CDI Russia Weekly-#194 22 February 2002 Edited by David Johnson Center for Defense Information 1779 Massachusetts Ave. NW Washington DC 20036 phone: 202-797-5277; fax: 202-462-4559 djohnson@cdi.org The CDI Russia Weekly is an e-mail newsletter that carries news and analysis on all aspects of today's Russia, including political, economic, social, military, and foreign policy issues. With support from the Carnegie Corporation of New York and the MacArthur Foundation, CDI Russia Weekly is a project of the Washington-based Center for Defense Information (CDI), a nonprofit research and education organization. CDI Russia Weekly web page (with archive): http://www.cdi.org/russia/ Visit CDI's web site: http://www.cdi.org Contents: 1. Interfax: Yastrzhembsky calls for protection of Russian athletes' interests. 2. Christian Science Monitor: Fred Weir, Putin's duel with the bureaucrats. Several recent reform proposals are losing momentum in a labyrinth of self-serving officialdom. 3. Boston Globe: Marshall Goldman, Who is a Model for Whom. 4. AFP: Oil markets mull message from Moscow, as new output showdown looms. 5. RIA Novosti: HEAD OF THE UNION OF RUSSIAN INDUSTRIALISTS SENT A LETTER TO US PRESIDENT GEORGE BUSH. 6. Jamestown Foundation Monitor: ARMS CUT ACCORD MAY NOT BE READY FOR RUSSIAN-U.S. SUMMIT. 7. RFE/RL: Don Hill/Elena Nikleva, NATO: Lobbying, Speculation Intensify Ahead Of Prague Summit. 8. Izvestia: Dmitry Safonov, EXCHANGING A SOLDIER FOR A COMPUTER. The Russian armed forces need better maps and better administration. 9. Itogi: Oleg Odnokolenko, DAMAGING RELATIONS WITH CENTRAL ASIAN STATES BECAUSE OF U.S. MILITARY BASES WOULD BE UNWISE AND ECONOMICALLY DISADVANTAGEOUS. 10. WPS Russian Media Monitoring Agency: POLITICAL FORECASTS [press review]: RUSSIA IN THE 21ST CENTURY: A DECADE OF REFORMS, AND 150 YEARS SINCE THE ABOLITION OF SERFDOM.] ******* #1 Yastrzhembsky calls for protection of Russian athletes' interests ST. PETERSBURG. Feb 21 (Interfax-Northwest) - Russian Presidential aide Sergei Yastrzhembsky is concerned about "the attack on elite Russian athletes in those areas where Russians occupy a sure, leading position." Yastrzhembsky said this in St. Petersburg on Thursday while commenting on the decision of the International Gymnastics Federation to disqualify Russian athletes Irina Chachina and Alina Kabayeva for a period of one year. Yastrzhembsky, who is president of the Russian Gymnastics Federation, said that "if this information is confirmed, we will appeal against this decision." Yastrzhembsky also said that a tendency is observed at the current Olympic Games "to squeeze our best athletes from world sport using non- sporting methods." As an example, he gave "the scandalous and unprecedented situation" with figure skating, freestyle skiing and the biathlon. "It is necessary to oppose this. It is necessary to protect the interests of Russian athletes tougher than the heads of our sports delegation do. We shouldn't let them walk all over us," Yastrzhembsky said. ******* #2 Christian Science Monitor February 22, 2002 Putin's duel with the bureaucrats Several recent reform proposals are losing momentum in a labyrinth of self-serving officialdom. By Fred Weir MOSCOW - At the height of his failed campaign to reform Communism, Mikhail Gorbachev complained to Kremlin aides that all his initiatives quickly became lost in the byzantine channels of Soviet bureaucracy, where they "gradually suffocate, as if in layers of cotton wool." Russian President Vladimir Putin may be voicing similar frustrations as he watches his bold plans to restore Kremlin authority over the country's far-flung regions, revamp the military, and streamline the economy amid official bickering, foot-dragging, and creative reinterpretation. "It is becoming clear that Putin is not the strong president he was advertised to be," says Alexander Konovalov, director of the independent Institute of Strategic Assessments in Moscow. "All the announced reforms are dissolving into a war of bureaucratic clans, and he seems incapable of asserting control." Experts say Mr. Putin is up against an unreformed bureaucratic machine that is actually larger and more obstreperous than its communist-era predecessor. Twenty years ago there were fewer than 800,000 officials in the entire USSR, as calculated by historian Martin MacCauley in his book The Soviet Union Since 1917. By 1994, Russia alone had 1 million bureaucrats and the number has since risen to almost 1.2 million, according to a study last year by sociologist Vladimir Slatinov published in the political science journal Politika in autumn 2001. The collapse of communist control a decade ago led to an explosion of official bribe-taking, graft, and influence-peddling that does not appear to have abated under Putin. A January poll by the independent Public Opinion Foundation found that 64 percent of Russians believe that all or most public officials are corrupt. More than 57 percent in the same survey agreed that "corruption in Russia is impossible to uproot." But experts say corruption is a small problem compared with the suffocating political influence of untrammelled officialdom. "The nature of Russian bureaucracy is absolutely different from a Western civil service," says Vladimir Gelman, a political scientist at the European University of St. Petersburg. "Our bureaucrats are unprofessional, badly paid and, most important, they exercise power not in the public interest but in their own. Until the state machinery in this country is completely redesigned from top to bottom, no other reforms can be reliably implemented." One of Putin's ambitious ideas upon assuming the presidency two years ago was to divide Russia into seven administrative zones and place a Kremlin watchdog over each to whip regional elites into line. Instead, the new presidential representatives appear to have merely added another layer to the existing bureaucratic confusion. Plans to downsize Russia's bloated military and introduce an all-volunteer force seem to be backfiring. The Defense Ministry is now threatening to revoke student draft exemptions next year, and a decree published last week ordered the re-introduction of Soviet-era compulsory summer military training for 16-year-old males. "It is an ancient rule in Russia that bureaucrats strangle any initiative - not because they desire to contradict the leader, but because any change contradicts their interests," says Sergei Mikhailov, deputy head of the Russian Public Political Center, an independent think tank. "The rule is that the longer the bureaucratic chain, the more the original policy becomes transformed into something else entirely." Another key reform pledged by Putin was to commercialize housing, gas, electricity, and municipal utilities in order to attract the capital needed for rebuilding dilapidated infrastructure and modernizing services. That plan has been delayed repeatedly, and last week Economic Development Minister German Gref announced that its objectives will be sharply scaled back. "Unlike their Western counterparts, Russian officials are heavily politicized," says Mr. Gelman. "In fact, most receive their jobs through networks of friends and keep them on the basis of personal loyalty rather than competence. The housing reform would have eliminated the jobs of huge numbers of bureaucrats. Because it is unpopular, the officials have a good pretext to scuttle the whole program." In recent weeks Putin has attempted to shake things up by appealing directly to the public, over the heads of officials, by declaring Soviet-style "campaigns" on important social issues. In December he used a TV broadcast to berate his social affairs minister, Valentina Matvienko, for not doing enough to help the estimated 1 million homeless children living on city streets, and promised "decisive steps" to address the problem. The next month he urged regional leaders to launch mass fitness programs to improve the country's declining health and flagging sports performance. Last week it was a war on crime, and the turn of police officials to face televised presidential wrath. "This is an old story in Russia: when a leader feels helpless, he declares a campaign," says Mr. Konovalov. "Putin hopes to translate his continuing public popularity into political momentum, but he is really just admitting that the state machinery does not function." Russia's official bureaucracy was created by Peter the Great in the 18th century, complete with a table of ranks and privileges, and has remained remarkably unchanged ever since. Political dissidents have railed against it, writers from Chekhov to Solzhenitsyn have derided it as a parasitical caste rather than a civil service. Czars and Soviet commissars alike have despaired of ever controlling it. Dictator Joseph Stalin succeeded in imposing his will, but the price was mass terror. "We cannot return to Stalinist methods, and we cannot go on pretending that this machine can ever be made to serve the public interest," says Mr. Mikhailov. "I hope Putin understands that he has limited time to tackle the bureaucracy head on - or all his other reforms will disappear like water into the desert sands." ******* #3 Boston Globe February 21, 2002 Who is a Model for Whom By Marshall I. Goldman Marshall I. Goldman is the author of the forthcoming Piratization of Russia and the Associate Director of the Davis Center for Russian Studies at Harvard University Greed knows no limits. Not content with his enormous salary and dividends, the chairman and CEO of this billion dollar energy corporation siphoned off valuable assets from his own company to entities set up for his son and wife. And all the while its Big Five accounting firm stood by in silence. One such operation is headquartered in Jacksonville, Florida. Over a billion dollars worth of assets disappeared this way. To win support for its activities, the mother company lavished millions of dollars on government officials and their political parties and charitable causes. It has also become a generous supporter of the arts and medicine. Not surprisingly, regulatory officials have in the past turned a blind eye to its questionable practices and requests for more transparency as well as the clarification of esoteric accounting practices are rarely heeded. This describes not only some of Enron's practices but Gazprom's, Russia's largest corporation and the world's largest producer and exporter of natural gas. Rem Vyakhirev together with his predecessor Viktor Chernomyrdin (later to become Russia's Prime Minister under Boris Yeltsin) managed to set up more than 300 straws or subsidiaries headed by, among others, Vyakhirev's daughter and son and Chernomyrdin's sons as well as the wives, children and mistresses of a few of their senior associates. Enron with its tax dodging 3500 subsidiaries is one of the few companies in the world with more offshore affiliates than Gazprom. There were major differences of course in the behavior of Enron and Gazprom. Despite being the world's largest exporter of gas (providing 24% of the natural gas consumed in Western Europe), Gazprom reported no profits for several years. That was their way to avoid taxes. Enron ended up with the same results but it took a very different route to get there. While it too managed to avoid paying taxes (only one out of five years) Enron needed to show high profits so it could attract investors and therefore it used its subsidiaries not only to shelter itself from taxes but to help it overstate its profits. Both companies also seemed to use transfer pricing- selling at a low price to a subsidiary which then sold at a high price- as a way to benefit those in control of the subsidiary and disadvantage those invested or expecting to collect taxes from the parent. That is how Gazprom built up its offshoot Itera which despite being headquartered in Jacksonville has now become Russia's second largest producer and exporter of natural gas-all with no visible sign of investment from either stockholders or lenders. Auditors for both companies (Anderson for Enron and PricewaterhouseCoopers for Gazprom) also seemed equally willing to ignore their client's fuzzy math. And like Enron, Russian companies like Gazprom have also provided lavish support to their legislators (including in Gazprom's case, the Russian Communist Party) in an effort to limit government intervention in their affairs. Now both in Washington and Moscow questions are being asked as to who was responsible for allowing the diversion of so much money and assets. In Russia, hearings (before a judge) are also being held as well and the prosecutor general is also busy issuing subpoenas. In case Kenneth Lay is watching, so far two senior officials of a Gazprom subsidiary are in jail accused of siphoning off millions of dollars of assets and just as with Mr. Lay's son, Mr. Vyakhirev's son has resigned from some of his positions. Gregory Yavlinsky, one of Russia's leading reformers has remarked that when Russia embarked on its economic reforms a decade ago, there were many who were determined to make Russian companies more like American companies. Many companies tried but only a few succeeded- unless you hold Enron out as the model. ******* #4 Oil markets mull message from Moscow, as new output showdown looms February 22, 2002 AFP The oil market is nervously anticipating a new showdown between OPEC and Russia over output, as Moscow shows signs of baulking at a deal struck late last year to rein in production to boost crude prices. Oil prices fell heavily on Wednesday after Russian officials signally failed to extend beyond March current restrictions on crude oil exports at a Moscow pow-wow. Though prices recovered somewhat on Thursday, analysts say that the market is increasingly turning its attention to the future of a landmark pact forged last December by the world's leading crude producers to rescue prices by reining in oil volumes. Russia, the world's second-largest oil producer, was a crucial part of that deal: its involvement was enough to persuade the Organisation of Petroleum Exporting Countries (OPEC) to trim output by 1.5 million barrels a day, and also encouraged other non-OPEC countries like Norway and Mexico to squeeze supply. But Moscow's export cutbacks were only valid for three months, leaving experts to wonder what will happen on April 1. A meeting Wednesday produced no decision on extending the export curb. "You are still left in the dark as to what is going to happen going into the second quarter," said David Thomas, an oil expert with Commerzbank in London. "The market is just nervous about it. It shouldn't take it as de facto that there won't be an extension in the second quarter," he told AFP. "But there is going to be some volatility in oil prices as you see the rhetoric bashing between the various OPEC states and Russia." Oil experts in Moscow argue that most Russian oil companies were extremely reluctant about cutting exports in the first place, given high levels of investments and the importance of hard currency to their balance sheets. Russia and OPEC locked horns for weeks over the issue through November and December last year. Both sides knew that to rescue prices from a steep September 11-induced slump, output would have to be reined in. But neither wanted to be the first to jump, because cutting output naturally runs the risk of surrendering market share. Russia is eager to recapture market share, and also believes it can live with lower oil prices than a rival like Saudi Arabia, OPEC kingpin and the world's biggest producer. "We believe that the country will have no other option but to increase its exports of crude oil, given that domestic oil companies are sticking to their current production plans (which assume six percent growth in crude oil output in 2002)," said James Henderson, an analyst with the Moscow-based brokerage Renaissance Capital. OPEC officials are due in Moscow in early March to try to secure some form of commitment to the output cutback pact ahead of a meeting of OPEC ministers in Vienna in mid-March. Some analysts believe the deal will be patched up until the end of June, but thereafter non-OPEC countries will revert to type and the oil market will have to rely on stronger demand to mop up the excess volumes. ******* #5 HEAD OF THE UNION OF RUSSIAN INDUSTRIALISTS SENT A LETTER TO US PRESIDENT GEORGE BUSH MOSCOW, 21 February. /RIA Novosti correspondent/. A letter sent on Thursday by Arkady Volsky, head of the Russian Union of industrialists and entrepreneurs, to US President George Bush and which was presented to RIA Novosti stated that plans to introduce special protection measures in relation to import from Russia to the USA of Russian metal products represented a real threat "to progressive development of bilateral trade and economic cooperation". Volsky indicated that "the Russian Union of industrialists and entrepreneurs was seriously concerned with "such turn of events" which might deliver a serious blow against Russian metal producers. While acknowledging the right of every state to protect the national market in accordance with international regulations and rules, the Union "could not, nevertheless, consider those measures in relation to Russian suppliers as being just". First of all, because of the availability of three restrictive agreements related to import of metal products from Russia to the USA which provided protection to American producers. According to the Russian Union of industrialists and entrepreneurs, the American side did not take this fact into account during its recent investigations. Secondly, calculations made by Russian exporters and presented to the US Ministry of Trade demonstrated that "lately export of steel products from Russia was not increased both from the point of view of absolute figures and share distribution." And that was why the letter stated that "it could not inflict material damage or become a threat to US national industry". The Union of industrialists has serious concerns that Russia might become " the only country in relation to which biased, new and very rigid restrictions would be introduced in addition to already available steel restrictions of 1999". In this connection Volsky on behalf of the Union requested the US President to instruct a conduct of a detailed investigation of the above-mentioned matter in order "to arrive to a just and objective decision in relation to Russian manufacturers which would correspond to the enunciated and consistently defended by the USA the principle of free trade". ******* #6 Jamestown Foundation Monitor February 21, 2002 ARMS CUT ACCORD MAY NOT BE READY FOR RUSSIAN-U.S. SUMMIT. Mixed messages in news reports have left it unclear this week just how much was--or was not--accomplished during talks U.S. Undersecretary of State John Bolton and senior Russian officials held in Moscow on February 18-19. The two days of talks clearly appear to have highlighted anew continuing differences between the two countries on the subject of Russian military and nuclear cooperation with Iran (see the Monitor, February 20). But the picture appears more muddy with respect to talks on strategic arms cuts and a political document aimed at setting out the terms of a new Russian-U.S. strategic framework. There seems little doubt that no breakthrough was achieved on the first count, despite some hints from the Russian side beforehand that the two sides expected to narrow their differences significantly. Pressure has grown on negotiators to finalize agreements on both the strategic arms cuts and the strategic framework so that they will be ready for signing when Presidents Vladimir Putin and George W. Bush hold summit talks in Moscow and St. Petersburg this May. Although he spoke of his belief that there are "no insuperable obstacles" to Russia and the United States completing a strategic arms reduction agreement by the May meeting, Bolton appeared in remarks to reporters on February 19 to acknowledge nonetheless that lingering disagreements on a host of issues could yet stymie those efforts. "We have a number of difficult issues, questions about how exactly to account for the offensive, strategic warheads, measures of transparency and verification and a series of issues that still have to be resolved," he told reporters. Russian Foreign Minister Igor Ivanov had likewise said earlier that the two sides still had "different approaches" to the nuclear disarmament issue, despite some "common understandings." A commentary posted on the Kremlin-backed Strana.ru website said that the February 18-19 talks "had not arrived at the desired result--an agreement on the two most important documents" (that is, the strategic arms reduction agreement and the strategic partnership statement). With respect to the arms cuts, Bolton's remarks appeared to reflect the fact that the two sides have continued to clash on the same issues that have divided them since negotiations resumed earlier this year. Those issues involve the nature of the agreement that is to be signed, Russian concerns over the Bush administration's plans to store rather than destroy many of the warheads slated for decommissioning under the arms reduction proposals, and Russian efforts to link the arms cuts to limitations in U.S. missile defense testing and deployment. The two sides have made some progress on the first issue: In remarks to the U.S. Senate Foreign Relations Committee on February 5 Powell signaled the Bush administration's readiness to meet Russian demands that the arms cuts be formalized in a legally binding agreement (see the Monitor, February 8). Precisely what form that agreement will take appears still to be a subject of discussion, however. At the same time, remarks by Bolton in Moscow suggested that Washington has budged little, if at all, on Russian demands that decommissioned nuclear warheads be destroyed rather than stored. And he appeared to bluntly reject Russian calls for some oversight of U.S. missile defense deployments. According to Russian sources, Moscow is pushing to have this linkage between strategic arms reductions and limitations on defense systems included formally in an arms reduction agreement (Strana.ru, February 17, 19; Moscow Times, February 20; AFP, February 19-20; Reuters, February 19). If the news out of Moscow on February 19 seemed generally downbeat about the latest round of negotiations, however, a report published yesterday by the Interfax news agency appeared to reflect a more positive view--from a Russian perspective, at least--of the week's events. The Interfax article quoted unnamed Russian "diplomatic sources" as saying that there had in fact been some significant progress made in this week's talks. The sources suggested that the two sides had agreed for the first time to base their strategic arms reduction agreement on provisions contained in the START I Treaty. The diplomats did not go into detail, but they spoke of "concrete oversight mechanisms, the procedure for recording reductions in the nuclear arsenals and a number of other effective measures." They spoke also of agreement on additional measures aimed at boosting transparency and confidence, including information exchanges that would continue after the arms reduction agreement is signed. Of perhaps greater interest, the diplomats also spoke of a new willingness by Washington to meet one of Moscow's key demands--that any arms reduction agreement require ratification by the legislatures of the two countries. The U.S. side has been reticent up to now to make any such commitment. Whether these statements reported by Interfax reflect the reality of this week's negotiations is unclear, particularly insofar as some of them appear to conflict with what Bolton said during his February 19 press conference (Interfax, February 20). Another Russian news source, meanwhile, suggested this week that Russian nuclear cooperation with Iran may also have emerged as a factor in the Russian-U.S. talks on strategic arms cuts. A commentary posted on the Strana.ru website speculated that the American side may be offering some sort of deal whereby Washington would agree to sign a strategic arms reduction agreement in exchange for a Russian commitment to cease nuclear cooperation with Iran, as well as with other countries which the United States considers to be a threat. To substantiate this claim the Strana.ru piece pointed to the fact that Bolton met during his stay in Moscow with two of the senior Russian officials involved in cooperation with Iran: Atomic Energy Minister Aleksandr Rumyantsev and the director of the Russian space agency, Yury Koptev (Strana.ru, February 19). The Russian side, meanwhile, attempted this week to turn U.S. charges that Russian-Iranian cooperation constitutes a proliferation risk back upon Washington. Diplomatic sources were quoted by Interfax yesterday as saying that Moscow remains concerned over U.S. plans to withdraw from the 1972 Anti-Ballistic Missile Treaty because the U.S. move could undermine efforts to halt the proliferation of nuclear, chemical and biological weapons. The same sources also restated Russia's hopes of further internationalizing the nuclear disarmament process by seeking the involvement of other countries--and of the UN Security Council (Interfax, February 20). That effort is unlikely to be appreciated in Washington, which is intending to withdraw from the ABM Treaty in part precisely to free itself from international obligations in this area. ******* #7 NATO: Lobbying, Speculation Intensify Ahead Of Prague Summit By Don Hill/Elena Nikleva Lobbying and speculation are intensifying ahead of the expected second wave of NATO expansion at a summit in Prague in November. Some observers -- including former U.S. National Security Adviser Zbigniew Brzezinski -- believe NATO is virtually certain to accept the three Baltic states and Slovenia; that Slovakia's accession is a question mark; and that Bulgaria and Romania may not yet be ready. NATO's official position is that nobody knows, and won't until November. Prague, 21 February 2002 (RFE/RL) -- When the top leaders of NATO and its member states gather in Prague in November for a summit, officials from nine aspiring alliance members will be holding their breath. NATO says one or more of the nine will certainly be admitted into the alliance, and that all nine might be. Within current member NATO countries, in aspiring member states, and in the NATO bureaucracy itself, there are nearly as many opinions about what will occur in Prague as there are people available to hold opinions. NATO spokeswoman Ariane Quentier, speaking from NATO headquarters in Brussels, says that anyone who pretends to know what the judgment will be nine months from now is simply guessing. "I think right now we are in a process of consultation among the capitals, and anything more would be speculation," Quentier says. As part of this consultation process, leaders from the nine aspirant nations are making the cases for their countries during trips abroad. Earlier in February, Bulgarian President Georgi Parvanov devoted his first presidential trip to visiting Brussels, seeking support for Sofia's NATO entry. In the same week, Romanian President Ion Iliescu went to the United States on a similar mission. NATO Secretary-General Lord George Robertson is in Latvia and Lithuania this week to discuss expansion. RFE/RL's Bulgarian Service recently spoke about NATO enlargement with Zbigniew Brzezinski, a professor of U.S. foreign policy at Johns Hopkins University in the United States. Brzezinski is also a counselor at the Center for Strategic and International Studies in the United States and served as national security adviser for U.S. President Jimmy Carter from 1977 to 1981. Brzezinski offers several NATO scenarios. His conclusion is that the three Baltic states of Estonia, Latvia and Lithuania, along with Slovenia, are virtually certain to enter NATO in the next wave of enlargement. He considers Romania and Bulgaria's entry in this next wave questionable. He entirely leaves out applicants Albania and Macedonia. As for Slovakia, Brzezinski says it depends upon whether the country continues in its current progressive direction or it returns former authoritarian Prime Minister Vladimir Meciar to power in an election scheduled shortly before the Prague summit. "I think the next enlargement of NATO will involve either four, five, or seven countries. The four would be the three Baltic states plus Slovenia, in the event that Meciar wins in Slovakia," Brzezinski says. "The five would be the ones I have just mentioned, including Slovakia [if Meciar doesn't win]. And the seven would include Bulgaria and Romania." As for Bulgaria and Romania, Brzezinski says he believes they will eventually become NATO members, but not just yet: "I do not think anyone envisages keeping Romania or Bulgaria out permanently from either the EU [European Union] or NATO. The only question under discussion is whether these two countries -- or any one of them -- are currently ready, in the near future, that is, to join either NATO or the EU. And that is, I think, a perfectly appropriate question to ask." Although not responding directly to Brzezinski's views, NATO spokeswoman Quentier says only two numbers are on the alliance's table at this early date: "The only thing we can say, the only relevant figures that we have right now, are two: [Those are] one and nine. There will be at least one country being taken for the enlargement, and there will be a maximum of nine." High-level officials in NATO nations have proven to be less restrained in their forecasts than NATO administrators. U.S. Secretary of State Colin Powell said recently he believes a number of nations will get accession bids in Prague. German Chancellor Gerhard Schroeder went so far as to call Slovakia a "very strong" candidate. Schroeder did not warn against Meciar's possible return to power, but he did praise the progress of Meciar's successor, Mikulas Dzurinda. NATO's Quentier says alliance leaders have two matters to consider in weighing each nation's candidacy: "There are two sides to look at. There's a technical-military side, whereby the countries that are part of the membership action plan and looking at accession have to reach NATO military standards. And there is, of course, the political side." Brzezinski makes a similar point in more evocative words. "NATO is not some sort of an award for good behavior, or compensation for suffering, or a decoration given for reasons of prestige. NATO is an alliance of countries that are prepared to make a contribution to that alliance," Brzezinski says. His comment serves as a counterpoint to remarks offered by Guenter Verheugen, the EU's commissioner for enlargement, speaking recently to NATO's Parliamentary Assembly. He said NATO should take in Bulgaria and Romania, which are unlikely to qualify early for EU membership, to avoid the difficult situation that would result from what he called a "double rejection." ******* #8 Izvestia February 21, 2002 EXCHANGING A SOLDIER FOR A COMPUTER The Russian armed forces need better maps and better administration Author: Dmitry Safonov [from WPS Monitoring Agency, www.wps.ru/e_index.html] THE DEFENSE MINISTRY BOARD HAS DISCUSSED ADMINISTRATION AND MANAGEMENT OF THE ARMED FORCES, AND SUPPLYING THE MILITARY WITH VITAL TOPOGRAPHIC AND GEODESIC RESOURCES. THIS WOULD GREATLY INCREASE THE EFFICIENCY OF THE ARMY AND SUCCESS OF MILITARY OPERATIONS. A Defense Ministry board meeting took place yesterday, chaired by Defense Minister Sergei Ivanov. It was devoted to prospects for developing the management system in the Armed Forces, and types and branches of troops. A separate topic for discussion was topographic- geodesic resources (cartography, navigation, intelligence, etc.) for the army and the navy, and what kind of new information technology may be required. The most important item on the agenda was not new for the military. Administration issues have always been important for the Defense Ministry, especially during the military reforms, aimed at optimizing the armed forces. Within the past year the Defense Ministry has set up a new branch of the military - the Space Forces, merging the military-space forces and anti-missile defense forces. Before that, these units were parts of the Strategic Missile Forces. Apart from that, several military districts have been merged into two new ones: the Trans-Volga-Ural and the Siberian districts. In the course of this process not only the headquarters changed their location, but also other infrastructure, as well as the system of monitoring the subordinate troops. That is why, according to the Defense Ministry, work on organizational and technical improvement of the monitoring system is now viewed as the primary task. The second issue - topographic-geodesic resources - is more complicated. The anti-terrorist operation in Chechnya has shown that the Russian army lacks good topographic maps of the region where it is fighting. The existing maps were made in Soviet times, and have nothing to do with reality. The air force and navy have similar problems: pilots and captains need to know for certain where they are, instead of figuring out their location (as they do it now) using methods dating back to the time of Columbus. The same problem is connected with high-precision weapons. We do have such weapons, but we cannot aim them. The Americans do this via satellites, but specially trained soldiers do the job in Russia. According to the Defense Ministry, we can increase the effectiveness of military operations and modern weapons and vehicles only by improving the electronic resoures which make up the automated system of battle control. In the Air Force effectiveness could be improved by 15%, in the Army by 25%, and in the Navy by almost one- third. (Translated by Daria Brunova) ******* #9 Itogi No. 7 2002 [translation from RIA Novosti for personal use only] DAMAGING RELATIONS WITH CENTRAL ASIAN STATES BECAUSE OF U.S. MILITARY BASES WOULD BE UNWISE AND ECONOMICALLY DISADVANTAGEOUS By Oleg ODNOKOLENKO According to public opinion polls, about two-thirds of Russian citizens are worried over the emergence in Central Asian states of military bases of the United States and its allies. The man in the street still considers this region a zone of Russian influence. Is it really so? Does the military presence of NATO countries in Central Asia threaten Russia's political and economic interests? Grigory RAPOTA, general secretary of the Eurasian Economic Community (the successor to the Customs Union of Russia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan), answered these and other questions in an Itogi interview. Question: Some people think that our partners in the Eurasian Economic Community simply use Russia to serve their own interests and will take the side of richer countries as soon as an opportunity arises. For example, Central Asian members of the Community have accommodated NATO military bases. Answer: I would not consider this situation at an emotional level. I have just returned from Tajikistan where I met actually with all Cabinet members. You see, when one understands their life better, many things look in a different way then. Not long ago, a civil war ended in Tajikistan. We gave them military aid - Russia's 201st division and border guard troops are deployed there. But we gave them no economic aid. Therefore they welcome any investments and, by the way, they first invited us. We have so far failed to find money for that. Should we now criticise them for letting Americans and Frenchmen into the country? Question: Even before the events in Afghanistan, Kyrgyzstan proposed to the United States deploying a U.S. military base on its territory in payment of its debts. Apparently, this was not only an economic decision. It seems that our allies rely more on the United States' ability to ensure security in the region. Answer: I am not ready now to comment on decisions of Central Asian leaders. I would only like to remind you that these are sovereign states pursuing independent policies. Yet it is indisputable that this region was and remains a sphere of Russian interests. However, one should not forget that Central Asia is, to the same extent, a sphere of interests of Kazakhstan, Kyrgyzstan and Tajikistan, which are members of the Eurasian Economic Community. And I think they are as interested in stability in the region as we are. Why they decided on military presence of the U.S.A. and its allies is another thing. After all, things turned out this way. Yet I would like to hope that the current U.S. activities in the region will not have a negative effect on our Community. Anyway, all the five members of the Community are interested in successful completion of the antiterrorist operation. Our and U.S. interests coincide here. Question: Are you sure that now, after ten years of disintegration, Central Asian countries will gravitate towards Russia? There is no trace of pro-Russian orientation in the region. Answer: The five members of the Community equally seek to build something that will work efficiently. There is political will. And although we do not deal with security issues directly, Dushanbe, Bishkek and Astana understand very well that in a broader sense this security depends, above all, on good relations with their closest neighbours. Question: Russia's political interest in Central Asia is understandable. And what is our economic interest in this not very prosperous region? Answer: Rule One: if there is political interest, this is already enough. Rule Two: if something is unclear, see Rule One. Actually, as an international official, I should not represent only Russia's position. But as a Russian citizen, I must say: our partners often have an impression that Russia knows very well what it does not want - for example, U.S. presence in Central Asia - but does not know what it wants. I don't think Russia is interested only in opposing Americans everywhere. Now about our economic interest. Take, for example, Tajikistan where the British have established a joint venture and begun to mine gold. They were not scared away by Russia's influence or the local situation. And isn't Askar Akayev's idea to revive the Silk Road attractive to Russia? Question: Is the Eurasian Economic Community a supplement to the Commonwealth of Independent States, which has not yet come up to expectations, or a variant of the European Union for domestic use? Answer: There seems to be no need to reform the CIS - it is useful already because it gives an opportunity to presidents to meet and discuss topical issues several times a year. As for the Eurasian Economic Community, I think it is a new cooperation model which presupposes a higher level of integration. When we were establishing it, we did use documents of the European Union and European experience. As distinct from the CIS, all decisions made by the Community are binding on all the members. Votes are proportionate to countries' contribution to the Community budget. Russia's share is the greatest - 40 percent, this is why its voice is the weightiest. Question: The analogy with the EU raises questions. It turns out that ours is a "union of the poor," while theirs is a "union of the rich." It is not difficult to predict their future. Answer: Indeed, today we are a union of the poor. But our Community is a constructive response to the process of globalisation. No one knows where the boundary between the "golden billion" and the rest of humankind will lie. But we do not want to find ourselves in the doomed half, this is why we are uniting. Question: Wouldn't it be better to simply join the well-off half? Some of the Community's members have already made such attempts. Answer: Yes, they have, but their attempts failed - no one has so far been able to integrate into the Western economy at once. Our variant of integration has major advantages: we have similar economies, a similar technological level, and actually the same level of economic culture. Besides, we have a common history and can speak one language - Russian, which by the way is an official working language of the Eurasian Economic Community. It is because we are so much alike that I do not lose hope that we will not only restore what has been destroyed but will also go further. At least, we will try. Question: You're not sure of that? Answer: Everything depends on Russia. Kazakhstan's President Nursultan Nazarbayev was the first to come up with the idea to establish an economic union of states with economies at different levels of development, yet nothing would have come of it without Russia's will. Integration stalled, while Central Asia remained, for various reasons, outside Russia's sphere of interests. Question: But participation in the Eurasian Economic Community creates certain difficulties for Russia. Some people think that it hampers Russia's integration into the world economy. Answer: I would not consider Russia's wish to join the World Trade Organisation and its participation in the Eurasian Economic Community as opposites. Russia is a large state with its own interests. Besides, the Eurasian Economic Community is a structure for domestic use inside the CIS. It is not a monastery which one cannot leave. Question: So you are not in a dilemma as to where Russia should turn - the West or the East? Answer: Whatever decision we make today, there is an objective development of events. For example, the flow of migrants from Central Asia to Russia. Up to 300,000 people come to Russia from Tajikistan every year to earn money. Is it bad or good? Cheap manpower is useful for the Russian economy. It is also good for our partners hit by total unemployment. So it turns out that, while we were engaged in discussions, the East itself has come to us. This is a real people's integration. Of course, it was caused by poor living conditions, but we have set up the Eurasian Economic Community to civilise this phenomen, too. And damaging our relations with Central Asian states only because U.S. military bases have been deployed there would be absolutely unwise and economically disadvantageous. ******* #10 WPS Russian Media Monitoring Agency www.wps.ru February 20, 2002 POLITICAL FORECASTS [press review] RUSSIA IN THE 21ST CENTURY: A DECADE OF REFORMS, AND 150 YEARS SINCE THE ABOLITION OF SERFDOM There is hardly a publication in Russia that missed a chance to declare its standpoint on the results of the first decade of reforms in Russia, entering the new century as a different state, and the surprises of the post-reform era. At a first glance, all these issues are far from being the hot topic of the day. And analysts make efforts to have the public look at itself in "the mirror on the road" - undoubtedly, the media is to play the role of the mirror. Has the transition period ended in Russia? Observers have different opinions on this issue. Director of the Political Situation Center Valery Fedorov stated in the "Nezavisimaya Gazeta" paper that at present, Russia is living in a typical post-reform times, characterised by "being tired of upheavals, avoiding extreme ideology - both neo- liberalism and communism, and looking for a trustworthy politician to believe in." According to Valery Fedorov, Vladimir Putin became the leader of this "tired generation". Director of the Political Situation Center is convinced that although the Russian president is a real state-oriented politician, the majority of people who support him are oriented on social- democratic values. Fedorov asks, "What do people consider to be the greatest achievement of Vladimir Putin's? Active social policy, care of pensioners and budget-sector employees." It is his attention to the needs of ordinary Russians that makes the president so popular. Besides, today's popularity of social-democratic ideas in Europe is likely to make it easier to Russia - in case it makes this way as a final choice - to integrate into the European community. At the same time, currently the people oriented on neo-conservatism in the manner of the present US government have very strong positions in the Russian elite. According to the author, the dilemma between social democracy and neo-conservatism makes the course of the power so unstable. Mr. Fedorov stresses that the final choice has not been made yet, which is no accident: social democratic development would force the president to finally break up with tycoons - raw material magnates and to look for alternative supporters. General Director of the Russian independent Institute for social and national issues Mikhail Gorshkov states in the "Vremya Novostei" newspaper that the transition period is not over in Russia yet. However, he stresses, the changes are obvious, "It is easy to feel that the young generation is considerably more active and can better adapt to the new situation." According to Mr. Gorshkov, further transformation of the country will go on along with "appearance" of new people in the "social space" of the state. Mr. Gorshkov thinks the main peculiarity of the moment is that by the end of the first decade of reforms, "there has been a rather noticeable positive psychological turn." If two or three years ago three fourth of Russians believed that reforms would lead the country to a dead end- today almost 60% of Russians hope that the efforts the authorities take will lead to a positive result. Head of the Political Consulting Center Igor Bunin estimated the situation differently in his interview with the "Moskovskie Novosti" weekly. He thinks that the matter is not that "things are getting better" but that conformist mood started prevailing in the society. Igor Bunin states: people are simply tired as over the past decade each tried to adjust to the new situation, some have had to change their profession, others have had to adopt new values. Sometimes people were forced to go into details of political fights, which were constantly public. At the same time, the Russians gradually distanced from big politics. In Mr. Bunin's opinion, the first stage was the so-called "nomenclatura privatization" that left the majority of Russians overboard. The second crisis was Boris Yeltsin's 1996 presidential elections, which demonstrated corruption of the authorities and the discrepancy of their actions with expectations of the society. Finally, the 1998 default started discrediting of liberal ideology in Russia. According to head of the Political Consulting Center, today "a considerable part of the population has shifted the responsibility for what is going on in the country and has delegated it to the top authorities." According to Mr. Bunin's data, no more than 5% of Russians are at present seriously interested in politics. The rest are tired of making out political stratagems and ideological complications and they are quite satisfied with the present imitation of stability in the country. Despite all talks of Putin's KGB past and the dominance of his associates in the power, the present Russian middle class does not consider the president as a danger to its well- being. That is why the people do not need political activity and have plunged into their personal issues. If the Russian authorities continue rendering to the Russian yappy some necessary freedoms, such as: the freedom of job choosing, freedom of entertainment, freedom of travel, and so on, the authorities will not have to expect any protest from this side. Thus, a high popularity rating of the authorities is secured for the next two years, moreover, it is not just a presidential popularity rating, but it is "a rating of symbolical uniting of the society, the rating of hopes." The "Inostranets" paper writes, Russian market reforms, "though ugly and inconsistent", have still changed the society: they created new social layers that have different values. It is due to them that the communists did not resume their authority in the country. Besides, according to "Inostranets" observer Mikhail Kalishevsky, the ruling elite headed by Boris Yeltsin also played an important role in preventing resume of a totalitarian revenge in the country, as they had their own reasons not to be interested in it. The new Russian elite is perfectly aware of the peculiarities of the Russian electorate due to its prior party experience. Besides, they are very good at political demagoguery and dealing with the "administrative resource". As we know, Putin's rise to power was secured by experienced manipulation of voters during the 1999-2000 presidential elections. The main result of the successful "successor" operation was a passive stabilization across the nation. However, "Inostranets" stresses, President Putin's 75% popularity rating should not deceive anyone today: despite a total trust in the liberal president, the Communist party is still the most popular party in the country. In January 2002, 32% of voters were ready to vote for it, 30% of voters would support the United Russia, 10% of voters would support the Liberal Democratic Party of Russia, 7% of Russians are for Yabloko, and 4% support the Union of Right Forces. According to the paper, such paradoxical electoral preferences mean that the political consciousness of the majority of Russians is still in fact a "clean piece of paper" and it is possible to write anything on it. Yabloko leader Grigory Yavlinsky states in the "Novaya Gazeta" newspaper that the Russian authorities are not interested in the electorate that is able to consciously make a choice, moreover, they do not need such voters, as "it is possible to achieve any goals with the help of electronic media." As we know, television played the major role in the 1999 - 2000 election campaigns. Besides, Yavlinsky reminds, "it was used to whip up war fever in autumn 1999, which was a reason to start a large-scale military operation in the North Caucasus." According to the Yabloko leader, this experience that is the basis of manipulating the electoral choice is very dangerous. Yavlinsky says, "It is highly likely to lead to creation of a totalitarian system with a democratic front, where all attributes of a democratic society are present: the Constitution, the parliament, courts, and so on, but they work to the needs of a couple dozens most close to the power people." Besides, in the opinion of Mr. Yavlinsky, such a policy of the authorities lays the foundation for irreversible lagging of the country behind as fooled and disoriented people are equally unable to do good politics and economy. "People, who open a newspaper and cannot understand which articles are paid for and which are not, which information is a provocation and which is true, are unable to make discoveries, create new technologies, they are unable to lead to the country to the level of leading developed countries." On the other hand, such people are very convenient for the authorities, "The Russian authorities lean on exporting natural resources, and it is satisfied with it." For instance, in Japan it was necessary to either create the Sony industry or to die - "in Russia it is always possible to export an extra ton of oil and 'resolve the issue'." Thus, the authorities do not need any new technologies - all they need is tamed people. Meanwhile, the "Vek" weekly believes, in the near future the Russian president is likely to find himself in a situation equal to the verge of the 1991 August putsch: "Vek" thinks that protesting electorate is being actively prepared in Russia. Until recently, one the Russian elite had grounds to be dissatisfied with the presidential policy, "first of all it was tycoons, regional leaders, and head of the largest financial- industrial groupings." However, after beginning of the housing reform, passing the law "On turnover of agricultural lands" - if it is ever passed - cancellation of privileges for the military the number of dissatisfied people is likely to sharply increase. We should also take into account growth of prices that was caused by increasing the rates of natural monopolies, considerable fluctuations of the inflation rate, resumed wage arrears, and growth of drug prices. According to "Vek", the political inertness of the Russian public is considerably exaggerated. "On the other hand, the expert community and the media so far prefer to promote and discuss "global specifics". "Vek" provides some most popular discussion topics, such as: to appoint or elect regional governors, and so on. The weekly notes that Russian law is shaped by the politicians who hope to be elected with its help. No wonder, at present the Russian electorate is maximally distanced from the results of elections. It is generally believed in Russia that all Russian parties are mostly busy with fighting for their own influence and prospects and they are uninterested in resolving real issues of the population. Consequently, the popularity rating of political parties in Russia is extremely low. People would never trusted them to nominate their candidates if they could, but in accordance with the Russian legislation, it is the political parties that have monopoly rights to represent the interests of people. All this explains the present situation: "Politicians are unwilling to take the responsibility - the people respond with disbelieve in politicians and in the whole election procedure." It is impossible to assure voters attendance in such a situation, and that is why politicians suggest replacing elections with appointments - a recent initiative of the United Russia. Overall, "Vek" writes, the majority of Russians do not even care whether their regional governor is elected or appointed - they only want him to do his work. That is why dragging people's attention to the issue of "appointment or electing" is just an attempt to avert their attention from real issues: the real strategy of the authorities must become carrying out long-term and systematical reforms the aim of which is improvement of people's living standard. According to "VEk" fulfillment of this goal, which was first declared in the Soviet Union, is a necessary condition for constructing a democratic society, "Experience of developed countries prove that poor people will never be able to build a civil society. There should be not only several percent of rich citizens in the country, who are able to buy everything and everyone, but a well-to-do majority. Only then Russia will be able to overcome its system crisis of the prior reforms." Meanwhile, judging by the results of a research held by the Institute for Complex Social Researches of the Russian Academy of Sciences and experts of the Ebert Foundation, Russians are rather calm about their position. According to the poll, published in the "Vremya Novostei" newspaper, 40% of respondents consider them middle and upper-middle class. However, sociologists explained that beside social-property criteria the poll also took into account self-estimation of people and their life style as well: education, the circle of acquaintances, and pastime. It turned out that the majority of people who referred to themselves as to "upper middle class" have on average a $100 monthly income. At the same time, the researches believe it is useless to compare the Russian middle class to the US or German middle class: the matter is the affordable living standards. On the other hand, today's data are twice as big as the 1999 data. Still, according to Professor Igor Chubais, even today the Russian middle class can be divided into "middle poor" and "middle very poor". It also depends on what to compare it with: it turned out that over the years of reforms, about 10% of adults in Russia have not only sunk to the very bottom of society, but have also lumpenized. Moreover, as a rule, they are well-educated people. Nonetheless, overall, according to expert appraisals, the attitude of the society towards the liberal market has stabilized: people do not consider it to be hostile any longer. Although, almost every Russian has suffered some losses over the years of reforms, at present 40% of Russians support the reforms, and slightly over 40% are determined as "reserved opponents of reforms", only 18% of respondents are "ardent opponents". According to researched these data should be compared to the presidential popularity rating, who is known as supporter of reforms. On the other hand, absence of interest to political parties should be considered a dangerous trend in the society, thinks head of the Ebert Foundation Moscow branch Peter Schultze: in these terms, the Russian political system resembles an automobile that runs a difficult road without traffic signs. At the same time, Dr. Schutze states that the post-communist transformation of the Russian society is close to an end and "now we have to deal with consolidated Russia oriented for the future." Famout political scientist, head of the Economic Politics foundation Gleb Pavlovsky also agrees that Russia has consolidated. At the same time the "Moskovsky Komsomolets" paper informs that at present Pavslovsky who has long been known as "the Gray Cardinal of the Kremlin" is passing through hard times: the Economic Politics foundation has difficulaties with financing, rivals are becoming stronger, and the main problem is that the authorities seem to have lost interest in the cunning political consultant. Nonetheless, Mr. Pavlovsky does not think these issues are very significant. According to him, it is much more important that all the declared aims of the first phase of Putin's presidency have been achieved unexpectedly fast: "The new political regime is built. All the political issues inherited from Yeltsin's epoch have been also resolved." However, as a result of such abrupt changes a sort of vacuum formed in the country, "It is necessary to determine new objectives, but no one is ready for this." According to Pavlovsky, Putin's surrounding uses the high popularity rating of the president as a chance to relax: neither civil nor security structures are able to formulate new objectives - "all are waiting for Putin to do this." At the same time, it is impossible to constantly wait, "All want to know how the system will work. It is impossible to permanently grumble and frighten someone.... We have built the plane, it is time to take off." At present the power has only two programs, first is "to keep pummeling tycoons" not only Berezovsky and Gusinsky. Second, is even simpler: "Let us not allow security structures to do this and save the society from their roistering." Pavlovsky thinks none of them can be considered a serious strategy, while the necessity in sensible strategic plans is very vital, as well as in economic objectives. Like many other analysts, Pavlovsky is convinced that "we have a very short break to make economic decisions". Ceasing of economic growth, the January acceleration of the inflation rate are threatening signs that demand the authorities to take urgent measures. Pavlovsky says, "I hope that the mobilized system will finally start moving somewhere, though it is very hard to say which economic strategy is correct." Some offence is easy to notice in Pavlovsky's words - he has obviously distanced from the Kremlin's issues, which is not characteristic of him. Perhaps the rumor of retrieving the Gray Cardinal to the shadow has some grounds. According to the "Profil" magazine, the basis of any regime in Russia, including the post-reform regime, is such a peculiarity of the Russian social psychology as traditional estrangement from the authorities. The Russian history is a convincing evidence of constant fight between the people and the authorities, constant attempts of the power to make its subordinates obedient. Apparently, it is this constant compete that has lasted for hundreds of years that has always averted the attention of both the people and the authorities from their direct objective: developing Russia. "Profil" states, the matter is that in fact there has not been a period in the Russian history when people felt free and independent and when their energy was directed to construction. Perhaps this is the real source of the constantly accumulating and systematically breaking through aggression of the "Russian riot" which is senseless and merciless. The authorities in turn have irreversibly deformed the national character in their intention to make the people obey. "Profil" writes, "All sociological researches of the last years cry: Russian people are not interested in life with all its variety, they expect nothing good from it, at the same time, they make not personal effort to improve it." In fact, it is a classical version of the so-called stagnated psychology: it is no accident the majority of Russians consider the years of Leonid Brezhnev's rule the best in the history of Russia. Started reforms have hardly changed the attitude of the population to life. Like before the maximum program for an average Russia is to preserve their present state of affairs, what he or she is used to. "Our dynamic times, all these reforms and modernizations are perceived as hostile and alien, as something that is to be "put up with" as the experience of previous centuries says." No state, even the most caring and super-socially-aware, will be able to have this "patient majority" to constructive cooperation. The magazine is convinced that even living very well these people will be "suffering and will consider the state alien and hostile". In these terms, there was a recent suggestion from the Union of Right Forces to make February 19, the day serfdom was abolished in Russia, another national holiday. Perhaps, says "Kommersant", after we celebrate this holiday we will be able to understand something in our souls? So far, despite a hundred and fifty years since Tsar Alexander II (the Liberator) issued his manifesto, Russian citizens have not shed their psychological legacy of the past and of this rather strange national peculiarity. For instance, Russians still want to have a "real master", a "strong hand", which would be able to establish "iron order" in the country. In these terms, Russians are lucky to have President Putin, no matter what the liberals say. As the New York Times noted recently, "after decades of living under senile leaders the people are proud of he who would undoubtedly pin down the man in the Oval Office." Well, let us believe it is a western observation of demonstration of Russian "imperial consciousness": it is important to find something to be proud of in your own country. Mavra Kosichkina (Translated by Arina Yevtikhova) ******