April 11, 2000    
This Date's Issues: 4450 • 4451 • 4452

Johnson's Russia List
#4451
11 August 2000
davidjohnson@erols.com


[Note from David Johnson:
1. Business Week: Paul Starobin, Why Russia Has to Cut Chechnya 
Loose.
2. Moscow Times: Peter Ekman, Pushkin Blast Highlights Police 
Failings.
3. The Economist (UK): Mayhem in Moscow. The fatal bomb blast in 
the Russian capital this week raises questions about the shifting
balance of power under President Vladimir Putin.
4. The Wall Street Journal Europe editorial: Putin's Presumption.
5. Reuters: Russia wants to boost trade in farm land from 2001.
6. MSNBC: Michael Moran, Too proud to accept Russia’s help. 
Why has U.S. spurned Russia’s fire-fighting aircraft? 
7. Reuters: Renewed Russian love affair may breed new bonds.
8. Moscow Times EDITORIAL: McTyranny More Scary Than Putin.
9. APN: Where should they bring the bribes now? A regular meeting 
of the Agency of Political News Expert Club concerned a reform of 
the federative structure of Russia. 
10. the eXile: How to Be Happy. The eXile Guide.]

******


#1
Business Week
August 28, 2000
Commentary: Why Russia Has to Cut Chechnya Loose
By Paul Starobin 
Moscow Bureau Chief Starobin covers Russian politics and business. 


Pushkin Square in central Moscow, so named for Russia's greatest poet, is a 
favorite meeting spot for young lovers. On Aug. 8, it was splattered with 
blood. A bomb placed in an underpass instantly killed seven people and 
gravely wounded dozens of others. The temptation for strongman President 
Vladimir V. Putin to lash out will be powerful--perhaps irresistible.
But lash out at whom? At the ``bandits''--the code name for Chechen 
rebels--whom federal security police blamed within hours of the explosion? 
Chechen terrorists may indeed be the culprits; they are widely believed to be 
behind the bombings of several Moscow apartment buildings last summer. But 
even if they are responsible for the recent explosion, for Putin to widen 
Russia's ongoing military campaign against Chechen forces would compound a 
policy that has already proved to be folly. It is time for a radical shift in 
approach: For Russia's own sake, it should grant Chechnya independence.
As America demonstrated in Vietnam, nations all too often cling stubbornly 
to policies that run counter to their own self-interest. But Russia's 
Chechnya blunder is even deeper and more intractable than the Vietnam 
mistake. Moscow's effort to subdue this small country--populated largely by 
fiercely clannish Muslims who are skilled at arms--is more than 150 years 
old, and it has never worked. Pride mixed with imperial ambition and racial 
and religious bias has blinded generations of Russian leaders--from Nicholas 
I in the 19th century to Joseph Stalin, Boris Yeltsin, and now Putin--to this 
unconquerable reality.
Putin says granting independence to Chechnya, now a republic of the 
Russian Federation, could rip Russia apart at its multi-ethnic seams. True, 
post-Soviet Russia is an intricately woven religious and ethnic tapestry, 
especially in the mountainous region of the North Caucasus, where Chechnya 
lies. But nowhere but Chechnya has such a determined movement for secession 
taken root. This is because no other ethnic group within the borders of 
today's Russia feels so massively aggrieved. During World War II, Stalin 
deported almost the entire population--men, women, and children--to 
Kazakhstan, in Central Asia, for supposed German sympathies. They were exiled 
for 13 years. That sparked the secession movement that flared anew after the 
Soviet Union's collapse in 1991. Yeltsin invaded Chechnya in 1994 in a futile 
two-year war, and Russian troops went in again last year after Chechen rebels 
tried to establish a new base in neighboring Dagestan--a plan that had little 
support from the native population, despite their Muslim kinship.
If Putin's rationale for keeping Chechnya in the Russian fold is flawed, 
so too are his means. He aims to eliminate the Chechen guerrillas as a 
fighting force. ``We must take what we are doing in the North Caucasus to the 
end, finish off the terrorists in their nest,'' he declared in an Aug. 9 
statement. But green Russian troops are no better masters of Chechnya's 
mountain passes than American boys were of Vietnam's rice paddies. Russia 
lost at least 6,000 troops in the 1994-96 Chechen war; some 2,500 more have 
died in the current one. Frustration, inevitably, has spawned barbarism 
against a civilian population whose rebel sympathies are plain--just as it 
did in Vietnam when American troops massacred the village of My Lai.
UNFINISHED BUSINESS. His uncompromising rhetoric notwithstanding, Putin may 
feel trapped in a political box of his own making. He was, after all, elected 
in March on a platform of muscular action against the rebels. But such boxes 
must sometimes be flattened, and Putin has no powerful political rival 
anyway. He can find other bases of popular support, such as his crackdown 
against the hated oligarchs. As for Rus-sian honor and credibility, America 
recovered from the indignity of Vietnam, and France from Algeria. Chechnya is 
the unfinished business of an empire that must make a final disinvestment.
Ninety minutes after the bombing at Pushkin Square, the acrid smell of 
explosives still hung in the air. One scene was predictable: A band of 
supporters of Vladimir V. Zhirinovsky, the fringe right-wing nationalist, 
unfurled a blue banner that read ``The Only Good Chechen Is a Dead Chechen.'' 
But a trio of Russian teenage girls just a few paces away had a quite 
different reaction to the day's horror. ``Of course'' the war should be 
stopped, said Olga Mayorova, a 15-year-old Muscovite. ``Russia doesn't need 
Chechnya.'' For the good of Russia's future, Putin should heed that wisdom.


******


#2
Moscow Times
August 11, 2000 
TWO KOPEKS WORTH: Pushkin Blast Highlights Police Failings 
By Peter Ekman 


Nothing shows how bad the nation's "law-keeping organs" are than a major 
crime such as Tuesday's bombing in Pushkin Square. Police throughout the city 
began checking the documents of any pedestrian with darker skin than usual. 
"Suspects" have been detained, but it is unlikely they will ever be 
convicted. Many people are afraid to walk on the streets f not because of a 
terrorist threat, but because of police harassment. 


This police action is a complete waste of manpower. Nobody actually expects 
to catch the bombers this way. And nothing police do should be expected to 
lead to a conviction of the bombers, if the experience of other major crimes 
is a guide. 


Consider bombings that have occurred in Moscow in the last five years. Before 
the 1996 elections, there were two bombings of trolleybuses downtown and a 
bombing of a subway car near Tulskaya metro station. No convictions. Last 
year, there was a bombing in the downtown shopping center and two apartment 
house bombings that killed nearly 300 people. No convictions. The public does 
not know who planted the bombs or why. 


Of course, almost everybody seems to know who's behind Tuesday's bombing. 
Moscow Mayor Yury Luzhkov and other officials were on television soon after 
the blast suggesting that Chechens were to blame. This is one possibility, 
but a thorough investigation is needed before conclusions can be drawn. 
Nobody seems to be bothered collecting the evidence that would be needed to 
prove who is guilty. In the West, the scene of the bombing would be closed 
off for several days while investigators gathered every scrap of evidence. 
The Pushkin Square bombing scene was open to heavy public foot traffic 
Wednesday, the day following the blast. 


But the inability of the police to get convictions in court goes beyond mere 
incompetence. Consider all the contract murders. Each week in Moscow and St. 
Petersburg, another businessman is executed mafia-style. A few times each 
year, a politician or public figure is added to the toll. Arrests in these 
cases are rare, coherent explanations from the police are still rarer and 
convictions almost never happen. To get a record this bad, the police must be 
trying hard not to solve many of these crimes. At the very least, the 
leadership of the Interior Ministry and the government do not care to commit 
the resources needed to solve the problem. 


Police work this bad raises questions about the legitimacy of the government. 
Can the state protect its citizens against random violence? Apparently not. 
Do officials participate in or cover up crimes? With so many unsolved 
political and economic crimes, it seems so. Some people even believe that 
last year's apartment building bombings were executed by federal forces as an 
excuse to restart the war in Chechnya and help elect their man to the 
presidency. Given the history of the KGB, this theory cannot be ruled out f 
certainly not with the evidence presented by the police. In any case, 
legitimate questions are not answered by the work of the police and the 
courts. 


President Vladimir Putin has promised an "adequate response" to Tuesday's 
bombing. The only adequate response will be careful police work leading to 
the arrest of the bombers, followed by a fair trial and conviction before an 
independent court. 


Peter Ekman is a chartered financial analyst and a financial educator based 
in Moscow. 


*******


#3
The Economist (UK)
August 12-18, 2000
[for personal use only]
Mayhem in Moscow 
The fatal bomb blast in the Russian capital this week raises questions
about the shifting balance of power under President Vladimir Putin 


The new terror 


IN THE twilight of the Soviet era, Pushkin Square was the nearest Russia
had to a democracy wall. Anti-communists of every shade, from wacky
anarcho-syndicalists to cautious social democrats, used to mill happily
round the headquarters of Moscow News, a pro-reform weekly, gossiping,
arguing and studying the latest slogans. Over the past decade, democracy
fever has cooled, but the area round the square, with its beggars,
street-traders, theatre-goers and burger-chomping youths, has always been a
good place to gauge the city’s mood. 


Now, however, Pushkin Square has taken on a new association in Muscovites’
minds: sudden death, pain and fear of worse to come. The bomb that went off
on August 8th in an underpass beneath the square, leading to the metro, was
small but cunningly placed, and timed to inflict the maximum number of
casualties on the rush-hour crowd. At least eight people were killed, and
over 90 injured, as the passage, lined with makeshift shops selling
flowers, cosmetics and books on self-improvement, became a smoky, bloody
mess. 


Muscovites were instantly reminded of last autumn’s strange set of bombs,
killing about 300 people, which began with an explosion in an underground
shopping arcade near the Kremlin. Those blasts were a catalyst for a new
Russian onslaught against breakaway Chechnya, where the bombers were
assumed to originate—though nothing was ever proved, and the explosions
stopped as mysteriously as they began. Odder still, both this week’s bomb,
and some of last year’s, occurred in places where some security measures
were in force. 


The official responses that followed this week’s explosion are worth noting
carefully, both for their sequence as well as their substance. Minutes
after the blast occurred, the mayor of Moscow, Yuri Luzhkov, said it was
clearly a “terrorist” act. Within two hours, the FSB—the domestic successor
to the KGB—confirmed only that a bomb had gone off. Then the interior
minister, Vladimir Rushailo, said he “did not exclude” a connection with
the war in Chechnya. 


Later in the evening, both the FSB and the interior ministry said it was
too early to draw conclusions; Mr Rushailo said President Vladimir Putin
would take personal charge of the investigation. Mr Luzhkov, however,
seemed more certain. He said that shortly before the explosion two young
men had left a bag at a shop in the underpass, saying they would return
after changing some money. This and other evidence confirmed that the bomb
was “100% Chechen in origin”. 


For their part, Chechens fighting for independence denied involvement. “We
are at war with Russian troops, we do not commit such crimes against the
civilian population,” said Aslan Maskhadov, the president of the rebel
republic. A separate statement from the Chechens on August 9th said the
blast confirmed their earlier warnings that “Putin’s clique” had planned a
series of terrorist acts in August and September whose aims would have more
to do with domestic Russian politics than with the war in the Caucasus. By
causing fear and uncertainty, the blasts would serve as a pretext for
personnel changes and a strengthening of the Kremlin’s powers. A first
step, the Chechens predicted, would be a campaign to remove Mr Luzhkov from
the city hall. In other words, despite his hasty, blustering denunciations,
the mayor would be made to carry the can for lax security—and eliminated as
a threat, albeit a diminishing one, to Mr Putin. 


By this time, the FSB said it had detained two suspects, one from Chechnya,
the other from neighbouring Dagestan; later it admitted they were “not
directly involved”. Separately, the police issued sketches of four
suspects. Mr Putin, meanwhile, gave a warning against jumping to
conclusions. “It is wrong to look for an ethnic connection, a Chechen
connection,” he said, insisting that a settling of scores between gangsters
was also plausible. As for Boris Berezovsky, the tycoon who helped bring Mr
Putin, a career intelligence officer, to supreme power but who is now at
odds with his protégé, he predicted more explosions. They would be an
inevitable result of a mistaken bid to subdue Chechnya by military means
alone. 


History repeated 

To judge by the history of Russian terrorism over the past century, not to
mention the past year, the truth behind this week’s explosion may never
come to light. Some of the most spectacular acts of violence against the
dying tsarist regime were committed by people who might have been
Bolsheviks or government agents or both at once. 


It is certainly true that some Chechens are resorting to increasingly
desperate tactics. By using ruthless force to bring Chechnya to heel, and
nearly flattening Grozny, the rebel republic’s capital, the Putin
administration has radicalised its population. Though there is no
suggestion that the Moscow blast was a suicide attack, there has been a
series of kamikaze-style bombings in the Caucasus. This is a new tactic for
a guerrilla army that has always husbanded its fighters’ lives rather
carefully. Within the Chechen camp, Mr Maskhadov has lost influence to
harder-line Islamists who dream of a broader war between Russia and the
Muslim world. 


While some Russian policymakers, possibly including Mr Putin, may hanker
after a political solution to the Chechen imbroglio, there is little sign
of a serious political effort to seek peace. Akhmad Kadyrov, the pro-Moscow
Chechen leader who might have struck a deal with Mr Maskhadov’s people, has
now been sabotaged by both Russian generals and Chechen militants. The
Moscow explosion may be a new bid, from some quarter or other, to wreck
hopes for a settlement. 


Whatever the motives, the blast is bound to have consequences for Russia’s
internal balance of power—and, in particular, the long-running rivalry
between the regular police, under the interior ministry, and the security
service, which under various names (Cheka, OGPU, NKVD, KGB, FSK, FSB) has
long kept watch over the body and soul of Russia. Recently there has been
fresh talk of creating a super-security service, which, for the first time
since the Stalin era, would bring regular police and secret agents under
the same roof. 


Such ideas may be premature, but there are clear signs that Mr Putin
favours his alma mater, the security service, over the interior ministry,
often the favourite institution of his predecessor, Boris Yeltsin. The FSB
has been regaining clout as a watchdog over the army; a recent law leaves
the way open for the agency to interfere in the army’s chain of command. In
a challenge to the regular police, the FSB is also taking over as the main
body dealing with organised crime. While Mr Putin has upbraided the
interior ministry for incompetence, he finds no such fault with his old
workplace. “The president seems to believe that the FSB is a loyal
institution with no agenda of its own,” says Mark Galeotti, a British
specialist on the Russian armed forces. “He could be wrong.” 


In the meantime, Russia-watchers are keen to learn which agency takes
charge of investigating the carnage in Pushkin Square. They will be
surprised if the increasingly confident FSB does not take the lead. 


*******


#4
The Wall Street Journal Europe
August 10, 2000 
Editorial
Putin's Presumption


The bomb that ripped through a central Moscow underground pass on Tuesday
seemed to have been purposefully timed. Exactly one year earlier, on Aug.
9, 1999, Boris Yeltsin named a little-known former KGB chief to the second
highest post in the land. Then Prime Minister Vladimir Putin quickly
distinguished himself as a tough hand.


Mr. Putin took personal charge of an investigation into bomb attacks in
Moscow and outside that killed some 300 last year. The attacks were widely
blamed on Chechen rebels despite no conclusive evidence that Chechens
orchestrated them. The bombs were thus the catalyst for the second all-out
Russian-Chechen war in three years. This time, though, the Russian people
were broadly supportive of the Kremlin's offensive.


For a while, Mr. Putin seemed to deliver. Chechen rebels were driven out of
Dagestan and forced back to the southern mountain region. Russian forces
gained control over most of the territory, though charred and destroyed by
warfare, it is of little use to anyone right now.


But Russia has not "won" its war in Chechnya and probably can never win it.
Suicide attacks, snipers and other fighting still claim casualties. Some
2,500 Russian soldiers have been killed in Chechnya so far this year.
Contrary to the two-week operation Mr. Putin promised last year, Russian
forces are there for the grisly, long term. Opinion polls show Russians
much less confident now that their government can win its Chechen war.
Support for that effort may also be waning.


It is not clear whether Tuesday's bomb blast was orchestrated by Chechens
any more than it is clear that last year's apartment bombings were. The
Chechen leadership has strongly denied it was a Chechen deed. Certainly
there is no shortage of nefarious underworld forces in Moscow,
Caucasus-linked or otherwise, who might do such a thing.


But real or not, the Chechens are certainly convenient targets for
accusations. The word went out minutes after the blast was that
dark-skinned, North Caucasus types were responsible. A Chechen and a
Dagestani were arrested. Mr. Putin, who took personal charge of the
investigation into the blast, nevertheless sought to portray the hunt as
even-handed. "It is not a very correct thing to do when we stigmatize a
whole people. Criminals and terrorists have neither nationality nor
religion," he was quoted by the Russian news agency Interfax as saying.


But then Mr. Putin got to his real message: "We must bring to a conclusion
what we are doing in the North Caucasus. We need to hit the terrorists in
their lair, we need to protect people from such acts in other parts of the
Russian Federation," So much for "let's not jump to conclusions." When it
comes to the North Caucasus, guilty until proven innocent is the rule in
Mr. Putin's Russia.


******


#5
Russia wants to boost trade in farm land from 2001
By Aleksandras Budrys

MOSCOW, Aug 10 (Reuters) - The Russian government may try to persuade 
parliament to adopt a land code this autumn easing trade in agricultural land 
from next year, Deputy Prime Minister Alexei Gordeyev said on Thursday. 


Such a move could revolutionise Russian farming, which has been plagued for 
years by lack of funds for basic inputs and so by falling output, while lack 
of true private ownership has held farmers back from raising the loans needed 
to boost production. 


"We are now debating including clauses on the sale of agricultural land in 
the land code, so that we could resolve questions of land sale as soon as 
next year," Gordeyev, who is also agriculture minister, told a news briefing. 


He added that if changes were not incorporated into the code, the government 
may ask parliament to pass legislation allowing trade in land separately from 
the land code. 


The State Duma lower house of parliament will debate the third and final 
reading of a draft land code this autumn. But in its present form the code 
does not allow for trade in agricultural land. 


Most farmland in Russia is no longer state property, and private ownership of 
land is guaranteed by the constitution, but the mechanism of buying and 
selling farm land has not been defined. 


Under the present system, most former state and collective farms have become 
shareholder-owned enterprises owned by their employees, who can technically 
sell their shares. 


But they cannot sell a specified plot of land, since the share certificates 
tend to show only that they own a certain percentage of the whole farm, 
without specifying particular fields or buildings. 


Until now parliament has stubbornly resisted passing legislation facilitating 
the sale of farm land. 


Gordeyev said the government needed laws allowing trade in agricultural land 
to be able to start bankruptcy proceedings against loss-making farms. 


He said reforms planned by the government in the farming sector would include 
a clause stipulating that next year all farms would have to present business 
plans demonstrating their efficiency in order to have debts written off or 
restructured. 


Gordeyev said farmers' debts now totalled 185 billion roubles ($6.68 
billion), far more than the value of the goods they could produce, and the 
accounts of 60 percent of farms had been blocked. 


"Farms have not enjoyed civilised financial relations with the state and 
suppliers for some three years, while the state has been stimulating barter 
deals," Gordeyev said. 


($=27.70 roubles) 


*******


#6
MSNBC
August 9, 2000
Too proud to accept Russia’s help 
Why has U.S. spurned Russia’s fire-fighting aircraft? 
By Michael Moran
Michael Moran is senior producer for special projects at MSNBC.com and a
columnist on foreign affairs.


NEW YORK, Aug. 9 — Two years ago, during a particularly bad year for
wildfires in Florida, I began getting e-mail from a reader who sensed a
scandal in the smoke-filled winds. As U.S. firefighters struggled with
blazes in 10 states, a Russian offer to lend the United States two of its
IL-76 tanker aircraft — by far the largest in the world — was spurned. But
now, with a new wildfire threatening unprecedented destruction, the United
States has snubbed Russia again. What, exactly, is going on? 
THE ILYUSHIN IL-76 is known to military and civilian aviation buffs as
the huge workhorse of Russian aviation. Since the early 1970s, the
four-engine jet has been the main Soviet/Russian military transport and a
major force in international cargo hauling since the USSR collapsed. But
it’s also the largest firefighting weapon in the world. A single IL-76
tanker can drop 11,000 gallons of water in one trip - about four times as
much as the largest tanker in the U.S. arsenal, the C-130 Hercules. Ask any
firefighters who don’t wear a tie to work and they’ll tell you that’s an
asset they want on their side.
In May, when fires threatened the Los Alamos nuclear plant, Russia
again offered the IL-76 for the cause. The U.S. Federal Emergency
Management Agency (FEMA) considered the offer. But in the end, once again,
the United States said no. That’s when several of my readers, again
outraged at what they perceived as America putting its pride over the
safety of its citizens, spammed me with mail about the Russian aircraft.

REGRETS? THEY’VE GOT A FEW 
With 4 million acres consumed already this year and more to burn, why
has the United States continued to say “Nyet?” It’s a question I put to the
National Interagency Fire Center in Boise, Idaho, which is coordinating the
national firefighting effort. 
“The aircraft Russia is offering is new, and we don’t understand its
technology or capabilities,” said Pat Entwistle, a fire information
officer. “Also, they have non-English speaking crews and we haven’t figured
out how to incorporate this plane into our system.”
Told that Russia has been offering this assistance for years,
Entwistle said: “In the past, we have never had a situation that exceeded
our capability to handle.”
Well, to me, “a situation that exceeds our capability to handle” is a
pretty good definition of what the Federal Emergency Management Agency
should be doing, no? 
Entwistle conceded the policy would probably be reviewed, but added
“now is not the time. We’ve got our hands full just dealing with the
fires.” She also said that previous assessments of the plane had found it
“incompatible” with U.S. methods, though she failed to explain exactly how.

MISSED OPPORTUNITIES
There certainly was ample time to learn how to use this exotic “new”
Russian technology whereby a gigantic plane that first flew in 1974 drops
water on a fire. Russia first made the IL-76 available to the U.S. in 1996.
It tried again during the big Western blazes of ’97 and throughout
Florida’s debacle in 1998. 
The most recent cold shoulder turned to Russia came back in May, when
the Los Alamos plant was evacuated. “We appreciate the goodwill ...,” FEMA
emergency analyst David Passey told the Albuquerque Journal. “But we
haven’t had a request for more aircraft and the Forest Service doesn’t
appear to need them.” 
Privately, several sources in the Forest Service and the Agriculture
Department described a “minor debate” within their ranks over the
usefulness of the aircraft. These sources - all of whom, incidentally,
support using the big jet - said the official line rejecting the offer
rests on the idea that a jet moves too quickly to drop water on downhill
slopes. While this may be true, it ignores the usefulness of dropping such
enormous quantities of water on uphill slopes (which, after all, simply
entails approaching the mountain from the other direction) or on level land
to help create firebreaks. 

SWORDS TO PLOWSHARES? 
Back in Russia, the Ministry of Emergency Situations understandably is
flabbergasted at all this. After years of being told their help is
unwanted, the Russians are beginning to sense something more than the
prickly pride of the U.S. Forest Service at work. 
“Fear of competition,” is how Sergei Shoigu, who heads Russia’s
version of FEMA, described the reticent American response.*
It’s not as though Moscow is offering to sell missiles to Cuba, after
all. Even if they are a bit loopy in suspecting that America fears
competition in the (non-existent) firefighting tanker market, it’s not
difficult to see why this kind of reaction contributes to international
misunderstandings.

ULTERIOR MOTIVES 
Certainly, Ilyushin, makers of the IL-76, have more than humanitarian
action on their minds. Like all of the great weapons makers of the former
Soviet Union, Ilyushin has struggled to find new markets after its captive
market of satellite and toady states collapsed. But unlike many of its
Soviet sister firms, Ilyushin made something useful in peacetime: the
IL-76. Helping former Soviet industry develop into civilian corporations is
standard State Department boilerplate. Yet in this instance, where a need
exists and a supplier readily available, American bureaucracy gets in the way.
Tom Robinson, a Florida-based firefighting consultant, has made the
cause of the IL-76 as something of a personal crusade. Robinson represents
Global Emergency Response (GER), a government and industry consortium of
U.S., Canadian and Russian agencies that has tried for years to get the
Russian aircraft onto American radar. He’s hardly a disinterested party -
over the years he’s become something of a zealot on the jet’s behalf - but
he’s got a point when he asserts that this issue has been grossly mismanaged. 
Robinson thinks this resistance comes down to pure inertia.
“Like any federal agency, they don’t want to change,” Robinson told
me. “They’re comfortable using small planes and a group of private
contractors. Now they have to adjust and they don’t like it.”
How many homes does it take to change U.S. Forest Service policy? How
many thousands of firefighters - American, Canadian or Mexican - should be
put at risk for the sake of a somewhat suspect ruling about this “new
technology?” 
Don’t tell me about it. Tell the Forest Service. The guys fighting the
fires.

*******


#7
ANALYSIS-Renewed Russian love affair may breed new bonds
By Catherine Evans

LONDON, Aug 10 (Reuters) - International bond investors' renewed love affair 
with Russia means that a return to the capital markets to refinance debt 
falling due next year is a real possibility, London bankers said on Thursday. 


Following remarks by Finance Minister Alexei Kudrin on Wednesday, they said 
Eurobond prices already reflected a reversal of sentiment towards Russia, 
which defaulted on billions of dollars of domestic and external debt after 
its economy crashed two years ago. 


Prices on Russian Eurobonds have risen sharply in recent months, as Russia 
has made peace with disgruntled Soviet-era creditors and seen rocketing oil 
and commodities prices push foreign exchange reserves to record levels. On 
Thursday, its 2003 Eurobond was trading at more than 97 percent of face 
value, having climbed steadily from 74 percent at the turn of the year. 


"We have long expected Russia would seek to borrow to refinance the ($1 
billion) bond falling due in November 2001, and bond prices clearly assume 
they will be able to do so," said a proprietary trader at a Japanese bank. 
"It looks like their strategy of giving preferential treatment to Eurobond 
holders has paid off." 


Holders of Russia's $16 billion of Eurobonds, issued from 1997 onwards, were 
exempted from its demands for debt forgiveness on the grounds that they were 
sovereign obligations of the Russian Federation rather than the defunct 
Soviet Union. Russia's insistence that it will service the bonds in full now 
appears to have won the market's confidence. 


FOREIGN BORROWING NEXT YEAR, BUT NO TARGET 


Speaking after he had unveiled a balanced draft budget for 2001, Kudrin said 
on Wednesday that Russia would need to borrow to cover next year's foreign 
debt obligations. Funding sources could include official lenders such as the 
World Bank and International Monetary Fund. 


Kudrin declined to give a target figure, however, and hinted that commercial 
borrowing would depend on an improvement in the country's credit ratings. 


"Eurobonds will depend on market conditions and the outcome of talks with the 
Paris Club. Russia needs to raise its rating so that interest rates would not 
be a burden for the budget," he said. 


Russia's Eurobonds were upgraded from default levels after the London Club of 
commercial creditors agreed in February to restructure around $32 billion of 
Soviet-era debt, but are still rated a lowly single-B. 


The London Club deal, which will write off about one third of the debt and 
repackage the rest into a new 30-year Russian Federation Eurobond, is due to 
close on Friday, with the actual exchange scheduled for August 25. 


Dealers say demand for Russian Eurobonds has intensified ahead of the swap, 
which is seen as a watershed in the relationship between new president 
Vladimir Putin's regime and international lenders. Other fully-serviced 
assets such as the Min Fin 4, a star performer in recent weeks, have also 
benefitted. 


Russia is now seeking similar terms from the Paris Club of sovereign lenders 
on some $42 billion of Soviet-era bilateral loans. Kudrin said on Wednesday 
that a deal would wipe around $4 billion off Russia's debt servicing bills 
next year, something analysts said might negate the need for it to issue 
Eurobonds. 


"I can't see a Paris Club deal happening soon but if they did get one, and 
assuming that oil and commodity prices don't collapse, they may not need to 
borrow," said a sovereign debt analyst at a U.S. bank in London. "On the 
other hand, the market is always open if you don't need the money, so it 
might be an ideal time to return." 


*******


#8
Moscow Times
August 11, 2000 
EDITORIAL: McTyranny More Scary Than Putin 


McDonald's restaurants are popular and the company makes enormous profits, 
which is wonderful for them. But if it truly wants to be a "responsible 
corporate citizen," McDonald's ought to allow its 1.5 million employees f 
many of them young people f to unionize. 


Unions provide a responsible, reasonable way for workers to seek and get fair 
wages and working conditions. McDonald's reflexively rejects unions, saying 
it already offers fair wages and gets along fine with its workers. But at the 
same time, McDonald's has lobbied in the United States, for example, to 
create a special lower minimum wage for young workers. In other words: 
McDonald's spends company resources to push an agenda its own workers would 
consider as hostile to their interests f but when workers try to engage 
management in a discussion about that, McDonald's portrays them as outsiders. 


So the news that Moscow-McDonald's will sit down and bargain with an 
18-person union at one of its food-processing plants has to be seen in the 
context of the company's world-wide practice over decades. McDonald's has 
only accepted unions and collective bargaining when the cost of not doing so 
f in public relations problems or strikes f became too great. 


"Even when they have allowed a union, they've then tried to chip away at 
union recognitions. So, one always has the sense that even if union 
recognition is secured, it is a temporary situation," says Dan Gallinn, 
general secretary of the Geneva-based IUF union umbrella group. 


Gallin's remarks are posted at www.mcspotlight.org, a web site set up in 
response to McLibel, the longest trial in British history: McDonald's in 1990 
sued members of Greenpeace over some anti-McDonald's leaflets. A court 
expressed sympathy for Greenpeace's allegations, but ruled it had not proved 
all of them to the oppressive standards of British libel law. 


The case has meandered on in various venues every since. (This year, as the 
House of Lords helped Boris Berezovsky reopen a libel case against Forbes 
magazine, it rejected another appeal from the Greenpeace McLibel defendants.) 


Along the way, the case has raised the question of whether multinational 
corporations should be allowed to sue for libel at all. Arguably they should 
not: Already, the public seems to have lost its right to ask questions about 
business practices that may be harmful to public health or the environment. 
For all the talk of Vladimir Putin as a possible threat to freedom, it is 
still far safer for this newspaper to criticize Putin than a company like 
McDonald's. So who is the real threat to freedom in the 21st century f the 
Kremlin or the multinational corporation? 


******* 
#9
APN
8 August, 2000, 19:53
Where should they bring the bribes now?
APN Expert Club meeting
A regular meeting of the Agency of Political News Expert Club concerned a
reform of the federative structure of Russia. The participants were put two
questions to:


Does a real reform of the power take place at present or is it the Kremlin
PR-action?


If it is a real reform which elite groups will win and which will lose in
the end?


Presented were:


ROMIR President Elena BASHKIROVA, director of the Institute for Regional
Problems Maxim DIANOV, professor, political analyst Iosif DISKIN (presided
at the meeting), deputy director of the Moscow Foundation of Presidential
Programs Vladimir ZHARIKHIN, director of the Political Studies Institute
Sergei MARKOV, president of the “Institute of Development” fund Viktor
MILITARYOV, director of Applied and Regional Politics Agency Valery KHOMYAKOV.


APN editors


Thirty tyrants come to take the place of the seven


Maxim DIANOV: I believe, the tycoons of the second round are winning, not
those seven but those thirty. For example, there are quite a lot of big
entrepreneurs who kept their political reputation untarnished in 1996. Now
they want and are able to go in for politics: they have not been
compromised in political elite`s opinion.


The thirty has a great influence on governors as they own subject-forming
structures in terms of taxes. Among them priority will be given mainly to
those who have got economic structures in five or six neighbor subjects of
the Federation providing from 5 to 15 per cent of budget revenues each in
one or another region. Such businessmen are free now to contact a relevant
governor-general whichever he may be named. Naturally, governors will fear
these businessmen as they understand they (businessmen) know ins and outs
of inter-subject and intra-subject economic relations because they
themselves have established them.


A few words about losers. Who are those sixteen regional leaders whom
Kotenkov (Alexander Kotenkov is presidential envoy in the State Duma ­ APN
comment) described as those who would be sacrificed? It`s ridiculous to say
they are “red governors” as there are no “reds” among regional leaders in
terms of former times (1996). Kondratenko (Nikolai Kondratenko is
Krasnoyarsk region Governor ­ APN comment), for instance, is not “red” at
all from viewpoint of the Federal center.


Mafia and clan structures close to a regional leader can not be a major
criterion either when label on the “tarnished” or “untarnished” are pinned.
Political basis of the Kremlin consists of such scandal figures as Rutskoi
(Alexander Rutskoi is Kursk region Governor ­ APN comment), you know.


The weakest figures in economic and political terms, to all appearances,
will enter the black-list. Remember autonomous districts which are
subsidized by the government. There is nothing there to be stolen, however,
it is possible to redistribute various external subventions in somebody’s
favor. It has happened so in Evenk, Karyak, Komi-Perm autonomous districts
as well as in Ust-Ordyn Buryat autonomous district where a conflict between
Govorin (Irkutsk region Governor) and Maleev (head of Ust-Ordyn Buryat
district which is a part of the Irkutsk region) took place.


Small fries seem most likely to be sacrificed. Big regional barons,
however, are expected not to be losers as a result of this reform.


What are reasons to reform the state?


Vladimir ZHARIKHIN: Recently I bother my head about what it is: reform of
the nation or PR-action? It turns out neither statement is true.


It is impossible to reform the state in such a non-fundamental way:
securing no rear, laying no “bricks” so as the construction would remain
safe for centuries. They are strengthening the construction through
delegation of authorities and restructuring of the executive for these
seven (presidential plenipotentiaries in federal districts ­ APN comment),
etc. That is something too far from the reform of the state.


At the same time it does not look like a PR-action because of the shortage
of PR support. Even such a talkative person as Kirienko (presidential
plenipotentiary in Privolzhsk federal district, former prime-minister ­ APN
comment) is absent in the information space.


If it had been PR-action they would have repaired a fence for a granny or
done anything else in a pointed manner to make people trust them.


Now about losers. An idea comes often to my mind last days the governors
will not lose. They seem likely to retain everything they have had.


If the “seven” receives no powers of their own (which can be given to them
only by the federal authorities as the governors are not going to share
their powers) they will face a similar problem as presidential
plenipotentiaries in the subjects of the Russian Federation. There was a
lot of remarkable persons among them but when they had been reduced to the
status of the staff in a presidential administration department the
governors regarded them as small officials.


Thus there are two versions. Either they will be considered officials from
a presidential administration department or division of the power into
seven parts but not its strengthening will take place if the President
shares his authorities with them. In fact, that will only result in
weakening of the federal power.


Reforming the Federation Council looks even less convincing. It is
suggested if the governors are sitting there it does not correspond to the
division-of-powers principle, and if their representatives are, it does.
Isn`t it nonsense?!


It looks like Voloshin (Alexander Voloshin is the presidential
administration head ­ APN comment) decided to give a lesson to those
senators who had not followed his advice and had not agreed with dismissal
of Yury Skuratov from a post of prosecutor general. To tell the truth, I
can not see any other deep reasons in the reformation of the Federation
Council.


Both a state reform and PR-action


Viktor MILITARYOV: According to the creators` idea the campaign seems to be
both an effort to make a state reform and a PR-action with governors rather
than population being the audience, or PR-percept. That`s why it is
Kotenkov but not Kirienko who acts as a speaker in the PR-action.


The outcome depends on a key item: if Putin, to strengthen his own power,
will start an attack against oligarchs who are a basis of the regime at
large. I admit, such a scenario is possible.


Vladimir Putin will win


Elena BASHKIROVA: I am a representative of the study center ROMIR. We are
engaged in opinion surveys. Here is some data concerning response to seven
federal districts introduced. Nearly 32% of respondents think the
innovation will strengthen power and order without restriction of regional
rights; 18% of those surveyed believe strengthening the federal center will
bound regional rights; 25% of Russians answered that the novelty will
increase the number of officials, and 25% of respondents were difficulty to
answer.


So the population believe it is possible to strengthen power and order
without regions` rights restricted. The people want to have the federal
center and Putin strengthened. I suppose, the matter concerns promotion of
Putin himself.


The people including many in the elite, by the way, have taken the
President until now for a very resolved person. Part of resources to
strengthen his image, however, have been exhausting. Therefore the new
campaigns are needed.


I believe the PR-actions will work. The people keep on approving Putin`s
activity as president of Russia. According to the polls, 32% of respondents
fully approve his activity as president and 30% rather approve than do not.
That is 62% in total or almost two third.


I think both simple people and leaders direct their attention not to some
instruments of power but to a person. In other words, Vladimir Putin will win.


Additional workplaces setting up


Valery KHOMYKOV: The data presented confirm there were no serious grounds
to launch the reform of this kind. Putin, enjoying such a high rating and
being so popular was able to remove any governor: to kick him off or send
some checking bodies on him and pass discreditable papers to the Federation
council forcing senators to deprive him of immunity.


That`s why I think different reasons are behind it all. First, it`s a
personnel sphere. Putin has no government of his own. He has failed to
promote all those he wanted because he had been tied to some obligations. A
problem arises what he should do with the persons who have won their
reputation in the Chechen war, as well as those who was linked with the
president before. The answer is clear ­ additional workplaces should be
created.


Thus I estimate what is happening is setting up of additional workplaces
for Putin`s allies. Putin seems likely not to have had other route to
follow. I think some special representatives in foreign policy will be
appointed. All foreign policy issues will be divided between six or seven
people who will be responsible of American, West European, South-Eastern,
etc. sectors.


I could imagine myself in factory director`s place, for example, in Samara.
I have no idea where should I go. Should I go to Samara governor Titov or
drive to Kirienko in Nizhny Novgorod? Where should they come with their
problems and bribes?


Manipulative democracy forming


Sergei MARKOV: First, I don`t agree, it is a PR-action. That is real
politics, struggle for a real power. A distinct goal is being pursued to
eliminate regional regimes and form federal regime with a permanent but not
a discrete unity of power through the entire territory.


Closed authoritarian regimes were intensively formed in regions that
hindered capability to governor the country. Russia is facing the situation
when there is no difference between a good economic program and a bad one
since none of them can be realized under such a level of governing. That`s
why the matter concerns restoration of state institutions all over the
sector. The issue we are discussing is just the first step.


There is no doubt the governors whose power is being minimized will lose. I
believe Alexander Rutskoi was right when he said: “They want to make
assistant managers of us.” That`s true they want to make assistant managers
of them.


Beyond doubt, the business associated with regional authorities and
governors will lose. This business is closely linked with a mechanism of
taking political decisions at a regional level.


Federal bureaucracy will win without doubt. Those groups which are engaged
in writing programs and designing a new system now will be the major
section among federal bureaucracy to win.


The federal-level entrepreneur groups which have dividends from taking part
in making decision at the very top will win. They will win, however, in
case one more blow is not delivered to them.


Besides, I believe the population will neither win nor lose because
semi-authoritarian regional regimes will be changed by a semi-authoritarian
federal regime so-called controllable or manipulative democracy.


Unfortunately, some civil freedoms may suffer as a result of these reforms.
In particular, local self-government may suffer from.


Putin could have lost but came round


Iosif DISKIN: If I may I would express a different version that, I believe,
gives explanation to many things happening. Do you remember when all these
presidential initiatives were launched? It occurred when Voloshin`s, very
important official`s, fate was decided.


I think it was this circumstance than defined the content and rates of
putting forward of these initiatives. Negligence and absolute disorder
linked with drawing up laws can be explained by that. To all appearances,
they took texts from Gref`s (German Gref is Economic Development and Trade
Minister of the RF ­ APN comment) writing table and showing them to none of
lawyers brought to the Duma to submit for consideration and play up to the
President`s expectations. It was necessary to demonstrate Voloshin was the
very man who was able to promote Putin as consolidator and creator of the
central power in Russia.


The problem to retain Voloshin in his office was under decision. I can
explain poor quality of drawing up laws just by this fact.


If such a reform had taken place the main loser would have been the
President himself. In this case he stood face to face to oligarchs and the
matter was of braking the executive system which had formed in Russia.


I think, however, Mr. Putin has come round in some way. Putin agreed to
have substantial amendments inserted into the law on the Federation Council
and, which is most important, to have Federation Council members changed in
a stepwise way.


What does it mean? It means that Yegor Stroev will be the next to head the
Federation Council. The Yeltsin-Putin scheme will be realized everywhere.
The scheme will be standard for the RF. A “regional Yeltsin” will appoint a
“regional Putin” who will sent “regional Yeltsin” in the Federation Council
as a gratitude. Old friends will gather in the upper house again: Shaimiev
(Tatarstan`s President ­ APN comment), Rakhimov (Bashkiria`s President),
etc. They will be gathering there as other will be leaving. They will
retain the chairman of their own who has secured such a good basis for them.


Thus I insist nobody planned any federative reform. Definite problems were
decided: to strengthen close oligarchs` power and retain influence of
people who agree to realize these oligarchs` will.


I absolutely agree with Sergei Markin when he says influence of federal
bureaucracy is increasingly growing. Let`s translate, however, the
word-combination “federal bureaucracy” into Russian. What does it mean?
Probable it is the federal bureaucracy bodies. As Marx wrote: “Capitalists`
lieutenants to governor the matters of state.”


The federal reform was aimed at total mobilization of power in definite
oligarch groups. I think a number of people Vladimir Putin likes to advise
with, for instance, Yevgeny Primakov (“Fatherland ­ All Russia” Duma
faction leader, former prime-minister ­ APN comment) explained to the
President that was wrong to stay alone among the people who are willing to
embrace him tightly which might hurt him.


Who has won? In my opinion, nobody`s either lost or won.


…So reviewing the debates I`d like to say there are more words about the
reform than activities to realize it. Practically all the presents agreed
the climax is yet to come. The decisions have been taken and then,
“haggling” is expected as some think and “forming of relations” as some
believe, and etc.


I suppose, however curious it might seem, the Federation will actually win
in the long run since everybody will appeal to the law during the talks.
They have got no other talking means. The major lobbyists that is the
oligarchs seem most likely to win at the start.


At last, I agree with Maxim Dianov that “oligarchs of the second level”
will also win. Because they are interested in a true Federation. The more
effective and specific law, the better.


People, by the way, will win in the upshot too because the more number of
regulations and laws, the better for them. Our people used to live, though,
not according to the law but in good conscience.
*******


#10
the eXile
www.exile.ru
July 20 - August 3, 2000 
How to Be Happy
The eXile Guide
[DJ: Just the beginning here....]


Old hands in the publishing business will sometimes speak of a mystical
link between an editor and his readers. For a certain kind of publisher the
link with his reader is something like ESP, and something like a religious
rite. You start to feel as though you're seated with your reader in the
same row of audience, suffering and rejoicing with him with the release of
each good or bad issue. You feel like you're on the same side, both riding
the same hope, in on the thing together to the bitter end.


And sometimes you feel other things about your readers. You feel it when
they've got family problems. You feel it when they're freaking out because
they're about to be sentenced to 18 months in Danbury. And sometimes, and
now is one of those times, you feel still subtler things. Right now it's us
doing the feeling, and what we feel is that you, our beloved eXile reader,
have become distraught and dangerously unhappy lately. Stop and look at
yourself: those blank eyes, that slouching posture, the way the flesh hangs
off your face...You've lost the ability to appreciate life in all its
beauty, friend; you're flailing, helpless, in a freefall. 


And deep down inside, through the single wailing note of a single anguished
heart-string, you're crying out for help. But who will hear you? Who in
this cruel materialistic world, which consigned us to cubicles, made a
sideshow of God, and with a snort ten years ago even proclaimed history
over— who will answer your cry?


Well, cheer up, reader. Help is here. We'll answer that cry. Laugh if you
will, but we at the eXile know a thing or two about being happy. 


You may not believe it, but to us the world is a revelation, each day a
gift. We keep fit, take time out to smell the flowers, enjoy daily the
company of decent, loyal friends and family, and look to the future with
great eagerness and anticipation. Sure, we complain a lot, but complaining
has its place, and this case that place happens to be our job. It's what we
do, not who we are. 


And who we are, in private, are people just like you—inwardly striving to
better ourselves, often confused as to what it's all about, at times
overcome with a sadness we don't understand, and clinging instinctively to
a hope for a better future. And like you—like all people, in fact—our most
closely-held private desire is the simple desire to happy. We want relief
from our worries and the world's approval—and for all our bile and
misanthropy, it's these simple desires for peace and acceptance which
motivate everything we do. 


We're trying to make our way. And sometimes it seems to us that this eXile
thing will get us there, and sometimes it seems that, on the contrary, it
won't. But throughout it all, we never stop seeking happiness. And very
often we find it. Oh, but how we find it! Should we all of us be thrown in
prison-camps tomorrow, and tortured ceaselessly for the rest of our waking
hours, we would still remain to the end thankful for the brief time on this
glorious earth we've enjoyed until now.


Dear reader, it seems to us that you are lost, that you've had your head
turned by the false temptress of despair, and have lost sight of those
countless little things that give us life. We want to show you the way back.


Why? Because...Because we love you, that's why. Because part of being happy
is sharing the secrets of happiness. But most of all, because it's so
simple. It's simple to explain how to be happy. We'd do it even if it were
difficult, but it isn't, and we don't have to. That's the way life is. The
best things in it are always simple—like a nice long walk down a wooded lane.


So here it is, the eXile guide to happiness. No big theories here, no
lengthy philosophies affixed to glossaries of terms, no diets and no
dictums. Just a few concrete suggestions to help get you reconciled with
Your Old Friend Happiness.....


******