Johnson's Russia List
#7195
24 May 2003
davidjohnson@erols.com
A CDI Project
www.cdi.org

[Contents:
  DJ: I am in Petersham, Massachusetts at the old 1802 Johnson family
home. We will be holding a commemorative gathering here tomorrow for
my father Russell who passed away earlier this year.
  1. AP: Putin welcomes ex-Beatle McCartney to Kremlin before Red Square 
performance.
  2. UPI: Martin Sieff, Review: Russia's darkness rising. (re David Satter's
Darkness at Dawn: The Rise of the Russian Criminal State)
  3. RFE/RL Russian Political Weekly: Laura Belin, PUTIN RAISES THE STAKES 
FOR DUMA ELECTIONS.
  4. Peter Lavelle: The Arrival of the Fourth Horseman.
  5. Boston Globe: David Filipov, St. Petersburg's time to shine glosses 
over woes.
  6. The Guardian (UK): Nick Paton Walsh, Real St Petersburg forced into 
hiding. Gardens torched and homeless cleared to prepare city for 300th 
anniversary bash.
  7. Argumenty i Fakty: CAN RUSSIA CREATE NOVEL STRATEGIC ARMAMENTS? 
  8. Kennan Institute: Nikolai Zlobin, The End of an Era: Russian-American 
Relations in an Emerging World.
  9. Kennan Institute: Exhibition of St. Petersburg Artists.
  10. WOODROW WILSON INTERNATIONAL CENTER FOR SCHOLARS--FELLOWSHIPS IN THE 
SOCIAL SCIENCES AND HUMANITIES 2004-2005.
  11. US Department of State: Vershbow Says U.S.-Russia Trade on Verge of 
Boom.]

********

#1
Putin welcomes ex-Beatle McCartney to Kremlin before Red Square performance
May 24, 2003

MOSCOW (AP) - Paul McCartney's dream to perform on Red Square is coming
true - an event President Vladimir Putin assured him Saturday couldn't have
happened in Soviet times when the Beatles' were deemed ``propaganda of an
alien ideology.''

Putin welcomed the former Beatle to the Kremlin ahead of the Saturday
evening concert in front of St. Basil's Cathedral. The performance is
McCartney's first in Russia, a country he is also visiting for the first time.

McCartney asked Putin if the Beatles' music had been banned in the Soviet
Union. ``It was not exactly banned. But the fact you weren't allowed to
play in Red Square in the 1980s says a lot,'' Putin told McCartney.

Putin, an ex-KGB agent, said the Beatles were considered ``propaganda of an
alien ideology.''

``It did not seem to some people that art was beyond ideology,'' he said.

Putin told McCartney that the Beatles were widely listened to in the Soviet
Union despite the official disapproval of their music.

``It was very popular, more than popular. It was like a breath of fresh
air, like a window onto the outside world,'' Putin said.

McCartney told Putin about his visit Friday to St. Petersburg, Putin's
hometown, where he was named an honorary professor at St. Petersburg
Conservatory, Russia's oldest musical institution.

McCartney also raised his campaign with his wife, Heather Mills, for a ban
on land mines. ``I think it is a very good cause,'' Putin replied. ``I
think everything aimed at saving human lives deserves our utmost support.''

Russia has not signed the 1997 Ottawa Convention banning the use and
production of land mines, which more than 130 countries have signed.

After their meeting in an opulent hall, Putin gave McCartney a tour of the
Kremlin - surprising student onlookers who despite their youth recognized
the ex-Beatle, the ITAR-Tass news agency reported.

Asked while touring the area about the meaning of the Beatles' 1968 song
``Back in the USSR,'' McCartney said the Soviet Union had been ``a mystical
land then.''

``It's nice to see the reality,'' he said. ``I always suspected that people
had big hearts. Now I know that's true.''
  
*******

#2
Review: Russia's darkness rising 
By Martin Sieff
UPI Senior News Analyst

WASHINGTON, May 23 (UPI) -- Washington policy-makers and pundits have
shared the comfortable assumption in recent years that Russia Does Not
Matter Anymore and that simultaneously it has been Saved for Democracy.
They should read "Darkness at Dawn: The Rise of the Russian Criminal
State," David Satter's vivid, impeccably researched and truly frightening
new book published by Yale University Press (314 pages, $29.95, 2003), and
think again.

To anyone who has covered Russia or visited often over the past decade,
most of the case studies, scandals and problems examined in "Darkness at
Dawn" will not come as any surprise. But what Satter has done is to
re-examine these individual cases and show their interconnections with each
other, like putting together the pieces in a jigsaw puzzle. He does so in
such a way that both the expert on Russia and the casual reader wishing to
be informed can be left with only one conclusion: One of the two major
thermonuclear superpowers in the world, and the only one left with
Multiple-Independently Targeted Re-entry Vehicles on its nuclear missiles
remains unstable, unpredictable, and is dangerously close to becoming a
ruthless, predatory and unpredictable criminal state.

Something -- in fact, a lots of things -- went terribly wrong during the
early 1990s transition of Russia from State Communism to a supposed free
market economy. Many others detailed the problems of transition in detail
as they were happening, but Satter maps the contours of the debris that was
left. 

Without any stable legal structure governing the owning and trading of
property and wealth or the regulation of business transactions in the
decade after the disintegration of the Soviet Union, Russian society became
totally criminalized, not merely in its day-to-day dealings but in the
widespread existential consciousness of its people. Russia's newly emergent
oligarchs have often been nicknamed "Robber Barons" after the Gilded Age
plutocrats of late 19th-century industrial America, but the term is a
misnomer in all too many ways. Industrial titans like John D. Rockefeller
in oil and Andrew Carnegie in steel built huge business empires and
acquired enormous power. But they did so within an ordered society, built
tremendous industrial infrastructures that generated wealth for generations
after them, and felt obligations towards it. Rockefeller and Carnegie, like
the Ford family after them donated hundreds of millions of dollars to
enormous, organized philanthropies that immeasurably boosted education,
health and culture, first across the United States and then across the
wider world. The Robber Barons of President Boris Yeltsin's Russia really
were that. They created an industrial and socio-economic desolation and
called it peace.

Satter takes his readers through the seven circles of this modern, all too
physically real hell. He explores the alleged role of Russia's Federal
Security Service, the FSB, in the terror bombings of apartment buildings
that killed hundreds of ordinary Russians in their sleep and provided the
main pretext for the 1999 Chechnya war. He documents how the worst old
Soviet-era traditions of excessive secrecy and xenophobic paranoia in the
Russian Navy's high command doomed the surviving sailors of the mighty
Oscar II class nuclear killer submarine Kursk when a faulty torpedo
detonated during a test firing, sending its 118 crew members to their
deaths at the bottom of the Arctic Ocean in August 2000. 

He shows how an innocent young Russian beauty queen made the biggest -- and
last -- mistake of her life in getting romantically involved with a
respected hired killer and what happened to both of them. He traces the
gangster struggles for control of cities, banks, industrial complexes, even
entire provinces each of which is larger than any other major European
nation. And he vividly documents the casual violence that the protagonists
in these -- literal --wars take for granted, making Al Capone and his
colleagues look like disciples of Mother Teresa by contrast.

Things have stabilized, and somewhat improved since President Vladimir
Putin succeeded Yeltsin. But the criminalized, rapacious super-oligarchs,
those billionaire modern barons, retain control of the Commanding Heights
of the Russian economy.

Beneath them, a society of 145 million people stretching across almost
one-seventh of the land surface of the planet remain mired in poverty,
despair and a moral squalor even more devastating than their physical one.
Russia's population continues to implode with soaring death rates and
plummeting birth rates. The underlying reason for this, far more than the
collapse of living standards in the 1990s was, Satter concludes, that most
of those people had lost all hope. They now despaired of things ever
getting better.

Satter plays Dante, taking his readers on a comprehensive tour of this
thermonuclear-armed Inferno. Reading his relentlessly grim, implacably
documented accounts is to be reminded of D.H. Lawrence's prescient vision
on observing the crazed gaiety and brilliance of Weimar Germany in the
1920s. Beneath the surface dazzle, the great British writer noted, a huge
chasm had opened up -- moral and spiritual even more than economic and
social. Superficial politics alone could not bridge it. From that gaping
abyss emerged: Adolf Hitler.

There is still time for Russia to stabilize and for those who wish her well
to support the constructive forces for good within her. But most of the
promise has been squandered, and the Hobbesian nightmare of a society of
chaos, red in tooth and claw, remains the dominant reality today. 

Western policy-makers, especially in Washington, would do well to study
these pages and to ponder the teachings of the great Russian religious
philosopher Nikolai Berdyaev with which Satter closes this important,
troubling book: "In the soul of the Russian people there should appear ...
a transfiguring and creative beginning." Only then, "the creative instincts
will defeat the rapacious ones." 

*******

#3
RFE/RL Russian Political Weekly
Vol. 3, No. 20, 23 May 2003

PUTIN RAISES THE STAKES FOR DUMA ELECTIONS 
By Laura Belin

	President Vladimir Putin's annual address to the
parliament on 16 May trod familiar ground in many areas, such as his
call for military reform and faster economic growth. However, he
dropped a political bombshell at the end of his speech: "Taking into
account the results of the coming [State Duma] elections, it is
possible to form a professional, effective government that relies on
a parliamentary majority."
	The president did not advocate constitutional changes that
would be necessary to create a parliamentary system of government in
Russia. Nor did he issue any binding pledge that would weaken the
presidential prerogative to appoint cabinet ministers. Nevertheless,
for the first time in post-Soviet Russia, a president endorsed in
such a forum the idea of appointing a government that would enjoy the
support of most parliamentarians. In so doing, Putin significantly
raised the stakes ahead of this year's Duma campaign.
	In 1995 and 1999, the Duma elections both determined the
composition of the lower chamber of parliament and served as
unofficial "presidential primaries." The results revealed the
strengths and weaknesses of various political parties and electoral
blocs, and by extension the presidential prospects of their leaders.
For instance, Unity's unexpectedly strong second-place showing in
the 1999 party-list vote helped make Putin the overwhelming
front-runner in the 2000 presidential election held just weeks later.
By the same token, former Prime Minister Yevgenii Primakov looked
like a strong presidential candidate for most of 1999 -- but that was
before the Fatherland-All Russia alliance, which he co-led, finished
a distant third in the Duma elections.
	Since Putin is not likely to face serious opposition in next
year's presidential race, this December's Duma elections will
not be the make-or-break event that the 1999 elections were for
members of Boris Yeltsin's "family" of advisers. However, now
that Putin has endorsed the principle of a government supported by
the parliament, a poor showing by pro-presidential parties in
December would be embarrassing for his administration. Whether the
popular president will endorse any specific party remains unclear,
but behind the scenes the Kremlin will make full use of its so-called
administrative resources to support the favored parties and undermine
its political opponents.
	The pro-presidential groups in the current Duma have much to
gain if the Kremlin has more riding on the election result. Not
surprisingly, several members of those factions lauded Putin's
comments about the composition of the future government. However, the
reactions of other political leaders were in some ways
counterintuitive. 
	Yabloko leader Grigorii Yavlinskii cautiously welcomed the
idea of appointing a government reflecting the parliamentary
majority, even as he pointed out that Putin's comments were
vague. Union of Rightist Forces (SPS) leader Boris Nemtsov said the
proposal "will allow political parties to get involved in tackling
the everyday problems of Russian society." His SPS colleague and Duma
Deputy Speaker Irina Khakamada argued that Putin should go further.
Appearing on NTV on 16 May, she advocated a transition to a
parliamentary republic, in which the president would take on the
functions of prime minister and appoint a cabinet based on a
parliamentary majority. 
	Yet recent opinion polls suggest that Yabloko and the SPS
might have trouble clearing the 5 percent threshold required to win
any of the 225 Duma seats distributed according to proportional
representation. Even if both parties clear that hurdle, they
certainly will not be the "main political forces" in the next Duma.
	In contrast, members of the Communist Party (KPRF) were not
impressed by Putin's proposal. KPRF leader Gennadii Zyuganov said
Russia should either become a presidential republic "where the
president heads the government and is responsible for everything" or
establish a "government of a State Duma majority which, along with
the State Duma, would be accountable for what happens in the
country," Interfax reported on 16 May. KPRF deputy head Ivan Melnikov
blasted Putin, saying he "was attempting to take the president out of
the line of fire and to shift responsibility to the executive branch"
-- that is, to the government. Appearing on NTV on 16 May, Duma
Deputy Sergei Glazev, a member of the Communist faction, asked
rhetorically, "If our president really wants to put the government
under the control of the people, what is stopping him today?"
	The Communists' stance is ironic. The KPRF leads all the
pro-presidential parties in recent opinion polls. Moreover, during
the 1990s the KPRF repeatedly called on Yeltsin to appoint a
government representing a parliamentary majority. Yet the Communist
position is logical, since the famously risk-averse Putin left
himself an out in his address. "It is possible to unite our efforts
if the main political forces possess the civic responsibility
[required] for collegial work," Putin said. In other words, if
parties not to his liking become the "main political forces" in the
next Duma, the president can cite their lack of "civic
responsibility" as an excuse for backtracking on plans to appoint a
government supported by the parliamentary majority.
	Putin's hedge underscores that he did not endorse a
formal parliamentary system, which would diminish his power to hire
and fire cabinet ministers at any time. Still, by embracing the
principle of a government backed by parliament, Putin increased the
pressure on centrist parties to secure a majority in the next Duma.
The coming election campaign just became more interesting.

Laura Belin has written extensively on Russian politics and elections
since 1995.

*******

#4
Untimely Thoughts
www.untimely-thoughts.com
Vol. 1, no. 10
May 23, 2003
By Peter Lavelle
plavelle@untimely-thoughts.com
Editor: Chris Doss

The Arrival of the Fourth Horseman

President Vladimir Putin's annual address to the Federal Assembly last
Friday appeared to confirm what many pundits and politicians have been
whispering about for months: The Kremlin is about to return to its old
Soviet habit of supporting a single party in the legislature. Putin
mentioned the successes of the past year like the well-trained Soviet
functionary that he is, but his statement that "Apparently, the
government needs to be helped. Apparently, it needs an additional
political impetus. Of course, it will get it," seems to have been the
only real message he wanted to convey. These are fighting words,
declaring the start of the election season and announcing that, this
time around, the Kremlin will openly support a slate of candidates.

Russia in is for another major political change, and Putin expects to
be on the winning side, with Prime Minister Mikhail Kasyanov possibly
losing his job in matter of months. That Kasyanov may no longer be
prime minister is hardly lamentable, but it is to be regretted that
the faceless and ideologically empty United Russia is to be the
Kremlin's official party.

It is all too obvious that the Yeltsinite experiment with "democracy"
- funded by oligarchs and acted out by pretend political parties - has
failed both Putin and Russia. The parties sitting in the Duma either
only represent themselves or that section of the population that longs
for the past and so supports the Communists. While Putin lauded
Russia's recent economic performance, it is clear to all that the
country will not approach Portugal's level of development in decades -
Putin's stated goal - given its current rate of GDP growth. This is
not enough, given the president's declared design to make Russia a
great power again. Kasyanov's government was publicly informed last
week that it is not up to accomplishing this task and that its days
are numbered.

With this state address, a fourth part of Putin's political
"retrolution" has started to play itself out. The structural changes
the Kremlin has in mind for Russia's political future are poised to
recast the nature of this experiment with democracy long after Putin
leaves the presidency. The only upside this change will bring about is
that Russia will most probably become an easily predictable country -
not unlike its Soviet predecessor.

The endgame of Putin's next stage of restructuring Russia, like the
fourth horseman of the Book of Revelation by Saint John the Divine, is
coming up. Russia's political end times of the Armageddon of
experimenting with Western-style democracy are about to come to a
close. The fourth horseman has announced his arrival, the consequences
of which most likely determine just how much democracy the Kremlin is
willing to accept.

The first horseman is called Conquest, and it arrived with Putin's May
13, 2000, decree creating seven federal administration districts, for
the most part headed by appointees hailing from what are called the
"power agencies."  Putin recently heralded this achievement, though
most of the regions to this day have not seen the advantages of
greater control from the "center."

The second horseman, Slaughter, took center stage in March 2001.
Secretary of the Security Council Sergei Ivanov was made Defense
Minister, and Mikhail Fradkov was appointed head of the then-Tax
Ministry. At the same time, Boris Gryzlov became interior minister and
former Interior Minister Vladimir Rushailo succeeded Ivanov at the
Security Council. The security "chekists" were given control of the
main power agencies and got rid of any hope we might have had that the
Kremlin was interested in promoting the development of a competent
civil service. Instead, that control was delivered to oligarchs with
business in the regions.  The Kremlin crushed the freedom the regions
desired (and were granted) under Yeltsin, but now knows that this
decision was most likely a cure worse than the disease.

In March of this year, the third horseman, in the cloak of Famine,
appeared in his biblical black. The former KGB was given a new lease
on life, with a number of state-orientated security agencies returned
to its successor organization, the FSB - agencies that had been
separated from the KGB a decade ago to avoid an all-powerful Big
Brother that would oversee all aspects of Russian life. Putin has
effectively starved his own self-proclaimed dictum of "dictatorship of
law" to death, as the security forces are now even more above the law
than they were when he took office.

Putin's comment that "the government needs to be helped" makes the
arrival of the pale fourth horseman, Death, a near certainty.
According to a number of Kremlin sources, Alexander Voloshin's
presidential administration has drawn up an amendment to the law on
the government. This involves a significantly new procedure for
selecting cabinet ministers: The prerogative to do this will be
shifted to the Duma - or, to be more precise, to the party or
coalition that has the majority in the Duma. This means that, in
January 2004, Russia will gain "a government that is accountable to
the parliament." The president will continue to nominate candidates
for prime minister and appoint cabinet members, but he will chose the
names from a list compiled by the "majority party."

The majority party in a parliamentary system usually determines the
cabinet of ministers. For Russia to do so now, however, would be a
mistake. At present, Putin's popularity stems from the fact that he is
not ideological - even anti-ideological. Finding a majority party that
matches Putin's understanding of politics in the Duma after
parliamentary elections later this year will severely limit what
little competition exists among Russia's political parties. It will
discourage the interest articulation from below that is the basis of a
competitive political environment. Additionally, if Putin places
United Russia under his wing, we may find ourselves with Putin running
Russia for a very, very long time.  This might not necessarily be a
bad thing; however, limiting the evolution of politics and
discouraging a healthy turnover within the political elite will not
further Russia's experiment with democracy.

Putin's implicit announcement of the fourth horsemen's impending
arrival will not provide the government with the help he claims that
it is in need of. This kind of help will only make the democratic
process irrelevant and redundant.

The greatest tragedy of the appearance of the Four Horsemen for Russia
is that the democracy's difficult history since the collapse of the
Soviet Union will not be very much missed. For most, democracy has
only brought about social and economic dislocation. Putin's support of
institutionalizing a Kremlin-dominated legislator will most likely not
empower the people's representatives, but it might crown a new tsar.

[Important Disclaimer: The above are personal views on Russia and
Russia-related issues and do not reflect any opinions other than of
the writer(s) associated with this private endeavor.]

******

#5
Boston Globe
May 24, 2003
St. Petersburg's time to shine glosses over woes
By David Filipov, Globe Staff

ST. PETERSBURG -- With a triumphant fanfare at the opulent Marble Palace,
the 300th birthday party of one of the world's great cities began
yesterday, kicking off 10 days of gala celebrations that President Vladimir
V. Putin hopes will make his hometown a showcase for post-Soviet Russia. 

It is a long-awaited moment to shine for a city whose sad and violent 20th
century history of revolution, war, repression, and crime had marred its
reputation as Russia's ''window on Europe,'' just as decades of neglect had
tarnished its greatest architectural landmarks.

Now the splendid Italianate facades of ''the Venice of the North'' have
been spruced up, its most famous monuments have been restored, and a
czarist palace where Putin will entertain 45 heads of state, including
President Bush, during the anniversary's finale next weekend has reopened
after a $300 million restoration.

But public discontent with the heavy-handed way the party has been planned
threatens to spoil the anniversary. People are frightened by rumors that
much of the city will be off-limits or overtaken by trigger-happy
government snipers and overbearing police, that there will be curfews for
children, and that residents of the center will need to show a passport to
go home.

Signs at the city limits advise out-of-towners to keep away, and many
residents also planned to leave the city for the holiday.

City authorities insist that the parades, fireworks, outdoor shows, theater
performances, and exhibits at the city's legendary museums are for the
people. But residents cannot escape the feeling that this holiday is for
visiting dignitaries, and not for them, not when the airport will be
closed, major routes shut off, and much of the city center off-limits to
ordinary citizens.

St. Petersburgers are also angry that the $1.3 billion allocated by the
Kremlin for the celebration has produced only superficial improvements,
while ignoring vital upgrades to the crumbling infrastructure, especially
when city auditors have discovered that millions of dollars have been
misspent or have gone missing.

''This is a classic example of bad planning and Soviet-style leadership,''
said Igor Artemyev, a federal legislator from St. Petersburg. ''The holiday
will end, there will be many concerts and fireworks and loud shows, but
then everything will fall apart.''

The controversy spoils a visitor's first impressions about the
tricentennial in the same way that turning into the courtyard of an opulent
St. Petersburg mansion often reveals a slum.

But the dispute is no surprise to anyone who lives here. St. Petersburgers
know that their city -- built in an inhospitable marshland by the emperor
Peter the Great at the cost of thousands of slave laborers' lives and the
home of the Russian Revolution and the horrific 900-day German siege during
World War II that killed 800,000 residents -- has always exacted a severe
price of its citizens for its beauty.

Writers and poets have sought to explain the mystery of a city that was
''not built for us,'' in the words of writer Tatyana Tolstaya, and where
there are ''too many dead people who were never buried properly,'' as rock
singer Boris Grebenshikov puts it.

They know this has always been a place where official exigencies clash with
the lives of ordinary residents, epitomized by the doomed hero of ''The
Bronze Horseman,'' the poem of St. Petersburg's greatest poet, Alexander
Pushkin.

That famous monument to Peter the Great has been restored in anticipation
of a ceremony involving Putin and visiting heads of state, followed by a
lavish party at the Konstantinovsky Palace, Putin's newly renovated
residence on the Gulf of Finland.

As part of the restoration of the palace, local officials burned down barns
and pulled up the crops of 400 pensioners whose humble garden plots happen
to face the estate. The idea had been to clear out the area completely, but
workers ran out of time and instead put up a big green fence to hide the
charred ruins.

The pensioners, who rely on their gardens to supplement their diets, cannot
understand what they did wrong.

''All of Russia lives like this,'' said Vladimir Mikhailov, 76, as he and
his wife, Valentina, 75, surveyed the damage to their ramshackle barn.
''What are they trying to hide?''

The tricentennial was intended to help Russia's former capital and cultural
center rebound from its 85-year decline since the Bolsheviks moved the seat
of power to Moscow.

''This means investment will come; this means tourists will come,'' said
Natalya Botozhok, the no-nonsense chairwoman of the city government's 300th
Anniversary Committee, summing up the purpose of the holiday. ''I'm happy
with our work.''

Critics say the main routes for official motorcades have been paved several
times over, while secondary streets remain riddled with potholes.
Completion of a ring road intended to relieve congestion in the city has
been pushed back indefinitely.

Many of St. Petersburg's 4.7 million residents still live in the same
communal apartments with shared bathrooms and kitchens that the Bolsheviks
carved out of the elegant palaces lining the city's canals.

Some of these buildings' street fronts have been tidied up. But behind the
facade, they are badly in need of repair, crumbling buildings with sewage
leaks in their basements. None of the money has gone to fix such problems.

''They are doing repairs so that the delegations will see them,'' said
Alexei Kovalyov, a member of St. Petersburg's legislative assembly. ''It
has always been that way and will always be that way.''

Meanwhile, the city's financial watchdog, the Audit Chamber, has accused
the city's administration of failing to account for some $30 million
earmarked for road construction. Dmitri Burenin, chairman of the Audit
Chamber, said $32 million more in taxpayers' money was used improperly.

''The city government doesn't want people to know how it spent money,''
Burenin said. ''But if you leave Nevsky Prospect, you can see they are
still building Potemkin villages.''

City Governor Vladimir Yakovlev denies any wrongdoing and bristles at the
reference to the fake village reputedly built to impress Catherine the Great.

''We're doing the best we can,'' said Yakovlev, whose term as governor ends
later this year and who is widely believed to be auditioning for his next
job in government. ''There are so many things to be done in this city.''

Yakovlev jokingly remarked Wednesday that he wanted to compile a book of
the 300 most misguided rumors about the birthday celebration. Valentina
Matviyenko, who is the Kremlin's pick to run St. Petersburg next, was more
circumspect.

''We should not let criticism of preparations overshadow the celebration,''
she said.

*******

#6
The Guardian (UK)
May 24, 2003
Real St Petersburg forced into hiding 
Gardens torched and homeless cleared to prepare city for 300th anniversary
bash 
Nick Paton Walsh in Strelna, near St Petersburg

The palace workers turned up around midnight and set fire to Ekaterina
Mikhailova's garden. Her crime? The rows of tomatoes and the shed where her
three goats lived could be seen from the ornate windows of the
Konstantinovsky palace across the road. 
The imperial palace-turned-presidential residence has been restored to the
tune of £120m to host dozens of world leaders who will be here to celebrate
St Petersburg's 300th anniversary. And Mrs Mikhailova's food was spoiling
the view. 

"They gave us no warning," said Mrs Mikhailova, 75, who has lived there for
50 years with her war-veteran husband, Vladimir, 76. "Now I have to walk 40
minutes to feed my goats on a different plot. It costs me 250 roubles [£5]
a month to hire." 

Last week, the local administration burned to the ground a dozen garden
sheds where locals grow subsistence crops, lest signs of real life in
Russia disturbed the foreign guests. 

Next week's lavish, seven-day long party will portray Russia's cultural
capital at its best for its third centenary. The city seems to reek of new
paint. Pressure-hoses force years of dust from building walls. Still-soft
asphalt covers cracks in the pavement. 

Security for the summit is tight. Local people, it seems, will be avoiding
the town centre, many heading for the countryside or staying at home,
leaving rich foreigners and Ingushetian police - drafted in from near
Chechnya to replace the "soft" local cops - to do the celebrating. 

St Petersburg residents say they have little to celebrate, however. A local
lawyer is helping dozens of them to sue the government for personal losses
and restrictions. At the Kremlin's orders, fences will line the route to
Konstantinovsky, masking roadside rubbish and ordinary villages. The
homeless, meanwhile, have been cleared from the streets. 

Critics say the £1bn budget could better be spent on the city's crumbling
infrastructure rather than its architecture. But harking back to Soviet
ideals of popular suffering for the benefit of the state, the Kremlin
insists the local upheaval serves a broader purpose. 

"St Petersburg was conceived by Peter the Great as the window to Europe and
it became for all the world the public face of Russia," said Valentina
Matvienko, the former deputy prime minister and now President Vladimir
Putin's special representative in the region. "The impression of the
foreign visitors about our country as a whole would depend on how good an
impression of the town they get [during the third centenary celebrations]
when it has the honour of representing all of Russia." 

There will be payback, implicitly for all of Russia. "The anniversary for
us is not the end of the line," she said. "After the [world leaders] like
our town, businessmen and financiers will bring their investment and
projects." 

The power of projection is important for the Kremlin. After the
recklessness of the 1990s, Russia has to appear to be strong and in control
again - to remind the world of the proud tsarist empire it once was.
President Putin wants the festival to show off his hometown as a gateway to
a western-orientated Russia, finally ready for business with Europe and
beyond. 

Yet as the dignitaries hurry between heavily guarded theatre performances,
ordinary Russians will attach little credence to the St Petersburg on show.
The Russian equivalent of the Sun, Komsomolskaya Pravda, ran a series of
stories on the disparity between the extravagance of the celebrations and
the poverty of ordinary Russians under the banner headline "Potemkin
village" - a reference to the fake hamlets built in the 18th century to
show Catherine the Great how well her people were living. 

A few basic facts take the shine off the new paintwork. Russia is
shrinking; its population has decreased to 145 million this year from 149
million a decade ago; life expectancy for men is 58 years and 11 months; in
three years' time, one in 20 Russians will be HIV positive. Average incomes
are rising, but still only amount to around £200 a month in the economic
powerhouse of Moscow, dropping to a third of that in the outlying regions.
Russians spend £1.7bn on bribes each year, fostering a corrupt system that
has led to the shootings of two senior MPs in Moscow since November. 

Economists dispute Russia's supposed boom. One side says real incomes
increased 10% last year, and a consumer boom benefits 20% of Russians who
consider themselves middle class. The other side argues economic reform is
too slow, and middle-class Russians use their excess cash to bribe
bureaucrats, preventing the money from "trickling down" to ordinary people
who live in relative poverty. 

For the pessimists, St Petersburg is another example of the money staying
at the top. Communist MP Valentin Chikin said: "[President Boris] Yeltsin
invested hundreds of millions of dollars in restoring the Kremlin palaces
to their tsarist splendour as the people lived in poverty. He showed the
restored palaces to Clinton and Chirac, they admired them, but no
investment followed because you need something else: stability, functioning
industry and the rule of law. The same will happen now." 

But the saving grace of this public relations exercise could be its key
architect - Russia's most powerful St Petersburger, President Putin, whose
approval rating is more than 80%. His administration's apparent belief that
national pride leads to national prosperity, and his consequent fondness
for extravagant displays of state wealth, have not embittered many
ordinary, poor St Petersburgers. 

While the Mikhailovas berate their local administration for torching their
garden, they have nothing but adulation for their president. 

Mr Mikhailova said: "This would infuriate him and he would have stopped it.
Yeltsin was a fool. But Putin is a lot better. He doubled my pension." 

Yakov Gordin, a local historian and journalist, said ordinary life was not
as impoverished as often portrayed, and the Kremlin was capitalising on the
reform of the Yeltsin years. 

"Putin inherited a clean slate, and now is ready to build. Life becomes
better, slowly but surely," he said. 

"The sporting, heroic persona of Putin plays its own role, but for an
ordinary citizen his main gift is hope." 

According to the Russian media, St Petersburg's week of excess includes: 

· Seven aircraft to seed clouds over St Petersburg, ensuring blue skies for
the festive week. Cloud seeding is often used by Moscow's wealthy
administration to ensure good weather for football matches 

· Large billboard posters used to mask the crumbling facades of many
buildings 

· Three nights of laser and water shows by Japanese and French artists,
after a day-long street party on the central avenue, Nevksy Prospekt 

· A 2 metre high, 6 mile long fence erected along the road between the
airport, town and Konstantinovsky palace - where 48 foreign leaders will
stay - to mask the poverty of villages they will pass en route. Locals
reportedly have been told not to use their cars between May 20 and June 1,
or open gates in the fence when motorcades pass 

· Criminal justice system will be suspended so police and court wardens can
provide security for foreigners 

· Rusty cars, fuel tankers, armoured bank trucks and HGVs banned from city 

*******

#7
Argumenty i Fakty 
No. 21
May 2003
[translation from RIA Novosti for personal use only]
CAN RUSSIA CREATE NOVEL STRATEGIC ARMAMENTS?
The Strategic Offensive Reductions Treaty (SOR treaty) 
stipulates the reduction of Russian and US nuclear warheads to 
1,700-2,200. What should Russia do in this situation and what 
did Vladimir Putin mean when he spoke about novel types of 
strategic weapons? Radmir SMIRNOV, deputy director general of 
the Vityaz 21st Century research and production company who had 
held leading posts in the space-related research institutes of 
the Defence Ministry for 20 years, in an interview with Sergei 
OSIPOV.
     
     Question: Does the SOR treaty suit Russia?
     Answer: Certainly. We should slash our nuclear missile 
capabilities, if only because they cost too much in their 
present form. Regrettably, our nuclear missile shield is the 
basic factor of global respect for Russia. But unless we do 
something now, it will cease to exist in the 2010s, above all 
because of the creation of the US NMD system. 
     
     Question: But the Americans say their NMD system is 
spearheaded against terrorists. 
     Answer: It is absolutely clear now that the NMD system 
will be strategic, which means that it will be not only 
spearheaded at repelling the missile strikes of rogue countries 
and international terrorists but will be also designed for 
defence against a large-scale nuclear strike. In US view, only 
two countries - Russia and China - can hypothetically deliver 
such a strike. 
     
     Question: What will be the structure of the new NMD system?
     Answer: It will consist of three echelons. The task of the 
first echelon will be to hit ICBMs at the boost phase. With 
this purpose in view, a group of up to 30 Space Based Lasers 
(SLB) is to be orbited in 10-12 years in addition to a large 
group of space-based interceptors, meaning small satellites 
that will use anti-missiles to hit ICBMs at the launch phase. 
The anti-missiles were created during Reagan's Star Wars 
programme. One such satellite weighs 75 kg and the USA will 
need 5,000-6,000 of them.
     The USA has also created tiny 8-10 kg nano-interceptors, 
which have essentially similar combat ability. The Americans 
may produce 15,000-20,000 of them and orbit them very quickly, 
as one space shuttle can orbit up to 3,000 of these tiny 
killers. A considerable part of Russian ICBMs can thus be 
destroyed at the initial stage. 
     But the USA stipulated the second and third echelons for 
guaranteed defence against a nuclear strike. I mean the land-, 
sea- and air-launched missiles that can destroy nuclear 
warheads at the ballistic trajectory. The USA has held eight 
tests of such missiles, three of them successful.  
     
     Question: What will happen to the other components of the 
nuclear triad - submarines and strategic aircraft - after the 
deployment of the NMD system?
     Answer: I think their effectiveness will decline. The 
Americans may soon create space-based laser weapons that would 
hit not only ICBMs but also aircraft. Worse still, in 10 to 15 
years they may learn to track submerged submarines. 
     
     Question: President Putin said in his address to the 
Federal Assembly that Russia's programme of novel strategic 
weapons had reached the stage of practical implementation. Is 
it connected with the effort to counterbalance the NMD system?
     Answer: Russia will not be able to create a similar 
system, as it would cost 300-400 billion dollars. But it can 
give an asymmetrical reply, meaning the destruction of vital 
NMD elements. It will be most probably space-based weapons, 
which must be given priority attention. We may use ordinary 
shrapnel shells or more effective systems based on novel 
physical principles to hit American satellites. 
     On the other hand, the Americans may find out, after 
spending vast sums of money on their NMD system, that Russia 
has elaborated effective reply measures that would fully 
neutralise the military and political advantages of the US 
system. Moreover, these novel Russian weapons would cost no 
more than 3-4 billion dollars, or a hundred times less that the 
NMD system.
     
******

#8
The End of an Era: Russian-American Relations in an Emerging World  
Kennan Institute Speech 
May 19, 2003 
Nikolai Zlobin  
nzlobin@cdi.org 
Nikolai Zlobin is the Director of Russian and Asian Programs at the Center
for Defense Information and editor-in-chief of the Washington Profile News
Agency. (www.washprofile.org)

Good afternoon, thank you. On June 1st Putin and Bush will meet in St.
Petersburg. It will be a very polite meeting, and they will kiss and hug
each other and try to cover up some very serious problems in US-Russian
relations. Using the American system of terrorist alertness, I would say
that Russian-American relations are in the orange level, and very close to
red. We are in the lowest point in our relations, and I think this is very
dangerous for both of our countries, as well as for a large part of the
world. Iraq became a sort of magnifying glass for exposing the tremendous
differences in Russian and American attitudes toward the world. I think
that the conflict in Iraq, and the Russian-American conflict over Iraq,
ended a big epoch in Russian-American relations, one which started at the
end of the Cold War. Now we have had a reality check, and we are starting
something new, something which we don't really want. 

I couldn't believe how many people in Washington were surprised by the
Russian position on Iraq, and how many people in Moscow were surprised by
the American position on Iraq, which suggests to me that we don't read each
other correctly, we have misread each other's position and each other's
intentions and policies toward Iraq. The Russian position was motivated in
many ways by Putin's unofficial start of the presidential campaign, and his
address to the Federal Consul was part of this campaign, and the war on
Iraq coincided with this campaign. Putin's motivation was to show to his
country that his decision was not influenced by the White House, that his
foreign policy is not run by Bush. He also had an idea, or at least a
dream, to influence Bush, and he failed, and I think this left him quite
bitter. I think the Russian position was also motivated by the necessity to
defend certain economic interests in Iraq, which, if you look closely, were
not economic interests but political interests of the current elite and the
oil business. Putin tried to play himself as a middleman between Europe and
the US; he thought he could be the European voice in Washington, and that
definitely didn't work, since he lost that role to Tony Blair. I don't
think Tony Blair was very welcome during his recent trip to Russia, and
Putin's attitude toward Tony Blair was bitter because he took the position
that Putin would like to have had. And now Putin is losing Kvashnevsky in
Poland, and Eastern Europe is running away from Russia, which is again, the
result of Russia's position in Iraq. So to become a middle man, a mediator
between European and American leaders and a moderate voice, Putin wasn't
able to do. 

Also, I think Putin has become a hostage to his own popularity and high
rating. His rating, popularity and money comes from the oil businesses,
which are very much in charge in Russia. Maybe, it was in a way a smart
decision for him not to risk a high rating, at lest until March 14, the
next presidential election in Russia. When I was talking to people from his
administration, they were telling me that he is very tired after 3 years of
running Russia, very disappointed and feels betrayed by so many people that
he doesn't trust anyone at all. One thing we should consider is the
situation inside Kremlin - Putin was influenced by members of his
administration, those who were able to come to his office. And I think the
people who were there, who had access to him, like Voloshin or Prikhodko or
Margelov, who were arguing for support of America were outshadowed, purely
through quantity, by people from the FSB and the security structures. Putin
had limited information, or unclear information, and I think in a way he
was basing his decisions on quantity of information, not quality.
Indirectly, I think people did manipulate Putin's decision - you can't
manipulate Putin directly, he's too strong for that - but they did
manipulate him indirectly, and as a result there was definitely not enough
Putin in the Iraq issue - he definitely didn't say enough about Iraq, he
didn't show his real attitude and allowed Igor Ivanov to do most of the
talking. In this situation it was very difficult for him to make any
thoughtful decisions, and if you follow the Russian position on Iraq, there
was little of Putin there. Actually, I would say, there's very little of
Putin in foreign policy for the last year at least. And Putin was very
quiet about Iraq, once in a while he would say something angry, but no deep
thoughts. He didn't explain the Russian position.

For him, personally speaking, it was a very indecisive position, which
before Iraq was very beneficial, when you didn't have to take sides. It was
good for him, and he tried to stretch that position as possible, but then
he couldn't maintain it. During and after the war, the US has lost
essentially all interest in Russia. Now, if you ask someone in the
administration about the policy toward Russia, they say "give me a minute"
and try to say something intelligent. Two years, three years ago they could
go on for hours and you could not stop them. Now they don't have any
policy. The point is, after the Cold War, US and Russia stopped to think of
each other as enemies. I would argue that after the war in Iraq, the US
stopped looking at Russia as a potential partner, maybe for a long time. I
very much think this is the Bush administration's position. We can discuss
whose fault that is, whose responsibility, but it's a fact of life.

So I would argue that this alleged strategic choice the Putin made on
Sep.11 2001 to turn his country toward the US didn't happen, and wasn't
much of a choice. Maybe it was a choice on the tactical level, maybe it was
influenced by Chechnya or just a moral reaction, but I don't see any choice
at all, for several reasons. The most obvious is that Putin didn't do
anything after Sep.11 to prove that the choice is there. There is no single
stand, there is no explanation to his country or to his elite what his
choice meant. And I think we're trying to believe so much that the choice
is there that we didn't really check what it means and took it for granted,
and now we have to recognize that it was no choice. There's plenty of
articles and even books already from both sides of the ocean about the
revolution in Russian foreign policy under Putin, and I don't think there
was any revolution at all. 

But the US took a very passive and indifferent attitude toward Russian
position at that time, which put Putin in a big frustration. It seems like
Bush administration didn't meet Russian strategic choices, and did not
appreciate Putin enough. After 9/11, Russia was very busy counting the very
unfriendly steps that the US took toward Russia, starting with the missile
defense system, bases in Central Asia, the State Department's position on
Pankisi, steel exports, Jackson-Vanick... I can go on and on, and mention
things that doesn't seem very important on the Washington scale of
political life, but very important on the Kremlin scale. 

The level of mistrust is tremendous. American missiles are still targeting
Russian targets, nuclear submarines are still swimming - I mean, Russia is
doing the same thing. You have to realize that mistrust level is very high
and we're in a catch-22 situation.

Where are we now? After the break-up of the USSR, I was arguing very hard
against the concept of improving US-Russian relations. I thought it's a bad
idea because you're trying to improve something that was designed for a
very different political and geopolitical situation, which is a bad idea. I
thought it would waste intellectual effort and time to improve what is not
improvable. I thought we have to drop it and start building a new
relationship based on something very different. I argued for new
fundamentals, but nobody listened at that time. Now I feel like I got my
revenge. We don't have fundamentals in Russian-American relations, we have
no idea what the relationship means, where it's supposed to go, what the
content or motivation is. In this situation, everything is based on current
events - America does something, Russia reacts, and this is what our
relations are. There is nothing behind it. And I think this is a very
difficult situation - we don't have fundamental relations, we don't have
proactive relations, it's purely reactive policies toward each other, and
some quite unfriendly. If you ask someone in Kremlin or the White House
what has been the biggest success in our relations - well, the answer is
that we didn't fight militarily. A phrase was used quite often, that we
"agree to disagree." I agree with that, it's a nice phrase, but what are
the things where we agree to agree? We agree to disagree on everything, but
we agree to agree on nothing. It's a strange situation, two big countries'
reactions to each other depends on current events, and all diplomatic
efforts are spent on trying to calm each other. 

Russia does not have a solid foreign policy, it's an imitation of foreign
policy, and there are no big ideas. When Putin came to power, a lot of
Americans argued that he's the man with big ideas. I think now we see he's
the man with little ideas, at least in foreign policy. There's no system in
American foreign policy, and Russian foreign policy is not solid. Plus, I
think we have to recognize that it's very important, for the last 10 years
now we haven't been solving our problems, we've been storaging and
collecting them, trying to look forward without solving these problems, and
now we have a whole roomful of these problems which we haven't solved in
the previous decade. Iraq, China, Iran, Syria, plenty of problems which we
try not to see in our relations and didn't solve them at the right time. 

We see the situation so differently now, and we don't have joint
understanding of how this came about. Russia is definitely in a worse
position than it was  a year ago, foreign policy-wise. If you remember
fundamentals of Putin's speech at the foreign ministry last summer, when he
said there were 4 main goals: establish closer, trustworthy relations with
the US, re-establish relations with the EU, straighten relations with NATO,
and secure Russian interests in Central Asia. A year later, every four of
these goals have failed completely. Both sides contributed a lot to the
deterioration of the UN. After the Cold War, where the UN did not play an
important role at all, when it was a hostage to the two superpowers, I
thought after the Cold War the UN could go through a reincarnation, because
it would really be a place to solve problems, but it didn't happen. This is
one of the reasons why Russia is so frustrated by American foreign policy,
because the UN Security Council is the last place Russia can exercise
power, as a result of WW2. If something happened to the UN and Russia's
veto power, then it doesn't have any tools. It's very clear from Moscow -
Russia is doing everything possible to keep the Security Council and its
position there, and try to win back the respect and reputation of the UN.
Paradoxically, over Iraq, Russia helped to destroy the UN, it didn't take
the right position. But now I see serious changes in Russian policy toward
compromising, particularly concerning the UN and the Security Council. 

I also remind you that before Iraq, Russia was quite anti-European, and
Europeans were quite anti-Russian, and whatever relations were achieved
were through huge influence from Washington. Whenever you talk to Europeans
here, they always complain about how Washington pressures them to bring
Russia in, to establish good relations with Russia. So if Russia loses
political support from Washington, its relations with Europe will be worse,
particularly with the EU. Both countries are now in a situation of making a
certain choice. There is no evidence that a multipolar world will give
Russia more security than a world run by the US alone. It's a choice for
Russia now which way to follow - if Russia decides, strategically speaking,
to go with the US, then Russia would definitely try to get a status of
special relations, like it was during the 1st Clinton administration.
Russia wants a much more formal union with the US; the US as you know,
rejects the ideas of formalities, of signing treaties, and Russia feels
insecure. In a way, it's like a huge North Korea, they need a formal
agreement with the US. After all, when the Cold War ended there was no
peace treaty, and there's no rules. So Russia would like to have some rules
and to formalize its relations with the US, and this is one big piece of
disagreement we have between the two countries. 

We see very differently how we can solve problems - we have different
political agendas. Putin said that each country its own axis of evil -
Russia has its own axis of evil which doesn't match the American one. For
Russia, the most dangerous country is Pakistan, and we have to solve this
problem. Musharaff is, at least according to Moscow, not more legitimate
than Saddam Hussein. And Pakistan has nuclear weapons, missiles that can
reach quite deep into Russian territory. There were discussions, with
Americans, Russian officials trying to say "let's deal with Pakistan" and
the Americans inevitably say, "yes, but let's start with Iraq". The second
concern for Russia is Saudi Arabia, as first a potential site for a
terrorist takeover of the government, and second as a potential competitor
in the oil business, a country that can stop Russia from going to Western
and particularly American markets. Israeli nuclear ability is very high on
Russian foreign policy priorities. 

So we have very different geopolitical agenda, and we could not so far
coordinate it. The non-proliferation issue - Soviet Union and the US signed
a bunch of non-proliferation treaties, but the Soviet Union doesn't exist
anymore, Russia is a poor country, and many people believe that
non-proliferation only benefits the US, because Russia can't compete
anymore, in non-proliferation, quality-wise. Russia doesn't have enough
money to develop new systems, to develop a missile defense system. Russia
cannot update existing systems, so it has to go with quantity, not quality.
But we can't go with quantity because that would violate non-proliferation
pacts. So we have another huge disagreement on that. Putin announced last
Friday in his speech at the Duma that Russia is on the way to develop new
strategic arms, nuclear weapons. But on the big scale, Russia is losing to
the US, quality-wise and losing its field of influence, a cushion around
Russia, to America, so Russia not happy about that. And we have common
disagreements in Iran. Lately, I see little changes in Russian position on
Iran and higher Russian officials did recognize that whatever Russia doing
in Iran can be used potentially to develop nuclear weapons. 

And North Korea was a disappointing moment for Putin because he thought he
had great influence over North Korean leaders after all these meetings and
trips. 

Our agendas are very different and our foreign policy on both sides speaks
in very different languages. This is very obvious. If Europeans think that
Bush is putting right questions but giving wrong answers, Russia actually
expresses opinion that Bush is even asking the wrong questions. We have a
different attitude to what terrorism is about. Is it world-wide political
movement or do we have to deal with them as criminals? In the last case, we
don't use armies and weapons, just police and intelligence. We have a very
different attitude toward international law - Russia suddenly become very
supportive of international law, and American's attitude is after the fact
law, and Russia wants now to set rules and preconditions. 

We don't agree on tactical foreign policy issues, like this preventive
strike - is it only a right of the US, or could Russia do it in Georgia,
let's say? And Americans were opposing this, remember, last summer. How
will Iraq affect the development of the terrorist networks, will it
increase it? Russians believe that it will increase network of terrorists
and suicide bombers and people who want to join terrorist organizations all
over the world. On Sep. 12, 2001, everybody was in love with America -
twenty months later, everyone hates you. So Russia doesn't want to be on
your side partly because of that. It doesn't want to have the anti-American
mood spread over Russia as well. 

And last point I'll make about this disagreements or how they effect
Russian-American relations. I mentioned at the beginning that Putin has two
big weapons in his arsenal - high rating and popularity in the country -
people do love him, I have no idea why. But his other weapon is the current
peace with the oil and the oligarchs. This is very important - the
structure of power, the structure of economy, of legislative and executive
power is very much paid off from this money. So if the price of oil drops,
then this source of Putin's support will disappear very fast, and the only
thing he can do is go and find another source of support for the power, go
to different people, and it's very dangerous because it's one year before
elections, and six months before Duma elections. I talked with a Duma
operator, and he said, every seat in the Duma is sold, particularly party
seats. And when money will stop from oil, then Duma is out of protection,
the Communists can take over. If your money will come from somewhere else
and not controlled by Kremlin than you have a big problem. And for Putin
it's a big problem. Berezovsky still in London trying to make some noise.
Iraq's stability and oil prices are a big concern to Putin, and he lost on
that as well. 

In conclusion I would say that we are in bad shape, we don't have
fundamentals in Russian and American relations. We could probably solve
certain tactical issues, and it seems we did, for now - Iraq, Russian debt.
But there's no fundamentals, and the next crisis can break our relations
even deeper than now. We are now in a situation when it's obvious we have
to do something. Both countries do not recognize this necessity. But now
Bush started his campaign, and Putin basically did the same on May 16, by
reading his speech in the Russian Parliament. So now, next year is
important because we're working on the agenda for both presidents' next
terms. We have to work very hard to give them some agenda on
Russian-American relations, not to try to improve what we had, because I
believe this is a lost cause, but try to find new fundamentals of this
relations, otherwise we might lose the chance to take advantage of Putin's
next term. After Putin, in 2008, I believe Russia will go in Eastern
European direction, Russia will get a president from the left, who will be
a socially democrat at the very least. It won't be so market-oriented, or
West-oriented as Putin. Russia will eventually go the same way as East
Europe, Russia just has huge inertia. But in 2008 it won't be a person like
Putin in Kremlin, at least we could talk reasonably to him, but if by 2008
there aren't certain fundamentals in Russian-American relations, and we
will need to wait a long time for next opportunity. Thank you.

Transcript prepared by Seva Gunitskiy, Washington Profile. 

*******

#9
Date: Fri, 23 May 2003 
From: "JOSEPH DRESEN" <DRESENJO@wwic.si.edu>
Subject: Exhibition of St. Petersburg Artists
  
The Kennan Institute is pleased to announce an exhibition of art works
presented by the Kolodzei Art Foundation (www.kolodzei.org) that will be at
the Woodrow Wilson International Center for Scholars from May 23 until June
20, 2003.  This exhibition is dedicated to the celebration of the 300th
anniversary of St. Petersburg. It covers three generations of artists and
showcases stages in the evolution of nonconformist and independent art in
St. Petersburg.

The exhibit is located on the fourth floor of the Woodrow Wilson Center,
and is open for viewing Monday through Friday during business hours, 9:00
a.m. to 5:00 p.m.  The Woodrow Wilson Center is in the Ronald Reagan
Building, located at 1300 Pennsylvania Avenue in Washington, D.C.  For
directions and more information on the Woodrow Wilson Center and Kennan
Institute, please visit the Centers homepage at (www.wilsoncenter.org).
You may also contact Joseph Dresen at (202) 691-4245. 

(The Kolodzei Collection of Russian and Eastern European Art features
paintings, drawings and sculptures by more than three hundred artists
chronicling three decades of Russian and Soviet nonconformist art, from the
post-Stalinist era to the present.  The Kolodzei Art Collection has been
written up in The New York Times, New York Newsday, Elle, Art (Germany),
Beaux Arts (France), Dagens Nyheter (Sweden), The Moscow Times, and The
Moscow Tribune; and has been featured on CNN.  Selections from the Kolodzei
Art Collection have been shown throughout the United States, Russia and the
former Soviet Union, and Europe.)

*******

#10
WOODROW WILSON INTERNATIONAL CENTER FOR SCHOLARS--FELLOWSHIPS IN THE SOCIAL
SCIENCES AND HUMANITIES 2004-2005 

The Woodrow Wilson International Center for Scholars announces the opening
of its 2004-2005 Fellowship competition.  The application deadline is
October 1, 2003.

The Center annually awards academic-year (or one semester) residential
fellowship to individuals in the social sciences and humanities with
outstanding project proposals on national and/or international issues.
Topics should intersect with questions of public policy or provide the
historical and/or cultural framework to understand policy issues of
contemporary importance.  Fellows are provided with a stipend (includes a
round-trip transportation allowance) and with part-time research
assistance.  Fellows work from private offices at the Woodrow Wilson
International Center for Scholars in Washington, DC.

Eligibility:  For academic applicants, eligibility is limited to the
postdoctoral level and, normally, to applicants with publications beyond
the Ph.D. dissertation.  For other applicants, an equivalent level of
professional achievement is expected.  Applications from any country are
welcome.  All applicants should have a very good command of spoken English.
 The Center seeks a diverse group of Fellows and welcomes applications from
women and minorities.

For application materials, please visit our website at:
www.wilsoncenter.org, or write to:
Scholar Selection and Services Office, Woodrow Wilson International Center
for Scholars, One Woodrow Wilson Plaza, 1300 Pennsylvania Avenue, NW,
Washington, DC 20004-3027; e-mail: fellowships@wwic.si.edu; telephone:
202/691-4170; fax: 202/691-4001.

********

#11
US Department of State
23 May 2003 
Vershbow Says U.S.-Russia Trade on Verge of Boom
(U.S. envoy speaks at the New Economic School in Moscow) (3800)

"I am confident that we are on the verge of a boom in trade and
investment," U.S. Ambassador to Russia Alexander Vershbow said at the
New Economic School in Moscow May 22.

"The structural reforms initiated by the Putin administration," he
said, "have gone a long way to putting the economy on a solid
footing."

Energy is the "most exciting and promising area" of joint cooperation,
Vershbow said, welcoming "indications that the Russian Government
plans to permit private companies to play a role in financing and
constructing the Western Siberia-Murmansk pipeline."

However, having painted what he himself described as a "rather
cheerful picture" of the U.S.-Russia economic relationship, Vershbow
cited a number of "problem areas" that "need to be resolved before we
have smooth sailing to the trade and investment bonanza."

In addressing those problem areas, he said, Russia needs to:

- Support the "sanctity" of commercial contracts and agreements;

- Create a "transparent, stable and enforceable" tax and license
regime;

- Improve and enforce intellectual property rights (IPR) protection;

- Act decisively on "pervasive bureaucratic red tape and
over-regulation";

- Bring corruption under control;

- Reverse the "worrying trend" in Russia towards control over mass
media; and

- Check the HIV/AIDS epidemic that threatens to devastate the Russian
economy.

"We can knit together our economies so that our different advantages
complement each other and both countries prosper. And in this way, we
also help ensure the integration of Russia into the world economy, and
further cement the strategic partnership between our two countries,"
Vershbow concluded.

Following is the text of Vershbow's remarks as prepared for delivery:

(begin text)

New Economic School
Moscow
May 22, 2003

OPPORTUNITIES IN U.S.-RUSSIAN ECONOMIC RELATIONS

Remarks by Alexander Vershbow, U.S. Ambassador to the Russian
Federation

As prepared for delivery

Thank you for giving me the opportunity to speak to you again. I had
the pleasure of participating in your 10th anniversary celebrations
last December and I'm glad you've invited me for an encore. Several
members of our Embassy staff have attended lectures and presentations
at the New Economic School over the past year. They always report how
impressed they are with the quality of the research, although they
admit to being a bit challenged by the econometrics that you all seem
to understand backwards and forwards. Gone are the days when Russia
relied on foreign economic advisors. Institutes such as the New
Economic School are doing a marvelous job of preparing the next
generation of Russian economists.

I first came here in 1969 as a high-school student, and again in
college in 1973. I served in the Embassy from 1979 to 1981. So as I
pass by Dolce & Gabbana boutiques and see Muscovites sipping
cappuccinos and eating sushi, I am still astounded by the strides
Russia has made in transforming the inefficient Soviet model into a
vibrant market economy. The contrast between the old days and today
reminds me of a quote by Marx - Henrietta Marx - who supposedly once
said that if her son Karl, instead of writing about Capital, had
focused on making Capital, life would have been so much better. Some
quotations by Groucho Marx might also be relevant, but I'll save those
for another occasion.

Anyway, the topic I've chosen to speak on this evening -
"Opportunities in U.S.- Russian Economic Relations" - will hopefully
be of more than just of academic interest to you. I'm guessing that
many NES graduates will help create and perhaps take advantage of the
very opportunities I'll be talking about -- as policymakers, advisors,
or businesspeople.

For those of us involved in building U.S.-Russian relations, this is
an exciting time. We are on the brink, I believe, of a real
breakthrough in our economic cooperation. Right now our levels of
bilateral trade stand at $6.9 billion in 2002 and U.S. investment is
at less than $6 billion. That's on par with the level of U.S. economic
ties with Costa Rica or the Dominican Republic, clearly far, far below
their potential. Some of you are undoubtedly asking why I am so
optimistic. Weren't we saying the same things in the mid-90s soon
after the collapse of communism? At that time, investors and exporters
had high hopes to cash in on the new market economy. But, as we soon
found out, their hopes were dashed on the rocks of default and
devaluation.

So why is the situation different now? Though there are still problems
-- and I'll touch on those later -- the Russian economy is
fundamentally stronger now than before the crash. The lack of reform
and spendthrift government budgets had been the key reasons for that
economic catastrophe and the loss of all investor confidence in the
Russian economy. The structural reforms initiated by the Putin
administration, however, have gone a long way to putting the economy
on a solid footing. Over the past three years, key legislation in
areas of land ownership, labor relations, tax reform, and pensions
have contributed to making the economic recovery sustainable.
Moreover, the sound fiscal and monetary policy of the past three years
make another financial catastrophe highly unlikely. While change in
the investment climate happens slowly, I hear from American business
people that it is easier to do business in Russia today than it was
even when I arrived less than two years ago.

And I am confident that the pace of positive change will continue. In
his address to the Federal Assembly last week, President Putin
challenged the nation with ambitious goals for the coming years,
including ruble convertibility, poverty eradication and doubling of
GDP by 2010. I trust that you econometricians can calculate for me
what that means in terms of yearly percentage growth rates - but it's
clearly very ambitious.

To be sure, investors -- burned by the 1998 experience -- are
cautious. This is why the breakthrough has been slow in coming. The
general downturn in the world economy also has slowed the inflow of
investment and trade with Russia. But I am confident that as investors
regain their confidence -- and that is already happening -- and the
world economy picks up, we will see an upsurge in trade and
investment.

Recent developments in our bilateral relationship also differentiate
the current time from the earlier periods of exuberant expectations.
The overall relationship provides the framework for economic ties;
good political and security relations give impetus to closer economic
relations. Strong economic relations, in turn, help keep the
relationship on a steady keel, even when political or security issues
threaten to rock it.

The warm relationship our Presidents developed in their first meetings
in mid-2001 signaled the deepening of the relationship between our two
countries. Both Presidents understood that the world had changed since
the end of the Cold War and that it is truly in our joint interest to
work together to face common threats and pursue mutual objectives.
President Putin's courageous response to September 11 accelerated the
trend in U.S.-Russia cooperation.

The Moscow Treaty on Strategic Offensive Reductions, which Presidents
Bush and Putin signed at their summit meeting last May, and which was
ratified by the State Duma last week, was another sign of a permanent
change in our relations. Our two sides were no longer focused on
counting numbers and types of nuclear warheads. Instead, we are now
together turning our focus to the new threats of the 21st century.

A second document signed by our Presidents at that Summit may be
judged by historians as even more important than the Moscow Treaty:
that is the joint declaration on the New Strategic Relationship, which
sets forth the action plan for dealing with new security challenges.
It commits us to work together against problems confronting all of
humanity: terrorism, the proliferation of weapons of mass destruction,
narcotics trafficking, organized crime.

The war in Iraq obviously has been a bump in the road, but we are
putting that behind us as our two countries, as well as our other
friends, work together to rebuild a country ruined by decades of
dictatorship. President Bush's National Security Advisor Condoleezza
Rice and Secretary of State Powell have both visited Moscow recently
to discuss areas where we can cooperate. And, of course, Presidents
Putin and Bush will have serious discussions next week in St.
Petersburg. Today's adoption by the UN Security Council of a new
resolution on Iraq - with a positive vote by Russia - is an important
signal that we have begun a new chapter in our cooperation.

Returning to today's main topic, our two Presidents in their first two
summit meetings furthermore pledged increased attention to economics
and business. In Ljubljana in June 2001, President Bush promised to
send a high-ranking economic team to Moscow and, within weeks,
high-level U.S. delegations were in Moscow, followed by visits by our
Secretaries of Commerce and Treasury in July. Secretary of Commerce
Donald Evans, in particular, has taken a strong interest in Russia. He
led a follow-on trade mission to Russia with senior executives from
U.S. companies in October 2001 and he also joined President Bush at
the Moscow Summit in May 2002. Not neglecting the regions, Secretary
Evans also visited St. Petersburg and Samara, prior to the summit, to
head a roundtable on small business. Moreover, he has much of the
Department of Commerce engaged in finding ways to increase trade and
investment between the U.S. and Russia, with many other trade missions
ranging from auto parts to railways.

Yet a key and innovative element in the Presidents' approach to the
economic relationship was the leadership of the private sector, rather
than governments. Contacts between bureaucrats are fine and necessary,
but only private businessmen can conclude the deals that will really
expand our trade and investment relationship. And business people are
best placed to make recommendations to their governments, too, on how
to improve conditions for trade and investment.

At the initiative of the private sector, Presidents Bush and Putin
announced at the Genoa summit in July 2001 the creation of the Russian
American Business Dialogue (RABD). The RABD is led by the Russian
Union of Industrialists and Entrepreneurs (RSPP) and the
Russian-American Business Council on the Russian side, and by the
American Chamber of Commerce in Moscow and the U.S.-Russian Business
Council for the U.S. The groups were chosen because they comprise a
broad range of sectors and encompass small and medium-sized
enterprises, as well as larger firms.

The four groups quickly set for themselves the task of identifying the
key obstacles to growth in trade and investment and making
recommendations to the Russian and U.S. governments on how to resolve
these problems. The result is a comprehensive list of recommendations
touching on a wide variety of concrete issues: business visas, airport
procedures, intellectual property rights, small and medium enterprise
development, market access and judicial reform. The RABD partners
presented this report to our Presidents during the May Moscow Summit,
and both governments committed themselves to tackling the problems the
business groups identified. The partners are now in the process of
updating their recommendations to present to the governments at the
June 1 summit and I am happy to hear that the new draft report cites
progress on many fronts.

The RABD partners have also launched a number of working groups on
specific sectors to allow business people, investors, and government
specialists from each side to meet and discuss issues relevant to
their specific fields - such as telecommunications and information
technology, small business, and aerospace. And we have already seen
success, for example, in the aircraft industry, another area where our
countries have complementary strengths that can lead to robust,
mutually profitable cooperation. I have in mind Boeing's participation
with Sukhoy and other Russian aircraft companies in developing a new
Russian regional jet, and partnership between Pratt & Whitney and
Aviadvigatel in Perm.

Yet, to be honest, I think the most exciting and promising area of our
joint cooperation with Russia is on energy issues, where there are
clear mutual benefits on both sides - developing new markets for
Russian energy producers and diversifying supplies for the U.S. The
U.S. and other major energy-consuming countries naturally seek
adequate, reliable supplies of oil from diverse sources. Russia, with
its substantial oil and gas reserves, is ideally suited to the role of
bolstering world energy security. But to do so it must be able to
increase its exports to meet growing world demand for Russian oil.
U.S. companies over the years have developed many technologies that
can improve oil recovery. Many have ready access to capital. Both
could be used more effectively to help Russian companies increase
their production, maintain and develop their energy transportation
infrastructure, and increase their exports to the world market.

Indeed, at their May and November Summits last year, Presidents Bush
and Putin issued joint statements emphasizing the important role of
energy cooperation in enhancing global energy security and
international strategic stability. Last October, Ministers Gref and
Yusfov and Secretaries Evans and Abraham presided over the first
Russia-U.S. Commercial Energy Summit in Houston and it was quite a
success. Plans are underway for a second Energy Summit in Russia this
fall.

But, as with the RABD, the important players in this dialogue were the
representatives of Russian and U.S. petroleum and petroleum services
companies, because true cooperation means Russian and U.S. companies
working together on concrete projects. The Commercial Energy Dialogue
that grew out of the Houston Summit and was launched in Moscow in
December offers great promise in improving and facilitating
cooperation between Russian and U.S. companies. We already have a few
results of the hard work and cooperation including direct shipments of
Russian crude oil to the U.S.

One of the most serious constraints to expanded Russian oil exports is
Russia's shortage of pipeline capacity. In their November joint
statement, Presidents Putin and Bush welcomed the prospect of
constructing a deepwater port for energy exports. Construction of a
pipeline from Western Siberia to the ice-free port of Murmansk would
fulfill the Presidents' vision and be a tremendous boon to increasing
Russian oil exports. I am glad that the Murmansk project was endorsed
today by the Russian Government when it approved a new energy strategy
for the country. We also welcome indications that the Russian
Government plans to permit private companies to play a role in
financing and constructing the Western Siberia-Murmansk pipeline.

Foreign investment in the energy sector has been developing in recent
years. But for there to be a lot more U.S. energy investment in
Russia, the Government must take a number of steps. One is to support
the sanctity of commercial contracts and agreements. In addition, we
believe special provisions should be made to facilitate investment in
the development of "difficult" oil and gas reserves - reserves that
might not be developed for years, if at all, without such provisions.
Some of these provisions, such as tax stability for new projects and
recourse to international arbitration, are key elements in Production
Sharing Agreements. We were disappointed that the Duma, in adopting
amendments to the tax code yesterday, has narrowed the scope of
projects eligible for PSAs. The bottom line is that there must be a
tax and license regime that is transparent, stable and enforceable,
and one that offers investors a fair opportunity to earn a reasonable
profit.

Energy comprises a very promising area for bilateral cooperation and
will be a cornerstone of our economic relationship. However, we also
want to expand cooperation across a spectrum of other business
sectors, and we have already seen some success stories - Ford and
General Motors, Caterpillar, International Paper, Gillette, Wrigley,
Proctor and Gamble, to name just a few. I read that Starbucks may be
coming to Russia soon, and I hope Wal-Mart comes to compete with the
many European hypermarkets that now dot the Moscow landscape.

For investment to grow, we need to build normal, stable trade
relations with well-established rules. Russia's accession to the WTO
is the key element in our strategy to strengthen economic ties. I
don't need to spell out for this audience all the benefits that Russia
would receive through membership in the WTO. Some of the economists in
this very room have already demonstrated with convincing data that
opening the Russian economy up to competition and removing investment
barriers will reap considerable gains. WTO membership will accelerate
and lock in the structural economic reforms that Russia has begun to
implement. Furthermore, as a WTO member, Russia will be able to
participate in setting the agenda and shaping the outcome of future
global trade negotiations, such as the current Doha Round, and the
resulting world trade regime.

The pace of negotiations over the past few months has been brisk and,
though steady progress has been made, there are still important
outstanding differences: on the degree to which Russia is prepared to
open up its economy to greater competition in the service sector,
including the important banking, insurance and telecommunications
sectors; on necessary tariff reductions on certain industrial goods,
such as aircraft and automobiles; on setting an acceptable level of
agricultural subsidies; and on Russia's plans to liberalize its
domestic energy prices. A late April meeting in Paris between Deputy
Prime Minister Kudrin and the U.S. Trade Representative Robert
Zoellick helped narrow some of these differences and improve our
understanding of each other's position. We hope that more progress can
be made before the next round of negotiations in late June and early
July.

I have been painting here a rather cheerful picture of our economic
relationship overall. As I stated at the outset, I am confident that
we are on the verge of a boom in trade and investment. However, a
number of problem areas, in additions to some that I've already
mentioned, need to be resolved before we have smooth sailing to the
trade and investment bonanza.

Up at the top of that list is the rule of law. Foreign direct
investment in Russia will remain at pitifully low levels until
investors can be confident that the courts will protect their rights
and that contract sanctity will be observed.

Our infamous dispute over Russian restrictions on poultry and other
meat imports underscores why WTO accession is so vital for our trade
relationship. We need to have adherence to a rules-based trading
regime instead of the arbitrary application of regulations purely to
protect the domestic industry.

The Russian government and, more importantly, by Russian business
itself, is now beginning to appreciate the importance of a key area
for U.S. companies -- intellectual property rights (IPR). Although the
Russian government has begun to take action to combat violations of
intellectual property rights (IPR), piracy remains a serious and
growing problem in Russia, one that affects not only foreign but
Russian trademark and copyright holders. The lack of IPR protection is
also a factor that seriously affects investment climate. We welcome
the Commission established last fall, headed by Prime Minister
Kasyanov, recent raids on counterfeit CD and DVD production
facilities, as well as passage of most legislation on IPR.

But the seriousness of the problem is illustrated by an event taking
place this evening: Tonight I'll be attending the Moscow premiere of
"The Matrix Reloaded," but I was sad to learn that there are already
crude, pirated DVDs of the film available on the streets. Please don't
buy them!

Pervasive bureaucratic red tape and over-regulation further cripples
business - Russian business, perhaps even more than American. I know
that several NES graduates have been involved in a series of studies,
supported by USAID, on the extent and impact of administrative
barriers. This excellent work demonstrates the difficulties of
reducing obstacles to business throughout the regions of Russia. The
Russian government has acknowledged this problem, but not yet acted on
decisively on it. No real progress is likely in this sphere without
comprehensive administrative and civil service reform. President Putin
acknowledged the importance of this issue in his strong call in the
poslaniye for administrative reform.

Moreover, excessive bureaucracy feeds corruption, which must be
brought under control if the economy, especially the small and medium
enterprise sector, is to flourish. As your study indicates, there is a
troubling pattern in many regions - the conflict of interests at the
municipal and oblast levels of government that work to keep out
competitors. This tendency is exacerbated by the weak and often
corrupt judicial system that fails to uphold court decisions. This is
an all too frequent element in long-standing investment disputes
involving foreign investors. At the federal level, policies are often
pursued to support the interest of specific firms at the expense of
competitors.

Another factor, which is not always identified with the economy, is
the free flow and unrestricted access to information. There is a
worrying trend in Russia of control over mass media, as well as
continued restrictions on information that should be in the public
domain, such as draft regulations, and details of the budget. This has
a negative impact on economic as well as democratic development.
Market economies by definition depend on information and transparency.
I applaud the efforts of the Ministry of Economic Development and
Trade to promote a law on freedom of information in the government.

I should not fail to add another, somber, note to this repertoire of
problems and that is HIV/AIDS. If not checked, the disease will
devastate the economy, nullifying the reforms that have been initiated
over the past few years. As the future generation of economic leaders,
you should be particularly concerned about the impact AIDS will have
on the work force in the next decade, if efforts aren't made to
reverse what is in Russia the world's fastest growing rate of new
infection. I was encouraged by President Putin's mention of the threat
of HIV/AIDS in his address to the nation last week and hope that this
problem will soon attract the attention it demands in Russia.

I believe these problems can be solved if we commit ourselves to
developing our mutual economic interests. For all the reasons I
mentioned at the beginning, we are at an important point in our
economic relationship, with a real chance for a major boom in trade
and investment. We can knit together our economies so that our
different advantages complement each other and both countries prosper.
And in this way, we also help ensure the integration of Russia into
the world economy, and further cement the strategic partnership
between our two countries.

********

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