January 20, 2001   

This Date's Issues:   5038 • 5039

Johnson's Russia List
#5038
20 January 2001
davidjohnson@erols.com

[Note from David Johnson:
1. RIA: Russia will see no surprises from new US Administration - Russian analyst. (Georgy Arbatov)
2. Bloomberg: Swiss Say They Need Russian Help to Prosecute Borodin.
3. Los Angeles Times: Maura Reynolds, It's Colder Than Siberia--Even in Siberia. Russia: Blackouts and temperatures as low as minus-70 leave millions struggling to survive.
4. Financial Times (UK): Andrew Jack, Devastation overwhelms life in Grozny: It will take a long time before Russia's plan to return Chechnya to civilian rule bears fruit.
5. Jamestown Foundation Monitor: KREMLIN STEPPING BACK FROM DEFENSE
REFORM PLANS?
6. Celeste Wallander: Re 5032-Lucas/Practical Advice. (DJ: Those who wish to receive future issues of Edward Lucas' newsletter should contact him at edwardlucas@economist.com)
7. Jerry Hough: crucial moment in history.
8. George Soros and James H. Billington to speak at at the Library of Congress on January 22.
9. strana.ru: Gleb Pavlovsky, There can be no discussions with the United States on question of Borodin's alleged guilt.
10. Wayne Merry: Pavel Borodin.
11. Itar-Tass: Capital Flight from Russia Rises 30 Percent in 2000.
12. Itar-Tass: Russian Experts Forecast Rise in AIDS, Hepatitis, TB Rate.
13. Washington Post: Susan Glasser, Ted Turner Wants Assurance From Putin on Deal for NTV. CNN Founder Seeks Promise of Journalistic Freedom.
14. Interfax: Standard & Poor's experts forecast Russia's economic growth in 2001 at 2-3%.
15. Interfax: Russian govt property, privatization revenues top 50 bln rubles in 2000.
16. Caspian Studies Program: Lucian Pugliaresi, Energy Security.]

******

#1
Russia will see no surprises from new US Administration - Russian analyst
Russian news agency RIA

Moscow, 19 January: In an interview to RIA academician Georgiy Arbatov, a
well-known political analyst and Honorary director of the Russian USA and
Canada Institute has said it is unlikely that the change of the US
Administration will alter the US political guiding lines.

He said that the US foreign policy, and the Russo-American dialogue in
particular would hardly depend on the party the White House boss belongs to,
thus, one should not expect an abrupt turn in the new Administration's
attitude toward Russia.

At the same time Arbatov thinks that considering President-elect George
W.Bush's lack of political experience one cannot rule out that he may make
some dashing "cowboy-like" steps. However, since Bush is only coming to power
and it is yet impossible to analyze his actions, one can judge him only by
the appointments he has already made.

Arbatov thinks that Defence Secretary Donald Rumsfeld is probably the most
sinister figure of Bush's future cabinet. He used to head the Pentagon when
president [Gerald] Ford was in power. Arbatov says that Rumsfeld is a fervent
supporter of accelerating the development of the national defence system
[NDS] and will naturally insist on speeding it up as well on NATO expansion.

Arbatov sees Gen Colin Powell as a sensible and moderate man, though Powell
has also come out in favour of accelerating work on NDS development. On the
whole Arbatov thinks that Powell's sensibility can be counted upon: even if
he does not actively oppose "the hawks", at least he will not be found among
the right-wing activists.

As for Russo-US economic relations under the new president, Arbatov is sure
that in spite of ongoing declarations of Washington's intention to support
Russian reforms, one should not expect too much real help from the overseas.
On the contrary, he thinks it is possible to forecast that the US position on
economic and financial issues will be tough enough and the current discussion
about the payment of the Soviet debts proves it.

Arbatov says that Moscow should build its relations with Washington
foremostly considering its national interests and firmly standing up for
them. "At the same time Russia is not going to evade a constructive dialogue
with the USA on all important issues as well as bilateral relations and the
issues of the international significance," - the analyst stressed.

******

#2
Swiss Say They Need Russian Help to Prosecute Borodin
 
Geneva, Jan. 19 (Bloomberg)
-- Geneva prosecutors said they probably will need Russia's help to
prove money-laundering charges against Russian government official Pavel
Borodin, arrested in New York Wednesday on a Swiss warrant.

The Swiss will seek to extradite Borodin on charges he laundered about $25
million allegedly derived from bribes paid him by Swiss companies Mabetex and
Mercata Trading, said Geneva's Chief Prosecutor Bernard Bertossa. Prosecutors
will have to prove Borodin illegally received the money involved before they
can prove money laundering, Bertossa said.

``If the Russian authorities don't show much interest in helping us, we could
face some practical difficulties,'' Bertossa said in a telephone interview.
``If Russian authorities simply refuse to hand us any documents or proof
linked to the Mabetex or Mercata cases, our task will become extremely
difficult, say impossible.''

Russia has demanded the immediate release of Borodin, former President Boris
Yeltsin's property chief and state secretary of Russia-Belarus Union, after
he was arrested in New York on arrival to attend U.S. President-elect George
W. Bush's Saturday inauguration. A U.S. judge yesterday ordered him held for
a Jan. 25 bail hearing.

Russia Demands Release

Switzerland has said it will ask for his extradition within the legal period
of between 40 and 60 days.

Russian prosecutors last month closed their investigation into allegations
Swiss construction companies bribed Yeltsin, his daughters and Borodin, and
other officials. Borodin has said he is innocent of the charges.

Russia yesterday called in U.S. Ambassador James Collins to demand Borodin's
release. U.S. authorities said they had to arrest him under the extradition
treaty with Switzerland.

The Clinton administration reiterated its rejection of suggestions from
Moscow that the U.S. was doing anything other than carrying out its
obligations under an extradition agreement with Switzerland.

``We have made clear all along this is not some diplomatic signal, this is
not some diplomatic incident between the two governments, this is not some
trap,'' U.S. State Department spokesman Richard Boucher said. ``This is a
matter of us carrying out our international legal obligations, and as far as
we're concerned, that's all it is.''

President Vladimir Putin fired Borodin last January in his first government
reshuffle after he took over as acting president following Yeltsin's
resignation on Dec. 31, 1999. He then appointed Borodin as secretary to the
Russia-Belarus Council, created after the two countries signed a treaty aimed
at bringing the two former Soviet republics closer to union.

Borodin in 1999 said the Kremlin Property Department, created in 1993 by
Yeltsin to manage the Soviet Communist Party's possessions, managed $650
billion worth of assets in Russia and abroad, the Moscow Times reported.

******

#3
Los Angeles Times
January 20, 2001
It's Colder Than Siberia--Even in Siberia
Russia: Blackouts and temperatures as low as minus-70 leave millions
struggling to survive.
By MAURA REYNOLDS, Times Staff Writer

    MOSCOW--It's enough to make California electricity customers count their
blessings.
    Across the Pacific Ocean in the Russian Far East, Olga Korolyova is
troubled by blackouts. But unlike her counterparts in California, it's not
the darkness that she fears, or even her electric bill. It's the cold.
    Since December, the temperature has hovered around minus-40 degrees
Fahrenheit--cold even by Siberian standards. Little or no heat comes from
Korolyova's radiators. She and her husband survive in the feeble warmth of
two electric heaters--all they can plug in without blowing a fuse.
    To cook, they have to turn off one of the heaters. Several times a day,
they decide between eating and staying warm.
    "It gets so cold while the water is heating that a few hours later, when
you have to decide again between boiling water and keeping both heaters
plugged in, you always choose in favor of the heaters," Korolyova said this
week by telephone.
     Across most of Russia, from the Pacific Coast through Siberia to the
Urals, temperatures have plunged to minus-40, minus-50, even minus-70.
     That would be tough enough, but it gets worse. The deep freeze has
conspired with fragile infrastructure and poor energy supplies to leave
millions struggling to survive with intermittent heat and electricity--if
there's any.
     The energy crisis is so dire that it triggered a tongue-lashing Friday
by President Vladimir V. Putin, who accused regional officials of "condemning
the population to death."
     "The deep cold is not an acceptable excuse," Putin scolded as he called
an emergency meeting in the Kremlin. "Where are the resources, the reserves,
the backup plans? No one is taking concrete, personal responsibility for this
situation."
     The "situation" varies building by building, town by town, and region by
region, but the fundamentals are similar everywhere. The temperature drops.
Heating and water pipes freeze and burst. Residents resort to electric
heaters, which overtax the electric system already operating at only partial
capacity because of fuel shortages. Fuses blow. Temperatures inside drop
lower. More pipes freeze.
     Korolyova, 51, is one of 12,000 residents of the mining town of
Novoshakhtinsky, about 60 miles north of the port of Vladivostok. The
temperature in the room with the heaters is just above freezing. The
temperature elsewhere in the apartment is so low, the thermometer has frozen.
     "It's inexplicably cold here--even your face muscles get numb and you
begin to talk funny," she said. "You can't go to the toilet properly. All the
pipes and sewer lines are frozen. So we use a bucket . . . and then take it
outside before it freezes."
     The cold wave has been caused by a "hyper-developed" Siberian
high-pressure system that has brought crystal-clear skies with nary a cloud
to help trap the faint warmth that emanates from the earth.
     As a result, some regions have experienced record low temperatures:
minus-67 in parts of the central Siberian region of Irkutsk, the lowest
recorded temperature there in a century, and minus-71 in the western Siberian
region of Kemerovo, a 70-year low.
     But the main problem, according to Roman Vilfand, deputy director of
Russia's national weather service, is how long the cold snap has lasted.
     "This has been the longest cold wave in eastern Siberia in the last 80
years," Vilfand said. "If the cold had lasted for just a week, there would
have been no problems. But after three weeks, disasters began to pile up in
one town after another as the boiler houses were unable to cope with the load
and energy resources were running low."
     This country is particularly vulnerable to outages because many
Russians, especially those living in apartment blocks, get their heat and hot
water pumped from a municipal boiler house. When a pipe bursts, entire
neighborhoods can go cold.
     Mikhail Tsedrik, a spokesman for the DalEnergo electric company, which
supplies Novoshakhtinsky, said the system is a remnant of the Communist era,
when people lived in mass-produced apartments and consumed mass-produced
utilities, essentially at no cost.
     "It would not be an exaggeration to say that the root of all these power
failures, blackouts and frozen pipes is that we are still getting over the
Soviet legacy, which has proven very tenacious," Tsedrik said by telephone
from his office in Vladivostok. "It never occurred to those who planned and
built the infrastructure that heating and energy may cost money."
     Those who live in old-fashioned wooden cottages are better off because
they tend to have wood-burning stoves. But two-thirds of Novoshakhtinsky's
residents live in more modern, concrete-panel apartment blocks constructed in
the last 40 years, and they are all but helpless when the city utilities
fail.
     "There's not a single place you can go to get warm," said 41-year-old
Vera Zarudayeva, Korolyova's neighbor. "A human being can get used to
anything--to shortages of food, to high temperatures, to wind. The only thing
that's impossible to get used to is cold."
     Life in a subzero apartment poses severe challenges to basic human
survival. Zarudayeva can't wash dishes, so she and her husband heat cans of
meat directly on an electric coil, then eat straight from the can.
     They go to bed fully dressed in hats and layers of wool, burrowed under
several down quilts, struggling to keep a passage open to breathe. They
collect drinking water in buckets from a tanker that comes by once a day.
They keep the buckets as close as possible to the heaters, but sometimes the
water freezes anyway and they hew off chunks with a knife to make tea.
     Zarudayeva hasn't been able to bathe in weeks, not even at the city
banya, or bathhouse, which is without power.
     "All we manage to do is to wash the essential parts of the body very
quickly in order to prevent ourselves from becoming animals," she said.
     Throughout the region, frostbite has become endemic. During the first
week in January, hospitals in Kemerovo reported 500 cases. Frostbite-related
amputations in Irkutsk are averaging three a day. Burns also are on the rise
as residents jury-rig gas and kerosene stoves. Such efforts led to two gas
explosions in the cities of Biysk and Novosibirsk that left at least six
dead.
     More than 50 frozen corpses have been collected off the streets of
Irkutsk, although authorities have yet to determine what role the cold might
have played in the deaths.
     Nearly everywhere, schools have been shut and public transportation
curtailed. In recent days, hundreds of Vladivostok residents have held street
protests to demand that local officials be held accountable for the outages.
In many regions, law enforcement agencies have opened criminal investigations
of energy and utility officials.
     "We are freezing to death while our top-ranking administrators are
lining their pockets," Zarudayeva complained. "They have been pocketing the
money that was supposed to finance the maintenance of the town's utilities.
And today we see the results."
     The lack of heat particularly grates in Novoshakhtinsky, where most
residents are coal miners. If they had their own stoves, they could easily
heat their homes with the coal they carve each day from the earth.
     "The situation is ridiculous and paradoxical," said Tsedrik, the
electric company spokesman. "The region is sitting on its own coal and
freezing to death."
     Natalya Klimenko, Zarudayeva's neighbor, finds the situation
particularly humiliating. Her husband is still going to work each day in the
mines.
     "When our husbands come back from working in the strip, they have no hot
water to wash the coal dust off their hands and faces," she said. "Sometimes,
they even have to go to bed like that, with their faces all black."
     Weather forecasts are promising a slight warming in coming days--as high
as minus-5, in some places. But Siberians and Far Easterners still without
heat will take little pleasure in the relatively balmy weather.
     "You can't compare this life to anything," Korolyova said. "It's not
like camping, because when you camp, you derive pleasure from hardships. Nor
is it like a prison, because in a prison, the warden has to pay at least some
attention to the inmates, and there is usually heating. Our life is more like
a research lab--our government is testing our strength, trying to find our
breaking point."
     Alexei V. Kuznetsov of The Times' Moscow Bureau contributed to this
report.

******

#4
Financial Times (UK)
20 January 2001
Devastation overwhelms life in Grozny: It will take a
long time before Russia's plan to return Chechnya to civilian rule bears
fruit
By ANDREW JACK

It could be a scene in any city, with the earlymorning mist rising and people
on their way to work. But in Grozny there are craters on the pavements and
little work to be had.

People proceed against a backdrop of buildings with no glass in their
windows, or no walls to support windows in the first place.

The surprise is that there are any inhabitants at all in Grozny, capital of
the Russian republic whose resistance to Moscow's rule has provoked
saturation bombardment of the city by federal forces during two wars in the
past six years.

Others make regular journeys in and out, traversing dozens of roadblocks on
their route. Some of the locals are well dressed, and one woman is even
carrying a stylish handbag as she walks purposefully along the pavement.

Most of the visible population is old and female, all with tales of
disappeared husbands and sons. There are few young men on the streets. Those
who have not vanished in fighting or military round-ups remain out of sight
for fear of joining those who have.

Almost one year after Grozny was recaptured from rebel forces, and the
Russian army announced the end of the "military phase" of the conflict,
regular telephones, let alone mobile ones, still do not work within the
republic. The trains do not run, and there are few signs of normal life
returning.

The Russian government yesterday announced a Rbs10bn (Pounds 240m)
development package as part of a plan for a shift in Chechnya from military
towards civilian rule, from anti-terrorist operations to economic
development. But it seems hard to imagine the restoration of normal life any
time soon.

After decades of persecution by Russia, Chechnya, a small territory in the
north Caucasus, has become the bloodiest example of attempts to seek
independence from the former Soviet empire.

Much of the city was severely damaged in the previous Chechen war in 1994-96.
A combination of the sheer scale of the problem, a lack of funds,
embezzlement, and other priorities by the then autonomous administration
limited the extent of rebuilding.

Since the outbreak of fresh hostilities in 1999, the Russian military has
been more systematic in finishing off the job. It held back the ground troops
who had been easy targets for snipers in the previous conflict, and instead
bombarded thoroughly from a safe distance.

Some buildings have been reduced to almost nothing, the odd concrete pillar
all that remains upright. But many more appear almost normal, until you
notice the bullet holes along the walls, the huge holes blasted through the
upper storeys, or the fact that there is nothing left behind the facade.

A twisted electricity transmission tower lies on its side, even more
incongruous in the middle of what was once a busy square than the many
similar ones which have been toppled in the countryside throughout Chechnya.

One building stands out among the ruins. The headquarters of the Grozny
Energy company appears almost obscene, freshly rebuilt and painted bright
white and orange, a Potemkin office in a city of shadows.

Ivan Babichev, the army commander for Chechnya, told a delegation from the
Council of Europe visiting the city this week that the pro-Russian civilian
administration of the republic would soon be moved from its temporary
headquarters in Gudermes back to Grozny.

But the logistics of the trip showed just how far away a return to peace
appeared to be. Military helicopters carried the delegates to Grozny, flying
early in the morning and fast, low and at an angle to the ground to minimise
the risks of rebel attack.

A tank and dozens of soldiers surrounded the group, while others lined the
streets, which had been swept for mines. A few blocks away, there was the
sound of gunfire. Nervous soldiers bustled participants out of the city
within an hour.

Elsewhere in Chechnya, the administration has begun to reopen civilian
courts. There are even two expatriate advisers on judicial reform from the
Council of Europe based in the republic. But the security to guard them is
enormous, and those locals siding with the Russians are regularly threatened
and killed.

The physical reconstruction of Chechnya will be long and costly. But to those
who hear the testimony of local human rights activists about frequent,
unexplained and uninvestigated cases of harassment and torture, kidnapping
and disappearances, it seems that the social and psychological reconstruction
of the republic will take much longer.

Just to the north of Grozny, there is one relatively peaceful place, with
grass beginning to grow and solid new buildings being constructed. It is the
headquarters of Russia's United Federal Forces at Khankala. It is a sober
reminder that despite the promises of a swift return to civilian rule, the
army will be present in force in Chechnya for a long time to come.

******

#5
Jamestown Foundation Monitor
January 19, 2001

KREMLIN STEPPING BACK FROM DEFENSE REFORM PLANS? Russian sources have
reported in recent days that President Vladimir Putin may have put off a
series of key decisions related to reducing and restructuring Russia's
troubled armed forces. Few details have been made public, but at least one
Russian daily has speculated that the military reform effort may be back to
square one. Izvestia reported yesterday that Putin had recently declined to
sign a development plan for the Russian armed forces for the years
2001-2005. The plan grew out of a brawling debate on defense reform which
began last July and intensified following the loss of the Russian nuclear
submarine Kursk. Putin had planned to sign the new defense reform plan this
past December. His failure to do so, Izvestia suggested, has returned the
Russian Defense Ministry and General Staff to the position they occupied
this past fall: ignorant of the direction in which military restructuring
in Russia is to proceed (Izvestia, January 18).

Other sources have suggested that the reason for the president's indecision
on the military reform plan is related to the issue which started Russia's
military reform debate: the question of whether priority spending is to go
to Russia's strategic or its conventional forces. Throughout the latter
part of the 1990s the needs of Russia's strategic forces--and of its
strategic missile forces in particular--were emphasized in Russian defense
planning. Those priorities were reflected in the appointment of a former
rocket forces commander, Marshal Igor Sergeev, to the post of defense
minister. Russia's conventional forces, meanwhile, continued the long
decline which had begun even before the dissolution of the Soviet Union.
That policy came back to haunt Moscow, however, with the start of the
current war in the Caucasus, which demonstrated (as had the first) the
dismal capabilities of Russia's conventional forces. The war also opened
the way for General Staff chief Anatoly Kvashnin--long a Sergeev rival--to
press for a reordering of budgetary priorities as a way to rebuild the
strength of Russia's regular army.

To date, most indications had been that the defense review Putin launched
last year had wound up favoring Kvashnin, and that the Strategic Missile
Troops were in for some lean years. Several sources suggested this week,
however, that the Kremlin may be reconsidering that decision, and that the
election and looming inauguration of George W. Bush may have had something
to do with the Kremlin's reported change of heart. Segodnya reported this
week that Russian security chiefs are reexamining the country's defense
posture while taking into account the increased likelihood that the new
Bush administration will indeed proceed with the deployment of some form of
U.S. national missile defense. According to Segodnya, that fact is leading
some Russian defense experts to conclude that Moscow may be better off
weakening its previous hardline opposition to U.S. missile defense plans
and seeking instead some sort of accommodation with Washington (Segodnya,
January 17).

A British report published yesterday, however, points to another
possibility. The Guardian quoted Russian sources as saying that, as a
response to expected U.S. missile defense deployment plans, the Kremlin has
in fact decided to shelve plans which called for restructuring the
country's armed forces and reducing military manpower by more than 350,000
over the next several years. Russian defense policymakers will reportedly
now wait until March to decide whether to proceed with the defense
restructuring program--that is, until after the incoming administration has
made the details of both its own missile defense plan and its approach to
relations with Russia more clear. Meanwhile, the newspaper quoted Russian
sources as saying that the initial signals from the Bush administration on
security matters have helped to strengthen Sergeev and those in Russia who
want to maintain robust nuclear missile forces as a counterweight to a
possible U.S. missile defense system deployment (The Guardian, January 18).

It is unclear how seriously reports of this sort should be taken. Putin's
military reform effort does indeed seem to have faltered for the moment,
but difficulties in finalizing Russian military restructuring plans would
likely have arisen regardless of whether a change of administrations loomed
in Washington. The restructuring and defense reduction plan which Putin's
Security Council drafted is, after all, sufficiently radical to have
generated considerable opposition not only within various service arms of
the regular armed forces, but also among elites in Russia's various other
security ministries. In that context, the Bush election victory--and the
accent put by his incoming cabinet on the administration's national missile
defense priorities--may be serving as but one more factor in an already
intense struggle over Russian military reform plans. Against this
background, the inauguration of a new American president may provide the
Russian leadership with a good reason to step back a bit and to see where
the chips are likely to fall with regard to Russian-U.S. ties before
continuing on with defense restructuring.

******

#6
Date: Fri, 19 Jan 2001
From: Celeste Wallander (cwallander@cfr.org)
Subject: Re: 5032-Lucas/Practical Advice

I'd like to thank Edward Lucas for his wonderful contribution on survival
packing for travel in Russia, the advice wherein I find I mostly cannot
use, but thoroughly enjoyed.  On the food front, I bring packets of Knorr
soup, perhaps the vegetarian's alternative to dried beef strips for
carrying nourishment in small spaces.

Most of all, I'm writing to thank him for solving one of the enduring
mysteries of my college years:  what IS Vegemite? as in the Men at Work
tune
"I said, 'Do you speak-a my language?'
She just smiled and gave me a Vegemite sandwich.
(chorus)
I come from a land Down Under...."

******

#7
Date: Thu, 18 Jan 2001 1
From: "Jerry F. Hough" <jhough@duke.edu>
Subject: crucial moment in history

I may be writing too much now, but I do think we are at a very
crucial moment in history.   It took ten years from the French Revolution
to Napoleon, 13 years from German democracy to Hitler.  I may think that
Putin does not have much power and that Borodin is a very high official.   I
may think that Putin has not done much.   But all that is academic
musing.   The Russian people have some positive feelings about the last
year.   If they are disillusioned this time, it is 10 years since 1991,
and I think the results will be ugly, including for us.

Fundamental economic improvement in Russia is crucial for American
security interests.   That means fundamental economic reform--which is very
different from the "reform" pushed by neoliberal economists.   A few billions
of aid mean nothing.   What is debt repayment?   The export of more goods
than
would have occurred otherwise.   Other countries call that export-oriented
growth and Japan begs us for it.   The US did not want reparations from
Germany in 1945 because that implied a rebuilding of German industry.  
Until Russians get away from the craziness of economic thinking of Marx
and neoliberal economists (which, as Andrei Shleifer shows, are very
close), they are going nowhere.   Agricultural reform, tariffs,
industrial policy, serving as an outsourcer, currency controls,
investment instead of luxury consumption.  That is what is serious
economic reform.

The secret for us is to stop thinking of governments and think of
the interests of key individual actors.   We got Yeltsin to mouth the words
we wanted by bribing him with what he wanted--the crushing of
democracy.   We got liberals to mouth what we wanted by bribing them with
support for their desire to use the state to seize property from the
capitalist class, the insider-owners.   But, just as we did not announce
what we were doing, but used words like market and democracy, so the new
Administration can apply individual incentives while ever announcing it.  
There are huge numbers of important people and their relatives with
naturalized papers and green cards.   They can be pulled for illegal
actions, and all have been involved in something illegal.   There are firms
like Itera that can be harassed.   There are bank accounts in the US and
Europe that can be attached.   There are visas that can be denied.   If, as
I think, Borodin is a top lieutenant of current President Yeltsin, I pray that
he was deliberately invited for that reason and then arrested.   But, of
course, if he is important and Putin does not want him arrested as a move
on Yeltsin, he should be immediately released once the signal has been
explained to him.

The fundamental problem of deterrence theory is that aggressive
leaders can be deterred only with high expense, and it is unreliable.  
The time to deter Lenin, Hitler, and Khomeini is before they come to power.
Realpolitik is not using national power vis-a-vis Soviet policy toward
Iran, but allowing Borodin go, letting Itera operate, not expelling those
with green cards if they do what is necessary to prevent someone awful
coming to power.    Realpolitik is understanding what world history shows
is necessary for economic growth, not what some extreme ideological
economist says is necessary when it is really necessary for his
individual enriching.   McFaul says Russia is being neglected.   Rice
knows a lot about Russia, Powell was a very positive and realistic force
toward the Soviet Union in the 1980s, and there are rumors about other
knowledgeable appointments.   My guess is that this Administration will
be quite serious about Russia.   Maybe this is wishful thinking, but the
last Administration certainly was not.

******

#8
Date: Fri, 19 Jan 2001
From: "Lewis Madanick" <Madanick@actr.org>
Subject: George Soros and James H. Billington to Speak - Open
  Society:Reforming Global Capitalism - 6:30 p.m., Monday, Jan. 22

George Soros and James H. Billington to Speak at "Books & Beyond" Program
at the Library of Congress on January 22

A new book, Open Society: Reforming Global Capitalism, will be discussed by
its author, George Soros, and Librarian of Congress James H. Billington at
6:30 p.m., Monday, Jan. 22, in the Mumford Room,  sixth floor, James
Madison Memorial Building, 101 Independence Ave.  S.E. The program, part of
the Center for the Book's "Books & Beyond" author series, is free and open
to the public. No tickets are required

http://www.loc.gov/today/pr/2001/01-002.html

Lewis Madanick
Program Manager
Russian Leadership Program
American Councils for International Education
Phone:  202-833-7522/Fax: 293-6925

******

#9
strana.ru
January 19, 2001
Gleb Pavlovsky: There can be no discussions with the United States on
question of Borodin's alleged guilt
  
The arrest of Pavel Borodin has come in for widespread response among Russian
politicians. The head of the Foundation for Efficient Politics, Gleb
Pavlovsky presents his views on the situation.

In principle, it is pointless to examine the so-called "Borodin problem"
within the framework of the subject concerning the Swiss case against Borodin
or within the framework of the political "scorecards" of the past epoch. But
that is precisely how many view that problem today.

In fact, there is no such thing as "the Borodin problem." What we have here
is a problem concerning the arrest and detention of the State Secretary of
the Russia-Belarus Union. The arrest and detention were carried out by our
geostrategic competitor within the framework of a "special" operation.

And then certain factors that are encountered become understandable and
obvious. First: the United States is creating, and will continue, with an
ever increasing degree, to create "a Belarus problem" for the purpose of
driving a certain breach into the system of internal Russian stability.

By questioning the legitimacy of the current Belarus President - and I am
quite certain that America will question the legitimacy of the outcome of the
future presidential elections as well, since this has been practically
included into the bottom line - the United States is counting on permanently
keeping Putin under some kind of threat or pressure, especially the European
vector in Putin's policy.

However, I would like to note that this is normal behavior on the part of the
new American administration. It is especially normal in the sense that the
American president-elect at the given moment commands a relatively low
international rating. This rating is incomparable with America's economic and
military clout, and at the same time, comparable with Putin's international
rating. This, of course, does not suit the American administration in
absolutely any way at all. This means that its task is first of all to
restore what it considers to be a balance.

It is silly to fight this by resorting to hysterics - on the one hand, and on
the other hand - with schoolboy threats, and thirdly - with absolutely
indecent expressions of loyalty to the New York magistrate. It is noteworthy
that this is precisely what the Moscow elite is demonstrating at this moment.

It is necessary to understand that playing against us is a competitor that
proceeds from absolutely the same priorities in foreign politics, i.e., from
the priorities of national interests that our administration also proceeds.
And it is this that makes the game both more tense, and in a certain sense,
more rational.

Playing against us is a competitor that - unlike our political elite -
understands the words "political planning." And if some planned process is
set into motion, then it is carried out in all its stages. This is no
improvisation. It is well thought-out operation.

But it turns out that our Moscow political elite was not prepared for this.
As a political community, the entire system of leaders of Moscow political
groups is today, in principle, incapable.

Extreme weakness can be seen today, for example, in the stand taken by our
former ambassador in the United States, Mr. Lukin, a man whom I deeply
respect. Instead of coming out with a definite statement like a responsible
politician should, instead of explaining that the problem - whether Borodin
is guilty or not of something - will be decided by us, and not by the
American administration or an American court, instead of using the language
that is used, for example, by the U.S. State Department when it demands that
Cuba release the Czech diplomats arrested there (not American but Czech
diplomats), and moreover the State Department simply does what it considers
necessary from the point of view of national interestsâ?¦

Instead of all that, our politician (moreover, he considers himself to be a
right-wing politician, and this is very important) is unable to act on the
basis of the country's national interests.

Or another seemingly rightist politician Irina Hakamada explains to
imprisoned Borodin that he should have traveled by the correct passport. That
is to say she is sooner acting like an experienced international adventuress
than a right-wing politician.

A rightist politician should take a very definite stand in the given
situation: first, status quo should be reinstated, and only after that shall
we speak about Borodin and his alleged guilt. There can be no discussions
with the United States of America concerning the alleged guilt of Borodin.
After all, the matter concerns a responsible statesman who is outside the
zone of jurisdiction.

The reaction of the Russian political community has demonstrated that the
community is not ready, in this sense, to support President Vladimir Putin.

In the given situation, Putin, understandably, is thinking about adequate
actions, however, adequate actions do not necessarily have to be symmetrical.
I would even say that in such a situation they cannot be symmetrical.

*******

#10
From: "Wayne Merry" <wmerry@earthlink.net>
Subject: Pavel Borodin
Date: Fri, 19 Jan 2001

Is Pavel Borodin a Dummy, or What? What in the world did Borodin think he
was doing? The story, as I understand it, is thus: Borodin receives an
invitation for Inaugural activities from a man he does not personally know,
from a company sending out batches of the generic, fee-for-service tickets
which pay for the  festivities of a new US administration. The man is not
specifically the guest of anyone important, nor does he have any official
meetings. He was coming to Washington, therefore, pretty much on spec (and
perhaps for shopping and entertainment). The man has both diplomatic and
civil passports, but did not have a US visa in the diplomatic one. So, he
applies for a visa. The Embassy recognizes a red-hot potato and wires back
to Washington for instructions. (Note: Based on my own Embassy Moscow
experience, including one year in charge of the visa section, the answer
likely would have been a polite "no" for obvious reasons.)  Borodin does
not wait for the answer, but takes off for New York with the multiple-entry
visa in his civil passport, I.e. with no protective status whatsoever.
Borodin does this in full knowledge -- as we all have full knowledge --
that there is an outstanding Swiss warrant for him posted with Interpol.   

In some conspiratorial quarters, Borodin's actions might be viewed as a
bizarre attempt to defect or as a suicide  attempt. Putting aside such
nonsense, one can only conclude that Borodin assumed either that Western
law enforcement agencies do not bother to do their jobs (on the Russian
model) or that his status as a Kremlin Pooh-Bah would suffice for the
American competent organs to look the other way. In short, Borodin must be
a dummy. He learned absolutely nothing from the Bank of New York affair or
from the current status of his erstwhile Ukrainian colleague Lazarenko.   

I suffered under the vague idea that  Borodin was a clever guy. Perhaps not
an honest or ethical one, but at  least smart. Unless someone can give me a
better explanation or additional evidence, I can only conclude that both
Yeltsin and Putin hired a man for "sensitive" work who really should not be
allowed to travel without  adult supervision.  

*******

#11
Capital Flight from Russia Rises 30 Percent in 2000.

MOSCOW, January 19 (Itar-Tass) - The unofficial capital flight from Russia
rose by 30 percent in 2000, virtually returning to the 1998 level. It hit
nearly 25 billion US dollars last year. This topic was discussed by director
of the Globalisation Institute Mikhail Delyagin at a news confernece on
Friday.

He acknowledged that stiffer currency-export control yielded fruit:
non-return of export revenues and fictitious import virtually stopped in 2000
as against the level of five billion dollars in 1999. Moreover, the return of
funds which were earlier syphoned off through these channels, started in the
third quarter of 2000 for the first time over the reform years.

However, Delyagin stressed, this does not point to a rise in Russia's
investment interest, since reduction of the capital flight through "grey"
channels was accompanied by a sharp rise in the outflow through "black"
channels.

Judging by the payment balance of the Central Bank, this clearly criminal
capital outflow increased by 25 percent as against 1999 when it stood at 7.5
billion dollars.

"The most troublesome part of the balance of payments is a sky-rocketing
growth of debts, recorded in intergovernment agreements," Delyagin continued.
This article rose by 3.7 billion dollars over the three quarters of 2000
alone as compared with 200 million dollars in 1999.

Delyagin claimed that, thereby, the government shoulders debts, accrued by
commercial structures. The recent example is restructuring of Ukraine's gas
debts.

Delyagin predicts further acceleration of capital flight in 2001 over
"inadequate" (in his opinion) behaviour of the Russian government concerning
payment of debts to the Paris Club.

*******

#12
Russian Experts Forecast Rise in AIDS, Hepatitis, TB Rate.

MOSCOW, January 19 (Itar-Tass) - Experts of the Ministry for Civil Defense
and Emergencies forecast a rise in the AIDS, hepatitis and tuberculosis rate
in some Russian regions in 2001.

The largest HIV problems are expected in the Irkutsk, Kaliningrad, Tver,
Tyumen, Sverdlovsk, Orenburg, Saratov and Moscow regions and the Khanty-Mansi
autonomous district, a source in the center for monitoring and forecast of
emergencies told Itar-Tass on Friday. A rise of the hepatitis B and C rate is
expected in ten regions, among them the Novosibirsk, Kemerovo and Chelyabinsk
regions and Moscow.

The experts forecast a larger rate of infection diseases in kindergartens and
schools. A wide spread of hepatitis A in kindergartens and schools may occur
at the beginning of the next school year.

"Secondary cholera nidi are possible in summer as cholera germ grows active
in water ponds," the experts said. There may be also an outbreak of
dysentery, salmonellosis, hepatitis A, typhoid fever and food poisoning in
summer.

Exotic diseases are possible because of a permanent migration.

*******

#13
Washington Post
January 20, 2001
[for personal use only]
Ted Turner Wants Assurance From Putin on Deal for NTV
CNN Founder Seeks Promise of Journalistic Freedom
By Susan B. Glasser

MOSCOW, Jan. 19 -- American media tycoon Ted Turner and a group of investors
have agreed to a $300 million deal that would keep Russia's sole independent
television network out of government hands, but only if President Vladimir
Putin personally promises Turner he will not shut the network down, company
officials said today.

The CNN founder wants to talk with Putin directly to gain assurances that the
government will guarantee NTV's journalistic freedom after Turner's
representatives were rebuffed at a meeting with a senior Kremlin official
this week. Putin's blessing would seal the deal, according to Chris Renaud,
who heads the investment office of NTV's parent company, Media-Most. Until
then, said Renaud, "we are at a pause."

"If Turner can pick up the phone and tell Putin, 'I'm giving you an elegant
way out of this controversy that's damaging your reputation and the
reputation of Russia,' it will be a choice that everyone will see," Renaud
said. "Does Putin's government want money, investment and a balanced and free
press? Or does it just want control?"

Turner, who founded and sponsored the Goodwill Games between athletes from
the United States and the Soviet Union and has increasingly positioned
himself as a global statesman, has confirmed his interest in purchasing a
stake in NTV, saying in a statement this week that he "looked forward" to
meeting with Putin. A spokeswoman offered no further comment today about the
disclosures by the network officials.

With the deal on hold, Russian prosecutors have intensified their pressure on
Vladimir Gusinsky, the tycoon who founded Media-Most but is now under house
arrest in Spain fighting a Russian extradition request. Today, prosecutors in
Moscow seized Gusinsky's villa outside the city even as the Spanish
government in Madrid announced that the Spanish High Court would consider the
extradition case against Gusinsky.

This week, Russian prosecutors arrested Anton Titov, chief of Media-Most's
finance department, and have been holding him without charges since Tuesday.
And Media-Most and its main shareholder, the state-controlled oil giant
Gazprom, have gone to court separately, seeking control of critical shares
that could determine NTV's future.

>From Gusinsky's point of view, the key to saving NTV from shutdown or
government control is bringing in a prominent foreign investor such as
Turner. But given the months of search warrants, arrests, court actions and
other government moves against NTV, convincing someone to invest sizable
amounts of money has been a major challenge.

The $300 million preliminary agreement described today would give NTV enough
money to repay $261.5 million it owes Credit Suisse First Boston and remove
the claim Gazprom has on a pivotal 19 percent share of NTV stock. Gazprom
asked a Moscow court this week to award it that stock, which, combined with
the 46 percent it already owns, would give it control over the seven-year-old
network. Gusinsky and his allies say Gazprom would effectively allow the
state to run NTV.

Alfred Kokh, the chief Gazprom official handling the issue, disputed that
assumption today and said the energy company would simply sell the 19 percent
share. Kokh accused Gusinsky of going behind his back in the negotiations
with Turner and scuttling a Nov. 17 agreement between the warring companies
in which they agreed to bring in a German bank to sell the disputed shares.

"What was the purpose of holding separate talks with Turner, thus destroying
the mechanism of selling shares through Deutsche Bank, and using his own
mechanism which ultimately started skidding?" Kokh asked reporters.

But Media-Most executives insisted it was Gazprom and Deutsche Bank that
undermined the agreement by cutting them out. At a news conference, they
released a series of letters and described months of complicated negotiations
that resulted in the latest eruption.

"Our goal is not to have a backdoor deal with Ted Turner," Renaud said, "but
to fulfill our obligations under the settlement agreement and pay off the
debt."

Gusinsky's aides gave few details of the tentative deal with Turner, but said
it would involve a 25 percent share of NTV owned by Media-Most as well as
shares in three other related media companies, NTV-Plus, TNT and 7 Days. More
companies could be involved later on, they said. They would not identify the
other potential investors.

Turner became involved in part "to be a peacemaker," Renaud said, and because
he believes independent media are "important for the democratic development
of Russia and its relations with the rest of the world."

******

#14
Standard & Poor's experts forecast Russia's economic growth in 2001  at 2-3%

      MOSCOW.  Jan 19 (Interfax) - Experts at the international  rating
agency  Standard  &  Poor's  have forecasted Russia's  annual  economic
growth  in  2001 at 2-3%, the S&P leading expert on Russia's  sovereign
rating, Helena Hessel, told journalists on Friday.
      In  her words, the S&P forecast is lower than that of the Russian
government,  which expects this year's growth to be 4%.  She  said  the
prospects  largely  depend  on oil prices, but,  in  her  opinion,  the
decision  by OPEC to cut oil production has prevented a sharp  fall  of
prices  and  thus  provided a gradual downslide  of  Russia's  economic
growth.  In that light the forecasted oil price stipulated in  Russia's
budget ($21 a barrel) looks reasonable.
     As for inflation, it will be, according to the S&P experts, higher
than  expected  by the government (12-14% - Interfax).  We  can't  give
specific  figures, said Hessel, but we find the government forecast  is
too low.
      On  the  whole,  the  agency's analysts think  that  particularly
important in 2001 will be the policy of regulating the exchange rate to
provide  for  the  competitiveness  of  all  Russia's  industries.   In
macroeconomic  and structural reforms, Russia has made  practically  no
progress, so they are still urgently needed, said Hessel.
     The S&P managing director Konrad Reuss pointed out that particular
concern  is caused by the fact that Russia's economy is largely  under-
capitalized,  which  is explained mostly by the absence  of  structural
reforms.  In the long term Russia's economy will not grow without  such
reforms,  therefore  their  speeding up is an  imminent  task  for  the
Russian government, he said.

******

#15
Russian govt property, privatization revenues top 50 bln rubles in 2000

      MOSCOW. Jan 19 (Interfax) - Russian federal budget revenues  from
state assets and privatization exceeded 50 billion rubles last year.
      This was 31% higher than the target that was adjusted with budget
amendments  in  December,  an official at the  Property  Ministry  told
Interfax.
      "This  is the first time such an amount of privatization revenues
has been transferred to the budget," he said.
      Revenues  from  the use of state property totaled  19.22  billion
rubles,  more  than  10% above the target. This included  3.42  billion
rubles  from  leasing  federal property, 28%  above  the  target;  5.57
billion rubles in dividends, 10% more; 400 million rubles from the  use
of  assets abroad (on target), and 9.78 billion rubles in revenue  from
the  Vietsovpetro joint venture with Vietnam (compared to a  target  of
9.25 billion rubles).
      Federal  assets brought in the most revenues last year in  Moscow
and  Novosibirsk,  in Moscow and Sverdlovsk regions,  and  the  Khanty-
Mansii autonomous district.
     The biggest payers of dividends were gas giant Gazprom, which paid
1.27  billion rubles on the government's stake; oil major  Lukoil  with
356.8  million  rubles; national grid operator Unified  Energy  Systems
with  300  million  rubles; oil company Tyumen Oil Company  with  287.5
million  rubles; oil company Rosneft with 187.4 million rubles, nuclear
fuel  producer TVEL with 151.9 million rubles, diamond monopoly  Alrosa
with  86  million  rubles,  and Sheremetyevo airport  with  75  million
rubles.  These  companies  accounted  for  75%  of  all  dividends   on
government-owned shares.
      Revenues  from  the  same of state assets totaled  31.36  billion
rubles  last  year,  50% more than the planned 21 billion  rubles.  The
biggest privatizations of the year were the sale of an 85% stake in oil
company  Onako, which brought in 24.98 billion rubles,  and  a  special
auction  for  about 2% of shares in Lukoil, which raised  more  than  3
billion rubles for the government.

*******

#16
From: sdijfk@harvard.edu
Subject: Caspian Studies Program Policy Brief #3, Energy Security, Lucian
Pugliaresi
Date: Fri, 19 Jan 2001

http://ksgnotes1.harvard.edu/bcsia/library.nsf/pubs/Pugliaresi

One of the most frequently asked questions about the Caspian region is
this: if the amount of oil in the region represents only a fraction of
world supply, why all the commotion about pipelines and investments?  The
enclosed policy brief from Harvard's Caspian Studies Program Policy Brief
Series discusses the contribution of Caspian oil to world energy security.

In this brief, Lucian Pugliaresi forecasts an increasing tendency for
the Gulf producers to try to control prices, and argues that "additional
supplies, even at modest levels of output, can make an important
contribution to limiting the market power of the major producers as well as
reducing to some extent the percentage of world oil production subject to
disruption."  Even small volumes of oil that adjust to price signals can
create stability in the market, Pugliaresi asserts, and thus Caspian oil
can play an important role in maintaining lower world oil prices through
its contribution to a diversification of supply.  Inherent in this argument
is the point that diversification of world energy sources inhibits the
ability of the oil rich Gulf States to make political dictates.

We invite your comments on this brief and others in our series, which
can be viewed on the web at
http://ksgnotes1.harvard.edu/BCSIA/SDI.nsf/web/CSPPubs. We especially
welcome this contribution from Lucian Pugliaresi, President of LPI
Consulting, Inc., as the first author from the business sector who is
involved in the Caspian to write a brief in our series.

The Caspian Studies Program seeks to locate the Caspian region on the
maps of the American policy-making community as an area in which the US has
important national interests and where US policy can make major
differences. Through its research and teaching, the Caspian Studies Program
raises the profile of the region's opportunities and problems, and utilizes
Harvard resources to train new leaders who will shape the future of the
region. The Caspian Studies Program and Azerbaijan Initiative are made
possible by a generous gift from the United States-Azerbaijan Chamber of
Commerce and a consortium of companies led by ExxonMobil, Chevron,
Aker-Maritime, CCC, and ETPM.

Sincerely,
Brenda Shaffer
Research Director
Caspian Studies Program
Harvard University

******

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