CDI Russia Weekly-#202 19 April 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 site (with archive): http://www.cdi.org/russia/ Visit CDI's web site: http://www.cdi.org Contents: 1. RFE/RL: Jeremy Bransten, Putin Praises Economic Progress But Demands More. 2. AP: Putin Confirms Military Reforms Needed. 3. AFP: Rebels kill 18 pro-Russians in Chechnya, Putin says war is over. 4. Christian Science Monitor: Fred Weir, Russia's population decline spells trouble. 5. Moscow Times: Pavel Felgenhauer, Weighing the Alternatives. (re alternative service) 6. Rossiiskie Vesti: Artem Ulunyan, RUSSIA WANTS TO WORK WITH NATO, BUT IN ITS OWN WAY. 7. Izvestiya Sees '20' Format as Russia's 'Reward' for Not Opposing NATO Expansion. 8. stratfor.com: CIA Will Continue Search for New Russian Technologies. 9. Carnegie Endowment for International Peace: John Wolfsthal, Russian Compliance. 10. Vedomosti: Alexei Nikolsky, DEFENSE SECTOR HAS EXHAUSTED ITS RESOURCES. 11. Asia Times: Hooman Peimani, Caspian Sea divide no closer to closure. 12. Financial Times (UK): Andrew Jack, A need to march with the times. (re military reform) 13. RFE/RL: Francesca Mereu, Russia/U.S.: Analysts Discuss Arms Cuts, Strategic Relations. 14. Nezavisimaya Gazeta: Konstantin Voronov, RAPPROCHEMENT BETWEEN RUSSIA AND THE WEST: ANOTHER FLIRTATION OR LONG-TERM ALLIANCE? ******* #1 Russia: Putin Praises Economic Progress But Demands More By Jeremy Bransten Prague, 18 April 2002 (RFE/RL) -- Russian President Vladimir Putin delivered his annual state-of-the-nation address to parliament in Moscow today, saying his administration would continue to push for democratization and economic development. "Our goals remain unchanged: the democratic development of Russia, the establishment of a civilized market and a state based on the rule of law, and, most importantly, the improvement of our citizens' living standards." Putin said his administration's reforms had already borne fruit. He noted some achievements of the past year, including the adoption of new Land and Labor codes, as well as a new Criminal Procedural Code, which is due to go into effect this summer. Noting the recent upswing in Russia's economy, Putin said that overall, the Russian people had become more optimistic about the country's long-range future. He cited growing numbers of university students as proof of this change in mood. But Putin also said much remained to be done. He stressed that 40 million people in Russia -- out of a total population of 150 million -- remain trapped below the poverty level. "There is no reason to be dizzy from success. The economic problems that Russia has accumulated over the past decades of stagnation and crisis have not gone away. Poverty has retreated slightly, but it continues to afflict almost 40 million citizens." Putin rebuked his cabinet for accepting modest economic forecasts, saying the 3 to 4 percent annual growth rates government ministers expect in the next few years would not help Russia close the gap with the world's other industrialized countries. Putin reminded his audience of legislators that in an increasingly globalized world, Moscow faces tough international competition for markets. He said Russia must be able to defend its economic interests aggressively on the world stage if it wants to remain an important political player. "Today Russia needs more ambitious goals and higher growth rates, and our economic policy and the everyday work of government bodies should be task-oriented so that Russia remains a solid member of the international community and a strong competitor. Our economy must grow at a much faster rate, otherwise we will always fall behind, and our interests in global politics and economics will be discriminated against." Putin said one of the government's key goals should be to "create conditions so that Russians can earn money for their own benefit and invest in their own country." To that end, he called for the clearing of bureaucratic barriers, noting that unnecessary regulation fostered a climate in which corruption could thrive. "Today's organization of state bureaucracy, unfortunately, favors corruption. And I would like to stress that corruption is not the result of a lack of law enforcement, but a direct consequence of restrictions on economic freedoms. Any administrative barriers can be overcome by bribes -- the higher the barrier, the greater the number of bribes and the more bureaucrats there are taking them." On the subject of crime, Putin addressed the issue of rising right-wing extremism. Gangs of skinhead thugs have repeatedly clashed with those not of Russian ethnicity in Moscow and other cities in recent months. In the latest incident this week, an Afghan interpreter who worked for Russia's Interior Ministry died in Moscow after he was savagely beaten by skinheads at an exit to a metro station. "The rise of extremism is a serious threat to stability and security in our country. I am speaking about those who, under fascist and nationalist slogans and symbols, organize pogroms and beat and kill people, while the police and the prosecutors often lack effective means to prosecute the perpetrators and instigators of these crimes." Putin said the government would soon send a bill to parliament to help law-enforcement agencies better prosecute the perpetrators of such attacks. The Russian president also touched on the issue of Chechnya. "The main task at this stage is to return Chechnya to Russia's legal and political environment, to create effective judicial institutions and its own law-enforcement agencies, and, in the future, organize free elections and set up a fully functioning republican government to ensure economic security for the Chechen people," Putin said. Despite Putin's optimistic-sounding words, the conflict in the war-torn republic shows little sign of abating. Russian news agencies reported today that 19 Russian servicemen have been killed in Chechnya in the past 24 hours. Thirteen of the servicemen were killed in mine explosions in the Chechen capital Grozny. The remaining six were killed yesterday when rebels ambushed a troop transporter in the Shatoi Mountains, about 40 kilometers south of Grozny. ******* #2 Putin Confirms Military Reforms Needed April 18, 2002 By VLADIMIR ISACHENKOV MOSCOW (AP) - President Vladimir Putin on Thursday reaffirmed his pledge to gradually transform the underfunded Russian military from a conscript to an all-volunteer force but said it was not clear how long the reform would take. ``The transfer to a professional army, along with a reduction of the length of conscript service, is a clear priority,'' Putin said in his state of the nation address. But, he added, ``the reduction of conscript service cannot be accomplished in one year.'' Putin has ordered the military to trim its ranks and draw up a plan for phasing out the draft, but top military officials want to preserve the bulky Soviet-era military structure and have been slow to work out specific guidelines. Col.-Gen. Vladislav Putilin, the Defense Ministry's top mobilization official, said Thursday the military must switch Russia's air force, air defense, navy, missile forces, special forces and permanent readiness units of the ground forces to full volunteer staffing by 2010. The transition will cost $5.7 billion with the minimum monthly wage of a contract soldier $177, Putilin said, according to the Interfax-Military News Agency. Putilin said the military must speed up the transfer to a professional army because the nation's poor demographic and health situation will cause the number of conscripts to drop by half after 2005. Putin said in his Kremlin speech Thursday that the military would make some units fully professional this year as a pilot project. ******* #3 Rebels kill 18 pro-Russians in Chechnya, Putin says war is over AFP April 19, 2002 Chechen rebels killed 18 pro-Russian police in the deadliest bomb attack the breakaway republic has seen for almost two years, even as Russian President Vladimir Putin said the war is over in Chechnya. Ten Chechen police officers were killed Thursday when a mine exploded under their transport bus in the republic's capital Grozny while another six died in a follow-up blast triggered as a second vehicle rushed to help, a top pro-Moscow official said. Two other members of the interior ministry's elite OMON unit died later in hospital from their wounds, the head of Chechnya's pro-Russian administration, Akhmad Kadyrov was quoted as saying by RIA Novosti news agency. The attack occurred within 200 metres (yards) of the Russian interior ministry's headquarters in Chechnya and only two hours before Putin delivered his annual State of the Nation address to both houses of parliament in Moscow. It was the most fatal single attack on pro-Russian forces in the North Caucasus since Chechen suicide bombers killed 44 soldiers, and wounded 120 others, in the republic's second city of Gudermes in July 2000. Yet it coincided with Putin's upbeat statement on nationwide television that Moscow's 30-month war against Islamic separatists in Chechnya was now at an end. "Regarding Chechnya, the military phase is over thanks to the bravery of army and special task forces," Putin said. "A year ago we were counting how many there were fighting against us, how many rebels, how many terrorists -- 2,000, 3,000, 5,000, 10,000. Today it's not important to us how many there are, what matters is where they are," he added. Gantamirov said the attacks could have been "meticulously planned and carried out by the rebels to coincide with President Putin's speech." Putin, then prime minister, launched Russia's "anti-terrorist" campaign in Chechnya on October 1, 1999, after a series of bomb attacks in Russian cities killed 292 people, sparking a wave of nationalism that ultimately swept Putin to the presidency. But despite repeated assurances from the Kremlin chief that life in Chechnya was returning to normal, Russian forces have abjectly failed to stop the rebels carrying out daily bomb attacks and guerrilla raids. The latest attack brought the total of pro-Russian servicemen killed in Chechnya over the past two days to 24, Interfax said Thursday. More than 3,500 Russian soldiers have been killed in Chechnya since October 1999, according to official figures, although unofficial estimates put the death toll much higher. The OMON deputy chief in Chechnya, Sultan Satuyev, summed up the frustration of the Russian forces Thursday when he reacted to the carnage by telling NTV television: "You cannot call the people who carried out this attack human. They are subhuman." ****** #4 Christian Science Monitor April 18, 2002 Russia's population decline spells trouble One demographer predicts that the ratio of worker to pensioner will be 1 to 1 within two decades. By Fred Weir | Special to The Christian Science Monitor MOSCOW – Russia is facing a demographic crisis so dire that its population could shrink by half within 50 years. The only obvious solution – to encourage youthful immigrants from overpopulated Asian neighbors such as China – is so politically sensitive that Russian leaders refuse to even discuss it. Russia's challenge is a double whammy. Like most of the developed world, birthrates have fallen far below levels that would sustain the population. At the same time, Russian death rates, particularly among working-age males, have skyrocketed due to post-Soviet poverty, substance abuse, disease, stress and other ills. Russia's population has fallen from 149 million a decade ago to just over 144 million today. Male life expectancy now stands at 59 years, with the average Russian woman living 72 years. Demographic experts say that the country is losing one million of its population annually, and the nosedive is accelerating. "Whole regions of Siberia and the Russian far east are already depopulated, and new deserts are appearing even in former 'black earth' regions of central Russia," says Lev Gudkov, a demographer with the independent Russian Center for Public Opinion Research. "We will not be able to maintain our industry, agriculture or our armed forces." Since the USSR's collapse, mortality rates among young males have risen to levels never before seen in peacetime. Mr. Gudkov predicts that there could be one pensioner for every worker in Russia within 20 years. "Not even a rich economy could survive that kind of strain," he says. Russian women, who tend to be as well-educated and career-oriented as their Western counterparts, have been been having fewer children since the 1970s. Births now stand at 1.1 per woman, far short of the 2.4 babies each that would be needed to stabilize the population. Russian nationalists have widely blamed the demographic crisis on women, and their proposed solutions boil down to removing them from the labor market and sending them home to have more children. Most Western countries compensate for lower birthrates by permitting temporary and permanent forms of immigration, which provide both skilled and unskilled workers to keep economies growing and tax revenues flush. But even after the fall of the Iron Curtain, Russia has resisted that solution. "The only acceptable sources of immigrants for us are the Russian-speaking populations of former Soviet countries in the Commonwealth of Independent States," says Yevgeny Krasinyev, head of migration studies at the official Institute of Social and Economic Population Studies in Moscow. The severity of Russia's population decline has been masked by an influx of mainly ethnic Russian immigrants from the former Soviet states of Central Asia, the Caucasus and the Baltics, but the flow from the CIS is slowing to a trickle. Alexander Belyakov, a pro-Kremlin parliamentarian and head of the Duma's Resources Committee, says: "We will encourage people to come from CIS countries, but Russia does not need any other immigrants." Experts say that Russia not only has no immigration strategy, it has no effective laws to govern the issue at all. "There are only prohibitions," says Viktor Voronkov, director of the St. Petersburg Center for Independent Social Research. "This guarantees that most immigration remains illegal, a boon to only the black market and the criminalized part of society." Tens of thousands of migrant construction workers, from Ukraine, Moldova, and other CIS countries fuel a growing housing boom on Moscow's outskirts, yet few have legal status in Russia or pay any taxes. Mr. Vorontkov says the main obstacle to rational immigration guidelines is a deep fear of being overwhelmed by outsiders. "Xenophobia remains very strong, not only in the Russian street but at the highest levels of officialdom as well," he says. Most feared of all is China, sparsely populated Siberia's teeming neighbor. Experts say there are already as many as 200,000 Chinese living and working in Russia, mostly in trade and small manufacture. Even among the most open-minded Russian experts, the idea of inviting Chinese workers to till Siberia's abandoned farmlands or lend their entrepreneurial skills to Russia's depressed cities seems dangerous. "The situation on the Chinese border is already out-of-control due to illegal immigration. Russia needs to protect itself," says Mr. Krasinyev. "Letting Chinese workers come in large numbers looks like a solution, but is it really?" says Vladimir Iontsev, a Moscow professor of demography. "You have to ask yourself, would Russia still be Russia?" ------ Reporters on the Job DOING HIS PART Fred Weir says his family is doing its part to overcome the demographic crisis. "Masha and I have had two children, and since I'm a Canadian, and must appear on a different ledger, that means a net increase to the Russian population of one," Fred says. ****** #5 Moscow Times April 18, 2002 Weighing the Alternatives By Pavel Felgenhauer After years of delays, the State Duma began discussing legislation Wednesday on alternative service, which, in accordance with the Constitution, will permit young people of draft age to choose a civil alternative to military service. But will the bill become law any time soon? Liberal Duma Deputy Vladimir Lysenko, a co-sponsor of one of the bills on alternative service presented for discussion in the Duma, is worried that further postponements may drag the legislative process well into the fall of 2002. "It may turn out that civil service will not be available either in 2002 or in spring 2003," he said. But Yevgeny Gontmakher, a high-ranking official in charge of drafting the government's bill on alternative service, believes Lysenko's worries are groundless. The government's bill states that alternative service will become law only from January 2004, so the Duma can spend its time discussing legislation for more than a year at least, he said. Maxim Topilin, the deputy labor and social development minister who will be in charge of organizing alternative civil service if the Duma adopts the government bill, warned a gathering of pacifist activists and liberal Duma deputies last week that "serious amendments in the government's draft will not tolerated. If you press on, the law will not be passed and there will be no alternative service at all." Lysenko agrees that only the government draft has any chance of becoming law. The government refused to provide an official financial assessment of the more liberal drafts, which -- according to rules on parliamentary procedure -- means that these drafts cannot be voted into law. But Lysenko and other liberals still hope to seriously amend the government-backed draft, which obliges conscripts to "prove" their pacifist convictions in order to be granted alternative service. The bill also has the provision that civil service will last twice as long as compulsory military service. Today, that would mean four years. Lysenko has been told by the Kremlin that President Vladimir Putin will announce in his state of the nation address Thursday a cut in compulsory military service from two years to 18 months. If this happens, civil service will also be automatically reduced to three years, making it a bit more attractive. What government officials and liberal deputies agree on is that the number of draftees choosing civil service will not be large -- hundreds, or at most a couple of thousand, out of the approximately 400,000 draftees called up each year. Gontmakher told me that government-sponsored polls say up to 30 percent of young men -- mostly from villages and small towns -- want to do military service despite the widespread hazing of solders. ("One year they beat us, the next year we in turn beat the new draftees," conscripts say, according to Gontmakher.) At present, some 30 percent of 18-year-olds (most of them willing) are drafted each year into military service, while the rest get a reprieve on medical or other grounds, such as going to university, Gontmakher said. (The Defense Ministry constantly stresses that they call in only 11 percent of available conscripts. But these statements are based on creative accounting: All those who get a legal reprieve from service are added up and still count as "avoiding the draft" year after year until they turn 27.) Gontmakher told me he personally orchestrated a revolt by ministers in January, when the government ordered a redrafting of a Defense Ministry bill on civil service that was even more severe than the one that is now in the Duma. Gontmakher tried to explain to the generals that it is not practical to impose excess punishment on those who volunteer to do civil service as there will not be many of them anyway. But some Duma deputies, supported by the Defense Ministry, are still proposing to amend the bill so that people who opt for civil service will be forbidden to run for president, be Duma deputies or serve in police departments, as well as other penalties. Pacifists believe that Russia's true enemy is poverty and social neglect and that an army of young civil workers should combat this. They say alternative service should be tailored to attract as many volunteers as possible. But most army generals and their political supporters in the Duma believe the main threat to Russia is the West and that nothing can be allowed to stand in the way of mass conscription. Pavel Felgenhauer is an independent defense analyst. ******* #6 Rossiiskie Vesti April 17-23, 2002 RUSSIA WANTS TO WORK WITH NATO, BUT IN ITS OWN WAY Why is the Kremlin striving for closer cooperation with NATO? Author: Artem Ulunyan [from WPS Monitoring Agency, www.wps.ru/e_index.html] THE IDEA OF CLOSER COOPERATION WITH NATO HAS BEEN MUCH DISCUSSED, THANKS TO NATO SECRETARY GENERAL GEORGE ROBERTSON AND BRITISH PRIME MINISTER TONY BLAIR. WHATEVER THE ORIGINAL INTENT, VARIOUS POLITICAL FORCES ARE INTERPRETING IT FOR THEIR OWN BENEFIT. The Russian government and European leaders have been talking lately of Russia possibly joining NATO - in a very specific way, as "semi-observer" and "semi-participant". These ideas give rise to more questions than answers. Judging by which countries speak in favor of strengthening the Russian presence at NATO, one can guess is pursuing what goals. Germany and Italy are ready to support Russia. There are reasons to believe that a few states that take a "special attitude " in NATO may in the near future come forward in support of this proposal. George Robertson, NATO Secretary General, who once spoke of the idea of closer cooperation between NATO and Russia, is most likely to have meant somewhat different targets. As is known, however, every idea can be "creatively expanded". The expansion entails now the Kremlin's categorical appeals to "solve all problems together with Russia". Alliance members perceive these quite cautiously. They are coming to suspect that Moscow simply strives to use its conventional presence at NATO (in the 1+19 or 19+1 format) to split the alliance and to take the dominant position in relations between NATO partners. Moreover, the Kremlin's play on their very cautious, if not critical, approach to a number of US actions is currently getting apparent to European states. Connecting supplies of Russian gas to Europe with the strengthening of Russia's political positions in European structures also sets Europeans in NATO on their guard. Time will tell how much seriously they are ready to consider the 19+1 scheme. However, it might already be said that there is a group of countries and politicians in Europe, ready to play their own part. For this country, this means the enhancing relevance of the so-called attendants points (the interest of some exact political forces and figures for the domination on the national and the European arenas; receiving Russia as a counterbalance to individual NATO member states, including the US). The persistence of Vladimir Putin who is constantly "pushing" in conversations with his European interlocutors the idea of Russia's equal participation when solving strategic problems of international life is perceived as the wish of Moscow to "enter Europe". However, exactly this scares Europeans: the inward political situation in Russia and its foreign policy moves differ way too much from the European standard and forms of behavior. On the other hand, everyone understands: the Kremlin will be trying to demonstrate its importance and significance by the use of any means available. The battle for the "great European chessboard" that Moscow is waging is commensurable with its analogous "great Asian one" or any other, drawn by other countries. In this connection, the 19+1 problem is getting an element of a play greater than relations between Russia and NATO or Russia and Western Europe. A particular feature about this combination is the interest of individual European quarters to enlist Russia's support for their domestic policy targets. At the same time, the Russian authorities are beginning to look for ideologically close political forces, suitable to gamble on in their own European game, many analysts believe. (Translated by P. Pikhnovsky) ****** #7 Izvestiya Sees '20' Format as Russia's 'Reward' for Not Opposing NATO Expansion Izvestiya 17 April 2002 Report by Svetlana Babayeva: "Expecting New Roman Law" The Russia-NATO summit at which documents on the creation of the "20" will be signed is to be held in Rome 28 May. The heads of all 19 members of the NATO bloc, including American leader George Bush, for whom Rome will be the last stop on his European tour, will meet in the Italian capital and put their signatures to the new document. This was announced yesterday [16 April] by sources within Russian political circles. The scenario for the "May event" will be approximately as follows -- George Bush will fly in to Russia 23 May (it will be the second stop on the European tour that he will begin the day before in Berlin). He will stay in Moscow and St Petersburg until the 26th, after which he will fly to Paris, and the next day to Rome. On 28 May in the Italian capital the 19 presidents and premiers of the NATO countries and Vladimir Putin will put their signatures to a document creating a new format for relations with Russia. Rome will be the last stop on Bush's European tour, and Russian politicians believe that the "20" that will be created will be a fine note for the tour to end on. The documents on the "20," sources within Russian political circles report, are almost ready. Admittedly, officials are adding, there is still no consensus as yet within NATO itself as regards the new "member." "This decision has been pushed by the 'big boys,'" a ranking Russian politician reported, referring to Britain, Italy, and Germany. In other words, it will still be necessary to persuade the less powerful but no less equal alliance members as well as the future members that will join in November not to be afraid of Russia. But this is something that the alliance itself will be undertaking -- it is clear from what has been said by ranking Russian officials that the "20" will be the reward for Russia's no longer opposing the "hostile bloc approaching its very borders." The "Rome Treaty" will be preceded by another two important documents which Putin and Bush intend to sign in Moscow -- the Declaration on Strategic Stability and the Agreement on the Reduction of Strategic Offensive Arms. Russia has succeeded in persuading the United States to accept a legally binding document. But in return, Izvestiya has been told, it was necessary to accept almost all of the Americans' terms -- particularly as regards cuts in so-called warhead delivery vehicles. On the other hand, Russia has also won one important point -- there will be no restrictions on MIRVed warheads. This provides a certain amount of compensation for Russia, since its MIRVed ICBM's have always been seen as the main threat to America. One problem is that the sides have still not reached agreement on the mechanism for verifying strategic offensive arms reduction, and are unlikely to do so in time for the summit. The scenario will probably be as follows -- the two presidents will sign an agreement, and verification mechanisms will be established later, probably by the end of this year. ****** #8 stratfor.com April 15, 2002 CIA Will Continue Search for New Russian Technologies Russia's Federal Security Service (FSB) said April 10 that it had blocked a CIA intelligence operation aimed at penetrating Russia's missile-design program, Russian media and the BBC reported. The FSB said CIA officers posing as embassy officials in Russia and another former Soviet state tried to recruit an employee at a secret Russian Defense Ministry installation, slipping him psychotropic drugs in attempts to get information from him. CIA and U.S. Embassy officials in Moscow refused to comment. As STRATFOR has previously said, the end of the Cold War has done nothing to halt espionage activities. The current case suggests that even the budding friendship between Moscow and Washington cannot stop intelligence-gathering. There is still something in Russia that the United States considers to be worth spying on: new military technologies. Despite Russia's financial and military declines in recent years, its scientific and technology potential remains formidable. The country remains a scientific power for two reasons: First, several experimental and research schools in the defense sector have survived in the post-Soviet era; and second, Russia has always had strong intellectual potential, which has been widely used for defense purposes. This remains in spite of the brain-drain created by better wages offered to scientists in the United States and other countries. The current spy scandal involved a scientist working in a secret research center near Zhukovsky air base, the Russian air force's top test center, near Moscow. To STRATFOR's knowledge, this center is designing new air-to-air and air-to-surface missiles. The distinctive characteristics of these missiles include supersonic speed, low flight altitude, new elements of stealth technology and extremely accurate guidance systems. The United States currently lacks a reliable defense against these weapons, and its own versions of the missiles lack some advantages. Despite the Russian military's diminishing production capabilities and financial resources, the country maintains design-technology superiority in other areas, such as new weapons systems for both surface ships and submarines. These include new ship-borne cruise missiles and a supersonic torpedo, Shkval, that is unsurpassed in speed and efficiency. U.S. citizen Edmund Pope was arrested and sent to prison last year in Russia while trying to obtain secrets concerning the Shkval from a contact at a Russia's Bauman Technical University, a leading defense technology center. It is worth noting that Pope was pardoned by President Vladimir Putin after spending only a few weeks in prison, ostensibly for health reasons: Putin said Pope was suffering from cancer, but American doctors who examined him later found no trace of the disease. Russia also maintains the lead so far in designing anti-defense missiles. In fact, only Russian-made systems, such as the S-300 and its modifications, would be able to repulse a massive air onslaught by hundreds of cruise missiles and bombers, the kind of air offensive favored by the United States. The United States benefited greatly during its air campaigns in Yugoslavia, Iraq and Afghanistan because its enemies did not have such defense systems at their disposal -- Moscow refused to deliver them to Baghdad and Belgrade. Recently, Russian scientists created an even more powerful system, S-400, and are continuing to improve it. Officials in Washington, who are embarking upon the National Missile Defense program, are concerned that Russia might develop a successful countermeasure, and Russian rocket scientists indeed are working on such technologies. Although these remain in the design stage -- and the Putin government has not yet made a decision on whether to proceed with production -- such technologies would help Russian strategic nuclear missiles overpower NMD systems and yet would cost a fraction of what Washington plans to spend on NMD. All of these technologies and other scientific achievements in Russia will continue to be important objectives of U.S. intelligence activities. More spy scandals are likely, but Russia -- under the administration of Putin, who appears to be seriously committed to his pro-Western policy course -- will sweep them under the rug. ****** #9 Carnegie Endowment for International Peace Russian Compliance By Jon Wolfsthal, Associate April 17, 2002 The Bush administration has abruptly frozen future work to secure Russian nuclear weapons and dismantle nuclear delivery systems, and may refuse to certify that Russia is in compliance with its current arms control obligations. If the administration, in fact, chooses not to certify Russian arms control compliance, the freeze could become permanent. These moves are already casting a negative cloud on the upcoming summit between Presidents Bush and Putin. The administration's striking move first reported in the New York Times on April 8, 2002, will block the signing of new contracts to secure Russian warheads, dismantle Russian submarines and long-range missiles, and fund new jobs for former Russian chemical and biological weapon scientists. Administration officials claim that the move is meant to protest what it sees as continued evidence that Russia has not made complete and full declarations about past Soviet chemical and biological weapon programs. These declarations are required by two important international treaties banning all such weapons: the Chemical Weapons Convention and the Biological Weapons Convention. Such concerns have been an issue for several years, and have not been fully resolved. The United States has chosen not to pursue these issues through the treaty-defined process, which include the right of challenge inspections, nor has it raised specific issues it wants Russia to resolve. The US Congress requires the administration to annually certify that Russia is complying with its arms control obligations in order for threat reduction assistance money to be spent. The affected programs are run by the Departments of Defense, State and Agriculture and fund the dismantlement of Russian missiles, submarines and bombers, secure nuclear weapons, redirect chemical and biological weapon scientists to peaceful research, and improve export control implementation. The programs funded through the Department of Energy to secure nuclear materials are not covered under the certification requirement and are not affected by the current dispute. Administration officials maintain that the current freeze is temporary, and designed to send Russia "a message" that the US is serious about resolving the long-standing compliance issues. The administration is hoping to obtain and implement a congressionally approved waiver of these requirements, so that the administration can continue to press Russia on its compliance without permanently ending these threat reduction efforts. It is unclear if republicans in the House or Senate will be willing or able to gain approval for such a waiver, or do so without having other issues linked to the passage that could further complicate US-Russian threat reduction efforts. ******* #10 Vedomosti April 17, 2002 DEFENSE SECTOR HAS EXHAUSTED ITS RESOURCES Author: Alexei Nikolsky [from WPS Monitoring Agency, www.wps.ru/e_index.html] THE DEFENSE SECTOR, WHICH WAS GROWING RAPIDLY A COUPLE OF YEARS AGO, HAS SLOWED DOWN. LAST YEAR OUTPUT ROSE BY ONLY 4.5%, MUCH LESS THAN IN 1999 AND 2000. OVER THE PAST TWO YEARS THE RUSSIAN DEFENSE SECTOR HAS EXPANDED TO MEET ALL SOLVENT DEMAND IN RUSSIA AND ABROAD. Russia's defense sector simply has no room for growth The defense sector, which was growing rapidly a couple of years ago, has slowed down. Last year output rose by only 4.5%, much less than in 1999 and 2000. Over the past two years the Russian defense sector has expanded to meet all solvent demand in Russia and abroad. According to the report "Russia 2002: the economic situation", prepared by the Center for Economic Conditions last year, the increase in civilian production of the defense sector exceeded the growth of military production for the first time. Yet this did not save the industry from a sharp drop in growth. However, the huge growth in 1999 and 2000, according to Konstantin Makienko, an analyst with the Center for Strategy and Technology Analysis, was connected with the fact that it had started from a very low level - in 1998 the industry was in a severe recession. In the opinion of Alexei Shulunov, Vice President of the League of Assistance to Defense Enterprises, the decline in growth is connected with the fact that last year ship-building plants produced fewer goods. Last year only one new ship - nuclear powered Gepard submarine - joined the Navy of Russia. In the words of a senior executive at a shipyard, the worst aspect is that ship repairs have nearly ground to a halt. The situation in other "capital-intensive" branches of the military - like the Air Force - is no better. A representative of an aviation plant says that they have not ordered new planes and helicopters for the Air Force for over a decade, and they will not order them at least until 2005, if not 2010. Less than a third of military aircraft are ready to fly in case of war, which proves that not enough funding is being provided for maintenance and repairs. The third consumer of the military budget is the Strategic Missile Troops, which used to take half of all funding allocated for military hardware. At present the new minister does not favor them, hence purchase of new Topol-M missiles is poorly financed. According to Shulunov, last year state arms procurement was funded very badly, especially at the start of the year, which caused a 3% slump in defense sector production. The situation this year has been repeated, when in the first quarter of the year almost no funding was provided for state arms procurement. Shulunov believes that only adopting a two-year plan for purchasing military hardware can improve the situation. As a result of interior financing deficit, arms export, consisting mostly of aerotechnics and tying products, remains that main source of income. According to Elena Sakhnova, an analyst with the Aton investment company, production of pursuit planes for export is growing. For example, the Irkutsk Aviation Union exported ten pursuit planes in 1999, eight planes in 2000, and 18 planes in 2001. The output of the second largest military plants in Komsomolsk- on-Amur also increased. At the same time, production of civilian planes is still in a state of stagnation, and the Ulyanovsk Aviastar plant has produced only a few units. According to the analyst, this year the situation is not likely to improve. In the opinion of Makienko, production of civilian aircraft has reached the borderline of solvent demand because the effect of the devalued ruble has fallen. No significant rise in domestic defense spending is planned. In the words of Makienko, this year arms exports will not exceed $4 billion (in comparison with $3.7 billion last year). (Translated by Daria Brunova) ******* #11 Asia Times April 18, 2002 Caspian Sea divide no closer to closure By Hooman Peimani The collapse of the Soviet Union opened a new era in the Caspian Sea region. Among other factors, the Caspian oil and gas resources have since elevated the region's international status, while pitting its littoral states (Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan) against one another over their division. The latter's inability to agree on a legal regime for the Caspian Sea has created uncertainty about the ownership of many offshore oilfields and prevented their development. Unsurprisingly, the situation is ripe for tension and hostility among the five littoral states. This fragile situation could easily escalate into military confrontation given the existence of many other sources of conflict among the littoral states arising from their political concerns and military/security considerations. In particular, disputes over certain oilfields between Azerbaijan and its two Caspian neighbors, Iran and Turkmenistan, have recently reached a dangerous level. The Caspian region is now prone to an arms race between these countries, which could escalate to a war only to destabilize the entire region. Having the world's fifth-largest oil reserves and its second-largest natural-gas deposits, the offshore Caspian fossil-energy resources are not of strategic importance to Iran. Nor are they for Russia, a country with the world's largest gas reserves and significant oil deposits. Nevertheless, for a variety of political, economic and security reasons, including its energy resources, the two regional powers have vested interests in the Caspian Sea. During the Soviet era, they agreed to joint use of the resources of the largest closed lake on Earth. However, the Caspian oil and gas resources are of great importance to the other littoral states. The latter have considered them as their main source of revenue and a means to preserve their sovereignty since their independence from the Soviet Union in 1991. In short, all the five littoral states have strong reasons to insist on a formula for the division of the Caspian Sea, which will leave them with the largest possible share. Apart from political conflicts among the littoral states and their manipulation by non-littoral powers, this reality has created a major obstacle to their acceptance of a legal regime binding on all parties. Disputes over the ownership of certain Caspian offshore oilfields between Iran and Azerbaijan and between Azerbaijan and Turkmenistan reached an unprecedented hostile stage in 2001. Iran and Turkmenistan then accused Azerbaijan of its illegal development and operation of certain disputed oilfields to which all the three states have ownership claims. They also accused Azerbaijan of efforts to develop other disputed oilfields with the assistance of foreign oil companies. Furthermore, they accused Azerbaijan of violating their territorial waters with its military and non-military vessels, while Azerbaijan accusing them of the same violations. On one occasion, the Iranian navy allegedly forced an Azeri oil-exploration ship to leave a disputed oilfield. While Iran evaluated the incident as a minor issue in Iranian-Azeri relations, Azerbaijan considered it as a major event endangering its territorial rights and economic interests. In its aftermath, certain developments contributed to the escalation of tension in the Caspian region. One was Turkey's dispatch of a small number of fighter jets to Azerbaijan under the pretext of participating in a previously arranged air show. Azerbaijan's official and unofficial references to Turkey's move as a clear sign of its determination to defend the Azeris in any future confrontation with Iran offset Turkey's official statements downgrading the move's significance. Of course, the Turks made sure that the "air show" had left no doubt about their taking sides with the Azeris. Another development was the simultaneous official visit of the Turkish top military official to Azerbaijan, which was treated in the same manner by the Turks and the Azeris. Not only did the two developments create tension in Iran's ties with Azerbaijan, they provoked the disapproval of other littoral states and particularly of Russia and Turkmenistan. Finally, the sale of two US military boats to Azerbaijan added fuel to its conflicts with Iran and Turkmenistan. The latter expressed deep concern about the transaction, which they portrayed as a threat to their national security and a provocative act leading to an arms race. In particular, Turkmenistan's reaction was very strong and included its revelation of its purchase of Ukrainian military boats, which in turn provoked a harsh Azeri reaction. Briefly, in their reaction to the developments, the Caspian littoral states, excluding Azerbaijan, warned against foreign involvement in their regional affairs, against the militarization of the Caspian Sea, against the use of force for settling territorial disputes, and against the threat of escalation of such disputes into war. Against a background of tension of hostility in the Caspian region, certain turns in the US policy toward that region over the past few weeks have created concern about an emerging arms race there. Such an arms race could contribute to a military confrontation between and among the Caspian countries, particularly between Iran and Azerbaijan, with a dire impact on the stability of the Caucasus, a region prone to war and instability. The recent turns include the US government's lifting of a ban on selling arms to Azerbaijan and Armenia and the conclusion of military cooperation agreements between Azerbaijan and the United States. They also include the statements of US State Department officials as to their country's commitment to Azerbaijan's defense and security and to the improvement of Azerbaijan's military capability to meet any future Iranian military challenge. As well, the officials have stressed the US support of Azerbaijan in any future confrontations with Iran over the disputed oilfields. The absence of a legal regime for the division of the Caspian Sea has not only prevented the full development of its rich oil and gas resources, but also created grounds for hostility and confrontation among its littoral states. Any major efforts on the part of Azeris to boast their military, especially their naval power, will surely provoke a reaction in kind by all other states. Given the history of conflict and mistrust between Azerbaijan and its two Caspian neighbors, Iran and Turkmenistan, an arms race will likely put all these countries on a dangerous path, which could lead to a war in the southern Caspian Sea. The United States' arming and taking sides with the Azeris in their disputes with Iran will likely widen the scope of any future arms race and military confrontation to include Russia, a regional power that shares Iran's concern about a US presence in its neighborhood. ******* #12 Financial Times (UK) 15 April 2002 A need to march with the times By ANDREW JACK The crashes of four helicopters in Chechnya this February alone said much about the difficulties facing the military in waging its most painful conflict in recent years, and about the state of the Russian armed forces in general. Official explanations have varied from mechanical failures to attacks or tampering by Chechen rebels. Whichever turns out to be true, the incidents offer powerful indictments of the problems for Sergei Ivanov, the defence minister appointed by President Vladimir Putin just over a year ago. A former intelligence official from St Petersburg closely linked to Mr Putin, he has been handed one of the most challenging portfolios in the administration. The signs - at least judging by the growing rumblings within the military - are that modest progress is being made, but is meeting substantial opposition. "Armies around the world are changing fast, but the Russian one is stuck in the past. It is a diminished, impoverished Soviet army which is unreformable because it fell out of history," says Vitaly Shlykov, a defence analyst and former military intelligence official. Andrei Kokoshin, a senior parliamentarian and former deputy defence minister under Boris Yeltsin, puts a brave face on the situation when he argues that dedication and effectiveness remain surprisingly high after a decade during which "society has not given the army enough materially or morally". Nevertheless, reports of problems have become an almost daily item in the Russian media: the poor living conditions of officers, the low morale, desertions, suicides, bullying, theft, equipment obsolescence and failure and a lack of discipline. Colonel Christopher Langton from the International Institute for Strategic Studies, a London-based think-tank, argues that the Russian military can be divided into two: a core group of about 100,000 competent soldiers "who do remarkably well, sitting on equipment manufactured years ago"; and the rest, "poorly-paid conscripts trying to escape". Like other analysts, he stresses that, while the rhetoric may have switched elsewhere, contemporary Russian military education, the mentality of existing officers and the deployment of troops are still heavily oriented towards a conventional land-based war in western Europe. Every observer of the Russian military has his or her own list of outstanding issues for reform, but there is a broad consensus about some. One is the need for the creation of a non-commissioned officer corps that would provide an educated backbone of sergeants to supervise, train and co-ordinate troops. That could pave the way towards the serious transition from a conscript to a volunteer army. Another is the need for not only a civilian defence minister, but also many advisers staffing "an entire civilian defence ministry", in Mr Kokoshin's words, which would by-pass the traditional domination of the General Staff and introduce democratic control. A third is financial transparency and the introduction of modern management techniques. That is perhaps the toughest challenge for a military empire that was, for so long, protected by state secrecy and able to command whatever resources it sought. After the neglect and degradation of the 1990s, the optimists argue that Mr Putin has begun to take some clear steps to address reforms. In nominating Mr Ivanov, he put in charge someone who comes from outside the military hierarchy and wears a suit rather than a uniform - albeit a former officer in the KGB. The very fact of the appointment of someone to whom he is so close indicated the importance he attached to the task. Although Boris Yeltsin did so before him and failed to deliver, Mr Putin has put the question of a shift away from a conscript army back on to the political agenda. He has provided a longer but more realistic timetable for its implementation, over the decade till 2010. While it is still difficult to obtain the size of the military budget - let alone to compare it meaningfully with defence spending by other countries - it is clear Mr Putin has authorised a substantial increase. He has several times, in public, endorsed the need for officers to receive pay rises. He has also announced plans for the restructuring of Russia's military-industrial complex, merging the different arms exporters and calling for a rationalisation of the many different defence manufacturers across the country. Furthermore, Mr Langton argues that Mr Putin has won the respect of the military by focusing on the need for the creation of rapid deployment forces to cope with instability on Russia's southern borders as its principal security challenge, rather than on a conventional war against the west. His orientation was already clear when he replaced Marshall Igor Sergeyev, a proponent of the nuclear forces, as defence minister with Mr Ivanov. How far Mr Ivanov is proving the right person to implement all the required changes is more open to debate. Privately, generals grumble that he is ill-suited to the job. Senior retired military officials have begun to express their concerns publicly in recent months. The army has been undermining his authority with its interference in draft legislation on forms of alternative service for conscripts. The division of responsibilities between him and Mr Putin is sometimes unclear, with Mr Ivanov, for example, claiming he was responsible for the decision to close the Russian military bases in Vietnam and Cuba announced by the president. As the man responsible for daily decision-making, however, Mr Ivanov has inevitably borne the brunt of criticism for introducing sometimes painful change. The fact that he breaks with tradition because he is not drawn from the armed forces does not help. Mr Ivanov's actions have included the start of a reduction in the size of the armed forces and the merger of different units. Nevertheless, Mr Shlykov argues that he has focused too much on grandiose political issues, such as Nato enlargement, when army officers are more concerned about improvements to their poor material conditions. If Mr Putin still faces a big challenge in winning over the military hierarchy - and Russia's political elite - to the pro-western strategic choices he made after September 11, Mr Ivanov may yet prove one of the first targets for critics at the tactical level. ******* #13 Russia/U.S.: Analysts Discuss Arms Cuts, Strategic Relations By Francesca Mereu A binding agreement on nuclear-arms cuts -- slated for discussion at next month's U.S.-Russia summit -- will include new measures to increase transparency on both sides. U.S. and Russian analysts speaking yesterday in Moscow said the steps include an unprecedented proposal to cooperate in the monitoring of warheads. RFE/RL Moscow correspondent Francesca Mereu reports. Moscow, 17 April 2002 (RFE/RL) -- Analysts at a Moscow press conference yesterday said the 23 May summit of the U.S. and Russian presidents could mark a turning point in strategic relations between the two countries. U.S. and Russian experts participating in the press conference, organized by the Carnegie Endowment for International Peace and the PIR Center for Policy Studies in Russia, also praised what they see as a new cooperative spirit in bilateral relations. Yurii Fedorov is the PIR Center deputy director and a well-known expert on international security and arms control. He said relations have warmed steadily since last summer, when U.S. President George W. Bush and Russian President Vladimir Putin met in Ljubljana, Slovenia. The spirit of solidarity that followed the 11 September terrorist attacks in the U.S., he said, only improved ties further. "Russian-American relations have radically changed. If just one year ago we had reason to expect a new crisis, today we are discussing how to improve [our relations]. We have already gotten some results: Russia in general, and President Putin in particular, decided to back the U.S.-led antiterrorist operation in Afghanistan. Moscow reacted calmly to Washington's decision to withdraw from the ABM treaty. And President Bush agreed to a legally binding deal [on reducing weapons stockpiles]," Fedorov said. Rose Gottemoeller is a senior associate at the Carnegie Endowment for International Peace. She said she believes a legally binding agreement will be prepared in time for the May summit. Gottemoeller said the agreement has the support of U.S. senators Joseph Biden (D-Delaware) and Jesse Helms (R-North Carolina), the chairman and ranking minority member of the Senate Foreign Relations Committee. Gottemoeller says the two senators signed a letter to President Bush saying they expect the agreement to be sent to the Senate for ratification. Gottemoeller said the new agreement includes measures already put forward by former presidents Bill Clinton and Boris Yeltsin during START-3 discussions in 1997. Gottemoeller, who worked on national-security issues during the Clinton administration, says the new arms deals will also include measures intended to increase transparency as the reduction procedures begin. Moreover, she stressed, the agreement will provide for the monitoring of warheads. "The second important aspect of the agreement is that it will be linked to the already-existing START-1 Treaty, which will provide structures and precedents for implementing these further reductions. For example, the inspection measures of the verification protocol of START-1 will be used to implement further eliminations of missile submarines and bombers. The third point of the new agreement will be a new area: the monitoring of warheads. Historically, the strategic-arms reduction agreements have not touched on warheads because they were considered to be too sensitive and difficult to monitor. But in this new agreement, there will apparently be some measures to monitor warheads cooperatively. This is a very welcome innovation in the strategic-arms control process and the first in many years," Gottemoeller said. Last year, Bush and Putin pledged to cut their respective nuclear arsenals to between 1,500 to 2,000 warheads each from the current levels of about 6,000 warheads. Bush initially favored an informal agreement on the numbers of warheads to be cut, while the Russians were pushing for a legally binding agreement. Bush has since warmed to the idea of a binding agreement, but Aleksandr Pikaev, a nuclear analyst with Carnegie's Moscow office, said there are still a number of issues that require further discussion. One sticking point, according to Pikaev, is a U.S. proposal to stockpile -- not destroy -- its decommissioned warheads. Russia opposed the plan, saying it falls short of an earnest effort to reduce arms. Russia's stance on that issue, however, softened slightly last month when Defense Minister Sergei Ivanov said Russia is likely to allow the United States to stockpile some of its decommissioned weapons. Pikaev said there has been no progress in this direction so far. But he said he is optimistic that an official decision will be made before the summit. The analyst added that it is very important for Russia to reach an agreement with the U.S., saying "even a bad agreement is better than nothing." In return, he said, Russia may ask to be freed from certain obligations held over from previous agreements. "First of all, the new document has to free Russia of constraints [under previous arms-control agreements]. These constraints prevent Russia from developing its strategic forces. [For example], under the START-1 agreement, Russia cannot modernize its strategic forces," Pikaev said. Pikayev said that Russia will also push for inspection guidelines to be less intrusive than those provided under START-1, which allow U.S. inspectors wide access to Russian military facilities. ******* #14 Nezavisimaya Gazeta No. 70. April 2002 [translation from RIA Novosti for personal use only] RAPPROCHEMENT BETWEEN RUSSIA AND THE WEST: ANOTHER FLIRTATION OR LONG-TERM ALLIANCE? By Konstantin VORONOV, candidate of historical sciences, senior research associate at the Institute of the World Economy and International Relations, the Russian Academy of Sciences Russia's foreign policy shift towards the West, that Vladimir Putin made in the wake of the September 11th tragedy, has dazed the world and even been dubbed "the Russian diplomatic revolution." The Russian president thereby changed the framework of Russia's international policy - usually passive and poorly expressed. Today, six months later, the question of how long-lasting and effective Russia's rapprochement with the USA/the West, prompted by the joint anti-terrorist efforts, will be seems very topical. Is there any alternative to Russia's present-day foreign policy line? The analysis of the leading industrialised nations 'and their alliances' possible future actions allows one to make some conclusions. USA and Russia Relations between the United States and Russia remained complicated throughout the 1990s, despite the fairly close co-operation between America and the Soviet Union in the years of Germany's re-unification and the formation of a new regime to the east of Brest. On the face of it, the US policy with regard to Russia was predicated on two competing prospects. The first one promoted the priority of Russia ("Russia first" principle) in US foreign policy. Washington continued to see Russia as the heir to and successor of the Soviet Union. The US viewed close ties with Moscow as a means to boost its transformation that would be beneficial for the US. Despite some political cataclysms and economic failures, Russia has remained a nuclear power and an important figure in Eurasian diplomacy, boasting the necessary resources, for the United States. Another prospect emphasised the geopolitical advantages that Russia as a new partner and former strategic antagonist could offer the United States and its allies. Close contacts between the White House and the Kremlin were equally significant for backing the development of the new Russia. Membership in western organisations of the cold war period - NATO and the EU - should have guaranteed security to the Central and East European countries. These geopolitical changes were meant to become permanent. After the USSR - Eurasia's power factor - broke up bringing about a decrease in the military threat from Russia, the West lost interest in it and its policy. When Moscow began talking about partnership and co-operation with the West in the 1990s, it was not yet ready for this. It put forward some unrealistic initiatives to replace the Yalta-Potsdam system in Europe with something abstract and vague, and the West replied with simple NATO eastward expansion. The internal problems Russia had in the 1990s gave the United States complete freedom of action. And whenever steps which Moscow took as unfriendly, but which were useful and favourable for the United States, had to be made, Washington would do so with no consideration for the Kremlin's opinion. The war on terrorism unexpectedly moved Russia to the centre of US diplomacy once again. The United States became dependent on Russia's military and diplomatic support, which is most likely to increase in view of the upcoming developments. The Middle and Near East This diplomatic revolution looks like a growing rapprochement of the sides' interests in a broad regional context: from Central Asia to the Middle and Near East, from the Western Mediterranean to India. In the short term, these increasingly common interests are accounted for by the US military-political needs in Afghanistan. It is still unclear, especially in the medium-term, if the US is ready to change its alliance policy in the face of the complex geopolitical situation and growing social stability in the region. The West has often emphasised the essential role the Roman Catholic Church played in undermining Soviet influence in Europe. The same processes were characteristic of Central Asia and the Middle and Near East, with the most militant Islamic followers playing a destabilising role. A long-term union between Russia and the United States would indicate that the US will break off its formal and informal ties with radical movements and Islamic fundamentalists and will have to support modernisers, secularists and reformist political elites and social forces. Quite a few present-day regimes in the Middle and Near East have ties and common roots with the former Soviet social and economic structures, later inherited by Russia. Despite the former alliances with the United States or the USSR, all of them in this socially and religiously unstable region want to reduce social and confessional threats to the minimum with a view to preserving their power. Even a temporary failure on the part of the United States would be crammed with disastrous consequences for the entire world, whereas for moderate and pro-western regimes of the Middle and Near East this would be completely ruinous. Today, the Russian Federation is not an alternative social and ideological system, as in Soviet times. Russia's influence in the region will not automatically expand, even if US positions in the Middle and Near East become less strong. The Russia-US latent union in the fight against the Taliban can serve as a foretype for achieving common Russo-American goals in developing and reforming the entire region. Moreover, it can become an acceptable form of international influence in this geo-strategic region, for it will reduce the purely American interference as "the great Satan" and activate the pro-western regimes against internal and external "pan-Islamists." Europe It is often forgotten that the United States and the Soviet Union as global superpowers were some kind of geo-political allies in Europe throughout the post-war years. The Old World lived through the cold war years virtually within the American-Soviet condominium. The leading European nations saw a way out of this in making the United States and Russia marginals of the continent. The fact that Russia got rid of the Soviet ideology and American stereotypes paved the way for Russia's direct ties with West-European neighbours and its pragmatic line in Europe. Our diplomats have even contrived to restrict US influence to some extent there. The new Russo-American alliance immediately brought back memories of the former cold war alliances when the Soviet-American domination pushed other Central and East European parties to the background. Now, West European partners have become more united in upholding their common interests, especially economic and monetary ones, against the United States. The introduction of euro has become a land-mark event in this respect. Therefore, the political alliance within the European Union will not remain on paper. Although the new Russo-American rapprochement was hailed by a number of European nations, it intensifies the activities of the European Union's integration advocates. Washington will obviously have to resume its policy of alternately containing the main powerful centres' attempts to dominate the continent. NATO The war on Osama bin Laden has doubtless involved NATO in the transatlantic interconnections that the Americans dreamt of throughout the 1990s. The joint declaration saying that after the September 11th events Article 5 of the North-Atlantic Treaty begins working added new political force and legitimacy to the Alliance. Paradoxically, the operation is being conducted outside NATO's command structures. Though the Alliance ensures US diplomatic and military interests in Europe and provides them with resources, it plays the same role for Russia in some terms. The developments in Central Asia and the Middle and Near East make the prospect of Russia's NATO membership real, which can help to: 1) boost overall European security and set up a common military organisation while preserving or replacing the OSCE; 2) reduce the chances of the EU's domination in the region. The Kremlin's line regarding NATO has been no less surprising at times, too. When meeting NATO and the EU leadership in Brussels on October 3rd, 2001 President Putin signalled Russia's readiness for closer co-operation with them, but added that Moscow's position on NATO's eastward expansion remained the same. To all appearances, Russia has de facto lost its drive against NATO expansion. In a bid to extend the scope of Russia- NATO co-operation and keep face, the Kremlin is obviously ready to eat some humble pie, i.e. put up with NATO's expansion. However, the West currently needs Russia no less than Russia needs the West. If our country continues its democratic development and maintains contacts with NATO through various mechanisms /within the Standing Consultative Commission, the 19+1 and 20 format/, Brussels may start to view Russia as a valuable and important partner. On the other hand, Russo-US rapprochement will reduce the geopolitical significance of both flanking and key nations of Europe. For many European countries, members of NATO, the advantages of the Alliance as an ideological and political reference frame and the former geopolitical structure are being devalued and its resources reduced. Competition is expected to increase within the Great European Three - Germany, Great Britain and France - for clout in the EU and influence as the main advocate of the European interests in NATO. The responsibility of each NATO and the EU member in determining policy with regard to the United States and Russia is growing. Less room for diplomatic manoeuvre and less mutual trust can boost Russia's ties with each of these nations. Home Front Although the diplomatic headway and the geopolitical blueprint seem to inspire hopes, a lot will depend on the internal political forces' alignment. The new foreign policy of President Putin was met with enthusiasm by the liberal-democratic forces, which view it as an additional way of rapprochement with the West. In this respect, the presidential centre and the ruling party diverge together with the guiding policy line. Conservative and the left-wing parties, especially the military establishment, are expressing scepticism. They are obviously displeased with the US military presence in Central Asia. Moreover, some experts find that there is a lot in common between the present hushed up discontent among the Russian leadership and the current split within the elite which could be seen in Gorbachev's time. Others, considering the close interrelation between domestic and foreign policy, believe that Russia's policy of rapprochement with the West is aimed at garnering support for radical economic reform and the modernisation of Russian society by means of Western capital and its technology. The implementation of these tasks is only possible if the current elite groups are replaced or reshuffled. The internal disposition in the United States is not plain either. Right-wing conservative forces are warning President George Bush against making concessions to Russians. On the contrary, neo-realists and trans-nationalists believe that Moscow and Washington will need each other until international terrorism ceases to threaten the United States. If the American President's visit to Moscow scheduled for mid-May does not produce any tangible results due to the complex and so far insoluble problems /NMD deployment, the future START Treaty, NATO expansion/, this will slow down the rapprochement between the two nations. We will come out a loser again, as some prominent Russian experts predict, calculating the advance payments and debts; the more so that history offers numerous examples to this effect. Insignificant diplomatic dividends of the summit at issue may considerably weaken the presidents' internal political positions. It should be some serious consideration as to what is more important - that the summit meetings' schedule is fulfilled or that they are productive for bilateral and international policy. ********