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CDI Library > Johnson's Russia List

Johnson's Russia List
 

   

May 27, 2001 

This Date's Issues:   5271 5272

 

Johnson's Russia List
#5272
27 May 2001
davidjohnson@erols.com

[Note from David Johnson:
1. AFP: Heyerdahl hunts Russian origins of Scandinavia's warrior kings.
2. Reuters: Ron Popeski, ANALYSIS-Russia expects minor reshuffle despite rumours.
3. AFP: Russia's struggling right opts for Nemtsov.
4. BBC Monitoring: Ekho Moskvy, Russia needs strong right-wing party, says its founder. (Nemtsov interview)
5. Stanislav Menshikov: REFORM WILL MAKE ELECTRICITY MORE EXPENSIVE. Net Result of the Battle for Control.
6. The Russia Journal: Otto Latsis, Russia needs more immigrants. Low migration growth is a serious problem.
7. Business Week: Paul Starobin, Give Gazprom a Fresh Start, President Putin.
8. The Wall Street Journal Europe: Vladimir Socor, Whose Terrorists Are These Anyway?
9. BBC Monitoring: ORT, Media tycoon seen behind latest anti-Russian campaign in USA.
10. Izvestia: Yevgeny Bai, BORIS JORDAN: I'M HERE TO STAY AT NTV. (interview)]

******

#1
Heyerdahl hunts Russian origins of Scandinavia's warrior kings

AZOV, Russia, May 27 (AFP) - 
Now aged 86, the Norwegian explorer Thor Heyerdahl, who famously crossed the 
Pacific over half a century ago in the primitive raft Kon-Tiki, has lost none 
of his taste for adventure or controversy -- as can be seen from his latest 
challenge, in Russia's Black Sea region.

Just as the Kon-Tiki voyage showed that the Polynesians could have come from 
South America, Heyerdahl is now helping archaeologists dig at Azov, south 
Russia, hoping to prove that a line of Scandinavian kings may have started 
out in this ancient port 2,000 years ago.

A passionate believer in contacts between distant civilisations and cultures, 
the still fit-looking Heyerdahl, whose bronzed face contrasts strikingly with 
his white hair, seems to relish the far-fetched theory and incongruous scene.

In the centre of Azov, where green-shuttered houses seem to slumber in the 
sun, next to the ruins of a fortress built by Peter the Great, and not far 
from where the mighty river Don flows into the Sea of Azov, fragments of 
pottery have been dug up dating back to the first century BC.

At half a dozen sites Russian students of archaeology, as well as some from 
Sweden and Norway, are searching for objects to support a theory that the 
legendary wizard-king Odin emigrated from here to Scandinavia where he ended 
up being worshipped as a god.

In Azov's museum, Heyerdahl bends over a bracelet and greenish metal buckle 
which have recently been discovered here, and which very closely resemble 
objects found on the Swedish island of Gotland.

Heyerdahl is a past master at finding such clues to the migrations of 
peoples, particularly when there is no written record.

Since the Kon-Tiki expedition, Heyerdahl has crossed the Atlantic Ocean in an 
ancient reed boat, the Ra, to confirm the possibility the Egyptians might 
have discovered America long before Christopher Columbus.

Then he sailed another reed craft 7,000 kilometres (4,000 miles) from the 
Tigris river in Iraq through Pakistan to the Red Sea just to prove the 
ancient Sumerians might have colonised southwest Asia and the Arabian 
peninsula.

He has also carried out similar exploits on Easter Island, the Maldives and 
in Peru, and his books have been translated into dozens of languages.

Heyerdahl told AFP that he had got the idea for the Azov connection from 
reading the 13th-century Icelandic saga, the "Heimskringla", during a trip to 
Reykjavik three years ago with his French wife Jacqueline.

Usually attributed to the poet-chieftain Snorri Sturluson, the saga traces 
the descent of Norway's kings back to Odin, a master wizard from the Black 
Sea region.

Most experts regard the Heimskringla as a collection of myths, but -- like 
Heinrich Schliemann reading Homer's Iliad in order to find Troy -- Heyerdahl 
became convinced that authentic history lay behind the tall tales.

He told AFP how he was particularly struck by a reference to Tanais, an 
ancient Greek colony near Azov, whose existence had remained unknown for 
centuries.

"When Snorri talks of names and places, it rings true," Heyerdahl added. The 
dates also seem to fit.

The Icelandic poet tells the story of the migration of the "people of As," 
who fled the land near the river Tanais, or Don, in order to escape from the 
Romans. He also remarks that Odin's grandson arrived in Denmark "in the year 
Jesus Christ was born."

Like a detective, Heyerdahl points out that the Roman generals Pompey and 
Lucullus defeated the Black Sea king Mithradates the Great in 66 BC, an event 
which might have prompted Odin to head north, his grandson arriving perhaps 
in Denmark two generations later.

"Everything indicates that Azov was the place referred to in the Icelandic 
saga," Heyerdahl told AFP. "I am convinced that Snorri was not making it up."

But the indefatigable explorer is careful to maintain the scepticism and 
caution that is appropriate for academic research.

"We are only at the halfway stage of our excavations. We are putting the 
words of the Icelandic poet to the test," he says.

In particular, Heyerdahl relishes the task of disproving the received wisdom 
of Norwegian academics, who regard Snorri Sturluson as a mythmaker who 
conjured up stories about legendary kings and their supposed descendants.

"I really like to take up this kind of challenge," says Heyerdahl, with a wry 
smile.

*******

#2
ANALYSIS-Russia expects minor reshuffle despite rumours
By Ron Popeski

MOSCOW, May 27 (Reuters) - An expected new reshuffle of Russia's cabinet may 
prove less dramatic than once anticipated, with only minor ministries 
changing hands and Prime Minister Mikhail Kasyanov staying in place, 
political analysts say. 

President Vladimir Putin overhauled "power ministries" in March, replacing 
his defence and interior ministers in a bid to consolidate central authority 
over the world's largest country. 

But he has maintained silence on further possible changes. 

A further revamp, the focus of interminable rumours, had been predicted for 
the end of May. But Kasyanov said at the weekend that he had asked Putin to 
put off for a couple of weeks what amounted to "fine-tuning." 

"As for the deadlines, there really is not much time...and we are beginning 
the budget process," Kasyanov told Russian reporters during a visit to 
Poland. "So I will ask the President to put off the fine-tuning...for a week 
or two." 

Kasyanov's dismissal, once considered inevitable, appears likely to be 
stayed. Analysts now see changes confined to reducing Kasyanov's five deputy 
prime ministers and weeding out second-tier ministers and remnants of the era 
of Putin's predecessor, Boris Yeltsin. 

"This is certainly not going to be a major overhaul, but rather a spring 
cleaning," a government source told Reuters. 

"You need not expect any radical shuffle. The prime minister will stay, as 
will those linked to the economy." 

Putin's engineered his first cabinet change in February, sacking his energy 
minister after thousands in Russia's Pacific region were left without heat or 
light for weeks. 

He tightened his grip on power a month later by naming Sergei Ivanov as 
Russia's first civilian defence minister and Boris Gryzlov as interior 
minister. Both were close allies from Putin's home town, St Petersburg. 

In his first year, Putin cut down other potential rivals, trimming the powers 
of local bosses. He also pledged to reform natural monopolies and that could 
mean a decision within days on the removal of Rem Vyakhirev, head of gas 
giant Gazprom. 

He distanced himself from Yeltsin, disowning business magnates who had close 
Kremlin ties and approving reinstatement of music from the Soviet-era anthem 
-- anathema to Yeltsin. 

PUTIN CEASES CRITICISM OF ECONOMIC POLICY 

But Putin's criticism of Kasyanov's economic policies early in the year, 
particularly his gaffe in proposing postponement of debt repayments to Paris 
Club members, faded as a parliamentary no-confidence vote in the government 
was crushed in March. 

Also gone is talk of a clearout of economic ministers. 

"Putin sometimes acts as a lion, cutting the Gordian knot with great speed 
when he is sure of the outcome. That was the case when he appointed Ivanov 
and Gryzlov," said Igor Bunin, Director of the Centre for Political 
Technologies think tank. 

"Sometimes, he acts like a fox, cautiously. I think we will see the lion 
again, in a few months, a year, but not now. He has dozens of options, but he 
must choose one to his advantage." 

Putin has been reassuring on government performance, playing down higher than 
expected inflation and saying positive economic trends, like growth rates, 
were being maintained. 

Most analysts say one or two of Kasyanov's deputies could face the chop. 
Speculation focuses on Alexei Gordeyev, who is also agriculture minister, and 
Ilya Klebanov, responsible for the defence industry as well as the project to 
raise the sunken nuclear-powered submarine Kursk from the Arctic seabed. 

SECONDARY MINISTERS MAY GO 

The government source suggested that those at risk included Health Minister 
Yuri Shevchenko, Science and Technology Minister Alexander Dondukov, Boris 
Yatskevich at natural resources and Vladimir Filippov at education. Also 
mentioned by commentators is Federal Affairs Minister Alexander Blokhin. 

Much has also been made of suggestions that Putin would drop his chief of 
staff, Alexander Voloshin, the most prominent leftover from the Yeltsin era. 
But analysts said they believed the time was not right for Putin to replace 
Voloshin. 

"I think it is likely that Voloshin will leave earlier than Kasyanov, but he 
won't be going just yet," said Andrei Piontkovsky, Director of the Centre for 
Strategic Studies. 

"The main feature of the changes is Kasyanov staying on. The prime minister 
is a valuable legacy from Yeltsin and would be an expensive scapegoat. But if 
the economy worsens he could go." 

******

#3
Russia's struggling right opts for Nemtsov

MOSCOW, May 27 (AFP) - 
An arduous 22-hour meeting between the very people who organized Russia's 
unsettled post-Soviet reforms ended in uneasy agreement Sunday that the 
photogenic Boris Nemtsov should head the country's struggling right wing.

A labored decision involving controversial but famed "perestroika" stars like 
Anatoly Chubais and Yegor Gaidar, known to have feuded endlessly among 
themselves, suggests that Russia's self-proclaimed reformers have made a 
choice between two options.

They will either support the current president, Vladimir Putin, in the 
scheduled 2004 elections, as they have done in the previous 2000 presidential 
vote, in the name of preserving the reforms achieved so far.

Or they will unite -- or at least try to -- behind their new, own candidate, 
Nemtsov.

After casually mentioning several times over the past days that he would not 
mind running for president, Nemtsov was finally picked by his cohorts to head 
the Union of Rightist Forces' (SPS) political committee.

The position has a rather moot job description but the summit of Russia's 
anti-communist wing left few doubts among observers here that Nemtsov has won 
the job of representing the right wing at the next elections.

Yet underlining just how unsettled Russia's opposition -- which in large part 
lost the two previous elections after failing to strike an agreement in its 
own ranks -- is, Nemtsov tried, repeatedly, to shake the hand of Chubais.

But Chubais turned away from Nemtsov, before a startled, if previously tired, 
auditorium filled with SPS members and supporters.

"I will work in a regime that is even (to all), rather than as a director of 
a political council," Nemtsov later said tartly in televised remarks.

Nemtsov, 40, was once identified by Boris Yeltsin as his favored successor 
for the presidency.

He then held a senior post in Yeltsin's government and the curly-haired, 
Nizhny Novgorod native was once viewed as the most popular political figure 
in Russia.

But Nemtsov's star faded days after Yeltsin sacked his government after it 
was forced to admit an August 1998 debt default, which also sent the value of 
the ruble plummeting, erasing Russians' life savings in days.

Nemtsov now heads the State Duma lower house of parliament's Union of 
Rightist forces, which holds 33 seats of the chamber's 450 seats.

He backed Putin in the elections, and currently badly trails the Russian 
president in popularity polls.

Putin's support meanwhile has been holding steady at up to 80 percent.

*******

#4
BBC Monitoring
Russia needs strong right-wing party, says its founder 
Source: Ekho Moskvy radio, Moscow, in Russian 1335 gmt 25 May 01 

The leader of a right-wing faction in the State Duma has said unification of 
democratic movements was a historic necessity because until now no right-wing 
party has succeeded into turning into a major political force to be reckoned 
with. Interviewed on the Ekho Moskvy radio, leader of the Union of Right 
Forces Boris Nemtsov said he was against party financing from the budget and 
expressed the hope that the forthcoming founding congress of the Union of 
Right Forces political party would be successful. The following is the text 
of the interview broadcast on 25 May. Subheadings have been inserted 
editorially. 

Union of Right Forces against party financing from the budget 

[Interviewer Merkulova] The law on political parties is being considered in 
the second reading. It contains certain elements that may provoke serious 
disagreement. To begin with, let's talk about the URF position on party 
financing from the budget, as being proposed. 

[Nemtsov] The thing is that from the very beginning the URF said that we were 
against budget financing. Firstly, simply because there are too many parties 
and there is not enough money for all of them. Secondly, there are some very 
important items of spending in the budget that don't receive financing. For 
instance, you can see what is happening in Yakutia right now: there is a 
shortage of medicines and food, the president had to go there. Meanwhile, the 
deputies of the State Duma are discussing how they are going to finance 
themselves. Those who advocate increasing financing simply behave 
disgracefully, in my view. 

The most interesting thing is that after the first reading, the proposal on 
state financing not only did not disappear, but, on the contrary, some 
legislators are trying to have it increased by a factor of 2.5. Moreover, 
this financing will be in line with the number of votes given for a party. 
The Communists, naturally, are most interested in budget financing. They are 
used to live at the expense of the state anyway. This is how they existed all 
the 70 years of Soviet power. And now they are trying to restore their former 
financial position at the expense of the taxpayer, at the expense of the 
state. But there are all indications that even the pro-Kremlin factions are 
inclined to take the same position, at least their preliminary decision was 
to support [budget] financing. 

Under the circumstances, if our amendment to cancel [budget] financing is not 
passed, we shall vote against the law in the second reading and, most likely, 
as a whole too, if nothing changes. 

[Merkulova] What do you think of [Fatherland - All Russia movement leader 
Yevgeniy] Primakov's proposal that parties should be compensated according to 
the results of the election campaign? 

[Nemtsov] At present parties already receive certain funds if they take the 
decision to take part in elections. I think that the existing norm which 
provides some financing is enough. But if all the expenses of a party are 
financed from the budget, I think we will end up with no budget left, we will 
have to cancel the financing of child allowances, not to mention the problems 
of the municipal services, not to mentions the problems relating to teachers' 
and doctors' wages, etc. In my view, deputies are showing extreme selfishness 
when resolving the issue which concerns them - the dear ones - personally. I 
think this is simply a disgrace. 

And another thing. If a party enjoys people's trust, it should not be 
difficult for it to find money. Firstly, its supporters, if they support the 
party, should give money. Secondly, companies that see in this party some 
prospects for themselves, will also support it. So, I don't quite understand 
why one should go into the budget's pocket. 

I can understand why the Kremlin is doing that - he who pays calls the tune. 
That's why the country's leadership is interested in the financing from the 
budget in order, if needed, to use this tool to control the political 
situation. But I think that party functionaries will find it difficult to 
explain to their voters why they fought for it. In general, I think that, had 
this law been discussed on the eve of parliamentary elections, our amendment 
to cancel [budget] financing would have most likely been supported and no 
Zyuganov or anyone else would have dared to say that they are prepared to use 
the state treasury in order to provide for ourselves. 

Incidentally, what sort of money are we talking about? If, for example, we 
look at the financing of the Communist Party, it is between 700 and 1,000 
dollars a year. 

[Merkulova] Does it come from the budget? 

[Nemtsov] Yes, from the budget. Yes, it is a very big amount. All the parties 
taken together will mean four times more, in other words between 3m and 4m 
dollars a year will be spent to support the parties which passed the 
3-per-cent barrier, not even the 5-per-cent barrier. Plus enormous 
expenditure on the upkeep of the State Duma. In short, it will cost the 
taxpayer a pretty penny. I think that, if this norm is passed, the same will 
happen at regional level. Regional parliaments will vote in favour of 
increasing financing for the parties which took part in the elections. Thus, 
it will result in a very large sum. I think that we have no moral right to do 
that. 

On the future of regional parties 

[Merkulova] Talking of regional parties - what will happen to them? 

[Nemtsov] The current bill does not include regional parties, it only 
includes nationwide parties. 

[Merkulova] Is it good? 

[Nemtsov] On the whole, on the one hand, it cements the country's political 
life and - 

[Merkulova, interrupting] Yes, except it cements it only within the [Moscow] 
ring road boundaries - 

[Nemtsov] Not exactly. The thing is that, if only nationwide parties can take 
part in elections, it means that in Krasnoyarsk Territory, in Kamsk, for 
example, we will have the URF faction. Or a similar faction might appear in 
the Far East, for example. From the point of view of parties that are 
currently represented in parliament, it is a favourable norm, and we are in 
favour of it, to be honest with you. 

One should also bear in mind that many regional parties are set up by 
governors and are used by them to realize their personal political goals. In 
other words, these parties do not defend some basic interests, the interests 
of some social groups, but more likely defend the power interests of regional 
leaders. In this respect, banning regional parties from elections makes sense 
from the point of view of uniting the country. 

On the other hand, one should bear in mind that there will still be regional 
parties. They have a right to exist and, providing they unite and, for 
instance, defend the interests of a Russian province, they will acquire the 
status of nationwide parties and in this respect there will be no 
discrimination. I don't regard this norm as harmful or dangerous. There are 
more dangerous things that are to do with repression actions stipulated in 
the law. The activities of certain parties can be suspended if they violate 
not just the constitution but, for example, the tax legislation or the 
ecological legislation, which is ridiculous. 

[Merkulova] What do they to do for that? 

[Nemtsov] It seems they have to annoy the authorities so much that they - the 
ecology committee - sends [a complaint], so that an organization can be 
closed on this ground. We, on the contrary, believe that the only reason for 
cancelling any party's activities is the violation of the constitution. If a 
party calls for overturning the existing regime, or if it is fascist or 
extremist organization, it violates the constitution and, hence, should be 
closed. 

Parties unification is a historical necessity 

[Merkulova] Boris Yefimovich, what do you think about a trend towards the 
enlargement of parties which we can observe now and, in this connection, I've 
got the following question: will the right succeed in creating a powerful 
party? 

[Nemtsov] You know, it is a historical necessity. The democratic movement has 
existed in Russia for 10 years now. There have been hundreds of parties, many 
of them tried their luck in the 1993, 1995 and 1999 elections. We know the 
result: no-one has succeeded in building a strong right-wing party in the 
past 10 years. None of the democratic parties has succeeded in being 
represented at, above all, municipal and regional levels. In the past 10 
years we have always been a minority in the Russian parliament. Therefore, if 
we are talking about that we are here to stay, we need to unite and create a 
powerful organization, and this is what we are doing. Despite the doubts 
expressed by observers, we have managed to dissolve nine organizations, the 
founders of the Union of Right Forces, and the URF uniting congress will be 
held the day after tomorrow. I believe and I hope that it will be successful 
and that the unification will materialize. 

I am against an artificial enlargement of parties. You know, there are two 
trends. Some parties are set up in the Kremlin offices - I mean Unity and the 
current merger of Unity and Fatherland. Moreover, it is being done very 
quietly, without fuss, and it is clear why. Because there are those who 
commissioned it, there is the boss. The boss proposed to the leaders of some 
parties that they unite or face the music, and they, without much 
consideration, agreed. You know, I was in Rostov yesterday where I was asked: 
why Unity and Fatherland are uniting in such an elegant way and you, on the 
contrary, have some interparliamentary debate, you debate all the time, you 
have alternative elections. The only difference is that Unity and Fatherland 
are being united from the top and will live only as long as their bosses 
survive in their offices, while the URF is being united from the bottom, 
which means it is going through birth-pangs but it will come to stay for a 
long time. 

Calm attitude to disagreement prevails in right-wing unification process 

[Merkulova] Incidentally, [Russia's Democratic Choice prominent member] 
Sergey Yushenkov compared the future of the URF to Unity and, in this 
connection, the question arises about disagreements that may arise: As far as 
I could see from news agencies reports, Yushenkov and [prominent human rights 
campaigner and member of the URF] Sergey Adamovich Kovalev are leaving you. 

[Nemtsov] I think that they have an opportunity to take part and, naturally, 
we are inviting them to our congress, and it will be marvellous if they 
attend. Of course, our hair was not cut using the same comb [Russian saying; 
cf. to put everyone in the same mould] and everyone has their own position, 
but I don't think it is a reason for splitting up. 

On the contrary, the wisdom and efficiency of our organization are explained 
to a large extent by the fact that we have a rather calm attitude towards 
disagreements. Let's recall, for example, the presidential elections. We had 
different positions regarding the presidential elections. Nevertheless, the 
URF has been preserved and it has even strengthened its positions in the 
State Duma. 

Our views differed on, for example, the so-called vertical of state power. 
Nevertheless, we voted in a consolidated way on basic issues. In general, if 
you want to unite, you'd better look for common things and pay less attention 
to disagreements. At present nobody can create a refined monolithic 
organization in which everyone would say the same things and think the same 
way. It is a crazy ambition. 

[Presenter in the studio] It was Boris Nemtsov, the leader of the URF faction 
in the State Duma. He was the guest of Irina Merkulova. 

******

#5
From: "Stanislav Menshikov" <menschivok@globalxs.nl>
Subject: REFORM WILL MAKE ELECTRICITY MORE EXPENSIVE
Date: Sun, 27 May 2001 

"MOSCOW TRIBUNE", May 25, 2001
REFORM WILL MAKE ELECTRICITY MORE EXPENSIVE
Net Result of the Battle for Control

By Stanislav Menshikov

Over the last weekend the government approved the latest version of the
electricity reform. It might well not be the final word. Another month is
provided to include last minute amendments. The battle for control of the
electric power industry is still on, and rival factions are still locked in
on a few major points.

Last December Anatoly Chubais, head of RAO UES nearly succeeded in having
his own plan adopted. Contestants saw it as another attempt at selling
government assets to insiders at bargain basement prices. Mr. Putin
appointed a special State Council Working Group headed by Tomsk governor
Viktor Kress to look into the matter, compare possible alternatives, and
come up with recommendations. At the same time German Gref's Economic
Ministry was fine tuning the initial Chubais proposal. Both reports were
presented to the president who, in his typical King Solomon manner, ordered
the government to find the "golden mean". The faithful Mr. Kasyanov did so
the very next day. Chubais said he was satisfied but Andrei Illarionov
accused the cabinet of ignoring the president's specific orders. The stage
was thus set for another bout between the Kremlin and the government.

On paper the reform looks smooth. It will last 8 to 10 years and go through
three phases. At first, in 2001-2004 the RAO UES would create affiliate
companies to manage federal power stations and two other companies, one to
manage the grid, the other to serve as dispatcher. In 2004-2006, RAO UES
would cease to exist as one company and would be divided into two holdings
in charge of the power affiliates and the grid. In the final two years, the
system of companies would be further perfected. Starting with 2004,
companies would set their own prices for electricity in all regions, except
the power shortage Far East and Kamchatka.

What does all this mean in simple terms? The main fight was around who stays
in control. The Kress group wanted to dissolve RAO UES at the start and
transfer direct control to the government. Chubais managed to delay his
ouster until 2004. Economically, the most important issues are whether
electricity becomes more expensive and whether there will be an adequate
supply of it in the coming years.

The answer to the first question is crystal clear. Yes, electricity will
become more costly for the simple reason that government control over prices
will be lifted. Because generating companies would become independent, they
would proceed with maximising profits in initially monopolistic markets.
Eventually market competition could lead to lower costs and prices. But
realistically that could happen no sooner than after 2010. Mr. Gref
estimates a price rise of 2 to 2.2 times, but chances are that prices would
rise much faster. The macroeconomic effect would be accelerating general
inflation, restricting real disposable incomes of consumers, and slowing
down overall economic growth.

Will there be enough electricity? This depends on prospects for capital
investment. The idea is for the generating companies to attract capital by
selling new shares of stock in security markets. But unlike oil, gas, or
aluminium, the electric power industry cannot count on natural rent and high
export prices to produce superprofits. The chances of it becoming attractive
for private investors is pretty dim. So far, there have been no signs of
wide investor interest. Shares of RAO UES have been falling all along.
Foreign interest was reduced to pension funds portfolio investment and was
not great. An economic revolution would be needed to change the tide. Inside
the country, exporting companies are the only ones with capital to spare,
but they have shown no interest.

Therefore, chances are that electricity shortages would continue and might,
in fact, become more severe if the newly created independent companies start
closing their least profitable generating capacities.

But the conflicting parties are currently more interested in issues of
control than in prices and investment. Mr. Chubais sounds like a winner who
can now proceed with projects that guarantee personal enrichment for himself
and his close friends and permit peddling political influence in favour of
his newly created unified right-wing party. While Mr. Gref warned Mr.
Chubais to strictly follow the government line if he wanted to stay in
charge, the real struggle will be between the ambitious RAO UES president
and Mr. Putin. Putin made it clear he wants oligarchs to stick to business
and stay out of politics. But Mr. Chubais keeps his eye on the Kremlin
throne and needs control over electric industry finances as a base in the
eventual battle for the Russian presidency.

As matters stand, Putin has the upper hand and can fire Mr. Chubais at his
will. But he prefers to wait. The president failed to support the Kress plan
that would effectively rid him of an ambitious political rival. The reasons
are not clear. Perhaps he plans on making Chubais even more unpopular by
having him take the claim for more costly electricity. Their feud will thus
develop at the expense of the consumer.

******

#6
The Russia Journal
May 25-31, 2001
Russia needs more immigrants
Low migration growth is a serious problem
 
By OTTO LATSIS 

At first glance, demographic statistics for the year so far in Russia look
promising. The birthrate for the first two months of the year increased by
almost 5 percent compared to the same period in 2000. At the same time,
mortality decreased. 

True, the mortality rate still exceeds the birth rate as it has done every
year since 1992. Natural population decline due to death so far is more
than 8 percent lower than that of last year. The apparent paradox, however,
is that Russia’s population declined by 157,800 people from January to
February 2000, but by 163,900 people over the same period this year. Fewer
people have died, but population decline has increased. How is this possible?

The secret lies in a decrease in population growth through migration.
Migration growth for the first two months of 2000 was 37,800 people (60,200
people took up permanent residence in Russia and 22,400 left). But this
figure for the first two months of this year was only 12,200 people (29,600
people came to Russia and 17,400 left).

This means that migration growth compensated the mortality rate by only 7.8
percent – the lowest figure since the Russian population began declining in
1992. In the early part of this period, migration compensated for natural
population decline by almost three-quarters. But since then, this ratio has
decreased steadily, and now the migration inflow does hardly anything to
offset the mortality rate.

Is this good or bad? It’s a question of population decline overall and of a
decrease in the number of people emigrating to Russia. Population decline
itself is nothing unusual. Most European countries have a shrinking
population. In some countries, the authorities themselves enforce measures
designed to keep the population from growing. China – home to one-fifth of
humanity – is the best example of this.

But Russia has different problems. It doesn’t have enough people to settle
its vast territory and faces labor shortages. At the moment, there are 5
million people who have come to Russia temporarily to work. In the long
term, declining population density in Russia’s eastern regions could create
serious geopolitical problems and lead to the emergence of a "Siberian
Kosovo."

Serious demographers don’t believe the state can realistically have any
direct influence on the birth rate, which develops according to its own
laws and is influenced above all by processes such as urbanization.

More realistic is influencing the mortality rate. Though the mortality rate
in Russia has decreased this year, negative factors have not decreased with
it, but have intensified. The number of deaths from accidents, poisonings
and injuries have increased, though these are precisely the causes the
state can have most influence on. The number of people murdered or killed
in transport accidents or as a result of accidental alcohol poisoning has
increased. The number of deaths due to various diseases has decreased
slightly this year, though it remains high. Here, too, the state can do
something to influence the demographic situation.

But where the state can do the most is in the area of immigration policy.
Ordinary people and bureaucrats alike have their prejudices against
immigrants, but for the most part, they are well-educated, well-qualified,
hardworking and law-abiding, and they tend to be younger than the local
population.

But more important is the fact that Russia has no other way to offset its
rapid population decline and the negative consequences it brings.
Unfortunately, however, the state still has no general immigration policy
that would enable it to attract needed migrants – above all from the former
Soviet republics.

There was spontaneous migration from these countries, but this is dwindling
now, as can be seen by the decrease in immigration from Kazakstan, Ukraine
and Uzbekistan, previously the main providers of immigrants to Russia. The
spontaneous flow is ending but no effort has been made to encourage an
organized immigration flow, as in the United States or Israel. If this
situation continues, it will take a lot of work in the future to put right
the negative consequences.

******

#7
Business Week
June 4, 2001
Commentary: Give Gazprom a Fresh Start, President Putin (int'l edition)
By Paul Starobin 

Russian President Vladimir V. Putin has a big decision to make: Whether to 
retain Rem Vyakhirev as CEO of Gazprom (OGZRY), the massive gas company that 
counts the state as its single largest shareholder. Vyakhirev's contract 
expires on May 31, and Putin has the votes on the board to bring in a 
newcomer.

It should be an easy call. Gazprom's opaque, retro-Soviet operating style 
is crimping an economy Putin has vowed to remodel along 21st century market 
lines. But the politics of reform are never simple in Russia. The Gazprom CEO 
did the Kremlin a big favor by removing the NTV television station from the 
hands of a Putin critic, Vladimir Gusinsky. (Gazprom is a major NTV 
investor.) Putin may thus feel obliged to repay a political debt by letting 
Vyakhirev, 65, stay--or tapping a Vyakhirev deputy as the new chief.

Such impulses should be resisted. The case for a fresh management team at 
Gazprom--Russia's biggest company, on target to reap $21 billion in sales 
this year--rests on two sturdy pillars. The first is that the Vyakhirev 
regime is blocking a sensible if painful reform plan that is crucial to the 
modernization of the Russian economy and supported by German Gref, Putin's 
Economics Minister, as well as one of the five government representatives on 
Gazprom's board.

The Gref plan would require Gazprom to open its monopoly pipeline system 
to all gas producers in Russia at reasonable rates. Eager for this 
opportunity are big oil companies with large gas fields: These companies now 
account for only 5% of Russian gas production, but their market share could 
reach 15% within three years if they are allowed access to Gazprom pipelines 
at market-based rates, says analyst Steven Dashevsky of Capital Group Aton in 
Moscow. Gazprom currently accounts for 88% of total industry production.

Putin should also end the devil's pact that Vyakhirev's regime has thrived 
on. The government makes Gazprom sell gas at artificially low prices to 
industrial customers, a practice that perpetuates the inefficiency that 
plagues Russia. But Gazprom gets a generous payback: abundant tax credits and 
a virtual monopoly on the export market, where prices are nine times higher 
than the subsidized rate at home. Its hard-currency earnings are expected to 
reach $15 billion this year.

The second reason for Putin to bring in an outsider is to strike a blow 
against the cronyism that prevails at Gazprom and too many other Russian 
companies. Documents filed with Russia's Federal Securities Commission show 
that a prime Gazprom pipeline contractor, Stroytransgaz, is at least 60% 
owned by Gazprom managers and relatives, including Tatyana Dedikova, daughter 
of Vyakhirev. Yet the Vyakhirev regime has paid little heed to minority 
shareholders who say such relationships are a form of asset-siphoning and a 
big reason why Gazprom's vast reserves are valued at a 90% discount to those 
of Western companies. The first task for a new CEO is to spend ``a couple of 
years cleaning up shop,'' says minority director Boris Fyodorov, a Yeltsin 
administration policymaker who is a vociferous Vyakhirev critic. Vyakhirev 
declined to comment on allegations of corruption.

This is not just an internal Russian matter. Gazprom is Europe's largest 
gas supplier--last year, it exported $3.5 billion worth to Germany. The sole 
Westerner on the board is Burckhardt Bergmann, vice-president of Germany's 
Ruhrgas, a gas distributor. Bergmann has been a Vyakhirev supporter, but 
Ruhrgas declined to state a position on his future. A spokesman says Ruhrgas 
hopes Gazprom will improve its corporate governance.

Gazprom management is not to blame for all the problems that afflict the 
company: It is the state that has forced Gazprom to subsidize the Russian 
economy with cheap gas. But with Putin's team coalescing behind structural 
reforms, new managers are needed to implement new policies. Gazprom shares 
could ``double'' if Putin brings in new management, says gas-industry analyst 
Steve Allen of Moscow broker Renaissance Capital. But if Putin shies away 
from this difficult task, investors will see another reason not to invest in 
a nation that continues to lag well behind Poland, Hungary, the Czech 
Republic, and the Baltic states in its adaptation to a post-communist world. 
The stock market has it right: Putin should evict Vyakhirev.

*******

#8
The Wall Street Journal Europe
May 25, 2001 
East of the Oder
Whose Terrorists Are These Anyway?

By Vladimir Socor. Mr. Socor is a senior analyst for the Jamestown 
Foundation, publisher of the daily Monitor.

This week in Yerevan and a week later in Minsk, CIS summits will witness new 
attempts to create a political-military bloc under Russia's leadership, 
ostensibly in order to combat international terrorism. Yet, few if any of the 
11 member countries share Moscow's view or trust Moscow's motives when it 
brandishes the specter of terrorism. And almost all of these countries are 
reluctant to join Russian-led "antiterrorism" collective forces. The few 
among these countries that do face terrorist threats would clearly prefer to 
rely on Western technical assistance and legitimate international mechanisms, 
rather than reconstitute a Soviet-type alliance to deal with that problem.

No one has seriously suggested that international terrorism poses an actual 
threat in the Central-Eastern European area of the CIS. In Belarus, President 
Alexander Lukashenko uses an entirely different pretext -- namely, NATO's 
enlargement -- to justify his alliance with Russia. As for "terrorists," 
that's how Mr. Lukashenko, in his flights of rhetoric, describes activists of 
his own domestic political opposition.

The president, now seeking reelection, has taken to accusing the Organization 
for Security and Cooperation in Europe of training "fighters" to topple his 
regime. By that he means OSCE seminars for election observers. Last week the 
chairman of the Belarusan KGB (still so named), Leonid Yerin -- a Russian 
citizen and career officer of Russia's security services, transferred to 
Belarus -- officially threatened to expel the OSCE mission. Mr. Lukashenko's 
foreign affairs ministry followed on cue.

In Georgia, President Eduard Shevardnadze has narrowly survived two 
assassination attempts -- a car bomb in 1995 that wounded him and a grenade 
attack in 1998 that killed the bodyguard riding next to him. Western 
observers, including diplomats in Tbilisi, generally suspect Russian security 
agencies to have been involved through proxies. The presumed organizer of the 
first attempt, Igor Giorgadze -- an ex-KGB officer -- was spirited within 
hours from Tbilisi by Russian military plane.

Sought by Georgia for investigation and trial on terrorism charges, Mr. 
Giorgadze has enjoyed a safe haven in Moscow, sputtering his threats against 
Mr. Shevardnadze in particular and Georgia in general in media interviews, 
even as the Russian government claimed to be ignorant of his whereabouts. 
Last week in Tbilisi during an international conference of the Interpol, 
Georgia cited recent evidence that Mr. Giorgadze has been moving between 
Russia, Belarus and Syria. Russia's representatives responded with the usual 
plea of ignorance.

These days, Chechen commanders such as Shamil Basaev and Ruslan Gelaev top 
the Russian authorities' wanted list as the ultimate "international 
terrorists." This is a classic case of Russian security services losing 
control over forces they themselves created. In 1992-93, the Russian 
military's Main Intelligence Department (GRU) armed and trained Messrs. 
Basaev and Gelaev and hundreds of Chechen fighters, throwing them into battle 
in Abkhazia alongside Russian soldiers and Abkhaz paramilitaries against 
Georgia. The GRU and its Kremlin backers fanned ethnic and religious conflict 
-- a familiar method of terrorism sponsors -- to defeat Georgia in that war. 
It was only later that these Chechens turned against their original sponsors; 
again, a familiar story in the lawless world of gunmen and their handlers.

Georgia and neighboring Azerbaijan firmly believe that "international 
terrorism" and the externally supported armed ethnic separatism are 
indistinguishable, and thus ought to be resisted by the international 
community. Azerbaijan outspokenly reaffirmed that position at last week's 
session in Baku of the CIS Defense Ministers' Council. Within the CIS, this 
view finds sympathy with Ukraine and Moldova, both of which are especially 
interested in upholding the principle of the territorial integrity of states.

Moldova has been splintered through the separation of Transdniester, where 
Russian army troops prop up the breakaway authorities. Those seized power by 
armed insurrection in the first place. A group of ex-KGB and OMON (special 
forces) officers, arrivals from Russia, oversee the Transdniester internal 
security services. Some of these officers -- such as Vladimir Antyufeyev, now 
a General and "security czar" of Transdniester -- had earlier operated in the 
Baltic states and are wanted for their role in murderous reprisal operations 
in 1991 in Latvia and Lithuania. Figures like Mr. Antyufeyev and Mr. 
Giorgadze, and their supporting networks, are emblematic of what may be 
termed post-Soviet transnational terrorism, an unofficial tool in the panoply 
of tools of Russian policy.

Armenia is a unique case in the CIS as a country undermined by home-grown 
political terrorism. During the years of independent statehood, a long row of 
Armenian officials have been gunned down or blown up as a means of 
account-settling among rival groups. Notorious cases include the October 1999 
assassination of the prime minister, the parliamentary chairman and six other 
officials in the hall of Armenia's parliament, followed by the March 2000 
fusillade which wounded the president of Karabakh. Almost all of the cases 
remain unresolved because the traces led to influential circles in the 
military, the security services and the shadow economy. In the Karabakh case, 
however, a former defense minister -- hero of the war against Azerbaijan -- 
and his military associates were recently found guilty and sentenced.

In Central Asia, the Islamic Movement of Uzbekistan (IMU) is a genuine 
international terrorist movement, so classified both in that region and in 
the West. The Russian government is second to none in denouncing the IMU. Yet 
IMU's guerrillas are, for the third consecutive year, crossing 
Russian-guarded borders in order to attack Uzbekistan and Kyrgyzstan from 
sanctuaries in Tajikistan. The latter country hosts powerful Russian forces, 
which could easily suppress IMU's base camps from the air. Many observers in 
the region and beyond have had to conclude that Moscow allows the IMU a 
certain leeway of action to maintain a controlled level of instability in the 
region, increase the countries' sense of insecurity, render them dependent on 
Russian assistance and pull them into a Russian-led bloc under the banner of 
antiterrorism.

All this is well understood in most CIS countries; but not all are strong 
enough to cope with the manipulative use of the terrorism threat. The 
upcoming summits will probably highlight a gap between two groups of 
countries: a core group that will form, however reluctantly, "antiterrorist" 
collective forces under Russian command, and another group -- the CIS soft 
periphery -- of countries that strive to preserve their non-bloc status.

******

#9
BBC Monitoring
Media tycoon seen behind latest anti-Russian campaign in USA 
Source: Russian Public TV (ORT), Moscow, in Russian 1700 gmt 26 May 01 

This week Moscow newspapers of most diverse political hues wrote about yet 
another anti-Russian campaign under way in the USA. This time its protagonist 
is Tom Lantos, an influential congressman from the Democratic Party. He is 
pushing for a resolution suspending Russian membership of the G8 until 
freedom of the press is established in Russia, as he puts it. Andrey Baturin, 
our correspondent, is trying to find out why this campaign started precisely 
now. 

[Correspondent] The beginning of this campaign coincided with [media tycoon] 
Vladimir Gusinskiy's arrival in the USA and his numerous meetings with US 
audiences. Here is just one quote from Gusinskiy: It's important that Western 
society define boundaries for the current Russian leaders which they mustn't 
overstep. 

One can find this situation amusing because it's precisely in Russia that 
Gusinskiy has accumulated the wealth he is now using against Russia. 

[Dmitry Simes, captioned as political analyst, president of Nixon Centre, 
Washington]
Moscow should be quite clear that, using the money he made in 
Russia, Gusinskiy has invited the best, the most influential and efficient 
people to represent himself, and this explains in part - not entirely but in 
part - the US reaction to the whole situation with regard to NTV. 

[Correspondent] This week "Moskovskiy Komsomolets" newspaper published the 
article "Bought-Off States. Who `Took Out Contract' on Russia?". Its author 
writes that former media tycoon Vladimir Gusinskiy decided to punish Russia 
for the loss of his empire. For a start, he intends to expel it from the G8 
and, ideally, to make Moscow and Washington quarrel. The article argues that 
Gusinskiy plans to attain this through the US authorities. Whereas before the 
US State Department regarded Gusinskiy's empire as one of its resources, now 
Gusinskiy regards the State Department and Congress as his resources, 
unquote. 

I'm not talking about Gusinskiy's delusion of grandeur here. This reversal is 
theoretically possible given two conditions: first - big money and second - 
who your lobbyist in Washington is. Two major structures are working for 
Gusinskiy in the USA, the Apco and Akin Gump companies. The former is led by 
ex-congressman Don Bonker. At one time he and his friend in the Democratic 
Party, Tom Lantos, pushed through the Congress the first resolution in 
support of Gusinskiy. Now Lantos is trying to push through another 
resolution, this time about expelling Russia from the G8. Curiously, Lantos's 
view coincides with that of former media tycoon. 

As for the second company, Akin Gump, it's quite known in the US capital too. 

[Simes] If you get a call from such a company as Akin Gump and are asked for 
a meeting, Washington responds to such calls and this, naturally, is a form 
of political pressure. 

[Ariel Cohen, captioned as political analyst, Heritage Foundation, 
Washington]
Akin Gump is one of the oldest lobbyist and legal offices in 
Washington. It employs Strauss, former US ambassador in Russia, who is also 
former chairman of the Democratic Party. It also employs a number of other 
former high-ranking US government bureaucrats. 

[Correspondent] Gusinskiy's projects in this company are handled by Ms Toby 
Gati, who in the past was head of the intelligence section at the US State 
Department. Of course, given such lobbyists, a lot can be achieved in 
Washington. But everything has its limits, though. 

[Ariel Cohen] They can work on bureaucrats; however, the government is an 
independent community representing the interests of the USA as a world power 
rather than the interests of individual lobbyist structures. 

[Correspondent] These include the interests of such clients as Gusinskiy, 
whatever methods he may be using for this purpose 

Leading American political analysts don't believe that the former media 
tycoon may really cause a rift between Moscow and Washington. They think that 
an exacerbation of relations with Russia is not in America's strategic 
interests, especially on the eve of the first meeting between the two 
presidents in Ljubljana. 

******

#10
Izvestia
May 25, 2001
BORIS JORDAN: I'M HERE TO STAY AT NTV
Boris Jordan is afraid of financial-industrial groups
Author: Yevgeny Bai
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
BORIS JORDAN, GENERAL DIRECTOR OF THE NTV NETWORK, WANTS TO TURN NTV INTO A STRONG MEDIA COMPANY, THOUGH HE SAYS NTV IS NOT READY FOR FULL-FLEDGED STRATEGIC INVESTMENT YET. HERE HE DISCUSSES PLANS FOR THE FUTURE, SAYING THE PRIORITIES ARE TO CUT COSTS AND GET OUT OF DEBT.

BORIS JORDAN, GENERAL DIRECTOR OF THE NTV NETWORK, MADE A SPEECH AT THE NIXON CENTER IN WASHINGTON, TRYING TO SHARE HIS VIEWS ON THE RECENT NTV SCANDAL. HIS SPEECH HAS STIRRED PEOPLE; EVEN MR. JORDAN DID NOT EXPECT SUCH A RESPONSE. HERE JORDAN EXPLAINS CERTAIN DETAILS AND DISCUSSES THE COMPANY'S PLANS FOR THE FUTURE.

Question: Could you explain why you decided to make a program 
statement in the US, not in Russia? Do you feel more comfortable here?

Boris Jordan: This was not a program statement. I spoke about 
general principles of NTV's activities and the problems we have to 
resolve. The program will be submitted to the board of directors 
within a month, and only after that it will be announced.

Question: The Russian electronic media quoted you as saying that 
the NTV management intends to start mass dismissals.

Jordan: Cuts will take place, but they will not concern the news 
block. I do not intend to dismiss correspondents. There are no plans 
for staff cuts. However, there is an actual fact. The NTV team 
consisted of 1,700 people two months ago. According to official papers 
only 25% of them were journalists. Others worked as drivers, 
producers, and representatives of diverse administrative departments. 
It is natural that some dismissals will take place. NTV cannot exist 
with expenses of $94 million and revenues of 78 million. We will not 
survive such losses. The Russian advertising market is worth $400 
million at most. We have dozens of TV channels, and only a few of them 
have taken 50% of all advertising. We plan to receive about $80 
million. We have to cut costs in order to become profitable and to 
repay debts.

Question: What is your concept for resolving the debt problem?

Jordan: We have at least three levels of debt. We owe over $90 
million to Gazprom and Media-Most. In addition we have to repay debt 
to producers, satellite channels, state-owned TV and radio companies, 
and Western providers. And at last we have to pay wages to our 
employees. NTV has not paid anything to anybody for six months. We 
will be able to restructure this huge debt in a year, and will start 
repaying it.

Question: Judging by your statements in the Nickson Center you 
intend to turn NTV in an entertainment rather than news channel.

Jordan: Nothing of the kind. NTV will remain a news channel, this 
is our invariable position on the market.

Question: Did you decide to let Tatyana Mitkova host a news 
program in order to increase the ratings and to attract advertising?

Jordan: We had to launch a shock news program. I talked to 
Tatyana and she agreed to host the news program at 7 p.m. Savik 
Shuster who hosts the program Geroi Dnya (Hero of the Day) is another 
trump card of NTV. So, we have two very significant presenters.

Question: To all appearances NTV's foreign correspondent network 
will not change. Recently the press said that New York and Paris 
correspondent will leave the channel.

Jordan: No one leaves NTV. I talked to almost all of them. We do 
not intends to cut this network, we will expand it.

Question: Did you come to the US to improve your image?

Jordan: Truly speaking, Washington's reaction to changes on NTV 
was negative. The Western press and politicians criticized our moves 
and considered them as an encroachment on freedom of speech in Russia. 
I have come here in order to meet with representative of the US media. 
I have held about ten such meetings with almost all big newspapers. I 
have met with representatives o the George W. Bush's administration, 
congressmen and senators engaged in creating policy toward Russia. I 
have expressed my point of view to them; NTV was not an independent TV 
channel, it carried out the policy of its owner who plunged deep into 
Russia's politics. I explained to them that I cannot understand how a 
TV channel can be independent if it had borrowed about $1.5 billion 
from government structures. I mean the Finance Ministry, 
Vnesheconombank, Mezhprombank, and other organizations. Judging by its 
sources of funding NTV depended on the state more than state-owned TV 
and radio companies. I told my interlocutors that we are working on a 
charter which will be submitted to NTV's team in a few weeks. 
According to the charter the management will never intervene in the 
activities of the creative group headed by Tatyana Mitkova. The 
channels information policy will be determined by journalists, but not 
the management of the company. in addition the shareholders will not 
be able to influence on the channel's policy.

We intend to create an advisory body which will consist of three 
foreign experts (two from the US and one from Western Europe) and 
three Russian journalists.

Question: With whom did you meet in the US?

Jordan: I do not want to announce their names. We have agreed 
that these were private meetings. US politicians do not want to become 
involved in public discussions owing to an ambiguous attitude to NTV 
in the US. However, there is a very important subject which I want to 
mention. The matter concerns a resolution (it has been submitted by 
Congressman Lantos); there are many distorted facts in it. The 
congressman demands that Russia be disqualified from the G8 because 
"an evident violation of freedom of speech". This campaign initiated 
by one person can become a catastrophe for the US-Russian relations. I 
have proposed quite a different solution to Americans: to watch our 
programs and follow our activities, but not to listen to what other 
people say about our company. This will allow the US to decide if we 
depend on anyone.

Question: Do you mean George W. Bush's administration is 
misinformed about events on NTV?

Jordan: Yes, I do. It is another thing that there is a problem of 
violation of the press' right in Russia, particularly in regions. I 
cannot deny this fact. But this question does not have anything to do 
with what has happened to NTV. I will visit Western Europe in the near 
future. I do not want to hide that I go there to improve NTV's image. 
The whole world follows what has happened on NTV.

Question: Are you continuing negotiations with Ted Turner? Do you 
have specific plans for attracting foreign investment?

Jordan: We do not hold negotiations with anyone. The company is 
not ready for full-fledged investment. In principle I am interested in 
strategic investment. But first of all we have to finish an audit, to 
restructure debt, and to create a new broadcasting schedule. After 
that we will be able to define terms for investors. NTV must remain a 
Russian channel. However, we could offer a share in our company to 
foreign investors who will give a potential of modern management and 
access to the Western market. capital can be found in Russia. At the 
same time I am afraid of the participation of financial-industrial 
groups in our projects. This is fraud with passing the channel from 
one oligarch to another.

Question: Do you plan to remain as general director of NTV for a 
long time?

Jordan: I do not conceal that I have projects in radio and 
publishing. I want to build a strong media company based around NTV. I 
hope that I have come to NTV to stay.
Washington

(Translated by Alexander Dubovoi)

*******

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