April 11, 2001 

This Date's Issues:   5196 • 5197  

Johnson's Russia List
#5197
11 April 2001
davidjohnson@erols.com

[Note from David Johnson:
1. AFP: Distribution the key to boosting Russian film production: minister.
2. AFP: Russian-German summit a failure says Russian press.
3. Reuters: CHRONOLOGY-Milestones in U.S.-Russian space race.
4. The Guardian (UK): Amelia Gentleman, Russia goes Gagarin. Cosmonaut Day, the 40th anniversary of man's first space flight, lifts off tomorrow.
5. strana.ru: Majority of Russians are against cutting space programs.
6. Itar-Tass: With Mir gone, Russia will focus on satellite research - scientist.
7. Bloomberg: Bush Budget Would Slice Efforts to Limit Russian Nuclear Threat.  
8. New York Times: Michael McFaul, A Step Backward on Nuclear Cooperation.
9. AP: Russia Seeks Aid To Destroy Weapons.
10. AFP: Weak Russian banks blocking economic development: PM.
11. George Slastnoy: NTV.
12. strana.ru: Leonid Bershidsky: "In reality, there is dictatorship inside media"
13. Segodnya: Svetlana Ofitova, THE RIGHT LOOKS ABROAD FOR EXTRA VOTERS. The Union of Right Forces promises to import democracy into Russia.
14. Interfax: British ambassador in Moscow says Russia on the right track.
15. Reuters: Russia may delay restructure of utilities-Kudrin.
16. Ryan Kreider: Media Assistance in Russia and Ukraine.
17. Reuters: Belarus's Lukashenko to compaign on strong state.]

******

#1
Distribution the key to boosting Russian film production: minister

MOSCOW, April 11 (AFP) -
Russian authorities are to radically increase expenditure on cultural
projects, focussing on a campaign to modernise the country's crumbling film
distribution circuit, Culture Minister Mikhail Shvydkoi said Wednesday.

Defending a controversial plan to privatise much of the former Soviet film
production giant Mosfilm, currently fallen on hard times, Shvydkoi said
private investment was needed to counter the influx of mass-produced foreign,
mostly American films.

Last week President Vladimir Putin signed a decree to turn most of the
sprawling Mosfilm empire into joint-stock companies which could attract
investment, and announced a plan to set up a state-owned film distribution
company called Rossiisky Prokat that would also engage in production and
training.

The government's priority was to create "a modern, nationwide distribution
network," Shvydkoi said.

He noted that of the country's 1,560 film theatres, only 80 could be
considered "modern", which is to say of a comparable degree of comfort to
cinemas in Europe and the United States.

The latter category produced profits equivalent to 50 million dollars a year,
while the 1,480 others made only six million dollars between them, he said.

Noting the need to encourage "self-identification" among film-goers by
boosting Russian film production, Shvydkoi said that Russian films captured
only seven percent of the national market, and only three percent in Moscow.

Rossiisky Prokat's target will be to raise the percentage of Russian films
distributed in Russian cinemas to 30 percent.

It is to build or renovate around 150 theatres nationwide that would belong
jointly to the federal government and local authorities, the business daily
Vedomosti reported, though Shvydkoi denied there would be any state monopoly.

Ticket sales in Russia have shown an upturn in the past few years, due mainly
to the construction of modern-style cinemas in Moscow, Saint Petersburg and
other large cities, many of them foreign-owned and mostly showing American
films.

Mosfilm general director Karen Shakhnazarov told AFP he was not against the
joint-stock proposal in the case of studios that were unprofitable, but would
oppose the privatisation of Mosfilm.

"Mosfilm is a first-class European studio, in reasonably good condition, and
receives not a kopeck from the state budget. If anything happened to Mosfilm,
Russian cinema would cease to exist," he said.

For years the main state purveyor of films including classics such as Sergei
Eisenstein's "Battleship Potemkin" and Vladimir Menshov's Oscar-winning
"Moscow Does Not Believe in Tears", Mosfilm has broken down into around 40
separate state-owned studios, almost all of them loss-making, according to
Vedomosti.

National film production has slumped from more than 150 a year to between 30
and 40, of which more than 10 a year were produced by NTV-Profit and
Kino-MOST, the film-making wing of businessman Vladimir Gusinsky's
beleaguered Media-MOST empire.

Shakhnazarov warned that privatisation could lead to the sell-off of its
studios in the suburbs south of Moscow, located on a large slice of prime
real estate that would be certain to attract developers.

"Though we're profitable, building a casino or a hotel would be even more
profitable, and private capital would think only of profits. That's why we're
so reluctant," he said.

Shvydkoi said cinema was one of several areas of culture under review. A
number of specific projects would eventually be singled out for special
funding, with emphasis being placed on education and training, he said.

******

#2
Russian-German summit a failure says Russian press

MOSCOW, April 11 (AFP) -
Russia's media on Wednesday described the summit between President Vladimir
Putin and his German Chancellor Gerhard Schroeder as a failure since no
progress was made on resolving Russia's debt problems.

Putin and Schroeder met Monday and Tuesday in Saint Petersburg to discuss,
among other things, Berlin's proposal to convert part of Russia's debt into
German participation in Russian companies.

But the idea was "buried" by Russia because the countries could not agree
specifics on valuation and a calendar for debt reimbursement, said the
economic newspaper Vedomosty, calling the summit a failure.

Germany is Russia's primary creditor, owed 27 billion euros (24 billion
dollars) of a total debt of 55 billion euros Moscow has with the Paris Club
of international creditors. Most of Moscow's debt was inherited from the
Soviet era.

"Friend Vladimir gets along marvellously with friend Gerhard, but friendship
is one thing and monetary questions are another," the newspaper Izvestia
said, adding that the summit "lacked content".

Controversial issues, such as the war in Chechnya and freedom of the press
were avoided during the summit.

Two agreements were signed on space cooperation and specialist training for
Russian economists. The opposition newspaper Segodnia said the agreements
were "a more than banal result" compared to the "dramatic" problem of debt
between the two countries.

The paper Vremia Novostei said there was only one way to assess the meeting:
"Putin is a Germanophile and likes to talk with his German colleague."

******

#3
CHRONOLOGY-Milestones in U.S.-Russian space race
April 11, 2001
 
MOSCOW (Reuters) - Russia on Thursday celebrates the 40th anniversary of the
first man in space, Yuri Gagarin, who blasted off from the Baikonur
cosmodrome in Kazakhstan on April 12, 1961 and completed one orbit of the
earth.

The flight, preparations for which were made in absolute secrecy, stunned the
West and triggered a space race between the Soviet Union and the United
States.

Following is a chronology of space race milestones:

October 1957 - The Soviet Union becomes the first nation to go into space
when it launches the man-made satellite Sputnik 1, meaning fellow-traveler,
though the word later came to be known universally as satellite.

November 1957 - The Soviet Union sends a dog, "Laika," into orbit, proving
life can be sustained in space. No provisions are made for returning the dog
to Earth and Laika dies in orbit.

February 1958 - The United States becomes the world's second space power with
the launch of the satellite Explorer 1.

April 12, 1961 - Cosmonaut Yuri Gagarin becomes the first man in space in a
Vostok 1 craft. During the 108-minute flight, he tests food and drinks.
Gagarin's capsule suffers a near-fatal problem during re-entry, but he lands
safely.

May 1961 - Alan Shepard becomes the first American in space on a sub-orbital
flight lasting 15 minutes, 28 seconds. U.S. President John F. Kennedy later
vows to send a man to the moon.

February 1962 - John Glenn becomes the first American in orbit, circling the
Earth four times over nearly five hours.

June 1963 - Valentina Tereshkova becomes the first woman in space. Nineteen
years pass before the next Soviet woman flies.

March 1965 - Cosmonaut Alexei Leonov takes the first space walk. His modified
Vostok pressure suit is subject to serious problems when he re-enters the
airlock.

June 1965 - Ed White becomes the first American to walk in space.

January 1966 - The Soviet Union is first to land an unmanned craft on the
moon. Later that year, the unmanned Soviet Luna 10 first orbits the moon,
broadcasting the "Internationale" to the Communist Party Congress in Moscow.

January 1967 - A fire on the launch pad during tests kills Apollo astronauts
Gus Grissom, Ed White and Roger Chaffee.

April 1967 - Cosmonaut Vladimir Komarov dies after a parachute fails to open
in re-entry of the space craft Soyuz 1.

July 1969 - Astronaut Neil Armstrong, commander of Apollo 11, becomes first
man to walk on the moon.

April 1971 - The Soviet Union launches the first space station, Salyut 1. A
crew arrives several days later but cannot open the hatch properly and
returns home after a few hours.

June 1971 - The first Salyut 1 crew finishes a record 23-day day mission, but
dies when their craft depressurises in re-entry.

May 1973 - Skylab 1, the first U.S. space station, is launched. A crew
arrives 11 days later for a 28-day stay.

July 1975 - The first international space mission, Apollo-Soyuz, brings
together astronauts and cosmonauts. A Soviet Soyuz space craft docks with a
U.S. Apollo command module.

July 1979 - Skylab tumbles from orbit as planned, scattering parts across the
Indian Ocean. Debris kills a cow in Australia.

April 1981 - The U.S. Space Shuttle Columbia, the first reusable space craft,
is launched.

June 1983 - Sally Ride is the first U.S. woman in space.

January 1986 - The U.S. Space Shuttle Challenger explodes moments after
lift-off, killing all seven crew.

February 1986 - The Soviet Union launches the first module of the Mir space
station. Cosmonauts man it almost continuously for the next 15 years until it
is brought down in March 2001.

February 1994 - Sergei Krikalyov becomes the first cosmonaut to fly on a U.S.
space craft.

November 1998 - Russia launches the first International Space Station (ISS)
component, the Russian-built Zarya module.

December 1998 - The U.S. Space Shuttle Endeavour docks the second ISS
component, the U.S.-built Unity module, with Zarya.

Oct, 2000 - A first U.S.-Russian crew blasts off for the ISS.

******

#4
The Guardian (UK)
11 April 2001
Russia goes Gagarin
Cosmonaut Day, the 40th anniversary of man's first space flight, lifts off tomorrow
By Amelia Gentleman

When state television announced on April 12 1961 that Yuri Gagarin had soared
through the earth's atmosphere to become the first man in space, there was an
explosion of patriotic delight in Russia.

Thousands of people hurried to Red Square to join the celebrations; among
them were a group of medical students who lined up in the centre of the
square with words "Gagarin! Hurrah!" painted letter by letter on their white
coats. Those who attended remember these events as spontaneous demonstrations
of enthusiasm - very different in atmosphere from the annual party-organised
revolution parades.

The 40th anniversary of his achievement is to be marked in Russia with
celebrations of a more muted variety. President Vladimir Putin will meet
space officials and cosmonauts in the Kremlin to remember Gagarin on April 12
- which has been designated as Russia's annual Cosmonaut Day.

Ceremonies are to be held in the city named after the cosmonaut in western
Russia; dozens of Gagarin statues throughout the country are being restored;
previously unreleased photographs of his have been published; documentaries
about his short flight into space have been prepared for broadcast on the day.

Gagarin remains a national hero. His death, aged 34, in a plane accident has
left a smiling, youthful image seared on the national consciousness. The
story of how a country boy was transformed overnight into the most famous man
in the world is still taught in schools and chapters from his life are
familiar across the generations.

Every episode in the build-up to his flight has achieved mythical status.
According to some versions of his life, it was Gagarin's skill at keeping
still that guaranteed him his place on the Vostok 1 capsule, taking him on a
108-minute journey around the world. On the night before the journey, both he
and his rival for the task, Gherman Titov, were wired up to a sleep
monitoring system to check who slept most soundly.

Officials were anxious to ensure that the first person in space would be
fully refreshed after a good night's sleep. Gagarin said later that he spent
much of the night awake trying to keep still so that the sensors would not
register abnormal tossing and turning - leaving him abnormally tired on the
day of his flight. He later attributed the decision to pick him for the task
to the fact that "Titov turned over in his bed".

Other versions suggest that it was Gagarin's modest background that gave him
the edge over Titov, who came from a more bourgeois, intellectual family. But
Titov, who died last year, had his own explanation for the selection of his
rival. "Yuri was loveable, but no one could love me," he said.

The more scandalous incidents in Gagarin's life - his drinking binges, his
alleged adultery, picked over in Western biographies of the cosmonaut - have
not been revisited in the adoring articles published in his honour in Russia
this week.

Instead the anniversary offers Russia's space community an opportunity to
remember its huge achievements at a time when international attention has
been focused on the end of the nation's human space programme, with last
month's public dumping of the ageing and cash-starved Mir space station.
Russia's space agency will now focus on unmanned space projects - less
glamorous but cheaper and, according to officials, more efficient.

Amid all the undiluted veneration being offered to Gagarin this week, there
is one sour note. Moscow city planners, constructing a new ring road for the
capital, have encountered an irritating obstacle. The massive, soaring
monument to Gagarin - one of the capital's architectural landmarks - is in
the way; Gagarin is set to be removed from his pedestal and cleared away to a
less obtrusive resting place.

******

#5
strana.ru
April 11, 2001
Majority of Russians are against cutting space programs
 
The majority of Russians speak out in favor of preserving or expanding the
country's space programs. The results of an opinion poll show that 38% of
respondents favor an expansion of Russia's space exploration program, while
41% call for the preservation of its present scope.

Only 7% consider that such space programs should be reduced. Some 1,600
persons were involved in the opinion poll that was conducted on the eve of
Cosmonautics Day commemorating the 40th anniversary of the first manned space
flight by Yury Gagarin.

50% of respondents concede that Russia has lost its former stature in space
exploration and feel sorry about that. Another 22% of Russians consider that
Russia still leads in the space exploration sector, while 8% of the
population are not interested in this question in general.

But just three years ago, the mood of the Russians on this question,
according to a similar poll, was better. Only 41% of the respondents then
considered that Russia had lost its priority in space exploration, while 28%
thought the country had retained its previous positions in this area.

Poll experts tend to explain such changes, first of all, by the recent
sinking of the Mir space station that was the workhorse of Russia's manned
cosmonautics.

*******

#6
With Mir gone, Russia will focus on satellite research - scientist
ITAR-TASS

Moscow, 10 April: Russia will use mostly satellites in it space research in
the nearest three years.

The space sector has to accept this after the recent dumping of the orbiting
space station Mir, the director of Moscow's Institute of Biomedical Problems,
Anatoliy Grigoryev, said in an interview with ITAR-TASS on Tuesday [10
April].

Russian crews will be flown on the International Space Station (ISS) which is
in assembly in orbit, but it is so far not ready for research, he said.

Grigoryev said biomedical experiments with protozoan micro-organisms, insects
and mice would be flown on several satellites. The largest species to be
studied in space will be rats.

Space flights of monkeys will be suspended because the latest experiment in
1997 proved unsuccessful.

However, some research is carried out at the ISS. Its Russian crews handle
about 10 experiments intended for health control and medical prevention. When
the ISS is complete, the institute wants to have some 60 research projects at
it, Grigoryev said.

He admitted that Russia's research at the ISS faces problems. "Life at the
ISS will be more competitive," he explained. "We would want the main
criterion for the choice of experiments to be their importance," Grigoryev
said. "But probably preference will be given to countries that so far have no
sufficient experience in space flights so that they have the possibility to
try their hand, which will negatively affect development of science," he
said.
 
******

#7
Bush Budget Would Slice Efforts to Limit Russian Nuclear Threat
 
Washington, April 10 (Bloomberg)
-- The Bush administration's new budget plan proposes an 11
percent cut in a range of programs to reduce the threats from nuclear weapons
and materials in the former Soviet Union.

The proposed reductions include a 75 percent cut in a program to re-employ
Russian nuclear scientists, a 29 percent cut in a nuclear reactor safety
program for the former Soviet Union, and an 18 percent cut in a program to
boost security at Russian nuclear weapons facilities, private analysts said.

The budget reductions harm U.S. security by threatening progress in all those
areas, the analysts said, and contradict the recommendations by a bipartisan
panel to boost threat reduction programs.

``Insecure nuclear materials and nuclear weapons scientists is one of the
foremost threats in the world,'' said William Hoehn, Washington director of
the Russian American Nuclear Security Advisory Council, a private advocacy
group. ``With this budget, it makes it a lot harder to get this work done as
soon as possible.''

The proposed cutbacks were contained in fiscal 2002 budget documents
presented yesterday to Congress. Figures involving nuclear threat reduction
were compiled today from those documents by study and advocacy groups that
include the Russian American Nuclear Security Advisory Council and the
Council for a Livable World.

Cuts Defended

Energy Secretary Spencer Abraham yesterday defended the cuts and said the
Bush administration might back increases for those programs in future years
after a formal administration review.

Overall, the administration proposed cutting nuclear nonproliferation
activities in the Energy Department budget by 11 percent, to $774 million in
fiscal 2002 from $874 million in the current fiscal year, said Steve
LaMontagne, a research analyst at the Council for a Livable World.

Details of the Bush proposal, according to LaMontagne and other private and
congressional analysts, include:

-- a 75 percent reduction, to $6.6 million from $26.6 million, in the Nuclear
Cities Initiative, which works to create civilian job opportunities in
Russia's nuclear research cities;

-- a 40 percent cut, to $8.9 million from $15.8 million, in a program for
spent nuclear fuel storage in Kazakhstan;

-- an 18 percent cut, to $138.8 million from $169.7 million, in the Materials
Protection, Control, and Accounting program, which upgrades security at
Russian nuclear weapons facilities; and

-- the elimination of several other programs, including work on creating a
spent fuel repository in Russia, and on immobilizing plutonium by sealing it
in glass.

Bipartisan Panel

The proposed cuts counter the recommendation earlier this year by a
bipartisan task force led by Howard Baker, Bush's pick to become U.S.
ambassador to Japan, and former White House counsel Lloyd Cutler that
proposed spending $30 billion over 10 years on programs to reduce the nuclear
weapons threat from the former Soviet Union.

The Baker-Cutler panel said the threat posed by Russia's stockpiles of
nuclear weapons and weapons-usable materials is ``the most urgent unmet
national security threat to the United States today.''

Russia wants to close about half of its 10 nuclear research cities and needs
to find civilian jobs for an estimated 30,000 to 50,000 nuclear scientists,
Hoehn said.

By the end of last year, only about 20 percent of the estimated 850 metric
tons of weapons-useable nuclear material in the former Soviet Union had been
placed in fully secure facilities, he said.

Abraham said the Bush budget places a priority on avoiding a waste of U.S.
tax dollars.

``Thoughtful critiques, both inside and outside the department, convinced us
that a status quo budget, while it might be the safe road to take, in some
cases, would simply perpetuate mistakes and waste money by locking us into
programs we might wish to adjust in later budgets,'' he said.

The cutbacks will face criticism on Capitol Hill.

``That is utterly irresponsible,'' Senator Joseph Biden of Delaware, the
top-ranking Democrat on the Senate Foreign Relations Committee, said of the
proposed cuts.

******

#8
New York Times
April 11, 2001
A Step Backward on Nuclear Cooperation
By MICHAEL McFAUL
Michael McFaul is a senior associate at the Carnegie Endowment for
International Peace and an assistant professor at Stanford University.

CHICAGO- President Bush and his new foreign policy team have announced that
they plan to undertake a full review of all aspects of American policy toward
Russia on matters like economic assistance, NATO expansion and missile
defense. There must be a new agenda, we are told, because the old approach of
cooperation and engagement pursued by the Clinton administration has been
ineffective. In hinting at the tone of their new policy, Bush administration
officials have promised a realist approach, which would presumably include
greater attention to Russia's international conduct and less to reforms
within Russia.

Reviews are necessary and rethinking of policies prudent. But why, before the
review is completed, has the administration already announced plans to cut
cooperative nonproliferation programs between the United States and Russia?
Perhaps, after a thorough reassessment, the Bush team could make the case
that the cooperative programs that we now sponsor in Russia and other former
Soviet republics do not serve American national security interests. Until
such a case can be made, however, the proposal to cut these programs by $100
million, or more than 10 percent, from current financing levels is bad policy
and worse as symbolism. True realism on the part of the Bush foreign policy
team would mean increasing, not decreasing, the size of these efforts.

Even two decades ago, it would have been unthinkable for Country A to pay
Country B to destroy its weapons. But that is precisely what American-Russian
nonproliferation programs have achieved in the past several years. With the
end of the cold war, Russian leaders â?" committed to greater cooperation
with
the West â?" allowed the United States to pursue our national security
interests by new, nontraditional means. In 1991, the idea that we could pay
the Russians to deactivate nuclear delivery systems, enhance the storage and
security of nuclear materials and keep their nuclear scientists employed was
radical. It showed real leadership that George H. W. Bush, who was then the
president, embraced this new approach as part of a national security
strategy.

A decade later, cooperative threat reduction is widely accepted. A bipartisan
review commission headed by former Senator Howard Baker fully endorses the
idea, and Democrats and Republicans vote year after year to finance these
programs. And President Vladimir Putin and the Russian army continue to
participate willingly in them. Indeed, Mr. Putin's recent firing of the
conservative head of the Ministry of Atomic Energy suggests that he might be
prepared to go even further to restructure the Russian nuclear complex.

Promoting nonproliferation programs in Russia, of course, directly benefits
American national security. The fewer delivery systems of nuclear weapons
there are in Russia, the better; the more securely and safely stored are
those nuclear materials, the better. If the Bush administration is prepared
to spend tens of billions of dollars on missile defense systems to protect
Americans against potential threats in the future, it cannot justify cutting
the already modest budget for nonproliferation programs that help diminish a
real threat in existence today.

These programs are also crucial to maintaining open channels between the
United States and Russia at a time when other opportunities for cooperation
are disappearing. Without question, Mr. Putin's negative activities in other
areas -- whether stifling the independent press or trading weapons with Iran
-- will make it more difficult to have meaningful and positive relations. In
fact, cuts in some assistance programs to the Russian state (though not to
Russian civil society, as in programs that support the development of an
independent press) may be appropriate. But reducing nonproliferation programs
as a reaction to objectionable Russian behavior in other areas makes no sense
and is contrary to American security interests.

Ten years after the Soviet Union's collapse, it is remarkable that the
decaying Russian state has not allowed more weapons of mass destruction out
of Russia and that there have not been more accidents with nuclear materials.
Yet, these threats to American security must not be underestimated. We should
in fact be accelerating aid to dismantle this threat, not reversing course.
At a time when there appear to be growing strategic conflicts between the
United States and Russia, we cannot afford to undercut the one area where
there is agreement and cooperation.

******

#9
Russia Seeks Aid To Destroy Weapons
April 11, 2001
By ANTHONY DEUTSCH
 
THE HAGUE, Netherlands (AP) - Russian Foreign Minister Igor Ivanov affirmed
Russia's commitment to destroy its massive stockpile of banned chemical
weapons Wednesday, but said it needed international help to cover the huge
costs.

``I have to tell you frankly that the acuteness of the problem of funding
Russia's chemical weapons destruction is still present,'' Ivanov said in The
Hague, Netherlands.

``Russia continues to have difficulty destroying in strict compliance with
the convention,'' he said.

Ivanov described his talks Wednesday with Jose Bustani, director of the
watchdog Organization for the Prohibition of Chemical Weapons, as
``substantive,'' but declined to disclose details.

The organization's officials said Ivanov's visit showed that Russia was
determined to reduce stores of deadly chemicals, but they expressed
disappointment that no concrete details were given about how and when it will
achieve reduction targets.

Russia - which has the world's largest stockpile of chemical weapons - agreed
to do away with 20 percent of stores by April 2002.

But it is lagging far behind schedule. The OPCW has extended a deadline for
destroying the first 1 percent of stockpiles to 2002, meaning Russia will
almost certainly miss the 20 percent requirement.

Russia has said it needs international financing for the expensive
destruction process, estimated to cost $7 billion. Russian experts say it
could take 15 to 30 years to destroy the entire stockpile.

Russia increased its 2001 budget for the project to $40 million - mostly to
build a destruction plant in the town of Gorny, in the Volga River region of
Saratov, the OPCW said. Another $1 billion was needed to build another
facility in Schuchye in the Kurgan region.

The Gorny plant, which has drawn some financial support from Europe, is being
built to destroy blister agents, older weapons which are at the greatest risk
of leakage because of poor storage facilities. The United States is more
interested in Schuchye, where more advanced nerve gas weapons are kept.

Ivanov called for international support Wednesday, saying he was confident
OPCW member states would ``take the necessary measures.''

``It is our common interest to destroy those masses of chemical weapons,'' he
said.

Russia has about 40,000 tons of chemical weapons, compared with 30,000 for
the United States. The volume of chemicals for weapons in those two countries
alone surpasses that of the rest of the world, OPCW spokesman Peter Kaiser
said.

Russia was one of the inaugural signers of a chemical weapons convention that
was opened for signing in January 1993. The convention has been ratified by
143 countries, including Russia in 1997. Another 31 nations have signed, but
not ratified the treaty.

******

#10
Weak Russian banks blocking economic development: PM

MOSCOW, April 11 (AFP) -
The underdeveloped Russian banking sector, which suffered a collapse in 1998,
could act as a brake to getting the country's economy back on track, Prime
Minister Mikhail Kasyanov said Wednesday.

Meanwhile, Russia reached on Wednesday an agreement with the Ukraine on a
customs regime on piping for oil and gas pipelines, agency Interfax reported.

Modernisation and strengthening of the banking system is "one of the most
important directions of government policy," Kasyanov told a congress of the
association of Russian banks in remarks quoted by Russian news agencies.

The banking system collapsed in August 1998 following a devaluation of the
ruble and suspension of state payments on foreign debt.

Since then, restructuring of the sector has fallen behind and economists have
accused the Russian central bank of failing to thoroughly clean house.

The large number of banks and their often low capitalisation have undermined
confidence needed to boost investments and halt capital flight.

And Russian legislation has hampered credit development because financial
laws lack a framework for mortgages or loan guarantees.

The Russian economy grew in 1999 and 2000, but with little help from the bank
sector, the contribution of which will be essential for future growth,
chairman Alain Froissardey of Credit-Lyonnais Rusbank told an economic forum.

Meanwhile, Kasyanov and Ukrainian counterpart Viktor Yushenko reached broad
agreement early Wednesday after 10 hours of talks, on import quotas for
Ukrainian piping for oil and gas pipelines, Interfax reported.

Details of the accord were not immediately available.

Moscow had sought to limit pipe imports to 480,000 tonnes per year, from last
year's level of 769,000 tonnes.

Following protests by Russian producers, Deputy Prime Minister Alexei Kudrin
had promised to slap customs duties of up to 40 percent on Ukrainian supplies.

But the Ukraine's Yushenko told the media that the accord excluded such
levies, while acknowledging that the Russian market was crucial to his
country.

"If we lose the Russian market, we lose Ukraine," he said late Tuesday in the
southern Ukrainian city of Odessa.

"Russia can do without Ukraine, but Ukraine cannot do without Russia."

Unless economic cooperation with its giant northern neighbor were reinforced,
Yushenko said Ukraine would be condemned to a "slow death."

Russia takes in between 30 and 40 percent of Ukraine's exports, and provides
up to 70 percent of its energy supplies.

******

#11
From: "George Slastnoy" <slastnoy@akbbgs.ru>
Subject: NTV
Date: Wed, 11 Apr 2001

All this rumbling about NTV has been  going long enough, with the prelude
starting back at the times Yeltsin's  presidency.  It jas nothing to do
with defense of the freedom of press that  NTV, Yabloko etc. are constantly
appealing to.  The thing is that the  struggle is being conducted between 2
groups of the oligarchs, which at hard  times always represent a monolythic
array against the true opposition.  One  group is called "The Family", that
is, the oligarchs, formerly close to pr.  Yeltsin and presently loyal to
Putin.  The other faction is associated with  ultra-liberals (Gusinski),
world capital of the American and Jewish origin.  backed on the political
stage by Yabloko, partly the Union of the Right Forces  and partly - by
Motherland - All Russia.  As serious people say, over the  last 10 years
there has been freedom of press in Russia.  Freedom existed  only for those
media that directly supported Yeltsin's regime.  And, when  Yeltsin closed
15 newspapers in 1993 and later by all means impeded their open
distribution (up to approximately 1998) no single sign of support was
issued  from NTV.  On the contrary, the very existence of the opposition
media was  silenced both by the state-controlled impression and TV channels
and by  NTV.  On RTR there was a program called "Press-express", which
concentrated  audience's attention on publications in the "quality press",
to which they  ascribed NG, Segodnya, Commersant, even Moskovski
Comsomolets, Argumenty i Facty  and Comsomol'skaya Pravda, the last three
more and more becoming "yellow"  press and have little in common with
serious media.  And simultaneously  nothing was said about such papers as
Sovietskaya Rossia, Zavtra.  Recenlty  vice-governor of Moskvskaya oblast',
as it was written by one Russian  internet agency, laid prohibition on a
TV-show of patiotically-thinking  Krutov.  That also passed on NTV without
notice.  What freedom of  press is the channel defending?  They are
defending the freedom only for  themselves.  The freedom to always pour
dirt on the state, Orthodox Church,  patriots, and to promote the interests
of a group of oligarchs, fattening at the  expense of the people and
filling the vaults of foreign banks with illegally  exported capital.  And
in this respect I have no single drop of pity for  this channel. The irony
of the situation is that now the  channel is struggling against the
principles they have professed over the  decade: the sacred character of
private property.  Now, when it has come to  pay off their debts to Gasprom
in the form of surrendering a part of shares to  the firm, they have
rebelled against the right of a proprietor to control its  property, that
is, to appoint the CEO of the company.  During the last 3  years they have
been showing "stupid socialist-minded workers" struggling  against
proprietors of their enterprises in the process of a redistribution of
property (that process negatively impacting workers' livings standards,
operation of their enterprises etc.), insisting that the workers have no
right  to interfere with company management.  They have riped what they had
 previously sown. 

*******

#12
strana.ru
April 11, 2001
Leonid Bershidsky: "In reality, there is dictatorship inside media"
 
Leonid Bershidsky, editor-in-chief of Vedomosti newspaper, thinks that
editors-in-chief should be appointed by shareholders.

- Of course, we have a charter, the Press Ministry will never register media
unless there is a charter. Otherwise it is simply impossible to get
registered as media.

Though I will again be branded as a strangler of the freedom of expression, I
think it is sheer idiocy when journalists elect an editor-in-chief for
themselves. Both editor-in-chief and director must be appointed by the owner,
while journalists have the right to vote for or against an editor-in-chief
only with their legs (by giving in their notice). In our case there was no
such problem, because we hired the staff from scratch.

In Vedomosti, shareholders appoint both director and editor-in-chief. I, for
one, have been appointed by the shareholders, not by the staff, and it is
very good. How, I ask you, could I run the shop if I had to go around handing
out election promises? It's sheer idiocy.

Generally speaking, a normal medium is not a democratic outfit. There is a
dictatorship inside, particularly during deadline moments. If journalists
agree to work with you, they respect you and accept all terms of hire, which,
incidentally, they get from shareholders, not you. If, however, they don't
trust you, if they think you are a bad editor and that the shareholders don't
pay them enough, they will beat it and that will be the right thing to do.
That's a vote for you.

True, it must be said that papers and Internet are in a somewhat different
position in this sense than TV, because in our sector there are employment
options, there is a number of other media (new projects may be created
comparatively cheaply), whereas television has none. If you have decided that
you will not work for the state-run television, then in reality you have
nowhere to go aside from NTV. In this situation, people will cling to a
chance to go on working freely, no matter by what idiotic methods they do it.

Well, there is, of course, TV-6, but it has an absolutely different budget,
it so far has no particular news broadcasting, and its financial prospects
are very vague.

********

#13
Segodnya
April 11, 2001
THE RIGHT LOOKS ABROAD FOR EXTRA VOTERS
The Union of Right Forces promises to import democracy into Russia
Author: Svetlana Ofitova
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
THE UNION OF RIGHT FORCES OPENED ITS FIRST FOREIGN OFFICE IN LONDON YESTERDAY. IN THIS INTERVIEW, BORIS NEMTSOV DISCUSSES THIS EVENT. HE COMMENTS ON THE POTENTIAL NUMBERS OF RIGHT-WING VOTERS, AND ON WHAT ANATOLY CHUBAIS SAID ABOUT THE NTV NETWORK.

     At the fourth economic forum in London yesterday, Union of Right
Forces faction leader Boris Nemtsov said: "The two million Russian
citizens living abroad are just what we need to establish democracy in
Russia." The Union of Right Forces (URF) also opened its first foreign
office in London yesterday. In this interview, Boris Nemtsov discusses
this event.

     Question: What are your reasons for believing that Russian
citizens living abroad will turn out to be URF voters?

     Boris Nemtsov: For example, in the last elections we got 25% of
the vote among Russian citizens living in Britain - more than any
other party. [i.e. those Russian citizens entitled to vote, who turned
up at the local embassy or consulate - editor's note] Why should we
let our compatriots be left out of important political processes in
Russia? There are up to 200,000 Russian citizens in Britain, and they
are mostly our supporters.

     After London, we plan to open branches in New York, Germany,
Israel, Canada, and finally in Australia.

     Question: Does the fact that you're looking abroad indicate that
your electoral resources in Russia are exhausted? I mean support for
the URF in the most recent parliamentary elections.

     Nemtsov: It just means that we have to use all our resources to
the full. The right's electoral resources in Russia not exhausted at
all - in fact, we were only getting started in 1999. According to the
National Public Opinion Research Center and the Public Opinion
Foundation, the URF has the potential to get 20% of the vote. Since
we're a very new organization - just one year old - you must agree
that it's difficult for us to persuade people to vote for us.

     Question: But you said at the forum today that the votes of two
million Russian citizens living abroad are necessary to the URF in
order to "establish democracy in Russia"...

     Nemtsov: At the last elections, we received 5,677,273 votes; just
imagine if we had been able to get another million - we would have had
45 Duma seats rather than 33. That could have altered the situation
significantly. For example, during the debate about the NTV network,
we got just over 100 votes.

     Question: Aren't the right's failures linked to its internal
splits? For example, the latest split over NTV. Anatoly Chubais says
it's a purely financial affair. Pokhmelkin says it's political. You
seem to be in the middle...

     Nemtsov: We do have an official position on this, as expressed in
a statement by the URF coordinating council. If the speech of Chubais
had been reported in full, from start to finish, it would have sounded
just like the URF statement. In the first part of his speech, Chubais
said he considers it incredibly stupid, and a stong blow to Russia,
that such a storm of debate has arisen around NTV, its journalists,
and its editorial policy. In the second part of his speech, he
discussed the rights of shareholders and property owners. But
unfortunately, only the second part of his speech was reported - hence
the problems.

     Question: Some observers are already describing the opening of
the URF's first branch abroad as preparations for a possible move into
opposition. Were you thinking about that when you opened your London
office?

     Nemtsov: No way! We're not emigrating!

(Translated by Elena Leonova)

******

#14
British ambassador in Moscow says Russia on the right track
Interfax

Moscow, 11 April: Sir Roderick Lyne, British ambassador to Russia, believes
that the situation in the country should give Russians strength and
confidence in the fact that the country is on the right course.

There was a crisis in Russia two to three years ago, but now the situation is
stable and living conditions have started to improve, Lyne said in an
interview published in the 15th edition of the Ogonek magazine.

Among the absolutely correct steps made by President Vladimir Putin, the
ambassador named the liberal economic policy, restructuring of various
branches of the national economy and also the establishment of closer ties to
the world economy.

Lyne believes that Russia's main achievement is that the country now has very
capable, hard-working businessmen.

He also believes that Russia is going through a painful process of gaining
its status in a new reality, where the country is not an empire anymore.
England went through this as well and it took the British almost half a
century to get used to the loss of their empire, Lyne said. He said it should
take Russia 20-30 years to get over this pain. And only 10 years have passed
since 1991, which is a very short time, Lyne said.

Speaking about international relations, the British ambassador pointed out
that there are and there always will be certain disagreements among
countries, including between Russia and Great Britain. "It is normal
international practice. If there were no disagreements, our relations would
be less significant. It is important to preserve effective instruments and
structures regulating them," Lyne said.

******

#15
Russia may delay restructure of utilities-Kudrin
 
LONDON, April 11 (Reuters) - The Russian government may delay decisions on
the restructuring of key utilities, electricity giant RAO UES and the world's
largest natural gas producer, Gazprom (GAZP.MO), in the interests of ensuring
an equitable deal, Finance Minister Alexei Kudrin said Wednesday.

"You should realise that restructuring monopolies requires a long process and
it has to be a planned process," Kudrin told a press conference on a Russian
investment conference here.

The Russian government faces a key challenge restructuring power monopoly
Unified Energy System (EESR.RTS) and the issue has resulted in a major
confrontation between shareholders and management, although both sides have
now made concessions.

The State Council, the Kremlin aegis for the industry working group, is set
to discuss the reform plan on April 16, but the government has said it will
not take up utility reform again until May 16.

"It is more important to have national consensus with such issues, rather
than just two or three months of delaying," Kudrin said, speaking through a
translator.

In a separate announcement, the European Bank for Reconstruction and
Development confirmed on its website that it was considering a 100 million
euros loan to UES, of which 40 million euros would be syndicated for banks. A
spokesman said last month EBRD was in the early stages of considering the
loan.

"RAO UES is a key player in the restructuring of the Russian power sector.
However, in the past it has impeded restructuring. Through this project, the
Bank will try to influence the industry restructuring process," the EBRD
said.

Kudrin said Gazprom's restructuring had been initially scheduled to be
discussed in August this year.

******

#16
From: "Ryan Kreider" <mvf@mvf.ru>
Subject: Media Assistance in Russia and Ukraine
Date: Wed, 11 Apr 2001

Dear David,

I was inspired to write this after reading Anne Applebaum's very good
account of the current media situation in Russia (written for Slate Magazine
and posted on JRL).

At one point, Applebaum commented, "Sad that no one thought of directing a
little of that Western aid money into teaching local newspapers about the
virtue of the classified ad."

I work for a nonprofit organization called the Media Viability Fund (MVF),
which is a joint project of the Media Development Loan Fund and the Eurasia
Foundation. We currently work in Russia and Ukraine, and our clients include
14 independent regional newspapers and three independent regional television
companies. We have also recently begun working with independent regional
radio stations.

MVF's program is based on long-term, low-interest loans (through a leasing
program) coupled with technical assistance.

We share Applebaum's concern that too many media companies in Russia are
either controlled by local administrations or are owned by various regional
tycoons whose primary businesses are not media related. That is why we made
the decision early on to work only with truly independent Russian media
companies in the regions. Of course, that begs the question: How do you
define "independent?"

MVF defines an "independent media company" as one which receives no
subsidies from, nor is owned or founded by governmental agencies or
officials. In addition we do not work with media companies owned or founded
by companies or individuals representing monopoly or oligarchic structures
or by foreign-based legal entities. A significant part of the media
company's content must be news, current events, or documentary programming
driven by an editorial effort to exercise fact-based, unbiased, non-partisan
journalism that is independent from the influence of the government or any
other interest group. Finally, we do not work with media companies based in
Moscow or St. Petersburg or with companies owned by networks or holdings
based in those two cities.

Our assessment (due diligence) process starts with an in-depth questionnaire
that assesses categories such the political and economic climate of a media
company's region, management skills, advertising and marketing, journalistic
quality, positive impact on the region, market longevity, market share,
credit history, financial condition, etc. In addition, each company's legal
documents are analyzed by a law firm selected by MVF to assure that the
documents are in compliance with Russian law and meet MVF's requirements for
independence in ownership structure. If the company passes these first
hurdles, MVF does an on-site assessment of the media company, and that
process usually lasts about two days.

MVF's leasing program helps media organizations acquire much needed large
capital items. Newspapers are able to purchase printing presses or develop
independent distribution systems. Television and radio stations are able to
acquire production, editing, and broadcasting equipment.

Our technical assistance includes projects such as team training trips and
advertising seminars for our newspaper clients. MVF believes that Russian
and Ukrainian newspapers need to work harder to serve and keep readers. The
most effective way to do this is to collect and present information in more
modern ways and work in teams: to concentrate on readers and their
information needs; to present stories in more appealing ways; to improve
newspaper design with information presented in charts, graphs,
illustrations, lists, sidebars, blurbs, etc.

The first and most basic task for our team trip advisers who visit our
clients on-site (teams usually consist of a Russian or Ukrainian designer
and an expert in Western management techniques) is to encourage editors,
reporters, designers, photographers and illustrators to work together to
plan and design stories. Other important issues addressed include: less
reliance on the ineffective executive secretary system; more diversity in
deciding how to approach and report a story; a more horizontal system to
manage news as more people become involved in the decision-making process;
incorporating good design elements into the overall system of the newspaper.

Training in finance and advertising is a big component of MVF's assistance
program. MVF's three most recent seminars have focused on contemporary
advertising techniques and market research. In fact, we recently helped five
of our clients conduct in-depth market research on-site (readers and
non-readers, advertisers and non-advertisers). We highlight what we believe
is honest, effective advertising (focusing on well-designed display ads) and
strongly discourage the deceptive and destructive practice of hidden
advertising.

We stress the necessity of developing quality business plans, and our
financial experts assist our clients with that process. We help them
understand how business plans can be effectively planned and written, but we
do not do the work for them. To qualify for a loan through the leasing
program, our clients must defend their business plans before a loan panel
comprised of Media Development Loan Fund executives and financial experts.
The clients must fully justify their equipment needs and expenses and their
ability to pay back the loans. They must show how the loan will contribute
to the media company's further development and profitability.

Perhaps this is more than JRL readers need to know about our program, but we
wanted to increase awareness that such media assistance programs do exist in
Russia and Ukraine. We focus on assistance to those media companies that are
ready and willing to provide their communities with quality sources of
information and bolster civic responsibility; to those that truly understand
the importance of independence and profitability and are ready to face the
challenges and hard work that such concepts entail.

The question has been posed, "Why does MVF work with only 15-20 clients? Why
not 40 or 50? These are big countries. Certainly there are more deserving
media companies out there with which you could work." Perhaps, but our
analysis of the Russian and Ukrainian mass media markets has not been able
to locate them. At least, not companies that meet our requirements (outlined
above) for a long-term partnership. We are always delighted when we find new
clients here who meet those requirements, and we welcome any leads people
might have for independent media companies that could benefit from the kind
of media assistance our program is able and willing to provide.

(Within the next couple months, MVF will have a fully functional web site up
and running. Currently, our web site simply gives a brief overview of our
program and our contact information.)

Sincerely,
Ryan Kreider
Media Viability Fund
Program Associate
Strastnoy blvd., 16, Bld. 2, Entrance 3, 4th Floor
Moscow, Russia, 103031
Phone: 937-56-58, fax: 937-56-59
Area code: for domestic calls (095), for long distance calls (502)

*******

#17
Belarus's Lukashenko to compaign on strong state
By Larisa Sayenko
 
MINSK, April 10 (Reuters) - Belarussian President Alexander Lukashenko said
on Tuesday he would maintain a firm hand on his country's affairs if he won
re-election this year and urged state media to explain his policies more
favourably.

Lukashenko, who often praises "iron rule," said in his annual address to
parliament that his Soviet-style economic policies and tight state control
should be preserved for another five years of his presidency.

Belarus is expected to hold a presidential election in September, but no date
has yet been set.

"A strong state has been created," Lukashenko said in the address, broadcast
by state television to the country of 10 million. "Belarus should become a
powerful and prosperous state, everything has been done for this."

"We should set an objective. By 2005 we need to consolidate our progress, so
that war veterans are not afraid to wear their medals, a working man is
always respected and the state itself is not regarded as an outcast by other
countries," he said.

Lukashenko, who is accused in the West of eroding democracy, told deputies he
expected to be in power after their four-year term expired in 2004.

The Belarussian leader, elected in 1994, used a referendum in 1996 to expand
his powers, dissolve parliament and increase his term in the office by two
and a half years.

He said state television, radio and newspapers failed to explain properly the
advantages of his political and economic policies.

"There is a lack of people with proper artistic taste and political intuition
(in the media)," he said. "We should raise the people's mood."

"Society needs clear and simple ideological directives, we need unity. We
must not split society and damage the state."

The opposition in Belarus complains of unequal access to the media, but
Lukashenko said state media should step up its fight against "ideological
enemies" from the West and from some Russian television channels ahead of the
election.

Lukashenko reiterated criticism of foreign election observers, saying he
would not allow Western aid to independent regional media and would restrict
election monitoring.

He said closer ties with Russia would remain a priority. Belarus and Russia,
its eastern neighbour, have signed a number of agreements to create a "union
state" but the accords have had little practical effect.

"There are no kind uncles in the West who will help us," Lukashenko said. "We
grew up in another value system. We Slavs are kind people who would give away
even the shirt on their backs. For them -- profits are the most important."

******

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