April 1, 2001 

This Date's Issues:   5180

Johnson's Russia List
#5180
1 April 2001
davidjohnson@erols.com

[Note from David Johnson:
1. BBC Monitoring: Russia's natural resources running out fast.
2. Interfax: Nearly half of Russians oppose policy in Chechnya - poll.
3. RIA: RUSSIA MOVES TO SECOND PLACE IN WORLD FOR ARMS SALES.
4. Washington Post: Jim Hoagland, Bush Inc. Takes On The Kremlin.
5. The Electronic Telegraph (UK): Marcus Warren, Email from Russia. (re patriotism)
6. Reuters: Azeri leader flies to U.S., cautious on Karabakh.
7. Reuters: New Russian defence minister wants "balanced" army.
8. Gordon Hahn: Power Ministries' Reshuffle.
9. Robert Huber: Three new studies from NCEEER.
10. The Russia Journal editorial: Now, to the economy.
11. Nezavisimaya Gazeta: Alexander Domrin, "Something Wicked Comes This Way": Sad Story of U.S. Aid to Russian "Reformers".]

*******

#1
BBC Monitoring
Russia's natural resources running out fast
Source: Rossiyskaya Gazeta, Moscow, in Russian 30 Mar 01

It is no secret that more than half of Russia's budget comes from
petrodollars. But this stream may soon begin running dry, and not just
because oil prices have started to drop. There is not that much easy oil
(which does not require significant expense for extraction and thus can
produce large profits) remaining.

The first bell already rang last year when the oil companies, not wanting
to miss a favourable moment and desiring to sell as much oil on the world
market as possible while the price was high, decided to increase
extraction. They were only able to scrape up an additional 20m tonnes;
moreover, even for this they had to reopen old wells that had been
mothballed...

Other raw material sectors in Russia are in a similar situation. In the
opinion of Viktor Orlov, president of the Russian Geological Society, this
is exactly what will be the main economic problem in coming years.
Industry, coming out of its state of collapse, will suddenly demand an
increase in extraction of raw materials. But it will be very, very
difficult to do that.

"In the last 10 years we have used what was already discovered," Orlov
claims. "The country will be able to hold out on these reserves for maybe
10 years. But that is only if extraction does not increase: about 300m
tonnes of oil and 600bn cubic meters of gas a year. And at the end of this
decade we will already be scraping up the remainders."

At least 15 years pass from the moment that a deposit is discovered until
the start of commercial extraction. That is why geologists in all the
developed countries explore 10-15 per cent more new reserves each year than
were extracted in the same year. This slight excess is the guarantee of
economic stability. But in our country in recent years, geology has been in
a state of neglect. Each year the state has directed a significant part of
the money that the companies transferred to the budget for geology to other
needs. And then too, the oil generals and gas barons themselves often
preferred to cherry-pick deposits, saving money on exploration to use for
building private homes, opening foreign bank accounts, and other luxuries.

This is definitely a case where the state simply has to take the matter
under control. And there is a lever for this - "deductions for reproduction
of the mineral raw material base". This complicated name can be replaced by
something simpler and more understandable: "investment in the future". The
"investment in the future" was instituted when the companies were converted
from state-owned to private. It was 5-15 per cent of the value of the
mineral products extracted, depending on the type. About one-third went to
the federal budget, one-third to the regional budget, and one-third was
left to the companies themselves, who were required to use it for
exploration...

The "oil kingdom" of western Siberia has passed the peak of its glory.
Extraction there is falling swiftly. To compensate for this loss we need to
scratch out 100m tonnes of oil a year in other compartments. Meanwhile, the
Nenetsk Autonomous Area and the Republic of Komi can only give a total of
20m tonnes, and eastern Siberia and Yakutia will not give more than 40m
tonnes.

"Only the offshore fields in the Far East and the northern seas are equal
to western Siberia," Orlov says. "It should have been brought into use
10-15 years ago. Since the Soviet Union did not do it, Russia should. But
without rigid regulation by the state this is impossible."

*******

#2
Nearly half of Russians oppose policy in Chechnya - poll
Interfax

Moscow, 30 March: Pollsters said today that 42.8 per cent of Russians support
Moscow's Chechnya policy and 46.4 per cent oppose it.

Russia's independent ROMIR opinion studies centre, a member of Gallup
International, reported a survey conducted late this month according to which
37.3 per cent of Russians expect large-scale hostilities to resume in
Chechnya soon, 18.2 per cent believe the Russians will liquidate the main
Chechen rebel leaders, 12.9 per cent think the pro-Russian Chechen
administration will be able to restore law and order in the region, 8.5 per
cent expect an agreement to give Chechnya independence, and 4.1 per cent
imagine other scenarios.

According to ROMIR, 38.3 per cent of Russians wish the war to go on until the
rebel movement is stamped out, 15.3 per cent want Russia to pull its troops
out and give Chechnya complete independence, 14.7 per cent wish Russian
forces in the region to be cut in number, 13 per cent would like the
pro-Moscow Chechen administration to be entrusted with restoring law and
order in the region, and 6.8 per cent believe Chechnya could be put under
international control.

ROMIR questioned 2,000 people.

*******

#3
RUSSIA MOVES TO SECOND PLACE IN WORLD FOR ARMS SALES

TULA, March 30. /RIA Novosti correspondent Yelena Shulepova/. Russia has
moved to second place in the world for arms sales, said Deputy Prime Minister
Ilya Klebanov in Tula on Friday at a meeting of the council of the Central
Federal District that discussed the defence industry.

According to him, this became possible thanks to arms manufacturers "being
able to return to the markets they once quit of their own will". Besides, the
vice-premier noted, at present Russia is selling the most up-to-date
armaments - "the days when we sold old equipment are gone never to return".

It is Klebanov's opinion that a role has been played by Russia's
long-standing partnership with a number of countries, enabling it to set up
joint ventures, "something which our competitors cannot afford to do as yet".
According to him, the practice is slowly coming back of "long" credits for
the defence industry.

The vice-premier also revealed that the development concept for Russia's
defence complex for the next 10 years will be presented to the government in
mid-May. But already it can be said, he added, that there will be no serious
increases in state orders, no special privileges and no easier tax schemes.
According to the vice-premier, over the past two years the state order has
been doubled - no other branch has seen anything like that. Klebanov also
noted that "in no country of the world are there tax breaks for arms makers.
This is a super-lucrative business," the vice-premier emphasised.

According to him, there will also be no return to large volumes of
production, as was the case in the USSR. He said that "this country will be
producing as much modern weaponry as our army needs and as we can sell for
export". Klebanov also promised timely financing of the defence branch.

The session of the council of the Central Federal District devoted to
problems of the military-industrial complex of the region and ways of using
its scientific, technical and personnel potential was also attended by Georgy
Poltavchenko, a presidential plenipotentiary to the Central District, and
governors of 16 regions of the district.

*******

#4
Washington Post
1 April 2001
[for personal use only]
Bush Inc. Takes On The Kremlin
By Jim Hoagland

The Bush administration has delivered a stinging slap to Russian pride with
its opening, somewhat dismissive moves. But the blow carries more calculation
than anger or ideological impetuousness. There is a business plan at work for
Bush Inc. on this too.

This is a White House that prides itself on replacing the self-indulgence of
the freewheeling Clinton bunch with efficiency and "realism," the vogue word
of Bush spin doctors. Show up for a 2:45 appointment in the West Wing these
days, and the door swings open at 2:44. Conversations carry a CEO-driven
crispness and brevity.

Think business, not Kissingerian Realpolitik, when you look at Bush methods
and goals: Instead of starting a new Cold War, this administration has set
out to induce a sharp correction in the diplomatic market. It seeks to pop a
Clinton-Yeltsin bubble of irrational exuberance and saddle Vladimir Putin
with higher transaction costs.

Washington is not writing off Russia or Putin permanently, as some Russians
fear. The Bush idea is to reach the market's bottom and reinvest from there.

The Bush team seeks a "benign" relationship with Russia, says one aide,
adding: "We need to move the foundation of that concept from 1972 to 2001. We
respect Russia. If they give it time, they will see that."

Moving beyond 1972 -- or more precisely, beyond the Anti-Ballistic Missile
Treaty signed that year -- is a declared goal for Bush and his top aides.
They have identified the treaty as a Cold War relic that should no longer
restrict the development of U.S. missile defenses.

Their tone suggests that Bush is tempted to give six months notice and
withdraw from the treaty, as its provisions permit. This option, urged on
Bush by Sen. Jesse Helms and other opponents of arms control, alarms Russia
and U.S. allies in Europe.

But the alarm may be premature. There is a forthright way to hook Bush's
justified concern about the ABM Treaty's obsolescent features to a genuine
desire to work with Russia to reduce the heavy nuclear overhang in both
nations' inventories.

That is to negotiate a new treaty with Putin to replace the ABM accord. The
decrepit 1972 treaty should be gently lowered onto history's ash heap rather
than bandaged with amendments and kept limping, as Clinton tried to do, or
symbolically executed, as Helms and company would like.

The new document would reflect the dramatic changes in strategic conditions
since the end of the Cold War. It would require a mutual recognition that the
time has come to redefine the roles and balance of offensive attack weapons,
defensive systems and the theory of mutually assured destruction.

The symbolic prestige such negotiations would offer the Russians is important
to them. It should not be given for free. In return, the United States would
need to gain effective new verification and controls over Russia's inevitable
nuclear downsizing, as well as new freedom on missile defense. Bush's
business instincts should extract a sound nuclear bargain once Putin accepts
that essential trade-off.

Replacing the ABM Treaty with a new strategic charter will finally consign to
history both the Cold War and the uneven interlude that followed, as Clinton
and Yeltsin bounced from bear hugs to growls over Kosovo and Chechnya. Both
Bush and Putin see advantages in tossing out the political baggage of that
period.

Putin stiffed Clinton on ABM renegotiation last year in large part because
the Russian leader wanted to deal on this question with the next
administration, which he expected to be headed by Bush. Two recent moves
suggest Putin is ready to address more seriously big cuts in Russia's nuclear
arsenal and missile defenses.

One was to sack Igor Sergeyev as his defense minister last week. Sergeyev had
strongly lobbied Putin to keep a large nuclear arsenal at the heart of
Russian defense. The other, made six weeks ago, was to offer to NATO a
missile defense plan that intellectually acknowledged the need for a serious
new look at this topic.

For that reason, the White House has been careful not to disparage Putin's
missile plan. And Bush and Putin have treated their reciprocal spy expulsions
as unpleasant but necessary business that does not permanently impair their
chances to work together.

Bush has irritated Putin by putting off meeting him and by making clear that
Russia's pretensions to a global role are undercut by an economy that ranks
between Portugal and Denmark. But neither man insults the future in his
remarks. The time for business is yet to come.

*******

#5
The Electronic Telegraph (UK)
1 April 2001
Email from Russia
By Marcus Warren in Moscow, exclusively for Electronic Telegraph

DR JOHNSON'S old saw is quoted so often that I hesitate to trot it out one
more time. But current events in Russia only confirm once again the truth
of his maxim about patriotism: namely that it is "the last refuge of a
scoundrel".

Of course, love and respect for one's homeland are admirable qualities. And
"my country, right or wrong" is an attitude that often leads to
unpleasantness but is at least understandable. No, what is disturbing about
Russia's new programme for instilling patriotic values in its citizens is
its atavism, a real life refuge for the scoundrels who drafted it.

President Putin last week lent his authority to "the demilitarisation of
Russia's public life", as he put it, when he appointed civilians to head
the defence and interior ministries. But the strain of patriotism about to
be inflicted on Russians propels the country in the very opposite direction.

The summary of the government's programme of patriotic education is a
shocking document. Patriotic computer games and CDs of military marches are
one thing. Teaching tiny tots patriotic values in their kindergartens is
another. Should the task of "resisting attempts to distort and falsify the
motherland's history" really be entrusted to, among others, the FSB and the
SVR, both offshoots of the old KGB?

Just what does "correct reproductive behaviour" mean and what is its
relationship to "traditional moral values"? As for "the complex of
psychophysiological measures" teaching teenagers to be active citizens -
God forbid that anyone attempt such perversion on my children.

This is the patriotic future mapped out for the nation by Russia's
bureaucrats. But, for a sneak preview of what lies ahead, one need look no
further than the grotesque campaign now underway in support of that well
known prisoner of conscience, Pavel Borodin.

Mr Borodin is an old friend of Email from Russia. We first saluted him as
the founder of "Kremlin Inc.", the huge empire of real estate and court
privilege he ran for Boris Yeltsin. Then the great dummy went and flew to
New York, despite being the subject of an international arrest warrant, and
ended up in custody in Brooklyn prison. There he is to this day, facing
likely extradition to Switzerland on money laundering charges.

As the State Secretary of something called the Union of Russia and Belarus,
Mr Borodin is a relatively big fish in our pond and the Russian foreign
ministry has been trying unsuccessfully to secure his release on bail. More
significant, however, have been the attempts to whip up public opinion here
in Russia and portray Mr Borodin as the victim of some new Cold War.

Strictly speaking, these have not been orchestrated by the government. But
they offer a foretaste of the synergy between the cultural "elite" and the
state in aid of the greater glory of Russia, as recommended by the new
patriotism programme. First, as outlined in the programme, Russia's
children were mobilised. Drawings by young patriots showing Mr Borodin
behind bars went on public display. In one our hero, a big man who is
clearly fond of his food, was shown weeping because the other prisoners had
stolen his dinner.

Now, a trainload of Borodin supporters is heading from Siberia to Moscow to
draw attention to his plight. State television will cover the train's
progress westwards as it passes through the big cities. Signatures are
being collected for a petition demanding his release. A host of stellar
Russian celebrities have signed up to the campaign as well. Most of their
names will mean little to anyone outside Russia.

One is a Duma deputy and the Soviet Union's most popular crooner, now
banned from entry to the United States because of his alleged underworld
links. Another is a second Soviet superstar, an overweight female singer
(as in "it's not over until the fat lady sings"). A third is the Russian
football team's manager. (They won last week's home tie against the Faroe
Islands by the confident margin of 1-0.)

However, one of the "Free Borodin" campaigners stands out. He is Russia's
best known film director and, not so long ago, an Oscar winner. He
sometimes travels with Mr Putin on the president's foreign trips. The
recent return of the old Soviet national anthem, with words written by his
father for third time, is another of his achievements.

Where would Russia be without Nikita Mikhalkov? Who else is as eloquent in
preaching the gospel of patriotism to the masses? Who else has such
intimate access to the powers-that-be? His performance on behalf of his
friend Mr Borodin last week was a classic, so passionate, so sincere, so
persuasive . . . and so wrong-headed.

He said: "Pavel Borodin's return to the motherland should be the
leadership's first and only task. I am against someone with a Russian
passport, moreover someone in high office [being kept in a foreign prison].
It discredits my government and the leadership of my country."

Do these people think before opening their mouths to spout this sort of
nonsense? Nothing discredits Russia more than the fact that someone subject
to an international arrest warrant in connection with the alleged
laundering of $25 million of taxpayers' money held any office at all. But
Mr Mikhalkov was deaf to that particular argument.

No, he wanted to talk about Kosovo and the international plot to put Russia
in its place. Poor dear! He seems to be under the delusion that his last
film, the dreadful "Barber of Siberia", was panned by the critics in the
West because he condemned Nato's bombing of Yugoslavia, not because it was
a kingsize prize turkey.

Anyway, all is not lost. Who said this country lacks "positive heroes"?
Pavel Borodin and Nikita Mikhalkov, step right up and take refuge behind
the new shape of Russian patriotism.
 
******

#6
Azeri leader flies to U.S., cautious on Karabakh
By Lada Yevgrashina
 
BAKU, April 1 (Reuters) - Azeri President Haydar Aliyev made optimistic
noises about the Nagorno-Karabakh conflict on Sunday, but saw a long road to
peace as he left for the United States for talks with Armenia.

The two former Soviet republics have been split for 13 years over the region
dominated by ethnic Armenians who tried to secede from Azerbaijan in 1988.

Some 35,000 people died in the conflict, which also drove some 800,000 Azeris
from their homes before a truce in 1994.

The April 3 talks with Armenian President Robert Kocharyan will be held in
Key West, Florida, under the auspices of the Organisation for Security and
Cooperation in Europe (OSCE).

The talks are at the invitation of U.S. Secretary of State Colin Powell.

"I have heard the opinion of the co-chairmen of the Minsk Group of the OSCE
that the sides in the conflict are nearer than ever to peace. I think there
is a basis for these optimistic statements," Aliyev told reporters.

The OSCE formed the Minsk Group, chaired by the United States, France and
Russia, to try to bring peace to Nagorno-Karabakh.

Despite the ceasefire, the region's status remains uncertain. It holds
elections but is not recognised as a sovereign state by any nation.

Baku has said it is ready to accord autonomy to Nagorno- Karabakh, but
insists it must remain part of Azerbaijan. Armenia would like full
independence for the region.

Aliyev said any solution would have to be implemented over several stages and
dismissed suggestions he and Kocharyan would sign any treaties at the Florida
talks.

"Most of all we and Armenia must agree on the principles, and then there are
many questions to be solved to achieve peace," Aliyev said.

"If we get peace, then we can sign an agreement which will also be signed by
the big world powers, the co-chairmen of the OSCE, the European Union and the
United Nations."

Aliyev, 77, who has had a heart bypass operation, will also undergo health
checks in Cleveland, Ohio, during his trip, but said he felt all right.

Meetings in January and earlier this month in Paris failed to make headway on
Nagorno-Karabakh. Aliyev said the Paris discussions had failed to advance the
process, and Kocharyan said the two sides had exhausted common ground.

*******

#7
New Russian defence minister wants "balanced" army
 
MOSCOW, March 31 (Reuters) - New Russian Defence Minister Sergei Ivanov said
on Saturday he backed a "balanced" army, where the country's nuclear shield
was maintained, but conventional forces were reformed and improved.

Ivanov, appointed last week by President Vladimir Putin and expected to
oversee any shakeup, said in a television interview he wanted to end
conscription, but said it would take time.

"I consider that everything should be balanced," Ivanov, who like Putin is a
former spy, told ORT public television.

"For example, the strategic rocket forces: this is the nuclear shield of the
country, it is a reliable barrier against aggression towards Russia using
nuclear weapons," he said.

"At the same time, the world is changing, the world is constantly changing.
We see new threats that were not apparent 10 years ago. We have ignored a
little bit the general armed forces, the infantry," he added.

He cited Chechnya, where the army has once been beaten and is currently
trying again to stamp out separatist rebels, as an example of the decline of
Russia's conventional forces.

"For this we need a mobile force, militarily capable, armed well and armed in
a modern way, including space means, which also need to be given a boost," he
said.

A new branch of the army called the Space Forces is to be broken out by June
from an earlier merger with the Strategic Rocket Forces and will launch spy
satellites.

Ivanov, a lieutenant-general in the SVR foreign intelligence service until
Putin made him a civilian last year, oversaw the drafting of the military
reform proposals in his previous job as secretary of the advisory Security
Council.

He said in the interview it was logical he should become minister so the
reforms could be made. He dismissed the idea of clashes between his
predecessor Igor Sergeyev and the chief of the General Staff Anatoly Kvashnin
over military reforms.

But Ivanov indicated he would be the decision maker in the relationship with
the General Staff.

"I am sure and I hope we can work out a formula in which I will continuously
feel the generating role of the General Staff as a generator of ideas," he
said.

*******

#8
Date: Fri, 30 Mar 2001
From: "Gordon M. Hahn" <hahn@hoover.stanford.edu>
Subject: Power Ministries' Reshuffle

Russian President Vladimir Putin's published on 24 March (days before the
Sergeev reassignment and other personnel changes in the power ministries,
particularly in the MoD) in Rossiiskaya gazeta should be of interest in
connection with the reshuffle in the power ministries. It finalized the
combining of the Rocket Forces and Space Forces into one branch of the
Russian Armed Forces. This is a step in the direction that former Defense
Minister Sergeeev opposed. This suggests that it is likely that Sergeev
resigned in protest. His new appointment as a presidential advisor
represents a compromise to cover over perception of an angry break and
resignation, much as Marshal Akhromeev became an advisor to Gorbachev after
the latter's decision to implement unilateral troop cuts in Eastern Europe
in December 1987. Several numbered but undetailed points in the ukaz,
simply marked "not being published" may also have contributed to the rift.

Also, the ukaz orders a cut in the Armed Forces down to 1 million by 2006.
This is a less deeper cut than the previously discussed goal of 850,000
million. This again suggests there was a final power struggle last week
over the military reforms and a compromise of sorts.

It is likely that the military officer corps will also be unhappy about
the appointment of a KGBshik to oversee them in MoD.

Another interesting item in the ukaz is the combining of the Urals and
Volga VO's into a single VO (military district) putting the lie to the
argument that the 7 Russian federal districtsa were established roughly
along the contours of the military districts in preparation for emergency
rule, as some of our Western Russophobes cried when the 7 FO's were formed
last May.

Gordon M. Hahn
Visiting Scholar, Hoover Inst.
Visiting Lecturer, Political Science Department
Stanford University 

*******

#9
Date: Thu, 29 Mar 2001
From: Bthnceeer@aol.com (Robert Huber)
Subject: Three new studies from NCEEER

The National Council for Eurasian and East European Research (NCEEER) is
pleased to announce the publication of three new studies on social science
and humanities topics concerning the former Soviet Union and Central and
Eastern Europe.  NCEEER is the largest national research organization
supporting such research:

Timothy Frye, Politics and Property Rights:  Evidence from Russia's Regions.

Linda Cook: Reforming the Safety Net?  Policy Responses to Poverty and
Unemployment in the Russian Federation.

Yanni Kotsonis, Subject and Citizen:  Taxation and Its Meanings in Imperial
and Soviet Russia,

NCEEER publications are usually 15-30 pp. (double spaced) in length, and can
be purchased for $3.00 by calling us at (202) 822-6950, or contacting us at
nceeerdc@aol.com.  NCEEER publications from 1978 to the present can be
reviewed in the Toumanoff Library at our headquarters office at 910 17th St.,
NW, Suite 300 Washington, DC 20006.  The library is open from 9-5 Monday
through Friday and a full listing of those publications can be found at our
website at www.nceeer.org

******

#10
The Russia Journal
March 31-April 6, 2001
Editorial
Now, to the economy

President Vladimir Putin issued his own vote of no confidence in the
government - in the form of a revamp of the power ministries.

In typical Putin fashion - maintaining political stability as the highest
priority - he managed to pull it off without much fuss. Interior Minister
Vladimir Rushailo, Nuclear Power Minister Yevgeny Adamov and Defense
Minister Igor Sergeyev are now history. The notorious Tax Police and the
Interior Ministry are now headed by appointees loyal to Putin. And, in a
move truly unprecedented in Russia, a female civilian, former Deputy
Finance Minister Lyubov Kudelina, has been appointed deputy defense minister.

Putin said that the move was primarily about a "demilitarization of public
life." And, indeed, it is in the military sphere that its immediate effects
may well be greatest.

Military reform has been a centerpiece of Putin's agenda for a while now,
albeit having stalled recently. It is no secret that Russia's armed forces
have become bloated, inefficient and torn by internal conflict between
military officials more interested in advancing their own careers, bank
accounts and personal agendas than acting in the country's best interest.

Reform of the armed forces - reducing the number of people in uniform,
upgrading equipment and in general streamlining operations - is a very
important issue for Russia. For one thing, military export is a key sector
of the economy. Yegor Gaidar and the other liberal "reformers" (or anybody
else, for that matter) were never able to effect much of a change in this
area - hardly surprising, since the people pulling the strings had a vested
interest in the status quo and were not ready to relinquish control. Now,
with civilians assuming more of a presence in the Defense Ministry and
elsewhere, it may be possible to implement changes that were impossible in
the past.

But there will be hurdles. As military analyst Alexander Golts shows (see
Page 5), the shake-up will have to come with much more. While the
appointment of civilians in key posts could mean a greater degree of
openness in military finances, the new deputy defense minister has
previously shunned transparency in the area of military spending.

Nevertheless, this was an excellent time to implement a change in Defense
Ministry leadership. Many in the military are of course conscious of the
terrible situation in the armed forces. They may not like to talk about it,
but they are aware of the military and humanitarian debacle that has
unfolded over the past two years in Chechnya - and that something has to be
done both for the sake of Russia's military and their own careers.

The appointment of a civilian, Boris Gryzlov, as head of the Interior
Ministry was also commendable. The Russian police have been getting
increasingly out of control in recent years, often operating rackets that
would be indistinguishable from typical criminal operations - but for the
fact that the perpetrators wear gray hats and drive militsia automobiles.
This is a grave danger to civil society.

While there is little in Gryzlov's background to show how effective he will
be in his new post, it is a good sign that one of his close allies is one
of Russia's most celebrated police officers who led the campaign against
organized crime.

But all is not happy in Putinville, nevertheless. The reshuffle has done
nothing to change economic policy, which will apparently remain an
inheritance from the Yeltsin regime. The same team, which includes Mikhail
Kasyanov and whose labors were a contributing factors in such economic
miracles as hyperinflation and the 1998 financial crisis, is still running
the show.

It is possible, of course, that Putin is merely biding his time and will
restructure this branch of the government soon enough. But there seem to be
few clear indicators of this as of yet. Unfortunately, another possibility
is that the lack of new appointments in the economic team simply shows a
desperate need for people with both the skill and personal integrity to
competently manage the economy.

In short, the president has taken a positive step, but much still needs to
be done.

******

#11
Date: Fri, 30 Mar 2001
From: Alexander Domrin <alexander-domrin@uiowa.edu>
Subject: Nezavisimaya Gazeta: Alexander Domrin, "SOMETHING WICKED COMES
THIS WAY": Sad Story of U.S. Aid to Russian "Reformers".

Dear David:
Here is an English version of my article published by Nezavisimaya on March
22. A complete version is to be published by the State Duma legal
periodical Predstavitel'naya vlast' (Representative Power) and a magazine
in the U.S.


Nezavisimaya Gazeta
March 22, 2001
"Something Wicked Comes This Way": Sad Story of U.S. Aid to Russian
"Reformers".
By Alexander N. Domrin.
Alexander N. Domrin, S.J.D. (Penn),
Senior Research Fellow, Institute of Legislation and Comparative Law (Moscow).
He is author of The Constitutional Mechanism of a State of Emergency
(Moscow: Public Science Foundation,
1998) and co-author of Essays in the Constitutional Law of Foreign
Countries (Moscow: Spark, 1999).

Russia is slowly coming to her senses after almost a decade of Yeltsin's
rule, if we start counting from the First Congress of People's Deputies
(May-June 1990) which elected Yeltsin its Chairman.

Vladimir Putin inherited a crushed, looted and humiliated country, which
industrial product has shrunk by 53 percent (or about 25 percent more than
in 1941-45, when Nazi Germany was occupying a larger portion of the
European part of the USSR and about 26,5 million Soviet citizens lost their
lives), whose increase in mortality rates (60 percent between 1990 and
1996) has been "unprecedented in any country during peacetime since Middle
Ages" (Murray Feshbach of Georgetown University, in Washington Post,
12.07.1995), whose men have a smaller chance to survive to age 60 than
under "terrible" Russian tzars a century ago, whose population is shrinking
by about 2,500 a day (or approximately 0,5 percent a year), which has more
homeless children today than after the Bolshevik revolution, and whose role
in the world politics has been reduced to a position of
"Upper Volta with nuclear missiles".

This is simply not true when senior U.S. officials are now trying to give
their post-factum (or post-mortem) assurances that the U.S. foreign policy
since the Cold War have included such "overriding goals" as "to work with
_Russia_ internationally" and "to support _Russia's_ effort to transform
its political, economic, and social institutions at home» (Thomas R.
Pickering, Address at Meridian House/Smithsonian Seminar "Russia: Sleeping
Superpower?", Washington, DC, March 28, 2000;  text available at:
http://www.state.gov/www/policy_remarks/2000/000328_pickering_russia.html
emphasis is added. AD).

In reality, since Margaret Thatcher's infamous endorsement of Gorbachev in
December 1984 through the latest period of contemporary Russian history,
the Western governments have been promoting a "strategic alliance with
Russian _reform_" rather than an alliance with Russia herself. A guiding
principle of the U.S. foreign policy was not to support Russia, but to
support "Russian _reforms_" which "were considered to be critical to U.S.
objectives"  (Foreign Assistance. Harvard Institute for International
Development's Work in Russia and Ukraine
(Washington, U.S. General Accounting Office: November 1996), p.2); not to
help Russian people to overcome consequences of the Communist rule, but "to
help Russian _reformers_" (Strobe Talbott, Stanford University, September
19, 1997; emphasis is added. AD) which is not the same.

The position of the IMF was hardly different in that respect from the
position of the U.S. Agency for International Development. Even the most
devoted supporters of "market fundamentalists", as George Soros names
Russian "reformers" ("Who Lost Russia?" , The New York Review of Books,
April 13, 2000), have to admit now that the IMF was acting "like another
political arm of the U.S. government" (Testimony of Michael McFaul,
"Russia's 2000 Presidential Elections: Implications for Russian Democracy
and U.S.-Russian Relations", Committee on Foreign Relations, U.S. Senate,
April 12, 2000; Johnson's Russia List, #4247, April 14, 2000).

Only in the earliest period of legal and political reforms in the USSR, the
U.S. national interests ("objectives") coincided with the historical
necessity of the Soviet transition to democracy and the rule of law. As
soon as the slogan "Down with Article 6" (Communist Party hegemony clause)
and (never realized) slogan "All Power to the Soviets" catapulted Yeltsin
and radical "democrats" to power, the correlation between national
interests of the U.S. and Russia became less evident. With disintegration
of the USSR and especially after the initiation of liberal economic
"reforms", turning Russian into a mineral appendix of Western corporations
and throwing Russia in her social and economic development into the group
of third-world countries, the values of the Russian transition to the rule
of law were finally forgotten and supplanted by the interests of the
ultimate economic and political subordination of Russia.

It's hard to believe that some of the most eloquent American observers,
really think so, when they say that Russia's socioeconomic collapse was
"largely unanticipated" or that deindustrialization of Russian economy was
an "unintended consequence" of liberal "reforms" (Thomas Graham, "Putin's
Russia. Why Economic Reform Requires Political Support. Reflections on U.S.
Policy Toward Russia", 9 East European Constitutional Review 1-2
(Winter-Spring 2000)). Warnings about inevitability of such collapse and
about suicidal character of monetarist experiments with Russian economy
were repeatedly voiced by the Russian Parliament already in 1992-93 and
became one of the main reasons of its violent dissolution by President
Yeltsin. Dissolution which was unconditionally supported, if not
encouraged, by the Western "international community" in general and by both
branches of the U.S. Government in particular.

As it was later cynically explained by an American scholar, if the
"international community" gives its support to a "traditionally
undemocratic act", as it did in Russia in September 1993, then this act is
actually "democratic", albeit "unconstitutionally democratic" (Donna R.
Miller, "Unconstitutional Democracy: Ends vs. Means in Boris Yeltsin's
Russia", 4 Transnational Law & Contemporary Problems 2 (Fall 1994), p.876).
The conclusion itself is a complete rejection of Clinton Rossiter's classic
legal formula: "Even if a government can be constitutional without being
democratic, it cannot be democratic without being constitutional"
(Clinton L. Rossiter, Constitutional Dictatorship: Crisis Government in the
Modern Democracies (Princeton University Press, 1948), p. viii)).

The day after Yeltsin's issuance of his notorious anti-constitutional
Decree 1400, Rep. Steny H. Hoyer (D-MD) admitted that Yeltsin's decree was
"technically speaking" "illegal" but insisted that Yeltsin "acted in the
spirit of democracy by breaking the letter of the law". However, the
"primary reason for continued Western backing for Yeltsin", in Hoyer's
words, was not even that he "acted in the spirit of democracy", but that
"Yeltsin is explicitly pro-American, pro-Western, pro-market", whereas the
Parliament "has accused the West of
seeking to undermine and weaken Russia" and "opposes Yeltsin's
privatization program". According to the Congressman, "it is imperative"
"for our own interests", that Yeltsin's government "implement necessary
reforms and keep Russia on a pro-Western track" (Yeltsin Moves to End Chaos
- Hon. Steny H. Hoyer (Extension of Remarks), Congressional Record,
22.09.1993. P. E2219). The question whether this was "imperative" for the
interests of Russia was not asked.

The same day Senator Claiborne Pell (D-RI) welcomed "the swift, unequivocal
show of support that the Clinton administration has shown for President
Yeltsin's move to consolidate democratic reform in Russia" and appealed to
the Senate to vote for $2.5 billion in "assistance" to Russia and other
former Soviet republics in order to "to show the reformers in the NIS that
we are in their corner" (Support for Democratic Reform in Russia,
Congressional Record, 22.09.1993. P. S12239). Thus again, the senator
unambiguously demonstrated that U.S. aid was intended not for Russia and
the countries of the region, but for the "reformers".

The speeches and proposals of Rep. Hoyer and Sen. Pell were quite typical.
Another prominent Congressman, Rep. Gerald B. Solomon (R-NY), for instance,
expected that the new  Federal Assembly "would almost certainly be more
democratic [in a letter to President Clinton of October 26, 1993, Solomon
even said: "far more democratic". - AD] and friendly to the West than the
previous parliament", "truly representative", and concluded that the
December 1993 elections "have a direct bearing on our national security and
should be treated as a top foreign policy priority by the administration".
"The democrats are in desperate need of outside assistance", Solomon said,
"We believe it is imperative for the West to provide as much assistance as
possible to democratic candidates in Russia", and called on Congress to
"divert from existing programs whatever resources necessary to achieve the
objective of ensuring" victory for the reformers in Russia
(Elections in Russia. - Hon. Gerald B.H. Solomon (Extension of Remarks),
Congressional Record, 26.10.1993. P. E2534, E2536).

At least one expectation of Rep. Solomon came true: the new Russian Federal
Assembly did in fact become a "truly representative parliament", but...
without most of those "reformers".

The list of similar speeches on the Capitol Hill and in the White House in
the days of Yeltsin's constitutional coup of September-October 1993 could
be continued, but what is really important for us is an open recognition by
the U.S. officials of not only a possibility but a desirability of use of
American "aid" as an instrument of interference into Russian internal affairs.

U.S. support for such undemocratic and anti-constitutional decisions as the
violent dissolution  of the Russian federal parliament, closure of regional
legislatures throughout Russia, and suspension (for about 18 months) of the
Constitutional Court made it clear better than ever before that despite its
verbal assurances in its interest to see Russia as a prosperous, respected
and democratic "partner", the U.S. government was quite satisfied with
making her a client state controlled by a dependent semi-criminal
authoritarian leader, "corrupt but friendly drunk", as Yeltsin was later
described by The Washington Post.

It's highly indicative that it was in 2000 only when the former Secretary
of State James Baker publicly appealed to the U.S. "leaders" to finally
"recognize that Russia will have its own foreign policy,
independent of our" (James A. Baker III, "Repairing Relations with Russia",
The New York Times,
February 05, 2000). Yet, Baker contradicts himself when saying that new
"Russian leaders" [read: Putin. - A.D.] allegedly "reject 'partnership and
friendship'" with the West. This statement, just like a similar Thomas
Graham's lament that "a constructive U.S.-Russian partnership now appears a
distant dream", is not convincing, because a "partnership" with Russia was
never an issue. In fact, Graham recognized it himself in his testimony
before the Senate Foreign Relations Committee (April 12, 2000) when saying
that "the
Administration's earlier talk  of 'strategic partnership' created
expectations in Russia that we were
never prepared to meet" (Johnson's Russia List, #4244, April 13, 2000).

The new Russian Constitution is usually more favorably viewed by Western
experts than similar constitutions of some other former Soviet republics.
It is claimed that "the Constitution of the Russian Federation created a
true federation", that after the adoption of the constitution in December
1993 "all basic civil rights" exist in Russia "not only in theory as they
did in the past, but in practice as is true in western democracies", and,
finally, that "the Constitution of the Russian Federation creates a genuine
western democracy" (Ronald C. Monticone, "A Brief Comparative Analysis of
the Russian Constitution". In: Constitution of the Russia Federation.  With
Commentaries and Interpretation by American and Russian Scholars
(Lawrenceville, VA:
Brunswick Publ. Corp., 1994), p. 7, 9, 14.). The 1996 Constitution of
Belarus, on the other hand, is usually seen as not meeting "democratic
standards of human rights", granting "sweeping powers" to President and
establishing "dictatorship" and "totalitarian state".

The problem is that often correctly criticized Lukashenka's Constitution of
Belarus (see, e.g., Presidential Powers and Human Rights under the Draft
Constitution of Belarus (New York: Lawyers Committee for Human Rights,
October 1996)) is just a stronger version of Yeltsin's Constitution. If,
for instance, according to the Russian Constitution the decision on
President's removal from office must be adopted by a vote of two-thirds
of the total membership of each chamber of the Federal Assembly, and the
whole impeachment process is to be accomplished  within three months after
filing the charge against him (Art. 93), the Constitution of Belarus has
the same provision regarding voting in the lower chamber (House of
Representatives), but raises
the threshold for the Senate to three-quarters of its total composition,
and limits the time frame to
one month (Art.88). Yet, the Russian Constitution provides for five stages
in the impeachment process
(including participation of both the Supreme and Constitutional Courts of
Russia) which makes the process more time-consuming, whereas the
impeachment process in Belarus is to be accomplished in four stages without
involvement of the Constitutional Court. In practical terms, however, the
Constitutions of both countries make their Presidents technically
unimpeachable.

The real reason why Western official figures and, what is more regrettable,
many foreign experts react so differently to these constitutions can be
explained mainly by the fact that one of them was endorsed by an
"explicitly pro-American, pro-Western, pro-market" president, whereas the
other one was introduced by a more independent national leader, which is a
sufficient reason for the U.S. mass media to label Alexander Lukashenka as
"stupid", "paranoid", "with Neanderthal views" (Chicago Tribune, Editorial,
March 29, 1997), "the Stalinist leader of Belarus", and even "an open
admirer of Hitler" (The New York Times, "Russia and Its Tyrant Neighbor"
(Editorial),August 25, 1997). That's about a leader of the Nation where
every fourth citizen was slaughtered by Nazis...

U.S. official support to the dissolved Belorussian parliament and
orchestration of anti-Lukashenka's "active measures" from overseas (see,
for instance, the U.S. State Department Press  Statement "Belarus: Deputy
Secretary Talbott Meets With Belarusian Opposition Leaders" of February 4,
2000; text available at:
http://secretary.state.gov/www/briefings/statements/2000/ps000204a.html),
on the one hand, and, at the same time, demonization of the Russian Supreme
Soviet as "nationalist-Communist bloc" ("Russia Without Rules" (Editorial),
The Boston Globe, September 23, 1993), a "nationalist, crypto-Soviet
opposition" (Celestine Bohlen, "An Old Georgian Story: Dancing with the
Devil", The New York Times, October 24, 1993), "a band of Communist
apparatchiks" (William Safire, "On Dying Hard", The New York Times,
September 30, 1993), a "band of
Communists and fascists"  ("Detours to Russian Democracy" (Editorial), The
Boston Globe, September 30, 1993), and even "communist fascists
masquerading as parliamentarians" (Thomas Oliphant, "Another Clash with the
Beast", The Boston Globe, October 6, 1993) bespeaks of a policy of double
standards, which is quite typical
for the U.S., but hardly healthy for democratic developments in both Russia
and Belarus.

The participation of American consultants in the Russian presidential
election of 1996 once again illustrated that proud words of U.S. officials
about the necessity of strict observance of laws in a law-governed state
and about "the promotion of democracy as a key feature of American foreign
policy" (Strobe Talbott, Deputy Secretary of State. Address at All Souls
College, "The Crooked Timber: A Carpenter's Perspective". Oxford
University, January 21, 2000; text available at:
http://www.state.gov/www/policy_remarks/2000/000121_talbott_oxford.html)
are very easily forgotten when the U.S. national interests - at that
moment, preservation of "our horse", as Ambassador Strauss called Yeltsin,
and "our best man in Russia", as Russian President was named by Brent
Scowcroft back in 1992, in power - are at stake.

Although there is no reason to overestimate the role of Richard Dresner's
group in Yeltsin's victory in 1996, what is really important, is the
practical lesson given to us in Russia by the U.S. consultants, their
attitude to legal norms and political "necessity". As revealed by Dresner
himself, he was on  a regular basis reporting about the work of his group
in Moscow directly to President Clinton's aide Dick Morris. When asked, "if
he had any compunction about the extent to which the Yeltsin campaign was
violating election spending laws by many orders of magnitude, Dresner's
answer was 'No', because "Yeltsin was for democracy, and whatever it takes
to win is OK" (see Jonathan's Weiler's report about a panel discussion at
Duke University "Designing Boris Yeltsin's Victory" (March 26, 1997)
featuring Richard Dresner, in Johnson's Russia List, March
29, 1997).

According to a well-informed American observer, the U.S. Embassy was
expecting pro-Yeltsin falsifications in the 1996 presidential elections and
"warned" the Moscow US AID Mission to keep a "distance from monitoring
efforts that might actually uncover fraud" (Sarah E. Mendelson, Western
Assistance and the Development of Parties and Elections in Russia
(Democracy and Rule of Law Project, Carnegie Endowment for International
Peace, Fall 1999;  text available at:
www.ceip.org/programs/democr/NGOs/index.html), p. 30, 31)).
Clearly, the end justifies the means.

A similar approach was used in the activities of at least two of the US
AID-funded programs aimed at "developing parties and elections" in Russia:
those of the National Democratic Institute (NDI) and the International
Republican Institute (IRI). Overall, according to US GAO, between 1992 and
1997 those programs received $17.4 million, as a series of US AID grants,
to "help reformist political parties strengthen their organizational
structures and their role in elections" (US GAO report, 1996, p.37).
Needless to remind of the disastrous defeats of radical "democrats", the
main consumers of the US AID "assistance", in every parliamentary elections
in Russia since 1993.

In the summer of 1995, the US AID Moscow Mission commissioned a report to
analyze the "effectiveness of U.S. government assistance to the Russian
Parliament" (on file with the author). An independent expert evaluated the
three main AID-funded programs working with the Russian Federal Assembly:
those of NDI, IRI, and of the U.S. Congressional Research Service (CRS).
The report revealed that the activities of the NDI and IRI were based on
favoritism. It found that "most efforts" by both the NDI and IRI "were
channeled to the education and training of  staff workers and MPs in the
Vybor Rossii" (Russia's Choice) faction" (p.12). Yabloko was not forgotten
either. A former NDI program officer in Moscow has admitted lately that in
the 1990s, Yegor Gaidar and Grigory Yavlinsky "appeared to favor trips to
the West vastly  more than they did trips to the regions" (Mendelson, p.24).

The same report also concluded that "some of the IRI activities have been
marked by unsystematic and over-demonstrating style" (p.11), and that the
seminars of NDI and IRI "leave an impression of some political show rather
than profound regular work"
(p.21).

Ironically, the group of approximately 3,000 "reformist-minded political
activists" trained by the U.S. programs in 1992-96 also included Vladimir
Putin ("trained" by NDI), who is now described by Michael McFaul, since
1990 an NDI consultant in Moscow himself, as someone who "may turn out to
be Russia's Milosevic", someone "willing to use the power of the state and
ignore the democratic rights of society in the pursuit of his objectives",
whose election as a new Russian President was not a "positive step" for the
U.S. interests in Russia (Testimony before the Senate Committee on Foreign
Relations, April 12, 2000; Johnson's Russia List, #4247, April 14, 2000).

Although certain aspects of the CRS program were criticized as well,
overall the CRS record was recognized to be "much better because all of its
activities are actually connected with the parliament as such" (p.20). As
stated by Duma authorities, "within one year of cooperation with the CRS,
the Duma has been equipped with modern technologies for 10-15 years ahead"
(p.18). According to a Federation Council respondent, "cooperation with the
CRS resulted in the unique computer network having no analogues even in the
executive structure" (p.19). Equally important is the fact that when in the
December 1995 parliamentary elections none of the
"reformist" parties, except Yabloko, cleared the 5-percent threshold to
bring its members to the Duma (by the party lists), the NDI and IRI lost
about 90 percent of their contacts in the Federal Assembly, whereas CRS,
whose credo was to work on an unbiased and non-partisan basis with all
factions and committees in the Russian Parliament, maintained all their
contacts.

Paradoxically, it was the low-budget ($2.5 million) CRS Program which was
abruptly stopped by the U.S. authorities in 1996, whereas multimillion NDI,
IRI and similar Western programs still promote the "reform-minded liberals"
in Russia and train "pro-Western, liberal-minded political activists
following strategies developed in Western capitals" (Mendelson, p.4, 5).

Interruption of the CRS-Russian Federal Assembly Parliamentary Program
became a part of a more general U.S. policy aimed at circumventing Russian
parliamentary processes (see, e.g., Peter Stavrakis, State Building in
Post-Soviet Russia: The Chicago Boys and the Decline of Administrative
Capacity (Kennan Institute for Advanced Russian Studies, Washington, 1993);
 Peter Stavrakis, "Bull in a China Shop: US AID's Post-Soviet Mission", 3
Demokratizatsiya 3 (Fall 1995); Janine R. Wedel, "Clique-Run Organizations
and U.S. Economic Aid: An Institutional  Analysis", 4 Demokratizatsiya 4
(Fall 1996); Janine R. Wedel, Collision and Collusion: The Strange  Case of
Western Aid to Eastern Europe, 1989-1998 (New York: St. Martin's Press,
1998)).

When it became apparent that the new Russian Federal Assembly was as
resistant to the experiments of "bolshevist monetarists" (Peter Stavrakis)
with Russian economy as the disbanded Supreme Soviet, U.S. "assistance" to
Russia gave precedence to decree-making over long-term legal institutional
development in the country. Much of the work of Western consultants and
USAID-funded programs has gone towards executive decrees rather than
parliamentary legislation. According to the  US GAO, just one AID-funded
program - the Harvard Institute for International Development (HIID) - in
1994-96 alone drafted "hundreds of decrees". As explained in the GAO
report, "HIID supported the use of decrees because it believed that they
advanced reforms"" (US GAO
Report, 1996, p.46).

The energetic work of the program came to a sudden end in May 1997, when
after a thorough investigation US AID came to the conclusion that key HIID
players in Moscow (Andrei Shleifer and Jonathan Hay) having "gained
influence over nascent Russian capital markets", had "abused the trust of
the United States government by using personal relationships ... for
private gain", and canceled the 58-million dollar Harvard project. The Wall
Street Journal drew the attention of its readers to the fact that "the
Harvard men had been assigned to promote, among other things, Western
ideals of fair play" (Carla Anne Robbins & Steve Liesman, "Harvard
Men Built Market, But Didn't Steer Clear of It", The Wall Street Journal,
August 13, 1997).

Another stunning defeat of radical "reformers" in the Russian parliamentary
elections in 1999, Putin's decisive victory in the presidential campaign,
which is viewed by most observers as the end of "revolutionary changes" in
Russia, and election of a new Republican President in the U.S. will
inevitably make it necessary for the new U.S. Administration to reevaluate
the results of its policy in Russia in the 1990s and outline a blueprint
for the next decade. The very first statements of U.S. President-elect Bush
about the necessity to reduce the role for the United States in financial
aid for Russia (The New York Times, January 15, 2001), got a positive
response in Moscow. In the words of the Duma Speaker Seleznev, "we are
tired of corruption and of our criminal leaders, who have concluded
transactions to Russia's detriment" (RFE/RL Newsline, January 15, 2001).

Whereas the programs of American assistance to dismantlement of nuclear
weapons in Russia, as well as cultural, scientific and educational
exchanges between our countries, should definitely be maintained and
further developed, continuation of the U.S. reliance on a narrow circle of
pro-Western liberal intelligentsia and "agents of democratic change"
(Michael McFaul) in Russia proves to be wasteful, eventually unproductive
for the U.S. interests and detrimental to the goals of long-term
institutional legal and democratic development of Russia. U.S. aid to
Russian "reformers" should be stopped by the U.S. Administration before
it's interrupted by the Russian Government!

On the other hand, a working group of experts of the Russian Council for
Foreign and Defense Policy (see its report on "Russian-American Relations
at the Turn of the Century": http://www.svop.ru/doklad23_3.html) formulated
its concept of "small deeds", where the "benefits are obvious for both
sides while avoiding sharp issues", as the most adequate, in the present
circumstances, form of mutually beneficial U.S.-Russian cooperation. The
assistance aimed at strengthening the system of checks and balances in the
Russian constitutional mechanism, and programs of cooperation with those
branches of the Russian government, whose position was undermined under
Yeltsin, may at least partly counterbalance the authoritarian character of
superpresidential Constitution of Russia. A new full-scale project that
would use the experience and continue the work of the CRS-Russian Federal
Assembly Parliamentary Development Program (1994-1996), and extension of
programs  of technical assistance to the Russian judicial reform (including
the Supreme Court and Cnstitutional Court of Russia), together with a
significant effort aimed at development of legal education in Russia (first
of all in the regions), should be seriously considered. In the long run,
impact of such programs on Russia's transition to the rule of law  will
prove to be more significant than just a "small deed".

*******

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

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