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September 28,
2001
This Date's Issues:
5465
5466
Johnson's Russia List
#5466
28 September 2001
davidjohnson@erols.com
[Note from David Johnson:
1. Izvestia: THE RUSSIAN PEOPLE BELIEVE IN REVENGE. Russian
views about the terrorist attacks are changing. (poll)
2. The Globe and Mail (Canada): Geoffrey York, New game
afoot in Central Asia. Behind antiterrorism rhetoric are other narrow,
dangerous agendas.
3. Toronto Star: Olivia Ward, Putin emerging as major power
broker. Russian leader has new role as a builder of bridges to West.
4. BBC Monitoring: Confusing terror and Islam is harmful and
dangerous - Russian president.
5. The Russia Journal: John Helmer, I GROZNIFY, YOU
GROZNIFY, WE GROZNIFY -- THE DECLENSION OF TERROR.
6. Novaya Gazeta: Mikhail Gorbachev, TERRORISM CANNOT BE
DEFEATED BY NUCLEAR BOMBS. Tracing its financial sources is much more
effective.
7. Peter Lavelle: Untimely Thoughts - The crude price of
respectability (re Oil, great power aspirations, and security).
8. Interfax: Russia's chief physician gives figures for HIV
and AIDS.
9. Reuters: Russia firm denies bid to axe TV channel
political. (TV6)
10. Reuters: Russia set to gain more Caspian oil clout.
11. Ben Aris: Crunchy Chewy Reforms.
12. Financial Times (UK): Robert Cottrell, TAJIKISTAN:
Dushanbe prepares for war next door.
13. Nezavisimaya Gazeta: THE COMMUNISTS WANT AN AMNESTY FOR
CAPITAL
FLIGHT. Interview with Sergei Glaziev about the economy and next year's
budget.]
*******
#1
Izvestia
September 28, 2001
THE RUSSIAN PEOPLE BELIEVE IN REVENGE
Russian views about the terrorist attacks are changing
Author: Svetlana Popova
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
THE LATEST POLLS SHOW THAT RUSSIANS ARE NOW TAKING A MILDER, MORE
CONSERVATIVE VIEW OF THE TERRORIST ATTACKS IN THE UNITED STATES, IN
COMPARISON WITH TWO WEEKS AGO. THEY STILL FEEL SORRY FOR AMERICANS, BUT
ONLY 34% ARE NOW PREPARED TO SUPPORT RETALIATORY STRIKES AGAINST
TERRORISTS.
The National Public Opinion Research Center (VTsIOM) continues to
test public opinion about the terrorist attacks in the United States.
The latest poll was done on September 21-24, two weeks after the sad
events. The results turned out to be rather unexpected.
Having recovered from the initial shock, Russians have
fundamentally changed their views about what is happening; they have
turned out to be fairly conservative. In comparison to a VTsIOM poll
done right after the attacks, when 52% of respondents were outraged
and 38% deeply compassionate, the emotional values of Russians have
changed places. Outrage has given way to calm compassion. This is a
substantial change, if we take into consideration the fact that the
opinion of "it served them right - for Yugoslavia, Iraq,
Hiroshima" is
now upheld by one-third of the respondents. They believe that
terrorists were guided by such motives as "hatred of the US" and
"religious fanaticism" (45% each). These motives imply revenge
for
some real or imagined crimes of the United States. Another 29% are
sure that the acts of terrorism were in response to bombings and
harassment by the US. It is noteworthy that Russians are almost ready
to pin the blame for the events on the United States itself; but at
the same time, they categorically disprove of terrorism and terrorists
(78%). Only a small number of respondents (11%) consider the
terrorists to be heroes who sacrificed their lives for an idea.
Actually, the idea of revenge which has recently dominated in the
United States appears to be dissipating - in words, at least. Defense
Secretary Donald Rumsfeld spoke about the military campaign; he said
the forthcoming war would not be a matter of revenge, but of self-
defense. And the aim of the war is far from being a vendetta. On the
contrary, everything is done for the sake of peace, so that such
tragedies should never happen again. But 90% of Russian respondents
don't believe it - they still think that the main motive of the US
administration is revenge.
For example, 34% of respondents are now feeling anxious, though
right after the attack on the US only 29% were scared. And 72% of
respondents (in contrast to 41% in earlier polls) are afraid that the
US operation might lead to World War III.
On all questions connected with the possibility of air strikes,
Russian respondents preferred to temper justice with mercy. On
September 13-15, 61% of respondents indicated an understanding of US
retaliatory strike plans; now only 34% are prepared to support them.
(Translated by Daria Brunova)
*******
#2
The Globe and Mail (Canada)
28 September 2001
New game afoot in Central Asia
Behind antiterrorism rhetoric are other narrow, dangerous agendas
By GEOFFREY YORK
DUSHANBE, TAJIKISTAN -- Is it the end of the Great Game, or merely the
beginning of a dangerous new joust for influence?
Optimists have been proclaiming a new era of Russian-American
co-operation
in Central Asia, the long-time battleground of global superpowers seeking
control of this strategic region.
In the 19th century, it involved an intricate competition between the
ambitious empires of Britain and Russia, known as the Great Game. More
recently, it was the United States and Russia that sparred for influence.
After a conciliatory speech by Russian President Vladimir Putin this
week,
Washington and Moscow seem to have abandoned their differences and agreed
to unite with the Central Asian republics in a coalition to fight
terrorism.
But a closer look suggests that a new game is afoot. Behind the broad
cover
of the antiterrorism campaign, the autocratic leaders of the former Soviet
republics -- particularly Uzbekistan, Tajikistan and Kyrgyzstan -- are
pursuing agendas that have little to do with global co-operation and more
to do with narrow interests.
The danger is that the Russian and Central Asian strongmen could
exploit
the antiterrorism rhetoric to justify a crackdown on Islamic opposition
factions, triggering a violent backlash. Instead of stabilizing the
region,
the antiterrorism campaign could fuel deeper long-term conflicts.
The Kremlin and the Central Asia republics have long been worried about
Islamic fundamentalist groups in the region -- especially the Taliban
regime in Afghanistan, but also smaller Islamic rebel groups that have
emerged in recent years. They are seen as the only alternative to the
corrupt ex-Communist strongmen who have ruled these republics for more
than
a decade.
Uzbekistan, the most populous of the Central Asian republics, hopes the
U.S.-led coalition can crush the Taliban and provide cover for its own
ruthless crackdown on the Islamic opposition. It has jailed thousands of
Muslims, shut down hundreds of mosques, arrested religious leaders and
prohibited bearded men and headscarf-wearing women from attending
university.
By allowing U.S. aircraft to be based on his territory, Uzbek President
Islam Karimov is bolstering his power and dampening Western criticism of
his human-rights abuses.
Tajikistan and Kyrgyzstan, too, hope their co-operation with the
U.S.-led
coalition will help weaken their Islamic opposition movements and destroy
the Taliban regime that has inspired and supported many fundamentalist
groups in the region.
"Everybody is looking to get something out of this," a
Western diplomat in
Moscow said.
Russia first tried to maintain its grip over the region. Defence
Minister
Sergei Ivanov insisted that Central Asia was "within the zone of
competence" of the Commonwealth of Independent States -- the
Moscow-dominated organization of post-Soviet states. In a reflection of
the
anti-Western suspicions of the Russia military lobby, Mr. Ivanov declared
that he saw "no reason whatsoever, even hypothetical" for any
Western
military forces to operate from Central Asia.
Soon, however, it became clear that Uzbekistan and Tajikistan were
willing
to co-operate with the United States. There were persistent reports that
U.S. aircraft had already landed at bases in the two countries. Washington
was exploiting contacts cultivated through years of military co-operation
with the Central Asian republics after they became independent in 1991.
Russia sensed that its influence was being eroded. Mr. Putin's pledge
of
co-operation this week -- and his announcement that he would not object to
the U.S. use of Central Asian territory for the antiterrorism operation --
was partly a face-saving attempt to take credit for a trend already in
motion.
Russia had other strategic reasons for its co-operation with
Washington. If
the United States is planning to overthrow the Taliban, the Kremlin
desperately wants to be involved in the process of installing a new
government in Afghanistan to safeguard its regional influence. Moscow,
too,
wants to exploit the antiterrorism campaign for its own crackdown on
Muslim
rebels.
In the Russian case, the Islamic rebels are in Chechnya. There are
strong
indications that the West is now muting its criticism of the brutal
Russian
military operation in Chechnya, in gratitude for Moscow's co-operation in
the antiterrorism campaign. For the first time, U.S. and German leaders
this week began expressing sympathy for the Russian "challenge"
in Chechnya.
The Kremlin realizes that the U.S. campaign could actually strengthen
the
Russian strategic goal of defeating Islamic radicalism in Moscow's soft
southern underbelly. For years, Russia has been trying to convince the
West
of the gravity of the Taliban threat, claiming that the Taliban was on the
verge of invading the Central Asian republics -- although there was never
clear evidence aside from an occasional flight of rhetoric from a Taliban
leader.
Less than a year ago, Russia tried to persuade Washington to
participate in
joint military strikes against the Taliban, but U.S. leaders refused. Now,
the United States is ready to strike, and Russia is moving closer to its
own goals in the region.
There is, in fact, evidence that Islamic radicals are making Central
Asia a
top target for future expansion. Hundreds of Central Asian students have
graduated from pro-Taliban schools in Pakistan.
But some analysts say the Central Asian republics have created this
threat
by cracking down so ruthlessly on Muslim groups.
"Uzbekistan and Tajikistan must be encouraged to abandon their
primitive
anti-Islamic policies," Moscow historian Rustam Shukurov wrote this
week.
"It is these anti-Islamic policies that have created fertile ground
for the
likes of the Taliban."
*******
#3
Toronto Star
September 28, 2001
Putin emerging as major power broker
Russian leader has new role as a builder of bridges to West
By Olivia Ward
EUROPEAN BUREAU
MOSCOW - Since he took power, Russian President Vladimir Putin has cast
himself on the world stage as a Slavic strongman, an economic reformer and
a battler against Islamic-based terrorism.
Now the international crisis sparked by the terrorist attacks on New
York
and Washington has given him a new role of post Cold War statesman, a
builder of bridges between Russia and the West.
He is also emerging as a major power broker in the volatile Central
Asian
region bordering Afghanistan, an area where Russia has been scrambling to
maintain its foothold since the Soviet empire broke up in 1991.
This week Putin won a historic standing ovation from German lawmakers
for a
speech pledging that the Cold War was definitively over, and Russia was
now
a ``friendly European country'' in search of a stable peace.
He followed it up with a surprise offer of peace talks with Chechen
rebel
leaders he has previously scorned as criminals, if they agree
``immediately
and unconditionally to cut all contact with international terrorist
groups.''
The overtures to the West, and seeming conciliatory gesture to
Chechnya,
was coupled with indications that Moscow wouldn't stand in the way of U.S.
warplanes landing in jealously guarded former Soviet bases in Central
Asia,
bordering Afghanistan.
Putin, whose tough defence of Russia's strategic interests have at
times
threatened to lapse into anti-Western rhetoric, appeared to have made a
quantum leap toward co-operation with the West following the Sept. 11
terrorist attacks.
There are even rumours that Russia is considering joining NATO, whose
expansion in Eastern Europe has been a source of bitter controversy.
But, some experts say, it is not only the philosophy that ``the enemy
of my
enemy is my friend,'' with Washington and Moscow allied in their fight
against world terrorism, that has caused the shift.
``Putin is very serious about co-operation now,'' said Victor Kremenyuk,
deputy director of the U.S.A. and Canada Institute. ``It's also a matter
of
damage control.''
With oil prices dropping, and the world's main petroleum producers
rejecting cuts that could force prices upwards and tip the world into a
deep recession, Putin is aware the underpinnings of Russia's economic
recovery are shaky.
``The main thing is the economy, and the threat that if the oil prices
drop
even further our crisis will be bigger next year,'' said Kremenyuk.
``There's no option but for him to reschedule Russia's debt, asking for
loans and credits, because otherwise the country may not survive.''
And, he said, the softer stand on NATO is partly a way of avoiding
embarrassment as the alliance prepares to take in three Baltic states that
were once under Soviet rule, against Moscow's strong opposition.
``I think the most rational next step would be to try to limit the
damage
through closer relations, and play down the threat from NATO, which was
very often (voiced) by Putin's military entourage,'' said Kremenyuk.
Putin's decision not to pressure Uzbekistan and usually obedient
Tajikistan
into closing their air space to the United States, was one of his biggest
tests of strength in the Kremlin corridors.
``Putin's reaction was unbelievably straightforward,'' said Lilia
Shevtsova
of the Carnegie Moscow Centre. ``For the first time he's not waiting until
it's too late. His answers are usually muted. But this time he has come
out
with the right reaction - openly pro-Western.''
Putin has made it clear Russia has no interest in plunging into another
war
in Afghanistan, where it took devastating losses in the 1980s and beat a
humiliating retreat.
But the Russian leader is embattled in Chechnya, the separatist
mountain
territory he describes as a hotbed of terrorism, funded by America's chief
suspect in the New York and Washington attacks, Osama bin Laden.
After resisting any peace moves since the conflict broke out in August
1999, Putin is now asking Chechen leader Aslan Maskhadov to ``cut all
ties'' with foreign-funded terror groups, and ask his fighters to turn in
their weapons within 72 hours as a precondition to negotiations.
There are concerns the offer is little more than an ultimatum, and an
excuse for a massive onslaught against Chechnya that would now be ignored
by a shell-shocked West.
``I don't see it as a peace move,'' said Alexander Iskandarian of the
Centre for Caucasian Studies.
``I think this is pressure on the Chechen guerrillas, and he's turning
up
the heat.''
By declaring himself an ally of the West's fight against terrorism so
promptly, Putin has won points that were previously denied him.
Western diplomats have already hinted that he will be rewarded with a
more
``flexible'' attitude to human rights abuses in Chechnya, where thousands
of people have disappeared, been killed, and have died from disease and
malnutrition.
``Putin's hands are untied now,'' said Iskandarian.
``He will use the anti-terrorism war as an excuse for whatever he
does.''
*******
#4
BBC Monitoring
Confusing terror and Islam is harmful and dangerous - Russian president
Source: Russian Public TV (ORT), Moscow, in Russian 0800 gmt 28 Sep 01
[Presenter] We have just received the statement which Vladimir Putin
made
at the meeting with the heads of governments of CIS countries.
[Putin] All of our states are multinational and multifaith countries.
This
is not a new idea for us. However, in the context of the present
discussions of the fight against terrorism I would like once again to
stress Russia's position and to clarify it.
We consider it not simply counterproductive but also harmful and
dangerous
to confuse terror and Islam. Terrorists who hide behind slogans - in this
case Islamic slogans - have nothing in common with this world religion, no
matter how hard they try to unite themselves with it.
Terrorists, as we know, can be of various types and various
nationalities
and can profess any religion. And when we speak about unifying the efforts
of the whole of civilized mankind, we are also, and by no means in the
last
instance, referring to representatives of Islam.
Of course an anniversary is always a festival but in this case I would
like
not so much to celebrate but rather to sum up results, to look at what has
been done and to analyse the mistakes of which there are always a
considerable number in such a major undertaking as constructing interstate
relations between states - which are without any exaggeration fraternal,
even though this word is old and worn-out - constructing relations on a
new
basis. This is a large-scale undertaking and here also mistakes cannot be
avoided. They must be analysed and considered and assessed, and ways must
be determined to overcome them.
*******
#5
The Russia Journal
September 28, 2001
I GROZNIFY, YOU GROZNIFY, WE GROZNIFY -- THE DECLENSION OF TERROR
By John Helmer
To groznify -- active verb. Maximum firepower concentrated on an
elusive
target, with severe collateral damage; derived from Grozny, capital of
Chechnya until its destruction in 1996-99; colloquial use, as in "we
had to
destroy the village in order to save it" (Vietnam 1970).
Following President Vladimir Putin's domestic television speech on
Monday,
and his address to the German Bundestag on Tuesday, it is being suggested
that Russia's foreign and security strategy has undergone a drastic change
in the
direction of the United States. This interpretation is mostly to be found
in
American newspapers whose reporters and editorialists speak of a
"huge
shift", "a fundamental break", and "watershed".
Naturally, if a man speaks
for too long about Russia with his eyes tightly closed, the sudden flash
of
light upon opening his eyes may produce the illusion that it is others who
have changed, not himself.
In reality, what is happening is a combination of a Russian leader
saying
aloud what has always been in mind; and the articulation of Russian policy
in
pursuit of state interests, after a decade of betrayal of those
interests for corrupt personal reasons. Those interests have been defined
in the short run as a combination of reducing the security threats inside
Russia, and on its borders; and of fostering profitable commerce, the
relief
of debt, and the stimulation of business growth wherever possible.
When Putin spoke in Berlin of advancing beyond the idea of "living
in two
opposing systems", he meant to emphasize not only, as he said, that
"the Cold
War is over"; that's an idea Boris Yeltsin gave lip-service to for
years. But
Putin also meant that the United States should pursue "a sustainable
international security policy." The codeword for the German audience,
and
Putin's emphasis, were on the term "international". What this
also means is
that Russia wants the Bush Administration to acknowledge the folly, and
not
repeat the mistakes of global unilateralism -- of what Russian and Chinese
communiques regularly refer to as hegemonism.
When Putin spoke of "common threats", he meant to identify
the Taliban regime
in Afghanistan, and other sources of terrorism in the Islamic world that
threaten Europe, China, everywhere -- including New York and Washington.
Putin did not mean to include, let alone agree to target Yasser Arafat in
Palestine, Saddam Hussein in Iraq, Muammar Qaddafi in Libya, or Mohammad
Khatami in Iran. To be sure, the traditional Soviet support for the Arab
confrontation with Israel is now being tempered by Russian pragmatism, but
not abandoned, as Russia's commercial interests increasingly influence the
priorities and methods of Russian statecraft.
In this respect, the Kremlin realizes that Arafat is a corrupt and
ineffectual figure who today has almost totally lost control of the
Palestinian movement
to Hamas and Islamic militants with the will to fight and die for their
cause. Russian business interests tie the Kremlin much closer to Ariel
Sharon, and
the electorate of the Russian diaspora which voted him into power. These
interests include diamonds, banking, the arms trade, and energy. The
warmth of
Sharon's recent reception in Moscow -- and Putin's earlier gesture towards
Natan Sharansky -- indicates the ascendancy of business as usual over the
politics of the past.
Putin accepts that he shares with Sharon the common interest of not
allowing
the Chechen secessionists to take instruction from the same
people who teach the Islamic militants to conduct their war in Palestine.
At the same time, Putin is not about to allow the Israel lobby in
Washington
to target the big Russian interests in the Middle East. These include
the strategic relationship with Iran, investment in the oil sector of
Iraq,
and the economic rebuilding of Syria and Libya. One of the Cold War
stereotypes Washington continues to cling to, and Putin is now trying to
shed, is that the Kremlin backs those who want the destruction of the
state
of Israel.
So what is emerging in Moscow is a carefully calibrated policy
in which Putin is encouraging President George Bush to concentrate on
doing to the Taliban, and the guerrilla armies they train and shelter,
what Putin believes he has been trying to accomplish in Chechnya. This
will
require a concentration of American firepower aimed at decapitating the
military leadership of the Taliban, as well as all their means to threaten
their neighbours to east, west, north, and south.
The Arab contingent in Afghanistan is a target of equal importance, as
Russian
official claims of the links between the bin Laden Arabs and the Chechen
fighters are now confirmed by US intelligence, and the formerly
anti-Russian
US press.
By encouraging the US to groznify Afghanistan, Putin is aiming to open
up
opportunities for the Afghan opposition, the internationally recognized
government of Afghanistan, the Northern Alliance to retake power in Kabul.
Putin's promise of "arms and technological supplies" may be the
first time
the Kremlin has publicly admitted arming the Afghan opposition. But that
is
less significant than the hardware that is on its way. This includes
anti-aircraft artillery and missiles to match or top the
equipment the Taliban uses from the US. In addition, the Kremlin will
deliver
helicopters to allow the Afghan opposition to speed up their movement into
the holes the Americans will blast in the Taliban's grip on the country.
Air
superiority over the Taliban, and air cover for the Northern Alliance, are
also to be provided.
For the anti-Taliban Afghans to have a real chance of recapturing
Afghanistan, the Cold War fighters in Washington have to be convinced that
this would not
become a backdoor victory in Kabul for the Kremlin's candidates.
Pakistan's
military junta must be convinced it has more to gain from cutting the
Taliban
loose, than retaining them in secret. At the same time, to persuade the
Bush
Administration of its good faith, Putin must offer airspace and ground
facilities as platforms for US airstrikes and commando operations.
That gesture is now part of the grand bargain over Afghanistan. It
carries
the mutual commitment that neither Washington nor Moscow will return to
backing
surrogates for power in Kabul, as they did twenty years ago.
The reason that Russia and the United States, along with the European
powers,
can agree to groznify Afghanistan is that everyone realizes that
concentrated
destruction of the camps, arsenals, troop formations is a precondition for
limiting the spread of terrorism. It is a short-term expedient, it is also
understood, with a limited effect on global terror risk. The recruitment
of
terrorism is a generational phenomenon; it takes time to pursue and die
out,
like teenageviolence in the American urban ghettoes. Groznifying the base
is
only the beginning. It also has the attraction of avoiding damage to the
business interests -- especially the oilfields and oil supply lanes --
that
matter far more to everyone than the Afghan cockpit.
*******
#6
Novaya Gazeta
No. 70
September 28-30, 2001
TERRORISM CANNOT BE DEFEATED BY NUCLEAR BOMBS
Tracing its financial sources is much more effective
Author: Mikhail Gorbachev
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
WHAT SHOULD BE DONE, AND WHAT SHOULD BE AVOIDED, IN THE AFTERMATH OF
SEPTEMBER 11? MIKHAIL GORBACHEV WOULD LIKE TO SEE A BROAD ALLIANCE WHERE
RUSSIA, CHINA, AND INDIA WILL STAND SIDE BY SIDE WITH THE UNITED STATES,
EUROPE, AND JAPAN. RETALIATION SHOULD BE TOUGH AND PRECISE.
Gorbachev praises Bush and calls for a more humane world order
It was as though humanity awakened from a nightmare in which
thousands became victims of global terrorism. Men and women like all
of us. And this is probably the most important thing - everyone
understands that what happened did not concern America or Americans
alone.
This understanding and solidarity has helped America survive the
shock. People closed ranks. It shows that there is nothing wrong with
thinking about the world we live in as a huge ark we all share, an ark
we cannot get off.
I hope that clear understanding of it will not dim, that the
victims did not die in vain.
And what should be avoided under the circumstances? First and
foremost, so horrible a crime against the innocent, against humanity,
cannot be left unanswered. Solidarity is what we need above all.
Solidarity is an answer of sorts as well. Terrorists should be
condemned by the whole world. Barbarous deeds like that should not
pass without response. Retaliation should be tough and precise.
But talking about a war is wrong. We should not respond to
terrorism with terrorism of our own. This response is probably what
was expected. A response like that will derail the whole system of
international relations.
The US Administration is out to identity the persons and
organizations that carried out the terrorist attacks so as to demand
their extradition. Special operations may take place otherwise.
It is of paramount importance as well that the American president
drew a line between Islam and terrorists who use it as an excuse.
Islam doesn't promote hatred and violence. The matter doesn't concern
a clash, it concerns solidarity of the international community in the
battle with global terrorism.
It will be a mistake to start thinking in terms of
"American",
"Chinese", "Islamic", or any other century. We should
be thinking in
terms of a single community of man based on the multitude of and
cooperation between cultures and civilizations.
Recognition of diversity as a value is the only realistic way
toward unification of the world. We cannot afford to pay in blood for
every new step closer to the new world. Nothing justifies bloodshed.
A peaceful strategy on the basis of concern over the future of
the world is the third component of our response, the one following
solidarity and retribution.
We will never understand how come the intelligence communities
failed us so badly otherwise. Without striving for a world where
everyone's rights are protected, we will never even establish an
international counter-terrorism body, something like Interpol, under
the aegis of the UN Security Council. A body like that should have
been established longer ago.
There is one more thing. The example of America, the most
powerful country in the world, shows plainly that there is more to
security than military might alone. How shall security be provided? It
is gradually dawning on us that a gross strategic mistake was made
when we blindly followed the people who thought in terms of military
contracts only. Even superweapons are not a protection.
We should have heeded the signals sent us by antiglobalists. We
persuaded ourselves that they are but a scandalous and aggressive
minority shattering shop windows all over the world. In Genoa, there
were 300,000 persons in the streets- young and not anymore, serious,
and well educated, all of them demanding that globalization should not
be made a one-way street, a phenomenon that promotes the interests of
the wealthy alone and forgets about the poor. As on numerous other
occasions, the criminals did their best to make use of the protests.
And we are like an ostrich, hiding our heads in sand and trying to
manage the world of the 21st century with the instruments of the 20th,
19th, and even 18th centuries.
A great deal of problems and issues are no longer pressing, the
Star Wars concept included. What happens makes is absolutely clear
that a mistake has been made in the choice of the way and strategy. We
were waiting for a missile to come streaking from the sky and found
out that no missile will ever protect us from a plane piloted by
suicide hijackers. Terrorists used planes this time. Tomorrow the
danger may be found in drinking water, in nuclear power, or in a new
disease resulting from the use of biological weapons. Impoverishment,
starvation, maladies, chaos, and violence send new and new recruits to
terrorist organizations. Our refusal to put up with terrorism and
determination to fight it should stipulate elimination of the
conditions that feed and nurture it.
Numerous attempts were made to persuade the world that
unrestricted movement of capital and free trade were going to become
the ultimate cure. Unfortunately, this solution benefited the wealthy
alone, and the gap between the rich and the poor has only broadened in
the post-Cold War decade.
That is why I can only echo the Pope: we need a new world order,
more stable, just, and humane.
There are lots of speculations these days about where and when
the first blows will be delivered. The UN Security Council and
international laws are not always recalled in these speculations.
At the same time, the UN Security Council is the only structure
that can find someone guilty and issue a mandate acceptable to the
whole international community. If the United States operate within the
framework of the UN instead of acting all on its own, it would only
consolidate its position as leader. I hear every now and then that the
UN has lost its effectiveness. Even if it has, what's stopping us from
making it effective again?
Special attention should be paid under the circumstances to
Russia's position. I find President Putin's proposals reasonable and
wise.
George W. Bush says this war will last a long time. It is indeed.
Such wars should be fought side by side, without careless hints about
the possibility of using nuclear weapons. Terrorism cannot be defeated
by nuclear bombs. Tracing its financial sources and channels is much
more effective.
These weeks have been an ordeal for Bush. He has passed it, he
has changed. I hope he will be able to, and want to, become the
organizer of a broad alliance where Russia, China, and India will
stand side by side with the United States, Europe, and Japan. What
seemed incompatible only yesterday appears necessary today. What
matters is working together toward the proper goal, and preventing the
spirit of revenge from prevailing.
*******
#7
From: "Peter Lavelle" <plavelle@metropol.ru>
Subject: Contribution
Date: Fri, 28 Sep 2001
Peter Lavelle: Untimely Thoughts - The crude price of respectability
(re Oil, great power aspirations, and security)
Today the Duma will most likely approve the first reading of the 2002
budget. At the same time, Kasianov, Kudrin, and Illarionov count the
kopecks and barrels of oil while Putin formulates new directions in
foreign
policy and Russia's position in the world. Sergei Ivanov is most likely
attempting to assimilate how the two set of players can perform in tandem
while marching to different beats. With oil markets desperately attempting
to find some equilibrium, Russia is facing the nightmare it hoped would
come
much later - an unstable and unpredictable international oil price regime.
The specter and curse of oil: Yergin called it the "prize", for
Russia it
may be a blight given its aspirations. Putin clearly enjoys the role of
'saving' the west and the world from the "terrorist-evil" Russia
claims to
know best. However, short-term international political gains are impacting
medium and long-term domestic economic goals. At some point a simple and
somewhat uncouth question needs to ask: Can Russia pay its way in this new
conflict, in this new alliance? Without stable and preferable prices for
commodities - especially oil, Russia faces a very grim future. Putin's
implicit mandate has been to be 'the quiet force' for a decade to turn
Russia around. That mandate is seriously in doubt now. Russia's material
venerability is more obvious than ever before. Maybe this is part of
Putin's
apparent go-slow stratagem when it comes to specific and concrete actions
supporting American resolve. To compensate for this fragility, Russia is
knocking hard on the doors where it can return to past greatness and
respectability (a real G8 instead of the obvious G7+1, NATO, the UN
Security
Council). This is the least effective route to security. Russia ability to
radically change these institutions is unlikely on the short-term. But
there is a different and better way. A way in which the west, especially
the US, can show its solidarity and appreciation with Russia is to
establish
a new oil regime guaranteeing purchase of Russian oil at a mutually
advantageous price. This is not as odd as it may appear. Mutual security
requirements may demand it. If Russia is willing to come out the cold, why
shouldn't the west as well? Russia's future sovereignty may demand on it.
The west's control of the international economy may not function without
it.
*******
#8
Russia's chief physician gives figures for HIV and AIDS
Interfax
Moscow, 27 September: There are about 148,000 people registered
HIV-positive in Russia today and 602 of them are ill with AIDS, Russia's
chief surgeon [physician] Gennadiy Onishchenko said in an interview with
Interfax on Thursday [27 September].
He has been taking part in the conference of the Coordinating Council
on
HIV problems in the CIS states that opened in Moscow on Thursday.
He said that both in Russia and the CIS, one can see "a
catastrophic rise
in HIV, with drug consumption as the main factor of infection".
Onishchenko singled out Yekaterinburg, Kaliningrad, and other cities as
the
sources of "the most intensive" spread of HIV in Russia, given
the number
of cases per 100,000 people.
At the same time, he said that the HIV-infected population in Moscow
and
its Region numbers 12,800 and about 15,000, respectively.
"Only emergency measures on a global scale and more vigorous
actions at the
national and international level can change the situation,"
Onishchenko said.
******
#9
Russia firm denies bid to axe TV channel political
MOSCOW, Sept 28 (Reuters) - A subsidiary of top Russian oil firm LUKOIL
said on Friday it had taken court action to close down the loss-making TV6
television station for purely commercial reasons, and not to stifle
independent journalism.
TV6, for many years a second-tier channel, rose to prominence earlier
this
year when reporters from the commercial NTV channel took refuge there,
accusing the Kremlin of using state-owned gas giant Gazprom to gag free
speech at NTV.
Moscow's Arbitration Court ruled on Thursday in favour of shutting down
TV6, in which LUKOIL-Garant, a pension fund owned by LUKOIL, is a 15
percent shareholder.
TV6 was expected to appeal against the decision in what is likely to
become
a lengthy legal wrangle.
"We are not following any political goals, but simply insisting on
our
rights as shareholders, which have been repeatedly violated,"
LUKOIL-Garant
general director Mikhail Berezhnoy said in a statement.
LUKOIL is 50 percent publicly traded, with 15 percent owned by the
state,
and the rest controlled by management. While not directly controlled by
the
government, as Russia's leading oil company it has close links to the
country's top officials.
Under Russian law, if a company's assets are less than its charter
capital
or the nominal value of the shares it can be wound up. TV6 lost money in
each of the last three years.
But TV6 reacted angrily, drawing parallels with Gazprom's actions in
its
battle to gain control of NTV.
"This decision is not of a legal, but exclusively political,
character,"
TV6 said in a statement.
It said Gazprom's media arm had invoked the same law in its battle
against
Media-Most, a now defunct company which used to own NTV.
NTV had been critical of President Vladimir Putin's administration and
Russia's self-styled "anti-terrorist" operation in separatist
Chechnya.
TV6 is majority-owned by Boris Berezovsky, a once powerful businessman
who
has fallen foul of the Kremlin and is living in self-imposed exile abroad.
"Given that LUKOIL cannot convincingly explain why it wants to
shut down
TV6, whose controlling share is held by Boris Berezovsky and general
director (ex-NTV director) Yevgeny Kiselyov, there are grounds for another
battle with the authorities over free speech," the Vedomosti
newspaper said.
******
#10
ANALYSIS-Russia set to gain more Caspian oil clout
By Samantha Shields
MOSCOW, Sept 28 (Reuters) - The diplomatic and economic balance of
power in
Caspian oil politics is likely to shift towards Russia in the aftermath of
the U.S. suicide hijacking attacks, analysts said on Friday.
The global oil industry is still testing the waters after the September
11
attacks as its players gather for the Kazakhstan International Oil and Gas
Exhibition in Almaty from October 2-5, one of the region's top
conferences.
But it looks like Russia will now be able to dominate export routes for
the
huge oil and gas reserves in the sea, estimated at equivalent to those in
the North Sea, while strengthening its pull on world oil markets.
"If Russia is co-operating with America and the other allies
against the
terrorists then clearly they're going to have some favours to ask,"
said
James Henderson, oil and gas analyst at Renaissance Capital in Moscow.
"The balance must now be that it is more rather than less likely
that
pipelines will go through Russia," he added.
President Vladimir Putin this week offered Washington broad
anti-terrorism
support, including opening Russian airspace to relief missions, taking
part
in search-and-rescue operations and armimg forces opposed to the hard-line
Islamic Taliban group that controls most of Afghanistan.
The U.S. has named Saudi-born dissident Osama bin Laden and his network
of
Islamic militants as the prime suspects in the attacks and says
Afghanistan
shelters him.
RUSSIA ALREADY AHEAD
Russia, already one of the world's top three oil exporters, has already
scored points in the pipeline game as the only completely new oil line
from
the Caspian to international markets to be built since the Soviet Union
broke up runs from Kazakhstan's huge Tengiz field to Russia's Novorossiisk
port.
Iran had been bidding to see oil move across its territory and a $3
billion
U.S.-backed pipe from Azeri capital Baku to the Turkish port of Ceyhan,
bypassing Russia altogether, had been gaining support.
"I don't believe the Baku-Ceyhan pipeline will happen, I think
it'll be
discreetly sidelined and we'll get new proposals being made routed through
northern Russia because they're more secure," said Troika Dialog head
of
research Chris Weafer.
Henderson at Renaissance said a potential pipe through Iran, a pariah
for
Washington, now looked even more dubious than it did before the attacks.
RUSSIA CAN BUILD ON TO STRENGTHS
Russia, along with Kazakhstan, which has the lion's share of the
Caspian's
vast resources, will also be able to underline its strengths as a secure
supplier of oil to world markets.
This could be a contrast to some Middle East OPEC states, potentially
in
the eye of the storm if the U.S. launches military action the suicide
attacks. Putin this week said Russia was ready to supply more oil if
regional conflicts broke out.
For now, Russia can also act independently as it is outside OPEC's
ranks.
The cartel has repeatedly made it clear it would like Russia to join, but
that now looks more unlikely than ever.
"Russia has constantly flirted with OPEC but has never signed up
to join or
expressed any real interest in joining," said Julian Lee, senior
energy
correspondent at London-based thinktank the Center for Global Energy
Studies.
He said Russia had never shown any concrete signs of cutting back
output or
exports in support of OPEC's policies, aimed at keeping oil prices within
a
$22 to $28 a barrel price corridor.
"Russia's in a much better position than OPEC and it is not in
their
interests to join at this point," said Weafer.
******
#11
Date: Fri, 28 Sep 2001
Subject: Crunchy Chewy Reforms
From: Ben Aris <benaris@online.ru>
Dear David,
here is something that I thought your readers would find interesting.
Although I still very encouraged by Putin's effort to reform Russian Inc I
think that the debate so far has been asking the wrong questions. We spend
too much time asking "if" reform is happening. I believe the
Cabinet meeting
on banking reform yesterday should finally lay this debate to rest. Now it
is time to talk about to turn to the "how" of reform, where
there is plenty
to discuss and lots of problems.
Best Regards
Ben Aris
Daily Telegraph, EIU...
Crunchy Chewy Reforms
Eurasia weekly comment
Ben Aris
Moscow
Friday, September 28, 2001
The first serious effort to reform Russiaıs ailing banking system
kicked off
yesterday as PM Mikhail Kasyanovıs Cabinet met with the Central Bank of
Russia (CBR) to discuss what to do. Having scored surprising and welcome
success so far with his ³crunchy² reforms, the meeting marks Putinıs
first
attempt to tackle Russiaıs ³chewy² reforms.
I am borrowing an idea first used in an Economist leader talking about
Mrs
Margaret Thatcherıs reforms in the 80s. All the reforms Putin has made so
far have involved binary changes either Vyakhirev is boss of Gazprom or
he
is not, tax rates are either high or low, UES either owns power stations
or
it doesnıt.
All these changes can be done in a vacuum just sacking Vyakhirev
will make
a massive difference to the gas sector in Russia. And to do so was very
difficult. Despite all the flak that Putin has attracted from to pulling
all
the threads of power into his hand, only a powerful president could
attempt
to out vested interests so deeply entrenched that they had become
encrusted.
In this sense these reforms are crunchy: Putin applies pressure until the
opposition simply crumbles and a big change is effected.
With banks Putin is attempting to push through chewy reforms. He can
apply
pressure, but opposition will not simply fade as it is malleable.
The crunchy part of banking reforms is yet to happen. CBR chairman
Viktor
Gerashchenko is widely seen as the main obstacle to reforming the banking
sector and last week promised to step down next October when his contract
is
up.
There is an obvious parallel been the ousting of Vyakhirev from Gazprom
and
Gerashchenko position today. Having won one high profile and difficult
confrontation, the Kremlin must be feeling much more confident about
winning
this one, confident enough to start the chewy part of banking reform
before
completing the crunchy bit.
Yesterdayıs banking reform meeting is a landmark. The sorry state of
the
banking sector has irked the World Bank and IMF for nearly a decade and
the
governmentıs obvious reluctance to tackle it has underscored the
governmentıs unwillingness to meddle with the interests of powerful
public
servants and businessmen.
What makes it a landmark is unlike the reforms to date, this one can
proceed
in a vacuum. Banking reform relies on a raft of legislation to work: there
need to be clear property rights, disclosure and the tax regime needs to
be
stable and transparent, the court system has to work to protect these
rights
and settle disputes and so on. If you change one part of the system then
it
affects all the others. In this sense bank reform is chewy as you have to
constantly tinker with all the different parts to make the whole work
better.
Banking is the only part of the economy where Putin is attempting chewy
reforms. The natural monopolies are now fully under Kremlin control, but
the
chewy part of reforming both Gazprom and UES breaking these companies
into
their production and distribution parts has been put off until at least
2002. Likewise judicial reform has been put off for two years.
For those that admit reforms are happening, the constant criticism has
been
that they donıt go far enough. But this is to confuse the two types of
reform. Chewy reforms, the ones that make the real difference in the long
terms, nearly always have to be preceded by a crunchy reform. The
government
couldnıt begin to make changes at Gazprom until Vyakhirev had been
removed.
What will annoy bank analysts with the bank reform is that Gerashchenko
is
still at the CBR, but this a price Putin is willing to pay. As
Vyakhirevıs
sacking clearly showed Putin tries to build consensus, removing these
people
with the least possible fuss and loss of face.
Rather than being annoyed analysts should take heart form the fact that
the
Kremlin is so committed to doing something about the banks that Putin is
willing to start the chewy reforms while Gerashchenko is still in office.
Leaving him there for another year is certainly going to make the whole
process a lot more difficult. Gerashchenko is already blocking two key
changes: the hiking of banksı minimum authorised capital and reducing the
role of state banks.
But unlike crunchy reforms, which are dramatic and can be implemented
from
one day to the next, the nature of chewy reforms is they take time, even
years. Another aspect is that unlike crunchy reforms, which usually entail
removing vested interests from their niche, chewy reforms is to leave
these
interests where they are and limit their power.
The banking reform meeting is a landmark for a second reason as
Kasyanov
and Gerashchenko sit down to discuss what was seen as impossible only two
months ago, analysts are finally beginning to be convinced that real
change
is on the cards. The meeting marks the beginning of general consensus (in
Moscow anyway) that Putin is committed to fixing Russia Inc.
Until yesterday it was still possible to be sceptical as crunchy
reforms fit
well with the ³Putin the dictator² thesis that has dogged VVP since he
came
to power. But you only attempt chewy reforms if you are serious about
making
a change.
Hopefully now the debate will shift. Crunchy reforms are necessary, but
chewy reforms are the key. In question is both the pace of reform and
their
quality. With his consolatory style, Putin both slows the pace and takes
the
punch out of these reforms, to the benefit of vested interests.
For example, Renaissance Capitalıs banking analyst Kim Iskyan
complains that
banking reform, as proposed, is too slow, which is an easy dig at any
reform
in Russia. He also underscores the fact that the question of the state
banks
is being ignored, which is a major flaw in this particular reform.
The problem of pace is a serious one as Russia faces a deadline. The
economy
is still overly dependent on oil exports and needs to build a broad base
of
small and medium sized enterprises (SMEs), which will free Russia from the
vagrancies of the international commodities market. The SMEs have been
growing quickly and investing into production and staff over the last two
years, thanks to high prices on those same markets. But what happens when
a
downturn finally arrives? Have they done enough to survive a much harsher
environment? With oil prices taking a nasty tumble following the events of
September 11th, the answer is probably ³no.²
The problem of quality also raises doubts. Crunchy reforms are a
necessary
first step, but are meaningless unless they are followed up with chewy
reforms. Banking reform is the first real chewy reform, but the vested
interests still have the upper hand and have significantly diluted the
quality of this particular reform. Most of the others have yet to begin.
Many dismiss the reforms because the oligarchs are involved. But after
ten
years these men are now firmly entrenched at the head of the leading
economic assets in the country and reform will have to include them. Of
course, they will try and make money out of the loopholes in the system,
but
then you can say the same of US and UK corporations. The whole point of
governmental regulation is to reign in this corporate avarice. The goal of
chewy reforms is to define the relationship between government and
business.
The danger in Russia is that the government tends to lean too far towards
protecting businessesı interests.
******
#12
Financial Times (UK)
28 September 2001
TAJIKISTAN: Dushanbe prepares for war next door
By ROBERT COTTRELL
Inside the dingy roadside shop are a few shelves stocked with soft
drinks,
lump sugar, biscuits and rice. Outside, a shattered syringe lies on the
ground.
The road here runs from the Tajik capital of Dushanbe to the Afghan
border
four hours to the south. Northbound, it probably carries a valuable trade
in drugs, given Tajikistan's role as prime transit route for heroin
leaving
Taliban-protected poppy fields in Afghanistan.
Southbound, the Tajik roads are lifelines for the Afghan forces of the
Northern Alliance in their war against the Taliban. Russia promised this
week to send more arms to the Northern Alliance. This is part of Russia's
contribution to the "war on terrorism" declared by the US.
The Northern Alliance hopes other countries will follow suit.
"Give us the
weapons and we can do the job ourselves," says Ahmad Wali Massoud,
who
represents the anti-Taliban Afghans in London.
This war next door could touch Tajikistan directly. The Taliban have
threatened retribution against any neighbour which helps the US attack
them. Tajikistan is expected to allow the US the use of its airspace if
necessary, though its government has not said so publicly.
In practice, any military threat from the Taliban seems a distant one.
Tajikistan has the Northern Alliance as its buffer and 15,000 Russian
soldiers guarding its border. Refugees may be more of a problem. So far,
they have been heading for Pakistan rather than Tajikistan. But Merlin, a
British aid organisation, thinks up to 50,000 could seek refuge in
Tajikistan if there is prolonged fighting in northern Afghanistan.
They could end up joining some 10,000 refugees who have been trapped
for
the past year in a no-man's land in front of Tajikistan's border fence and
refused entry by the government.
Public opinion towards the war on terrorism remains calm, even
indifferent.
Dushanbe's People's Gazette gave the subject second billing below the
opening of a new road by President Imomali Rakhmonov. A straw poll on a
Dushanbe street yields the view that the US would be foolish to strike at
Afghanistan. So exhausted are Tajiks from their own civil war, which ended
with a ceasefire in 1997, that they find it hard to understand anyone else
wanting a war of any kind.
Tajikistan's peace is fragile but still intact. The more picturesque
warlords, who rejoiced in names such as "Hitler" and
"Fingerless Ali", are
dead, retired or integrated into the regular army. One runs a trucking
business in the north of the country, where he is admired as a model
entrepreneur.
The key to this relative stability has been the power-sharing deal
imposed
by Russia. Lucrative public offices are parcelled out cunningly enough to
satisfy the president's main rivals.
Another big factor in keeping the peace has been the presence of
Russian
troops. Russia has a 10,000-strong infantry division in Tajikistan, as
well
as the 15,000 border guards.
The arrangement guarantees Russia the means to project its power in a
region where its influence is otherwise ebbing. Other ex-Soviet republics,
especially Uzbekistan, are seeking to diversify both their economic and
their foreign-policy links, loosening their historic dependence on Moscow.
"We are open to ties with all countries," says Igor Satarov, a
Tajik
foreign ministry spokesman. "But we do not conceal the fact that
Russia is
our strategic partner."
Tajikistan certainly needs all the friends it can get. Its per capita
GDP
of about Dollars 200 means that poverty among its 6.7m people is almost
medieval in places.
Diplomats and aid officials say foreign investment is desperately
needed,
and so is a real crackdown on the heroin trade, if Tajikistan is to have
real stability in the long term. And for these things, reliance on Russia,
which has problems enough of its own, may not be help enough.
Uzbekistan's president looks for guarantees in return for assistance
Islam Karimov, Uzbek president, has moved his country one step closer
to
assisting a possible US-led attack on neighbouring Afghanistan by saying
he
was "prepared to discuss" offering airspace for an operation,
reports David
Stern from Tashkent.
The authoritarian Uzbek leader, however, couched his offer in cautious
language, adding that his country would also need "security
guarantees"
from the United Nations and Security Council members.
Prior to this latest statement, the Uzbek president said simply that he
was
ready to discuss all possibilities, but did not elaborate.
Kazakhstan and Kyrgyzstan, which are Uzbekistan's neighbouring
ex-Soviet
central Asian states, have already offered an air corridor for an
anti-terrorist operation. Russia and Turkmenistan have also said they
would
provide airspace, but only for humanitarian purposes.
Uzbeks are no strangers to military campaigns against their southern
neighbour.
During the Soviet Union's nine-year war in Afghanistan, Uzbekistan
provided
a jumping-off point for Soviet forces as well as large numbers of fresh
recruits to fill the ranks of the invading Red Army.
Mr Karimov's plea for security guarantees stems threats which the
country
is facing. Uzbekistan has battled its own Islamic insurgency - with
alleged
ties to the Taliban and Osama bin Laden - for the past three years.
*******
#13
Nezavisimaya Gazeta
September 28, 2001
THE COMMUNISTS WANT AN AMNESTY FOR CAPITAL FLIGHT
Interview with Sergei Glaziev about the economy and next year's budget
Author: Anna Zakatnova
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
SERGEI GLAZIEV, CHAIRMAN OF THE DUMA COMMITTEE FOR ECONOMIC POLICY AND
BUSINESS, BELIEVES NEXT YEAR'S BUDGET WILL RECORD A DEFICIT. THE RUSSIAN
PEOPLE'S PATRIOTIC UNION IS TAKING THE LEAD IN OPPOSING THE GOVERNMENT'S
DRAFT BUDGET THIS YEAR.
Increased political activity in autumn is becoming a tradition
for the communist opposition. A plenary meeting of the Communist Party
(CPRF), dedicated to problems of the communist opposition and
preparations for the upcoming reforms in connection with the new law
on political parties, will take place in Moscow today. A congress of
the left forces will be held on Saturday under the auspices of the
Russian People's Patriotic Union, the CPRF being its major driving
force. Finally, next week the CPRF will hold a nationwide action of
protest, aimed against nearly all of the president's reform proposals.
The fact that the draft 2002 budget has now reached the Duma is
an additional reason for the communists' tempestuous activity.
However, this year the CPRF, which has no real influence on the
outcome of the vote on the budget, has obviously decided to change the
tactics of its parliamentary opposition to the executive branch. The
Russian People's Patriotic Union has suddenly come to the forefront,
instead of the CPRF leadership. Sergei Glaziev, a Duma deputy and
member of the Russian People's Patriotic Union, told us about the
plans of national-patriotic forces in relation to the budget.
Question: Why has the left opposition made alternative proposals
on the budget this year, and why have you decided to offer some
political competition to Yabloko's projects?
Sergei Glaziev: First of all, I want to note that we're talking
about a concept of budget policy proposed by the Russian People's
Patriotic Union, not an alternative draft budget, since only the
Cabinet can add this bill to the Duma's agenda, according to the
Budget Code.
According to the people's patriotic forces, the Cabinet's draft
budget is not in the interests of the majority of Russia's citizens;
it reduces opportunities for developing the economy, and contains
provisions which violate the commitments we have made to the public.
The Cabinet had disregarded our proposals before, saying it has
no opportunity to carry out our proposals for increasing the budget
revenues rapidly. The revenues are always disputed. As a matter of
fact, our proposals, which are usually connected with an opportunity
to activate non-tax sources of revenue (fees for extraction of natural
resources, for instance), were rejected by the Cabinet for technical
reasons. Our concept is based on the same figures the Finance Ministry
has. It will be officially presented to the Duma during consideration
of the federal draft budget for 2002 today. We hope to have a serious
discussion with the government about principal issues of social-
economic and budget policies.
Question: What ideas for distributing additional revenues have
you offered for the Cabinet's consideration?
Glaziev: Actually, the surplus in the Cabinet's draft budget is
based on calculations, since the Cabinet has divided the current
revenues and capital revenues, and as a result the budget deficit has
merely been shifted to capital revenues. Overall, the budget deficit
will amount to 2.5% of the GDP.
Speaking of revenues, we are planning to set budget revenues
higher than the Cabinet's version - 425 billion rubles; these revenues
would primarily be used to implement social standards: to finance
education, culture, science, and health care, and also to stimulate
investment activity, provide conditions for economic growth. We
propose to raise wages for state sector employees and bring the
average monthly wage up to 4,000 rubles; to double the minimum wage to
900 rubles a month (twice as high as the government's option). Another
area is connected with restructuring the economy on the basis of new
technologies by implementing the corresponding targeted programs,
launching a budget of development, stimulating investment and
scientific-technical progress. We propose to allocate about 100
billion rubles for such purposes, which would make it possible,
according to our estimates, to guarantee that investment will increase
not by 6-8%, as in the Cabinet's plans, but by 20%. That how much we
need to initiate growth of investment activities and bring economic
growth up to around 6-8% in 2002.
Question: According to the concept, you propose to declare a
partial amnesty on capital taken out of Russia, as a source of
additional revenues.
Glaziev: Why shouldn't we, if the taxes are paid and currency
receipts would be returned? In fact, we propose to establish order in
the sphere of raw materials exports. According to our calculations,
over the past few years Russia has lost around $88 billion in hard
currency receipts for the natural resources it exported. These are
revenues from exports which were not received by exporting
enterprises; income tax was not paid on this money, and it remained
abroad.
The enterprises have been incurring losses - they have not shown
a profit, whereas those who organized this operation concealed income
from taxation, thus withholding around $30 billion from the State
Treasury. Therefore we have made the following proposals to the
Cabinet: first, to register revenue shortfalls, instigate criminal
investigations against tax evaders, and start working with tax evaders
in order to make them return foreign currency revenues and pay the
income tax as it should have been paid.
Question: The left opposition has almost no proposals for
servicing foreign debt next year among its priorities.
Glaziev: The whole trick is in finding a way to service the debt
which would not be too great a burden on the budget. The government
has accepted the simplest and most primitive option: to "pay
everything", thus withdrawing over 400 billion rubles from the
economy. Can this be beneficial for our society? In my view, it is
necessary to carry out an idea Putin once proposed: to try
restructuring the debt by shifting it to a "debt for equity"
pattern.
A proposal to establish a stabilization fund for servicing foreign
debt in 2003 would remain within the framework of the "pay
everything"
policy, and if it is approved, none of our Western creditors would
restructure our debt.
Question: Besides additional revenues, Russia may face some extra
spending on combating international terrorism. What impact might this
have on the draft budget?
Glaziev: I hope that we will not enter the war, and that common
sense will prevail. Neither our financial capacities nor the state of
the Russian Armed Forces and morale in our society enable us to take
such adventurous steps. I think we should confine ourselves to a
reasonable minimum; at any rate, at the moment we have no need to
increase funding for such purposes.
Question: What is your assessment of likelihood that the Duma
will pass the budget? During preparation of a final conclusion on the
bill, your committee has nearly split into two camps.
Glaziev: For the first time in this parliament existence, we have
encountered a situation when the presidential administration has
established control over the conduct of all Duma deputies who have
sworn allegiance. The deputies who are controlled by others receive
many phone calls; their presence at meetings and voting sessions is
demanded, and speeches are written for them. Unfortunately, the
situation in the Duma has become insipid because the majority of Duma
deputies vote as they are ordered, and do not seem to listen to
arguments.
Nonetheless, I hope that the Cabinet will listen to our remarks,
at least those related to two principal positions. Firstly, in the
cause of researching forecasts: economic growth and budget figures
must be considered in conjunction with economic policy measures. In
addition, I believe it is high time the government started thinking
about the huge hole in our financial system, through which tens of
billions of dollars vanish.
(Translated by Andrei Ryabochkin)
*******
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