.S. may again designate Turkmenistan as a country of concern regarding human rights. But he said there appears to have been progress on religious tolerance in Uzbekistan.

Separately, reports on Russian diplomacy say Foreign Minister Igor Ivanov is due to arrive in Ankara later today for talks with Turkish leaders on a range of bilateral and regional issues.

Ivanov's talks are expected to include preparations for a visit to Turkey by President Vladimir Putin.

An array of economic cooperation and security issues is also expected to be raised. Tensions between the Turkish and Russian governments were heightened in recent months over allegations of Turkish support for the activities of Chechen separatist rebels. Turkey denied all such allegations.

Before arriving in Ankara, Ivanov is due in Hamburg, where he will chair a meeting of foreign ministers from the Council of the Baltic Sea States. Russia today takes over the rotating chairmanship of the Council from Germany.

The Council was established in 1992 to promote economic and political integration in the Baltic region. Members include Denmark, Estonia, Finland, Germany, Iceland, Latvia, Lithuania, Norway, Poland, Russia, and Sweden.

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#2
Foreign Policy In Focus
www.fpif.org
Global Affairs Commentary
June 7, 2001

The Slovenia Summit: Bush Meets Putin
By Robert Cutler
(Robert M. Cutler is Research Fellow at Institute of European & Russian Studies, Carleton University. Web: www.robertcutler.org)

The first Bush-Putin meeting will not take place in a vacuum. Their one-day summit in Slovenia will come after Bush concludes a swing through Spain, Belgium, Poland, and Sweden (which currently holds the rotating presidency of the European Union). President Vladimir Putin will have already assessed the new U.S. president personally through psychological profiling and consultations with European leaders who have met him. He already has his agenda, which is to use the meeting to influence European elite and public opinion, which is already skeptical about Washington's plans for National Missile Defense (NMD).

What is the background against which this meeting will take place? By objective performance, the foreign policy and diplomacy of the new administration looks less like a disaster waiting to happen and more like an unfolding disaster movie.

One need only think of Washington's abrogation of a cooperative stance against international money-laundering (because of a mistaken belief that this would harmonize national tax systems), its abandonment of the Kyoto climate change treaty, its ignominious loss of a seat on the UN Human Rights Commission, its failed attempt (undertaken despite justified public advance warning of failure) to get the UN Security Council to adopt new sanctions on Iraq, its ineptitude in the face of China's intransigence over the spy plane affair, its failure to persuade NATO partners to affirm the existence of a common missile threat from "rogue states," and its money-influenced ambassador nominations for Europe (taken directly from a list of large campaign contributors inexperienced in international affairs).

This pattern in Bush's foreign policy is more than the inevitable ironing out the kinks in a new administration. Instead, it looks to many observers like a combined head-in-the-sand and shoot-yourself-in-the-foot syndrome. Secretary of State Powell and Russian Foreign Minister Ivanov have already held two series of meetings in the middle and at the end of May, at which they affirmed a willingness for consultations and negotiations about "strategic stability," meaning what to do about the ABM treaty. But, oblivious to the effects of its bull-in-a-china-shop behavior on even friendly countries, Washington has not altered its declared intention to abrogate unilaterally the ABM treaty.

Anticipating the absence of any real results at the Slovenia meeting, Washington has begun conditioning U.S. domestic public opinion. Starting in mid-May, anonymously provided background to selected journalists sought to emphasize the personal contact that will be established at the two leaders' first meeting. Bush is to "look Putin in the eye" and tell him that "Russia is not an enemy." But Putin hardly considers Washington's opinion important for his management of Russia's domestic and foreign affairs. In a recent poll, Russian public opinion ranked the U.S. in seventh place among the foreign powers whose view of Russia mattered to those questioned. When he talks to Bush, Putin will have an eye toward influencing not only Europe, but also China, India, and other Asian countries.

Also in mid-May, a memorandum describing U.S.-German discussions about Russia at the highest diplomatic level happened to be leaked to the German press. It noted in particular a U.S.-German agreement not to sponsor international financial assistance to Russia until Moscow has put limits on overseas capital flight. The Western press treated the memorandum as authoritative, and no one disclaimed it or claimed it was inauthentic. Putin's subtlety is revealed in his response, commenting that he did not believe the memorandum to be genuine but that nevertheless "secret agreements will come out." That remark was addressed to the Russian elite. Like Putin, the educated Russian public and foreign policy establishment will recall how the Bolsheviks, immediately after the 1917 revolution, published secret treaties concluded by the Tsar with Western powers. Putin was thus assuring his domestic constituencies that Russia will not reach secret agreements with the United States.

What sort of secret agreements might there have been? By coincidence, after Putin's remarks there appeared revelations in the press that the U.S. had proposed purchasing Russian arms systems to be integrated into an NMD system, if only Russia would endorse Washington's idea for it. Cutting through the diplomatic jargon, Putin was saying that such an agreement will not happen. Such a quid pro quo would eventually become public knowledge, and probably sooner rather than later. One might add that Russia's arms export industry is successful enough not to need the U.S. as a client.

The two presidents live mostly in different political worlds. They will meet and then go their separate ways. The Bush spin will claim that the fact of the meeting is itself a success. The Putin spin will politely agree then add statements making clear that nothing was really accomplished. Because the meeting's real significance will be its impact on European opinion, Moscow will emphasize the need for continuing consultations on nuclear matters about which Europeans are deeply concerned. After handshakes and statements of good will, the two sides will return home, each with its own fish to fry elsewhere.

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#3
US wants Russian assurances before allowing nuclear waste transfers

WASHINGTON, June 6 (AFP) -
The United States will not allow spent nuclear fuel that originated here to be transfered to Russia from third countries without assurances from Moscow on its safety and security, the State Department said Wednesday.

Under US law, Russia must sign a so-called "Peaceful Nuclear Cooperation Agreement" with the United States before receiving irradiated waste containing material originating in the United States from third countries as envisioned by a new Russian law.

Russia does not now have such an agreement with the United States, the department noted.

To approve future transfers to Russia of waste containing US-origin nuclear material, Washington would need to be assured by Moscow that the waste was intended for disposal and not reprocessing, it said.

In addition, "the United States would need to be assured that the planned transportation, storage and disposition of the fuel complied with appropriate standards of safety and security," it said in a statement.

"An especially important factor would be the nature of Russia's nuclear cooperation with third parties," it added.

The last criteria was an apparent veiled reference to Moscow's intention to boost military and nuclear cooperation with Iran which Washington has protested, calling the Islamic republic a "rogue state."

Earlier Wednesday, Russia's lower house of parliament approved in its third and final reading a controversial bill that allows the import and storage of nuclear waste from abroad.

The bill amends existing legislation to allow Russia to import and store on a "temporary" basis nuclear waste and by-products from abroad but provides no specific definition of how long that waste can be stored.

Environmental groups furiously opposed the measure, but President Vladimir Putin's administration backed it.

The Russian atomic energy ministry says the law will enable Russia to sign contracts to reprocess 20,000 tonnes of waste with China, Germany, Japan, Spain, Switzerland and Taiwan, earning 21 billion dollars (24 billion euros) over the next 10 years.

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#4
strana.ru
June 7, 2001
Russian-U.S. ministerial ABM talks in Brussels likely to be pointed
By Viktor Sokolov, Strana.Ru

The meeting of the Russia-NATO Permanent Joint Council (PJC) due to be held at the NATO HQ in Brussels on June 8 with the participation of Russia Defense Minister Sergei Ivanov will not be a totally usual one. First, it is timed to coincide with the summer session of the North Atlantic Council at the level of defense ministers, which opened in Brussels the day before. Ministers from 18 countries (without France) will at first assemble within the framework of the Nuclear Planning Group and the Military Planning Committee. Somewhat later they will continue the discussion at full strength in the format of the North Atlantic Council. Second, the session will for the first time be attended by the U.S. Secretary of Defense, Donald Rumsfeld. Third, he will deliver a report on strategic stability and the U.S. NMD initiative. Remarkably, he will attempt once again, on the basis of additional arguments, to convince his European opposite numbers that it is high time the system had been created and that it is necessary to revise the 1972 ABM Treaty, something that State Secretary Colin Powell failed to achieve at the meeting of foreign ministers in Budapest ten days ago.

Donald Rumsfeld came up with a number of sensationally tough statements, the day before, concerning a revision of the U.S. nuclear deterrence policy and a possible reduction of the U.S. military presence in Europe, which caused bewilderment in European countries. Barely alighting from his plane in Brussels, for example, he went on record as saying that the United States had started the testing of some elements of the would-be missile defense system, which would inevitably clash with the 1972 Soviet-U.S. ABM Treaty.

These statements give one the right to assume that the tenor of his report will be equally tough. After that it will be Sergei Ivanov's turn to speak on the same theme at the PJC meeting. Judging by all appearances, he has brought to Brussels a powerful delegation of military experts, whose arguments against the break-up of the ABM Treaty are likely to be no less weighty.

The Russian Defense Minister believes that despite the originally bilateral nature of the ABM Treaty, it later became a multilateral affair, serving as the basis for 32 subsequent agreements, including the non-proliferation treaty and the strategic arms reduction treaty. "It is on the basis of the ABM Treaty that the wide-ranging architecture of global strategic stability took shape," he stressed. He thinks, therefore, that "this factor cannot but be taken into consideration" and requires an involvement in the discussion of these problems of all states participating in the shaping of the global architecture of strategic stability.

Ivanov intends not only to set forth the Russian position at the PJC meeting but also to draw the attention of his NATO opposite numbers to the concrete Russian initiatives regarding the creation of a European antimissile defense system. Since, as reported by Western media, not all NATO members are unconditionally in favor of the U.S. NMD plans, an open discussion of this theme at the PJC meeting promises to be quite pointed.

One has the impression that the U.S. toughness in connection with the NMD topic is assumed. The U.S. Administration is somewhat confused seeing its European allies give the cold shoulder to the NMD idea. Hence the growing toughness, although in other no less complicated matters it already demonstrates reserve and even tractability. This is confirmed by the softening of its position on contacts with North Korea and the lifting of sanctions against Iraq. The same is evident from a debate between U.S. Congressmen and business people concerning a motion to extend sanctions against Iran and Libya, which is under consideration in the Congress. All these factors tend to increase Moscow's chances of defending its point of view at ABM talks with the United States and bring the sides closer to an inevitable compromise.

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#5
Duma Deputy Alexey Arbatov--Chechnya Situation Reverse of Moscow's
Assessment; Mountains and Border Calm, Plains Poorly Controlled

Vremya MN
5 June 2001
Excerpt of Interview of Duma Dep. A. Arbatov by D. Chernov:
"Situation in Chechnya "Caught up" with Commander"

In connection with the scandal that flared up among politicians and experts commenting on the words of General Troshev, our newspaper decided to show an interest in the opinion of the Gosduma Deputy from the "Yabloko" faction, Aleksey Arbatov, about the general's initiative and about what is happening in Chechnya itself right now. The Deputy, along with his colleague Vladimir Zelenov, very recently returned from a trip "around Chechnya", during which their helicopter was shot at. Arbatov received three shrapnel wounds, but is feeling well now. This is what he told our correspondent Dmitriy Chernov in an interview:

[Arbatov] - As concerns Troshev's statements, with all due respect to the great commander, I cannot agree with him in the least. It seems to me he just got a little hot under the collar. This situation can start to catch up with a calm and reasonable man such as himself. For, public executions are accepted practice according to Shariate law. They were used by the likes of Dudayev and Maskhadov when they were establishing their rule in Chechnya. We cannot do likewise, because we do not want to establish Shariate law in Chechnya, but constitutional order. Our constitution does not allow public executions, just as it does not allow executions in any way, shape or form. Therefore, I think this is absolutely out of the question, even from a purely legal perspective.

From a political perspective it is no less unacceptable, because no matter how long we keep our troops there, there will never be stability in that area. The creeping guerilla warfare will never cease if we do not win all or the majority of the peaceful population over to our side.

The methods Troshev spoke of in the heat of the moment would only serve to show the population that the federal authorities are no different than the likes of Dudayev.

It is not the mission of the federal forces to frighten the population. Their mission is to show the population that federal authority is better for them and to win the population over to our side. Only then will we be able to rob the militants of their base of support and be done with this war and with this illegal separatist armed movement.

I made a few observations on my last trip. Around here, people are of the opinion that, while the federal forces to a certain extent are keeping things under control in the plains, the real war is underway in the mountains, and nothing can be done there. Supposedly, militants, drugs and ammunition are coming into Chechnya through the mountainous regions. But that is not the case. Strange as it may seem, the situation is the other way around. Right now, in the mountains things are under control to a much greater extent than in the plains regions. Of course, the tragic episode that occurred during our visit cannot be used to formulate any kind of general rules, but even that episode says something. We were flying on that ill-fated helicopter in the mountainous regions, in the Argun ravine, and in other mountainous areas, and everything went well. But when we were on our way back and were flying over the plains, and we had gone outside the limits of the Chechen territory at that, to the territory of Ingushetia, our helicopter was shot at, as a result of which the crew's commander - Lt. Col. Konstantinov - died.

Therefore, the situation is not as it is usually portrayed. In fact, everything is much more complicated. In the mountainous regions, the local relief helps keep the situation under control: on the one hand, it is easier for the militants to walk on the mountain paths, but on the other hand, in the mountains, it is easier for the federal forces to cover those paths.

As concerns the border with Georgia, the border troops have settled in seriously and for a long time, and I can say with confidence that there are no penetrations of large numbers of detachments, no strong flows of contraband weapons and drugs are being allowed through these foreign borders of Chechnya by the border troops and the Internal Troops.

But the situation in the plains is not under control. Terrorist acts and attacks take place in Groznyy everyday, and it is the same at the defensive installations. The armed separatist movement is skirting Chechnya's foreign borders from two sides: from Ingushetia in the West and through Dagestan in the East. Militants come and go freely across the republic's borders. What's more, the situation is out of control outside the republic, and in the plain zones at that.

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#6
Vremya Novostei
June 7, 2001
A DEADLY EMBRACE
The Finance Ministry is out to buy the military
Plans for an unprecedented militarization of the 2002 federal budget
Author: Yuri Golotyuk
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
THE MILITARY HAS BEEN INSTRUCTED TO SPEED UP PLANNED TROOP STRENGTH CUTS IN THE ARMY AND NAVY. IN OTHER WORDS, REORGANIZATION OF RUSSIA'S MILITARY STRUCTURES SHOULD BE COMPLETED A YEAR FROM NOW, NOT BY THE END OF 2004. ALL MONEY SAVED WILL REMAIN WITH THE MILITARY.

On Wednesday, the Finance Ministry suddenly revealed plans for an unprecedented militarization of the 2002 federal budget. A reliable source at the top of the ministry, who is privy to all kinds of information, told us anonymously that spending on arms procurement would be increased by $1.5 billion, and a further 14.5 billion rubles would be allocated for implementing the military reforms. Allegedly, the draft budget prepared by the Finance Ministry includes a steep increase in wages for military personnel, and simultaneously freezes the wages of civilian state officials at their current level. These figures have caused a commotion among the Russian military leadership and top defense sector executives.

Our source has a simple explanation for the Finance Ministry's unexpected tenderness toward the military. It is not as if the military will be given all that money for nothing. In return, it is supposed to speed up planned troop strength cuts in the Army and Navy. In other words, reorganization of Russia's military structures should be completed a year from now, not by the end of 2004. All money saved will remain with the military.

The restructuring plans for the Armed Forces and other security structures involve unprecedented cuts. Between now and 2005, the security structures will lose 600,000 people (470,000 military personnel and 130,000 civilian employees). This means that about one person in five will go. The figures reflect the state's financial capacities, rather than the ability of what remains of the security structures to handle threats to national security. The generals put up a heroic fight against these plans, of course (resistance was particularly fierce in the Federal Border Guards Service, Interior Ministry, and Emergency Ministry) but the heavy economic artillery was wheeled out against the rebels.

The second phase of the battle over "military money" is about to start. It seems that the government means business in promising the military additional money in return for faster cuts. Informed sources even imply that there will be some dismissals among the top brass if the military continues to resist. Federal Border Guards Service chief Konstantin Totsky will probably become the first sacrifice.

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#7
Excerpt

TITLE:	PRESS CONFERENCE WITH CARNEGIE MOSCOW CENTER DEPUTY DIRECTOR DMITRY TRENIN [PRESS DEVELOPMENT INSTITUTE, 12:03, JUNE 4, 2001]
SOURCE:	FEDERAL NEWS SERVICE (http://www.fednews.ru/)

Moderator: Dear colleagues, good afternoon. I am glad to welcome you at this Press Development Institute, I am glad to welcome our guest Deputy Director of the Moscow Carnegie Center Dmitry Vitalyevich Trenin who will present his book The End of Eurasia: Russia Between Geopolitics and Globalization.

Trenin: Thank you very much, Natalya Alexandrovna. Good afternoon, ladies and gentlemen. It's a pleasure for me that you have gathered here, that you have displayed interest in the publication which was released by the Moscow Carnegie Center. I would like to briefly explain some of the things concerning this book.

Firstly, about the name. Of course I do not claim any new geographical discoveries. I believe that Eurasia was, is and will certainly be, at least in our memory. On the other hand, Eurasia, of course, is no Atlantis and it will not go under the water. But Eurasia I talking about in this book, in my opinion, has indeed come to the completion of its historical life.

And I have in mind, talking about the name, Russia as a world pole, Russia which was not so much a combination of Europe and Asia because this country, in my profound conviction, has always been, is and will be European despite the multi-colored pattern of the peoples living in Russia.

But this country, our country, ceases to be what it used to be over the past three or four centuries. Namely, self-sufficient, a self-reliant pole which, being in the center of the Eurasian continent, dominated a significant part of Europe, including outside its borders, in Northeastern Asia, in Central Asia, and has been, if you wish, equal in weight to such notions as Europe, say, Europe and Asia or even the whole of the rest of the world, when our country, called the Soviet Union, actually was in a state of confrontation simultaneously with Western Europe, North America, China, Japan and a number of other countries which were in allied, partnership relations with the United States of America and Western powers.

So this Eurasia, in my opinion, is no more. In other words, despite the current talk about a revival of some space on the territory of the USSR, and this space would play for Russia a central role, despite the talk about the multi-polar world, it seems to me that reality is quite remote, the further, the more, remote from such dreams. And so, in actual fact Russia faces the emergence of a complex, heavy and unpleasant problem: how to find its place, where to find its place, as what, to fill a new place in the constellation of states.

This country, obviously, after the catastrophe which it experienced over the past few years, will not be able to claim, with its 1.5 percent of the world domestic product, with its diminishing population which will eventually be less than 100 million people, with life expectancy which is not very high, so with all this heritage it is very difficult to seriously pursue the policy of a great power.

One can talk about this but to seriously pursue such a policy is no longer possible. And in this connection, as I have already said, Russia faces a very hard choice. In principle it can develop in one of the three directions, as I see it. The first, the most comfortable and the most habitual, the most obvious (for the majority of Russians) is to restore itself as a great power.

In other words, what is now happening with Russia, is temporary difficulties, temporary or may be long-term, which in principle does not change Russia's position in the world. Russia will restore its health and will be able again to take its place in the first row of world powers. The second road, we may assume, is revenge-seeking, i.e. the attempt to take it out on others for its troubles, to re-enact the results of the end of the Cold War and, by entering an alliance with Asia giants, China, India, Iran and other countries, to limit the American hegemony in the world and then to launch a geopolitical onslaught. And the third variant is a hard one, an unpleasant one, connected with huge moral losses, this is the variant of entry into Europe.

These, it seems to me are the three main options now faced by Russia and which will be facing Russia for the years to come. So far, it appears to me, it is the first option that is being implemented so far, albeit with some elements of the third way. But at a certain stage it will, as I see it, become obvious that Russia will no longer be strong enough to seriously develop on its own basis and to seriously pursue a policy of self-reliance and to revive itself as a power of the first level. And the continuation of this line in this direction will lead to a decline and further marginalization of Russia, and quite possibly to its disintegration.

The second option, and I would not like to comment it too long, it is the end of not only Eurasia, or rather it's no longer the end of Eurasia already, it will already be the end of Russia. An attempt at taking revenge.

And the third variant, as I said, is the most complex, the heaviest, is an attempt to rethink itself as a European country. This is not integration in the European Union and NATO. In the foreseeable future there can be no question of this but this is a conscious path to getting compatible with Europe in the economic, legal, humanitarian, political, financial and other fields.

It seems to me that this path does not just open up before Russia possibilities of fulfilling its potential of development, but Russia will have to follow that path due to circumstances. That is, Russia will have to adapt itself to Europe whether it likes it or not.

But of course there is a difference between doing something under the pressure of circumstances and a conscious policy aimed at achieving certain aims. This takes care of the content of the book. And I am now presenting it for your judgement.

To answer the obvious question, why is the book published in English, you see, I began thinking about these problems while I was in the process of writing a work in English. And I seemed to like it and I decided to enlarge this nucleus. And so, I drifted into writing this book in English. I hope that the Russian edition will come out in due course, but that would be a substantially reworked publication, the next stage as it were in the quest for a perspective for our country today and tomorrow. I would like to end there and I am ready to answer your questions.

Q: Golos Rossii. It is unclear from what you said what path do you consider to be the most acceptable path for Russia. How should it behave?

Trenin: It ought to be obvious. But I will elaborate. I think Russia faces the task of transforming itself internally while regarding itself as a component part of the European community.

Russia's path is the path of Europeanization, if you like, in other words, continuation of the reforms on which Russia has embarked. And also it should be external Europeanization, that is, a thinking of itself as part of the European community.

Since a definite goal should be set in the relations between Russia and Europe, I would set the goal of creating a European community that includes the European Union and the part that is not yet integrated, but is closely linked to the rest of Europe. And the biggest element in that non-integrated part will certainly be Russia. I see Russia as the last great European power which is returning back to the fold. Each in their different ways, France, Britain and Germany have returned to Europe. They all stopped being world empires. Of course, it happened differently in each specific case.

I see the same fate for Russia. To be quite unsparing of ourselves and our country, I think Russia has ceased to be a great power, it has ceased to be a pole in its own right. And it has to find a community which could accommodate it. Europe is to my mind the only community into which Russia could fit.

So, from a mode of integration consisting in including ever new areas -- and that was our model of imperial development over the centuries -- we should pass on to integration in the shape of fitting Russia into a community that is larger than Russia, in which it cannot play the leading role but in which it can ultimately occupy a worthy place. I see this place on a par with Germany, France and other countries.

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#8
Russia: Human Rights Experts Differ Over Isolating Moscow Economically
By Andrew F. Tully

Witnesses gave grim testimony about the human rights situation in Russia during a hearing on 5 June in Washington of the U.S. Commission on Security and Cooperation in Europe. They put particular emphasis on the continuing war in Chechnya, as well as limited press freedoms throughout Russia. But they differed on whether the West should move to isolate Russia economically until peace is brought to Chechnya. Our Correspondent Andrew F. Tully reports.

Washington, 6 June 2001 (RFE/RL) -- Human rights advocates disagreed at a hearing in Washington Tuesday (5 June) over what steps the international community should take to persuade Russia to end the war in Chechnya.

The witnesses gave their differing recommendations before the U.S. Commission on Security and Cooperation in Europe, also known as the Helsinki Commission. They included two of Russia's leading human rights activists, Yelena Bonner and Emil Pain.

Witnesses at the hearing also discussed other aspects of human rights in Russia in the 10 years since the breakup of the Soviet Union. Topics ranged from press freedom to some advocates' accusations that the Russian government is guilty of genocide in Chechnya.

Bonner -- the widow of Soviet human rights advocate Andrei Sakharov and chairman of the foundation named for him -- said the best way to stop the war in Chechnya is to stop all international assistance to the Moscow government. And she said that perhaps a more effective step would be to expel it from the Group of Seven leading industrial economies, also known as the G-7, or the G-7 plus Russia, and even the G-8.

"What is more important is that Russia is eager to get more international prestige. You cannot include Russia in the G-8 while it conducts the war [in Chechnya]. It goes without saying that Russia does not meet the economic standards for membership in it [the G-7]. If it stops the war, it might be a goodwill step to allow it to stay [in the G-8]."

Pain -- who once was an adviser to former Russian President Boris Yeltsin -- disagreed. Pain now consults on human rights issues at the Kennan Institute for Advanced Russian Studies of the Woodrow Wilson International Center in Washington.

According to Pain, it would be more productive to engage Russia and use positive persuasion in any effort to end the Chechnya fighting. Isolating Russia, he said, would be bad for everyone.

"I suppose that within [this] organization [the G-7], it's much more easier to influence Russia than if -- in the situation of isolation. The situation of isolation will grow fascism in Russia. That is all. It will be [a] danger not only to Chechens, [but] to everybody."

Bonner also said she believes that Russia is guilty of genocide in Chechnya, at least indirectly. She told the Helsinki Commission that she is not sure that the Kremlin directly orders its army to commit genocidal acts in Chechnya. But she said unequivocally that she believes that the actions of Russian generals are de facto genocide.

"All male civilians, including boys as young as 12, are rounded up, and most of them disappear. That is also evidence of genocide."

Bonner said she is certain that there are mass graves in Chechnya filled with the bodies of many innocent victims executed by Russian forces. Unless the world community brings pressure soon to have these graves investigated and exposed, the Russian people will never know the truth about the war.

Another witness was John Beyrle, a U.S. State Department official specializing in the nations of the former Soviet Union. He was emphatic in stating that U.S. relations with Russia can never be normal as long as Moscow continues what he calls human rights abuses in Chechnya. He also accused the Russian government of stifling freedom of religion and the press.

In the area of press freedom, Beyrle said most observers in the West are probably aware only of the financial and legal pressures on Media-MOST and NTV, nationwide Russian news organizations that at times were critical of the government of President Vladimir Putin.

Beyrle said similar pressures are constantly being put on regional publishers and broadcasters. He said the world community must become more aware of the problems facing these media outlets, and they must support them.

The State Department official gave few details about the constraints put on Russia's regional meetings. But Bonner said journalists in these organizations face threats, beatings, and murders. According to Bonner, the people responsible are rarely if ever brought to justice.

Another witness -- Paul Goble, an analyst of Russian affairs -- agreed. Goble said 121 Russian journalists have been killed. He said that as far as he knows, only a few people have been charged with these killings, but so far there have been no convictions.

Goble, the communications director for Radio Free Europe/Radio Liberty, said that as a result of what he called a climate of intimidation, the killings, beatings, and threats have their constraining effect not only on their immediate targets. He said other journalists become aware of these tactics and, as a result, often report the news less candidly.

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#9
Moscow Times
June 8, 2001
The Failure of Crony Capitalism
By Jonas Bernstein
Jonas Bernstein is a senior analyst with the Jamestown Foundation, a Washington-based think tank.

For most of the 1990s, the idea that Boris Yeltsin and his "young reformers" might not be genuine democrats was considered beyond the pale by mainstream Russia-watchers. The "success" of Russia's reforms had become crucial to the argument that Western-style democracy and free-market theory were universally applicable, and that with the collapse of Soviet communism — a kind of historical aberration or blind alley — mankind could resume its ineluctable march toward democratic capitalism. Russia's financial collapse in August 1998 dealt such a severe blow to this belief that its chief ideologist, Francis Fukuyama, author of the 1992 book "The End of History and the Last Man," even suggested he might have to rethink his thesis.

The Tragedy of Russia's Reforms: Market Bolshevism Against Democracy, by Peter Reddaway and Dmitri Glinski, is the latest in a series of recent books by the small group of Russia-watchers who never bought into Yeltsin's reforms. They are now saying, with justification, "I told you so."

The book's main thesis is that a democratic opposition to the corrupt Soviet nomenklatura emerged in the 1980s only to be hijacked by members of that same elite — the "market bolsheviks" who used economic "shock therapy" as prescribed by the International Monetary Fund and Harvard's Jeffrey Sachs to consolidate elite rule in a new form. The authors, unlike other Yeltsin critics, do not spare Soviet leader Mikhail Gorbachev, describing how his prime minister, Valentin Pavlov, took the first stab at this "monetarist, authoritarian approach to reform."

But their main target is Yeltsin, and they argue persuasively that despite his enduring image as the democratic leader who stood atop the tank in August 1991 and foiled the hard-liners' coup, Yeltsin carried out what amounted to a "counter-coup."

He and his team first secured control over the Russian Federation by hastening the Soviet Union's disintegration and then lifted price controls and carried out rapid privatization as a way to transfer wealth and property to a new handpicked elite — the "appointed millionaires," to use the term coined by one of them, Alfa Bank founder Pyotr Aven.

The authors also argue that a genuinely social-democratic system could have been created had the transition to the market been gradual and had it protected the interests of the Soviet "middle class." This layer consisted mainly of engineers, teachers, physicians, academics and other members of the intelligentsia, who were "more reform-minded and imbued with modernizing attitudes than most 'liberals' in the Soviet establishment" and thus could have provided the basis for a genuine civil society. Instead, these people ended up being among the main victims of the "shock therapy" experiment that Yeltsin launched in 1992, when millions of ordinary Russians lost their life savings to hyperinflation, the first in a number of upward transfers of wealth.

The authors are critical of the West, particularly the U.S. government and the international lending institutions, for forgiving — and even in some ways encouraging — Yeltsin's violent suppression of parliament in October 1993, his creation of a new constitution that gave the presidency nearly authoritarian powers, his end-running of the legislature by ramming through top-down economic reforms by decree, and his launching of a war that killed Russian citizens in Chechnya en masse. Indeed, while Serbian leader Slobodan Milosevic was deemed a war criminal for doing much the same, Yeltsin remained "Friend Boris."

But while the book is a ringing indictment of Yeltsin's Western cheerleaders, many of whom viewed his anti-communism as sufficient grounds for support, the authors themselves fall into what might be called the-enemy-of-my-enemy-is-my-friend syndrome. While they describe the corruption scandals involving Anatoly Chubais and other "young reformers" in copious detail (and, in doing so, perform a historical service), the authors give the benefit of the doubt to almost everyone who opposed them and advocated — or paid lip service to — statist economic policies.

For example, the authors approvingly cite policy recommendations inspired by "the Japanese model" that were drafted in 1993 at the direction of then-First Deputy Prime Minister Oleg Lobov, whom they describe as the "principle ideologist" of the "statist and dirigiste wing of the bureaucracy." They fail to mention that Lobov, according to Russian and Japanese press reports, received large bribes from the Japanese cult Aum Shinri Kyo. (The cult's former security chief claimed in 1997 that Lobov had sold it the blueprints for a sarin nerve gas plant for $79,000, a charge Lobov denied.)

Elsewhere, the authors call Oleg Soskovyets, the first deputy prime minister who oversaw the industrial sector before losing in a power struggle with Chubais, "a known defender of the legitimate interests of the productive industrial sector of the Russian economy." That is a peculiar way to describe an official who reportedly helped several offshore companies of questionable reputation (to put it euphemistically) acquire some of Russia's largest aluminum smelters and reap huge profits, thanks to a system Soskovyets helped institute that exempted them from paying taxes on both imported raw material and exports of finished aluminum. Soskovyets, it should be noted, also joined Chubais in backing the notorious loans-for-shares scheme, by which the crown jewels of Russian state industry were essentially given away to a small group of bankers.

The authors rightly take Western journalists to task for simplistically reducing the Yeltsin-parliament battle of 1993 to a battle between good reformers and wicked hard-liners. Yet they are wrong to dismiss some press reports from the scene as having been "far from the historical truth." For example, they cite with disapproval Washington Post correspondent Lee Hockstader's description of the Russian White House, where supporters of the dissolved parliament gathered until Yeltsin's military assault, as "a Disneyland of paranoia, a Jurassic Park of menace." That fits pretty well with what I saw there — graffiti and placards everywhere denouncing the "Yids" in the government or quoting from the Protocols of the Elders of Zion, members of the virulently anti-Semitic Russian National Unity party in uniforms with swastika-like shoulder patches.

The one political figure the authors praise almost unequivocally is Yevgeny Primakov. It is certainly true that Primakov had broader support than any other of Yeltsin's Cabinet chiefs, and some of his initiatives, particularly his attempt to coax Yeltsin into ceding some of his inordinate power to the parliament, had merit.

However, the authors' assertion that Primakov sought to change the essence of Russia's corrupt system is questionable. They themselves note that his government extended about $1 billion in cheap loans to a handful of politically powerful banks following the August 1998 financial collapse. What they fail to mention is that the bank that received the largest portion of those credits — SBS-Agro, which belonged to the powerful oligarch Alexander Smolensky and was part-owned by Boris Berezovsky — had as its deputy chairman Arkady Kulik, son of Primakov's deputy prime minister in charge of agriculture. Such corruption charges against members of Primakov's Cabinet, made by Grigory Yavlinsky and others, are not detailed in the book.

More fundamentally, one can reject "market bolshevism" (along with all other "revolutions from above") and agree with the authors that the reforms should have been implemented gradually, but question whether Yeltsin's economic program had anything to do with the free market. The authors themselves concede that what Yeltsin and Yegor Gaidar carried out was only "the closest possible approximation to Sachs' and the IMF's original intentions," but fail to emphasize the significance of the divergences. The Central Bank continued to hand out cheap credits to the politically connected while the government maintained price controls on energy, allowing the fledgling oligarchs to make fortunes selling cheap domestic resources abroad.

This was not exactly laissez-faire, yet the authors claim throughout that the government "retreated" from the economy — asserting, for example, that in post-Soviet Russia "[l]egal limitations on all kinds of economic activities, including those outlawed in most other countries, have either been abolished or practically ignored." Yet their analysis skims over how businesses in Russia are subject to labyrinthine bureaucratic procedures imposed by a massive state apparatus that has only grown in size in the post-Soviet period. And while they rightly take aim at Russia's privatization process, they fail to mention that one of the main factors in spawning corruption at the federal level and undermining the government's already weak separation of powers was an act of nationalization — the Yeltsin decrees of 1993 ceding the Soviet Communist Party's property to the Kremlin administration. This gave Yeltsin the power to supply all of the country's top officials, including parliamentary deputies, with life's necessities and thus to exercise control over all branches of power in a manner reminiscent of the Central Committee.

In my view, Russia's reforms have failed not as a result of excessive statism or excessive laissez-faire (or, to use the current parlance, a "weak state"), per se. They have failed because the state interferes where it shouldn't — by creating bureaucratic obstacles to normal economic activities as a way to extract bribes and granting special privileges to cronies — while failing to carry out basic tasks in the common interest, like elementary law enforcement and protecting private property. In fact, as the journalist Yulia Latynina has cogently argued, private property does not really exist in Russia — nor, one might add, does a public sector, as the term is commonly understood. In a word, the system is feudal. And perhaps it always has been.

"The Tragedy of Russia's Reforms: Market Bolshevism Against Democracy," by Peter Reddaway and Dmitri Glinski, 769 pages. United States Institute of Peace. $29.95

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#10
The Russia Journal
June 1-7, 2001
Tales about "terrible Russia" spun by profiteers
By ANDREI SHMAROV and VASILY AUZAN
(The authors are journalists at Expert magazine, where this article first appeared in Russian.)

Standard & Poor's international rating agency assessed Russia long-term sovereign rating as B- on May 4, 2001, which means limited safety and high vulnerability. A similar rating was given to Turkey. Mongolia, Romania and Surinam have been rated a pitch higher, at B. Next on the list, at B+, come Pakistan and Senegal, followed by Bulgaria, Lebanon and Jamaica (BB) and Kazakstan, Bolivia and Papua, New Guinea (BB). Even the latter are still 11 grades below the leaders, the United States and Great Britain, rated at AAA.

In fact, Russia is not at the very bottom of the Standard & Poor's rating list. Next to last on the list of 88 countries, Russia still managed to outpace Ecuador, which was rated at CCC+, which means an extremely vulnerable market.

From the recent research report published by PricewaterhouseCoopers it follows that Russia is the world leader in terms of corruption rate. The companies specializing in credit-rating assessments characterize Russia as a country with extremely high business risk and unfavorable investment climate.

The very same world leading rating companies that feed their clients with bloodcurdling stories about flagrant lawlessness and arbitrariness in our far-away northern country have long since been operating in our country, where they rent luxurious offices and employ large staffs. What for? Haven't they gone out of their minds? Or are they looking for trouble?

The questions have a very simple answer: The tales about "terrible Russia" have nothing to do with the reality. These tales are composed and disseminated by quite calculating and professional PR specialists who are driven by their cynical interests. The assumption is that the more dangerous the country is painted the more money it can bring. The more the client is scared the more he or she will pay for consulting services.

It's true that Russia is neither an alpine meadow nor a Garden of Eden. There are bureaucrats and there are bribes here. But one thing is surprising. The results of our own research -- an opinion poll (done in the form of extended interviews) among top managers of leading world corporations -- clearly indicates that Russia is viewed as a unique country in which to do big business.

Russia -- a rare chance

As we have found out, Western top managers view Russia neither as a faraway barbarian land, nor as an exile destination, nor as a banana republic, but as a country offering real chances to do big business, make a name for oneself and acquire excellent prospects for making a career in the parent company. The idea is: If you have managed to show off well here, it means that you can manage everything and everywhere.

It is totally wrong to think that foreigners come here to live their years before retirement while getting well paid (in Russia they are paid quite well). Of course, this happens sometimes, especially in big corporations that employ special manager corps specializing in "difficult" countries. But this institution is dying out and being replaced by a new generation of managers with global thinking and a flexible mentality who love to surf the Internet and stress that they don't see any difference between working, say, in Russia, in Germany or in Singapore. Therefore, Russia is in no way a "sedimentation tank" for the failures. Our respondents stressed time and again that Russia is a far from divided market that offers rich and versatile opportunities. Russia's market is characterized by a stronger factor of uncertainty, less planning and higher risks. To work here one has to be a simultaneously venturesome and calculating player who knows how to take reasonable risks. Russia is a favorable land for adventurous entrepreneurs, in the good sense of the term.

The extensive business opportunities offered by Russia do not mean that only adventurers and filibusters are coming here with the aim to board, plunder and leave. Such types were abundant during the first years of Russia's reforms, but later they either found a niche for themselves and set up a decent business, or went to work for big corporations, or wrapped up and fled.

Situation is stabilizing

The interviews have demonstrated that to do business in Russia it is not at all necessary to have criminal connections, evade paying taxes and bribe the officials. Russia's legal system is developing toward the normal and business infrastructures are being established. Of course, the bureaucratic red tape remains a serious problem and business-regulation mechanisms and procedures are extremely complicated. Meanwhile, a network of consulting and legal services is developing and business associations and communities have appeared. A good example is the European Business Club: Its members hold regular discussions with Russian ministers seeking to resolve specific problems (the customs regime, transition to international accounting standards, taxation, company registration, etc.) in order to improve the business climate in general.

The present situation gives strong competitive advantages to foreign companies operating in Russia because they are transparent, law-abiding and have learned to pay taxes and survive. Now domestic businesses have to catch up with them and master such boring sciences as cost-efficiency, sales promotion, expanding the range of products, etc. This is far from easy.

Ordinary Russian people

Almost all of our respondents maintained that there are no barriers for an ordinary Russian to make a good career in a foreign company. All what he or she needs is to be a good manager or specialist and this is enough to climb to a leading position in a Russian branch or even in the parent company. The best tactic in making a career is a zigzag way, for example: department head in the Russian arm -- vice president in Chile -- department head in the parental company -- director of the Russian arm. It is not necessary to have a special Western education, but knowledge of the language is essential. It is also very important to get inspired with the corporate spirit, to understand the company's goals, its strategy and ideology. This is important to become a trusted member of the team. It is also important to be a good team player, to assume responsibilities and to be able and willing to discuss everything in a positive way, including your own work-plan, plans of your department, your group and the company as a whole.

Advantages

More so than in other fields, Russians show themselves in such spheres as industrial manufacturing, sales, technology, engineering and, specifically, in IT and high technologies. They have a lesser success in the field of finance, but this is rather not a national feature but an inheritance of the Soviet past.

A strong advantage of Russian businesspeople and managers is their flair for innovation, risk, new approaches and entrepreneurship in general. Russians are ambitious, adventurous and not afraid of risk. They are critical, not prone to servility and, in appraising a person, they look at specific deeds, not positions or ranks.

Russian businessmen are intuitive. They are good psychologists and masters of finding weak points in their competitors and using them to their advantage. Foreigners often do not understand that and lose in competition. At the same time, Russians are prone to render disinterested assistance even to those whom they hardly know. This trait often captivates foreigners and helps create an atmosphere of confidence.

Russian specialists and managers love to study and to achieve career growth. The best way to get a Russian interested is to present him or her with an education and career program.

Drawbacks

Russians are prone to self-humiliation and humiliation of their country. This is stupid and provokes some of their foreign partners into dishonesty -- it is always a pleasure to shortchange a half-wit.

Another drawback of the Russian style of management, most strongly manifested in big companies, is authoritarianism and voluntarism where the boss concentrates all power in his hands and is not prone to delegate anything to anybody. This style is rarely met in companies that operate in a competitive medium.

The Russian style of management to a considerable extent involves concentration on the ultimate goal rather than developing a system and technology of business. In this sense, Russian style of management is more American than European.

Russian management is strongly politicized in the sense of an excessive role being given to personal connections and informal relations.

Squandering and profligacy have become less widespread after the crisis, but such an important resource as time is still undervalued. Russians have not yet come to understand that time is money.

Other serious drawbacks are egocentricity and greed. Russian business is strongly oriented on immediate success and enrichment at the partner's expense. Not enough attention is devoted to such things as long-term prospects and corporate culture, which leads to conflicts between managers and shareholders. Incidentally, some Western top managers disagree with this thesis saying that Russians are, on the contrary, good team players.

How to do business in Russia

First of all, one has to understand that Russia is a dynamically developing country with undivided markets. Therefore, success here is most likely to be achieved by those with a flair for entrepreneurship, risk, initiative, ability to overcome inertia and sluggishness in decision-making often characteristic of big corporations and to assume responsibilities. But as long as the situation tends to stabilize, regular, traditional management is becoming increasingly important.

A foreign manager in Russia should forget about arrogance and should not expect irrevocable obedience from his subordinates only because he is the boss. In order to win respect of his employees he should prove his competence with deeds.

Russia is not a barbaric country. People here are well-educated, knowledgeable and quirky. Therefore, the tactic of "buying factories for a handful of coins" will not work. At the same time, one should not be too trusting -- there are enough swindlers here.

Russia still lacks effective working rules and regulations as well as market infrastructures and information channels. Therefore, it is necessary to acquire contacts, connections, information sources and personal friends who will help you if and when the system comes to a crash. Consequently, a knowledge of the Russian language is important, although almost all of Russia's young specialists and managers can speak English.

Information is priceless. Any potential partner and/or employee should be tested through all attainable channels of information. No time or money should be spared to get more information. Advertising and especially PR are also very important.

It is essential to develop into the provinces. There are a lot of problems there. People are less knowledgeable and less well-educated and it is more difficult to organize logistics, but the main prospects are precisely there.

It is important to use bonuses and career opportunities for your personnel as much as possible. This is the best way to make Russian employees interested, especially managers. It is necessary to encourage private-property instincts -- it's better to pay an employee a bonus so that he could buy a car than to provide him with a service car.

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