February 13, 2001   

This Date's Issues:   5089 • 5090

Johnson's Russia List
#5089
13 February 2001
davidjohnson@erols.com

[Note from David Johnson:
1. AFP: Putin launches investigation into Russia's top investigator.
2. Itar-Tass: Legendary King Arthur was a Russian prince.
3. Los Angeles Times: Nina Khrushcheva, Missile Defense Would Rile the Russian Bear.
4. Moscow Times: Yevgenia Albats, The Vices of Bureaucracy.
5. Finansovaya Rossia: LOOKING FOR THE MIDDLE CLASS.
6. RFE/RL: Michael Lelyveld, Caspian: Diplomacy Intensifies Ahead Of Summit On Oil Resources.
7. The Wall Street Journal Europe editorial: Keep Russia On the Hook.
8. AFP: Russian media chiefs to fight bill barring commercials.
9. Interfax: Russian Communist leader slams "weak-willed" government.
10. BBC Monitoring: Russian official says financial cost of Chechen war enormous. (Stepashin)
11. Itar-Tass: Chief seeks wider brief for Audit Chamber.
12. Kennan Institute Meeting Report: Margaret Paxson on the Cultural Dimension of Agricultural Reform: Social Organization and the Metaphysics of Exchange in Rural Russia.
13. Tom Robinson: The Future of Large Fire Mitigation is the Ilyushin 76TD "Waterbomber."
14. Transitions Online OUR TAKE: The Uncomfortable Truth. Nothing is perhaps more illustrative of Russia's regional chaos than a glimpse inside one of its titanic central heating systems.
15. Moscow Times: Alexei Pankin, Objectively, Russia Needs A Cold War.
16. Zavtra: PUTIN AT A LOSS - WAIT FOR EXPLOSIONS.]

*******

#1
Putin launches investigation into Russia's top investigator

MOSCOW, Feb 12 (AFP) -
Russia's top prosecutor, heading a probe into the country's largest private
media group Media-MOST, found himself under fire Monday after President
Vladimir Putin ordered an inquiry into his property dealings.

Putin launched the probe into allegations -- broadcast loudly by Media-MOST's
NTV television network -- that prosecutor general Vladimir Ustinov had
illegally accepted a 500,000 dollar central Moscow flat.

In a convoluted scandal befitting Kremlin politics, Ustinov is accused of
taking the apartment from Pavel Borodin in exchange for ending all inquiries
into the former Russian property chief -- now jailed in New York.

Putin's motion is significant as it sends a signal that Media-MOST and its
exiled owner Vladimir Gusinsky -- who accuses the government of leading a
political charge on press freedoms -- may be gaining favor in the Kremlin.

Officials now say the Kremlin's control department has been given 10 days to
report back to Putin over whether Ustinov broke any laws in accepting an
official apartment in 1998, when he was number two at the prosecutor's office.

Political analysts, meanwhile, said that intense Western media attention paid
to Media-MOST's -- and specifically NTV's -- fate have likely forced Putin to
review his position on the legitimacy of the prosecutor's investigation into
the company.

"The Kremlin is trying to make a show of its neutrality in the battle between
the prosecutor general's office and Media-MOST," commented Yury Korgunyuk of
Moscow's INDEM think tank.

But he added that the investigation would almost certainly whitewash Ustinov.

Media-MOST spokesman Dmitry Ostalsky suggsested tentatively that either the
Kremlin was seeking to prove that the campaign against Gusinsky's group was
not politically motivated, or it was impatient at Ustinov's lack of success.

"Either it's a farce or Ustinov has finally angered the Kremlin with his
inept handling of the Media-MOST affair. In 10 days' time we will know which
is the truth," he told AFP.

Ustinov, who has served at the helm of the prosecutor general's office since
1999, sued NTV after its allegations first aired.

But the station is pressing on with its offensive against the prosecutor's
office, accusing it of being bought off by Borodin.

Now jailed in New York, Borodin is awaiting a decision on extradition to
Switzerland, where he stands accused by justice officials of laundering money
through Swiss bank accounts.

He is suspected of having taken at least 25 million dollars in bribes from
the Lugano-based construction firms Mabetex and Mercata, which were awarded
lucrative contracts to renovate the Kremlin.

Russian prosecutors closed the case in December although Ustinov said Sunday
the inquiry into corruption allegations against the former Kremlin aide could
be reopened if Swiss authorities provide fresh evidence.

Ustinov denied any impropriety in an interview with the latest issue of
weekly Argumenty i Fakty, insisting that when he received the apartment in
February 1998 the "Mabetex affair" had not even surfaced.

"I never doubted I was in the right, and that is why I went to court. The
court's final decision on January 30 this year ruled that I had received the
apartment entirely legally.

"The reason NTV attacked me is clear. The Gusinsky affair is a genuine fight
against corruption not merely a pretence," he added.

******

#2
Legendary King Arthur was a Russian prince

LONDON, February 12 (Itar-Tass) - Legendary King Arthur, the pride of West
European knighthood, was, in fact, a Russian prince, who came to England with
his warriors in keeping with an agreement he had concluded with Roman Emperor
Marcus Aurelius. This sensational statement was made by Howard Reed, an
eminent British historian.

As a result of his long-lasting studies in Britain, France and Russia, Reed
arrived at the conclusion that King Arthur was chieftain of the tribes that
lived in Southern Russia, in the Sarmatian steppelands. These tribes, known
for their tall and blonde horsemen, reached the Danube early in the second
century and ran up against the Roman legions there. After some lengthy
negotiations, Rome was able to find common language with them and the core of
the "barbarian" force included in the emperor's army. About six thousand
Russian warriors came to the British Isles in 175 b.c.

While working in the archives of the St.Petersburg Hermitage Museum, Reed
found numerous symbols from burial mounds on the territory of Russia, which
are identical to those on the banners under which the soldiers of legendary
King Arthur had fought.

******

#3
Los Angeles Times
February 12, 2001
Missile Defense Would Rile the Russian Bear
By NINA KHRUSHCHEVA
Nina Khrushcheva Is a Senior Fellow at the World Policy Institute of the New
School University in New York

     Although no Russian leader is banging his shoe on a table in protest,
the American quest for a national missile defense system threatens Russia's
national defense reforms. Having no desire for a renewed arms race, President
Vladimir V. Putin has moved to enlist European opposition to America's plans.
     Ten years after communism's end, Russia's defenses and defense strategy
are finally being refashioned to meet the needs of the post-Cold War world.
Big cuts are coming in military manpower and conventional weapon stockpiles.
A restructuring of the armed forces, including the strategic missile forces,
is planned. All this comes in the wake of a key change in doctrine: Forty
years after President Eisenhower's recognition that nuclear weapons are
cheaper than large standing armies, Russia yet again has chosen to rely more
strongly on nuclear deterrence for its defense.
     Arriving at a remake of the old ruling military doctrine was not easy,
which is one reason why Putin does not want to put it at risk. Since 1991,
all attempts at military reform in Russia have been preceded by struggles
among various military service chiefs. These struggles are animated not only
by rivalry and personal ambition but the government's lack of funds. Indeed,
a huge part of Russia's military budget is spent on basic needs (really the
survival) of military personnel.
     The tragic sinking of the submarine Kursk last August compelled Putin to
act on reforms. In the wake of the drownings on the Kursk and the ongoing
Chechen war, the Army's autumn efforts at conscription saw thousands of boys
go into hiding to avoid the military service. Politicians, sensing the public
mood, began to demand speedy transition to a professional army. But a
professional army is expensive. Putin knows that efforts to keep Russia's
nuclear deterrent credible in the face of NMD will drain resources needed to
professionalize the army.
     Military reform is arriving now because, for the first time since Boris
N. Yeltsin became president, political authority in Russia is stable,
relatively united and--most important--self-confident. In the past, the
foundation of Russian military doctrines was to ensure military
readiness--with massive ground troops--for a great war. But Russians no
longer support such a stance. Polls conducted during the Kosovo war, the
second Chechen campaign and during the Kursk tragedy show that Russians
primarily are concerned with everyday problems, including the conscription of
their children.
     Under these circumstances, it would not be particularly difficult for
Putin to convince ordinary Russians of the need to be on friendly terms with
the West, and thus cut the size of the army. Winning over generals and
political hawks would be more difficult, and it is with them that NMD stirs
up trouble.
     But even with the hawks on board, genuine military reform is impossible
without effective civil control. That would require transparent budgets,
strong and independent legislative power and a clear decision-making process
with well-defined responsibilities. This is both simple and incredibly
difficult. But without genuine reform, Russia will remain in a kind of
permanent transition, its democratic revolution incomplete.
     Although the Kremlin's current political course is open to
interpretation, Russia's leaders have unambiguously declared their European
(read pro-Western) intentions. The most difficult task for the Kremlin now is
to overcome the West's sense of weariness toward Russia, built up over the
last 10 years.
     To convince the West of its sincerity, Russia must avoid resorting to
hackneyed Bolshevik-style nuclear threats. New interests and mechanisms of
cooperation are needed. Russia needs the West to be engaged in its security.
It must, while it is still possible, try to intensify military-political
cooperation.
     The world, and Russia's place in the world, have undergone a revolution
since 1990. Russia's military and its leaders have mostly sat on the side,
watching and worrying. They are now finally changing the military's
doctrines, its orientation and its vision of the world. NMD would make moving
forward that much harder.

******

#4
Moscow Times
February 13, 2001
The Vices of Bureaucracy
By Yevgenia Albats  
 
I noticed a fantastic quotation from a "source in a major oil company" in a
recent issue of Vedomosti. "[Former Energy Minister Alexander] Gavrin turned
his ministry into a real bazaar. He lost control of all matters related to
production-sharing agreements and the distribution of export quotas. He was
not a professional and had no idea how to properly run a ministry, which
means that he didn't know how to impress his superiors. Now it is even
possible that the whole ministry will disappear from the face of the earth."

It seems to me that this quotation has it all -- the vices of bureaucracy,
the
principles of interaction between business and bureaucrats and a complete
mish-mash of views.

What exactly does this "source in a major oil company" consider to be the
essence of Gavrin's bureaucratic unprofessionalism? The fact that he was not
able to hold on to his functions. Why is this so important? Because the
utility or lack of utility of any bureaucrat (and therefore the necessity of
investing more taxpayer money into his office) is determined not by the
effectiveness of his actions but by how many functions he is able to take
over. The more functions a bureaucrat controls, the more important he is (the
greater his usefulness) in the eyes of related organizations, both state and
private. The greater his boss's dependence on him and the greater his market
value. On the other hand, if a bureaucrat is unable or unwilling to collect
functions, he loses.

And it just doesn't matter whether the bureaucrat handles his
responsibilities. Our bureaucratic agencies simply don't have a mechanism
(comparable to the profitability of a commercial enterprise) for properly
gauging the effectiveness of a state official.

Moreover, we also do not understand which functions in reality, already de
facto, are controlled by the market and which really need to be managed by
the state. When functions that are actually controlled by the market find
themselves in the hands of a bureaucrat, the result is corruption -- payment
for services distributed to market players in the absence of competition for
those services.

When a bureaucrat loses his functions, he ceases to be a desirable target for
investment from business and, naturally, loses its support. When this
happens, he inevitably becomes a candidate for dismissal. This is a clear
demonstration of the intermingling of business and government.

And here is another vice of bureaucracy. Bureaucrats do not interfere in the
market simply in order to increase their status, but also to gain political
advantage in the internal struggle with other bureaucrats. And the result is
that bureaucrats have no rational motives at all for working in the interests
of society (the same society that pays his salary, however miserly it may
be). His survival depends on his ability to privatize as many functions as
possible and to sell them as profitably as he can, both to other government
agents and to private business interests close to the state. There is no
place for the interests of society in this trade.

And finally, this "source in a major oil company" complains that the Energy
Ministry might disappear altogether. One might expect that such a development
would thrill him. After all, at present the ministry is nothing more than an
additional management structure over the oil, gas and coal industries.

Clearly the existence of one more management structure is nothing but a
burden for private companies in the energy sector. The management and
transactional costs of energy companies are increased and their profits are
correspondingly reduced.

So why is the "source" upset? For two possible reasons. Either his additional
management costs are compensated by the preferences that his company receives
by avoiding market mechanisms (that is, the total cost of the bribes he pays
is less than the profits generated by the privileges he receives and which,
naturally, are denied to his competitors).

Or, if it turns out that this "source in a major oil company" is pure as the
driven snow, that must mean that he doesn't belong in business at all. He
doesn't understand the desirability of limited (both in terms of size and
function) government. Most likely, he is just another Soviet-era bureaucrat
who managed to capitalize on his official post and get a better-paid job in
an oil company. He left his heart, though, back in the bureaucracy.

******

#5
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
* Finansovaya Rossia, No. 4, February 2001, p. 5
# LOOKING FOR THE MIDDLE CLASS
     Is there a middle class in Russia? The class that is the
foundation of stability in all developed countries? According to the
Economic Analysis Bureau, there is.
     The analysts have determined the five defining features of
members of the middle class. Besides a certain income level, they must
have some property (a car, or a second apartment); a certain amount of
savings; an education; and, finally, they must feel like successful
and worthy members of society. Only 1-2% of Russians have all five
features. This is the ideal middle class, which is numerically equal
to the elite, the new Russians and the tycoons.
     Then the analysts decided to extend the definition of middle
class to all who have at least three of the five features. About 20-
25% of Russian citizens meet these criteria. A characteristic of the
Russian middle class is its low percentage of entrepreneurs, compared
to Western nations, and its high educational level. At the same time,
the Russian middle class is contrasted with the impoverished majority.
Russia is only slightly behind some of the Latin American countries in
terms of social inequality. However, in Brazil all the poor are
illiterate, while Russia leads the world in having the highest number
of impoverished intellectuals and hungry students per capita.
Apparently, this is why opinion polls show that half of Russian
citizens have middle class values. They only need a little more money
to become the foundation of stability in Russia.

******

#6
Caspian: Diplomacy Intensifies Ahead Of Summit On Oil Resources
By Michael Lelyveld

Caspian Sea nations have stepped up their diplomatic activity in the days
before a summit meeting on the question of dividing resources. Our
correspondent Michael Lelyveld says diplomats have been courting Iran,
seeking a compromise to resolve the stubborn issue.

Boston, 12 February 2001 (RFE/RL) -- Diplomacy has intensified in the Caspian
Sea region as the five shoreline states prepare positions on sharing the
oil-rich waterway for a summit in Turkmenistan next month.

In the past few days, envoys from Russia, Kazakhstan, and Azerbaijan have all
paid calls on Iran to smooth the way for a Caspian working group, which is
expected to meet in Tehran in the middle of this month.

Deputy foreign ministers from the five nations hope to break their long
deadlock on a formula for a legal division of Caspian resources, clearing the
way for unchallenged investment in the post-Soviet period. A summit meeting
of the five presidents is planned for the port city of Turkmenbashi to seal
the results in the first week of March.

So far, the diplomatic process has produced a series of vague statements that
mask frictions and make it hard to determine whether progress is being made
or not.

After meeting with Kazakh Foreign Minister Yerlan Idrisov, Iranian President
Mohammed Khatami shed little light on the question, saying the littoral
states "should formulate the legal regime through negotiations and
understanding in order to meet the security concerns of the countries in the
region."

A Kazakh Foreign Ministry communiqué was equally opaque, saying only that the
two countries were searching for a "mutually acceptable compromise."
Diplomatic language is needed to put the best face on conflicts that have yet
to be resolved.

Iran and Kazakhstan have been on opposite sides of the Caspian question for
nearly three years. Kazakhstan was the first country to agree with Russia on
a formula that would split the seabed into national sectors but keep the
water and its surface in common. Iran has sought at least 20 percent of the
entire Caspian.

Tehran is worried that open waters would allow Russian warships to roam too
close to Iranian shores. The importance of that fear was reflected in
Khatami's reference to "security concerns" rather than oil.

But a further problem is that Russia's plan for sectors based on a modified
median line would give Kazakhstan the largest piece of the Caspian and Iran
the least. Any increase in Iran's share would have to come at the expense of
its neighbors. Such problems are difficult for even the most skillful
diplomats to resolve.

But officials have tried by focusing on matters of mutual interest. Kazakh
oil is key to Iran's plan to provide a Caspian export route that would
compete with the U.S.-backed plan for a pipeline from Baku to the Turkish
port of Ceyhan.

Negotiators seem to be working toward an announcement that Kazakhstan has
started shipping oil to Iran for exports through swaps, allowing Iran to use
the crude at its refineries while moving an equal amount through the Persian
Gulf. The Kazakhs have also backed the idea of a consortium to build an oil
pipeline through Iran. The question is whether the deals could be part of a
package to overcome Caspian sticking points.

Other countries have also been stressing their broader interests with Iran.
On his visit to Tehran, Russian Deputy Foreign Minister Alexander Losyukov
called for expanding relations. Iranian Deputy Foreign Minister Ali Ahani
reciprocated, calling the trend in ties with Russia "positive." In diplomatic
parlance, such statements are often taken to mean that no real breakthroughs
have occurred.

Ahani used identical terms to describe relations with Azerbaijan during a
visit Wednesday by Deputy Foreign Minister Khalaf Khalafov. Tensions between
the two neighbors have been particularly hard to camouflage. But new efforts
are under way.

Iran's anger may be slowly subsiding after Baku reached its own agreement
with Moscow in early January, siding with Russia on the division issue. The
pact was followed by harsh recriminations in the Iranian press.

But there have been some signs of warming during the runup to the Caspian
talks. Late last month, the two countries signed agreements on restoring
Iranian electricity supplies to Azerbaijan's enclave of Nakhichevan and
rescheduling its debts. In Tehran, Khalafov also raised the possibility that
Iran may pipe gas to Nakhichevan.

Iran publicized a shipment of aid to Azerbaijan's poor last week and proposed
that the two countries lift visa requirements to increase contacts and trade.

Azerbaijan's ANS television reacted with suspicion, saying that the opening
"could also create wide opportunities for Iranian secret services, who could
start using the Azeri youth for some reasons." The station also raised
similar questions last week with a delegation of visiting Iranian
businessmen, asking if they traded with Armenia.

Such responses may frustrate efforts to focus on the broader benefits of
solving the Caspian problem. But better regional relations could be either
the cause or the consequence of an agreement, if one is reached.

*******

#7
The Wall Street Journal Europe
February 12, 2001   
Editorial
Keep Russia On the Hook

After threatening to suspend payments on its Paris Club debt, Russia has
seemingly backed off and budgeted for further debt service. Pity, we're
tempted to say. If the Kremlin could somehow be induced to default, its
creditors might this time develop some backbone and resolve to teach the
Russians that default has a cost.

We'll admit that our thoughts were mischievous. Countries should honor their
debts. Indeed, there is no more basic requirement of membership in the
community of responsible nations than meeting contractual obligations. But
that is just the point. Russia has defaulted three times on its Soviet-era
debts already and received numerous breaks in terms of reschedulings, IMF
credits, and other relief along the way.

Indeed, Russia's very membership in the Paris Club of creditor nations
required a suspension of disbelief. To be recognized as a creditor nation,
Russia was allowed to include debts owed it by other former Soviet republics
-- which, in turn, required valuing as credit some of the military hardware
"lent" to these governments against their wishes. The Paris Club then
magnanimously valued these debts at the old Soviet rate of 0.6 to the dollar,
magically elevating Russia to creditor nation status.

And yet the experience of the last decade is that reform in Russia runs in
inverse relation to the comfort level of the country's business and political
leaders. That comfort level could be significantly reduced if the Paris Club
punished threats of default by closing down access to further lending.

Now, it may be that the Kremlin decided last week that it might be running
such a risk. But there's reason to fear that Russia's apparent retreat is
more a tactical shift than a sign that it has had word from its sovereign
creditors that they have resolved to start treating Russia as a grown-up.

Russia owes $3.4 billion this year in debt service payments to the 18 Paris
Club sovereign creditors, of which $2.8 billion is Soviet-era debt. A total
of over $48 billion is owed the Paris Club in all, all but about $9.3 billion
of it Soviet-era debt. German loans account for over 40% of the total.

Now there is nothing particularly unmanageable about this year's payment
schedule -- particularly not for a Russia awash in cash from oil and gas
revenues. But like a gambler who has happened on the cash to pay back his
gambling debts, Russia suddenly feels it can get lucky and wants the freedom
to wager again. So at the start of this year, the government again pleaded
penury. Well, not exactly penury: Unable to deny its more favorable financial
position, Russia instead said that its repayment schedule would jeopardize
reforms and risk social unrest. Indeed, so confident was Russia that it would
be granted some relief that its 2001 budget didn't even provide for all of
the $3.8 billion in payments. Russia demanded a partial write-off of its
Paris Club debts and a rescheduling of the rest over a long payment period.

The case for relief was so weak as to be laughable. Aside from some
much-needed tax reform, Russia's government has done very little to address
the structural causes of economic weakness. The Paris Club, to its credit,
balked at the demands. German First Deputy Finance Minister Caio Koch-Weser
gave an interview a week before the World Economic Forum in Davos in which he
effectively said Germany would oppose full membership for Russia in the G-8
if Moscow didn't honor its debts.

And so Moscow pleaded it had been misunderstood. At Davos, Russian Deputy
Prime Minister Alexei Kudrin insisted payment delays were only temporary and
that Russia would honor its Paris Club debt in full. Prime Minister Mikhail
Kasyanov last Monday ordered changes to be drafted for the 2001 budget that
would allow for the repayment of foreign debts. Then on Friday, President
Putin told business leaders in Vienna that Russia will fulfill its
obligations to creditors.

Certainly this should be a lesson to Russia's creditors that there is an
alternative to caving in to Russian demands. But it would be naive to assume
this is the last we'll hear from Russia on the subject. As the Kremlin is no
doubt aware, the good times in Russia cannot last. The 1998 devaluation drug
has already begun to wear off and its inevitable side-effect, inflation, is
becoming more pronounced. Indeed, without the combined effects of rising
commodity prices and a debauched ruble (as well as a strong dollar) its
probable that Russia's economy would have contracted again last year instead
of posting 7% GDP growth. Matters could be stickier by 2003, when some $18
billion of Paris Club debt comes due. By settling up now, Russia is hoping to
earn a reserve of goodwill for down the road.

The Paris Club should steel itself now for that possibility. If Russia is to
grow up it must be held to the same standards as those countries it aspires
to stand alongside on the world stage. A test of Western resolve has been
avoided but there will undoubtedly be more.

******

#8
Russian media chiefs to fight bill barring commercials

MOSCOW, Feb 12 (AFP) -
Russian media spokesmen pledged Monday to resist a law passed on first
reading last week that would ban publicity spots during television and radio
shows and could undermine the independence of the media.

The State Duma lower house of parliament on Thursday passed a bill that would
forbid broadcasters from running commercials during programmes, triggering an
outcry from media and advertising industry leaders.

Government ministers criticised the bill, drafted by a Communist deputy and
approved by a massive 275-73 majority, as likely to hit programming and
provide a disincentive to television participation in film production.

Alexei Voynov, legal advisor for the Russian Publishers Association, Monday
called on the media to unite in opposing "the danger presented by this
anti-advertising bill."

Any restriction on advertising "makes the media more expensive, deprives them
of investors and forces them to seek sponsors, either the state or the
commercial sector. In either case that reduces the level of independence of
the press," he told reporters.

Admitting that the bill was likely to be popular, given the frequency of
publicity slots on Russia's two nationwide television broadcasters RTR and
ORT, Voynov warned that without the revenue from advertising, "the quality of
news programmes will deteriorate."

Alexander Ponamaryov, head of TV6 which stands to lose more than a third of
its advertising revenue if the bill is enforced, said he hoped President
Vladimir Putin would "see reason" before he signs it into law.

"We are joining with other media professionals to make our position known as
strongly as we can and bring pressure to bear on the deputies" who will have
to vote on the bill twice more before it is passed on to the upper chamber
and then to the president, he told AFP.

Ponamaryov saw the bill as "an act of stupidity" rather than part of any
scheme consciously designed to cow the media into submission.

The bill, comprising a raft of disparate amendments to current legislation
that sets limits on the advertising of tobacco and alcohol, comes amid
increasing concern by Russian journalists and media analysts at apparent
Kremlin attempts to tighten control over the media.

Vadim Zhelnin, director of the Advertisers Association, said that the bill,
if passed into law, would "strike a serious blow at the resources of the mass
media" for whom advertising provides the lion's share of their income.

He warned that the effect of the bill would be "a return to the time when
some anonymous civil servant decided what films could be shown on television,
because without the money from advertising, it would no longer be possible to
buy good films" for the small screen.

Russia's fragile advertising market -- equivalent to that of Greece and less
than that of Poland, Voinov noted -- provides more than half of all
television revenues nationwide and some 85 percent at regional level, the
press ministry was reported as saying last week.

Broadcasters have already lost the income provided by tobacco advertisers
whose aggressive television campaigns for years provided a major source of
revenue.

*******

#9
Russian Communist leader slams "weak-willed" government
Interfax

Moscow, 12 February: Communist leader Gennadiy Zyuganov called today for the
complete or partial replacement of Russia's "helpless, weak-willed,
inefficient and not very responsible" government.

There should be a "clear economic strategy" and then a "competent" government
should be put together to carry it out, Zyuganov said. The government has
increasingly been demonstrating "helplessness" on essential issues, he said
to Interfax.

Examples are its "inability" to handle the energy crisis in Maritime
Territory and other regions, its "inarticulate position" on the country's
foreign debt, its "incorrect and harmful" decision to decommission the space
station Mir and an inflation rate he called two or three times higher than
forecast.

"The president should make a decision: our government is helpless,
weak-willed, inefficient and not very responsible and it needs to be
strengthened," Zyuganov said. "Each grouping is defending its own private
interests. [Economic Development and Trade Minister] German Gref is
suggesting one thing, [Prime Minister] Mikhail Kasyanov another, [Deputy
Prime Minister] Ilya Klebanov something else. We don't have a government for
everyone."

"What needs to be done now is putting together an efficient and
professionally competent government. What most of all needs to be done for
this is putting together some of the most influential forces in the country
and choosing an economic strategy for the executive branch."

Zyuganov went on to say that he expects that after the State Council has seen
the government's economic programme, implementation mechanisms will be
urgently worked out for the programme and "the strengthening of the
government will begin". "But I don't see this," he said.

But dismissing the government will not solve all the problems, Zyuganov said.
"One can keep it or form a new one, but what will they do? First of all, a
clear economic strategy needs to be worked out and only then should an
efficient, competent and professional team be selected to match it."

******

#10
BBC Monitoring
Russian official says financial cost of Chechen war enormous
Source: NTV International, Moscow, in Russian 12 Feb 01

The head of the Russian parliament's Audit Chamber, Sergey Stepashin, said on
Monday that the cost of the war in Chechnya had been so great that the money
spent could have covered much of Russia's debt to the Paris Club.

"I'm not going to give you the figures. I know what they are but they're
classified at the moment," Stepashin said in remarks broadcast by Russian
NTV.

"I will say, however, that we could have paid off a great deal of our debt to
the Paris Club had it not been for the vast additional spending on bringing
about order in the Chechen Republic... Any war is very costly, not just in
human terms but in financial terms as well."

******

#11
Russia: Chief seeks wider brief for Audit Chamber
ITAR-TASS

Moscow, 12 February: Chairman of the Accounting Chamber Sergey Stepashin
favours the expansion of powers of the Audit Chamber during the inspection of
performance of the Central Bank of Russia. Speaking at a press conference
today, he denounced the situation when the Audit Chamber cannot inspect the
economic activities of the Central Bank, and said it should be changed. In
the opinion of Stepashin, it looks strange, when a foreign auditing firm can
inspect the work of the Central Bank, including checking its trade-currency
reserves, while the Audit Chamber is not allowed to do so, PRIME-TASS
reports.

According to Stepashin, this suggested corresponding amendments to the laws
on the Central Bank and on the Audit Chamber. He stressed that both the
president, the government and the State Duma agree with him on this point.

At the same time, he continued, the independence of the Central Bank should
not be violated. "It should be a banking institution, not a government
institution," Stepashin said. "Otherwise we may lose the Central Bank,
together with the opportunity to maintain a serious dialogue with Western
creditors."

******

#12
Kennan Institute
Meeting Report
Social Organization and Exchange in Rural Russia
By Jodi Koehn

"The Cultural Dimension of Agricultural Reform: Social Organization and the
Metaphysics of Exchange in Rural Russia" (January 29, 2001)
Lecture at the Kennan Institute of the Woodrow Wilson International Center
for Scholars, Washington, D.C.

"Russian villagers operate primarily outside the market
economy, making the Russian village the safest place in the
country for economic survival, remarked Margaret Paxson
at a 29 January 2001 lecture at the Kennan Institute. Paxson,
a Title VIII-Sponsored Research Scholar at the Kennan
Institute, continued to say that villagers are able to either grow
or obtain much of what is needed for survival. This lack of
dependency on the market, Paxson stated, reinforces the
self-sufficiency of the village.

One of the most popular ways of obtaining what one needs is
through exchange, which comes in several forms. Goods and
services are often offered in exchange for goods and services.
Money is useful, but can be an uncomfortable form of capital,
particularly in certain contexts, Paxson noted. The symbolism
of "money" inherited negative connotations during the Soviet
period. Within the ideology of socialism, the desire for money
and endeavors to generate it was seen as a sin of the capitalist
enemy. Owning dollars was a criminal offense in Soviet times,
and dollars still bear this sort of underworld association,
Paxson argued.

Paxson stated that another reason for the negative connotation
of money is deeper and has to do with certain fundamental
principles of exchange. Money is used in exchange where
debts are precisely calculated and promptly erased. Money is
comfortable where debt and the social connections it implies
are uncomfortable. However, within the village, there are
intricate webs of social connection. Money can quantify debt
and erase social connection, which is appropriate if there is
social distance between the traders. The closer the relationship
between people, the more uncomfortable and socially
inappropriate the use of money becomes. Exchange of goods
and services is something that is done with categories of
svoi--one's own people. Money is more appropriate to
dealings with chuzhie (outsiders).

The preferred system of exchange is an informal one, where
accounts are kept, but where there is a principle of returning
more than what you received. In this system, Paxson
remarked, villagers are connected by the dynamic of debts
they owe each other. According to Paxson, such exchange is
viewed as a positive feature of social life. For example, when
there is social distance between families, exchange is avoided.
Furthermore, when outsiders are involved, the social distance
makes monetarized exchange more accepted.

For these reasons, there is a reluctance in the village to
formalize economic exchange with money. When villagers
occasionally sell each other produce, they are careful to name
prices. Conversely, in terms of one's reputation and status in
the village, it is absolutely necessary to reimburse people for
their services.

Exchange is closely kept track of. An outsider to the village
first sees countless examples of generosity. According to
Paxson, in head-to-head social confrontations, to "win," it is
necessary to be the one who gives more. Paxson referred to
this as "one downsmanship"--by spreading out one's surplus
one wins status in the community. The "circle" of exchange
groups appears to include an aspect of verticality. In short,
vertical extremes (of wealth) are avoided in the village
economic system in favor of relative social "evenness." Status
is won by being an agent of redistribution, not of individual
accumulation.

As time passes, it is clear that accounts are carefully kept in
the village, even without formalizing them through money,
Paxson noted. Giving someone a basket of produce does not
imply a similar item in return, but it does create a debt which
must be "paid" eventually. The debt is not meant to be
quantified and then erased, but will instead continue to
encourage future inter-dependence on a local level.

Furthermore, the unspoken rule that one should return more
than what was received is the hallmark of a broader system of
exchange that encourages economic homogeneity in the village
community. In this system, generosity is good and in terms of
one's social status, generosity must be met with equal or
greater generosity. In the Russian village, Paxson added, an
inequality of means can become a social liability.

What does this system say about the prospects for reform in
rural Russia? According to Paxson, there are two main issues.
First, there is the question of how rural communities interact
with non-rural communities. As was noted earlier, the closer
the relationship between two parties, the less comfortable
exchange involving money becomes. At the same time, Paxson
noted, the closer the relationship, the deeper the
interdependence. When considering rural reform, this is a
problem since villagers should more actively engage with the
market. Exchanges do occur involving money, but the question
becomes how to continue to exchange through their
comfortable "barter" system, Paxson argued.

Second, Paxson stated, in rural Russia, there is a dynamic of
social interaction in which an individual gains status from their
generosity and risks various forms of social "danger" by
private acts of accumulation. This does not mean, however,
that villagers will never accumulate wealth or lord it over one
another, but that there is an unspoken, powerful mechanism
for eliminating the extremes of wealth. Paxson concluded that
this is part of an overall dynamic which tries to maintain a
certain level of group cohesion. This dynamic, Paxson argued,
can discourage the development of rural capitalism in its most
extreme forms.

Jodi Koehn is editor at the Kennan Institute.

******

#13
From: "Tom Robinson" liaison@usa.com
Subject: The Future of Large Fire Mitigation is the Ilyushin 76TD
"Waterbomber".
Date: Monday February 12, 2001

Through much of the Clinton administration, Global Emergency Response has
campaigned to bring the Russian Ilyushin 76TD "waterbomber" to the largest of
forest and wildland fires in North America and internationally.

This "waterbomber" is by far the world's largest, fastest, longest-range fire
fighting aircraft. The Pentagon s Partnership for Peace personnel calls it the
world's only truly "strategic weapon" against wildfire.

While we at Global Emergency Response, its promoter-managers talk "extreme
machine", the experts at the United States Forest Service talk...

"It is too big and would only be useful on small to moderate fires,
while
our smaller planes are better designed for the really big fires."

"The plane is new technology and we don't understand it."

"It is 50's technology and we are not going there."

"It is illegal to use it in the USA."

"Flies at very high speed."

"It is not a real sophisticated type (drop) system."

"It's not completely useless."

"Even if it was free, I m relatively sure we wouldn t consider it."

"It just doesn't do much good work."

"The darn things can't work in rough terrain."

"If I were a fire, it would discourage the hell out of me," USFS Joe
Madar on having viewed a demonstration in UK, 1994.

"Madar was merely being polite on foreign soil; the Forest Service has
never really been interested."

"We don't care how good the Il-76 is, we have no intention of using it."

As the Los Alamos National Laboratory was suffering severe damage and more
than
two hundred homes were being destroyed by fire, EMERCOM was asked by FEMA to
stand-down two Il-76 waterbombers, stating the fire was under control. FEMA
had
previously asked EMERCOM, on a government-to-government basis, to make ready
the aircraft to assist in the disaster - USFS was unhappy.

MSNBC's Michael Moran says US is "Too proud to accept Russia's help" but
others might suggest a Cold War sentiment at work here.

Versatile and of rugged construction, the Il-76 is a 1990s technology,
turbo-fan
4-engine jet. The 11,000-US gallon VAP2 twin tanking system with gravity
release makes the aircraft ideally suited to combating large forest fires.

The aircraft s characteristics include relatively short take off/land
abilities
even on turf strips. In drop mode the Il-76 travels at 300 feet above ground
level at a speed of 280kph. Liquids descend vertically, as rain, ensuring
even penetration of forest canopy and optimal effect on forest floor. The
aircraft releases the 11,000-gallon payload over an area 1.2 kilometers by 90
meters, or six double-width US football fields.

Essentially, Global Emergency Response sees forming a stand alone, fully
integrated service for combating large forest and wildland fire. Packaged
as a
comprehensive service, IL-76 emergency response aircraft would come from
Russia
seasonally, each complete with a fully-experienced and certified crew of
eight,
under a typical "ACIM" aircraft-hire contract which includes spare parts.

All other fire-fighting planes are of turbo-prop propulsion. The C-130
Hercules, most regularly in use in fire fighting, has a capacity of 3000
gallons. US fixed-wing fire fighting airplanes are of 1950s technology and
aging. There are no new large-volume waterbombing capability aircraft
currently on the drawing board, and no modern comparative aircraft suitable
for conversion.

The future of large fire mitigation is the Ilyushin 76TD "waterbomber".

The future is now!

Tom Robinson
liaison@usa.com
Chief Administrator
Global Emergency Response

*******

#14
Transitions Online
February 12, 2001
www.tol.cz
OUR TAKE: The Uncomfortable Truth
Nothing is perhaps more illustrative of Russia's regional chaos than a
glimpse inside one of its titanic central heating systems.

Aging, rusted, leaky pipes groan under the stress of supplying millions of
people with heat and hot water. Tape of all kinds, rags, gums, and glues
hold the whole contraption together, just barely. The buildings themselves
are mazes of damp, dark, and moldy inefficiency. Repairs are seldom, and
always with a quick fix in mind.

Out-of-control Far Eastern Primorye Governor Yevgeny Nazdratenko is one
link in that chain that has long needed dismantling. And, in the first week
of February--while the 2.2 million people he has ruled for eight years were
freezing to death--he was removed from the system, forced to resign.

The governor no doubt has former President Boris Yeltsin to thank for being
able to rule for so long. Oligarchs, namely Kremlin-insider Boris
Berezovsky-have their hands in the region, and Yeltsin's policy toward them
was one of friendship not confrontation. During his tenure, Nazdratenko
managed to blatantly ignore the needs of his many subjects, brush aside the
trust given him by his unusually loyal voters, and make certain that all
industry and business could be used for his own personal gain. His power
was thoroughly entrenched and seemingly unshakable. If the people were
freezing, there were always plenty of scapegoats around to blame. On 7
February, two days after rumors surfaced that he was being forced to
resign, Nazdratenko fired his deputy governor in charge of utilities and
then admitted himself to the hospital, claiming heart problems.

Nazdratenko has lasted for so long mainly because Vladivostok, the Far
Eastern capital city, is so far away from Moscow. Yes, there have always
been federal authorities stationed there, but they found it more convenient
and lucrative to kiss up to the governor, rather than the Kremlin. And
Yeltsin certainly wasn't going to stop them. Nazdratenko's only mistake--or
misjudgment--was in thinking that new Russian President Vladimir Putin
would allow it all to continue.

Since taking office in March of last year, one of the grandest efforts
Putin has made has been in the area of regional reform--namely, legislation
aimed at returning control over the regions to the Kremlin, and reining in
governors who have had little respect for federal law, ruling their
provinces like personal fiefdoms. For nearly a year, there has been much
talk about Putin's regional reforms and many less-than-subtle threats aimed
at those governors. Last week, a key piece of legislation was put into
force, allowing the president to remove governors under criminal
investigation or otherwise thought to be subverting federal law or abusing
power. Nazdratenko was the immediate casualty and the first to fall.

That doesn't mean that there's going to be heat now, though the federal
government is responding to the crisis by airlifting replacement pipes,
plumbers, and coal to the region. It also doesn't mean that things will
change overnight in Primorye--the corruption and cronyism is far too
entrenched. But Nazdratenko could be the first in a long list of governors
who should be a bit worried about their futures at this point.
Now is the time to watch if all the other governors fall, and, most
importantly, if federal authorities will rule the regions any more
effectively (read less corruptly). According to the plan, a regional
governor will answer directly to a Putin-appointed federal authority in the
region, who will in turn answer directly to the president. That puts a lot
of responsibility on Putin--and a lot of accountability.

The short of it is that everyone--Russian officials, the public, and
especially the Western media--is quite pleased about Nazdratenko's demise.
And most seemed to be equally happy with Putin's strong-arm tactics with
the unwieldy governors in his regional reform plans.

Editorialists, especially in the West, are uncomfortable praising Putin for
his firm hand. Liberal columnists--writing about Russia--are troubled by
the ideological ramifications of supporting a more authoritarian style of
government and appease their consciences with vague oxymorons like "a
dictatorship of law" or pseudo-historical notions of "the Russian people
need a strong hand anyway." It is equally uncomfortable for liberal
publications to find themselves supporting a more centralized government in
the name of supporting law and order, when in every other country, the
opposite is fought for. It is perhaps that fact that is most troubling and
most indicative of the desperate state of affairs in today's Russia.
Nazdratenko's fall should be celebrated. But celebrated with extreme
caution.

******

#15
Moscow Times
February 13, 2001
Objectively, Russia Needs A Cold War
By Alexei Pankin  
 
Sixty percent of those surveyed believe that the foreign press covers events
in Russia more objectively than Russian journalists do, while 40 percent felt
the opposite." This is the way Ekho Moskvy radio presented the results of a
telephone poll of listeners last week.

On Feb. 4, Security Council chairman Sergei Ivanov delivered an important
speech at the Munich conference on international security, a sort of
"military-political Davos." The first article I saw about this speech was
written by UPI correspondent (and former Moscow Times columnist) Martin
Walker and was full of impassioned commentary like, "In one of the toughest
statements to emerge from the Kremlin since the Cold War â?¦". Other Western
publications, judging by articles appearing on Johnson's Russia List, adopted
a similar tone.

And what about the Russian press? No emotion at all. If you look at the
headlines in Segodnya (Feb. 5), Kommersant and Nezavisimaya Gazeta (Feb. 6),
you'll see that they emphasized the disagreement between Russia and the
United States concerning the 1972 Anti-Ballistic Missile treaty. Obviously,
this is an important matter, but it is only one aspect of relations between
the two countries.

The government newspaper, Rossiiskaya Gazeta (Feb. 6), reported that Ivanov
stated that Russia would build its relations with the other states of the
former Soviet Union primarily on a bilateral basis. The following day,
Nezavisimaya Gazeta picked up this theme in an article headlined, "The
Security Council Has Decided to Close the CIS."

As you can see, this speech was nervously interpreted by the English-language
press as Russia's return to the Cold War, while the domestic press dryly
presented it as a rejection of Russian pretensions to hegemony in its
"traditional sphere of vital national interests." Interestingly, toward the
end of the week the new U.S. CIA director, George Tenet, listed Russia among
the nations threatening the United States, while President Vladimir Putin was
in Austria declaring that he does not intend to oppose the expansion of NATO.

So is the Russian public supposed to take up their familiar posts at the
barricades or are they supposed to break out the olive branches? Or maybe
they should do both.

Konrad Adenauer, the first chancellor of West Germany, began his political
career as a separatist. In the 1920s, he wanted to unite his native Rhineland
with France or with Belgium in order to avoid being dominated by Prussian
Berlin. Nothing good, however, came of this effort.

The real greatness of Adenauer's separatism was not revealed until after the
war. Then he chose Bonn as his new capital, in a complete rejection of
pompous Berlin. He was also able to stubbornly oppose any moves toward
reunification, using Cold-War tensions to shift all the blame to the Soviets.

This policy brought innumerable benefits. Foreign troops defended western and
southern Germany lands from Prussian inroads, while simultaneously keeping an
eye on local generals. And it was all so cheap for West Germany that the
economy flourished, as did democracy.

Now transitional Russia needs a "cold war" just as badly. Islamic
fundamentalism has been named as the enemy du jour (this, after all, was the
real topic of Ivanov's speech). Now it is simply necessary to convince our
powerful Western friends of the reality of this threat. I only hope that they
figure this out before they start bombing us.

Alexei Pankin is the editor of Sreda, a magazine for media professionals. He
contributed this column to Vedomosti.
 
******

#16
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
Zavtra, No. 6, February 2001, p. 1
PUTIN AT A LOSS - WAIT FOR EXPLOSIONS
     According to our Kremlin sources, the last week was noted for the
increased uncertainty of President Putin, who has suddenly lost all
his main supports in both the administrative elite and in the media.
According to the same sources, the president has become hostage to a
"stalemate"; he is unable to influence any of the opposing group in
his inner circle. In this situation, Alexander Voloshin, head of the
presidential administration and Prime Minister Mikhail Kasianov have
met to discuss possible changes in the Cabinet and the government as a
whole. The first consequence of the meeting has been direct pressure
on Governor Yevgeny Nazdratenko of Primorye, as a result of which he
had to resign.
     As Putin was about to sign the dismissal for Interior Minister
Vladimir Rushailo, he was interrupted by a call from Yumashev, who
told Putin that in the opinion of Boris Yeltsin this would not be
expedient; and this was accepted as an instruction.
     According to our analysts, all these developments, as well as the
start of a new stage of the military operation in Chechnya, may lead
to more terrorist bomb blasts in Moscow and other Russian cities.

*******

CDI Russia Weekly:  http://www.cdi.org/russia

Johnson's Russia List Archive (under construction):  http://www.cdi.org/russia/johnson