July 5, 2001 

This Date's Issues:   5336 • 5337

Johnson's Russia List
#5336
5 July 2001
davidjohnson@erols.com

[Note from David Johnson:
1. AP: Coup Plotters Defend Their Case.
2. AP: Russia Unhappy With Putin Motorcade.
3. Interfax: Poll shows Russia split over attitude towards socialism, reforms.
4. gazeta.ru: Fortress Moscow to Reinforce Defences.
5. Itar-Tass: Diplomat Comments on Russia-China Rapprochement.
6. Moscow Times: Elizabeth Wolfe, Survey: Cost of Expat Lifestyle Up.
7. Robert Bruce Ware: An Opening On Chechnya (JRL 5335).
8. Reuters: Russian Gazprom uses dinosaurs' lesson pay up!
9. AP: Moscow Gets Princess Diana Statue.
10. Moskovsky Komsomolets: Lev Sigal, A BLIND MAN IN A TRANSFORMER VAULT. This is the Russian state as perceived by a former Kremlin economist. An interview with Mikhail Delyagin of the Globalization Institute.
11. BBC Monitoring: Nezavisimaya Gazeta, Russian MP calls for compromise with USA on missile defence. (Aleksei Arbatov)]

*******

#1
Coup Plotters Defend Their Case
July 4, 2001
By VLADIMIR ISACHENKOV

MOSCOW (AP) - Organizers of the failed hardline coup against Mikhail
Gorbachev, sitting together Wednesday in an eerie reprise of their last joint
appearance a decade ago, defended their actions and said Russian President
Vladimir Putin is working to achieve many of their goals.

The August 1991 coup bid against the reformist Gorbachev was an attempt to
keep the Soviet Union from disintegrating, the organizers said. But it
backfired and precipitated the end of the USSR, whose collapse four months
later eventually spawned 15 independent nations.

``The current leadership is making efforts to restore control over the
country,'' said former Soviet Prime Minister Valentin Pavlov, flanked by
other coup-plotters at the offices of the hardline newspaper Patriot. ``Today
they are trying to do what we attempted to do in the Soviet Union in 1991.''

Pavlov and other members of the State Emergency Committee, as the plotters
called themselves, said their action was aimed at preventing
independent-minded republics from splitting from the Soviet Union. They said
it failed because they were badly prepared and were too cautious to use
force.

``We didn't want to fight against our own people,'' said former Soviet Vice
President Gennady Yanayev, who was the formal head of the State Emergency
Committee.

The coup plotters announced Soviet President Gorbachev was ill and isolated
him at a Black Sea resort. Looking glum and nervous, eight of them sat
together at a news conference to tell the nation the committee was in charge.
Yanayev's hands shook visibly.

The plotters moved armored columns into Moscow but stopped short of using
force against thousands of protesters who rallied behind Boris Yeltsin, then
president of the Russian republic.

After just three days, the coup was defeated, its organizers arrested and
Gorbachev freed to return to a Moscow where Yeltsin was increasingly in
charge. One organizer committed suicide after the coup collapsed.

The 12 jailed coup plotters were released by 1993 and amnestied by parliament
in 1994. Some later became lawmakers and one, Vasily Starodubtsev, recently
won a second term as a provincial governor.

The coup's defeat encouraged former Soviet republics to claim broader
independence, and in December 1991 Russia, Ukraine and Belarus announced the
Soviet Union defunct, forcing Gorbachev to resign on Dec. 25.

The coup organizers said the ensuing economic meltdown and a string of armed
conflicts in Russia and other former Soviet republics has proven they were
right in trying to stem the Soviet breakup.

``The last 10 years can be summed up in one word - collapse,'' said former
Soviet Defense Minister Dmitry Yazov. ``Current leaders have begun to
understand it,'' he added.

Putin has pledged to restore Russia's economic and military power and its
international prestige. He has championed a war in breakaway Chechnya and
reined in Russia's regions, putting them under stronger federal control.

``I hope that the current political leadership will learn the lessons of 1991
and keep Russia from breaking up,'' Pavlov said.

``President Putin has given signals that he was trying to defend Russia's
positions at an international arena,'' Oleg Baklanov, the former chief of
Soviet military-industrial complex.

Putin's critics have expressed concern about media freedom in Russia and
assailed his decision to restore the old Soviet anthem - albeit with new
words. Some eyebrows were raised when Putin invited one of the coup plotters,
former KGB chief Vladimir Kryuchkov, to his inauguration ceremony in May
2000.

Kryuchkov didn't attend Wednesday's news conference, but praised Putin as
``an independent politician and the most constructive leader of recent
years'' in an interview in the weekly Literaturnaya Gazeta.

*******

#2
Russia Unhappy With Putin Motorcade
July 4, 2001
By ANNA DOLGOV

MOSCOW (AP) - It's the nightmare of every Moscow motorist, swooping down on
unsuspecting drivers on the city's clogged streets, locking cars in place for
hours on exhaust-choked roads - President Vladimir Putin's motorcade.

When Putin travels to and from the Kremlin, major thoroughfares are blocked
off to speed and secure his passage, worsening traffic jams in a city whose
streets are already overcrowded with cars.

Exasperated by the jams and the message the closures send to ordinary
citizens, Russian lawmakers urged Putin to ``abolish the archaic practice of
blocking roads for the passage of official convoys of any level.''

The State Duma, Russia's 450-seat lower parliament house, made the request in
a nonbinding resolution passed by a 262-1 vote on Wednesday.

The author of the appeal, film director and lawmaker Stanislav Govorukhin,
described a massive weekend jam caused when a major road was blocked for
hours while tens of thousands of Muscovites were returning from the country.

``There were women, children in the cars,'' Govorukhin said in a written
appeal. ``There was heat and clouds of dust from cars trying to pass the jam
along the curbs. No water wells, no toilets.''

Former President Boris Yeltsin also had traffic stopped to clear the way for
his convoys - but only in the direction he was riding, and only for about the
amount time it took his to pass a stretch of road.

But under Putin, long before the presidential cortege approaches, police stop
all regular traffic along the route in both directions. Scores of people had
to spend the night in their cars during his visit last month to St.
Petersburg for a meeting with Austria's president.

*******

#3
Poll shows Russia split over attitude towards socialism, reforms
Interfax

Moscow, 4 July: One in five Russians (20 per cent), looking back over the
past decade, would prefer to have socialism back in Russia.

Interfax obtained this statistics on Wednesday [4 July] from the
monitoring.ru research group, which polled 1,600 residents of more than 100
communities in all seven Federal Districts of Russia at the end of June.

Forty-eight per cent of respondents would prefer that Russia develop by way
of reform but with the population socially secured, while 16 per cent want
the current course of reform to continue.

Sixteen per cent were at a loss to answer.

*******

#4
gazeta.ru
July 4, 2001
Fortress Moscow to Reinforce Defences
By Inga Zamuruyeva

In response to the Moscow Mayor’s unrelenting drive to limit the flow of
outsiders into the Russian capital, the city authorities have devised a new
scheme for imposing stricter controls on those arriving in the city.
Initially, new rules will apply only to foreigners arriving at Moscow’s
Riga train station, but plans are in place to check all arrivals in the
city, irrespective of nationality.

Vice mayor of Moscow Valery Shantsev has announced that a trial immigration
checkpoint will begin to operate at Moscow’s Riga station on July 15th.

En route to Moscow’s Riga station all foreign passengers will receive an
immigration questionnaire to complete, giving details of full name,
passport details, the aim of visit, planned term of stay in Moscow and
place of abode in the capital.

Although the questionnaire is officially voluntary, in reality those who
refuse to complete the questionnaire will not be allowed to pass through
the police checkpoint at the station.

Upon registering at the Rizhsky train station, the new arrivals will then
have the right to stay in the capital for three days, after which they will
be obliged to register at the Interior Ministry’s visa and registration
department. The checkpoint stamp will cost visitors 20 rubles.

Authorities say the summary registration procedure will save trouble for
transit passengers who do not plan to stay in Moscow longer than 3 days.
But then, in compliance with the current rules, those who stay longer than
three days will have to re-register with at an Interior Ministry visa and
registration department. This rule applies to all foreigners arriving
anywhere in Russia.

Officials in the Moscow government are working on amendments to the city’s
laws pertaining to the terms and conditions of the CIS-citizens wishing to
stay in Moscow. At present CIS citizens are not required to acquire visas
to enter Russia. However, when in Moscow they have to go through the often
time consuming and bureaucratic process of registering with Interior
Ministry registration departments, called OVIR in Russian.

Non-Moscow residents with Russian citizenship are obliged by Moscow
legislation to register at passport offices (passportnyi stol) after three
days in the capital.

The amendments being planned by the Moscow City government, if adopted,
will allow CIS-citizens to stay in Moscow without registering with the OVIR
for 10 days, instead of the current 3 days.

The amendments also provide that the Moscow registration certificate will
be issued for an unlimited period, which means visitors will not have to
worry about expiry all the time.

The above-mentioned amendments pertain only to CIS citizens who do not
require visas to enter Russia, and not to Russians from outside Moscow.

The real purpose of the planned immigration checkpoints is to make it
easier for the Moscow authorities to record the amount of outsiders
arriving in the capital and make it easier to trace those who stay longer
than 3 days in the city without registering.

Those who fail to comply with those requirements are subject to fines from
5 to 100 minimum monthly wages (currently that amounts to 1500 – 30 000
rubles respectively). Indeed these fines are a significant source of income
for Moscow's law enforcement authorities.

Moscow’s laws on compulsory registration are a blatant violation of Russian
citizens’ constitutional right to freedom of movement and choice of place
of abode.

Back in 1997 the Constitutional Court ruled that the Moscow registration
laws are anti-constitutional. However, the Moscow government has stubbornly
ignored both the Court ruling and public protests.

The Moscow Mayor’s decree issued on June 4th providing for the immigration
checkpoint to be opened at the Riga station is clear evidence that
Luzhkov’s administration intends to preserve and strengthen the city’s
special regime for outsiders.

Although the pilot registration upon arrival scheme will provisionally only
apply to foreigners arriving in Moscow at Rizhsky train station, if the
project proves successful, in a year and a half the requirement will be
extended to apply to Russian non-residents of Moscow.

By the end of 2002 the Moscow authorities plan to set up immigration
checkpoints at all of the cities train stations.

It remains to be seen whether the presidential envoy to the Central Federal
District will intervene and challenge the Moscow authorities’ violation of
constitutional rights.

********

#5
Diplomat Comments on Russia-China Rapprochement

MOSCOW, Jul 03, 2001 (Itar-Tass via COMTEX) -- It's incorrect to explain the
rapprochement of Russia and China with anti-American feelings or the striving
for "a military-political union," Deputy Foreign Minister Alexander Losyukov
told Itar-Tass in an exclusive interview on Tuesday.

Asked about the role of "the American factor" in the Russia- China relations,
Losyukov said, "naturally, the rapprochement is based on similar assessments
of international development prospects, but it is mostly explained with the
pragmatic understanding of national interests of the two countries."

Russia and China are working on favorable conditions for their economic
growth and better living standards. Therefore they are using possibilities of
the bilateral cooperation. "This very long-term task is set in the new
interstate treaty," the diplomat said.

Russia and China are genuinely vital neighbors. They are connected to each
other by the long and complicated history of bilateral relations, cooperation
traditions, the 4,000 kilometer border and similar opinions about the state
of international affairs, Losyukov said. "It is good that they are stronger
than the separating factors of the past. It is wonderful that Russia and
China are determined to develop the course of friendship, neighborliness and
cooperation. The course will be outlined in the new interstate treaty between
Russia and China," he noted.

********

#6
Moscow Times
July 4, 2001
Survey: Cost of Expat Lifestyle Up
By Elizabeth Wolfe
Staff Writer

Life is getting more expensive for expatriates in Moscow and St.
Petersburg, according to a cost-of-living survey released this week.

After taking a plunge following the ruble collapse in 1998, Moscow is moving
back up the list of the world's most expensive cities and now stands at No.
34 -- sandwiched between Mexico City and Helsinki -- according to research
conducted in March by the London-based Economist Intelligence Unit.

Europe's most costly place to live in 1998, Moscow sank to 88th place the
following year, according to the EIU's international survey of 131 cities.
Oslo is the most expensive city in Europe this year, followed closely by
London and Zurich.

St. Petersburg, along with Casablanca, Warsaw and two other cities, is ranked
No. 89, up from 101 in 2000.

The survey is not meant for the average citizen but is supposed to serve as a
calculator for corporations sending employees and their families abroad. If
for that reason alone, then expatriates in Asian cities working for
international companies should get a raise in living expenses to retain the
same purchasing power: Osaka, Kobe and Tokyo are tied for first place with
Hong Kong right behind.

Belgrade and Tehran were ranked last, with Belgrade falling from 19th place.

The Russian capital saw little movement in the survey since last year, when
it was ranked 39th, and is not forecast to return to its previous top-10
status next year, survey editor Bill Ridgers said in a telephone interview
from London.

The driving factor behind Moscow's sturdy performance in 2000 was the
relatively stable currency. The ruble lost less than 1 percent to the dollar,
in nominal terms, from February 2000 to February 2001, while prices shot up
22 percent.

"Moscow has not moved as much as we thought because a lot of goods are
dollar-denominated," Ridgers said.

Inflation, which rose some 22 percent, has less impact on dollar-denominated
goods.

New York City served as the survey's benchmark with an index of 100. Osaka
and Tokyo had an index of 140, Moscow had 85 and St. Petersburg, 65.

There were 10 categories and about 130 items that were factored into the
index, from groceries to haircuts to utility bills. EIU had correspondents in
each city recording prices in places they judged expats were likely to
frequent. Some categories were not included in the index, such as rented
accommodation, hotels and car hire. The EIU also calculated how much a
traveling businessperson should spend on a trip.

Cities were chosen if they had large expat populations and thus clients to
buy the survey.

Another survey will be conducted in September and published at the end of
December.

********

#7
From: "Robert Bruce Ware" <bruce@brick.net>
Subject: An Opening On Chechnya (JRL 5335)
Date: Wed, 4 Jul 2001

Brzezinski, Kampelman, Haig hit their highest note in the Washington Post
piece, "An Opening on Chechnya" (JRL 5335), when they observe that Russia's
legitimate interest in defending its citizens from aggression fails to
justify its brutal tactics against Chechen civilians. In fact, they might
have gone further to point out the fundamental inconsistency in Russian
policy: If Moscow really wants Chechens to be Russian citizens then it must
begin by defending their rights as such. So long as Russia fails to
guarantee the rights of Chechen civilians it presents a de facto admission
that they are not Russian citizens. It thereby sustains the separatist
cause and persuades more people to take it up. Russia surely will fail to
pacify Chechnya unless it begins by protecting Chechens.

If its timing is any indication, the lowest note in the Post essay may be
the coincidence of its rather close approximation to Patrick Armstrong's
recent JRL contribution on the same topic.

But before we reach the refrain it becomes clear that none of the three
authors has had much experience in the North Caucasus. Otherwise they
might have felt some need to try to explain exactly how, apart from
military occupation, it will be possible to prevent attacks upon Russia and
Russians from Chechnya, and who in Chechnya could possibly pretend to be in
any position to guarantee that such attacks will not occur. Perhaps it is
difficult for Alexander Haig to imagine, but in Chechnya there simply is no
one "in control".

Had there been anyone in control in Chechnya from 1996 to 1999, and had
there not been continuous attacks from Chechnya upon Russia, and upon
Russians, and upon virtually all organizations and individuals who were
active in the region because they wished to understand and assist the
peoples of the Caucasus, then Russia would have had no cause to reenter
Chechnya.

Few people in Dagestan would agree with Brzezinski, Kampelman, Haig that
there is any revelation in Putin's remark that the principal issue in the
Chechen war is the protection of Russians from Chechnya-based depredations.
They understand that Russia left Chechnya alone for three horrible years,
until long past the time that attacks from Chechnya had become unbearable.
It is only those, like the authors of this piece and the editorial staff of
the Post, far from the scene and with little experience, who are naive
enough to believe that the principal cause of the war is Russian imperialism.

The authors this piece, and other "independent analysts", fail to recognize
the harsh reality of the situation: The fact that a military solution in
Chechnya is not feasible, as it surely is not, does not establish the
feasibility of a political solution. The fact is that there is no
solution, as is sometimes the case when wars are fought. Peace will come
only with complete exhaustion on all sides. The horrible truth is that it
is likely to take time.

It is a truly horrible situation. But no one who calls for an end to the
war in Chechnya without explaining exactly how the people of Dagestan,
Ingushetia, Osetia, etc., will be protected from the horrors that were
visited upon them from 1996 to 1999 can make any pretense to caring about
the peoples of the Caucasus. It is possible for "analysts" and
editorialists to write essays such as those that regularly appear in the
Post, precisely because they have never cared, and will never care, about
the people of the Caucasus. Where were all the essays about the suffering
of the people of the Caucasus from 1996 to 1999?

*********

#8
Russian Gazprom uses dinosaurs' lesson pay up!

MOSCOW, July 3 (Reuters) - Eighth-grader Irina Grankina drew a shivering
green brontosaurus bundled up in a scarf, and wrote a poem for the Russian
gas company.

"Why did the dinosaurs die out?/ It's a difficult question for us./ But we
managed to find out the answer: It's 'cause they didn't pay for their gas."

The cartoon was one of hundreds of thousands submitted to a contest promoted
across Russia by the Education Ministry and state-dominated gas monopoly
Gazprom, urging schoolchildren to draw pictures and write poetry on the topic
"Why pay for gas?"

Winning entries have been bound in a glossy, 250-page coffee table-sized book
published by the gas giant, which accounts for a quarter of Russian exports.

With their teachers' help, children enlisted Winnie the Pooh, Donald Duck,
the Three Little Pigs, and other characters to exhort their countrymen to pay
the gas bill.

The issue is no laughing matter. Gazprom blamed unpaid bills, mostly from
businesses, for late payment of taxes that helped snowball into Russia's 1998
economic crisis.

*******

#9
Moscow Gets Princess Diana Statue
July 4, 2001

MOSCOW (AP) - A prominent Moscow sculptor known for mammoth and sometimes
controversial works has made a statue of Princess Diana for a museum in the
Russian capital, his office said Wednesday.

Zurab Tsereteli, president of the Russian Academy of Art, sculpted the 6
1/2-foot bronze statue on his own initiative, roughly timed around what
would have been her 40th birthday on July 1, said Elena Larionova,
spokeswoman for the academy.

The artist, a close ally and the favorite artist of Moscow Mayor Yuri
Luzhkov, said he had met Diana several times at art and charity events.

The statue, which portrays Diana standing in a ruffled evening gown and
tiara, is to be installed in a modern art museum in central Moscow later
this month, Larionova said.

The statue's size is modest by Tsereteli standards. He sculpted a 660-ton
bronze statue of Christopher Columbus 10 years ago that has yet to be
installed, after five U.S. cities rejected it for reasons including its
cost, size and appearance. The sculpture is twice as high as the Statue of
Liberty without her pedestal.

The Columbus statue is now in pieces awaiting installation in a Puerto
Rican town, but the project has been held up by legal challenges and a lack
of funding.

Tsereteli's architectural projects and oversized sculptures have appeared
all over Luzhkov's Moscow, to the irritation of residents who feel the
works lack subtlety and artistic merit.

The most criticized was a 310-foot-high statue to Peter the Great on the
embankment of the Moscow River, a bronze behemoth depicting the seagoing
czar in Roman warrior attire astride the rigging of a ship. Despite Peter's
famous disdain for Moscow, it was unveiled in a pomp-filled ceremony to
launch the city's 850th anniversary celebrations in 1997.

*******

#10
Moskovsky Komsomolets
July 4, 2001
A BLIND MAN IN A TRANSFORMER VAULT
This is the Russian state as perceived by a former Kremlin economist
An interview with Mikhail Delyagin of the Globalization Institute
Author: Lev Sigal
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
MIKHAIL DELYAGIN ACCUSES THE LIBERAL REFORMERS OF CORRUPTION AND BLAMES THE CABINET FOR THE PLAN TO LIFT RESTRICTIONS ON CAPITAL EXPORTS. HE SUPPORTS SOME DEGREE OF STATE INTERVENTION IN THE ECONOMY.
HE ADDS THAT VICTORY FOR ECONOMIC LIBERALISM IS IMPOSSIBLE AS LONG AS MOST RUSSIANS ARE LIVING IN POVERTY.

Mikhail Delyagin, 33, holds a doctorate in economics, is an
associate member of the Russian Academy of Natural Sciences, and heads
the Globalization Institute. He came to the Kremlin at the same time
as Boris Yeltsin, as a student. During his third year studying
economics at Moscow State University, Delyagin wrote a paper on
monopolism in the USSR. His tutor, Igor Niet, liked his work so much
that he immediately included the talented young man in the economic
think-tank he chaired for the future first Russian president. Delyagin
worked for nine years, first in Yeltsin's presidential administration
and then in the Cabinet administration. He left government work only
two years ago. Despite his young age and a career exclusively "under
the democrats", Delyagin hates being associated with the so-called
young reformers. He wishes he could have opposed Yegor Gaidar's "shock
therapy" and Anatoly Chubais' privatization at the time. Delyagin is
one of the few consistent and stern opponents of the liberal
monetarists nowadays.

Question: You suggest that the state should regulate many
economic processes and intervene in resolution of certain economic
problems. But this is fraught with colossal corruption, isn't it?

Mikhail Delyagin: As long as there is a state, there will be the
threat of corruption. So what? Or do you perhaps think that
liberalization of the economy is less fraught with corruption than
state economic regulation? Please note that in the USSR, where the
economy was totally state run, the level of corruption was
nevertheless much lower than during and after the liberal reforms.
Many have already forgotten that under the liberal course the state
policy was actually aimed towards encouragement of corruption. What
else were the state short-term bonds if not the means of colossal
enrichment for senior state officials and their affiliates - the
oligarchs? Incidentally, after the August 1998 crisis the government
and the Central Bank authorities were accused of unscrupulous gambling
on the state short-term bond market. Those officials were not put on
trial only because they were later on replaced by political
vegetarians who thought better of prosecuting the predecessors. And
that mistake cost them dearly, although the Primakov government
fulfilled his duty: with help of the economic program developed under
the leadership of Maslyukov the cabinet stabilized the situation and
lay the fundament for the 1999-2001 economic growth...

But let us return to corruption. If we are to compare a liberal
economy and an economy effectively regulated by the state we must
understand one thing: a wrecked sewer system is much more dangerous
for the country than corruption per se. On the other hand, disrupted
sewerage often results from the same corruption, but this corruption
is specific.

I will give you one example. Let's assume an apartment block is
being erected. The chair of the building department stows away a
number of bricks and later builds himself a dacha with them. Now if he
is not too cheeky a thief, the apartment block still does not fall
down. This is the Soviet - or, if you so desire, international - type
of corruption.

However, the Russian reformers have invented a qualitatively new
type, when an already erected apartment block, let it be ugly or
inconvenient, gets razed to the ground, its debris used as material
for a villa, and its residents thrown out onto the street because they
have allegedly been living in a house not fit for living...

And it would be a mistake to think that all t7his is already in
the past. Figuratively speaking, this is how the future reforms of the
natural monopolies will look like, according to the plans cherished by
those monopolies' top managers.

Question: Could you expand on the topic?

Delyagin: I have asked Chairman of the Russian Construction
Department Anvar Shamuzafarov on many occasions about the average
percentage of the planned increase in housing and communal services
tariffs across Russia. Shamuzafarov avoids direct answers. And it
seems to me he does not know the exact answer himself. On the other
hand, poor citizens need tariff compensations already today. We all
know the value of such calculations. They will result in mass heat
cutoffs and power blackouts which, in turn, may well lead to a true
"energy terror"...

Whatever the case, the reforms of the natural monopolies designed
by their top managers will do Russia no good for they are objectively
directed towards satisfaction of the interests of those managers, not
of society. Only the state is capable of sticking up for society's
interests. Therefore, I suggest not only concentrating the tariff
policy management into the hands of a uniform state body but also
establishing that the growth of the tariffs on the natural monopolies'
produce should not exceed the growth of the industrial prices. If the
tariffs growth does exceed the growth of industrial prices, then let
the government or the parliament form an investigation commission to
establish the cause: a real economic problem or a crime.

However, the main thing is that the reform of the natural
monopolies should not be started until the state has provided for
financial transparency of the said monopolies. Without financial
transparency, we will resemble a blindfolded man who enters a
transformer vault and tries to "reform" something or other inside.

Question: Can it be so that the absence of transparency is the
basis of the natural monopolists' power?

Delyagin: The problem is, the absence of transparency results in
inefficiency. The most terrible thing is that the natural monopolies'
material resources are degrading. For example, the Gazprom
headquarters are located in a gigantic skyscraper in the center of
Moscow, whereas northern gas deposits are exhausting. And there are no
investments for developing new deposits. As a result, today the
European part of Russia already depends on Turkmen gas, and President
Niyazov may dictate his conditions to us...

Question: Well, it's no use hoping for investments from the
state. It still has to pay the foreign debts... Incidentally, what is
your opinion of the foreign debt problem?

Delyagin: Our foreign creditors have generally conceded to the
formula, according to which we diligently pay off Russia's debts and
recoup the debts of the USSR only when we can. One high pitch of the
payment will be in 2003 and 2004, and another in 2008. It would be
logical to try agree with out creditors in such a way that we could
stretch the installments along the entire period between these two
pitches. However, our government has undertaken to repay the debt
without as much as trying to negotiate over its restructuring. So much
for the government of reformer: whom does it actually serve, society
or foreign creditors?

By the way, such things are also fraught with corruption, because
if you pay from the federal budget at the moment when you might as
well not pay, the suspicion forms that you personally receive a
percentage on these payments.

Question: Two percent, to be exact?

Delyagin: Come on, don't pin on Kasianov the blame for the sins
he did not indulge in - he has sins of his own, after all. If someone
wants to cover up the traces of a crime he/she raises hell over an
even more terrible alleged crime. In July 1998, the West granted
Russia a $4.8 billion credit for stabilizing the ruble exchange value.
If this sum had arrived in the Moscow Interbank Currency Exchange,
there would have been no August 1998 crisis at all. However, the
credit was sold outside the exchange, and not by the market exchange
rate, at that. It was for the purpose of hushing up this incident that
the misinformation was leaked to the media about "Misha the Two
Percent" - the alleged nickname given to Mikhail Kasianov by Western
creditors he negotiated with over the August default consequences...
By the way, the level of our prime minister's competence is manifested
by the fact that he never managed to protect himself against these
absurd accusations.

Question: It is worth noting that despite the necessity of
servicing foreign debts, the government intends to deregulate taking
capital out of Russia...

Delyagin: I was really shocked to hear that the Gref plan to
deregulate currency control had been included in the presidential
address to the Federal Assembly. The government's way of thinking
defies elementary logic: capital flight is enormous, i.e. currency
control cannot cope with it; ergo, the currency control should be
eliminated. It is like saying that since the crime rate is high, the
police perform poorly; therefore, in order to eradicate crime we
should get rid of the police... It is true that citizens of developed
nations have the right to take their capital out of the country
without restriction. But we live in social and economic conditions
different from those in countries with stable market economies. For
instance, one-third of the Russian population is living below the
poverty line. As long as this situation continues, a victory for
economic liberalism is impossible in Russia.

(Translated by Alexander Dubovoi)

*******

#11
BBC Monitoring
Russian MP calls for compromise with USA on missile defence
Source: Nezavisimaya Gazeta, Moscow, in Russian 4 Jul 01

A leading Russian parliamentary defence official has called for a more
positive Russian response to the USA's call for changes to the ABM treaty.
Aleksey Arbatov, deputy chairman of the Duma Defence Committee, argues that
if mutual nuclear deterrence can be preserved between Russia and the USA
there is room for compromise on missile defence. Arbatov says that Russia
should accept amendments to the ABM treaty in exchange for concessions on a
new START treaty. Russia could agree to testing of missile defence system
components, he says. Arbatov argues that such a response is in Russia's
long-term strategic interests. The following is the text of a report from the
HTML version of the Russian newspaper Nezavisimaya Gazeta on 4 July with
subheadings as published:

The Russian-American Ljubljana summit did not move the sides forward in
resolving the serious issues of relations between the two powers and
primarily the problem of antimissile defence. Positions were "articulated"
yet again, leaving very little room for compromise, and two working groups
were formed to study missile threats and methods of fighting them.

The official American view is that with the end of the cold war Russia and
the United States have ceased to be enemies, war between them has become
unlikely, and relations of mutual nuclear deterrence based on the mutual
ability to destroy each other with nuclear strikes have lost their point and
meaning. Accordingly, the 1972 ABM Treaty, which enshrined this mutual
deterrent capability through tough restrictions on defensive systems against
strategic ballistic missiles, has lost its stabilizing importance. At the
same time, it is claimed that the Treaty has become an obstacle to the
creation of missile defence for defence against "rogue countries" (threshold
countries) which the proliferation of missile technology and weapons of mass
destruction enables or will enable in the future to deliver unimpeded strikes
against the great powers and to blackmail them with that threat.

Proceeding from that logic, Washington suggests consigning the ABM Treaty to
the scrap heap and embarking on the creation of strategic missile defence
systems. And at the same time renouncing formal agreements on the reduction
and limitation of strategic offensive weapons and moving to unilateral
voluntary reductions and confidence-building measures in this sphere (saying
that since deterrence is being abolished why have mutually agreed limits on
strategic offensive weapons?)

The official Russian line, while not disputing that the two powers are no
longer enemies and have no need of mutual deterrence, relies on the thesis
that the ABM Treaty remains the cornerstone of strategic stability and of the
entire nuclear weapons limitation and reduction system (primarily START I and
START II and the START III framework agreement).

The likelihood of missile threats from threshold states is not denied but it
is proposed that they initially be studied jointly and that a joint Russian
Federation-NATO nonstrategic (theatre) missile defence for Europe be created
to counter them and a more effective policy for the nonproliferation of
nuclear and missile weapons be pursued.

Thereupon the presidents parted in Ljubljana, having formed a most pleasant
impression of each other.

Mutual Deterrence

It seems to me that both positions are insufficiently realistic and that they
are inconsistent. Guided by diverse political motives, the sides are circling
and approaching the real problems but are quite unable to embark directly on
finding a solution for them. And as long as that is the case we cannot hope
for practical results in this sphere and the sides will talk "past each
other", albeit in a friendly manner.

First about the United States' approach. The cold war does indeed no longer
exist although relapses into it are not out of the question (we only have to
recall the eruption of hostility between Russia and the United States during
NATO's air attacks on Yugoslavia in 1999). As for deterrence, on checking,
one sees that that concept is not so bad. It means primarily that nuclear
weapons are not regarded as the most powerful and effective means of warfare
which make it possible to achieve victory with greater certainty in an armed
conflict. (Those were the views which prevailed in US doctrine through to the
end of the fifties and in USSR doctrine through to the end of the sixties).
On the contrary, the enormous destructive power of these weapons is seen as a
factor which makes war mutually unacceptable. The main purpose of nuclear
weapons is to prevent their use by the other side thanks to one's own ability
to inflict unacceptable damage on a potential aggressor.

The presence of such destructive weapons in the hands of one state is of
itself the greatest threat to one's own national security. The only abiding
guarantee of safety is one's own nuclear deterrent potential - even if at a
particular time powers do not regard each other as enemies. Especially as
political relationships can change very rapidly and the strategic deterrent
balance takes a long time, measured in decades, to change substantially
because of the enormous complexity, cost, and physical size of nuclear
missile weapons and their infrastructure.

In that sense we shall venture to formulate the rule that nuclear powers are
doomed to mutual deterrence as the essence of their strategic relationships.
Deterrence can come to the fore under crisis conditions or recede into the
wings of short-term politics in an atmosphere in which relations improve, but
it remains an objective reality and is always an invisible presence. It is
like the force of gravity which is not felt in ordinary life but immediately
makes it presence known if you try to jump from a 10th floor window. Mutual
deterrence is the best scenario for strategic relations (particularly if it
is regulated by a system of treaties) for which no more attractive substitute
has been conceived despite the sea of rhetoric and the embraces and toasts at
the summits of the nineties.

In every case the exception proves the rule. In particular there may not be
relations of mutual deterrence between nuclear powers if they are
military-political allies (for instance the United States, Britain, and
France). If they are out of range of their nuclear weapon delivery systems
(like Britain and China). Or if their nuclear weapons are obviously targeted
on another foe (France and Israel or Pakistan and the PRC). Or if one of them
has overwhelming nuclear superiority and the potential for a disarming strike
against another (the United States and the USSR until the late fifties or the
United States and China until recently). Finally, nuclear deterrence in its
traditional model can be done away with if effective antimissile defence
systems and systems for defence against other types of nuclear weapon
delivery systems are created by one or both sides.

Under the Screen of Rhetoric

The present strategic collaboration between Russia and the United States does
not conform to any of these exceptions and so remains a system of mutual
nuclear deterrence. Each side is left with something like 5,000-6,000 nuclear
warheads in the strategic nuclear forces. Since there are weapons there are
also operational plans for their use and also lists of targets for nuclear
strikes. To an overwhelming extent these weapons are aimed against each other
because throughout the rest of the world there are simply not enough targets
for the application of available nuclear weapons. Lowering the degree of
combat readiness and the non-targeting of strategic nuclear forces does not
alter the thrust of relations but merely introduces a small time lag before
missiles and bombers are launched. And that is how it will be for the next
10-15 years even if both powers reduce their strategic nuclear forces to
1,500-2,000 nuclear warheads. Unless, of course, any of the above-mentioned
exceptions to the nuclear missile rule should materialize.

It is clear that responsible politicians now consider it bad form to talk of
this in public. The sordid side of life has been left to the military and
technical specialists to deal with. But loudly denying this reality is like a
child who closes his eyes and thinks no one can see him.

On that plane American statements about deterrence are nothing but political
rhetoric designed to justify to the broad public the intentions to abandon
the 1972 treaty and create a missile defence for the United States'
territory. One could take the US stance seriously at least to some degree if
the United States were simultaneously to invite Russia to agree on an
in-depth reduction of offensive nuclear weapons, to below 1,000 warheads, for
instance. Then it would be possible to suppose that most of these weapons
would not be targeted against each other and that relations of deterrence
would recede into the past with both sides' creation of antimissile defence
systems individually or through joint efforts. But the United States does not
agree to a treaty on the in-depth reduction of strategic nuclear forces and
its vague statements regarding the possibility of an antimissile system
shared with other states is not taken seriously by many people even among its
NATO allies, not to mention Russia.

Under these conditions American proposals to renounce the legal treaty regime
for the reduction and limitation of defensive and offensive strategic weapons
does not stand up to any criticism. The two powers may no longer consider
each other enemies and may not be preparing in earnest for war but relations
of latent mutual deterrence remain between them since they are still a long
way from being allies. This intermediate status presupposes more radical
disarmament and confidence-building agreements from which with time there may
grow something bigger than partnership in regulating strategic stability. And
conversely the premature renunciation of treaties could generate mounting
uncertainty and mutual suspicion and return the powers to a state of
confrontation and hostility.

It seems to me that, in reality, behind the screen of rhetoric the United
States' position is determined by different considerations. Apart form the
inertia of election commitments and the Republicans' traditional adherence to
the idea of missile defence (let us recall Richard Nixon's Safeguard missile
defence programme and Ronald Reagan's strategic defence initiative) the key
role in Washington's approach towards this issue is played by the United
States' new position in the world since the end of the cold war. In the
United States' security priorities an increasingly large place is indeed
taken up by questions of nuclear missile weapons proliferation and the growth
of China's military and political might. As for Russia, in its real strategic
policy Washington still relies on the deterrence concept but is less and less
concerned about strategic offensive arms limitation.

What Perturbs Washington

In actual fact, why should Washington be worried about START I, START II, and
START III if Russia, as can be judged from open information, has in any case
unilaterally decided to reduce its strategic nuclear forces to 1,500 or fewer
warheads and, in addition, to restructure them in a feeble simulacrum of the
American triad, that is voluntarily and free of charge to do what the United
States has been seeking for 30 years to achieve in the course of persistent
negotiations? As for the ABM Treaty, here too the United States is losing
palpable incentives to restraint - after all, if the United States leaves the
treaty Russia will hardly be able to do anything very inconvenient to
American security.

Ground-launched ICBM's, particularly mobile ICBM's, have the greatest
survivability before launch and the opportunity for rapid build-up both in
terms of missiles and warheads (by deploying multiple re-entry vehicles) with
a view to enhancing their potential for overcoming antimissile defence and
equalizing the offensive forces balance. If that component is wound down as
currently planned then the possibility of equipping silo-launched ICBM's with
multiple warheads will not perturb the United States too much. After all, the
United States is capable without exertion of maintaining its own strategic
nuclear forces at a level which will retain a substantial quantitative
superiority over the Russian Federation, not to mention the ability to strike
all Russia's silo-launched ICBM's, airfields, and submarine bases using a
small proportion of its own Peacekeeper and Trident-2 missiles. It is as
naive as it is futile to blame the Americans for that. A nuclear missile
policy is determined by the calculations and plans of pragmatic strategists
and not by the high-flown declarations of politicians and Russia would
probably behave in much the same way if the sides changed places.

Thus the main strategic deterrent factor which operated in the seventies and
eighties against withdrawal from the ABM Treaty and the development of an
antimissile defence system loses its meaning. Elements of a general political
nature are left: the disquiet of American allies, reluctance to push Russia
towards closer relations with China, personal changes in the US Senate.
Washington's activity, including the Ljubljana meeting, is now aimed at
settling these issues, and on the basis of past experience the Administration
will eventually be able to settle problems with its allies and the Senate at
any rate.

Threshold Countries and China

With regard to the missile threat from rogue countries Washington is
obviously leaving something important unsaid. It is not that it is afraid of
an unprovoked and suicidal attack from them (for which use could be made of
the "bomb in the suitcase" and other nonmissile delivery methods). The point
is that the United States intends to continue to use force in crises like the
war in the Persian Gulf in 1991 and its adversaries' possession of nuclear
weapons would curb American strong-arm actions. A pre-emptive strike against
the missile systems of "rogue countries" might not destroy all targets and it
is here that a missile defence would protect the United States against a
limited retaliatory strike.

There is even more unpredictability with regard to China. Predicting an
increase in tension and rivalry with the Asian giant in the next few decades,
the United States is seeking to put off the moment when Beijing will acquire
a full potential for deterrence against Washington. The United States would
like to maintain the capability for a disarming strike against the PRC's
missile forces combined with antimissile defence to repel its weakened
responsive salvo. Here there operates the same inexorable strategic logic
which operated with regard to the USSR in the sixties when the United States
promoted the Nike X and Sentinel missile defence programmes (incidentally,
even at the time the latter was in part targeted against China). To determine
the defence's technical potential the Pentagon wants to conduct tests on a
wide range of missile defence elements and systems, which is hindered by the
1972 treaty's restrictions.

Whether the new American missile defence will be designed for use against
Russia depends primarily on the United States' technical successes in the
field of creating missile defence and the Russian Federation's course towards
the unilateral reduction of its strategic nuclear forces. The dynamic of
mutual deterrence in some cases promotes limitations on offensive and
defensive strategic weapons while in others it works against these
limitations. Only a radical change to Russian-American relations in the
spirit of the above exceptions to the nuclear deterrence rules can eliminate
that dynamic.

Moscow's Line

Now about Moscow's line on this issue. First of all, the programme that has
been adopted for the unilateral reduction and restructuring of the Russian
strategic nuclear forces - far ahead even of the limits of the START III
framework agreement - has drastically weakened the basis of the Russian
Federation's political position with regard to START II and START III and
with regard to the 1972 treaty. On questions as serious and complex as
military-strategic balance one cannot count on the philanthropy of the other
side and it is futile to rely solely on the power of the logic of one's
negotiating position. Weightier arguments are needed here. It is true that
all is not that well with regard to Moscow's logic either.

The ABM Treaty was indeed a cornerstone of the [treaty] regime and the
procedures for the regulation of offensive strategic weapons in the seventies
through to the nineties. But the treaty was not born of the strategic
stability theory which Moscow initially totally rejected (as manifested at
the meeting between Aleksey Kosygin and Lyndon Johnson in Glassboro in 1967).
The 1972 treaty embodied a pragmatic compromise whereby the USSR limited the
stockpiling of its ballistic missiles while the United States halted the
Safeguard missile defence programme. Here the terms of the treaty were geared
to the systems which both sides had already deployed at that time: The USSR
around Moscow and the United States near the ICBM base in North Dakota. Hence
the initial permission for each side to have two antimissile defence
deployment regions (one each under the 1974 amendment). Under article XIV the
treaty allows the introduction of amendments and under article XV withdrawal
from the treaty is possible with six months' notification if it proves
incompatible with the supreme national interests of one of the sides.

In other words, the stability formula does not preclude the existence of a
defensive component. Over the past 30 years and over the coming decade only
one power in the world has had and will continue to have an operational
[razvernutyy v boyevoy sostave] strategic system of antimissile defence - the
USSR and its legal heir Russia. In terms of the stability of deterrence what
is important is not the number of authorized antimissile defence deployment
areas or the number of interceptor missiles but the overall ability of
antimissile defence to rebuff a greater or lesser proportion of the other
side's retaliatory strike systems. Offence is enormously superior to defence
in the Russian Federation-United States equation. This could quite well be
maintained in the future under certain conditions, creating at the same time
the potential for defence against a missile threat from third countries.

The proliferation of nuclear missile weapons may quite well be viewed as a
reason for the modification of the Treaty. But the complete abrogation of the
Treaty, particularly, on a unilateral basis, would obviously be a
destabilizing factor as long as relations of mutual nuclear deterrence
survive between Russia and the United States. By diplomatically keeping quiet
about the question of nuclear deterrence Moscow is weakening its argument in
favour of preserving the 1972 Treaty. Especially since a categorical refusal
to make amendments to the Treaty is unjustified.

Moscow's proposal to create a joint nonstrategic antimissile defence system
does not jell with this. Since it means acknowledging the inadequate
effectiveness of the nonproliferation regime and agreeing to the need for
systems to provide direct defence against threshold countries' missiles -
albeit not strategic missiles but intermediate-and shorter-range missiles.
What is more, the technical parameters of theatre missile defence agreed by
the United States and the Russian Federation in 1997 are insufficient to
rebuff the potential threat to Europe posed by the missiles of Iran and
Pakistan, say. (Their range should be greater than the 3,500 km mentioned in
this agreement, which was one of the reasons for the US Senate's refusal to
ratify it.) The Russian argument that the threshold countries do not yet have
intercontinental missiles is not very convincing either: It will take many
years to develop antimissile defence and waiting for such missiles to emerge
would mean being very late in adopting defensive countermeasures.

Lastly, the idea of protecting the continent of Europe alone with an
antimissile defence system is entirely feeble. Since Russian territory is
also situated in Asia like America's allies Japan and South Korea. Leaving
them without defence is unacceptable from both the political and strategic
viewpoints. Obviously Moscow is guided here by the considerations of its
relations with the PRC and the DPRK but its stance on antimissile defence
does not become more convincing as a result. It is no coincidence therefore
that Russia's proposals on European antimissile defence are seen as an
attempt to drive a wedge between the United States' relations with its
European allies rather than as a consistent policy of combating the missile
threat from threshold countries.

How Can the Knot Be Unravelled?

How can the knot of what are not just incompatible but also internally
conflicting Russian and US positions be unravelled? Giving the Americans
advice in the current situation is a thankless task and the Russian course is
undoubtedly in need of adjustments, and extremely major ones at that.

First and foremost, it is necessary to review the recent decisions regarding
the development of the strategic nuclear forces, which are extremely weak
from the strategic viewpoint. The strategic nuclear forces programme should
concentrate efforts on areas where the USSR and Russia were traditionally and
still are ahead of everyone else and which best accord with the specific
nature of the country's military-technical development, geostrategic
position, and economic capabilities. I am talking about ground-based missile
forces. Expanding production of the Topol-M missiles would produce within
10-15 years a group of 300-400 silo-based and mobile ICBM's capable of
carrying 1,000-2,000 warheads when fitted with multiple re-entry vehicles. It
is easiest and cheaper to provide them with a reliable ground- and
space-based command and control and warning system. The naval and aviation
components of the strategic nuclear forces should be maintained economically,
where possible extending existing systems' service life.

Let us stress especially that it is not a question of building up Russia's
nuclear potential or of intimidating the United States. The Russian
Federation's strategic forces will in any case be downsized within the
foreseeable future but an optimum structure for these forces will ensure
military stability no matter how relations with the United States develop
with regard to the ABM and START Treaties. A side-effect of this policy,
which is also of no small importance, is that Washington's strategic interest
in resolving these matters on a mutual basis will in all probability increase
palpably. It is possible that then there will be no need dramatically to
speed up the deployment of the Topol-M system and fit them with a large
number of multiple re-entry vehicles.

And another point, it will hardly be possible to persuade the United States
that the missile threat from threshold countries will not materialize within
10-15 years (that is the realistic timeframe for the development of strategic
antimissile defence). It is important to ensure that the strategic arms
limitation and reduction regime is not ruined with all the attendant
political consequences in order to prepare for this hypothetical threat and
for the sake of what are extremely vague prospects.

Here too a sensible compromise is possible in theory. If Washington agrees to
a new START treaty that suits Moscow, a number of amendments to the ABM
Treaty could be adopted that will make it possible to carry out more varied
tests of antimissile systems and components. The question of their deployment
could be the subject of separate talks in the future depending on the
assessment of the threats and the development of technology.

Russia's flat refusal as a bargaining position is only good for the time
being but it could at some point provoke supporters of antimissile defence in
the United States to wreck the whole treaty once they have twisted their
allies' arms and conquered the fragile equilibrium in the Senate. It would be
far harder for the United States to reject a reasonable compromise,
especially if the "Ljubljana" spirit of partnership with Russia were
preserved and in the light of the attitude of America's allies and the
possible Moscow-Beijing future rapprochement factor.

Russia's Security

Generally speaking, Russia must itself give far greater priority to the
threat of nuclear missile weapon proliferation since most threshold countries
are near to Russian territory and Moscow's relations with many of them could
deteriorate in the foreseeable future. The theatre antimissile defence
ceilings agreed in 1997 do not guarantee the possibility of rebuffing the
missiles of certain countries, Pakistan, for instance. Hence it is necessary
to adjust the Russian national security concept and considerably step up the
Russian Federation's efforts both to tighten up the nonproliferation regime
and develop nonstrategic antimissile defence for both Europe and Asia.

A real programme of cooperation between the United States and its allies and
Russia should be another condition for the modification of the ABM Treaty.
Furthermore, theatre antimissile defence must not necessarily be an
alternative to a strategic antimissile system. It could be the first phase in
the introduction of disposed in-depth antimissile systems and an experimental
testing ground for collaboration between the powers in this field.

Russia's military-technical cooperation with Iran and certain other countries
should not stand in the way of ensuring the highest long-term interests of
its security, particularly given the sides' extremely pragmatic and
completely mutual interest in this kind of cooperation. There is every
indication that India will not object to missile defence, its nuclear missile
potential will not be aimed at Russia or the United States or its allies in
Europe and the Far East.

As for China, it is undeniable that Russia is very interested in developing
mutually advantageous economic, political, and military-technical cooperation
with it. Developing relations with China represents, in addition to
everything else, an important trump card for Moscow in its relations with the
United States, but Russia's own national interests, in strategic affairs
among others, should always undoubtedly take centre stage. Moscow has no
commitment to defend China's potential for nuclear deterrence. And China
itself does not consider the Russian Federation a military-political ally
either and is clearly pursuing its own interests in everything (thus, it
recently failed to back the UN resolution condemning the Taleban). It is
worth recalling that Chinese nuclear deterrence (intermediate-range missiles)
over the past 30 years has been entirely aimed northward and this thrust will
in many respects be maintained for the foreseeable future whereas Moscow's
antimissile defence complex was traditionally pointed primarily in this
direction with its missile hazard.

Needless to say, the modification of the 1972 Treaty and the deployment of US
national missile defence could impel China to a larger-scale build-up of its
strategic forces, which would have a negative impact on Russia's security and
could provoke a chain reaction in the form of an India-Pakistan-Iran nuclear
arms race, and so on. But it is also clear that the complete dismantling of
the system of laws and treaties would make the nuclear missile race processes
even more intensive and would undermine Russian-US cooperation in the sphere
of nonproliferation. What is more, Beijing is significantly keeping quiet
about its possible reaction to the United States' withdrawal from the 1972
Treaty and is displaying greater concern regarding the likelihood of US
theatre antimissile defence to defend Taiwan. This does not make it possible
to rule out the possibility of a US-PRC accord on the lines of 1972, which
would leave Russia in splendid isolation with its firm stance.

It is inadmissible to set a sensible compromise between Moscow and Washington
on offensive and defensive strategic arms as well as on theatre antimissile
defence against the development of collaboration between the Russian
Federation and China in other spheres. What is more, keeping the United
States' antimissile programmes within the framework of the treaties and laws
and of further coordinated, verifiable reductions in its offensive nuclear
forces is objectively far more in line with Beijing's long-term strategic
interests than the complete breakdown of this regime. After all, in the more
distant future China itself may want to subscribe to strategic arms
limitation in order to directly influence it in accordance with its growing
military and political role in the world.

******

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