June 13, 2001 

This Date's Issues:   5296 • 5297 • 5298

Johnson's Russia List
#5296
13 June 2001
davidjohnson@erols.com

[Note from David Johnson:
1. AP: Boris Yeltsin Praises Putin.
2. Reuters: Russians get close up of Putin in TV documentary.
3. Interfax: PUTIN CALLS KURSK DISASTER WORST EVENT DURING HIS PRESIDENCY.
4. BBC Monitoring: ORT, Russian president says Russian democracy here to stay.
5. BBC Monitoring: NTV, Putin regrets Russian public organizations rely on foreign donations.
6. strana.ru: Sergei Markov: "When the authorities have to deal with a civil society, they deal with the nation."
7. CBS.MarketWatch.com: Craig Tolliver, Europe funds rushing to Russia.
8. MSNBC: Preston Mendenhall, From rags to riches in Russia. (re Anis Mukhametshin)
9. Luba Schwartzman: ORT Review.
10. Reuters: Patrick Lannin, US slips as EU weight rises in Russian foreign policy.
11. Lenard Leeds: re 5292-Mikheyev/Myths and Realities.
12. Frankfurter Allgemeine Zeitung: Barbara Wieland, The Reality of Life in Russia's Juvenile Prisons.
13. Christian Science Monitor: Scott Peterson, In the land of vodka, a boom in alcohol-free beer.]

*******

#1
Boris Yeltsin Praises Putin
June 12, 2001
By JIM HEINTZ

MOSCOW (AP) - Former Russian President Boris Yeltsin, appearing vital despite
a long bout of health problems, praised successor Vladimir Putin in a TV
interview Tuesday and advised him to be ready for a tough summit with
President Bush.

Americans ``press down from the position of force. In short, it will be an
onslaught,'' Yeltsin predicted of the Bush-Putin meeting Saturday in
Ljublana, Slovenia.

``Even such a phrase from the younger George Bush as 'I want to meet Putin to
have a look in this guy's eye' sounds coarse on the part of a president,''
Yeltsin said in the interview on state-controlled ORT television. ``But this
is American style. One needs to get accustomed to this.''

Unlike some recent public appearances in which he appeared weak and
disoriented, the 70-year-old Yeltsin was forceful and articulate in the
interview, in which he sat outside, wearing a colorful sweater.

He said he's completely healthy and needs no further medical treatment after
a bout of pneumonia last winter that hospitalized him for more than a month.

``There's no reason for me to have treatment. I am completely healthy, I'm
better,'' said Yeltsin, who has had multiple health woes since 1996 when he
had heart bypass surgery.

ORT did not specify when the interview was conducted, but timed its broadcast
to coincide with the 10th anniversary of Yeltsin's election as Russian
president - when Russia was still one of the republics of the Soviet Union.

Yeltsin's surprise resignation on Dec. 31, 1999, catapulted Putin into the
presidency and he said in the interview he is pleased with his successor's
performance.

``My hopes for Vladimir Putin were vindicated. He is taking the country on
the right path and enabling the growth of Russia's authority in the whole
world,'' Yeltsin said.

``Now, things are going more smoothly,'' he said, reflecting on his
frequently troubled years in office, which included ordering tanks to fire on
a government building occupied by lawmakers who opposed him.

``The Duma (parliament) is working better than it did earlier,'' said
Yeltsin, whose reform proposals often were blocked by the parliament when it
was dominated by communists.

Yeltsin also said he relaxed and enjoyed himself during a recent trip to
China.

``While I was in China for 12 days, I didn't see one Chinese doctor. I did
what I wanted, I saw China, I visited several cities,'' he said.

Yeltsin said he had gone to the theater, seen sights, gone swimming and
relaxed in the sauna. ``In general, I had a vacation.''

*******

#2
Russians get close up of Putin in TV documentary
By Patrick Lannin

MOSCOW, June 12 (Reuters) - Russians got a close view of their leader on
Tuesday in a new TV documentary about President Vladimir Putin which showed
him dwelling on matters of state and his vision for the nation.

They also found out that he thinks about buying beer on the way back from the
Kremlin and weighs 75 kg (165 lb).

In an hour-long, largely complimentary programme screened on state-owned RTR
television, Russians got their most intimate look yet at a man who came from
relative obscurity to lead the world's biggest nation.

The film on Putin, an ex-KGB agent and former head of Russia's domestic
security service, came amid fears of a new cult of personality in the land of
Josef Stalin.

During the documentary, shown on the 10th anniversary of Russia's post-Soviet
declaration of sovereignty, Putin was shown in February 2000. Then, he was
running the nation as acting president but went on to win an election a month
later.

The documentary also showed him in May 2001, marking the first anniversary of
his official inauguration.

"We have no more time to wait and take it easy, we must act and act
energetically," he told the film maker in May this year, talking of the need
to reform taxes, shake up the legal system and stop the country's post-Soviet
decline.

He also said he would only go for a second term in office if he had proved to
the nation he deserved it.

Aside from matters of state, the documentary tried to portray Putin's
informal side, showing him in March 2000, on the verge of taking the highest
office in the land, visiting one of his former school teachers at her
apartment.

He chatted and laughed with the teacher, before hugging her and her husband
and leaving.

The president was also shown in his limousine on the way back from the
Kremlin, saying he would like to get out and buy a beer but lamenting that it
would cause crowds to gather and traffic chaos.

His weight of 75 kg, a slim size likely to be envied by many statesman, was
shown as he weighed himself after taking a swim at the pool in his residence
outside Moscow, another of the many examples of his fitness broadcast to the
public.

Some liberal commentators have seen danger signs in such uncritical
documentaries, harking back to the cult of personality built around Soviet
dictator Josef Stalin.

Fuel for such fears was also provided by a march on May 7, the anniversary of
Putin's inauguration, when thousands of youths sporting T-shirts with the
president's portrait on them paraded through Red Square, an event organised
by a new youth organisation with strong links to the Kremlin.

*******

#3
PUTIN CALLS KURSK DISASTER WORST EVENT DURING HIS PRESIDENCY

MOSCOW. June 12 (Interfax) - Russian President Vladimir Putin has
said the disaster of the nuclear submarine Kursk was the worst
experience he endured in the first year of his presidency.

Talking to writers of the film Vladimir Putin: Leap-year, which was
shown on the RTR television channel on Tuesday evening, Putin said he
has not experienced great disappointments in the past year. "All
disappointments arise from exaggerated expectations of something good. I
did not expect anything especially good here, and therefore there are no
particular disappointments," the president said.

At the same time, the Kursk disaster "has been, perhaps, the worst
thing in this time," and "this feeling has been a dominating one in this
period," he said.

However, the loss of the sub "is not directly connected with the
state of the armed forces," he noted.

"An ideological mistake was committed back when this type of
submarine was being constructed and all chances for the crew to escape
were concentrated on only one rescue apparatus, which did not work in
this case, and no others were envisaged," Putin said.

The situation in which the Kursk found itself "was unanticipated
from the very start," he said.

*******

#4
BBC Monitoring
Russian president says Russian democracy here to stay
Source: Russian Public TV (ORT), Moscow, in Russian 1100 gmt 12 Jun 01

[Presenter] A festive reception was held in the Kremlin today to mark the Day
of Russia holiday. Here is Ilya Kulikov's report.

[Correspondent] Today's Kremlin guests gathered in three banqueting halls, St
George's, St Alexander's and St Andrew's halls. Government ministers,
deputies to the Russian State Duma, foreign diplomats and prominent cultural
and scientific figures were present.

Opening the reception, Vladimir Putin recalled the events which had taken
place 11 years ago, when Congress [of People's Deputies] voted for adopting
the declaration of Russia's state sovereignty.

[Vladimir Putin] This document marks the beginning of our new history. It is
the history of a democratic state, based on civil liberties and supremacy of
the law. The main goal of this state is the success, prosperity and happiness
of its citizens.

[Correspondent] It has become clear over the past 10 years that the only
point to any reforms is when they serve the people, because otherwise they
fail, said the president.

[Putin] We reacted to and it is for the sake of the citizens of Russia that
reforms were begun. Life with dignity was proclaimed to be the supreme goal,
the supreme goal of the declaration of state sovereignty.

[Correspondent] Vladimir Putin made a specific mention of Boris Yeltsin. The
institution of presidency in Russia is 10 years old and this is inseparably
linked with his name.

[Putin] I greet Boris Nikolayevich on this and am happy to announce that I
have signed a decree awarding the first president of Russia the Order for
Services to the Fatherland first class.

[Correspondent] Our common task is to prove that democracy in Russia is not
temporary, that it is not designed to last a presidential term in office,
because it is forever, Vladimir Putin said in conclusion.

[Putin] Democracy and civil liberties represent a state of affairs in society
for which one must struggle daily, every day. Dear friends, going by the
yardstick of history, the past decade is not such a big period. However, the
Day of Russia which we are marking now has already become a holiday, a
national holiday in our country, a country we are creating, we are building
and for which we are all responsible. I propose a toast to the Russian
people, to peace and consensus, to Russia.

*******

#5
BBC Monitoring
Putin regrets Russian public organizations rely on foreign donations
Source: NTV International, Moscow, in Russian 1200 gmt 12 Jun 01

[Presenter] Today President Putin met members of nonpolitical public
organizations which included unions of stamp collectors, horticulturists and
even bards. Vladimir Kondratyev, our observer, attended this meeting and now
he is reporting live from our studio in Red Square.

Hello, Vladimir, over to you.

[Correspondent] Hello, Natasha. This was the first meeting of this kind.
Until now Putin couldn't find time to meet members of these nonpolitical
noncommercial organizations which the Kremlin is now calling civic unions - a
new term much liked by the Kremlin. To all appearances Putin is devoting a
lot of attention to this new work and new sector of interaction. We saw only
about 30 people in the hall, although Putin said that about 300,000 civic
bodies had been registered in the country. There were such famous
personalities as film actor and director] Yevgeniy Matveyev, [musician]
Vladimir Spivakov, cosmonaut Leonov, former hockey player Tretyak as well as
the chairman of the new youth organization Marching Together. There was also
a representative of a media union which is being set up as a counterbalance
to the Journalists' Union.

Putin didn't know many of them personally, and they were invited to the
Kremlin to meet them and find out how they are doing in these public
organizations. The journalists were made to understand that if everything
goes all right, the Kremlin will continue cooperation with them. It's a
question of creating, if not a vertical system of civil unions, at least some
system of cooperation. This is not going to turn into a ministry of civic
unions but perhaps into a chamber of public bodies, similar to the one in
France where the government and the president see it their duty to agree
their decisions with civic associations. It's understood that a strong state
is fine but no state can achieve anything if it's not supported by society
and people.

Putin drew historic parallels because the Soviet Union used to have similar
structures. Let's listen to what he said.

[Putin addressing the meeting] The laying of main components of the
foundation of civil liberties, a democratic electoral process and the
people's right to set up independent associations started a decade ago. Of
course, there were many similar organizations in the past, in the Soviet
Union, but it's one thing to set them up on orders and instructions from
above and it's quite another when they are set up from within, at people's
own initiative. It's a totally different quality.

[Correspondent] There is yet another very important aspect which Putin didn't
mention directly but hinted at. The West is paying a lot of attention to this
public niche in Russia. There is a host of grants and various financial
donations. It's no secret to anyone that the disgraced oligarch Boris
Berezovskiy is too setting up something like a civic union in Russia and
supports many organizations. In a sense, the Kremlin is reacting to this
development too, and Putin had the following to say about this.

[Putin] Unfortunately, it's no secret that very many nongovernment
organizations exist thanks to foreign grants. It's no credit to us. Of
course, we use them and support this direction of cooperation with
international organizations but naturally our civic society should grow on a
foundation of its own, it's a fact.

[Correspondent] Nobody can tell yet which way this new civic society will go.
Nevertheless, we were told that it's an important initial source of
information for Putin. Putin fears that he may be in the dark about something
or missing on information, and in this sense this new association - although
nobody knows what forms it will take - could become a kind of state council.
We know that the State Council is made up of governors and this one will be a
so-called civic council which will have more or less regular meetings with
the president. We don't know how often, and the results of this meeting will
be revealed later when some of its participants meet the journalists.

*******

#6
strana.ru
June 12, 2001
Sergei Markov: "When the authorities have to deal with a civil society, they
deal with the nation."

Sergei Markov, Director of the Association for Political Consulting, invited
to a meeting with the President, considers that Vladimir Putin's meeting with
civil society representatives may result in establishing a permanent
institution to help maintain a dialogue between the authorities and the
society.

"As I see it, the President's meeting with representatives of public
organizations shows that the authorities begin to attach increasing attention
to civil society. At the first stage a political regime was formed, the
institutions of power were restored and the country became controllable. At
the second stage structural reforms in the economy (Tax Code and the Land
Code), a political reform (formation of a multi-party political system) were
launched. Now we see that it is the turn of the civil society.

"There can be two possible approaches of the authorities to the civil
society. The first one is that it can be regarded just as an object of
manipulation, a cover-up for one or another policy. If that were the case, it
would be unnecessary and harmful. But, as far as I understand, people in the
President's team are oriented towards Europe. They see that it is impossible
to advance within the limits of a manipulative regime. Therefore their goal
is gradually to Europeanize the Russian society. In this context the civil
society has a key role to play. Primarily because there can be no democracy
without it. In other words, to make Russia a really democratic country the
civil society must be developed in it.

"The second approach. In order that Russia could develop, the civil society
should be developed as well, because precisely it allows to unchain public
initiative. It is the civil society that charts moral guidelines, makes
stereotypes of conduct, and shapes the people idea of what is good and what
is evil. It offers patterns of conduct and comprehension for the overwhelming
majority of the population. All this makes a civil society extremely
important for development.

"I am glad that the President displays interest in this. I would like to
bring it home to him that the civil society is not ammunition carriers for
the authorities; a civil society is a nation. Because unorganized people are
a mass, an object for manipulations. Only organized people, organized on
their own, can be called a nation. Therefore when the authorities have to
deal with the civil society, it deals with a nation. When the President talks
with people in the streets, it is not a nation, it is a population. It is not
yet a subject of history. Only a nation organized in a civil society becomes
a subject of history. It is very important.

"A dialogue between the authorities and the society on cooperation is
important as well. Cooperation and presumption of innocence, I would say.
Because the society still suspects the authorities of ill intentions, while
the authorities suspect the society of being irresponsible. It divides them,
and prevents them from uniting and acting together. But a country's
development is possible only when such a unity is achieved. So, better mutual
understanding is indispensable.

"I think this meeting could result in setting up a permanent institution to
help maintain a dialogue between the authorities and the society.

"The state should help the civil society to develop. It should regard the
development of the civil society as a top priority in the country's progress.
A special program of developing the civil society should be drawn up. This
may be of small importance to the United States, Britain, France or Germany -
they have a well-developed civil society. But we need it. There exist
numerous foundations for civil society development. Most of them are American
and German. But there should be a Russian state foundation for the
development of democracy in this country. And it should have resources for
developing the civil society. It is important that the state should become a
Kulturtraeger, it should develop the country.

"Now the government has concentrated in its hands control over numerous mass
media. It should use this control for bringing home to all this appeal: join
public organizations, work for common good! The present authorities have a
right, a possibility and resources for launching a big propaganda campaign,
and they should do it. They should introduce a new course of study at all
institutions of higher learning, which may be called "Principles of
self-organization and defending one's interests in society." It is necessary
to show people ways forming such organizations, of making the authorities
fulfil your demands, heeding your words, etc. To help them with taxes, so
that they would not have to pay for the activities of a public organizations
as much as for a business, to help them with registration, with setting up
public and political centers on privileged terms, where public organizations
could rend office rooms on easy terms. And there should be a large-scale
public propaganda campaign, encouraging public activities. So that they could
understand that if they join, for instance, a committee for animals'
protection, it should be the most important public activity for them, and if
you are not involved in a useful undertaking, you cannot regard yourself a
decent man."

*******

#7
Excerpt
CBS.MarketWatch.com
June 12, 2001
Europe funds rushing to Russia
By Craig Tolliver

BOSTON (CBS.MW) -- Fund managers focusing on emerging Europe have
significantly upped their stakes in Russia over the first half of the year
and are increasing their exposure to Israeli technology despite tensions in
the Middle East, according to a report released Tuesday.

Most of the 68 funds tracked by monthly journal Emerging Europe Portfolio
increased their Russia weightings, averaging exposure of nearly 30 percent,
vs. 21 percent at the beginning of the year.

Some funds, such as the $66 million closed-end Morgan Stanley Dean Witter
Eastern Europe Fund (RNE: chart, news, alerts) and the $140 million
European-listed Schroder Eastern Europe Fund, increased Russia to majority
weightings, according to the study.

"Russia's benchmark RTS Index is the world's best performing market this
year, up more than 45 percent year to date on solid economic growth, strong
oil prices and a growing perception among some fund managers that corporate
governance is improving," said journal editor Brad Durham.

"The Russian market seems to have severed its correlation with Nasdaq and has
showed impressive resistance to external shocks in Turkey and Argentina,"
Durham added.

Natural resource issues trumpeted Russian exposure in most funds by beefing
up core Russian holdings, with Lukoil, Surgutneftegaz and UES as the
favorites.

High oil prices certainly helped fuel gains at Third Millennium (TMRFX:
chart, news, alerts) but more fundamental changes in Russia's economy and
society should propel further growth, according to fund manager John Connor.

"While the Russian stock markets are small compared with their Western peers,
they are liquid, integrating with European markets and beginning to attract
foreign investment, particularly from Germany," Connor said in a recent
interview.

Craig Tolliver is the mutual funds editor for CBS.MarketWatch.com in Los Angeles.

*******

#8
MSNBC
June 12, 2001
From rags to riches in Russia
By Preston Mendenhall

MOSCOW — The last nine years of tumult in Russia haven’t been unkind to
everybody, nor did everyone start on the same rung of the ladder. From the
ashes of the Soviet Union sprouted thousands of new capitalists who made
fortunes almost overnight. Many were old-time communists who used
connections to adjust to the new world. But even in Soviet times, there
were genuine entrepreneurs. One of them was Anis Mukhametshin, a moderately
successful promoter of kitschy Soviet concerts who used cunning, cajoling
and luck to transform himself into a billionaire.

MUKHAMETSHIN’S RISE to wealth after the fall of the Soviet Union
stands in stark contrast to his life during the Communist era. He was born
into poverty in Tatarstan, a Muslim republic in central Russia, at a time
when access to basic goods diminished according to a city’s distance from
Moscow.

On a hot summer’s day at the tender age of 13, Mukhametshin hit upon a
way to make some pocket change: he made a batch of ice cream and sold it to
a local store. It was the beginning of something big.

“I realized that if you make one ice cream yourself and sell it, then
you have the money to make another two.

Today, 32 years later, Mukhametshin presides over a string of products
bearing, somewhat immodestly, his own name. There’s Anis ice-cream, of
course, and then Anis aftershave, Anis-Lady perfume, Anis chocolate — and a
new line of products called Black Man, which includes cigarettes and beer.
The name Black Man also comes from Anis, who usually dresses completely in
black — with a diamond-encrusted Rolex watch punctuating his look.

“It cost $40,000. A Belgian businessman gave it to me as a present,”
Mukhametshin said.

ROAD TO RICHES

Mukhametshin’s path to such phenomenal success — he said his sales
will top $1 billion in 1999 — is unorthodox in Russia. Mukhametshin, unlike
the oligarch-style businessmen that have pervaded Russia’s economy using
their Kremlin connections to grab sweetheart deals and stash profits
abroad, takes pride in his investment in Russian production.

This year alone, Anis Investment, Inc., Mukhametshin’s holding
company, spent $15 million on new production lines. And like the day
Mukhametshin sold his first ice cream, his company has concentrated on
investing its profits at home.

Most businesses in Russia, however, do the opposite.

Since the fall of the Soviet Union a decade ago, Russian and
international experts estimate that anywhere between $200 billion to $500
billion has been sucked from Russia’s vast natural resources by corrupt
businesses, much of it in collusion with government officials. In the most
recent example, U.S. investigators are looking into a suspected Russian
money laundering ring — possibly involving government officials — that
transferred more than $10 billion through the Bank of New York.

At the same time, some 50 million Russians live below the official
poverty line, meaning a monthly wage of less than $37, while 10 percent of
the population — the rich, in particular a half dozen “oligarchs” — control
an estimated 50 percent of the country’s economy.

AT THE GOVERNMENT’S WILL

“The government works against successful businesses that aren’t
politically connected,” Mukhametshin said. “It acts unilaterally against
one business and then gives a break to another.”

Mukhametshin goes to great lengths to portray himself as a
“by-the-bootstraps” businessman, but he also admits to having friends in
high places, friends who are indispensable to doing business in Russia.
Many of Russia wealthiest biznesmyeni came from the leadership structures
of the Komsomol, the Communist youth league. They became the country’s
first young entrepreneurs — albeit with the cards and connections stacked
in their favor.

Mukhametshin wasn’t in the Komsomol, but when he moved to Moscow in
1989 to promote concerts of Soviet pop stars, one of his first ventures
brought him into contact with the youth league.

“I stay in touch with them all,” said Mukhametshin, who now has
Komsomol buddies running some of the country’s largest banks and oil
companies. “They call me, they introduce people to me. That’s good, because
I trust their judgment. And when I need something, they introduce me to
someone they know. If we recommend each other, it’s a done deal. My credo
is never to lose touch with people.”

HEAVEN IN MOSCOW

Although his fortune pales in comparison to the wealth amassed by
Russia’s Kremlin-connected business elite, Mukhametshin lives a life most
Russians will never know. He bases himself at his “ranch” in southern
Moscow, where he has built a dozen Swiss-style chalets from himself, his
mother, sister and top directors. From an office in one of the chalets,
Mukhametshin is in constant contact with his Belgian bankers and British
lawyers.

Success in Russia comes with a price. Although Mukhametshin doesn’t
use bodyguards (“No matter how much you pay someone, nobody here will ever
take a bullet for you”), he employs a phalanx of Russian Interior Ministry
police to guard his property and factories.

“People are constantly trying to disrupt our business. Where does it
come from? It comes from competitors, from political structures that for
some reason or another will profit from your failure.”

*******

#9
ORT Review
www.ortv.ru
Compiled by Luba Schwartzman (luba7@bu.edu)
Research intern at the Center for Defense Information
Research fellow at the Institute for the Study of Conflict, Ideology and
Policy at Boston University

HEADLINES:

Tuesday, June 12, 2001

- Suspects in yesterday's murder of Lukman Madalov, head of the administration in Valerik, in Chechnya, have been detained. Two men are already confessing; the identity of the third criminal has been established. Measures are being taken towards his arrest.

- Chechen fighters attacked an armored vehicle in Argun. A radio-operated landmine was set off under the vehicle, then it was assaulted with machine guns and grenade launchers. One serviceman died and five were injured.

- No attacks registered in Grozny today, thanks to the strict security measures.

- Russia Day is celebrated in Chechnya: General Gennady Troshev handed out awards and medals to soldiers, sergeants and officers at a base in Khankala.

- Fight breaks out at the rally for a candidate for governor in Primoriye

- Viktor Chernomyrdin hosts a reception in the honor of Russia Day in Kiev.

- Panic in Kazan. A two-year wild tiger brought to the city yesterday escaped the zoo. Citizens watch with interest as the police, the military and EMTs chase the animal - using helicopters and cars with flashing lights

- Belgian actor Jean Claude Van Damme arrives in Moscow

- Vladimir Putin presents state awards in the fields of literature and the arts. Recipients (many of whom could never imagine receiving a state award 10-15 years ago) include: Dmitrii Sukharev (poet, received the Bulat Okudzhava award) Vladimir Voinovich (writer), Aleksandr Kushner (poet), Alla Demidova, Leonid Yarmol'nik (actors, film), Aleksei German, Valerii Ogorodnikov (film directors) Diana Vishneva (choreographer), Yuri Bashmet (violist), Marina Neyelova, Yelena Yakovleva, Sergei Makovetskii, Alisa Freinlikh (actors, theater), Yuri Rost (photojournalist), Georgii Garanin, Yuri Kariakin, Tatiana Shmyga.

STORY OF THE DAY:

CEREMONIAL RECEPTION HELD TODAY IN THE KREMLIN IN HONOR OF RUSSIA DAY

Guests gathered in three of the Kremlin's ceremonial halls - Georgievskii, Aleksandrovskii, and Anreevskii. Ministers, government representatives, State Duma deputies, foreign diplomats, and well-known members of the arts and sciences community. In opening the reception Vladimir Putin recalled the events of 11 years ago, when congress deputies voted in favor of accepting the Declaration of the State Sovereignty of Russia.

Vladimir Putin: "Refoms have meaning only when they serve the people."

All of Russia's successes and mistakes over the past 10 years attest to this, Putin declared. "If reforms are not in the interest of the citizens, they fail," he noted. this, according to the president, is one of the most fundamental lessons of recent times.

With the acceptance of the declaration of Russia's sovereignty "a new era in our history began, an era of the democratic state founded on civil rights and the supremacy of law," Putin proclaimed. He said that the main goal of the declaration was the "success, prosperity, and well-being of the citizens."

According to Putin, the deputies who voted in favor of the Declaration in 1990 "answered the call of the times."

"Today we live in a different country. The very nature of Russian power, its constitutional order, has changed. The power now has a new, democratic face," the head of the government feels.

Vladimir Putin: "Refuting the predictions of the pessimists, we quickly became familiar with the fundamentals of democracy and market economy. We learned to build our lives on our own, without hints."

The president declared: "Today our common goal is to prove that Russian democracy is here to stay - not just for the time being, not for a presidential term, but forever."

At another point Vladimir Putin talked about Boris Yeltsin.

Vladimir Putin: "Today we are celebrating the tenth anniversary of the institution of presidency in Russia. This day is bound by history with the name of Russia's first president - Boris Nikolaevich Yeltsin. I congratulate him with this holiday.

Those present at the reception warmly greeted Boris Yeltsin, who was present, and responded with hearty applause to the decree about his decoration and to the words of Vladimir Putin

********

#10
ANALYSIS-US slips as EU weight rises in Russian foreign policy
June 12, 2001
By Patrick Lannin

MOSCOW (Reuters) - When Russian President Vladimir Putin gave his
state-of-the-nation address in April, the United States did not even warrant
a mention in the list of foreign policy objectives he wanted to pursue.

Whether intended or not, Russia's focus in its bid to regain the world's
respect as a power to be reckoned with has shifted away from the United
States and toward Europe since Putin came to power last year.

As Putin heads for his first meeting with President Bush in Ljubljana
Wednesday, he knows the change in Moscow's priorities has been dictated as
much by the relegation of Russia as a partner for the United States under
Bush.

For Sergei Karaganov, head of the Foreign and Defense Policy Council think
tank, the balance is clear: "With the United States, we want normal, quiet,
constructive relations without confrontation," he said.

"The priority is clear, it is Europe. Europe, but not against America," he
added.

LINKS INTENSIFY

On the surface, contacts between Russia and the European Union have been
hotting up. The two are engaged in talks on plans to allow Russia to export
its oil and gas to the EU, where demand for energy is expected to rise
sharply in the future.

Much has also been said about the need for close cooperation over
Kaliningrad, Russia's Baltic enclave which will be surrounded by EU members
once Poland and Lithuania join the EU.

Russia wants to work out special visa and trade ties between what will be its
EU beachhead. The EU also wants expansion to help the enclave, but it is
equally worried about Kaliningrad's pollution, high crime and potential for
illegal immigration.

On the symbolic level, while Bush and Putin are heading for their first
meeting, European leaders have already met Putin several times and Putin in
March became the first Russian leader to join 15 EU chiefs for informal
talks.

"EUROPEAN PATH" RAISES QUESTIONS

While Russian membership of the EU remains the stuff of dreams, some see the
path to closer ties as historically justified as well as good for democracy
and the economy.

"I see Russia as the last great European power which is returning back to the
fold," said Carnegie Moscow Center deputy head Dmitry Trenin at a recent news
conference.

But amid the frequency of visits and meetings, many in Europe remain deeply
concerned about Russia's bloody war in Chechnya and the massive force used to
quell what Moscow itself called terrorists.

Europe was also disturbed by the takeover of the NTV television station by
state-dominated gas monopoly Gazprom, which was seen as a blow to media
freedom.

Despite the intensification of Russia-EU ties, Putin cannot afford to forget
Washington. Much effort has gone into keeping a dialogue going despite a
series of spy scandals and an ongoing argument over missile defense plans.

At their summit, Putin and Bush are likely to talk about U.S. plans for a
missile defense shield, which Russia says could spark a new arms race,
although few expect much progress.

Meanwhile Russia and China have said they want to counter the weight of the
United States as the sole remaining superpower and have spoken almost as one
in rejecting Washington's missile defense plans.

Putin has sought to keep close ties with China, witnessed by a planned visit
to Moscow by Chinese President Jiang Zemin in July, where a special
friendship treaty is to be signed.

Russia also sees China as an economic partner, and would particularly like to
sell it more weapons.

The Russian leader has also put much effort into rebuilding ties with former
Soviet nations, grouped as the Commonwealth of Independent States, trying to
reassert Moscow's hegemony in the region and make sure its goods have ready
markets.

*******

#11
From: "Lenard Leeds" <lleeds@post.com>
Date: Wed, 13 Jun 2001
Subject: re 5292-Mikheyev/Myths and Realities

I am not sure whether to be heartened by the prideful comments of Dmitry
Mikheyev regarding the progress of the Russian economy under Vladimir Putin,
as they show optimism and hope for the future, or deeply disturbed, as they
show a fundamental failure to comprehend reality.

Mr. Mikheyev points to a claimed figure of 12% annual growth in the Russian
economy as significant proof that Russians are doing much better than
foreign analysts, who are apparently fools and Russophobes for thinking
otherwise, have concluded. He also claims that Russia is repaying its
foreign debt at an admirable annual rate while at the same time accumulating
substantial new reserves of foreign capital, and operating a substantial
trade surplus.

First of all, everyone knows that the recent increases in revenues to the
Russian state are due only to the fact that the price of oil has nearly
doubled (Russia is an oil exporter). Neither Russia generally, nor President
Putin specifically, can claim pride of accomplishment in that fact, and but
for it Russia's foreign reserves and debt payments would be negligible. The
price of oil, historically, will not continue indefinitely at high levels.

Mr. Mikheyev made no attempt to remove the price of oil from his
calculations, and that is bad science. Likewise, everyone knows that Russia
is only repaying renegotiated portions of its actual foreign debt and has
never said that it will ever repay the full amounts (noticeably, Mr.
Mikheyev made no reference at all to the total amount of Russia's
outstanding obligations to world lenders).

Second, Mr. Mikheyev fails to express Russia's economic growth in marginal
terms. This is more bad science. Russia's GDP was $200 billion last year.
12% growth this year translates into $24 billion being added to the economy.
A substantial part of that figure is accounted for by doubled receipts from
the price of oil (indeed, probably well over 50%), but even if all of it
amounted to new production there are 150 million people in Russia, so per
capita it is well under $200 more per person. Americans will receive a tax
rebate of much more than that amount this year, and many people scoff at it.
And there are many reports from Russian economists and even government
leaders who have concluded that Russia's current rate of growth is not
sustainable. I have seen several of these reports published on the Russia
List. America has only 3% annual growth, which by Mr. Mikheyev's analysis
would be paltry. But that growth is on a base of over $8 trillion and
therefore amounts to $240 billion, more in growth than the entire value of
the Russian economy although the US population is not even twice Russia's.
Russia's foreign currency reserves are, per capita, among the lowest in the
world, and much less in the aggregate than much smaller east European states
like Poland and Hungary. Russia has a trade surplus only because Russian per
capita income is so low (the national mean wage is less than $100 per month
and despite the rosy economic performance Mr. Mikheyev points to, President
Putin has not raised any baseline salaries) that few if any Russians can
afford to import products, while on the contrary Russian goods produced at
such remarkably low wages are eminently affordable to foreign buyers
(despite this, there has been only a negligible increase in the sales of
Russian products abroad, due to their reputation for poor quality).

I am also somewhat disappointed that Mr. Mikheyev would attempt to produce
such a long list of negative comments about Russia in the foreign press
without even attempting to document the situation in Russia: is he claiming
that press coverage of the United States, for example, is generally
fair-minded and positive in Russia? Could he make an equally long list of
fair and positive statements gleaned from Russian publications? Indeed, is
there even such a thing as a Russian version of the Russia List, where
Russians study the United States and publish comments from Americans, as the
Russia List has done for Mr. Mikheyev?

Russians have always had an extremely serious problem with productivity,
which as been well documented in both the academic and popular press. The
economy of the USSR, with 300 million people, was never more than a quarter
that of the USA alone, with 75 million fewer people. I'm glad that Russians
can find basis for optimism in their current regime, controlled by many of
the selfsame leaders and institutions who brought the nation near
bankruptcy, but if that optimism is not based on real facts then I question
its value. I would have thought that Russians would have learned from the
Soviet experience what happens when economics and fantasy are mixed at the
policy level.

********

#12
Frankfurter Allgemeine Zeitung
12 June 2001
The Reality of Life in Russia's Juvenile Prisons
By Barbara Wieland

The first time Sergei was sent to the youth prison in Kolpino he was 14 years
old.

He and two other boys had been sentenced to two years in jail for stealing
money and alcohol. Although the stolen goods were not worth much, the judge
was convinced that the three worked in cahoots. By Russian law, that
qualified them for extra punishment as "organized criminals."

Shortly after his release, Sergei was arrested again for breaking into a
store. This time, the sentence was even more disproportionately severe: six
years confinement, initially in the Kolpino youth prison about 30 km (18.5
miles) from the center of St. Petersburg -- and later in a male adult prison
closer to the Czarist capital.

Sergei said that after his release he again committed petty crimes because he
was "bored." He said he did not want to work, and, like many of the other
teenagers doing time in Kolpino, his parents neglected him.

During the interview, Sergei's eyes were fixed and glassy, his pupils shrunk
to the size of pinholes. That, too, is typical. Almost all of the 300
juvenile inmates in Kolpino are drug addicts.

Currently, there are about 18,000 young people between 14 and 18 in Russian
juvenile detention facilities. More than half of them are serving sentences
of three to five years for theft. The legal practice here is to imprison
youthful first offenders, even for stealing flour and eggs.

Police and justice officials have to show their bosses how hard-working and
efficient they are, and that means they have to arrest and punish a certain
number of criminals every month. The gravity of the offence matters little.
What is important is to fulfill the plan.

The facility at the small town of Kolpino is one of those penitentiaries
reserved for young men between 14 and 21. The prison is on the outskirts of
the town's industrial park. Depending on the wind, the prison is blanketed
either with the exhaust of a polyethylene or that of a metal-working factory.

Apart from a few scraggly birch trees around the basketball court, the place
is landscaped in dreary industrial concrete. The water and heating pipes run
three meters (10 feet) above ground across the prison property. At one place,
the warm water is leaking. The warden says the pipes were in that condition
when he took over six months earlier, and there is no money available to fix
them.

Besides the warden, the prison employs 16 other people. Eight of them work
directly with prisoners and the others guard exits and man the watchtowers.
The prison staff is operating 50 percent below capacity. The jobs pay badly,
and guards would rather supervise adults.

Young inmates, it seems, are unpredictable, and it can be difficult to get
them to obey the rules. Unlike adults, many of the teenagers have no
relatives or friends to bring them money, food and clothing while they are in
prison. The inmates themselves might not use such gifts directly, but they
can certainly put them to other use.

Although chronically understaffed, Kolpino is quiet and orderly. As the
warden never tires of repeating, these are the cardinal virtues of a Russian
prison. He says when he came to Kolpino, the first thing he did was
reorganize the prison and change the composition of the "companies."

As in all Russian prisons, the inmates at Kolpino are divided up into
companies of 100, each of which is subdivided into sub-groups of 25 youths.
The system is patterned on the organization used in the Russian army. Each of
the companies is led by a "commander" from among the prison population who
rules over his fellow inmates, supported by the "elders" from the respective
sub-units. The commanders, the elders and a few of their close associates
belong to the "activist" prisoners. The activists collaborate with the prison
administration.

Collaboration means that the activists see to it that the prison population
remains quiet and orderly and that all incidents are reported to the
administration. In exchange they enjoy certain privileges. The activists are
allowed to have longer telephone calls with friends and relatives, have
regular visits and can enjoy a rare excursion outside the walls. The warden
characterizes this group as people "on the road to improvement." A young
inmate paroled for a portion of his sentence is almost always an activist.

Those who do not want to collaborate with the administration belong to the
"humbled." The activists force them to do all the dirty work like getting
down on their hands and knees to clean floors and toilets. In Kolpino,
activists are easily distinguished from the "humbled." Activists wear better
shoes, longer hair and modern jogging suits. The rank and file walk around in
flip-flops, and their heads are shaved.

When young prisoners leave their living and sleeping quarters, they have to
wear black uniforms and caps. They are led by the companies into the dark and
stuffy dining areas where their midday meal is served in aluminum bowls. The
warden says each prisoner receives a daily food ratio worth 24 rubles (82
U.S. cents).

After eating, the boys raise their hands and are paraded past the guards, who
check them for stolen food or dining utensils. Despite these controls, the
prisoners smuggle food into the sleeping halls. They then give it to the
commanders because it is beneath a commander's dignity to enter the dining
area.

After meals, all inmates attend roll call together. They stand in long rows
beside the soccer field and are counted off. Many of the boys look younger
than 14. Some have faces that are still quite childlike and are barely five
feet tall.

Malnutrition, lack of fresh air and the tense atmosphere within the companies
prevent them from developing to a size normal for their age. Two uniformed
prison guards strut up and down the ranks mustered for roll call. The field
echoes with the count: "...298, 299, 300..."

High above it all stands the warden on the balcony of the administration
building. He casually leans on the balcony railing and lights up a cigarette,
gazing out over the mass of black-clad youth at his feet.

The warden's shake-up of the companies initially led to unrest among the
prison population. Physical violence and psychological coercion was used to
settle who would be "commanders," "seniors" and "humbled" in the new
companies. The new "activist" leadership is largely the product of that
process. Although the warden recognizes most of the inmates only by their
faces, he knows the most reliable of the activists by name.

In Kolpino, every company occupies one floor of a housing block. There are
halls on every floor, each of which houses one sub-unit of 25 men. There is
also a recreation room. The choicest beds in the dormitories, those where the
"seniors" and their deputies sleep, are the ones furthest from the entrance.
Their colorful wool blankets set them apart from the gray ones distributed to
the others. The dormitories have no doors. Just a thin curtain separates them
from the hallway. Right now, the prison is not fully occupied because two
waves of amnesties at the beginning of the year reduced the population from
400 to 300.

The boys are educated in the freshly renovated school. There are four classes
from seventh to 10th grade to give the inmates what by Russian standards is
considered a complete education. But it is hard to teach them. Some can just
barely read when they arrive at Kolpino, while others have already completed
several grades. Many are not used to the discipline of doing anything
regularly.

Most of these boys have been brought up in orphanages or by alcoholic
parents. They have lived a long time in the streets and are already mentally
disturbed when they end up in prison.

Others have avoided school out of principle. This includes the commanders and
some of the activists who feel attending school or vocational training would
violate their code of conduct. Instead, they play soccer and train to stay
fit for the next fight for dominance in the prison.

There is no special education program or mental health treatment available.
Those who are no longer of mandatory school age either attend vocational
training or go to work. A workshop is supposed to teach trades and crafts,
but even the warden admits that hardly any inmates leave prison having
completed training. The boys are instead put to work gluing medicine boxes or
sawing wood to make coffins. And even this work is done so poorly that hardly
anyone buys the results.

Yelena Galaktyonov, a volunteer from the legal aid department of the
organization Memorial -- which intervenes on behalf of prisoners and seeks to
document the crimes of the communist dictatorship -- is trying to help them
by stimulating them to depart from their everyday prison routine.

Since the early 1990s, Ms. Galaktyonov has been coming to Kolpino. She
established a library there and plans to build a greenhouse. Last year, the
Robert Bosch Foundation awarded her a grant of DM50,000 ($21,500) to build
it.

Ms. Galaktyonov wants to persuade the young inmates to work in the greenhouse
and get them to change their thinking. With luck, she can help prisoners get
used to living within the bounds of the law. Whether the organization has
been successful, is impossible to tell since Memorial's volunteers do not
keep statistics.

It is hoped that Memorial can improve the reintegration of boys who have been
released. But with recidivism rates of around 50 percent, prison authorities
simply give them a hearty "see you later" upon their release.

*******

#13
Christian Science Monitor
June 13, 2001
In the land of vodka, a boom in alcohol-free beer
By Scott Peterson
Staff writer of The Christian Science Monitor

Czars tried to control it. Bolsheviks outlawed it. Soviet-era Communist Party
bosses campaigned against it. But none could keep Russians from their vodka.

And they still lead the world in alcohol consumption, each drinking some 16
quarts of pure alcohol a year.

But while high alcoholism rates are often cited as part of Russia's broader
social decline, today that hard-liquor culture may be changing, if modestly.

Vodka sales are slowing, and production dropped 9 percent last year, while
sales of beer - with much lower alcohol content - have surged from 10 to 30
percent each year for a decade. Growth in 2000 was 23 percent.

But the key may be the surprising popularity of a new, nonalcoholic beer,
called Baltika No. 0.

"In the beginning, we were afraid there would be no demand, or that it would
be very weak," says Alexandre Dedegkaev, production director at Baltika,
Russia's largest brewery. "Now the line is loaded to 100 percent capacity,"
with plans to at least double output this year."

Baltika first put a nonalcoholic brew on the market in 1996, but it failed to
sell and became the butt of jokes. Since late February, though, when the
Swedish-Finnish owned St. Petersburg brewery put out "Baltika No. 0,"
Russians have been snapping it up.

One reason is taste. To separate alcohol from fully fermented beer, Baltika
uses an expensive process that preserves taste. Even plant workers here can't
tell the difference in blind tests, company officials say.

But some argue that Russian "progress" is the main reason for its popularity.
There is a growing awareness of the dangers and scale of alcoholism in
Russia, even as many statistics continue to worsen. Some 34,000 people died
of alcohol poisoning in Russia last year, government officials say, up 13.7
percent from 1999. Overall alcohol consumption continues to grow.

So there may be a greater sophistication of Russian drinkers, who demand a
"softer" tipple than vodka, and who widely consider beer to be on a par with
soda. People gather at city kiosks to drink beer at any time of day.
According to Russian law, beer is not an alcoholic beverage; Baltika
advertises it as a "civilized" and even healthy alternative to vodka. Market
research commissioned by Coca Cola found that overall soft-drink sales were
up 17 percent last year, too, with expected gains of 13.5 percent in 2001.
Mineral-water production is also increasing.

"I didn't think the market could change so much," says Mr. Dedegkaev, who
notes a rising standard of living in recent years. "Alcoholism is a social
phenomenon, and while many countries have it, we consume more [vodka] than we
should. Now, priorities are changing. People are more European, busier, and
treat their life and health more carefully."

Not all are convinced that beer - or its nonalcoholic variant - can wean
Russian drinkers from liquor.

"I don't think that Russia has passed the turning point toward a healthy mode
of life," says Alexander Pavlov, deputy head of the Agriculture Ministry's
Food Industry Department in Moscow. "The wider spread of nonalcoholic beer,
and more low-alcohol drink consumption, does not solve the problem of
alcoholism," he says. "If young people lose interest in vodka, the situation
may be improving. But on the other hand, regular consumption of low-alcohol
drinks can form a habit."

Still, it's a start.

There have also been changes at the political level. Former President Boris
Yeltsin was sometimes visibly drunk in public, an infamous imbiber of vodka
who would disappear for days during drinking bouts. But the more youthful
President Vladimir Putin, a judo expert who exercises regularly, met British
leader Tony Blair last year in a Moscow pub for a pint of lager.

Though Russia last year received $3.2 billion in revenues from alcohol
production - more than 5 percent of total state income - Mr. Putin last
August signed a string of strict new tax regulations that chilled the
industry. Confusion over their implementation, and lack of new required tax
stamps, led to the shutdown over the weekend of many of Russia's 700 legal
vodka distilleries.

Prohibition winds have also come from health minister Gennady Onishchenko,
who told Russians in January not to be lulled by feel-good beer ads. He
warned that a "sea of beer" was exacerbating already-heavy vodka use. "Now
even children and teenagers drink this."

While some in the Russian press criticized the minister for missing the point
that vodka is the real concern, that antidrinking sentiment is hardly
ruffling feathers for the new Museum of Russian Vodka, which opened in St.
Petersburg last Friday. "We see vodka as a national drink, like Irish whisky
and French cognac," says museum director Sergei Chentsov. "Formerly, it was a
myth of the Russian image, that vodka was a degenerating aspect of Russian
culture."

Exhibits show vodka's historic importance, and "indispensable" role in
Russian feasts since medieval times. Visitors are greeted by a life-size wax
figure of a monk offering a shot of vodka, while standing over a primitive
moonshine apparatus.

History records that even this nation's choice of religion depended on the
stuff. In the 10th century, Prince Vladimir (later made a saint) chose
Christianity over Islam, which prohibited alcohol, because "drink is the joy
of the Russians." There's also the legend of a 14th-century battle at the
River Piani, where Russian forces, after a bout of drinking, were surprised
and slaughtered by Mongols. Ever since, the word piani has been the root for
many Russian words about drunkenness.

Peter the Great - a famously heavy drinker himself - used a "Great Eagle
Goblet" as a punishment, sometimes forcing guests to drink down a bowl full
of vodka.

But in the Soviet era, alcohol had mixed reviews. Lenin reportedly said that
"vodka and other poisons will lead us back to capitalism." Stalin portrayed
alcoholism as tantamount to economic sabotage, and one official study in 1923
- the year total prohibition was lifted - calculated that the grain wasted on
brewing illegal moonshine, called samogon, could have saved thousands from
starving.

Mikhail Gorbachev launched his own war against drunkenness in the '80s, but
though the tough restrictions he imposed improved health appreciably, they
carried a high political cost.

As much as aficionados may consider vodka the "water of life" in Russia,
critics and officials say Russia must confront this heritage. Non-alcoholic
beer may be a start, and the popularity of Baltika No. 0 points to changing
Russian attitudes. But few think it will prove a solution.

"Because all beer is not officially considered alcohol, it can be advertised
and sold everywhere, including improper places like schools," says Pavel
Shapkin, head of the National Alcohol Association.

"Even when factories produce some no-alcoholic beer, they are motivated not
by the propaganda of a healthy life, but by purely economic reasons."

*******

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

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

CDI Headlines:  http://www.cdi.org/

Defense Monitor:  http://www.cdi.org/dm/2001

Weekly Defense Monitor:  http://www.cdi.org/weekly/