CDI Russia Weekly-#209 7 June 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. AP: U.S. Calls Russia Market Economy. 2. Asia Times: Sergei Blagov, The St Petersburg summit: Good intentions. 3. US Department of State: State Department's Haass Outlines U.S.-Russia Agenda. 4. Jamestown Foundation Russia and Eurasia Review: Peter Rutland, PUTIN'S LEVITATION ACT. 5. Interfax: Russian defence chief says NATO enlargement still sore point in relations. 6. strana.ru: Vladimir Yegorov, Axis of Evil - Make Way for Arch of Stability. Defense Ministers Rumsfeld and Ivanov will dwell specifically on prospects for greater interaction in the war on terrorism at their Brussels meeting on Friday. 7. Moscow News: Mikhail Klasson, Russian Oil for the States. 8. RFE/RL: Emil Danielyan, Caucasus: Russia Boosts Alliance With Armenia As U.S. Gains Foothold In Georgia. 9. Christian Science Monitor: Gloria Goodale, Russian ballet dances from coast to coast. 10. www.thenation.com: Matt Bivens, Let's Finish the Job. (re nuclear weapons) 11. The Russia Journal: Gordon Hahn, Moving to a new U.S. Russia-Eurasia policy. 12. Izvestiya: US Federal Farm Subsidies May Impact Russian, World Agricultural Markets. 13. Nezavisimaya Gazeta: Salavat Suleimanov, SECURITY COUNCIL AMENDING MILITARY REFORM PLANS AGAIN. The General Staff says the military is in "critical" condition. ******* #1 U.S. Calls Russia Market Economy June 6, 2002 By MARTIN CRUTSINGER WASHINGTON (AP) - More than a decade after the collapse of the communist Soviet Union, Russia won a long-sought economic prize from the United States on Thursday - designation as a market economy. President Bush personally relayed the decision to Russian President Vladimir Putin in an early morning telephone call from the White House. Commerce Secretary Don Evans, whose agency made the determination, said the action reflected ``the tremendous economic changes that Russia has made over the last decade.'' The determination will give Russian companies more protection to fight off charges that they are selling products in the United States at unfairly low prices, a change that Putin's government estimated could boost Russian exports to the United States by $1.5 billion annually. The decision, which was made by the Commerce Department's Import Administration, represented a further step in Bush's campaign to strengthen economic ties, symbolizing that relations between the United States and its former Cold War foe have entered a new era. For his part, Putin has actively pursued closer ties with the West as a way to bolster his country's efforts to recover from 70 years of communist central planning and lift the country's economic fortunes. He also viewed the designation as a reward for Russia's support since Sept. 11 of the U.S.-led war against terrorists. Putin had hoped to win the ``market economy'' designation from Bush during the president's trip to Russia last month. However, administration officials stressed that the timing on the announcement was determined by law and could only go into effect once Commerce Department officials had completed their nine-month investigation. Russia hopes that winning the market economy designation from the United States, the world's largest economy, will strengthen its case for membership in the World Trade Organization, the Geneva-based organization that sets the rules for world trade. WTO Director General Michael Moore has said that Russia could complete all its negotiations to lower trade barriers and be ready for membership by the fall of 2003. The U.S. market economy designation follows by a week a similar announcement from the 15-nation European Union, Russia's biggest trading partner. Russian Economics and Trade Minister German Gref said on state-run RTR television Thursday night that Russia had lost $1.5 billion in annual export sales in recent years because it lacked this designation in the United States. He predicted a boost for Russian manufacturers of steel, nuclear fuel, fertilizer and titanium products. ``For Russian producers it means better access to the U.S. market. For the Russian population, it means creation of new jobs,'' Gref said. Representatives of companies in the United States that compete against Russian products contended during the Commerce hearings that the Russian government still heavily subsidizes its own industries. But U.S. companies eager to do business in Russia hailed Thursday's announcement, saying it would put U.S.-Russian economic ties on a more permanent footing. ``One by one, we need to be removing all the vestiges of the Cold War from our trade books,'' said Z. Blake Marshall, executive vice president of the U.S.-Russia Business Council. The biggest immediate effect for Russian companies will be in the handling of antidumping cases, in which American companies petition the Commerce Department for the imposition of penalty tariffs for products they contend are being sold in the United States at prices below the cost of production in the home market. With the new market designation, Commerce will be required to use actual data on production costs in Russia in determining whether to impose penalty tariffs. Before, the government had latitude to simply estimate those production costs based on calculations of what they should be if Russia was a market economy. In making the ruling, Commerce officials had to rule that Russia's decade-long effort to transform from a state-run economy to one operated by private enterprise had been a success. A Commerce official, who briefed reporters on condition of anonymity, said the U.S. investigation found that private companies now account for 70 percent of Russia's economic output; Russia's currency, the ruble, is set by market forces; and the country is open to foreign investment. In order for Russia to win WTO membership, the United States must remove the country from the requirements of the 1970s Jackson-Vanik law, which ties Russia's tariff privileges to an annual congressional review of the country's record on Jewish immigration and human rights. The administration had hoped to win repeal of the Jackson-Vanik requirement from Congress this year, but that effort was put on a back burner after Russia upset many members of Congress this spring by imposing a temporary ban on imports of American chicken parts. Russia is the largest foreign market for U.S. chicken producers. On the Net: Commerce's Import Administration: http://www.ia.ita.doc.gov ****** #2 Asia Times June 6, 2002 The St Petersburg summit: Good intentions By Sergei Blagov MOSCOW - Friday's Shanghai Cooperation Organization (SCO) meeting will be the fifth summit in roughly two weeks for Russian President Vladimir Putin, following summits with the United States, the North Atlantic Treaty Organization (NATO) and the European Union and the pan-Asian summit in Almaty on confidence building. It is understood that by holding the SCO summit, the Kremlin not only wants to reinforce the Central Asian vector of its foreign policy, but also to strengthen the anti-terrorist agenda in the SCO course of action. The fight against terrorism will be a "system-setting" element of the SCO, Russian Foreign Ministry spokesman Alexander Yakovenko told journalists in Moscow on Wednesday. The SCO, which includes Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan as well as China and Russia, holds its summit on Friday in St Petersburg. The summit is expected to approve the 30-page SCO Charter, a joint declaration and an agreement to establish an anti-terrorist center in Bishkek, Kyrgyzstan. Furthermore, Moscow presumably has secured Beijing's backing in its drive to make the war on terror the SCO's priority. For instance, during a recent visit to Moscow, Chinese Foreign Minister Tang Jiaxuan stated that the SCO had to become not "a club for empty discussions but a viable institution capable of making an important contribution to the international war on terror". According to the Russian Foreign Ministry, apart from the SCO Charter, the member states are to sign some 30 multilateral agreements designed to make the organization work. The SCO is not a military alliance, but an open international organization, Putin stated in an interview released by the official Russian Information Agency (RIA) on Tuesday. Putin also said the SCO summit will have "historical significance". In January, foreign ministers of the SCO met in Beijing and agreed to set up "mechanisms for emergency anti-terrorist response". After the January SCO meeting, Chinese President Jiang Zemin urged the setting-up as soon as possible of "a regional anti-terrorism mechanism". A perceived threat of Islamic separatism has been a matter of concern for Beijing, notably due to outbreaks of unrest among the Muslim Uighur minority - a Turkic-speaking group in China's westernmost Xinjiang region that borders Central Asia, Afghanistan and Pakistan. Russia has long advocated collective security action to deal with perceived threats in Central Asia. In 1997, Russia and China signed a treaty along with the former Soviet states of Kazakhstan, Tajikistan, and Kyrgyzstan on significant reduction of border troop numbers. These nations that now share the former Soviet-Chinese border became known as "Shanghai Five". A transformation took place at the fifth annual summit of the Shanghai Five in China last June 14-15. The summit announced that the group had become a new international body, the Shanghai Cooperation Organization, or SCO. The six leaders (the group now also included Uzbekistan) also signed the Shanghai Convention to Combat Terrorism, Separatism and Extremism, which is supposed to be a basis for subsequent deal on a joint anti-terrorism center in Bishkek, the capital of Kyrgyzstan. Furthermore, the SCO has mulled expanded membership, something that Russian officials have said Moscow has not ruled out. So far there are no new applications to join the SCO, though Mongolia, Iran reportedly might consider such a move. Putin has said that in the wake of the Soviet collapse and Russia's withdrawal from Central Asia, "a sort of power vacuum" has emerged in the region, so joint efforts, notably by the SCO member states, are needed to control the situation there. However, after presumed rapprochement between Russia and the West, notably NATO, there has been a talk of reduced cordiality in relations between Moscow and Beijing. Subsequently, the Russian leader lost no opportunity to reassure China. Moreover, in the interview released by RIA on Tuesday, Putin stated that Russia was not going "underestimate China's significance" in world affairs. The Russian leader also confirmed Moscow's intention to develop a "strategic partnership" with China. Jiang is scheduled to hold bilateral talks with Putin on Friday. Among other things, Putin and Jiang are to discuss tensions between India and Pakistan, RIA reported on Wednesday. At the Conference on Interaction and Confidence Building Measures in Asia (CICA) summit in Almaty on Tuesday, Putin pressed India and Pakistan to have a direct meeting to prevent the Kashmir conflict from exploding into a war. The effort failed to bring Indian Prime Minister Atal Bihari Vajpayee and Pakistani President General Pervez Musharraf together for face-to-face talks. Subsequently, on Wednesday Putin stated in Moscow that he "did not intend" to arrange direct talks between Vajpayee and Musharraf, since such a meeting might be premature and "counterproductive". Presumably, Putin's attempt to mediate in the standoff between India and Pakistan was intended to demonstrate that Russia is still relevant internationally. However, the lack of practical results not only came as a blow to Russia's diplomatic efforts, but also raised questions on whether new groupings such as the SCO or CICA can really make a difference in terms of strengthening Asian security. Nonetheless, it has been understood that both Russia and China share concern over Central Asian volatility. Yet it remains to be seen whether the SCO or its anti-terrorist body can in fact fill a perceived "vacuum" and address security concerns in Central Asia. ******* #3 US Department of State 03 June 2002 State Department's Haass Outlines U.S.-Russia Agenda (June 1: Amb. Richard Haass at Rand Business Leaders Forum) (5340) The United States is "moving on a broad agenda of engagement with Russia," the State Department's Richard Haass told the RAND Business Leaders Forum June 1. "Russia can be a critical partner in building security and stability in the regions it borders -- Europe, Central Asia, and the Far East," and it is a "necessary partner" in addressing transnational and global challenges such as terrorism, proliferation, HIV/AIDS and environmental degradation, said Ambassador Haass, director of the Secretary of State's Policy Planning Staff. Last year Presidents Bush and Vladimir Putin "announced their intention to shape a new U.S.-Russia relationship. The Moscow summit shows we are moving out in the direction the Presidents laid down," he said. After recounting the achievements of the May 24 summit -- including the signing of a strategic offensive reductions treaty -- Haass said the United States and Russia have "an opportunity to do even more together." "Indeed, the most important and challenging task at this stage is to define a long-term positive agenda for the bilateral relationship. It has to be about more than eliminating old Cold War threats and fighting terrorism, important as those are. The relationship must be based on new opportunities for cooperation," he said. Among the new opportunities he cited: - Energy: "There are opportunities for Western investment and joint ventures with Russian companies to improve oilfield recovery rates in Russia and to engage in joint ventures in third countries." - Economic development of the Russian Far East: "In addition to benefiting Russia, a revival there would have positive reverberations in China, Korea and Japan." - Central Asia: "Assuring Russia a prominent role in the economic reconstruction of this region could go a long way towards alleviating Moscow's concerns about the growing U.S. military presence there." Haass also spoke of the United States, Europe and Russia jointly addressing "the large and demanding multilateral agenda that extends beyond Europe," including "managing regional crises such as those in the Middle East and South Asia; tackling transnational challenges such as HIV/AIDS, drugs, and human trafficking; cooperating in the field of bioterrorism and biodefense; addressing the threat of proliferation of weapons of mass destruction and the means to deliver them, including joint work on theater missile defenses; and strengthening institutions in Europe and Asia that promote political stability and economic prosperity." He acknowledged there will also be differences to manage "in areas such as trade, non-proliferation policy, human rights, and Chechnya.... Among the most difficult issues are Iraq and its weapons programs, Iran, and North Korea." But he added that "the ability to discuss and exchange views should be better now than it has been for a very long time." Russia also needs "to complete its transformation into a democratic, market-oriented state," Haass said. "Nothing is more important. Russian leaders must recognize that this is the key to Russian prosperity, and to continued integration with the West and with international political and economic institutions." While pointing out that "Russia also has work to do to overcome the enduring legacy of distrust and suspicion that exists in Europe," Haass also said that "Europeans who view Russia as though it were still the Soviet Union risk missing the historic opportunity to facilitate Russia's continued integration into Western norms and values." He concluded by observing that, although it will take "hard and sustained effort" to make the U.S.-Russian relationship work, "there is no structural reason" the two countries can't have good relations. The United States should make the economic and commercial aspect of the relationship a high priority. Haass also called for improving the "quality of consultations" with Russia. "When either Americans or Europeans are about to make decisions that have an impact on Russia or the relationship, they owe it to Russia to consult in advance, not simply announce a decision after the fact. That does not mean Russia will have a veto, but it does mean decisions will be made with full knowledge of the impact on the relationship. And, we expect our Russian partner to do likewise," Haass said. ****** #4 Jamestown Foundation Russia and Eurasia Review 4 June 2002 PUTIN'S LEVITATION ACT By Peter Rutland (Wesleyan University) President Bush came to Moscow, President Bush left. There were no surprises, no open conflicts, and thankfully no gaffes. The goal of the American visitors was to show the flag, to indicate by the president's physical presence that Russia still matters for the United States. The goal on the Russian side was to prove that President Putin's radical policy of integration with the West is paying dividends. Bush may have scored with his domestic audience, but the modest set of signed agreements only underlined just how shallow Washington's commitment to Moscow is. The agreement to cut nuclear delivery systems to below 2,200 per side produced neither relief nor trepidation, and Putin pointedly noted that Russia still believed that there should have been agreement on the destruction of disarmed weapons. The "NATO at 20" concept was overshadowed by front-page coverage, on the day of Bush's arrival, of an announcement by Ukraine's national security adviser that Kyiv is ready to join NATO. There was no concrete progress to report in lifting the Jackson-Vanik amendment on emigration policy nor in recognizing Russia as a market economy, two steps that would help promote U.S.-Russian trade. (Let alone Russian entry into the World Trade Organization, something that Putin set as a priority for 2002, but which is now quietly fading from view.) A CHECKERED HISTORY But no news is good news in this case. It is important to recall the quite dramatic fluctuations that have occurred in Russian-American relations over the past few years. Both Russians and Americans were becoming increasingly disillusioned with the Bill 'n Boris partnership of the mid-1990s, the primary purpose of which seemed to be boosting the egos of the respective presidents. Then came the financial cataclysm of August 1998, an event which among other things wiped out the savings of most of Russia's nascent middle class. Rightly or wrongly, for Russians that crisis had "made in the USA" written all over it. Shortly thereafter came the NATO bombing campaign against Yugoslavia, launched without any pretence at consultation with Moscow and followed by a surge of interest in Russian Mafia stories (remember the Bank of New York scandal?). A year later, the incoming Bush administration made clear its intention to downgrade the status of Russia to that of a mid-ranking country. In an interview with Le Figaro, Condoleezza Rice even suggested that Russia was still considered a threat. It was five months before Bush personally met Putin, in Slovenia, long after European leaders had taken measure of the new man in the Kremlin. But when the two men did finally meet, the personal chemistry was positive, and U.S. policy began to thaw. LONELY AT THE TOP When Putin came to power, it was reasonable to assume that the KGB veteran would revert to the anti-Western policies of the Primakov administration. Yet this did not happen. Putin has consistently pursued a policy of cooperation with Europe and the United States, making a stream of hitherto unimaginable concessions. Extend NATO to include the Baltics? No problem. Station American troops in Central Asia to wage war in Afghanistan? Fine. Unilateral American withdrawal from the ABM treaty? That is "no threat to Russian security," said Putin. American special forces in Georgia? "No tragedy," says the Russian president. These concessions began before September 11, and accelerated in response to the tragedy. One after another, Putin gave up longstanding Russian strategic positions, issues of principle that had been considered lines in the sand even for the Yeltsin administration. No one I have talked to in St. Petersburg or Moscow has satisfactorily explained to me why Putin is doing this. He is certainly not acting under pressure from domestic constituencies. Quite the opposite: It is hard to find anyone in the Russian foreign policy establishment who agrees with Putin's actions--and opinion polls show the public at large is equally skeptical. Conservatives, from communists to military generals, consider his actions to be treason, and openly say so. Even Russian liberals such as Duma deputy Aleksei Arbatov or Yabloko leader Grigory Yavlinsky feel that Russia's dramatic guestures--and supporting the war against terror with intelligence-sharing and airpower access--have gone unrequited. Russian liberals are still operating in the mindset of the detente era (which is when most of them cut their teeth as analysts). In detente, linkage was key: Cooperation was built through mutual concessions. Putin has somehow intuitively grasped that linkage is over, that in the post-Cold War world economic ties and political alliances (what Joseph Nye has called "soft power") matter more than main battle tanks and nuclear missiles ("hard power"). In this new world, national interests have to be pursued through diffuse means, by the nation integrating and adopting prevailing political and economic norms. Perhaps this is why Putin dragged the Bushes through a crash course in Russian high culture during their visit to St Petersburg, abandoning power politics for cultural one-upmanship. (The nightly news on NTV showed Putin's surprised look when Bush took out his chewing gum while marveling at the decorations in the Kremlin.) Yet Putin is alone in embracing this global vision: It is almost impossible to find anyone in the Russian commentariat who espouses such a sophisticated interpretation of Russian national interests. Even liberal, Westernized analysts still look at the world in geopolitical terms. They see Russia's influence resting on its nuclear arsenal and status as an ex-superpower, and its capacity to project power in the "near abroad." They are, in other words, oriented towards the past rather than the future. This yawning gap between Putin and the foreign policy establishment leads to the interesting question of where on earth Putin's ideas came from. It cannot be pure intuition, and it goes beyond simple pragmatism. Maybe he has been secretly reading the Economist all these years. Maybe there is a small, invisible team of long-term strategists who accompanied him from the KGB to the Kremlin. Maybe pursuing a pro-Western policy was another one of the secret conditions that Yeltsin laid down when he appointed Putin president. Russians have always been fond of conspiracy theories, especially when there is an anti-Semitic tinge--in this case provided by the figure of Boris Berezovsky, who played a shadowy role in Putin's rise to power. More seriously, from Putin's memoirs one can see that the pivotal event in his political maturation was the experience of calling for help from the Soviet Army when his KGB office was besieged by an angry crowd in Dresden in November 1989. He was told that they had no orders to act ("Moscow is silent")--a visceral lesson in the limits of military power. A second question that arises is how long can Putin keep up his political levitation act--floating above the prevailing opinions in Russian society, without any visible means of support. Increasingly one hears hints of a comparison with Gorbachev, another innovative leader who got too far ahead of his country, and paid the price. For the time being, Putin's grip on power is secure. Although they do not share his equanimity about Washington's strategic intentions, ordinary Russians continue to express their trust in Putin, and seem content to delegate foreign policy making to him. Putin has skillfully boxed in right and left forces in the parliament, and has the media under his control. There is no political figure on the horizon who can mount a credible challenge to his authority. But the past decade has shown that Russian politics is full of surprises. (As Yavlinsky has said, "Anyone who tries to predict what will happen in Russia is an idiot.") Things could change quickly in the event of a military setback in Chechnya (something that looks increasingly unlikely), or another financial crisis (something that looks all too possible). This view of Putin as an embattled, pro-Western leader is not widely shared in the United States. If it were, we would not waste time lecturing Putin on how Russia should manage its TV channels or the sanitary inspections of imports of American chicken parts. The Russian-American relationship is changing, to be sure, and changing for the better. But managing change is a challenge for both sides. It behoves Americans to pay a lot more attention to what Russians are saying and thinking, to get ahead of the curve and forestall any unpleasant surprises down the road. ******* #5 Russian defence chief says NATO enlargement still sore point in relations Interfax Brussels, 6 June: NATO enlargement remains a point of "dispute" in Russia's relations with the North Atlantic alliance, Russian Defence Minister Sergey Ivanov has said. "The position of the Russian Defence Ministry on the further enlargement of NATO remains unchanged. Moreover, we believe that the creation of the '20' [the new Russia-NATO council] is to no extent a form of psychological compensation for the enlargement of the alliance," Ivanov said during the council's first session. "It should be noted that we meet within the framework of our Russia-NATO Council to solve disputed and at times painful points in our mutual relations. One such point is the course of the alliance for the further enlargement of its membership. "Undoubtedly, enlargement is an internal matter of the alliance, and we do not intend to dramatize the situation to any extent, but it would run entirely against our interests if the negative scenarios of the past years, where Russia was listened to but not heard, were to be repeated," he said. ******* #6 strana.ru June 6, 2002 Axis of Evil - Make Way for Arch of Stability Defense Ministers Rumsfeld and Ivanov will dwell specifically on prospects for greater interaction in the war on terrorism at their Brussels meeting on Friday By Vladimir Yegorov After the Russian president managed, while attending the recent Conference for Interaction and Confidence-Building Measures in Asia, to obtain some relaxation of tensions between India and Pakistan and force the conflicting parties to make encouraging statements, the main vector of world politics has begun shifting south, the nexus of many urgent problems presenting real security threat for both East and West. The situation in Southern Asia will be up for discussion at a bilateral meeting between Defense Minister Sergei Ivanov and Secretary of Defense Donald Rumsfeld scheduled for Friday in Brussels. A Pentagon spokesman reported that Messrs. Rumsfeld and Ivanov would dwell specifically on prospects for greater interaction in the war on terrorism and for cooperation in the area of antimissile defense. As is expected, Mr. Rumsfeld is to go from Brussels to India and Pakistan after having consultations with his Russian counterpart and the United State's Richard Armitage, who had already visited Islamabad and Delhi. To quote a statement Mr. Rumsfeld made before setting out on his lengthy tour of Europe, Southern Asia and the Middle East, the threat of war between India and Pakistan was distracting attention from the antiterrorist fight, which had specifically reflected on the joint U.S. and Pakistani efforts to rout Osama bin Laden's forces on Afghan territory. In keeping with information from different sources, elements of the Taliban and Al Qaeda were being more active in the territory of Pakistan, taking direct part in attacks on India in Jammu and Kashmir. Some Delhi sources also say that, according to radio exchanges intercepted by the Indian army, the local gunmen have received an order to halt their operations for the time being, which, the sources believe, only confirms that the terrorists are supported by official Islamabad. Interestingly, the Pentagon leaked information - shortly before the Rumsfeld tour - concerning the activities of terrorist organizations in Pakistan. The leak was obviously aimed at bringing pressure to bear on Islamabad and making President Pervez Musharraf fulfill promises on fighting terrorism he had given President George Bush during his visit to Washington earlier this year. It is not inconceivable that Mr. Rumsfeld may suggest launching joint strikes at terrorist camps in Pakistan. Simultaneously, he intends to tell the forthcoming Brussels meeting of the Euro-Atlantic Partnership Council at the defense ministry level that the United States and a number of other NATO countries plan to shift the burden of Partnership for Peace to Transcaucasia and Central Asia. A high-ranking NATO diplomat commented on that intention by saying that security in Europe depended not only on what NATO and EU were doing but also on relations with their Eastern neighbors. Indicatively, these actions and statements follow in tandem to the latest statements Vladimir Putin made in his interview with China's Renmin Ribao. These concern both Russia's lack of "any particular allergy" to the temporary presence of U.S. troops in the Central Asian region, and Moscow's evaluation of the Shanghai Cooperation Organization as one of the main mechanisms for security and cooperation in Central Asia rather than a military bloc. The presidential statement to the effect that bilateral cooperation between Russia and China is not directed against any other country fits squarely with this premise as well. Finally, a logical sequel to this kind of approach is Vladimir Putin's view that Russia, China, Western European countries, and the U.S. may form "an arch of stability." The prospect for creating "the arch" is not only probable but is also quite obvious, as stated by the president. He meant specifically "special relations" with NATO that Russia had established several years ago, and the Rome Declaration, which, to quote Vladimir Putin, "deepens Russia's relations with the North Atlantic Alliance." Evidence of the deepening of those relations was given at the Almaty summit, where Russia also acted on behalf of NATO, whose position on the conflict between Pakistan and India the Russian president communicated to the leaders of the two countries in the course of his personal meetings with them. This also means new strategic relations with the United States - resumption after a long break of disarmament negotiations - and more cooperation in other areas. This finally means a stepped up dialogue with the EU in spite of serious differences regarding the future of the Kaliningrad region and guarantees of the legitimate rights of its inhabitants following EU expansion. China seems a logical continuation of this arch, being the country, with which Russia signed an unprecedented friendship treaty last year. Certainly, the U.S. is unlikely to be ready to share the president of Russia's opinion concerning "the arch of stability," particularly in view of its economic, political, and ideological differences with China, among others. It will be recalled in this connection that Washington retains a negative view of China's human rights record, that Washington cooperates with Taipei while Beijing cooperates with Pyongyang, that there are recurrent "spy scandals," and other things. Against this background, one can see that the, "arch of stability" drawn by the Russian president and the, "axis of evil" declared by the U.S. president are parallel propositions. On the one hand, this demonstrates the completely different approaches that Moscow and Washington have - not only to a future world order but also to methods of world organization in the 21st century. Moscow is clearly demonstrating its wish for compromise, equitable partnership, protracted and difficult talks, and only peaceful solutions to the most difficult problems. All of that has been graphically revealed in the Russian approach to both the Indian-Pakistani conflict and the Palestinian-Israeli conflict. Washington, on the contrary, puts its main stake on force - military force included. On the other, both Russia and the U.S. view the main sources of threats to modern world identically, including international terrorism and the proliferation of weapons of mass destruction. As a result the "axis" and the "arch" overlap each other. This fact fully explains why Russia, the U.S., and NATO have concentrated on such regions as the Caucasus, the Middle East, and Southern Asia. ******* #7 Moscow News June 5-11, 2002 Russian Oil for the States Mikhail Klasson The treaty on the limitation of strategic offensive weapons that the presidents of Russia and the United States signed during their Moscow summit has upstaged another document of considerable importance - the memorandum on energy. When put into effect, it could bring Russia tens of billions of dollars in investments To enhance bilateral relations, Presidents Vladimir Putin and George W. Bush agreed to start a new dialogue on energy to provide a good basis for fostering cooperation between Russian and American companies in prospecting for mineral deposits, extracting and processing hydrocarbons, transporting and marketing mineral products, and also in carrying out joint projects, including for third countries. One project calls for giving Russian fuel broader access to world markets, which is feasible if Russia develops its seaport and transportation infrastructure. This country is most keen to sell petroleum and liquefied gas to the United States. According to Russian Deputy Prime Minister Viktor Khristenko, we need to have deep-water ports where supertankers of 150,000 tonnes displacement and larger can be loaded. Because Russia does not have ports that can accommodate such tankers, it has to resort to transshipment. Russian oil companies will be able to use Croatia's deep-water Adriatic port of Omisalj upon completion of a $40 million project to integrate the Druzhba and Adria pipelines, which will increase the pipeline system's capacity to 15 million tonnes of oil a year. In the absence of a similar pipeline facility, tankers have to cover a distance of 8,500 to 9,000 km between the Adriatic Sea and the Atlantic coast of the United States. Pipeline integration had long been delayed for lack of consensus on a single transit tariff for the six nations involved - Russia, Belarus, Ukraine, Hungary, Slovakia and Croatia. Agreement was recently reached on a rate of $0.6 per tonne of oil for every 100 km of pipeline. According to Russian pipeline operator Transneft's Vice President Sergei Grigoryev, an agreement has been achieved with most participants in the project. The document only needs the approval of the Hungarian company MOL. But an intergovernmental treaty has to be signed before the construction of the project can start. According to Dmitry Druzhinin, an analyst with investment company Prospekt, oil deliveries from Sakhalin (as Khristenko had also pointed out) could be more profitable as the United States' Pacific coast is only 7,000 to 8,000 km away from the island, where the Sakhalin-2 project was already producing oil. Sakhalin Energy, the technical director of Sakhalin-2, plans to build on the island a gas liquefying plant with a capacity of 10 million tonnes a year. When the plant comes into service, tankers will be able to take oil as well as liquefied natural gas from Sakhalin to the United States. And in 2005, the Sakhali-1 project too will start oozing oil. As American companies are participating in both projects, any Russian bureaucrat who will try to throw a spanner in the works will have President Putin to reckon with. Khristenko noted that Russian oil could also be carried to the United States via the northern export route. If a terminal were built at the ice-free seaport of Murmansk, it would be possible to export from there oil from the Timano-Pechora field. Such a project is proposed by LUKoil, which suggests taking the oil to Murmansk by small icebreaker tankers (a voyage of more than 1,000 km). But Prospekt's Druzhinin thinks that despite the feasibility of making the 8,000 to 9,000 km run from Murmansk to the U.S. Pacific coast, two transshipments would make delivery costs too high. Besides, it remains to be seen whether American companies would risk making multibillion investments in such a project. To induce them to come forward with their money, they would have to be offered really attractive terms, plus guarantees from the United States' Investments Insurance Agency. All these matters will be examined by a Russian-American working group for cooperation in the field of energy, which is in the making. The group's findings will be sent out to all levels of government in Russia and the United States - and to future meetings between the two presidents - as stipulated by the Bush-Putin memorandum. Nonetheless, it will take at least three to four years for Russian bulk oil to appear on the American market, Druzhinin said. ****** #8 Caucasus: Russia Boosts Alliance With Armenia As U.S. Gains Foothold In Georgia By Emil Danielyan Russia is deepening its close military alliance with Armenia by signaling plans to supply more weapons to Yerevan. The move comes as a small contingent of U.S. troops has been deployed to neighboring Georgia, a step Moscow views as a challenge to its regional interests. Analysts say the U.S. presence in Georgia has heightened Russia's interest in Armenia. Yerevan, 6 June 2002 (RFE/RL) -- A top Russian security official last week announced that Armenia is seeking fresh arms deliveries from Russia in a bid to boost its defense capabilities. Russian Security Council Secretary Vladimir Rushailo, on an official visit to Yerevan, suggested that Russia would likely agree to the request. Speaking at a joint news conferences with Armenian Defense Minister Serge Sarkisian, Rushailo said: "We are now looking into the request of our Armenian colleagues. Experts from our Defense Ministry and Foreign Affairs Ministry are now working on that. Our own [Security Council] experts are also involved in that." In the meantime, Rushailo said Armenia is due to submit a detailed list of the defense items it hopes to acquire for its armed forces. Sarkisian confirmed the information but would not say what kind of new weaponry the Armenian military is looking to procure. Last week's meeting marked the first time senior officials from the two allied countries publicly discussed an impending weapons deal. But some analysts say the development is not a surprise, as it is timed to the arrival of U.S. troops in neighboring Georgia, which Russia considers within its traditional sphere of influence. The troops are officially there to train Georgian security forces in antiterrorism tactics and to develop a local rapid-reaction force. Such analysts say the move -- the first-ever U.S. military presence in the South Caucasus -- has unnerved Russian President Vladimir Putin, despite public assurances he is not opposed to what Washington is describing as part of its global antiterrorism campaign. According to Russian defense analyst Pavel Felgenhauer, in holding open arms talks with Yerevan, the Kremlin is trying to "scare away" the United States by "publicly doing things that were previously done discreetly or secretly. From Russia's point of view, what happens now in Georgia has certainly added to the importance of the Moscow-Yerevan axis because Georgia is increasingly pursuing what many in Moscow believe is an anti-Russian policy," Felgenhauer said. Sergei Shakariants is an expert on ex-Soviet affairs at the Armenian Center for National and International Studies (ACNIS), a private Yerevan think tank. He likewise noted that Russia is trying to counter the decline of its influence in the region. "Russia is emphasizing that it has an ally in the Caucasus, that that ally must necessarily receive Russian assistance and that Russia will not stop asserting its interests by helping those countries that accept those interests," Shakariants said. Faced with the weakening of its positions in pro-Western Georgia and Azerbaijan, Moscow is thus trying to remain a key regional player by strengthening its ties in Armenia, its sole Caucasian ally. Armenia's dependence on Russia for security -- necessitated by its unresolved disputes with Azerbaijan and Turkey -- bodes well for the success of that strategy. Russian military support was essential for the Armenian victory in the 1991-94 war over Nagorno-Karabakh. It has enabled Armenia to build what its leaders say is the strongest army in the South Caucasus. With renewed fighting in Karabakh remaining a serious possibility, Yerevan is bound to seize on any opportunity to reinforce its army. It would also welcome Russian efforts to contain Turkey, which too is expanding military cooperation with Georgia and Azerbaijan. However, the government of President Robert Kocharian is unlikely to be drawn into a possible new round of the Russia-U.S. rivalry in the region just as it is trying to develop military cooperation with the United States and NATO in general. Armenian officials have indicated recently that global geopolitical changes since the 11 September terrorist attacks on the U.S. emphasize the need for greater reliance on the West for defense and security. They are keen to stress that such an arrangement will complement, not contradict, the Russian-Armenian military alliance, pointing to warming ties between Russia and major Western powers. But analysts say the U.S.-Russia rivalry is not necessarily over as far as the South Caucasus is concerned. Russia's initial anger over the U.S. announcement in February that it planned to dispatch up to 200 military instructors to Georgia highlighted the depth of Russian unease over growing American involvement in the region. "Officially, Russia is not against the presence of American troops in Georgia. Putin has repeatedly reaffirmed Russia's commitment to Georgia's territorial integrity and independence. Nevertheless, I am well aware that people close to the Kremlin call Georgia and [President] Eduard Shevardnadze the most anti-Russian regime in the world," Felgenhauer said. The stated goal of the U.S. deployment is to train and equip Georgia's weak military for antiterrorism operations in the lawless Pankisi Gorge. The mountainous area bordering Chechnya is not controlled by the government in Tbilisi. Washington claims that Islamic militants affiliated with the Al-Qaeda terrorism network may have found refuge there following the start of the U.S. military campaign in Afghanistan. But with Georgian officials ruling out military action in Pankisi in the near future, many observers believe that the Americans are simply trying to prop up Shevardnadze and even gain a foothold in the region. The administration of U.S. President George W. Bush has begun to provide military aid to Armenia and Azerbaijan as well, as part of its war against terrorism. Moscow cannot fail to take notice of that. Shakariants of ACNIS said Moscow's close relationship with Armenia, especially its military component, will continue to be the bedrock of Russian policy on the Caucasus. Felgenhauer agreed, saying recent shifts have not translated into major changes in Moscow's Caucasus strategy. "There have been no big changes there, and [the strengthening of Russian-Armenian military ties] is a kind of reaffirmation of our previous, traditional policy on the Transcaucasus," Felgenhauer said. ****** #9 Christian Science Monitor June 7, 2002 Russian ballet dances from coast to coast By Gloria Goodale | Arts and culture correspondent of The Christian Science Monitor LOS ANGELES – The Russians are coming. Next week, dance lovers on both coasts will be able to sample the yin and the yang of Russian dance. While Washington plays host to the well-known Bolshoi Ballet, the passionately athletic embodiment of everything that the West has come to expect from that country's rich dance traditions, Los Angeles will be entertaining the company that Muscovites know as "the other ballet company in town," the Moscow Stanislavsky Ballet. This lesser-known company was created in 1941 when Konstantin Stanislavsky, the famous Russian acting teacher, merged his music theater with another one run by a Stanislavsky disciple. This background in theater is what has given the company its distinctive profile. "The art of dancing is what is in between the lines," says Dmitry Bryantsev, artistic director of the Moscow Ballet. "This is not written, it must be danced and felt in the whole body." In Shakespeare's "Hamlet," "You cannot dance 'To be or not to be.' But you can dance the state of his soul when he says those words," he says. "It's what Stanislavsky would call acting." That, he adds, is the connection between Stanislavsky and his company today. "When ballet is just illustration, it's not interesting. We do not want to merely illustrate the story." In 1998, New York Times dance critic Anna Kisselgoff called the Moscow Stanislavsky Ballet, then touring the US, "a cozy foil to the more spectacular Bolshoi. Its dancers ... communicate on a direct, human level." This is most evident in the troupe's signature work, a reinterpretation of the ballet classic "Swan Lake," created by choreographer Vladimir Burmeister in 1953. This version returns to the original score by Tchaikovsky and details Princess Odette's bewitchment into a swan and her return from that state. The story line makes more sense psychologically and is easier for the dancers to perform, says artistic director Mr. Bryantsev, who is also the company's choreographer. This interpretation is at odds with the one performed by most classical companies, including the Bolshoi. But Bryantsev is concerned more about the future of ballet and its appeal to younger audiences than with tradition. "Ballet technique is only a means for expressing an idea," he says. "There is no reason for the idea to be unclear." His task, he says, "is to make classic ballet exciting and accessible to the young, and not be boring." Beyond that, Bryantsev says, the company has its roots in the technique that is widely known as "Method acting," but the influence of the well-traveled Russian acting teacher stretches across the globe. "Everyone sees themselves as an actor or a performer now," Bryantsev says. "Stanislavsky was just studying people and showing them how to re-create themselves. Everyone is so aware of this state of self-consciousness ... that it is no longer just the theater. Stanislavsky influenced the entire world." ****** #10 www.thenation.com June 4, 2002 Let's Finish the Job By Matt Bivens When Presidents George Bush and Vladimir Putin met at the ranch in Texas, they declared that keeping weapons of mass destruction out of terrorist hands would be "our highest priority." That priority seemed to have lost its edge, though, by the recent summit in Moscow. Bush and Putin agreed to collectively take about 7,000 nuclear warheads off of ballistic missiles. That still leaves Russia and America with up to 4,400 nuclear missiles aimed at each other, many hundreds on high-alert status. Should early-warning systems report an incoming rocket, the American government allows itself twenty-two minutes to decide whether to order a return strike. The Russian government allows itself just six minutes. (Check out "Back from the Brink," a campaign to remove nuclear weapons from hairtrigger status, for a breakdown of the decision-to-launch timeline. Note that the Russians only allow six minutes to act because US rockets come in so rapidly.) But whatever else one can say about keeping thousands of nuclear weapons on ballistic missiles, at least they remain inaccessible to terrorists. The same cannot be said of nuclear weapons removed and put into stockpile storage or kept around for portable battlefield use-so-called tactical nukes. The Administration congratulated itself after the summit on agreeing with the Russians to reduce existing missile-mounted nukes to about 2,200 on each side. But that's still enough hairtrigger muscle to erase America. And shockingly, this treaty says nothing of an additional 23,000 non-missile-based nukes-17,000 in Russia and 6,000 here. (In fact, it only says it may add to those stocks by storing some of the nukes it removes from missiles.) These thousands of unconsidered nukes could be politely described as "of proliferation concern," which means they could be stolen-in fact, there have been compelling assertions they've already been stolen-and someday floated up the Potomac River or into the Marina del Rey. Given that our highest priority is stalemating nuclear-hungry terrorists, why this odd silence on the thousands of the most portable, and hence most frightening, nuclear weapons? The distinction between missile and nonmissile nukes has always been an artificial construct: We needed a way to start counting and reducing weapons during the secretive and mistrustful cold war, and it was expedient to count missiles, whose existence can be verified by satellites. One side-benefit of this is that, thanks to reporting requirements in the international architecture of treaties, each side has published information about the "strategic" (or missile-based) weapons. There has never been any such requirement to report on tactical weapons. Therefore the alarming truth is, no one knows how many nuclear weapons Russia and America actually possess. They could have cut to the chase in Moscow and put our collective arsenals on the table. That would probably come to 33,500 total nuclear weapons-11,000 on the American side and in the ballpark of about 22,500 on the Russian, according to the Washington-based Arms Control Association. (For perspective, China, the third major nuclear power, has about 400 nuclear weapons, 250 of them on missiles, according to the Center for Defense Information.) And we could start arguing for deep cuts, or at least more transparency about who has what, and how well it's guarded. After all, the proliferation of nuclear weapons-and particularly of tactical nukes-is emphatically not in US military interest. We first pursued battlefield nukes in the cold war and spread hundreds of them across Western Europe, as a way of deterring a hypothetical invasion by the enormous Red Army. Today, however, we are the ones with the overwhelming conventional military superiority, and we don't need battlefields gummed up with radiation; while the Russians, by contrast, have an ever-weaker conventional military, and so have embraced tactical nukes as critical to their national defense. Modern Russian military strategy even has a word for using a tactical nuclear weapon that belongs in the Evil Euphemism Hall of Fame: "de-escalation." This refers to detonating a small nuclear explosion amid a conflict that seems to be spiraling out of control, and by so doing demonstrating you have the cojones to do it again. The theory is that this will give pause to even a militarily superior enemy. (Much the same "de-escalation" theory could be applied by, say, Pakistan, should its troops find themselves in danger of being overrun by a far larger Indian military.) A better approach to de-escalating would be to disarm. The United States still maintains about 180 tactical nukes in seven European nations, according to Alistair Millar, an arms control expert with the Fourth Freedom Forum, which works for nonviolent conflict resolution. Writing in Arms Control Today, Millar argues these 180-odd weapons serve no real military purpose, and suggests that an offer to withdraw them-or at least, to disclose their exact number and location-could jump-start negotiations with the Russians about accounting for and reducing their own arsenal. "If Washington is serious about working with the Russians to prevent nuclear terrorism, it could put the issue of reducing tactical nuclear arsenals back on the table at the Moscow summit," Millar writes. Doing this would continue the work of the first President Bush. When the Soviet Union disintegrated eleven years ago, Washington was rightly concerned about portable and terrorist-friendly tactical nukes. President George Bush announced a unilateral reduction of US tactical nuclear arsenals, and invited the Russians to reciprocate. Mikhail Gorbachev and then Boris Yeltsin both pledged to do so, and in 1997 Presidents Bill Clinton and Yeltsin reaffirmed that commitment to negotiate on tactical nukes. Yet suddenly, in the wake of September 11, this is no longer important? Madmen seeking weapons of mass destruction threaten the existence of the United States. The first President Bush got a good start on this, but didn't go far enough. Now it's time for his son to go back in and finish the job. One of the best ways to wage the war on terrorism would be to put the US tactical nuclear arsenal on the table-and invite the Russians to follow suit. ******* #11 The Russia Journal May 31-June 6, 2002 Moving to a new U.S. Russia-Eurasia policy By Gordon M. Hahn Dr. Gordon M. Hahn is The Russia Journal’s political analyst and a visiting research fellow at the Hoover Institution, Stanford University. To win the war against terrorism and incorporate Russia and Eurasia into the West’s zone of peace and prosperity, the United States needs a revolution in its foreign-policy thinking. It needs to turn the "heartland thesis" inside out. From heartland thesis In 1919, Sir Halford MacKinder outlined a strategy for expanding British imperial power and containing Russia’s reach. It was influenced by imperial competition between the great sea power and Eurasia’s great land power of the 19th century. The "seaman," England, and the "landman," Russia – as MacKinder called them – probed and warred to expand their empires along Eurasia’s periphery from Afghanistan to the Crimea. MacKinder concluded that to expand British power it was imperative to control the "world island," the Eurasian super-continent, and its heartland, Russia. This preceded the West’s policy of containing communism after World War II. As the Soviet Union took hold of Eastern Europe after Nazism’s demise, George Kennan, a U.S. Embassy official in Moscow, proposed a second policy of containment: a system of alliances along the Soviet perimeter from Asia to Europe that would deter communist expansion until the system reformed or failed. Containment II preserved a cold peace in a potentially very hot Cold War. Containment III Containment was abandoned briefly after the Cold War. Former Presidents George Bush Sr. and Bill Clinton tried to build bridges, however lackadaisically and ineffectively, to a partially democratizing heartland. Then, for reasons of the NATO bureaucracy’s "organizational maintenance" and domestic American politics influenced by electoral support from the U.S. Polish community and defense industry, Clinton moved to expand NATO, alienating Russia’s elite. Soon, noises emerged from Republicans in the U.S. Congress that America’s post-Soviet or Eurasia policy was too focused on the heartland – Russia. Ukraine, despite a climate even less democratic than that of Russia, suddenly became the darling of American strategists. Kiev moved up to third place on the list of U.S. foreign-aid recipients. U.S. economic assistance to, and NATO cooperation with, other former Soviet republics were boosted as well. Containment III was emerging by default. The August 1998 Russian financial collapse and the bombing of Belgrade alienated the Russian population and seemed to spell the end of the Russian-American partnership. New-old containment The current U.S. administration came into office unsure of its Russia policy. It rejected Clinton’s "permissive engagement" policy and appeared ready to deepen accidental containment. The new plan was to ignore Russia in practice, while at the same time declaring that it was a threat. This confused policy suggested that the incidental, almost accidental containment III would be ratcheted up, also by default. The Republican administration would not abandon NATO expansion, and early signs of repealing Clinton’s universal humanitarian interventionism evolved into policies of retaining the U.S. presence in Bosnia and Kosovo. But the events of Sept. 11 undercut Bush’s neo-isolationism and the inherited containment III. Twisting MacKinder Containment I and, most certainly, II were suitable strategies for their times. Containment III was not. Sept. 11 could do what Western policymakers could not: turn the heartland thesis inside out and seek to consolidate democracy, markets, and stability in Eurasia from Russia out. The United States should use its still-emerging partnership with Russia to advance Western security interests and expand democratic and market values to other post-Soviet states and beyond. To do this, the West will have to reconcile itself to an enhancement of Russian power on the "world island." The West should not be a priori adverse to this. It has repeatedly asserted to the Russians that the post-Cold War world is a post-zero-sum game. Both Western and Russian influence can be enhanced in regions like Central Asia and the Transcaucasus simultaneously and even jointly, rather than in parallel and competition. In the new Afghan war against al Qaida and the Taliban, the risks of parallel efforts turning into competitive ones have become clear. U.S. efforts centered on the Pashtuns in the south, while Russia stepped up its backing of the Northern Alliance dominated by Tajiks, Uzbeks and Khazaris. Suspicions among policymakers on both sides grew over the appointment of the interim government, support for opposing factions in the government and building a new multi-ethnic Afghan military. Stability and cooperation in Central Asia and the Transcaucasus are crucial. Any competition between the West and Russia can only destabilize these weak states. Growing instability in Kyrgyzstan, Kazakstan, Armenia, Azerbaijan and Georgia since the United States assumed more of a presence in the region is no accident. Russia and the West, therefore, must work jointly towards democracy, prosperity, and stability in the C.I.S. and along its rim in places like Afghanistan, Pakistan, Iran, Iraq and elsewhere. Inside out What specifically can Russia and the West do together? A good start has been made in building an infrastructure for cooperation on security issues relevant to the region. This includes the joint Russian-American working group on Afghanistan, to be upgraded to one on international terrorism; working groups on Iran and on proliferation of nuclear and rocket technology proposed by Russian Foreign Minister Igor Ivanov here at Stanford on May 6 and the new Russia-NATO Council of 20. Working groups on interethnic conflict and U.S.-Russian economic cooperation in the region are in order as well. In addition, the United States could seek funding for a joint U.S.-Russian-C.I.S. institute for the study of democratization and market development in the C.I.S. Militarily, Russia and NATO should prepare some limited joint military operations for when and where they may be called into the war against terrorism. Cooperation between our intelligence services must be maintained and expanded, where possible. Economically, the United States and Russia should cooperate as well as compete for markets and pipelines in the C.I.S. One way to ease President Vladimir Putin’s shift westward would be to develop joint projects in the cleansed regions of the "axis of evil." Afghanistan would be a good place to start by arranging a joint American-Russian-Central Asian consortium to build gas- and oilexport pipelines to Karachi. This might also demonstrate to Iran the benefits of a potential regime transformation. To wean Russia from its Cold War-era economic partners like Iraq, the United States should guarantee that any new Iraqi government honor the Ba’athist regime’s contracts with, and debts to, Moscow. In the event that this becomes impossible after Saddam, the West could provide compensation for any lost contracts or debt payments.. Only this kind of cooperation can ensure a U.S. victory in the twilight struggles against international terrorism and for global liberty and security. ****** #12 US Federal Farm Subsidies May Impact Russian, World Agricultural Markets Izvestiya 31 May 2002 [translation for personal use only] Article by Igor Popov: "Ongoing Wheat War" The world market in agricultural produce is beginning to live by new rules, set by the United States. U.S. President George Bush signed the law on agricultural investments, within the scope of which American farmers will get an additional $190 billion from the government over the next 8 years. Competitors are talking about a "catastrophe for farmers throughout the world," and Russian importers are preparing to purchase an entire series of foodstuffs at reduced prices. This does not make our producers of meat products happy, but their losses may be compensated by purchases of cheaper fodder. It would seem that, by its new farm law, the USA has put an end to the extended discussion by world agricultural producers about a total rejection of subsidies to agriculture. Now the developed countries will spare no funds for their farmers, trying to retain their presence on the market. The USA is subsidizing primarily plant-growing--the production of grain and oil seed crops. Two-thirds of the funds will go to the 10 percent of the largest farms in the United States (18 percent of the farms in the USA provide almost 90 percent of the agricultural produce). The first payments will begin in October of this year. Thus, as of the Fall, subsidies to agriculture in the USA will increase by 80 percent. This, of course, has evoked a storm of protest on the market. Competitors believe that the Americans are expanding their influence on the market at the expense of others. The subsidies will allow them to sell the products at cost. "This means that the competitiveness of products of other exporters, including exporters of Russian grain, will sharply decline," believes Yelena Tyurina, general director of the Agrarian Marketing Institute. Today, the USA accounts for 25 percent of the world trade in wheat and 57 percent of soy. But the subsidies will affect not only the grain market. Cheap fodder will have an impact on poultry and pork prices. We know that it is specifically in these products that the USA holds a significant share on the Russian market. Then again, the head of the Russian representation of the USA Poultry and Egg Export Council, Albert Davleyev, assures us that subsidies to fodder producers will have no effect on prices of American poultry products. "Prices on meat are determined by other factors," says Aleksandr Stoklitskiy, chief of the procurement department of the "Prodovolstvennaya Programma" ["Food Program"] Company, which imports meat products. "However, I am not ruling out the possibility that cheap fodder may affect the cost of American poultry." Today, American poultry meat and pork is being edged out of the Russian market by cheaper Brazilian products. Importers say that, perhaps, they will soon have to change suppliers and once again return to the Americans. The situation may also change on the Russian fodder market. Traditionally, Russia has purchased corn and soy in the USA. But now, a large part of the fodder is supplied to the Russian market by Hungary. In the opinion of the director of the Sovekon Center, Andrey Sizov, Hungary will be able to withstand the price onslaught of the American competitors, and has capacities to deal a retaliatory price blow. "If we do not take measures in time, we may forget about the rebirth of agriculture in Russia," believes Yuriy Kostyuk, head of the agricultural administration of the Rusagro Company. "The first thing we must do is to protect our domestic market against the influx of cheap import." ****** #13 Nezavisimaya Gazeta June 4, 2002 SECURITY COUNCIL AMENDING MILITARY REFORM PLANS AGAIN The General Staff says the military is in "critical" condition Author: Salavat Suleimanov [from WPS Monitoring Agency, www.wps.ru/e_index.html] THE SECURITY COUNCIL HAS DISCUSSED DEVELOPMENT OF THE ARMED FORCES TO 2010, WITH PRESIDENT PUTIN ALSO CONTRIBUTING HIS OPINION. ON THE ISSUE OF MILITARY DEVELOPMENT, THE GENERAL STAFF IS CURRENTLY TAKING THE OPPOSITE STANDPOINT FROM THAT OF THE SECURITY COUNCIL. Battles among the top brass over the future of the Armed Forces All Russia's military organizations, and particularly the Russian Armed Forces, are in a "critical" condition after eight years of "incorrect" and two years of "correct" reforms, according to Chief of the General Staff Anatoly Kvashnin. Kvashnin made the statement on May 30, on the eve of the Security Council meeting that discussed a draft document entitled "Fundamentals of the State Policy of the Russian Federation on Military Development to 2010". The decision itself to do some additional work on these fundamentals is unprecedented for documents of this magnitude. Deputy Secretary of the Security Council Vladimir Potapov confirmed what analysts had already said: military development plans have become outdated even before their implementation has been completed. According to Potapov, all current plans for developing Russia's military organization focus on the period to 2005. "Given the changes taking place in Russia and the rest of the world, we need to amend the plans and agree on the major directions for the period to 2010," Potapov said. It isn't hard to guess that several solutions to the problem were proposed at the Security Council meeting. The president expressed his opinion - a definite opinion, for a change - on one of the issues. This concerns old debates between the Defense Ministry and other security structures. The Defense Ministry is annoyed about the armed formations of other security structures escaping extensive cuts, and sometimes even expanding, while the Army and Navy are endlessly cut and starved of funding. The debates became even more fierce in the light of the plans to cut army troop strength by a further 200-250,000 over the next two years. President Putin sided with the Defense Ministry, and promised "a steady reduction" of the military component of the other eleven ministries and departments concerned. Cuts in the army will continue all the same, and Potapov says that its numerical strength will be brought down to 850,000 - 1,000,000 by 2010. The General Staff cites different figures, speaking of an even 1,000,000, the troop strength initially specified for the Armed Forces by 2005. Tellingly, Defense Minister Sergei Ivanov was absent from the meeting. He is always absent when matters are discussed on which the nation's political leaders disagree with the military. The military is particularly concerned about the unprecedented high number of resignations from the officer corps, on top of planned troop strength cuts to the Army and Navy. More often than not, it is young officers who decide that enough is enough. Senior officers say that "we no longer have battalion commanders between here and the Urals, or regiment commanders beyond the Urals." Senior officers attribute this situation to social insecurity. Kvashnin claims that salaries should be "more than doubled". It seems, however, that the president is of a different opinion. Opening the meeting, he reminded those present of the plans to double salaries of officers from July 1, 2002. He must have been misinformed, because officers' salaries will really rise only from January 1, 2003, at best. In an attempt to persuade their political masters to continue raising the salaries of officers, Russian generals are using a new argument. They attribute the growing crime rate in the Armed Forces to exacerbation of the social problems. Kvashnin mentioned theft and embezzlement in the Armed Forces in his May 30 statement. Kvashnin's thesis is supported by the Military Prosecutor General's Office, which is investigating thefts and other crimes committed by senior officers. One investigation involves the theft of over 1 million rubles meant for food purchases. Charges have been issued against Major General Mikhailov, chief of the food supply service of the Siberian Internal Troops District. Similar charges were issued against Mikhailov's counterpart at the Moscow Military District. Some senior officers have already been convicted. More than 28,000 infractions have been uncovered in the security structures in 2002 alone, and more than 700 criminal proceedings instigated. In utter defiance of the law, officers and warrant officers become involved in commercial activities. According to the data compiled by the Military Prosecutor General's Office, one-fifth of the crimes are committed under the influence of alcohol; one-eighth of the crimes are committed by groups. It's almost impossible to assess the true crime rate in the Army and Navy at present. The most frequent crime involves cannibalizing military hardware for spare parts or valuable materials and selling them. Light weapons, ammunition, and explosives are stolen and end up in the criminal underworld. Law enforcement agencies are searching for more than 20,000 weapons missing from military units. On the issue of military development, the General Staff is currently taking the opposite standpoint from that of the Security Council (i.e. Kvashnin versus Vladimir Rushailo). Defense Minister Sergei Ivanov is somewhere on the sidelines. He has not attended a single Security Council meeting where the structure of the nation's armed formations was discussed. It certainly seems as though it is time to put an end to these games. After all, they do not facilitate improving the situation of the Armed Forces. *******