CDI Russia Weekly-#195 1 March 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: Russia rejects US allegations of theft of nuclear materials. 2. Interfax: Up to USA to get strategic arms deals ready for summit, Russia says. 3. Moscow Times: Pavel Felgenhauer, No Prize at All for Progress. 4. BBC: Russian papers bemoan US-Georgia deal. 5. RFE/RL: Jean-Christophe Peuch, Caucasus: Russia To Reluctantly Agree To U.S. Military In Georgia. 6. Komsomolskaya Pravda: Sergei Chugayev, RUSSIA BEING PUSHED AWAY FROM BIG OIL. Russia, the United States, and influence in the Caucasus. 7. Asia Times: Sergei Blagov, Troubled waters in the Caspian Sea. 8. Christian Science Monitor: Fred Weir, Alternative service under fire. Russian military officials attack a city's new effort to allow service in hospitals rather than the Army. 9. Jamestown Foundation Monitor: RUSSIA MULLS OFFER OF LIMITED ROLE IN NATO AFFAIRS. 10. www.fednews.ru: REMARKS BY ALEXANDER VERSHBOW, US AMBASSADOR TO RUSSIA, AT THE CONFERENCE "RUSSIA ON THE RISE", ORGANIZED BY THE AMERICAN CHAMBER OF COMMERCE IN RUSSIA AND THE EXPERT INSTITUTE. ******* #1 Russia rejects US allegations of theft of nuclear materials Interfax Moscow, 28 February: Russian Atomic Energy Minister Aleksandr Rumyantsev has categorically denied reports of the theft of a significant amount of nuclear fissile materials in Russia in a Thursday [28 February] interview with Interfax. Reports said the claims about the theft of fissile materials in the Russian nuclear industry were made in a CIA report to the US Congress. The document quoted a Russian official as saying that in 1998 "a significant amount of fissile materials was stolen, which is sufficient for making a nuclear bomb" in Russia. According to the CIA, there were also unreported cases of theft and smuggling, though the scale of such offences was not known. "Fissile materials have not disappeared," Rumyantsev told Interfax. "We do not confirm such reports," he said. ******* #2 Up to USA to get strategic arms deals ready for summit, Russia says Interfax Moscow, 27 February: Whether or not a legally binding document on cuts in strategic offensive weapons will have been drafted before the Russian-American summit set for May depends, in Russia's opinion, on the American side. The Russian and American presidents "have given priority to the drafting of a new Russian-American agreement on radical cuts in strategic offensive weapons by the arrival of US President George W. Bush in Russia", Russian Foreign Ministry spokesman Aleksandr Yakovenko told the press on Wednesday [27 February]. "However, a great deal currently depends on the US negotiators' preparedness to implement the presidential agreement on real and radical cuts in strategic offensive weapons under appropriate control," Yakovenko said. Earlier, US Under Secretary of State John Bolton, the leader of a US delegation to the second round of talks on strategic issues, held recently in Moscow, made it understood that Russia and the USA may fail to reach an agreement on cuts in strategic offensive weapons by the May summit. But neither of the parties is confronted with insurmountable obstacles, the US diplomat said. During the Moscow round of the talks, the parties made proposals on the documents expected to be signed at the May summit, after which they "got down to practical work on the drafts", Yakovenko continued... In addition, the parties are actively working on a second extremely important document - a declaration on the formation of new strategic relations between Russia and the USA, which will outline the main spheres and trends of political, economic and military-political cooperation, including in creating a mechanism for building a Group of 20 comprised of Russia and the NATO member-states, Yakovenko said. However, "serious disagreements still remain", he went on to say. The main thing now is to come to terms on real, not "virtual" cuts and limitations of strategic armaments that would be guaranteed by proper control measures and, on the whole, enhance predictability and strengthen strategic stability and international security, said Yakovenko. Moscow is convinced that the future agreement on strategic offensive weapons should also reflect "mutual dependence of strategic offensive and defence weapons, on which the Russian and American presidents agreed in Genoa on 22 July 2001", the Russian diplomat said. ******* #3 Moscow Times February 28, 2002 No Prize at All for Progress By Pavel Felgenhauer During the Cold War, major international sporting events such as the Olympic Games were a substitute for armed conflict, but without the bloodshed and carnage. After defeats, the sportsmen could walk away to fight another day or could simply leave the sports arena to live normal lives. In the Soviet Union, the Olympic gold medal-producing industry was given the same state priority as strategic nuclear missile production and some times even higher priority. Major Soviet research institutes, primarily in the fields of chemistry and biology, received generous government grants to help give athletes an unfair advantage and bring home the cherished Olympic golds. Sports that were not represented at the Olympics (baseball, cricket, etc., including some traditional Russian sports) for the most part got little government funding. But if a sport made it into the Olympic arena,the authorities began to forcibly cultivate it, even if no one knew the rules and the public had no interest in the particular sport. In the 1970s and 1980s, following Moscow's lead, East Germany began to mass-produce Olympic champions (primarily women) by relentlessly pumping athletes with steroids and other performance-enhancing drugs. The GDR's sporting tricks were exposed after German unification, but in Russia, there has been no cleanup of the corrupt Olympic medal-producing industry. Former Soviet officials control sports today, the same doctors and coaches are, apparently, still pumping athletes with performance-enhancing drugs and so on. Sports seems to be just as corrupt as in Soviet times, maybe even more so, as many former Soviet athletes and Olympic champions, sports officials and coaches have in the past decade been involved in organized crime and in some instances organized major criminal mobs of their own, while maintaining connections with the sports world. Like many other former Soviet state institutions, sports organizations were partially privatized. The result has been fewer medals at the Olympics, but more illicit profit for corrupt officials. Stadiums were converted into markets. In the first half of the 1990s, the National Sports Fund was created and allowed to import large amounts of duty-free alcohol and tobacco and so on. Hundreds of millions of dollars in profits from these activities apparently disappeared without trace. It is hardly surprising that at the Olympics in Salt Lake City, Russian sports officials behaved in a Cold War manner. But it was in fact not their own initiative to do so. They hate public scandals that interfere with business and began issuing ultimatums only under direct orders from the Kremlin. At a press conference last Thursday in Salt Lake City, sports officials acknowledged that President Vladimir Putin personally phoned the Russian Olympic chief, Leonid Tyagachyov, and demanded action after a women's ski team was disqualified. Tyagachyov told reporters that Russia might boycott the last two days of the Olympic if its demands were not met and confessed that a final decision to stay or leave would be made in the Kremlin. Tyagachyov was so agitated that he slipped back in time more than a decade and told reporters that the decision would be taken in consultation with the International Directorate [of the Central Committee of the Communist Party]. Nowadays this directorate has been replaced by the presidential administration. Also, apparently quoting Putin, sports officials said that the mistreatment of Russian athletes was the result of a conspiracy by reactionary forces that were planning to sabotage the summit in Moscow with U.S. President George W. Bush in May. Several hours after the press conference, Foreign Minister Igor Ivanov issued an unprecedented note of protest to the IOC. The Duma passed an almost unanimous resolution calling for a boycott of the closing of the Olympics. But later Putin, apparently, recovered from his fit of uncontrolled rage, the situation began to slowly normalize and there was no boycott. But it is remarkable how fully and unquestioningly the public, press and ruling elite followed Putin in his fit of xenophobia and how slowly things are returning to normal. Russia's unreformed sports organizations, as well as many other unreformed national institutions, make integration of this country into the community of democratic nations a still remote possibility. Pavel Felgenhauer is an independent defense analyst. ******** #4 BBC 28 February 2002 Russian papers bemoan US-Georgia deal The official Russian Government newspaper Rossiyskaya Gazeta describes the prevailing mood of the general public in the Georgian capital Tbilisi as that of "a mixture of apprehension and hope". "We can say with almost 100% confidence today that the Georgian leadership has chosen its official ally to carry out a special operation in the Pankisi gorge. The preference was given to the USA," writes the daily. Its survey of the views of leading Russian politicians and other public figures shows their unanimously negative opinion. 'American intrusion' The leading daily Izvestiya compares these plans with the opening of a second Chechen front. The paper challenges the official US version that the aim of the deployment is to train the Georgian army to fight against international terrorism. "In reality, everything is just the other way round." However, the paper says that, "judging by the first reaction of the Russian leadership, Moscow was not entirely unaware - there have been preliminary consultations". At the same time the paper notes that "these consultations may have taken place on a very high level, whereas many people in the Russian political elite, including top officials in the power-wielding structures, were not ready for this turn of events". This is why these officials have interpreted the US moves as "intrusion into the sphere of Russia's strategic interests", the paper writes, adding that "this will trigger off more criticism of President Putin's foreign policy". 'Russian defeat' The mass-circulation Komsomolskaya Pravda believes that "there have been no preliminary consultations with Moscow". The paper argues that "all these events that took place in the North Caucasus in the past few years are episodes in a giant battle for controlling the major deposits of Caspian oil and gas, primarily, for routes to transport the Caspian oil". The paper sees Georgia's choice of the US as "a serious Russian defeat in this battle". At the same time it analyses another version of interpreting all these events. "The deployment of the US troops in the region is the result of a deal between the USA and Russia. Allegedly, the Americans have offered Russia to divide the spheres of influence in Georgia by splitting the country into several administrative parts. "As a result of the deal, Russia will gain control over Abkhazia and South Ossetia as well as Ajaria and Dzhavakhetia," the paper predicts. 'Odd one out' The popular tabloid Moskovskiy Komsomolets believes that reports about the American deployment plans are "just a canard to check the Kremlin's reaction". However, the paper predicts that if these plans are given a go-ahead, "Russia will be the odd one out. Strategically, the situation will change, and not to Russia's advantage". "Moscow's influence will be further weakened in Georgia, Azerbaijan and even Armenia, the Chechen conflict will become an international one, and in a couple of years Moscow and Washington will start competing for the influence over the leadership of all other North Caucasus republics which currently are constituent parts of the Russian Federation." 'Western influence growing' The upmarket broadsheet Nezavisimaya Gazeta remarks that "the ring of Western influence is getting tighter and tighter - Central Asia was followed by Moldova and Georgia. Russia is continuing to lose its positions in the post-Soviet countries". The business newspaper Vedomosti takes a fatalistic view on the events - "the anti-terrorist operation in Georgia is inevitable". The paper argues that "Iraq is being traded off for Chechnya, and Georgia will be a go-between in this deal". The paper notes rather sarcastically that "Russia is unable to expand its military presence in Georgia anyway, and, as her experience with Central Asia shows, she will get used to the US presence very quickly. "Russia is given a chance to pretend that all is well even when everything is going wrong." ******** #5 Caucasus: Russia To Reluctantly Agree To U.S. Military In Georgia By Jean-Christophe Peuch Russia's foreign minister has warned that the presence of U.S. troops in Georgia could "aggravate" the situation in the region. But experts believe there is little Moscow can do to prevent a possible American military buildup in the region except ask to be included in a joint operation on alleged Al-Qaeda fighters who may be hiding there. Prague, 28 February 2002 (RFE/RL) -- News that the U.S. is considering sending military advisers to Georgia to restore order in a lawless area bordering Chechnya has sparked strong reaction from the Russian Foreign Ministry. Foreign Minister Igor Ivanov said yesterday such a development might destabilize the area. "Regarding the possibility of U.S. soldiers appearing in Georgia, from our point of view, that could further aggravate the situation in the region, which is already difficult enough," Ivanov said. "This is our position, and Washington is well aware of it." The U.S. is reportedly considering sending as many as 200 military advisers to Georgia to train law-enforcement agencies in fighting terrorism. In addition, the U.S. is likely to increase military technical assistance to Georgia, an ally in the region. The official aim of the operation is to help authorities assert control over the Pankisi Gorge, a crime-ridden northeastern area which is also believed to harbor Chechen separatist fighters. Washington has also said the area is home to Al-Qaeda fighters who fled Afghanistan to escape the U.S. military operation there. It's not clear from the reports whether the U.S. troops would participate directly in any Georgian security crackdown, although Washington has said it does not envision a combat role for the troops. It's also not clear whether the U.S. is considering setting up a military base in the country -- as some Georgian media have already speculated. Defense analysts say strong obstacles exist to any extended U.S. troop presence. They say the U.S. would first need to ensure that Georgia is stable. They also say Washington must be careful not to upset Russia, which considers Georgia and the South Caucasus as lying within its sphere of influence. Giora Shamis is editor in chief of the Jerusalem-based "Debka File," an electronic defense newsletter. Shamis's publication reported on 23 February that a small number of U.S. elite troops had already arrived in Tbilisi to assess Georgia's security needs. This information was confirmed by the U.S. military European Command in Germany. Shamis told our correspondent that he believes it would be difficult for Putin to object to a U.S. operation in Georgia since he agreed with U.S. president George W. Bush to cooperate against terrorism in the aftermath of the 11 September attacks. "[There] is a mutual and deep understanding between the two presidents since 23 September, when they had a most important telephone conversation [during which] they agreed upon this kind of cooperation," Shamis said. "Since then, [this agreement] has been working very efficiently and certainly they are going to solidify it at the next [U.S.-Russian] summit on 25 May." Shamis continued: "Even if there are disagreements, misunderstandings, and conflicting interests between the two countries, still they agreed to work hand-in-hand in the war against terrorism. Since the [possible] landing of U.S. forces will be part of the war against terrorism, I think [the Russians] will agree to it even if they are presenting this as being against their basic interests. [Besides,] that could not [be possible] without the [clearance] of the highest Russian echelons [of power]." It's not known yet whether or to what extent the Russian military would be willing to agree to the U.S. deployment. Russia's military leadership -- in contrast to the political leadership -- has been critical at times of the U.S.-led war on terrorism and U.S. moves to establish military bases in Central Asia. Some 1,500 American soldiers are currently deployed at Uzbekistan's southern Khanabad airfield, near the Afghan border, and U.S. troops are building an air base near the Kyrgyz capital, Bishkek. Svante Cornell is a regional expert at the School for Advanced International Studies at John Hopkins University in Washington and editor of the newsletter, "Central Asia-Caucasus Analyst." He said that despite objections from some quarters, Russia has little alternative other than to agree to a U.S. military presence in Georgia. He said the situation is similar to the one in Central Asia. "I don't think that anybody in the Russian leadership wants an American presence. But they realized that it is politically impossible for Russia to oppose it. It would not fit with Putin's policy to try to appear as an American ally," Cornell said. "If you want to be an American ally and if you want to gain further influence in NATO, you cannot try to prevent an American military presence in Central Asia. That is impossible. They realize that, from a political perspective, they have to accept it -- at least for the time being." But Cornell said any U.S. presence in Georgia may further strain relations between Putin and the military. "The frustration [among] the Russian military at Putin's friendly relations with the U.S. and at allowing -- or not opposing -- the American presence in Central Asia will increase further now, I think," Cornell said. "But the thing is, what can the Russians really do? There is not much they can do to prevent the Americans from coming in, [although] they can increase again their pressure on Georgia. But they also know that an increased military presence in Georgia will make it much more difficult for them to [exert pressure on] the Georgian government the way they've been doing for the past couple of years. " One of the means that Russia could use to exert pressure on Tbilisi would be to delay negotiations over its planned withdrawal from military bases it has in Georgia's Adzhara autonomous republic and in the mostly ethnic-Armenian region of Akhalkalaki. Georgia insists Moscow pull out its troops within two or three years, whereas Moscow, citing financial problems, says it needs more time. Russian Deputy Defense Minister Aleksandr Koshovan, speaking to reporters shortly after news of the possible U.S. military operation in Georgia broke, reiterated Moscow's stance that the pullout might take up to 14 years. Moscow could also use its influence over the leaderships of Georgia's breakaway republics of Abkhazia and South Ossetia. In the early 1990s, both separatist and unrecognized republics fought against Georgian troops with the active support of the Russian military. Despite Moscow-brokered cease-fire agreements, they are still formally at war with Tbilisi and have remained de facto under Russian control for the past 10 years. Abkhazia's Foreign Minister Valerii Arshba said yesterday that should Tbilisi decide to use the presence of U.S. soldiers to forcibly reassert its control over the disputed Korodi Gorge -- an area in Abkhaz territory that is partly controlled by separatist troops, partly by Georgian forces -- Sukhumi will take "all necessary measures to defend itself." Abkhaz Prime Minister Anri Djergenia also said yesterday that Sukhumi might ask to become an "associate member" of the Russian Federation. In June, the Russian parliament adopted a controversial bill that, in principle, facilitates the admission of foreign states, or parts of foreign countries, into the Russian Federation. In December, the then-future leader of South Ossetia, Eduard Kokoev, also said that should he be elected president, he would see that his region is integrated into the Russian Federation as an "associate member." In comments made to Russia's state-controlled ORT television channel yesterday, Kokoev made no reference to his earlier threat, but said he might ask Moscow to send troops to South Ossetia. In the meantime, Russia will continue to insist that it is included in any military operation in the Pankisi Gorge -- as Foreign Minister Ivanov suggested yesterday. "Russia has repeatedly offered Tbilisi to join forces in order to put an end to the terrorist threat. This is important for Georgia, this is important for Russia, and this is important for the stability in the Caucasus," Ivanov said. "Moscow reaffirms its readiness to help the friendly Georgian people fight the terrorist threat in order to build a peaceful life in the Caucasus, a life that would be based on mutual respect and neighborly terms." Since the 11 September attacks in the U.S., Moscow has been trying to prove its claims that the Chechen leadership is linked with Al-Qaeda and that separatist fighters are hiding in Pankisi Gorge. Asked whether Russia could possibly try to save face by pressing the U.S. to accept its cooperation on the Pankisi issue, regional analyst Cornell said: "That sounds likely. I think this is what they are going to do. I am not sure how the United States will respond to that, [but] it will be difficult for the Americans to ignore it. I think that the U.S. military and some in the [political leadership] would not be very happy to cooperate with the Russians in this matter. But in some symbolic way, they [may] have to do it. But it is a little bit too early to say." Addressing Georgia's parliament, Foreign Minister Irakli Menagharishvili said today a Russian military crackdown in Pankisi would be "totally unacceptable" for Tbilisi. But he said Georgia remains ready to examine any other offer of cooperation that would emanate from Moscow. A delegation of Russia's Federal Security Service (FSB) will visit Tbilisi soon, and Georgian President Eduard Shevardnadze is expected to discuss the Pankisi issue with Putin when he attends a CIS summit tomorrow near the Kazakh city of Almaty. ******* #6 Komsomolskaya Pravda February 28, 2002 RUSSIA BEING PUSHED AWAY FROM BIG OIL Russia, the United States, and influence in the Caucasus Author Sergei Chugayev [from WPS Monitoring Agency, www.wps.ru/e_index.html] TWO THEORIES ABOUT GEORGIA'S EAGERNESS TO ACCEPT AMERICAN ASSISTANCE IN DEALING WITH TERRORISTS IN THE PANKISI GORGE. THERE IS A HUGE BATTLE FOR CONTROL OVER CASPIAN OIL UNDERWAY, AND GEORGIA'S MOVE SHOULD BE VIEWED AS A SIGNIFICANT DEFEAT FOR MOSCOW IN THIS BATTLE. It is common knowledge that the events of the last several years in the Caucasus - restoration of constitutional order, counter- terrorism operation, and so on - are in fact episodes in the huge battle for control over Caspian oil. To be more precise, for the transport routes of Caspian oil. That is why the news that Georgia has invited US commandos to help it fight terrorists - while ignoring analogous proposals from Moscow - should be viewed as a significant defeat for Moscow in this battle. Essentially, neither Georgia nor the United States bother to conceal the fact that they are really aiming to ensure the safety and security of the future pipeline. Restoration of order in the Pankisi gorge is just a preliminary phase in implementing the plan. If the plan is a success (which is likely, by the way), the major pipeline will be built across Georgia. Shevardnadze will get guarantees of stability of his regime and considerable money. Russia will lose immeasurably more than $4 billion. The Chechen war and all casualties will have become pointless. However, there is another theory about the American military presence in Georgia. Referring to sources in the Georgian government, advocates of the theory claim that the arrival of US commandos in Georgia is a corollary of an agreement between Russia and the United States, and that Moscow and Washington have agreed on dividing Georgia into spheres of influence. Advocates of this theory consider that deployment of an American military contingent in Georgia, a country bordering on Russia, would have been impossible without Moscow's consent and its interests in the region taken into account. They are of the opinion that the Kremlin's interests in the Caucasus have been observed in an unexpected manner - that the Americans came up with the proposals to divide Georgia into spheres of influence which essentially means its split into several administrative-territorial formations. This agreement allegedly establishes Russia's control over Abkhazia and South Ossetia (with the prospect of their eventual annexation), Adzharia and Dzhavakhetia. Moreover, Washington needs the deal so badly (the theory assumes) that it doesn't even intend to insist on dismantling Russian military bases in Batumi and Akhalkalaki and is prepared to bring up the matter of revision of the Istanbul accords on withdrawal of the Russian troops from the region. All this is confirmed by reports from diplomatic sources to the effect that deployment of a US contingent in the Pankisi gorge and division of Georgia was discussed in early February by the Russian- American working group on Afghanistan chaired by Deputy Foreign Minister V. Trubnikov and Undersecretary of State R. Armitage. Time will tell which of the two theories is correct. ******* #7 Asia Times February 28, 2002 Troubled waters in the Caspian Sea By Sergei Blagov MOSCOW - In yet another attempt to reach a consensus on Caspian Sea issues, Moscow held a conference this week to discuss how to divide the sea's lucrative resources. Yet all the gathering demonstrated was that the long-awaited consensus remains elusive. The Kremlin has been trying to urge the Caspian littoral states - which also include Azerbaijan, Iran, Kazakhstan and Turkmenistan - to agree on the sea's division. "The Caspian region is among the priority areas of Russia's foreign policy," its Foreign Minister Igor Ivanov told the international conference on Caspian Sea legal issues. The gathering, co-sponsored by Russia's Ministry of Foreign Affairs, Moscow's Institute of International Relations and some Russian oil firms, was attended by representatives from the five littoral states as well as lawyers, experts and researchers. Russian officials renewed their calls for consensus. Continued disputes over the Caspian could entail violent conflicts, according to Viktor Kalyuzhny, Russia's special envoy on the Caspian and deputy foreign minister. Kalyuzhny reiterated at the conference that determination of the Caspian status was an "exclusive affair of the littoral states". Kalyuzhny described a "package solution" as counterproductive and suggested a phased solution instead. Joint conservation and management of the Caspian's unique bio-resources could become a first step in this direction, he said. The principle of shared water resources has proved viable, Kalyuzhny noted. The Caspian, the world's largest inland sea, is a focal point of the accelerating clash of interests between Russian, its newly independent neighbors, and Iran. The Caspian, as an inland sea, has never been subject to international maritime laws and its status is regulated by bilateral treaties of 1921 and 1940 between the former Soviet Union and Iran. Russia believes that the status of the Caspian is already determined by those two agreements, Kalyuzhny said on February 26. The Caspian Sea region has been widely viewed as important to world markets because of its large oil and gas reserves. Proven oil reserves for the entire Caspian Sea region are estimated at 18-35 billion barrels. The basin is also believed to hold some 5 trillion cubic meters of natural gas reserves. However, in recent years the myth of Caspian riches has began to fade somewhat as some oilfields seem not as lucrative as originally expected. The situation in the Caspian basin could be described as a "curse of resources", Steven Mann, the US envoy on Caspian energy issues, told the conference. The region's economic progress lagged behind expectations because of a lack of the rule of law, low-level investments and graft, he was quoted as saying by RIA. Russia currently controls 19 percent of the Caspian - according to the length of its shore - and was to gain from equal division. Kazakhstan (29 percent) and Azerbaijan (21 percent) were against the idea. Russia eventually changed its view and backed Azerbaijan and Kazakhstan, which argued for the delineation of the seabed but not the water itself. The surface of the sea should remain shared, while the seabed needs to be divided on the principle of equal distance or median line, basically according to the length of the shore, according to the Russian experts. Turkmenistan and Iran have disagreed with Russia's plan for splitting the Caspian bottom along a "modified median line" while keeping the waters in common. Kazakhstan and Azerbaijan have agreed. Iran objects, seeking a larger share of the resources. Ashgabat's wavering stance has saved Iran from isolation. In the wake of the Soviet Union's collapse, Iran has suggested that the Caspian should be divided equally and that the five littoral states should each get 20 percent of the sea. According to the treaties of 1921 and 1940, Iran controls just 13 percent of the sea and is poised to benefit greatly from equal division, but its post-Soviet neighbors disagree. The littoral states should refrain from unilateral moves to develop the Caspian resources until the sea's status is determined, Iran's Deputy Foreign Minister and special envoy on the Caspian Mekhdi Safari told the conference. Iran still insists on a "condominium" approach to the Caspian, where oil and gas reserves would be developed jointly by all littoral states, Safari said. Moreover, Iran insists on its original position as Safari said that in respect to the sea's division, the littoral states should get 20 percent of the sea's surface and seabed. Iran claims 20 percent of the Caspian seabed and "will not allow foreign oil firms" to explore and drill in the contested areas, RIA quoted him as saying. Last July, an Iranian gunboat forced a British Petroleum (BP) exploration ship out of disputed waters. The Azeri government had given the BP ship a license to explore the Araz-Alov-Sharg concession, which Iran regards as its own. There have been pieces of circumstantial evidence relative to continued disagreements between Russia and Iran on the Caspian. On February 19, the latter's official news agency IRNA commented that the scheduled two-day official visit of Iranian Foreign Minister Kamal Kharrazi to Moscow was aimed at "cementing existing good ties" and seeking a comprehensive legal regime to govern exploitation of the resources of the Caspian Sea. However, the trip was cancelled at the last minute. On the other hand, Kazakhstan has tended to back Russia on Caspian-related issues. Kazakhstan favors a phased solution of the Caspian problem, Kazakh Deputy Foreign Minister Anatoly Smirnov told the conference. "We should act without waiting until a final solution," he said. In response, there have been encouraging signals from Moscow to Kazakhstan. "Increased export of Kazakh oil will not destabilize Russia's domestic oil market and will not affect international oil prices," Russian Prime Minister Mikhail Kasyanov stated in Moscow on February 26. Russia signed an agreement with Kazakhstan to export up to 15 million tons of oil per year and such volumes "do not cause concern in Russia", Kasyanov said. Subsequently, in Moscow on February 26, visiting Kazakh Prime Minister Imangali Tasmagambetov stated that Kazakhstan's oil export potential was estimated at 30 million tons a year, thus was no threat to the stability of the global oil trade. Kazakhstan largely relies on Russian pipelines to export its oil. Incidentally, Mann opted to remind the conference about alternative routes. He said that both an oil pipeline from Baku to the Turkish port of Ceyhan and the Shah Deniz gas pipeline from Azerbaijan to Turkey should be operational by 2005. Russia, and Kalyuzhny in his previous capacity as energy minister, have long lobbied in favor of of the CPC (Caspian Pipeline Consortium) pipeline that runs runs across Russia from the Tengiz field to Novorossisk on Russia's Black Sea coast. The competition between the CPC and Ceyhan pipelines has been widely seen as a part of "big game" around the Caspian hydrocarbon resources, with Washington trying to calm any fears Moscow might have of. The US has no intention of competing with Russia in the Caspian region, Mann was quoted as saying by RIA at the conference. Turkmenistan, on the other hand, agrees that the seabed needs to be divided, but the country wants to use a method differing from that proposed by Azerbaijan, Russia and Kazakhstan. The Russian and Turkmen positions "have become considerably closer", Russian President Vladimir Putin told Turkmen President Saparmurat Niyazov last January in Moscow. However, as Niyazov has a history of being an unpredictable negotiating partner in talks to determine the Caspian Sea's status, a final consensus will probably have to wait for a Caspian summit, tentatively scheduled for the next fall - or maybe even longer. Notably, last January Niyazov warned that the summit could only be "an exchange of views", indicating he was not ready for a solution. Therefore, the remaining differences between the littoral states arguably indicate that the actual settlement of the status of the Caspian Sea is still some time off. ******* #8 Christian Science Monitor March 1, 2002 Alternative service under fire Russian military officials attack a city's new effort to allow service in hospitals rather than the Army. By Fred Weir | Special to The Christian Science Monitor NIZHNI NOVGOROD, RUSSIA - Andrei Zakolodkin spends his days cleaning bedpans, hauling trash, and washing stairs. "It's hard work," he says, "but I don't mind serving my country. I just will not join the Army." Mr. Zakolodkin is among 20 young men here who have become the first Russians in history to fulfill their compulsory military duty by performing public service rather than bearing arms. If the military prosecutor in Moscow has his way, they could be the last. The youths, who have been working as orderlies in the city's main hospital since early January, are part of a program set up by Yury Lebedev, the reform-minded mayor of this Volga city of 1 million, about 300 miles east of Moscow. Mr. Lebedev says it's a matter of constitutional principle. Beyond that, the aim is to curb draft-dodging, and provide workers to fill critical but low-paid municipal-service jobs. Lebedev says he tired of seeing 2,000 local boys go on the lam every year to avoid military service - while those unlucky enough to be caught are dragged away to the Army, or to prison. "We have all the legal mechanisms to provide decent alternative service to young men, but for the past decade there has not been the political will in Moscow to do it," Lebedev says. "This idea is long overdue, and the loud demand for it to be implemented is coming from below." But the project has run into trouble. At the beginning, military recruiters pressured four of the participants into dropping out and heading for boot camp instead. In late February, a federal court declared the program illegal, and letters handed out by a prosecutor to the boys last week warned that their working time in the hospital would not be counted against their military obligations. "These young men have become hostage to a battle being waged between local authorities and the Defense Ministry," says Eduard Vorobyov, deputy head of the State Duma's Defense Committee. "The mayor of Nizhni Novgorod is responding to public opinion and acting on humanitarian principles, but he is on a collision course with the federal government." Russia is one of the few developed countries to practice universal male conscription, requiring all men between the ages of 18 and 28 to serve two years under arms. But the 1993 Constitution guaranteed a civic alternative to those whose "religious or other convictions" preclude military service. Successive Russian parliaments, heavily lobbied by the powerful Defense Ministry, have refused to pass enabling legislation. In the absence of a law, courts have turned a deaf ear to conscientious objectors and, in most cases, consigned them straight to the Army or to jail. A draft federal law being written by the Defense Ministry proposes alternative service in a form critics describe as unreasonable and punitive. The bill, which should see its first reading in the Duma in March, would require young men to go through a tough and humiliating process of proving their pacifist beliefs, and then agree to four years of "alternative service" at jobs that would be defined by military authorities. "The goal of this draft law is obviously to make alternative service so unattractive that no one will want it," says Sergei Sorokin, chair of the Movement Against Violence, a grass-roots, antimilitary group. "Alternative service should entail an honorable choice for each citizen, and our Army seems completely unwilling to accept this idea." The Nizhni Novgorod initiative, conceived last summer, revived the Soviet-era local draft commission - a public review board that includes civilian as well as military representatives - and empowered it to design municipal alternative service projects. In communist times, local draft commissions were purely for show, but the city's new panel of 85 local citizens quickly became a battleground between advocates and opponents of universal military service. When the dust settled, 25 young men destined for last autumn's conscription intake had been accepted for the new alternative-service project. One of the boys was subsequently exempted on health grounds, four were swept into the Army, and 20 were sent to fill menial but badly needed positions at the city's main hospital. "I've been asking for alternative service for five years, and now I'm delighted to finally have the chance," says Vladimir Korochkin, who says his religious beliefs forbid any association with violence. His job, which pays 500 rubles (about $15) per month, involves working with disabled and elderly patients, had been unfilled for years before the program began. Like the others, Mr. Korochkin has signed a three-year contract in exchange for Lebedev's pledge that this will legally discharge his military obligations. Zakolodkin says he had to flee the military police and take refuge in City Hall. But once the mayor's office took up his case, his papers were forwarded to the local draft commission and he was quickly accepted into the program. "If it weren't for the mayor's commitment to alternative service, I'd be marching and saluting right now," says Mr. Zakolodkin. Supporters of the program say it has revolutionized Russia's political landscape. "Before we started this, these lads had no one to advocate their rights," says retired Col. Vasily Antipov, who serves as the mayor's representative on the city draft commission. "Now the struggle is between institutions. It is getting fierce, but we believe we have the constitution on our side and we'll take it to the Supreme Court if necessary." Most of the young participants remain confident. "I trust the mayor. I think he will stand by us," said Vsevolod Kurepin, after being served the prosecutor's letter warning that the local program was illegal in the eyes of federal authority. "I can see that resistance to alternative service is very strong. But our country needs these changes, and I'm willing to suffer for it." Experts say the main reason Lebedev and some other regional leaders have begun to openly defy Moscow is that the popular groundswell on this issue is becoming hard to ignore. But the traditionally promilitary public mood has only recently begun to soften. A February survey carried out by the independent Public Opinion Center among 1,600 Russians nationwide, found that just 27 percent want to keep conscription, down from 38 percent four years ago. In the same survey nearly two-thirds said Russia must build an all-volunteer army, compared to just over half in 1998. Lebedev is more optimistic than many of the critics that acceptable terms will eventually be worked out. "Providing proper alternative service is in the best interests of the country, the regions and even the military," he says. "We will adjust our own local initiative to whatever federal law eventually comes down, but we will not abandon these boys." ****** #9 Jamestown Foundation Monitor February 28, 2002 RUSSIA MULLS OFFER OF LIMITED ROLE IN NATO AFFAIRS. Officials from NATO and Russia, who met this week in Brussels under the auspices of the NATO-Russia Permanent Joint Council, announced yesterday that they had made progress in talks aimed at forging a new, more cooperative relationship. The vagueness of the joint statement released at the close of the talks, however, suggested that serious differences remain. The talks are to be resumed next week, when NATO Assistant Secretary General for Public Affairs Guenther Altenburg is to travel to Moscow for a meeting with Russian Deputy Foreign Minister Yevgeny Gusarov. The two sides hope to finalize an agreement on a new Russia-NATO cooperation council by the time alliance foreign ministers gather in Reykjavik, Iceland, in May. Officials from NATO and Russia have had little to say over the past week regarding details of the agreement now in the process of being negotiated. But a February 25 Financial Times article appears to have sown some confusion. It claimed that NATO has put a proposal on the table under which Russia would be granted something akin to membership status on the alliance's top political decisionmaking body--the North Atlantic Council. It also suggested that NATO leaders were mulling the idea of transforming NATO from a defensive military alliance into a more purely political organization to embrace all the former Warsaw Pact countries. And though the article noted that NATO leaders were building safeguards into the new relationship to ensure that Moscow was not granted a veto power over key NATO decisions, it described a proposal that in fact would grant Russia much of what it has long demanded of the alliance. Except that no such proposal appears to have been put on the table--or at least not from the NATO side. Alliance officials have since denied that they have any intention of offering Russia a seat on the North Atlantic Council, emphasizing instead that they continue to seek a solution whereby Moscow will be given a more active role in NATO affairs through the creation of a new NATO-Russia council that is to be separate from the North Atlantic Council. Russia will sit as an equal member on that council--in conformance with the so-called "at twenty" formulation--but the council's agenda will be limited to such issues as fighting terrorism, controlling arms proliferation and conducting rescue and peacekeeping operations. It will not, in other words, deal with core NATO decisions like those related to the alliance's enlargement. NATO officials have also denied, moreover, that they intend to transform the alliance from a military into a political structure. U.S. NATO envoy Nicholas Burns said as much in Vilnius on February 26 when he described reports to this effect as "fundamentally inaccurate." The deal being offered Moscow right now, in other words, appears to fall short of a proposal mooted by British Prime Minister Tony Blair last November with the apparent support of the Bush administration. That proposal also called for the creation of a new Russia-NATO council--one that would be called the "Russia-North Atlantic Council"--but would have conferred upon both it and Russia some limited but nevertheless real influence over alliance decisionmaking. Top officials at the Pentagon reportedly rallied opposition to the British plan, however, and the new proposals being offered Russia appear to reflect their views on the more limited role that Moscow should be allowed to play in the alliance. The move to restrict Russia's role has been embraced by NATO's new Eastern European members, and also by a number of the countries hoping to win admission into NATO at the alliance's November summit meeting, including the three former Soviet Baltic states (Financial Times, AP, Strana.ru, February 25; New York Times, Moscow Times, International Herald Tribune, February 26; Reuters, AFP, NATO Press Release, Interfax, February 27). The question now is whether the deal on offer will be enough to satisfy the Kremlin. President Vladimir Putin has sought to win a formal Russian voice in NATO affairs as recompense for the support he offered Washington during the U.S. war against Afghanistan. But the Russians have repeatedly insisted that this voice must be a concrete one, and that they will no longer be satisfied with the purely consultative role they were granted in 1995 with the creation of the current NATO-Russia consultative mechanism--the Permanent Joint Council. The issue of NATO-Russia cooperation, moreover, is linked in part with the alliance's plans for further expansion, despite claims by NATO leaders to the contrary. That is, efforts to strengthen NATO-Russia cooperation are intended to help ease Moscow's unhappiness over the alliance's further eastward expansion, and particularly over the likely admittance of the three Baltic States. Russia's political, military and economic weakness mean that it can do little to stop the alliance's enlargement plans, of course, but, particularly in the wake of September 11, Western leaders would prefer to couple enlargement with the establishment of a benevolent new cooperation agreement with Moscow. They are likewise loathe to leave Putin vulnerable to criticism from Russian hardliners, who have long objected to the Kremlin's sharp pro-Western tilt and who might profit politically if NATO-Russian talks wind up offering Moscow little. ******* #10 TITLE: REMARKS BY ALEXANDER VERSHBOW, US AMBASSADOR TO RUSSIA, AT THE CONFERENCE "RUSSIA ON THE RISE", ORGANIZED BY THE AMERICAN CHAMBER OF COMMERCE IN RUSSIA AND THE EXPERT INSTITUTE [RADISSON SLAVYANSKAYA HOTEL, 9:00, FEBRUARY 26, 2002] SOURCE: FEDERAL NEWS SERVICE (http://www.fednews.ru/) Somers: We're delighted that our first speaker this morning, Ambassador Alexander Vershbow, will address the changing the dynamics of the Russian-American political relationship. Mr. Vershbow became ambassador less than a year ago, having most previously been ambassador to NATO and intimately involved in the restructuring of NATO's mission for the post-Cold War period. He has shown a remarkable grasp of comprehending and acting upon complex business and trade issues, which I guess if you're dealing with missiles and other issues, is not that much of a leap forward, but we in business do think that our issues are complicated. We think we have no greater friend at the US Embassy than Ambassador Vershbow, and I mean both the Russian and the American business community. He is strongly behind the Russian-American business dialogue. I now present to you Ambassador Alexander Vershbow. Vershbow: Thank you very much, Andrew. And it is more complicated than missiles. But I do want to thank the American Chamber of Commerce and the Expert Institute for this opportunity to say a few words about the new relationship that is emerging between the United States and Russia, and in particular the economic and business dimension -- how it fits in the larger picture. But let me make a few initial comments about the overall state of the relationship. Unfortunately, there is a tendency to focus on our disagreements. To some extent, this is a legacy of the Cold War. The most recent manifestation of this sort of thinking are the many commentaries in the press, both here and in the United States, to the effect that US-Russian relations have taken a turn for the worse after a strictly tactical post-September 11th convergence of interests. With anti-terrorist operations in Afghanistan wrapped up, the argument goes, the basis for this so-called temporary alliance has largely disappeared and differences are allegedly taking center stage. The hullabaloo in this country surrounding the Winter Olympics has only added to the sense of gloom and doom and does cause all of us a bit of distress. But I nevertheless believe that pessimism about US-Russian relations is completely unfounded. This isn't to say that there aren't differences between us. There are some, as there are bound to be in relations between any great powers with wide-ranging interests. We will continue to disagree in some areas, as is the case even with our traditional allies. I can say that from my experience at NATO. But focusing on what divides us misses the forest for the trees. President Bush and President Putin have fundamentally redefined the relationship between our two countries since their first meetings in Ljubljana and Genoa last June, and they've put behind us much of the legacy of Cold War thinking. I believe we now have the basis for managing, if not resolving, our differences on the basis of what President Putin has called "logic of common interests." The new post-Cold War US-Russian relationship is based on far more solid ground than just the need to fight the common enemy of international terrorism. It's founded on a more enduring interest in defending and extending the common values of democracy, the free market, and the rule of law. And this is more than rhetoric. I believe that Presidents Bush and Putin are committed to making our real-world political and economic relations reflect these shared fundamental values. Since the first Bush-Putin meetings last summer, our countries have been expanding cooperation across a broad agenda. We're working on deep reductions in strategic nuclear arms. We're developing a qualitatively new NATO-Russian partnership. We're working to bring stability to the Balkans and other troubled regions of the world. We are expanding our economic ties and promoting Russia's integration into the World Trade Organization. So a lot of this was already underway last summer, and Russia's strong support for the anti-terrorist coalition after September 11th simply added further impetus to this positive agenda. When our two presidents met in Washington and in Crawford in November, they agreed that the most effective way for the welfare of American and Russian citizens to be assured would be through a market economy, freedom of economic choice, and an open democratic society. In their joint statements on the new US-Russian relationship, the two presidents pledged to pursue these goals in part by expanding economic, trade and investment relations between our two countries. They recognized that doing this will require the elimination of legislative and administrative barriers to trade and investment, a transparent and predictable investment climate, and market-based economic reforms. All of these things will obviously be good for Russia, good for the United States, and good for relations between our two countries. The key point is that government and the private sector must work together in both countries to achieve these objectives, and I think they are already making good progress in doing so. The businessmen among you, Russian and American, are far more familiar than I am with the limiting effect on trade and investment that can be caused by legislative and administrative barriers to trade and by the lack of transparency in the business climate. The recommendations of the Russian-American Business Dialogue, which are currently being developed and will soon be formally presented to the two governments, are of very crucial importance, and I want to commend the leadership on the spirit of cooperation demonstrated by all four of the participants in this dialogue: the American Chamber of Commerce; the US-Russia Business Council; the Russian-American Business Council; and the Union of Industrialists and Entrepreneurs. We will certainly continue to work closely with you and with the Russian government in keeping with the commitment of our two presidents in order to eliminate the investment barriers that you have highlighted in your initial work. I don't have to tell this audience that we have barely half the potential for trade and investment between Russia and the United States. Our trade still represents less than one percent of total US trade worldwide, and our $7 billion in directed portfolio investment is on par with US investment in Costa Rica. So that enormous potential for the growth that still is out there underlines the importance of dealing with the impediments to trade and investment as quickly as possible. I think you can continue to count on the US government's commitment to promoting trade and investment. Our Commerce Secretary, Don Evans, has already been to Russia twice leading a business development mission on the second visit in October. Treasury Secretary Paul O'Neill, Energy Secretary Spencer Abraham, and our Trade Representative Bob Zoellick have also met with their Russian counterparts several times over the last six months to advance our agenda on a range of economic, energy and trade issues. The Prime Minister, Mr. Kasyanov, and Ministers Gref and Kudrin have all visited the United States to meet with their counterparts. And next month a US oil and gas trade mission will travel to Sakhalin, and a senior Commerce Department official will participate in an aerospace forum with US and Russian companies here in Moscow. So the work continues. I'd also mention that the Export-Import Bank, the Overseas Private Investment Corporation, and the Trade Development Agency of the United States are promoting bilateral trade and investment through project assessment, project finance, and risk insurance. OPIC's project insurance and finance for Russia totals more than $425 million, and we will be increasing our funding for programs like the EBRD's Russia Small Business Fund in order to provide more financing for Russian entrepreneurs and to help Russian financial institutions provide such financing. I'm pleased that Andrew mentioned the fact that our embassy is, and will remain, an aggressive advocate for American companies who have been subjected to unfair business practices, which have unfortunately done serious damage to Russia's reputation as a place to invest and conduct business. We are now engaged in a regular and productive dialogue with our counterparts at the Ministry of Economic Development and Trade in an effort to resolve these outstanding disputes, and we will continue to raise them as necessary with the Russian government at all levels. And in addition, we'll be continuing to work with our Russian counterparts to address issues of corporate governance, transparency, and fair business practices with a view to improving the business climate for Russian as well as American companies. Now, trade promotion and business advocacy are, of course, just part of what's required to tap this huge potential that still exists for expanded US-Russian trade and investment. Banking reform is essential. It can be one of the key missing links in the Russian government's otherwise very impressive reform agenda to date. When they met in Washington, our two presidents called for the creation of a Russian-American banking dialogue, and this dialogue will, we hope, bring together the private sector's views and its recommendations on what's needed to build a vibrant banking sector in Russia. Clearly a safe, sound, competitive and transparent banking system will sustain economic growth here, particularly with regard to the still credit-strapped small and medium business sectors. I mentioned Russia's integration into the world-based global trading system of the WTO, and that, too, is essential to building confidence in the climate for trade and investment between our two countries. We remain committed to working with the Russian government to accelerate its WTO accession. Our negotiators have met bilaterally on more than a monthly basis since September, and we expect the WTO to product its draft working party report on Russia's accession very soon, and this would be sort of the road map for the remaining steps Russia must take to complete its succession. We've been very clear and consistent regarding the conditions for WTO accession. Russia will be asked to meet standards that are no less and no more than those asked of other countries. We'll not ask for "WTO "Plus," but neither will we settle for "WTO Light." Russia has to continue to make progress in deregulation. It must increase transparency, create a level playing field for Russian and foreign enterprises, and perhaps most challengingly, improve intellectual property rights protection. Now, I should say that WTO membership does not mean that Russia needs to completely open every bit of its market. This is a common misconception here. What Russia does need to do is fully accept the rules-based system governing international trade that the WTO represents and offer improved market access for other countries, firms and products. This will help Russian exporting industries and improve the competitiveness of all sectors of the Russian economy, and the resulting growth will, in the end, benefit all Russian citizens. It will benefit us too because trade and investment is not a zero sum game. An economically strong Russia will be a more stable and capable partner with which the United States can cooperate on the political and strategic levels. I think that a sound economic relationship between the US and Russia is, in many ways, the cornerstone of the broader new relationship that is emerging between our two countries. As Ambassador Bob Zoellick said last week in South Africa, free trade is about freedom; it's about economic liberty; and it's about political liberty. All these things are interconnected. And the United States government is committed to working with the Russian government and with the private sectors of both countries to expand the frontier of shared economic interests. These shared interests will, in turn, strengthen the basis for cooperation across a broad spectrum of issues and establish a relationship that will allow us to work together and resolve not just today's problems, but the many problems that we will face together. Somers: Thank you, Ambassador Vershbow, for that insightful commentary from the perspective of the US government on the Russian-American economic and political relationship. *******