August 8, 2001

This Date's Issues:  5383 • 5384

Johnson's Russia List
#5384
8 August 2001
davidjohnson@erols.com

[Note from David Johnson:
DJ: There's just so much burning on the beach that one can take.
1. AFP: Muscovites still uneasy as Pushkin square blast remains unsolved.
2. Moscow Times: Ana Uzelac, A Year, a Plaque, but Still No Answers.
3. Financial Times (UK): Andrew Jack, Russian divorcee stands up for first wives' rights.
4. Reuters: A year on, Arctic Russia braces for Kursk's return.
5. The Guardian (UK): Stephen Carter and Natalya Shulyakovskaya, Into the woods: Since the collapse of the Soviet Union, timber production has dropped dramatically. Yet Russia's forests are still under threat from illegal felling, aided by the tacit support of the authorities.
6. Delovoi Vtornik: Pavel Voshchanov, REDIVISION OF PROPERTY IN RUSSIA IS COMING TO A CLOSE.
7. fednews.ru: Vremya ORT: INTERVIEW WITH STATE DUMA DEPUTY ANDREI KOKOSHIN AND STRATEGIC ASSESSMENTS INSTITUTE PRESIDENT ALEXANDER KONOVALOV ON START-1.
8. Sharon Tennison: Putin's New Initiative to Support Regional Entrepreneurs.
9. Chicago Tribune: Frank Prial, A flavorless and clear favorite. Vodka surpasses gin, other spirits in popularity.
10. Wall Street Journal: Guy Chazan, Russia Discovers Long Road In Bid for WTO Membership.]

*******

#1
Muscovites still uneasy as Pushkin square blast remains unsolved

MOSCOW, Aug 8 (AFP) -
A year after a makeshift bomb exploded in an underground passage in Moscow's
Pushkin square, Muscovites admit to persistent fears of further outrages as
police struggle to find a lead to track down the perpetrators.

"I'm not sure there won't be another explosion," Vera Udulova, sister of one
of the 13 people who died in the August 8, 2000 bomb attack which also
wounded 120 others.

Vera travelled to the underpass Wednesday to place flowers at the spot which
has been refurbished and a plaque erected to commemorate the "victims of the
terrorist act."

Her sister Olga, at 18, was the youngest of the blast victims, dying in the
ambulance which was taking her to hospital.

"She'd just been waiting to meet her boyfriend," Vera told AFP, tears welling
up at the memory.

On the lack of progress in the investigation, she said she felt "the police
have just given up on the case."

Investigators have so far drawn a complete blank on the bombing in the busy
pedestrian underpass on Moscow's main thoroughfare, and the city prosecutors
admitted Tuesday they had as yet made no arrests in relation to the case.

Interior Minister Boris Gryzlov acknowledged Wednesday that the security
services "are unable to say who committed this crime. But the investigation
is continuing, and I hope that one day it will be solved."

Valery Surikov, 62, said he still felt afraid for his children.

"When my daughters are late coming home at night, I feel a touch of panic
coming on," said Surikov, who sells newspapers in the underpass not far from
the scene of the blast.

But he had a thought for the investigators: "How can the police fight
criminals effectively when their pay is so low?" he asked.

In the immediate aftermath of the blast Moscow Mayor Yury Luzhkov, along with
other officials, proclaimed there was a "Chechen connection," and in the
first few weeks of the investigation police concentrated almost entirely on
questioning city residents with Chechen names or of Caucasian origin.

Another theory examined by investigators, also without results to date, was
that the attack was a settling of accounts between kiosk-holders and mafia
bosses who were trying to win control of the businesses.

Over the past year, security measures have been stepped up considerably in
the city's 400 underpasses, 89 of which provide a shelter for kiosks selling
products ranging from flowers and perfumes to wristwatches and CDs.

Police patrols, closed-circuit cameras and a system of alarms have all been
laid on to reassure Moscow residents, though to little effect.

"Every time I go down into an underpass, and even when I enter my building, I
think there could be a bomb," Katya, a 19-year-old student said, recalling
two deadly bomb attacks on Moscow apartment blocks in September 1999 that
left more than 200 people dead.

However for Vladimir Aleksandrovich, a 62-year-old engineer who believed the
motive for the blast was gang warfare, the police "aren't doing their job."

A policeman patrolling Pushkin square observed that Moscow residents had
become a great deal more vigilant over the past year.

"They're always calling us to point out bags that have been left unattended,"
he said.

*******

#2
Moscow Times
August 8, 2001
A Year, a Plaque, but Still No Answers
By Ana Uzelac
Staff Writer

A year after a makeshift bomb exploded in the underground passageway at
Pushkin Square, the place has the feel of an empty gray cement basement.

The passages have been renovated but the colorful kiosks have not been
allowed to return to the areas damaged by the blast. The only thing there
now is a marble plaque commemorating the "victims of the terrorist act" on
Aug. 8, 2000.

But no terrorist has been found, and investigators have not even been able
to determine the motive for the bombing, which left 13 people dead and 118
injured. Terrorism is only one of three possibilities.

"The criminal case on the blast in the underground passage at the
Pushkinskaya metro station remains unsolved," the Moscow city prosecutor's
office said in a statement Tuesday. "Currently there are no people detained
for or charged with this crime."

The Pushkin Square bombing is one of the most high-profile cases in the
city's recent history, and the failure to solve it is all the more glaring
in light of city and federal authorities' repeated pledges to do away with
terrorism and violence tied to organized crime. So far, the only thing that
the year-long investigation has managed to establish is the sequence of
events just before the blast.

According to the prosecutor's office, the explosive device that tore the
passage apart was a mixture of TNT and hexogen combined with nuts and
bolts. The press release said a motorcycle battery also was used,
presumably as a detonator. The bomb was packed in two containers — a
briefcase and a plastic bag — that were left by two unidentified men at
kiosk No. 52 at 5:50 p.m., eight minutes before the explosion.

The men said they would have to change money to pay for their purchases.
They were seen running out of the passageway a minute before the blast,
which happened at 5:58 p.m.

Neither of them has been found, even though federal criminal police told
Interfax on Tuesday they have received around 20,000 telephone calls from
people who thought they saw men who looked like the two composite sketches
posted around the city.

The police and prosecutor's office refused to answer questions about the
investigation. The statements released by both agencies were filled with
statistics describing the hard but futile work of their investigators.

More than 30,000 people were "checked," and 15 of them were arrested for
other crimes: illegal possession of weapons, munitions, explosives or
drugs, the federal police told Interfax. More than 2,300 people were
detained "for different transgressions," they added.

The prosecutors' statement gives the numbers of homes and companies
searched (more than 6,000) and kiosks closed (116) as a result of these
searches, albeit for reasons not connected with the Pushkin Square bombing.

At one point, the probe focused on the so-called Kemerovo gang, the
prosecutor's office said. Two of its members were arrested and sentenced to
several years in prison after weapons and drugs were found at their homes.
"However, their connection to the bombing was not proven," the release said.

The investigators said they still have three equally likely possible
motives: a terrorist attack, a criminal showdown and the settling of
personal accounts.

Immediately after the blast, Moscow Mayor Yury Luzhkov hurried to announce
that there was a "Chechen trail" to the bombing, and police in the first
few days concentrated almost solely on detaining city residents with
Chechen names or of Caucasian origin. The federal authorities, on the other
hand, insisted from the beginning that all three possible versions should
be investigated.

Svetlana Gannushkina, the head of the human rights group Civic Assistance,
recalls being busy at the time recording the numerous detentions of Moscow
Chechens and the reports of police abuse that followed.

"There is a Russian joke about a person who loses his wallet in the dark
and goes searching for it under a street lamp — because at least there is
some light there," she said in a telephone interview Tuesday. "Our police
remind me of such a person: They went after the Chechens who were
registered in Moscow, while the real culprits were already far away."

For Tamara Ivanovna, a vendor in one of the kiosks in the underpass who
witnessed the blast, the real culprits are simply "evil people," and evil
has no ethnicity. "It was done by a scoundrel," she said, declining to give
her last name.

In the days after the blast, people came to the site to lay flowers and
light candles for the victims. Long lines of people wanting to donate blood
for the injured formed outside medical clinics.

The city government initially considered the idea of closing all the kiosks
in all the underground passages in Moscow for security reasons, but soon
thought better of it. They are the main source of income for a small army
of traders and vendors, and closing them would have left thousands of
people jobless as well as cut the city's tax revenues. The idea of banning
sales of easily flammable substances in the passages also was considered
and then silently dropped. The kiosks under Pushkin Square still sell
perfume and nail polish.

The kiosks were not replaced in the passages closest to the blast site, but
further down the main passageway there are gleaming new kiosks — the
reconstruction was finished in May. Vendors complain that their new work
places look nicer but are smaller and not as comfortable as the old ones.
But they also say they feel quite safe working in the passageway.

"It's cozy and well-guarded," said Vera, an 18-year old vendor of
cosmetics, who declined to give her last name. "I feel quite safe here."

But Tamara Ivanovna said she still fights the anxiety every time she comes
to work. "But what can we do? All of life is extreme here. It's either work
here or starve," she shrugged.

She said the new regulations make her feel safer — vendors can't leave
their garbage in the passage anymore, so strange bags would be more likely
to be noticed. And the new lighting system guarantees that if something
happens, people would at least be able to run out instead of tripping over
one another like they did after the blast.

But one thing she is sure of. "A year has passed and they haven't found the
culprits. For me that means they will never find them."

*******

#3
Financial Times (UK)
August 8, 2001
Russian divorcee stands up for first wives' rights
By ANDREW JACK

The sight of a beautiful young woman stepping out of a limousine on the arm
of an ageing tycoon is a now familiar one in Moscow. But after fighting off
demands of the tax police, political foes or business rivals, Russia's
growing class of newly rich oligarchs is facing a new threat: their first
wives.

In an open letter this week to Moskovsky Komsomolets, Russia's highest
circulation newspaper, Elena Mordashova called for the creation of an
organisation and even a political party to defend the rights of "former wives
and current mothers".

Ms Mordashova is the divorced wife of Alexei Mordashova, the industrialist
with a growing public profile who heads Severstal, a steel plant in the town
of Cherepovets, 600km north-east of Moscow.

In an all too familiar tale, she wrote that she had sacrificed her own career
to support her husband in his, only to find that when he became finance
director of Cherepovets he started to accumulate a string of lovers.

Several other prominent Russian businessmen, including Boris Berezovsky,
Vladimir Gusinsky and Roman Abramovich, have left their first wives and
sought younger women.

Ms Mordashova wrote she was no feminist but instead called for a "civilised
divorce" procedure to tackle what has become a "social problem" in Russia.

A new package of family laws passed in 1995 theoretically provided for the
equal division of property between husband and wife and the possibility of
continued financial support for the wife after separation. But Russia's
unreliable court system and poor record of the enforcement of judgments make
the outcome of divorce settlements uncertain.

Alexander Barannikov, deputy head of the federal parliament's committee for
women, families and youth, said: "There is a problem that women often do not
know their rights and even lawyers are not familiar with the legislation."

*******

#4
A year on, Arctic Russia braces for Kursk's return
August 8, 2001
By Daniel Mclaughlin

MURMANSK, Russia (Reuters) - A year after the Kursk set sail for the final
time, carrying 118 men to their deaths beyond Russia's Arctic coast, many of
this remote region's residents dread the day the submarine finally comes
home.

The explosion that tore through the nuclear-powered Kursk Aug 12 last year
focused the world's attention on the Barents Sea, where Russians eke out a
living mostly by fishing and working on the ships that ply the Arctic waters.

But international efforts to salvage what remains of the Kursk and her crew
and drag it back to port -- fulfilling a promise made by President Vladimir
Putin last year -- has many locals fearing for their future.

"As far as I know everyone here is against it," said Irina Matushenko, a
young mother strolling with her family around the coastal village of
Roslyakovo, and wondering what secrets the Kursk's two nuclear reactors and
missile bay really hold.

Robot equipment is due to cut off the submarine's mangled bow later this
month, leaving it on the seabed. Then a huge barge will lift the vessel and
tow it to Roslyakovo's navy shipyard in mid-September, where experts will try
to discover what triggered a string of explosions in the Kursk's torpedo bay.

"They're going to put the thing here and people don't know what to do ...
everyone's planning to get out of here and there'll just be an empty village
left," said Matushenko. "They've agreed nothing with the public."

LACK OF TRUST

The cause of Russia's worst nuclear submarine accident is still a mystery,
subject of wild speculation in Russian media and countless conspiracy
theories circulating the Internet.

Last August, the navy's top brass took two days to reveal a "malfunction" on
board the Oscar-II class Kursk, then delivered a rash of contradictory
statements.

Officials alluded to a collision with a NATO vessel; they said the crew was
tapping out mayday messages on the hull; then they announced that all on
board had died minutes after the blasts, rendering Russia's delayed, botched
rescue effort pointless.

Then, last autumn, a final note was found on one of a dozen bodies brought to
the surface. It suggested that some of the crew had survived for at least
several hours after the submarine sank to the seabed.

Matushenko's husband Oleg said the Russian military and government had lost
the trust of the people with their handling of the national tragedy.

And the Murmansk regional authorities had done little to win it back.

"I think they need to be honest with the public ... because the whole thing's
happened in secret," Oleg Matushenko said. "I just can't believe that
everything will be alright, so I'm planning to evacuate my family from here
if possible."

NO DELAY

Russia unexpectedly awarded the contract to lift the 18,000-ton Kursk to the
Dutch heavy transport company Mammoet, which enlisted help from compatriot
salvage firm Smit Internationale and Norway's Norsk Cutting and Abandonment.

Mammoet won the deal after a high-profile international consortium, which had
been in talks with Russia for more than six months to raise the Kursk, said
it could not guarantee the safety of the project this summer.

Russia refused to postpone the operation and Mammoet's team got the contract,
which is set to earn them about $65 million.

Despite protests led by the Norwegian ecological group Bellona, Russia
insists the plan is as safe as it could be, given the problems of lifting a
vessel more than twice the length of a jumbo jet through some 330 feet of
freezing water.

"I can tell the people of Roslyakovo that we plan constant radiation
monitoring... and in case of any 'force majeure' situation the navy has a
detailed plan of action and the means necessary to solve the problem,"
Vice-Admiral Mikhail Motsak, the man leading the salvage operation, said last
month.

SAFETY FOR ARCTIC'S BIGGEST CITY

A few miles down the Kola inlet is Murmansk, the world's largest city above
the Arctic Circle and home to 380,000 people.

Yuri Yevdokimov, governor of Murmansk, sent a letter to the government in
June saying he wanted more information on measures to protect his region and
its people from the effects of what Motsak called a potential 'force
majeure'.

Yevdokimov later visited St Petersburg's Rubin bureau, which designed the
Kursk and is part of the salvage team, to get some answers on safety for
himself.

He says that, for the most part, he came back satisfied.

"My fears receded after seeing how carefully, how responsibly every stage is
being prepared, including preparations for force majeure and emergency
situations.

"But fears do remain -- this type of operation is being carried out for the
first time, so naturally it is very hard to predict everything. That worries
me, but on the whole I am satisfied with the preparation and execution of the
project."

Yevdokimov said he understood why residents were worried about the operation,
but insisted they were as well protected -- and as well informed -- as
possible.

"We understand that anything could happen and we will be ready. We have to
take measures to prepare for any natural cataclysm that could occur and we do
have the powers and equipment to (do that)," he said, without elaborating.

He said Murmansk residents had been given plenty of news about the operation
on television and promised a board would be erected in Roslyakovo showing
radiation levels in the village.

WHAT PRICE REGULAR WAGES?

But Olga Lapina, one of Roslyakovo's 5,000 residents, said Russia's grief
over the Kursk had scrambled its priorities.

"It's a crime to risk the future of our children. That's my view and that of
many in our village. We should not forget the dead but should above all look
after the living," Lapina said.

Dmitry Vladisenko, strolling down Roslyakovo's potholed streets, said dozens
of damaged vessels had passed through the off-limits shipyard, with locals
unaware of their impact.

And it has more to worry about than the Kursk, he said.

"At least people have started getting paid their wages ... and they've
started painting the houses and asphalting the roads," Vladisenko said,
glancing over his shoulder at a freshly painted peach-colored house in a row
of dilapidated grey buildings.

"We should lift the Kursk and figure out what happened," he said. "All that
stuff about radioactivity's a load of rubbish; we've so much filth here
another bit won't matter."

*******

#5
The Guardian (UK)
8 August 2001
Into the woods: Since the collapse of the Soviet Union, timber production has
dropped dramatically. Yet Russia's forests are still under threat from
illegal felling, aided by the tacit support of the authorities.
By Stephen Carter and Natalya Shulyakovskaya

Fly across northern Russia, over the vast expanse of Siberia and the Russian
far east, and what strikes you is the awe-inspiring sight of the great green
forest stretching out below you for hour after hour without any sign of human
presence.

The Russian forests are almost mythical. The deep, dark and limitless woods
are the setting of fairy-stories, the home of the fire-bird, and one of the
few really wild places left on earth. But the forests are not just a cultural
heritage but a major resource facing new pressures that, if not yet a threat
to their existence, are a serious cause for concern.

Russia has about one fifth of all the world's forest. It extends over some
763m hectares - an area 100 times the size of Scotland. The total timber
reserve is around 75bn cubic metres, which would fill 35,000 Domes.

Since the collapse of the Soviet Union the volume of timber cut has
officially fallen from about 500 to 167 cubic metres a year. When the state
logging companies were privatised most of them folded. In absolute terms,
Russian forests would therefore seem today to be under less pressure than
they have been for decades. But this huge drop is just part of the picture.
The areas abandoned by the loggers were mainly those where exploitation was
most expensive.

Production is now concentrated in places where transport is cheap and the
wood is good quality. And in the post-Soviet world, logging controls have
been seriously undermined. Some environmentalists say the amount of timber
being cut may be greatly underestimated - although they acknowledge that the
problem is not the absolute volume of cutting so much as where and how it is
done.

Theoretically Russian forestry is highly regulated with a sophisticated
system of permits, regulations, export controls, and rangers. Indeed, Russian
environmental rules are some of the strongest in the world, with as much as
47% of the country's forest off limits to loggers. In practice, however,
there are huge holes in the net.

According to official figures, the scale of illegal cuts is significant: the
total volume cut illegally last year is estimated at 732,000 cubic metres.
Officials investigated 8,253 violations of forestry regulations in 2000,
leading to 860 criminal trials. They were just the tip of the iceberg: there
were an estimated 30,000 violations of forestry regulations in total.

Until recently one body had the responsibility for managing and protecting
Russian forests. Rosleskhoz, the Federal Forest Service, has a long and fine
tradition of custodianship - it was founded by Peter the Great. Last year it
was incorporated into the Ministry of Natural Resources, an organisation
which - at least according to some environmental groups - is more interested
in promoting exploitation than protection. The service is not just the
protector of forests but also Russia's largest single timber company,
responsible for around 17% of the official national output.

In the ramshackle town of Balagansk, on the river Angara deep in the Siberian
oblast of Irkutsk, the forest is the lifeblood of the whole district. It is
one of the few sources of work and income in the town of 11,000. 'Everyone,
every single person, is getting into timber', says Valery Yemelyanov, the
deputy head of the district administration. Some cutting, he says, is done by
individuals on 'own-use' permits given by the local administration. But the
system is often abused, by individuals selling their permits or through
corruption of the local council.

Rosleskhoz officials decide how much and what wood can be taken, supervise
cutting, and fine offenders. But there are widespread accusations against the
people who work for Rosleskhoz. Aleksei Morozov, forest campaigner at
Greenpeace Russia, says regulation is undermined by widespread and routine
bribery, and that the price paid for timber is artificially low.

Rosleskhoz employs thousands of low paid workers, says Morozov, and there are
obvious temptations when dealing with expensive wood. His concern is that
commercial pressures are proving irresistible. Rosleskhoz say firmly there
are only isolated incidents of corruption. 'All that is done in the forest is
marked on maps, written down and submitted for checking. So to do it secretly
is almost impossible', says Kuzmichev.

Rosleskhoz argues that it does not commercially exploit the forest: the
timber it cuts is supposed to be from 'sanitary cutting' - removing
individual dead or diseased trees. But it admits that these cuts are a vital
source of income.

Kuzmichev acknowledges the problem: 'There is a certain paradox - in that
sometimes it is very profitable'. But only in a few exceptional
circumstances, he says, does it cut the trees for commercial purposes.

But the concerns are not limited to Greenpeace. According to Tatyana
Goritskaya, section head in the Irkutsk forestry department, 'our sanitary
cutting has increased seven-fold since 1993. In 1998 alone, forestry
officials cut down 1.5m cubic metres of timber under the pretence of doing
necessary cleaning cuts'.

Then there is straightforward poaching. It is particularly bad in areas close
to export markets, like the far east, where Chinese traders fuel a rising
trade in raw logs. This is perhaps the most likely place for logging to do
serious harm, as China exports an environmental crisis following the ban on
its own cutting. In the Krasnoarmeysk region on the Pacific coast, according
to Greenpeace, the problem has become so bad that 'a greater part of the
population, companies and state agencies of the region, are now involved in
illegal logging and trade in wood'.

It is not hard to see the poachers at work. In Irkutsk the timber goes direct
by train to China. At one rail spur, four workers were watched loading about
600 cubic metres of timber into two railway cars. Nearby two smartly dressed
men were doing the paperwork. But as the forestry police approached, they
ran. A search of some nearby shacks, revealed 10,000 roubles ( pounds 238) in
100-rouble bills hidden behind a heater. In a desk was a stack of letterheads
with Chinese stamps and a timber price list.

Vitaly Salamakha, of the under-funded police forestry department, said that
this one find of illegal timber would make little difference. 'There are
about 2,600 small companies all logging or trading timber: it is impossible
to control them all. We wanted to introduce licensing on timber trading and
export, but because we are just a region of the Russian federation, we
can't.' It is, he suggests, a losing battle.

Partly because of the poaching, it is hard to say accurately how much timber
is being cut in Russia. But even if the official figures hugely underestimate
reality, the volume is probably not the biggest threat. According to Vladimir
Sakharov, vice-president of the Irkutsk timber union, a trade and lobbying
group in Irkutsk, the Siberian city where much of the timber trade is based,
logging practices have deteriorated drastically: 'Now, the region harvests
only 8m cubic metres a year, but when we cut down 20m [in Soviet times], we
used every bit, from the stump to the needles. Now, everything but the best
logs are left behind.'

Moreover, the best logs are found in the untouched 'old-growth' forests, of
particular biological significance. Russia, home to 26% of the world's
remaining old forests, has already lost about 70% of its original old-growth
cover. 'Most of the companies work as if tomorrow will be the end of the
world' says Morozov.

'Economically available forests are under strong pressure', say Greenpeace ,
who report 'substantial overlogging' close to export markets. 'There is no
timber as far as 80 or even 150km around Irkutsk,' says Sakharov. 'It is
mayhem.'

In Balagansk, Aleksei Gritsko, a truck driver with the lumberjacks, says:
'You can land a Boeing in the taiga these days. If it continues at the same
rate, in about five years there will be no forest left around here.'

For now, the decline in overall cutting might be said to compensate for the
chaos and illegal timber extraction but when Russia recovers economically,
the problems could be more serious. Russian forests absorb something like
600m tons of carbon dioxide a year. If they go the way of Europe's forests,
it would be a disaster, not just for Russia, but for the world.

*******

#6
Delovoi Vtornik
No. 28
2001
(translation from RIA Novosti for personal use only]
REDIVISION OF PROPERTY IN RUSSIA IS COMING TO A CLOSE
By Pavel VOSHCHANOV, political analyst

The present Russian leadership is completing the
fulfilment of the historical task, which was undertaken by
Yeltsin but turned out to be beyond his powers, i.e., to end
the redivision of property between bureaucratic clans. This is
the main feature of the present developments in this country.

While the country could hardly follow its president's
flights from one place to another (Moscow - Vitebsk - Moscow -
Sevastopol - Sochi - Moscow), the government approved the next
year's privatisation programme. Under this programme, more than
300 enterprises are to be sold for 18 billion roubles. What
does this mean? That each of them will be sold for 60 million
roubles (about 2 million dollars) on average. The ministry in
charge of property relations thinks that this is good money.
However, many specialists in Russia and abroad view this
programme as the continuation of the Chubais course, which has
led the economy to criminalisation and the country - to
bankruptcy. The "secret" is simple enough: if the enterprise is
first ruined and then sold on the cheap, it means that it will
inevitably land in a pocket of someone close to the
powers-that-be.

About five years ago, many political scientists, pointing
to the weakening of the federal centre, predicted that the
power vertical structure would be restored as soon as the
redivision of property came to a close and the task arose to
confirm one's grip on one's share of the divided property. In
this case, the demand will emerge for strong authorities
realising their responsibility to Big Capital.

There was much talk in early August that the victory of
Khodyrev, a communist, in gubernatorial elections in Nizhni
Novgorod seriously damaged the prestige of the Kremlin which
supported another candidate. Not at all. No doubt, the Kremlin
considers candidates and gives promises to support and help
them.

But this is not the main thing. By and large, it is of no
importance for the Kremlin who will lead this or that region.
The present political system in the Kremlin is such that any
winner, no matter what political doctrine he adheres to, will
"play" only for the Kremlin and only by the Kremlin's rules.
Therefore, even if Zyuganov (leader of the Communist Party of
the Russian Federation) himself became a governor, the first
thing he would do is, like Khodyrev, make a statement that he
is a firm supporter of President Putin's policy and considers
himself a member of his team. Opposition ends where power
begins, since the main thing - property - lies behind it. There
are quite a few regions in the country headed by nominees of
political organisations standing in opposition to the Kremlin.
But there isn't a single region whose authorities oppose the
Kremlin's policies in any way. All of them are supporters, and
ardent supporters at that.

Even such an event as the CIS leaders' meeting is
determined by interests of newly-formed national capital (in
which, by the way, nearly every post-Soviet leader plays a no
minor role), rather than political considerations. Perhaps,
many observers made a note of the fact that all the
participants in the recent Sochi tea-drinking party declared
that "the CIS was ineffective but expedient." At the same time,
none of them raised the issue of its qualitative transformation
into something more definite.

Is this a paradox? Nothing of the kind. No new alliances or
allied states will emerge on the territory of the former USSR
until this is needed by Big Capital adding to someone's
property.

Meanwhile, the present "together but apart" situation is more
suitable for manipulations with finances, resources and
properties.

I am not at all surprised, for instance, that the
participation of Russian capital in various spheres of the
Crimean life is felt stronger with every passing year, while
Ukrainian capital gets more firmly entrenched in the economy of
the Russian Black Sea coast.

Surely, one can expatiate on the CIS as a collective
attempt of young democracies to counter political and economic
pressure from the West. But in real fact, this is something
different, i.e., an attempt to retain the economic space in
which huge fortunes are being made and, for the time being, to
bar aliens from it.

In conclusion, I want to say a few words about the results
of the Nizhni Novgorod elections. No doubt, the interests of
Capital and Power played their role in them. But these
interests are far from those of the ordinary voter who goes to
the polls.

And no matter how you look at the case, he voted against the
Kremlin's candidate. What does it signify? Perhaps, it shows
that the powers-that-be, who are trying, by hook or crook, to
complete the historical redivision of property, will inevitably
face a sort of "political default." The leaders' attractiveness
for the public will fade, and fade considerably. And another
main problem of future elections will be the apathy of voters
aged from 18 to 35. It is this very age group that practically
ignored the second round of the Nizhni Novgorod elections.

And the last thing. Russian society feels averse to any
changes today. Therefore, future elections will be won by
politicians oriented towards "stagnation." Hence the inevitable
intellectual degradation of the political elite. Is it too
pessimistic? Perhaps. Alas, life is such that everything leaves
its mark, everything should be paid for. We are paying for the
illusion of democracy and market abundance.

*******

#7
TITLE: INTERVIEW WITH STATE DUMA DEPUTY ANDREI KOKOSHIN AND
STRATEGIC ASSESSMENTS INSTITUTE PRESIDENT ALEXANDER
KONOVALOV ON START-1
[VREMYA ORT NEWS PROGRAM, 22:30, AUGUST 5, 2001]
SOURCE: FEDERAL NEWS SERVICE (http://www.fednews.ru/)

Anchor: Today we are talking with former Secretary of the
Security Council Andrei Kokoshin and President of the Strategic
Assessments Institute Alexander Konovalov and our topic is START-1
Treaty. Good evening, Alexander Alexandrovich and Andrei
Afanasyevich.

Kokoshin: Good evening.

Konovalov: Good evening.

Anchor: Andrei Afanasyevich, my first question is for you.
Many in the US administration say that treaties such as START-1
which run to many hundreds of pages are antiquated, survivals of
the period of confrontation and the period of the Cold War and it
hardly makes sense to stick to them now. Do you agree with this
assessment?

Kokoshin: Well, if we really had a relationship with the US
similar to that Germany, or, say, Britain have, then it would
probably have been antiquated. But so far we are in a transitional
period and we have not forged a new relationship and these treaties
remain relevant. It is another question what new agreements we will
work out.

Anchor: Alexander Alexandrovich, START-1 laid the foundation
of the entire process of strategic nuclear arms limitations in the
1990s. It was followed by START-2 Treaty and framework agreements
for START-3. But difficulties already arose with START-2 and it is
still not in effect. Why?

Konovalov: Yes, START-2 fared much worse than START-1. Its
ratification took much more time, it met with far more criticism,
not only in Russia, by the way, but also in the US, albeit for
other reasons. As a result, a kind of stalemate situation arose.
Eventually, the US Congress ratified START-2 and then the Russian
State Duma followed suit, but it accompanied ratification with a
document and introduced some additions so that the texts of the
documents ceased to be identical. So, for START-2 to come into
force now the US Congress should gather and vote, as it were, for
the amendments introduced by Russia. These had to do with the term
of the treaty and some other important details, for example, the
New York protocols of 1997 that distinguished strategic defense
from theater defense.

As far as I understand, the US Congress is not going to have
another vote on the document and since there is no de facto
ratification, the treaty cannot come into force.

Anchor: Andrei Afanasyevich, we offer the United States still
deeper cuts in strategic nuclear arsenals, down to 1,500 warheads.
Will the US agree and will such cuts be justified if they go ahead
and deploy a national missile defense system?

Kokoshin: Well, to us these reductions are more important than
for the Americans because for reasons that are entirely economic we
will be hard put to it to maintain even 1,500 warheads, and America
is well aware of that. But the US Administration in general does
not want to stick to the high ceilings -- 3,000-3,500 envisaged by
the START-2 Treaty. But they have yet to persuade their military to
agree to lower ceilings. They have those who advocate a
multiplicity of targets for the strategic forces. But I think that
the US administration has enough clout at the current stage to
eventually persuade the Joint Chiefs of Staff to take this measure.

But what is important for us is not just to have such a
ceiling, but to agree on configuration of forces and on a degree of
combat readiness that would not pose a threat to us -- it may be
hypothetical and highly improbable, but it cannot be dismissed --
of a preemptive strike which becomes all the more dangerous if the
other side acquired an anti-missile defense.

Anchor: Alexander Alexandrovich, and still going back to
START-1, what is its role today? Is it a working document or a
monument to the period of military confrontation and ideological
confrontation?

Konovalov: No, it can in no way be seen as a relic of the Cold
War. It is a working document alright. And a lot of the new
provisions in the document I think will be the basis of
negotiations which we now want to start, talks on strategic
stability that will consider defensive and offensive weapons
together. Well, for example, START-2 provides for a very thorough
mutual verification system, a detailed system of checks and on the
spot inspections. It provides for transparency and confidence, it
enables you to understand the intentions of your opponent and even
your partner and to be sure that the other side is not doing
anything that is unclear to you. So, the principles of START-1 will
remain relevant for a long time. But perhaps, 800-page treaties
will no longer we signed.

Anchor: Thank you.

*******

#8
Date: Tue, 7 Aug 2001
From: P Dowden <pdowden@compuserve.com>
Subject: Putin's New Initiative to Support Regional Entrepreneurs

Dear David,

You asked for input during your vacation, thought your readers might be
interested in the email below from Sharon Tennison, founding President of Center for Citizen
Initiatives. She reports her observations (unedited) from the first day of a Putin
Administration-sponsored meeting in Volgograd with regional entrepreneurs.

The public confrontation described between the entrepreneurs and regional
bureaucrats is a very important symbol of the changes underway in Russia's economy and culture -- as is Alexander Lubyanoi's courage in opening the conference proceedings on the morning after his dental clinic was burned down.

From: Sharon Tennison, INTERNET:pep@online.ru
Date: 8/6/01 6:37 PM
RE: Putin's New Initiative to Support Regional Entrepreneurs

August 4, 2001

Friends, Colleagues and Supporters,

Unexpected and unprecedented changes are happening in Russia today.

In July President Putin and team quietly called together about 30 of
Russia's regional entrepreneurs to organize a new thrust: 1) to unite
small and medium-sized private business owners across the country to
fight corruption from the bottom up... and 2) to unite and ignite the
grassroots business sectors across the regions. At least two CCI
Fellows (both members of our Leaders Institute) were among the 30
original participants, one from Volgograd, another from Saratov.
After brainstorming the agenda, they were asked how rapidly each
entrepreneur could put together a conference in their region on the
theme of Business & Power. They were given the full support of the
President's office, including having Putin's representatives to
travel to their regions to lay out the initiative for the local
entrepreneurs.

The strategy: 1) to erect a first-ever, nationwide Association of
Regional Entrepreneurs for small and medium-sized Russian businesses;
2) to develop seven major centers in Russia (originally to correspond
with the seven major presidential grouping of regions) for horizontal
and vertical action; and 3) to create a multitude of provincial
associations of entrepeneurs across Russia, all of which would be
linked with each other and with all other associations working for
the same goal of ridding the lower business sectors of official
barriers, under-the-table payoffs, etc.

This month conferences are quickly being set up in far flung Russian
regions. By September regional conference organizers will meet in
Moscow to determine next-step strategy. It's impressive that Putin
and his team are going directly to the regional entrepreneurs
themselves (bypassing officials and bureaucrats), listening to these
entrepreneurs, asking for their help, and guaranteeing them support
from the top office in the land.

Knowing this population of Russia's business owners, I can say
without doubt, that this move on Putin's part is of inestimable value
to them, and I saw the evidence of it yesterday.

Volgograd, Aug 3, 2001:
Upon being informed of this event on Aug 1, I couldn't resist
changing plans and flying to the Vgrad confererence (my last day in
Russia). Upon entering the conference hall the first thing that
grabbed the eye was a striking white banner which announced in big
bold letters, "Business & Power: A Strategy for Interaction."

With only two weeks to plan, and despite August being the vacation,
dacha, harvest season... the hall began filling up with, not only
Volgograd entrepreneurs, but regional entrepreneurs who had driven up
to eight hours, all the way from Krasnodar, Uropinsk, Rostov, to be
present.

Alexander Lubynoi, Founder of the Vgrad Association of Entrepreneurs,
CCI Fellow and Leader, opened the meeting and spoke eloquently about
the urgency of this new initiative and its potential influence.
Vladimir Leontovich, Co-Director of the same association, CCI Fellow
and Leader, described the initial Moscow meeting and urged all
present to join in this endeavor. Then two of Putin's team, both
articulate and knowledgeable young women from Moscow, spoke
powerfully about the need for ridding Russia of its endemic
corruption, and of giving young businessmen and women a fair field in
which to enter the business world. They once more guaranteed Putin's
support.

(Note: Alexander Lubyanoi had his private dental clinic burned down
on the night of August 2nd, and he
convened the conference without mentioning his personal tragedy. He
had no known enemies, his clinic did charity dentistry one day every
week, his family is known for their high morals and Protestant
Christian persuasion. "Bottles were thrown" at the clinic where some
50 Volgogradians were employed, but no one knows by whom. Midway in
the conference Volodya Leontovich announced this tragedy, and
reported that Alexander had to leave to take care of urgent issues.
He quietly remarked, "It's clear that we still have some who oppose
us, and the path ahead won't be easy.")

Conferees from different regions were called to speak on the topic.
Powerful messages came forth, each entrepreneur giving different
examples of how Power had interfered with, and made ridiculous
demands on their businesses, how entrepreneurs must unite against
this entrenched force in Russian society. They spoke pointedly and
openly, apparently without fear of reprisal. (Even last year when I
questioned some of these same entrepreneurs about whether they could
voice their abuses by local power, they were adamantly opposed to it,
saying their businesses would be shut down if they spoke up).

I was most impressed by the fact that several of the entrepreneurs
stated from the podium that "we entrepreneurs want to have a
transparent business environment, we want to report all of our
income, want to pay our fair share of taxes... but between outrageous
tax policies and bribes from public officials at every turn, we have
been forced into all manner of devious behaviors in order to survive
and grow our businesses."

This openness may not seem so revolutionary to you, but to one who
has questioned, catalogued these abuses, and empathized with these
owners of private businesses on this corruption issue for years, I
was stunned to hear them being so specific and vulnerable in
public.... with media present, and with bureaucrats and Volgograd's
Mayor Chekhov in the audience!

The Mayor nd the public officials came to the podium and admitted to
some of the allegations (by others, not themselves) and tried to
defend their sector, but it was weak indeed. And it was noted from
the podium shortly thereafter, that these officials left the
conference after they had their say. However, the whole event was
civil. The entrepreneurs "Spoke Truth to Power" in a respectful way,
as did our early Quaker Friends. Putin's representatives were
energetic and empowering to the end, and it was obvious that everyone
present was eager to join the new effort.

The entrepreneurs' recommendations were to: 1) reduce the number of
officials on payroll by half, and give those remaining better
salaries; 2) pay public officials according to how well they
encourage and work for business development and entrepreneurs, not
impede them; 3) bring local, regional and federal laws in line,
otherwise the situation provides many opportunities for bribes; 4)
update whimsical and unnecessary regulations on the books since the
Soviet era (some dating back to 1953); 5) create "hot lines" for
entrepreneurs to report public official abuses; 6) keep journals in
each company and require public officials to sign in and state their
reason for visiting; 7) create conflict of interest legislation...
and many other ideas too numerous to list. It's clear the
entrepreneurs know needs to be done.

This scourge of public corruption from bottom to top could only be
tackled by the President's office. This is the only power sufficient
to threaten the lesser powers. Now that the entrepreneurs have that
assurance, I think we will see rapid change in this decades old...
no, centuries old... way of operating in Russia.

I sat in the large hall in shock mixed with euphoria. It felt like
what early townhall meetings in America might have felt like. A
dignity was present in the room, the entrepreneurs were intelligent
and articulate, they presented their cases boldly, they listened to
the bueaucrats even when it was clear there was no agreement between
them... and they seemed to have a new sense of themselves... and a
new sense of what Russia is becoming.

Upon a call for the audience to stand, a magnificent
choral/orchestral arrangement of the new (old) Russian anthem swelled
throughout the hall. There was utter stillness. I looked at the
serious faces of these men and women on the podium (and in the
audience) whom I've grown to know, love and respect so deeply over
the years... and nearly burst with pride and joy for them. Finally,
I believe, their day has come. It won't be without resistance,
without retribution, but the end is in sight, I believe... and what
is happening in August and September of 2001 will be of historic
significance when this generation of entrepeneurs looks back on the
unbelievably harsh path they've trod to rebuild their country from
the bottom up.

Sharon

PS: I inputted most of the Business & Power conference on computer.
If you have need of specific quotes, I can put them together for you.

******

#9
Chicago Tribune
August 8, 2001
DRINK!
A flavorless and clear favorite
Vodka surpasses gin, other spirits in popularity
By Frank J. Prial
New York Times News Service

As a gin drinker, I always thought all vodkas were essentially the same. I
was wrong. If there was a difference, I used to think, it was just
advertising, or that some vodkas are made from potatoes. Wrong again.

Over the years, I have come to understand why one out of every four drinks
consumed in the world is vodka or vodka-based.

Vodkas differ considerably in texture, taste and aroma, with different parts
of the world producing distinctive styles. Russian and Polish vodkas (like
Stolichnaya and Belvedere, respectively) are not the same as Scandinavian
vodkas (like Absolut), which differ from Dutch vodkas (like Ketel One), which
in turn are different from British, French and American vodkas.

Vodka caught on in the U.S. in the 1950s and '60s, eventually surpassing not
only gin but also traditional spirits like Scotch and Bourbon. Many people in
the liquor industry attributed its initial popularity to its reputation for
being without a telltale odor.

Others cited the generally accepted proposition that most people did not like
the taste of alcohol and took to vodka because it could be bottled with so
many other more palatable flavors, like orange or nuts.

True vodka aficionados insist that the proper way to drink vodka is very
cold, from a heavy 1-ounce shot glass, and the only worthy accompaniment is
caviar.

Connoisseurs argue over the relative merits of vodkas. Vodkas from Russia,
Poland, Belarus, Lithuania and Ukraine are regarded as heavy and meaty, with
layers of flavor. Most Russian vodkas are made from wheat, most Polish vodkas
from rye.

The Russians disdain potato vodkas, but a few Polish and German vodkas are
still potato-based. Potato vodkas have a slightly grainy texture, but do not
taste much different from those made from grain. To me, Stolichnaya is among
the strongest and most complex vodkas. It is also among the more expensive:
more than $20 a liter.

Vodkas from Sweden, Finland and Denmark are usually made from wheat mash.
They are light and easier to drink than the Eastern European styles. I find
Absolut to be among the mildest.

Dutch vodkas are somewhere between the Scandinavian and Eastern European
styles and are almost sweet. This apparently is because Dutch distillers
prefer to use winter wheat, which is high in glucose. Most vodka distillers
in the U.S. and Canada also are partial to winter wheat. British vodkas like
Tanqueray Sterling are thought to come in somewhere between the Dutch and
Scandinavian styles. To me, Ketel One from the Netherlands has a fuller body
than other vodkas. It also carries a premium price.

Vodka is an old Russian word meaning "little water." Both the Poles and the
Russians claim to have invented vodka. Wherever it started, it was probably
made from potatoes and beets and tasted awful. Not until the 18th Century and
the introduction of charcoal filtering did it really become palatable.

Filtering eliminates impurities. Some distillers favor beechwood charcoal,
others maple. Some vodkas are distilled and filtered two, three, even four
times. In his 1997 book, "Kindred Spirits," F. Paul Pacult notes that
overfiltering can strip a vodka of its flavors.

"The trick is to achieve a balance between flavors and finesse," he said.
"You have got to be sure the power of the spirit doesn't overshadow the
finesse."

Inexpensive vodkas, like inexpensive whiskeys and brandies, are usually made
in column stills that operate continuously. Premium vodkas are made in
batches in pot stills, like good Cognac, Armagnac and Scotch. This helps them
to retain some of the aromatics, congeners and flavors derived from the grain
from which they are made.

Pacult evaluates vodkas for his magazine, Spirit Journal. In his most recent
ratings compilation last September, he gave his highest honor, five stars, to
four unflavored vodkas: Original Polish from Poland; Smirnoff Black and
Stolichnaya Gold from Russia; and Vincent Van Gogh from the Netherlands.
Among his four-star favorites were Finlandia 100 Proof from Finland; Grey
Goose from France; Ketel One; Hamptons and Tito's Handmade from the United
States; and Three Olives from England.

Absolut garnered only two stars and was not recommended, which put it far
below flavored Absoluts like Citron, Kurant and Mandarin, each of which
received four stars. Pacult said he understood that the distillery in Sweden
where Absolut is made was in the process of changing its production methods.

Russian Life, an American magazine for lovers of all things Russian, stages
an annual taste-off. Ketel One was the winner in 1998, Finlandia in 1999 and
Three Olives last year. None of them is Russian.

*******

#10
Wall Street Journal
August 7, 2001
[for personal use only]
Russia Discovers Long Road In Bid for WTO Membership
By GUY CHAZAN
Staff Reporter of THE WALL STREET JOURNAL

MOSCOW -- Sweden says Russia isn't doing enough about copyright infringement.
New Zealand says Moscow's import tariffs are too high. Japan wonders why the
same law can be interpreted differently in various regions.

It seems every country in the world has a quibble with Russia. In the past,
Moscow could just brush off such grievances, but these days they could
scupper one of its most cherished ambitions -- joining the World Trade
Organization.

Under President Vladimir Putin, WTO membership has become a top policy goal.
China's imminent accession means Russia will soon be the biggest country left
outside the organization, an anomaly Russian officials seem eager to correct.

Over the past few weeks, a bevy of world leaders have pledged support for
Russia's WTO bid, first launched in 1993. WTO Director General Mike Moore
said the body is incomplete without Russia.

For the Kremlin, the advantages of membership are clear. It would be a signal
to the world that Russia, long criticized for murky business practices, had
adopted global rules of trade, perhaps triggering more foreign investment.
Competition from cheaper foreign imports would spur more reform of Russia's
wasteful industries.

Moscow would also gain access to the WTO's dispute settlement body, allowing
it to file complaints against countries that discriminate against Russian
exporters. According to one estimate, membership would save Russia $1 billion
to $1.2 billion (1.13 billion euros to 1.36 billion euros) a year in
antidumping procedures.

Despite strong backing from Washington and Europe, the hurdles Russia faces
in joining the 142-member club are formidable. It will have to overcome
strong protectionist sentiment among domestic producers and will have to pass
56 laws to bring its legislation in line with WTO rules.

And that's just the start. Even when laws are passed in Russia, they are
often ignored. Investors complain that contracts are unenforceable, property
rights easily disregarded. Critics of Russia say a country where laws can be
so brazenly flouted has no place in a rules-based trading system.

Take the Swedish point about copyright. A quick shopping trip in Moscow will
show that much of the software, CDs and videos for sale is pirated.
Counterfeit goods -- from shoes to detergent -- are rife. And the country's
rickety legal system seems powerless to do anything about it.

On the other hand, Russia now has a president who is determined to improve
the country's business climate. Over the past few months, his government has
slashed taxes, cut red tape and eased strict foreign-exchange controls. It
has begun to overhaul the courts, dismantle the Soviet-era ban on land sales
and stamp out money laundering.

This reform surge prompted Mr. Putin to shoot for a framework deal on WTO
membership by the end of the year. But a meeting in June in Geneva dashed
hopes of early entry. WTO members said accession talks could begin in earnest
only once Russia has adjusted its legislation to WTO standards. They also
suggested that Russia submit trade bills for WTO approval before sending them
to parliament to make sure that they are WTO-compliant.

Russia was furious. Prime Minister Mikhail Kasyanov accused the WTO of making
"unprecedented" demands. But WTO officials said prior inspection of laws was
a routine requirement for candidate countries. "You get admitted to the WTO
because you want to comply with the rules, not because you're a great power,"
said one Western diplomat.

The standoff has led to dark mutterings that Russia is being victimized. Some
Muscovites grumble that other ex-Soviet republics like Georgia and Moldova
joined the WTO with much less fuss. Others point out that China -- another
big country with an economy in transition -- hasn't had to revamp all its
laws in quite the same way that Russia is being asked to do.

The WTO admits its approach to China was different. China, which has been
negotiating with the organization for 14 years now, still has some laws that
aren't WTO-compliant, but it has committed itself to reforming them "in a
timely manner." The WTO wants to make sure Russia's laws meet the body's
standards right from the start. "The WTO is learning from the mistakes it
committed during the negotiating process with China," says the diplomat.

But some Russians think this tough stance is more about squeezing economic
gain than following the letter of the law. "The U.S. wants us to repeal
customs duties on steel imports, even though this is not obligatory under WTO
rules," says Stanislav Smirnov, head of the Russian Chamber of Commerce.
"Pressure is being exerted on Russia to make American products more
competitive on our market."

Despite the acrimony, some progress has been made. Russia and its trading
partners have so far agreed on maximum import tariffs for 40% of goods, and
are close to agreement on another 40%.

Russia's reform-minded government is doing its best to improve things. A
package of 12 WTO-friendly laws will go to parliament by the end of the year,
including a new customs code and an intellectual-property bill.

This, observers say, shows the Russian approach is changing. Moscow had
figured that political support from world leaders would be enough to get it
into the WTO. Now, they may be beginning to realize that membership comes
after years of painstaking negotiations -- not a quick phone call from a
friend in the White House or the Elysee Palace.

******

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