March 2, 2001   

This Date's Issues:   5127 

Johnson's Russia List
#5127
2 March 2001
davidjohnson@erols.com

[Note from David Johnson:
1. AFP: Moscow attacks US rights record and "American propaganda"
2. Moscow Times: Boris Kagarlitsky, Something a Little Like Pluralism.
3. Matt Petersen: Gorbachev birthday site www.mikhailgorbachev.org
4. strana.ru: Gorbachev blazes Russia's trail to the market.
5. BBC Monitoring: Vietnamese daily interviews Russian president on relations with Hanoi. (Excerpt re "the key achievements of Russia in recent times")
6. Reuters: Kremlin pleased with impact of Putin's Asian swing.
7. The Wall Street Journal Europe: Paul Klebnikov, The Gang That Couldn't Do Capitalism Straight.
8. Moskovsky Komsomolets: Alexander Minkin, THE PRESIDENT'S MISTAKE. Gleb Pavlovsky, presidential adviser and professional mud-slinger.
9. Laura Belin: question on trust in tv.
10. Jonas Bernstein: re 5126-Novaya Gazeta/Abramovich and ORT.
11. Washington Post: Peter Baker, An Unlikely Savior on the Tundra. A Russian Tycoon Adopts Abandoned Arctic Region, but Why? (re Roman Abramovich]

*******

#1
Moscow attacks US rights record and "American propaganda"

MOSCOW, March 2 (AFP) -
Moscow has attacked Washington's human rights record and dismissed as
"American propaganda" a US State Department rights report which was widely
critical of Russia's rights record.

"The report contains material which has clearly been invented concerning
freedom of the press and religion, actions of the security forces and the
situation in the republic of Chechnya," Russia's foreign ministry said in a
statement issued Thursday.

"The authors (of the report) did not even attempt to back up their
'revelations'," the statement continued.

The ministry therefore dismissed the report as "American propaganda" and the
"usual unloading of bile" against Russia.

"We cannot tolerate the pious tone or the unfounded accusations which come
from a state where the cases of arbitrary policing, violence, antisemitism
and racism, ignorance of fundamental rights and constitutional liberties are
nothing unusual and remain unpunished," the statement continued.

"The authors of this report are clearly suffering from blurred vision: They
present an almost unsullied image of the situation in Estonia and Latvia with
scarcely a word on the discrimination against the Russian-speaking
population" in the former Soviet republics, Moscow said.

The statement called for "more objectivity" in future State Department
reports under the new administration of George W. Bush.

"Nobody in Russia fears declaring in a loud voice that there are still
problems. That is unavoidable in the context of fundamental democratic and
political reforms," the ministry statement said.

On Tuesday Russia's human rights ombudsman Oleg Mironov had admitted that the
human rights situation in Russia remains "difficult."

Commenting on the critical US report, Mironov told AFP: "US concern is
justified. Human rights are still being violated in Russia."

The State Department annual report, released Monday, said Moscow's record on
press freedom had "worsened" and that "serious problems" remained with
Russia's overall human rights record, especially in Chechnya.

Mironov said he believed fact-finding visits to Chechnya by outside observers
"have a positive effect because they oblige the Russian authorities to act
with more respect for the law."

The US report cited recent cases of government pressure on Russia's
independent media by such methods as initiating tax probes and criminal
investigations of companies like Media-MOST, owned by tycoon Vladimir
Gusinsky.

The State Department annual report on global human rights also highlighted
problems of press freedom in Russia and the treatment of prisoners.

"Although the (Russian) government generally respected the human rights of
its citizens in many areas, serious problems remain, including the
independence and freedom of the media and the conditions of pre-trial
detention and torture of prisoners," the department said.

*******

#2
Moscow Times
March 2, 2001
Something a Little Like Pluralism
By Boris Kagarlitsky  
 
It would seem that the spring thaw in Russian politics is already upon us.
Both the Communists and Yabloko have lately announced a "stiffening" of
their opposition to the government. Yabloko leader Grigory Yavlinsky even
declared that his party was now a "systemic opposition."

Yabloko politicians believe that the government's economic policy is
correct, but that the people implementing it are wrong. If only matters
were handed over to some liberal intellectuals, they say, instead of these
dense KGB types and Leningrad provincials, then everything would be fine -
the reforms would proceed and democracy would be saved.

So the liberal intelligentsia has been eagerly anticipating some major
personnel changes coming in the administration and the government, and are
trying to jockey themselves into favorable positions. The media has been
full of speculation about who is coming and who is going, although most
likely it is all just the typical wishful thinking of Russian intellectuals.

The indecisiveness of the government's economic policy in 2000 had nothing
to do with any personnel mistakes by the president. Upon taking hold of the
reins of power, Economic Development and Trade Minister German Gref's team
found itself faced with a choice: either proceed with its program despite
the fact that practically the whole country neither understands nor
supports it, or compromise its principles in the face of this reality. If
the former, the state faces serious opposition from the general population,
which wants neither "housing reform" nor land sales nor tax breaks for the
rich. If the latter, the government faces liberal criticism that it is
"inconsistent."

Strange as it may seem, this is not an easy choice for the administration.
After all, they see the liberals as "their own people," and are persuaded
by their arguments and stung by their criticism. It is a domestic dispute
within a single family.

The general populace, on the other hand, is seen as foreign and just an
obstacle to the proper management of the country. Moreover, the threat it
presents is less clear, and, as long as the people continue to manifest
their seemingly endless patience, it is hard to say how that threat might
emerge or what its dimensions might be.

Obviously, changing personnel in the government will just place new faces
in front of the same dilemma. That is why many politicians secretly see the
possibility of high office not as a way of making their careers, but as a
way of ending them. Being in the "opposition" has become an alibi for them,
allowing them to spout liberal slogans and support social ideals that are
acceptable to everyone in the abstract.

But this situation cannot last forever, and the time of reckoning is fast
approaching. In order to advance its programs, the government will soon be
forced once again to "break" the country. And the liberals understand that
they will need the KGB types for this.

When this happens, the present "opposition" will fade from the scene. But
what will the new opposition be like? A consistent struggle for democracy
must be based on a consistent defense of the people's fundamental social
rights. But it is certainly very difficult to defend the masses when they
simply refuse to defend themselves.

The traditional helplessness of Russia's left-liberals is actually a result
of our famous Russian patience.

If there is a bright side to Putinism, it is that it has led to a split
within the establishment, and, therefore, to something a little like
pluralism.

I would say that Russia has never been as close to democracy as it has been
for the last 18 months. Faced with its difficulties and dilemmas, the
Kremlin has been seeking a way of consolidating the elite. The scary part
will only come when it figures out how to do this.

Boris Kagarlitsky is a Moscow-based sociologist.

******
 
#3
Date: Thu, 01 Mar 2001
From: mpetersen@globalgreen.org (Matt Petersen)
Subject: gorbachev birthday

David,
I receive your weekly Russia updates -- they're so informative.

I wanted you to know that Global Green USA, in partnership with the
Gorbachev Foundation and Tree Media Group, facilitated a creation of
Gorbachev birthday tribute website.  It will be fully live on Friday morning
(the video tributes and film aspects are not functional as of this moment).

We'd appreciate it if you passed along the address Friday morning or late
this evening to any of those you think will be interested, as it will not be
fully live until then.  The address is www.mikhailgorbachev.org.  Visitors
can send birthday greetings that will be forwarded to Pavel Palazchenko and
the Gorbachev Foundation staff to present to the President.

Thanks for putting his message out there.

Best,
Matt
--
Matt Petersen
Executive Director
Global Green USA
the American affiliate of Green Cross International
Mikhail S. Gorbachev, President
(310)394-7700 - fax (310)394-7750 - www.globalgreen.org

*******

#4
strana.ru
March 1, 2001
Gorbachev blazes Russia's trail to the market
By Alexander Roubtsov, Strana.Ru observer
 
April 1985 saw the CPSU Central Committee headed by Mikhail Gorbachev make a
choice of principle favoring economic motivation levers over the
authoritarian approach. This foreshadowed the necessity of converting the
economy to the market mechanisms. Moreover, the influence, which the party
organizations still had on the economy in the first perestroika years,
gradually petered out around the year 1988.

To quote Nikolai Ryzhkov, who was the USSR Prime Minister during the
perestroika years, "The Government was becoming independent and no longer had
to coordinate every matter with the Politburo the way it had been before."

The break-up of hitherto seemingly unshakable economic relations started at
the juncture of 1987 and 1988. The legislature approved the laws on the
enterprise and on cooperative societies. The former officially granted
enterprises economic independence, converting them to cost-accounting
operation. The directive plans were reduced to the state order, for which
there were financial allocations. The law on the enterprise weakened the
state control over producers' costs and over the transfer of money from the
cashless to cash turnover.

The cooperation act made it possible for Soviet people to produce goods and
services in conditions of cost accounting and sell them at free market
prices. Under the law the cooperative sector could hire some of the
capacities of the state sector not subject to state-sponsored contracts, buy
raw materials from state enterprises at commercial prices, produce consumer
goods and services and sell them to the population at free market prices.
Both laws extended the sphere of production outside of state control,
something that had seemed unthinkable under the total domination of the State
Planning Committee.

The new system paved the way for free enterprise and entrepreneurship but it
was precisely for that reason that it did not fit into the "unshakable" basis
of the political system. From the very start the authorities were intent on
showing the non-state forms of economic management and entrepreneurship their
modest place. For instance, a decision to encourage individuals to produce
goods and services was made almost simultaneously with a decision to combat
what was called unearned income, a decision which struck a heavy blow at
private manufacturers and small businessmen at the very outset of their
activity.

The campaign against alcoholism severely undermined the economy and on top of
that impeded the development of the wine industry. 200,000 hectares of
vineyards were cut down. In 1986 the state lost an estimated two billion
dollars in unsold beverages and 1.2 billion in 1987. Another 1.13 billion was
lost because of low wine production and low grape harvests.

By 1987 legal production of alcoholic beverages had fallen by more than a
half, while half a million people were convicted for bootlegging. In spite of
all the repressive measures, 180 million decaliters of homebrew were
distilled precisely in that year. This was almost six liters per capita,
including pregnant women and children.

Moreover, what concerned that anti-alcohol campaign, the people dismally
joked that it had accelerated the collapse of socialism: on the one hand, it
caused a big dent in the budget, while on the other hand, the people awoke
from their drunken way of life, and this compelled them to think about their
lifestyle. Like all countries that went through Prohibition, Russia got its
Mafia, drug addiction and the idea of socially-oriented capitalism.

The lowering standard of life connected with economic hardships,
dissatisfaction with the absence of efficient economic decisions and reforms
- all this generated mounting social tension in society. In the given
circumstances, only swift and efficient economic decisions, cardinal changes
in the status and rights of republics and regions, on the one hand, and the
center, on the other hand, could still save the country and its economy from
collapsing.

The failure of intentions to improve the economic situation, primarily by
achieving financial stabilization, compelled the authorities to resort to
even more stringent administrative-power methods in order to achieve this
goal. The tax policy, in particular, taxes on sale and purchase was geared
towards this objective. There was a short-term exchange of bank notes of
large denominations for new bank notes.

And finally, prices were jacked up whereas the population's deposits in
savings banks were substantially devalued in spite of indexing. The result
was the exact opposite of what was expected. The inflation spiral started
unwinding at a terrific pace. Inflationary expectations began wrecking the
already weak commodity markets.

As a result, it became necessary to introduce additional, local initiatives
for restricting free sale of products and rationing consumption. And this
served to intensify even more regional autarchy and national centrifugal
tendencies.

*******

#5
Excerpt
BBC Monitoring
Vietnamese daily interviews Russian president on relations with Hanoi
Source: Nhan Dan web site, Hanoi, in Vietnamese 27 Feb 01

[Nhan Dan] Mr President, could you please tell us about the key achievements
of Russia in recent times?

[Putin] In the late 1980s, Russia began its reforms with a view to
democratizing the state and building an effective market economy. Also, right
at that time in your country, similar events were taking place.

The selection of orientations to reform Russia is absolutely right, but it is
a pity that the changes in the social system and the social structure
occurred, resulting in the serious weakening of our state system. The process
of emancipating society from excessive sponsorship of the state went too far
to the extent that the state sharply decreased its presence, even in areas
where state control was of vital importance to the country itself, for
example, in the social field.

Ordinary people have quickly recognized all the shortcomings of the
situation. The requirements of society to stop crime, fight corruption, and
restore social assistance to the poorest have been voiced vehemently. I
believe that these are the issues we now have to settle. Our fundamental
achievements recorded in recent times are closely related to these issues. Of
course, many social and economic issues cannot be solved overnight, like a
Vietnamese saying "slow but firm".

Luckily in Russia today, the state is being consolidated, and on many issues
the model of Vietnam's reforms is mentioned. You have precious experience and
we intend to adopt them.

In the political field, we have been successful in gaining the unity and
agreement of basic political forces in society in order to restore a nation
that is capable of being run normally. I believe this is a foundation of
success. Anyway, throughout the 1990s, this separation prevented Russia from
developing. Of course, there are some who consider what is happening in
Russia as not choosing between chaos and law and order, seeing this in the
framework of opposing "democracy-authoritarianism". They criticize us for
having "authoritarian tendencies". I do not agree with this criticism, but I
accept it calmly. Freedom to debate and exchange ideas is one of the specific
characteristics of a real democracy.

The relations between Russian leaders and those of various regions in the
country have also changed. We are to a certain extent going back to what we
left behind at the time. And we should not have done that. The central
authority has reassumed responsibility to work out policies and strategies to
develop the country both economically and in domestic and foreign policies.

Any country, even a great country like Russia, will be impossible to develop
dynamically if it stifles the creative spirit in localities. Put in another
way, a dinosaur only turns its head around when its tail is bitten. So, we
cannot talk about the return of the centrally planned economy of the former
Soviet Union. Here I only mention the establishment of an environment of
uniform laws in Russia and the building of an effective justice system. In
conclusion, this can be called a recovery of the capability of running the
country. Russia's ability to draw investments depends directly on this issue.

Last year was a year of many successes based on the view of strengthening
relations between the business sector and the administrative structure. We
are building uniform conditions to develop all kinds of business, including
small and medium-sized businesses. At the same time, we have solved the
problem concerning the indifference of big capitalists and their separation
from the administration. I think the influence of financiers on the process
of carrying out political decisions is intolerable.

At present, we are compiling legal documents to limit the capability of
officials from interfering in business and obstructing its development in
some way or another. I hope our partners from Vietnam who have trade benefits
in Russia will feel this soon.

I repeat that the most important factor that has decided most of our
successes in our first steps is associated with social support. The Russian
people really agree with basic directions in our policies. I can even say
that the Russian people are defining the concrete targets and we take action
in that direction.

[Nhan Dan] Thank you.

*******

#6
Kremlin pleased with impact of Putin's Asian swing
By Dmitry Zhdannikov
 
HANOI, March 2 (Reuters) - Russian President Vladimir Putin wrapped up a
two-country Asian tour on Friday that Kremlin officials said had helped put
Russia back on the map in the region.

Putin visited South Korea, Moscow's former Cold War enemy, and Vietnam, one
of its staunchest allies in the Soviet era.

The aim of the trip was to boost Russia's profile in a part of the world
Moscow had largely neglected since the collapse of the Soviet Union, and
its trade and economic ties.

"Putin and our delegation departed with excellent feelings," a Kremlin
official told Reuters just before the president headed back to Moscow on
Friday afternoon after two days in Hanoi.

"The impression is very positive. We have made a considerable progress in
Vietnam and South Korea."

Putin started his tour in Seoul on Monday, carrying Moscow's promise of
support for South Korean President Kim Dae-jung's Nobel Peace Prize-winning
efforts to thaw ties with the North.

He also pledged to forge deeper economic ties, including a plan to build a
railroad link between Russia's Trans-Siberian Railroad and South Korea
through the territory of North Korea that could help bring peace to the
divided states.

In his visit to Vietnam, which started on Wednesday, Putin and his
counterpart Tran Duc Luong declared a new strategic partnership covering
military, trade and economic cooperation and Russia reported progress on
resolving Hanoi's Soviet-era debt.

"An interesting thing about this tour is that it was rather economic," the
Kremlin official said. "We spent less time on politics."

Putin, the first Kremlin chief ever to visit Vietnam despite close Cold War
ties between Moscow and Hanoi, told Communist Party Chief Le Kha Phieu he
was pleased with his reception.

He was warmly greeted by the Soviet-trained leadership of what is one of
the world's last communist states and was given a rousing welcome when he
spoke to thousands of Vietnamese students educated in the former Soviet
Union.

OIL, GAS AND ARMS SALESMAN

Putin, who has been fighting since he became president a year ago to build
an image as a pragmatic leader, discussed several energy projects with
South Korea and Vietnam and also pitched weapons to Hanoi.

He praised the Russian-Vietnamese joint venture Vietsovpetro, which taps
most of Vietnam's crude, as a rare success story in Russian oil projects
abroad.

On Tuesday, South Korea and Russia agreed to boost cooperation on
development of a major natural gas field in Siberia and oil fields on the
remote east Russian island of Sakhalin.

South Korea has said it will take part in a huge gas pipeline project from
the field in Siberia, which requires some $11 billion in investment and is
to be developed by BP Amoco (BP.L). It is designed to ship natural gas to
China.

Seoul said last year it may buy some 10 billion cubic metres of Russian gas
annually from the pipeline.

Putin said Russia and Vietnam planned to expand cooperation on electricity
generation and confirmed a $100 million Russian state loan for a Vietnamese
hydropower plant.

Russian officials said two countries were mulling four electricity projects
and would soon start discussion on the possible construction of a nuclear
power station, Vietnam's first.

Hanoi expressed support for Putin's stance on U.S. missile defence while
the Russian president said Vietnam wanted to buy new Russian armaments.

Putin said Moscow was willing to sell advanced weapons to the Vietnamese
military, which has long been depended on Russian equipment.

Talks were expected on the strategic naval base at Cam Ranh Bay, on which
Moscow's lease expires in 2004.

But deputy head of Kremlin administration, Sergei Prikhodko, said it was
not discussed and an existing agreement signed in 1979 gave Russia the
right to use the facility without payment.

Vietnam does not object to Russia's presence at the base but wants it to
boost lease payments. Analysts say Washington and Beijing eye the facility
enviously for its strategic and commercial potential.

*******

#7
The Wall Street Journal Europe
March 2, 2001   
[for personal use only]
The Gang That Couldn't Do Capitalism Straight
By Paul Klebnikov
Mr. Klebnikov, a senior editor at Forbes, is the author of
"Godfather of the Kremlin: Boris Berezovsky and the Looting of Russia,"
published by Harcourt.

Big Biznis, Russian-style, functions according to some strange rules. If you
have a market rival who threatens you, you can simply murder him. If you want
to take over a big state-owned company, you bribe the relevant official to
give it to you. Then, instead of investing in this company and growing it,
you soak it of all the cash flow and park the money in your personal offshore
account.

Why did Russia go wrong? How did Russians get such a warped conception of
capitalism? Westerners pondering this mystery may find some answers by
looking at the people who taught Russian businessmen what it means to be a
capitalist.

One of their first and most important modern role models was Marc Rich. The
fugitive American commodities trader -- most recently of Clinton pardon fame
-- traded Soviet oil and aluminum for years. But he really hit his stride
after 1989, when the Soviet Union began falling apart and corrupt Communist
Party bosses and unscrupulous young traders from the Communist Youth League
began staking their claims to Russia's most valuable assets.

Russian officials, including former trade minister Oleg Davydov, have
asserted to me that Mr. Rich's companies set a bad example of how to set up
shell companies in obscure offshore tax havens, how to open Swiss bank
accounts, how to buy Russian commodities at the domestic price (5% or 10% of
the world market price) and resell them abroad at a huge profit. Mr. Rich's
commodity business boomed: In the early 1990s, he sold billions of dollars of
Russian oil, and thanks to his purchase of Russian aluminum, he came to
control a third of the world spot market of this metal.

The corruption of Russia's new business class stems from much more than one
person's influence, of course. The deeper problem is that the Russians have
long had a completely perverted understanding of capitalism and the West.
Indeed, news of the Marc Rich pardon was received with little surprise in
Russia. I suspect that the tycoons see this is as just a routine example of
the corruption rampant in America.

Over the past decade, whenever I asked Russian tycoons why their market was
so penetrated by organized crime, they always argued that capitalism in the
United States had been violent and lawless initially too. Many Russian
businessmen related to some fantasy image of modern America, too. In 1993,
having heard that a dozen bank presidents had been assassinated in the mob
war raging in Moscow, I asked the head of Aeroflot Bank if he was nervous
being a banker. "Why should I be?" he replied. "There is nothing unusual in
this. Bank managers get killed in the West all the time."

Such references can come from the most sophisticated people; even Anatoly
Chubais, the architect of Russian privatization. "During the formation of
capitalism in the United States, there was a phenomenal amount of killing,
bloodshed and lawlessness," Mr. Chubais pontificated to me.

The difference, obviously, is that in the U.S., gangsters and criminals
operated on the fringes of society and usually ended up in jail. In the new
Russia, they came to dominate the nation's business and politics.

Why was the democratic government of Boris Yeltsin so deeply corrupt? In
1996, I posed the question to Boris Berezovsky, a car dealer who had acquired
Russia's premier television, airline and oil companies and become the
country's most influential businessman. He also offered a familiar excuse for
the triumph of organized crime in Russia: "I, for one, know that a mass of
people in the West are corrupted," he said. "There are incessant
denunciations of high-ranking functionaries in the United States, in France .
. . Mayors of major cities are being thrown in jail."

Where did the Russian oligarchs get such twisted ideas? All of Russia's big
businessmen were members of the communist establishment and received the best
Marxist-Leninist education the Soviet Union had to offer. This upbringing
left an indelible imprint on them. Mr. Berezovsky, for instance, loves to say
that he and other oligarchs are engaged in the "primary accumulation of
capital." Marx used the term to describe the most primitive stage of
capitalism -- the way a medieval baron would loot and pillage his way to his
first fortune.

Often I tried to disabuse the biznismen of the notion America's early
capitalists were simply crooks or gangsters who had made good. Their success
was due to innovation, hard work and steady reinvestment in their businesses,
I pointed out. They had earned their money honestly, had paid their taxes and
had succeeded in a market that gave all participants an equal chance. I was
met with disbelief, and smirks, by my Russian acquaintances. Surely I was
smart enough to understand that any successful human endeavor was accompanied
by intrigue and double-cross?

At any rate, the new Russian kapitalisty are a completely different species
from the pioneers of American capitalism. The Robber Barons of the 19th
century presided over the biggest economic boom the world had ever seen.
Rockefeller created the world's largest oil industry. Carnegie built the
world's largest steel company. J.P. Morgan mobilized American capital to fuel
the country's industrial boom and made Wall Street a more honest marketplace.
They all created something out of nothing.

Russia's tycoons, by contrast, are almost without exception mediocre
businessmen. They have not created a single noteworthy business enterprise.
The big state-owned companies they have taken over with their inside deals
have almost all languished under their management. Not surprisingly, the
Russian economy has been ravaged by the crony capitalism of the Yeltsin years
(GDP contracted by 41% between 1990 and 1999). Russia has suffered the
biggest catastrophe -- economically, socially and demographically -- since
the Nazi invasion in 1941.

The tragic irony of Bill Clinton's pardon of Marc Rich is that it confirms
Russians' worst suspicions of how the president of the United States colludes
with the schemes of big businessmen. You can skip your high-minded
principles, they say, we know that America is just a slightly more polished
version of, well, Boris Yeltsin's Russia.

*******

#8
Moskovsky Komsomolets
March 2, 2001
THE PRESIDENT'S MISTAKE
Gleb Pavlovsky, presidential adviser and professional mud-slinger
Author: Alexander Minkin
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
A CRITICAL LOOK AT PRESIDENTIAL ADVISER GLEB PAVLOVSKY, MASTER OF DEVIOUS CAMPAIGN TECHNIQUES. THE PRESIDENT LISTENS TO PAVLOVSKY'S OPINION. OBSERVERS SAY THIS MEANS THAT THE REGIME CONTINUES TO USE PAVLOVSKY TO DECEIVE PEOPLE; THIS MAN HAS NO REAL VALUE OUTSIDE ELECTION CAMPAIGNS.

     President Putin has two advisers: Andrei Illarionov and Gleb
Pavlovsky. Illarionov is the economic adviser. It turns out that
Pavlovsky is in charge of ideology.
     Possibly, Putin's most serious mistake is that he listens to a
man who helped him collect about 50% of votes in the election
(officially, 52.94%). An election is a one-off event, a matter of
trickery. Why is the president retaining a one-off specialist as an
adviser?
     If Pavlovsky was of benefit to Putin in the election, Putin
should have paid him and said farewell, because a specialist in one-
off actions is not suited to state-building.
     It is possible to win elections using underhand methods. It is
impossible to build a nation using such methods.
     As for Pavlovsky is concerned, those who can't understand him
should read Yelena Bonner's words: "I knew Pavlovsky for what he was
back in 1980 or 1981, when he gave evidence against Sergei Adamovich
Kovalev's son to the KGB. He showed who he is."
     Pavlovsky was breathlessly smug when the Duma approved the Soviet
music for the national anthem: "The state is coming up to the rebels'
throats. The Kremlin is taken. Smolny is taken. The state has taken
Okhotny Ryad, Lubyanka, the Old Square, Media-Most, Ostankino and the
banks... The president's victory is incredible! Putin cannot be
opposed!" (Nezavisimaya Gazeta, December 9, 2000)
     Only bile, or a gangster with a knife, can come up to somebody's
throat. Which alternative did Gleb Pavlovsky mean? The state as bile,
or the state as a gangster? And the main question: Whom does this
professional informer consider to be rebels? It is clear that he has
already prepared a list. This is a method of earning money: to invent
rebels and rebellions.
     It is very interesting that Pavlovsky speaks in terms of
occupation. It is interesting that his statements coincide with those
of Hitler, who said: "I don't see anyone who can oppose us."
     He was not interested in people who opposed him.
     Pavlovsky has organized many provocations. "Theory No. 1", a tape
allegedly recorded by the deceased Fadin... A person who does such
things should have the decency to keep silent. But Pavlovsky brags: I
did this, I did this...
     Pavlovsky states publicly that every day he meets with the
political leadership and gives advice. It is possible that someone at
the top does not like him. It is possible that no one likes him. But
he exists, he creates ideas, he is an ideologue. Others can make
amendments, hinder something, but they cannot change anything. It is
possible that they are afraid to do so. The ideologue will destroy
them, using the Internet, his Strana.ru website, and more.
     What does it mean "to hinder something"? To deceive less? To
deceive more cautiously? This is not a comforting thought.
     Pavlovsky wants to get rid of everyone who is cleverer than he.
He wants to destroy such people as a class. He states: "The Moscow
elite must be purged... The old elite will come to grief... Why do we
need these people?"
     It seems that the elite is afraid of the ideologue like decent
people are afraid of bandits.
     Pavlovsky heads the Effective Politics Foundation. Effective
politics - what is that? Disqualifying a candidate 12 hours before the
election? If meanness and falsehood are effective politics, then an
effective economy is embezzlement, effective ethics are provocations
and deceit...
     We suggest that the wise reader consider the text below and
decide if this is an analysis of the events of 1993, or the Kremlin's
script for 1999-2001.

"A HITLER-TYPE COUP D'ETAT : THE REGIME WHICH ISN'T THREATENED BY
ANYTHING "INVENTS" A PLAUSIBLE SCENARIO OF A COUP D'ETAT (WITH AN
IMAGINARY ENEMY), AND THRUSTS THIS SCENARIO ON THE PUBLIC, USING ITS BOUNDLESS RESOURCES.

     "The imaginary enemy must be evident and pitiful at the same
time. He must be allowed to encroach on something sacred. The public
must see a threat to peace and sigh with relief after the regime
(which people do not like) defeats the scoundrel. The main thing is
that the nation has swallowed a new way of being treated. Legality
will be buried along with the enemy. The coup d'etat in Moscow was
organized by the Kremlin through a plot by a group of people from the
president's team, under the pseudonym of the president of the Russian
Federation.
     "No one has ever elected these people but they are ruling the
country. The National Center for Public Opinion Research feeds us
fresh delights: this is a victory! About 63% of Russian citizens adore
the president. However, 42% are not sure that their love of
dictatorship is ardent enough.
     "The regime has offered us elections as a result of which the
upper house is already elected. The lower house will consist of those
who will agree to the president's terms.
     "The essence of such a parliament is that it has turned into a
machine for buying voters. Mr. Yeltsin is losing the nation. The
regime is trying to make this loss imperceptible. If the regime
succeeds the president will win in purely decorative elections and
hand over the nation to a group of generals and intriguers who have
entrenched themselves in the Kremlin.
     "Currently the most important thing in Russia is state security.
The regime will guarantee it."

PAVLOVSKY WROTE THIS PASSAGE IN 1993. HE CRITICIZED THIS PROCESS. WHY?
WAS HIS CRITICISM CAUSED BY HIS MORAL PRINCIPLES, OR BY THE FACT THAT SUCH AN INTERESTING PROCESS LEFT HIM OUT?

     Now he is using all the methods he criticized in 1993. He used
the thing which he calls "a Hitler-type coup d'etat". Pavlovsky's
foundation is effective if it has to deceive or slander someone. The
regime used it. The regime wanted to handle a one-off task: to seize
power (or as the honest Veshnyakov says, to win in the first round of
elections). The ideologue's talents were useful in this process.
     However, the election is over. Now it does not matter if the
election was fair or unfair: we have to get on with our lives.
Currently Pavlovsky has no value. In other words no one needs him in
non-crisis periods, when there is no need to deceive people. The fact
that the regime is using him means that the regime continues to
deceive us.
     He does not understand anything in the economy or sciences.
Educated people despise him.
     He can do everything using dirty methods and dirty techniques.
     He has to frighten the president with an opposition and rebels.
If the opposition exists, it must be undermined and split (Pavlovsky
is good at this).
     The opposition does not exist. Opposition means competing for
power. No one competes for power in Russia. Putin is criticized,
mildly, by the Communists and Yabloko. However, they are not
organizations which want to come to power.
     The president should use clever, experienced and respected people
with good reputations. The president has enough common sense.
     We see it: the Kremlin is trying to replace people. However, the
Kremlin is still using the old deck of cards. This is a hopeless,
sometimes even a shameful, business. (After the Kremlin appointed
Yevgeny Nazdraenko to head the Fisheries Committee, any claims to be
fighting corruption are ridiculous. Presidential envoy Konstantin
Pulikovsky, who said that Nazdratenko should be treated by police
investigators, is in trouble. Was it a plot against Pulikovsky?
Perhaps he is a victim of dirty techniques?)
     Pavlovsky's achievement is that Russia is mired in dirt and lies.
People have an almost physical awareness of political dirt. They are
tired of it. They long for cleanliness.

*******

#9
Date: Thu, 01 Mar 2001
From: laurabelin@excite.com (Laura Belin)
Subject: question on trust in tv

During the Lehrer News Hour discussion Ellen Mickiewicz asserted that NTV
"has the highest credibility and trust in every national poll in Russia."

Does any JRL subscriber have data to back this up? In the mid-1990s I
remember seeing polls to that effect, but in 1999 I saw polls suggesting
that despite the consensus opinion among media professionals, public trust
in ORT was greater than trust in NTV. 

If anyone knows where reliable information about public trust in various
television networks can be found, I would be interested to hear about it.

*******

#10
Date: Thu, 01 Mar 2001
From: JBernstein92@aol.com (Jonas Bernstein)
Subject: re 5126-Novaya Gazeta/Abramovich and ORT

Re: ABRAMOVICH GIVES THE ORT NETWORK TO THE MOTHERLAND In return for oil? By
Oleg Lurie, Novaya Gazeta, No 14 February 26 - March 4, 2001, posted on JRL
#5126, 1 March 2001

I think it is quite important to call attention to this article, and
particularly to Lurie's central allegation: that in exchange for handing over
Boris Berezovsky's 49 percent share in ORT, Runicom, a company controlled by
Roman Abramovich, was given the right to be the sole oil trader for the
state-owned oil company Slavneft - a deal which, according to the author,
will bring Abramovich $700 million in revenues per year.

Compare Lurie's allegation with the profile of Abramovich that ran in the
Financial Times just two months ago, in January. The author of that profile,
John Lloyd, paraphrases Abramovich as saying that "the first decade of
Russian freedom and capitalism," when "anyone who wanted to be something in
business at least had to have lines into the government," is now over. "It's
over because the need for such a system has gone," Abramovich is quoted as
saying. "Everyone now does his own business and doesn't poke his nose into
others' business." Lloyd also quotes Abramovich as saying of Putin: "I'm not
in his circle. His circle, as I understand it, is made up of those who are
his work colleagues, organised by responsibility and rank. Maybe he has some
friends who are not obvious, but I don't see that if they exist they
influence the decisions he takes. The people he has are all formal; they are
there because they fulfil a specific function." All of these comments from
Abramovich go unchallenged by Lloyd.

It seems obvious that if Lurie's allegation is true, Abramovich's assertion
that Russia's big business-state symbiosis has ended is patently false. It
also strikes me as unlikely that someone in the government would have made
the decision to grant Runicom the right to sell Slavneft's oil without
permission from on high, which in turn suggests that Abramovich's claim not
to be in Putin's "circle" is misleading, at best.

It would be interesting to know whether the ORT shares-for-oil deal really
took place. (Perhaps the FT could find out.) If that deal did happen, it
would go a long way in refuting the prevailing assumption that Putin's
accession marked a sea change in the way Russia is ruled, not to mention the
Kremlin propaganda line about level playing fields and the like.

*******

#11
Washington Post
March 2, 2001
[for personal use only]
An Unlikely Savior on the Tundra
A Russian Tycoon Adopts Abandoned Arctic Region, but Why?
By Peter Baker
Washington Post Foreign Service

ANADYR, Russia -- It is difficult to tell the billionaire from the bodyguards
as they step off the helicopter in this farthest corner of Russia's Far East.
Roman Abramovich,after all, favors blue jeans, wool sweaters and Nike
sneakers. Several days of whiskers cover his face in a sort of designer
stubble.

Yet to the forlorn of Chukotka ("home of the reindeer people"), there is no
mistaking the man they hope will save them. Invariably, it does not take long
for the anxious pleas to start.

Can you get us our back wages?

Electricity for our homes?

Medicine for our sick children?

For reasons clear only to him, one of Russia's wealthiest "oligarchs" has
partially exiled himself to one of the most remote and miserable places on
Earth, as its newly elected governor. Bored with business at age 34,
Abramovich has adopted Chukotka, just across the Bering Strait from Alaska, a
place he had never visited until a year ago, and has set out single-handedly
to replace a state that stopped providing for its people.

In recent months, Abramovich has spent $18 million from his own pocket
airlifting food, parkas, boots and medicine, relocating pensioners to more
hospitable climes and even flying 3,000 children to the Black Sea and other
vacation destinations so they could swim in warm water. He said he "was
shocked" the first time he saw Chukotka. It was "a complete ruin."

His arrival has promised a transformation not only for Chukotka, but for a
man known as a hard-knuckled oil-and-metals magnate, an alleged "cashier" for
Boris Yeltsin's family and a favorite of President Vladimir Putin. In a way,
this improbable marriage in this improbable place brings together disparate
pieces of the story of the new Russia: how a few accumulated vast fortunes by
taking over state industries, while whole regions were abandoned to a harsh
subsistence with little to show but broken promises.

In the decade since the Soviet Union fell apart, an orphan like Abramovich
was able to build an empire worth perhaps $2 billion through deals involving
former government assets. But the people of Chukotka, lured to the permafrost
by Soviet leaders seeking to tap natural resources, suddenly found their
higher wages, early retirement and other privileges disappearing along with
the government that offered them.

Left behind was a community so isolated that no road leads to it, in a
climate so daunting that the Arctic Ocean on its north coast freezes as if in
mid-wave. Winter lasts nine months. There are no trees, no bushes, no visible
plant life of any kind -- only an expanse of white as far as the eye can see.
Workers go months, sometimes years, without being paid. Areas resemble a war
zone, with crumbling, vacant apartment buildings.

Back in Moscow, some 3,800 miles to the west, few understand why one of the
most powerful men in the country has embraced this wasteland. In Russia,
oligarchs have not been known for their benevolence and little turns out to
be as it appears. Is Chukotka an opportunity for progress or just another
vulnerable commodity to be exploited? Are Abramovich's motives to give or to
take?

Some in the Russian capital speculate that Abramovich is using the
governorship to claim for himself any natural resources in the region. His
oil company, Sibneft, has embarked on a $20 million plan to search for
heretofore-unknown reserves of crude in Chukotka. Or perhaps, some say, he
has eyed the barren region as home for a lucrative nuclear waste facility.

His aides suggest a more complicated picture. They point to the American
robber barons of the 19th century who later dispensed much of their great
wealth through charities. They invoke Andrew Carnegie, rapacious capitalist
and legendary philanthropist.

Abramovich casts his interest not as financial or even philanthropic. He has
come, he says, for the challenge. "Of course there are" hidden motives, he
said: "I do it for pleasure. If I didn't like it, I wouldn't be doing it.
It's not altruism at all."

Lately, he said, he has become restless simply earning money. "Business is a
sport, and somehow it became not very interesting to participate in it. We
achieved a certain success but it is not interesting to develop it
limitlessly. And here everything is new. There are no limitations. People
say, 'thank you'."

That they do. Abramovich received 90 percent of the vote in a Christmas Eve
election for governor. In the restaurants where there are no menus because
the same fried meat is served every day, in the museum where for 17 cents
they show visitors walrus-bone carvings, in the post office where they use a
pot of glue to seal packages, residents of Chukotka universally hail the
young tycoon. The one word everyone uses is "hope."

"I love him," said Natalya Lyashko, 47, who works in the government
bankruptcy department. "We hope that our life will become better. Since he
came in the new year, we have been receiving salaries on time. There have
been no problems. All hope is on him."

Oksana Zaichenko, a 30-year-old teacher, and her friend, Vera Manyk, 38,
share the enthusiasm. Zaichenko accompanied children sent on vacation by
Abramovich; Manyk's son was among them. Whether Abramovich is showering them
with gifts to win a political position seems irrelevant.

"He didn't buy us," Zaichenko insisted.

"Even if he does," added Manyk, "why not?"

The Man to See in Russia

For a man who has thrived in the world of Russia's gangster capitalism and
who loves the movie "Pulp Fiction," Abramovich in person hardly fits the
tough-guy image. Sitting in the prefabricated Canadian house he shipped here
to use as his home two weeks a month while his wife and three children remain
in Moscow, Abramovich comes across as strangely shy. He sits with legs
crossed and arms wrapped across his chest, with a boyish smile that suggests
anything but that he is master of the room.

Yet Abramovich has emerged from the shadow of his longtime mentor, Boris
Berezovsky, to become the man to see in Russia. While Berezovsky and another
media mogul, Vladimir Gusinsky, have fled the country under pressure from the
government, Abramovich orchestrated a takeover of the world's richest
aluminum industry and bought out his former partner's share of the ORT
television network. His success demonstrates that oligarchic capitalism, a
form of capitalism dominated by a handful of politically well-connected
businessmen, is alive and well in Putin's Russia, at least for tycoons who do
not make trouble for the Kremlin.

"In terms of political influence, he is probably the most influential" of the
tycoons, said former deputy prime minister Anatoly Chubais. "Berezovsky and
Gusinsky were always very naive. They always tried to demonstrate their
influence, which was very counterproductive. Abramovich is the next
generation, so he's much smarter than his parents."

Abramovich took an invisible path to power. His name did not appear in the
Russian media until 1997, and then only as Berezovsky's sidekick. Frustrated
that it could not find a photograph of him, one newspaper sponsored a contest
offering money for one. Until now, he has never given an interview to an
American newspaper.

The reason, he explained, is simple: "It's common knowledge that money loves
quiet."

Born in Saratov, 500 miles southeast of Moscow, Abramovich lost his mother to
illness when he was 18 months old and his father to a construction accident
when he was 4. Taken in by grandparents, he grew up in the oil-producing Komi
region of northwestern Russia. He served a couple years in the army and came
to Moscow to study, only to drop out when the economic reforms of perestroika
ushered in a new age of private enterprise.

Soon, Abramovich was working for Runicom, a company specializing in oil
trading, the lucrative practice of purchasing oil at rock-bottom prices in
Russia and selling it at dramatic markups abroad. At 25 in 1992, he was
investigated when 55 tanker trucks of diesel fuel bound for a buyer in Moscow
somehow were diverted to Latvia and never seen again. The case went nowhere.

By the mid-1990s, Abramovich was moving in heady circles and found himself
invited on a yachting vacation in the Caribbean where he met the flamboyant,
energetic Berezovsky. "I cannot say I liked him" at first, Abramovich
recalled, but "he sort of envelops you and you find yourself inside him."

The two went into business, using Berezovsky's political connections to
privatize a state refinery and production unit to create Sibneft in 1995.
Abramovich set about building what today is Russia's sixth-largestoil
company, pumping 340,000 barrels a day and taking in $1.7 billion in annual
revenue.

Abramovich befriended Yeltsin's daughter, Tatyana Dyachenko, widely
considered the power behind the throne. But he disputes that he was the
"cashier" in charge of the family's financial support, as alleged by
Yeltsin's disgruntled former security chief and adviser, Alexander Korzhakov,
and insists he has never even met Yeltsin.

He does know Putin, however, and admires the new president's hands-off
treatment toward business. Despite antitrust concerns, the Putin government
has not challenged a deal last year in which Abramovich and Berezovsky
created Russian Aluminum, which commands 70 percent of the nation's market
and has become the world's second largest aluminum company.

Today, Abramovich controls nearly 45 percent of Sibneft and 50 percent of
Russian Aluminum. Anders Aslund, a senior associate at the Carnegie Endowment
for International Peace in Moscow, says he believes Abramovich also controls
much of the government -- from the railways and nuclear energy ministries to
law enforcement agencies. Several oligarchs privately suspect he was behind
short-lived government investigations of them last year in a failed effort to
clear the field of competitors during the auction of state-owned Onaco oil
company, a bid he lost.

Abramovich calls that nonsense, but it is clear that he has had a falling out
with at least one oligarch -- Berezovsky. Abramovich recently bought his old
partner out of ORT, paying $80 million through offshore holding companies for
a 49-percent share in the television channel whose reporting on the Kremlin
helped land Berezovsky in such trouble. But Abramovich wants nothing to do
with media companies and assigned the voting rights to the state, which he
hopes will eventually buy the stock.

As for Berezovsky, Abramovich has no sympathy. "I think he himself drove
himself into that situation," Abramovich said. "He stopped working and doing
business a long time ago and began to give advice to the government. After
the new president came and acted independently and stopped listening to him,
he decided for some reason to come out in open opposition to him.

"I explained it to him and tried to calm him down, but unfortunately you saw
the result."

'Hostages of the North'

Nine time zones from the intrigue of Moscow, Abramovich has discovered a
place that could hardly be more desolate and desperate. During his most
recent visit, temperatures dipped to 36 degrees below zero and a blizzard
made it impossible to walk outside more than a hundred yards. Eyelashes were
the first thing to freeze just seconds out the door, and 10-foot snowdrifts
threatened to swallow the hardiest souls.

In this forbidding environment, where there are more reindeer than people,
the Soviet Union formed the Chukotka region in 1930 in hopes of mining its
coal, gold and other natural resources. But the perks that were offered to
colonizers ended along with the Soviet Union.

"The state turned its back on Chukotka and other northern regions," said
Mikhail Ermakov, editor of Extreme North, the local newspaper. "For a long
time people depended on the state and the state took care of them. Then
overnight, it all just stopped and people didn't know what to do."

Those who could, left. Over the last decade, Chukotka's population plunged
from 156,000 to 72,000. Those who remain often go without wages, electricity
or food. "People find themselves to be hostages of the north," said Larisa
Ponomareva, Abramovich's top aide.

Escaping is not easy, even for those who can afford it. Chukotka is
effectively an island separate from the "mainland," as the rest of Russia is
called here. The only way in or out is by airplane and then only if the
weather cooperates. In the capital, Anadyr, flights to Moscow have dwindled
to just one each week, and 25 days passed in December without any. In the
second city of Pevek, regular flights have been canceled altogether.

Abramovich had never been here prior to late 1999, when he was shopping
around for a seat in the lower house of parliament, the State Duma. At the
time, many businessmen sought seats in the Duma, some because it offered
immunity from prosecution. Then-Gov. Alexander Nazarov invited Abramovich to
represent Chukotka and he agreed sight unseen.

As Abramovich tells the tale, visiting after his December 1999 parliamentary
election made him realize he had a responsibility to Chukotka. He started a
foundation called Pole of Hope to provide humanitarian aid and received 9,000
letters begging for help. Abramovich said he decided to run for governor
after he realized Nazarov was charging parents to deliver their children to
the airport for the free Black Sea vacations sponsored by Pole of Hope.

It was not difficult to dump Nazarov. During the campaign, Moscow tax
authorities summoned him for questioning. Then days before the vote, Nazarov
abruptly dropped out. Abramovich later appointed him to represent Chukotka in
the upper house of parliament in Moscow. Now, even Nazarov offers unqualified
support. In an interview, Nazarov denied making a deal to withdraw and did
not blame Abramovich for the tax inquiry.

Either way, the difference will be stark. Chukotka's budget for 2001 includes
$65 million from federal and local revenue. Abramovich will match that
himself -- through $35 million in personal income tax and $30 million for
Pole of Hope.

His goals, he said, are straightforward: "In the first place, people are not
going to starve. People who work will receive wages regularly. I hope we will
be able to establish aviation connection between places where people live.
Medical care also. The children in summer will go to the south. Things like
this."

Other goals are left unstated. Sibneft plans to drill in June in the Anadyr
basin off the coast. So far as is known, there are just 50 million barrels of
proven reserves in Chukotka -- "peanuts," as Sibneft chief operating officer
Alexander Korsik put it. Independent analysts say this summer's exploration
would have to turn up far more to be worthwhile, especially given the
logistical difficulties. The first shipment of equipment, for example, sat
for three weeks aboard a ship stranded in the ice until helicopters offloaded
it.

"I'm not sure we would go to Chukotka if Roman were not there," said Korsik.
"It's a combination of political motivations and economic drivers."

Abramovich agreed. "If I were only an oil man, I wouldn't begin with this
region," he said. "There are areas much better explored and studied with a
better infrastructure to do that."

A Numbing Procession

Not far from his prefab house is the office of Abramovich's foundation. In
the darkened, dingy hallway wait dozens of supplicants each afternoon, their
faces as impassive as the ice outside. One by one, Abramovich's right-hand,
Ponomareva, calls them in.

The first woman on one such day took a seat next to Ponomareva's desk and
pulled out a letter. Her daughter was in school "on the mainland" and had no
money to come home. Next came an indigenous man who complained that the chief
of his village was hindering his fishing business. An older man asked to fly
to Moscow to see his leukemia-stricken son. The next faced eviction because
he owed 7,600 rubles (about $270) in back rent and could not pay his power
bill on his monthly salary of 700 rubles ($25).

It was a numbing procession. Ponomareva offered what help she could but urged
the pleaders to find ways to help themselves. "We could pay the debts for
electricity," she told the man with the late bills, "but the moment we do it,
they'll start accumulating again."

Abramovich acknowledged the problem of simply swapping dependence on the
state for dependence on him. "They think that I can do anything. Of course, I
can't do any more than they can. The problem is they don't believe in
themselves -- yet."

His new constituents might be distressed to know he thinks he can complete
his reconstruction project in three or four years. "I set hopes on him
because I'm planning to move from here, maybe in 10 years' time," said
Lyudmila Kutz, 40. "I'd like to see gardens." It seems unthinkable that he
may not stay long enough to fulfill that dream.

"He gave promises," she said. "How can he leave? We trust him."

******

CDI Russia Weekly:  http://www.cdi.org/russia

Johnson's Russia List Archive (under construction):  http://www.cdi.org/russia/johnson