August 27, 2001

This Date's Issues:   5411 • 5412

Johnson's Russia List
#5411
27 August 2001
davidjohnson@erols.com

[Note from David Johnson:
1. Newsweek: Mark Hosenball and Christian Caryl, A Stain on Mr. Clean. How a money-laundering indictment in Europe could haunt Putin.
2. Argumenty i Fakty: The Fathers and Sons of Default. (Interview with former General Prosecutor Yuri Skuratov)
3. AFP: Landmines kill off farming in war-blighted Chechnya community.
4. Moscow Times: Pavel Podlesny, Attention Turns to the CIS.
5. UPI: Russian beer to hit U.S. stores.
6. UPI: Martin Walker, Oil, Russia and OPEC.
7. Christian Science Monitor: Fred Weir, Russia's reds in from the cold. Banned in 1991, back with a vengeance in 2001, Russia's Communists rebound as political force.
8. Financial Times (UK): Robert Cottrell, Islands of contention. Russia's eastern border has become a test of her relations with China.
9. BBC Monitoring: Former Media-Most editor to launch new magazine in mid-September. (Sergey Parkhomenko)
10. Reuters: Russians flock to ravaged Abkhazia's beaches.
11. BBC Monitoring: Premature to require Russian president to be party nominee - newspaper.]

*******

#1
Newsweek
September 3, 2001
A Stain on Mr. Clean
How a money-laundering indictment in Europe could haunt Putin.
A NEWSWEEK investigation
By Mark Hosenball and Christian Caryl (CCaryl@compuserve.com)

Say what you want about Vladimir Putin, he’s always been known as Mr.
Clean. Even when he was deputy mayor of St. Petersburg, the Russian
president cultivated an ascetic image, driving a humble Volga to work. That
reputation served him well politically—especially in contrast to his
predecessor, Boris Yeltsin, whose bloated frame and entourage of cronies
came to symbolize Kremlin corruption. As president, Putin has attacked
Boris Berezovsky and other high-living “oligarchs” and is reforming the
legal system. Earlier this year he declared that his government must defend
its citizens “from the arbitrariness of racketeers, bandits and
bribe-takers.”

BUT PUTIN, it turns out, may be a less than perfect pitchman for his
anticorruption campaign. New revelations are focusing attention on a murky
episode from his past in St. Petersburg, a city known to many Russians as
the country’s “criminal capital.” The indictment of a onetime business
associate in Western Europe on charges of money laundering and fraud is
raising serious questions about Putin’s former role in the affairs of a
mysterious Russo-German property-development firm. The company, called the
St. Petersburg Real Estate Holding Company (known by its German acronym,
SPAG), has not been charged and denies any wrongdoing, but U.S. and
European intelligence officials suspect it is linked to the laundering
operations of Russian mobsters and Colombian drug dealers. Until he was
inaugurated as president, Putin was on SPAG’s advisory board and, according
to U.S. and European intelligence officials as well as a SPAG director, he
spent more time on its affairs than the Kremlin will now admit. Since then
Putin has also maintained a close relationship with the onetime head of
SPAG’s Russian operations, Vladimir Smirnov.

The allegations surrounding SPAG and Putin could reverberate to Europe
and America. Next week officials of the United States and 28 other
governments will meet in Paris to consider whether to impose sanctions on
Russia for shirking on money-laundering enforcement. Russia has attempted
to stave off the threat by rushing a new anti-laundering law through the
Duma. But NEWSWEEK has learned that U.S. officials last year successfully
lobbied for Russia to be placed on an international money-laundering
blacklist. A key reason, said a former top U.S. official, was a sheaf of
intelligence reports linking Putin to SPAG.

FINDING FOREIGN PARTNERS

The story begins in 1992, when an obscure former KGB officer named
Vladimir Putin was starting to make his name as St. Petersburg’s deputy
mayor in charge of attracting foreign investment. That year Putin was part
of a city delegation that traveled to Frankfurt, Germany’s financial
center, to drum up interest in their hometown. There Putin got to know
fellow delegation member Vladimir Smirnov, a budding St. Petersburg
businessman eager to find foreign partners. Smirnov soon persuaded a group
of Frankfurt investors to set up a German company that would invest in
choice real estate in St. Petersburg via Russian subsidiaries. To those
wary of the rough-and-tumble business climate of the former Soviet Union,
Smirnov offered a compelling argument. The St. Petersburg city government
was giving its wholehearted support to the project, he said. To prove it,
four city officials would join the new company, SPAG, as members of an
“advisory board,” separate from the board of directors. Among those
officials, according to documents from a German commercial registry, was
Putin.

The company operated in obscurity until two years ago, when SPAG
caught the eye of U.S. and European intelligence agencies. Its name turned
up in a probe by Germany’s foreign-intelligence service, the BND, of
alleged money launderers in Liechtenstein, a tiny Alpine principality that
is a notorious tax haven. The BND accused the company’s cofounder, Rudolf
Ritter, who contributed much of SPAG’s seed capital, of laundering funds
for both Russian organized crime and Colombian drug traffickers. A German
intelligence report also suggested that Russian criminals were using SPAG
to buy property inside Russia.

Six weeks ago prosecutors in Liechtenstein and Austria indicted
Ritter on money-laundering charges. The indictment, which is still
officially sealed but was made available to NEWSWEEK, alleges that Ritter
and a handful of associates laundered more than $1 million for the Cali
cocaine cartel. Separately, the indictment charges Ritter with using shares
in SPAG to scam a group of foreign investors, including Americans. That led
to a criminal referral to the FBI. (Through his lawyer, Hermann Bockel,
Ritter denied the charges.)

PUTIN’S DENIAL

Company officials have since played down Putin’s involvement in SPAG.
Markus Rese, a Frankfurt lawyer who serves as SPAG’s chairman, says that
while Putin was a “contact,” his presence on the unpaid advisory board was
largely an “honor.” Rese says Putin had nothing to do with SPAG’s alleged
current problems. The Kremlin declined to comment on Putin’s involvement
with the company. But last year a Putin spokesman denied the president had
ever “worked for it as an adviser” or been paid a salary.

A NEWSWEEK investigation, however, suggests that Putin was at least
in regular, and sometimes close, contact with some of the company’s key
Russian and foreign directors over a period of years, and even signed
important St. Petersburg city documents for the company’s benefit.
Klaus-Peter Sauer, a German accountant who helped found SPAG and is still a
company director, says he met Putin about six times both in Russia and
Frankfurt. Sauer says SPAG founder Ritter traveled to St. Petersburg and
met Putin at least once, in 1994 or 1995.

But the real key to the mystery surrounding Putin’s role may be the
relationship between him and the ambitious entrepreneur Smirnov. According
to Sauer, Smirnov used contacts he made during that 1992 Frankfurt trip to
become SPAG’s principal Russian co-founder and managing director of its St.
Petersburg operations. Sauer says that Smirnov met regularly with Putin,
eventually becoming “fairly close” to the future Russian president.
(Russian sources told NEWSWEEK that Smirnov and Putin were close enough
that they bought, and still own, adjoining weekend dachas on the outskirts
of St. Petersburg.) SPAG company records obtained by NEWSWEEK from a German
commercial registry show that in December 1994, Putin signed an affidavit
on St. Petersburg’s behalf giving Smirnov voting power over the city
government’s 200 shares in the company.

THE ULTIMATE COMPLIMENT

Then, in August 1996, Putin did what appears to have been a more
important favor for Smirnov. On the city’s behalf, Putin signed a decree
granting a Smirnov gasoline company called PTK (Petersburg Fuel Company) a
virtual monopoly over retail gasoline sales in the city, including
lucrative supply contracts for St. Petersburg’s huge fleet of ambulances,
cop cars, buses and taxis. A Russian source says that one of Putin’s
relatives, a St. Petersburg lawyer named Viktor Khmarin, is a major
shareholder in Smirnov’s gasoline company. Late last year Putin paid
Smirnov what may be the ultimate compliment, inviting him to the Kremlin to
join the Household Affairs Directorate of the president’s office, where
Smirnov is now in charge of the huge communist-era real-estate portfolio.
The same Kremlin department is deeply implicated in alleged bribery and
kickback scandals that tainted the Yeltsin administration.

SPAG and St. Petersburg officials suggest it was through Smirnov that
the company acquired a connection to alleged Russian gangsters. According
to SPAG cofounder Sauer, one of Smirnov’s partners in his gasoline business
was a colorful, one-armed local character named Vladimir Barsukov. A major
figure in St. Petersburg’s restaurant and casino industries as well,
Barsukov is reputed to head one of Russia’s most powerful organized-crime
gangs, known as the Tambov Group. Russian corporate records show that as of
November 1999, Barsukov was listed as a director of one of SPAG’s most
important subsidiaries, which has been planning for years to develop a
shopping mall and business center on St. Petersburg’s main boulevard,
Nevsky Prospekt. (Barsukov did not respond to requests for an interview.)

There is no evidence that Putin ever got any money from SPAG. U.S.
officials say they believe that Putin may have helped SPAG, expecting
future political support from some of the company’s influential Russian
backers. Whether the allegations have an impact on Putin’s political fate
at home remains to be seen. But Putin has already made plenty of powerful
enemies—such as Boris Berezovsky and his fellow exiled oligarch, Vladimir
Gusinsky—who will be only too happy to exploit a scandal involving Mr. Clean.

*******

#2
Argumenty i Fakty
August 22, 2001
via www.compomat.ru
(translation by Luba Schwartzman luba7@bu.edu)

The Fathers and Sons of Default
[Interview] By Andrei Uglanov

Former General Prosecutor of the Russian Federation, Yuri [Ilyitch]
Skuratov, has faced many trials and tribulations: notorious murders,
political intrigues, a conflict with [former Russian President Boris]
Yeltsin, accusations of amorality. But the most difficult test was the
investigation of the causes and consequences of the major financial
disaster of August, 1998.

[A.U.] Yuri Ilyitch, are specific people in the late-Yeltsin-era Russian
elite to blame for the default, or was it a tragic confluence of
circumstances, economic bad luck, a world crisis?

[Yu.S.] There were many reasons for the default: among them, the flawed
economic system, and to some extent, the crisis. These are the objective
conditions. There were also subjective factors: major governmental
miscalculations in financial policy, which sometimes bordered on criminal
responsibility.

[A.U.] Was the former chairman of the Central Bank, S[ergei] Dubinin
involved in the default?

[Yu.S.] Absolutely. It is clearly recorded in the Constitution that the
primary task of the Central Bank is supporting the value of the Ruble.

I was not bloodthirsty, but I needed to determine the causes, find out who
was responsible and investigate the legal components of the case. Why?
Because the default had many causes. The main questions is: Why were
there miscalculations in the publication of state treasury bills (GKOs)?
Already in December of 1997 it was clear that the profits from new GKOs
fell short of the cost of servicing the payments. It became obvious that
a pyramid was formed that would collapse, sooner or later.

But the Central Bank - one of the primary GKO holders - continued to dump
large batches of GKOs into the market, exacerbating the critical situation
of the valuable papers.

Why was this done? Because many of the officials responsible for
financial policy were themselves players on the GKO market.

The Players

[A.U.] During your time as general prosecutor you spoke a number of times
before the Federation Council and before journalists. It always seemed as
if you were leaving something out. You say "officials," but there were
rumors about a certain list...

[Yu.S.] These are names we received from the Interbank Currency Exchange
database, although sometimes passport numbers were put in instead of
names, or the last names were misspelled. We traced deputy prime
ministers [Anatoly] Chubais and [Valeriy] Serov, foreign minister [Andrei]
Kozyrev, first deputy finance minister [Andrei] Vavilov, and five other
deputy finance ministers. All these men played on the GKO marker. Deputy
chairman of the Central Bank [Sergei] Aleksashenko, President Yeltsin's
daughter Tatyana Diachenko, Yelena Okulova. Representatives of the
Defense Ministry were there and...

[A.U.] What kind of sums are we talking about?

[Yu.S.] Considerable sums. With Kozyrev, for example we are talking about
millions of rubles, when the exchange rate was about six rubles to a
dollar.

[A.U.] [Viktor] Chernomyrdin?

[Yu.S.] He wasn't on the list. Neither was Yeltsin. But, of course,
government officials are categorically forbidden to make commercial
transactions.

[A.U.] Did Dubinin play?

[Yu.S.] No. At least I have no evidence that he did. This may be
because the decoding of the database was started during my term, but was
supposed to be finished afterwards. And it seems that as soon as I was
dismissed, Acting General Prosecutor [Yuri] Chaika lost interest in the
project... Or maybe he did have an interest in it. But he understood
that this material was so explosive that one could get caught up in the
upsurge. So he left it alone, quietly closed the investigation.

[A.U.] Does the list of participants still exist? Or is it lost forever?

[Yu.S.] It still exists. About 45 thousand people played the GKO market.
These were criminal figures, oligarchs. Many suspected, and I am sure,
that an enormous "laundry machine" was at work, laundering profits,
legalizing dirty money. One could always say: I won it on the GKO
market."

[A.U.] Well, you kind - prosecutors - you're always suspecting criminal
activity.

[Yu.S.] That's not quite true. But those privy to the details of the
release and cancellation of GKOs used to trade this information. Insider
info was leaked. Moreover, it was sometimes leaked to friends, to the
West.

Evidence points to the US

There was, for example, the so-called Harvard Project, which channeled
U.S. tax-payers' money to the development of privatization ideology. The
main Russian-based players of the Harvard project forwarded the money to
the purchase of Russian GKOs. In other words, they appropriated state
funds. Upon the advice of their Russian friends they bought those papers
that would bring them huge profits. Actually, there is still a criminal
investigation into this affair in the States. There are many layers to
this story that have not yet been investigated - including the fate of the
last IMF tranche ($4.8 billion).

[A.U.] Let's look at that in more detail. So, our officials had a $4.8
billion present from the IMF fall into their lap. But they should have
known, in the IMF, how this would turn out. Why did they hand over that
money? Perhaps for a "cut" of about 50%?

[Yu.S.] This possibility cannot be ruled out. Of course the IMF must have
know what was going on. Furthermore, if the IMF was to take a formal
position, it should not have given Russia the money, because international
loans must be confirmed by the State Duma, and this tranche was not. It
had not gone through the proper procedure, and it should not have been
accepted. And since it was received through the back door, that's how it
was dealt with.

So where's the money?

[A.U.] But were these billions of dollars officially accounted for at
all?

[Yu.s.] One billion was registered with the Finance Ministry for on-going
financing. Another 450 million went to the Interbank Currency Exchange
for supporting the value of the ruble. The rest of the money never even
made it into Russia. It was sold at a lowered exchange rate, by-passing
the Interbank Currency Exchange, where the rate was determined. It was
sold to eighteen Russian and foreign banks. Sometimes the GKOs
themselveswere used as payment.

[A.U.] Do you know who "curried" to those 18 banks? Who in the
government supported them?

[Yu.S.] It's difficult for me to say right now. I know that the
S[tolichnyi] B[ank] S[berezhenii] was supported by the so-called Yeltsin
family.

The banks received large amounts of hard currency to pay their clients,
compensate them for their losses. But they chose to use the money in a
different way. They began to create new, "active" banks from the ones
that "burst."

When the exchange rate of the ruble collapsed four-fold, these banks
became four times as rich within 10 days.

Getting rid of the evidence

The way the tranche was dealt with remains shrouded in darkness. After I
was removed from my position, the investigation puttered out, since it
concerned the financial-political elite of Russia.

There were other interesting things about the tranche. Someone should
have compiled the American investigation of the Bank of New York Affair
with the information available here. I am positive that the Bank of New
York was one of the giant vacuum cleaners sucking money out of Russia.

In any case, I know that some of the currency from this tranche was sold
into the financial structure controlled by Mr. [Lawrence] Summers - the
Clinton Administration's treasury secretary. I don't remember whether
this was in rubles or in GKOs. This is something else that needs to be
cleared up.

[A.U.] You remain a prosecutor at heart. What differences do you notice
in the methods chosen by the two presidents - current and former - to
fight corruption? It seems to us that there is more order nowadays.

[Yu.S.] Objectively, there isn't more order, although the state budget
isn't robbed as much and the FSB asserts certain positions.

From another side, it would be better for it to be tougher on some issues.
What's the fate of the investigation of (Roman Abramovich's) Sibneft's
tax evasion? As far as I know, the case was settled after Abramovich made
some visits to the Kremlin and pressed all of the levers that he could.
Is this considered "holding on to positions?" Why was the case against
[SBS President] A[leksandr] Smolensky suspended? The doctored letters of
advice make it absolutely clear. Here, too, you need willpower. In the
Aeroflot case Berezovsky also escaped punishment - they were satisfied
with secondary figures.

For now the picture is blurry. But reality will force Putin to fortify
his position on the question by the presidential elections; because as of
now, there has been no cardinal improvement in the fight against
corruption.

******

#3
Landmines kill off farming in war-blighted Chechnya community

ALKHAN-KALA, Russia, Aug 26 (AFP) -
At night in this wrecked town they melt away behind closed doors. Even the
doctors and nurses are so frightened they desert its one hospital at night,
leaving patients to fend for themselves.

Fear and poverty stalk this ruined community of Chechnya.

Young men fear arrest by Russian government troops suspecting them of
separatist sympathies.

And they fear the vengeance of separatists against collaborators, or actions
taken against them for failing to fight against Russian forces.

Poverty has devastated the area. Landmines infest the fields, killing off not
only anybody who steps on them but farming itself, the traditional local
mainstay.

Farming was a major source of livelihood here before Chechen separatism
escalated into conflict with Russian government forces sent south by Moscow
to quell the insurgency.

Today only about a third of the surrounding countryside is still being farmed.

"Our great problem is the mines," said Sultan Abdulayev, head of a local
state farm: "They're all over the place in the fields."

"Lack of drinking water and electricity are also problems," Malika Umatova
reminded him.

She is a 50 year-old woman just elected head of the local pro-Moscow
administration after her predecessor was shot dead by Chechen separatists who
consider pro-Moscow administrators traitors to the cause.

"I'm not afraid," she said: "It's a feeling you can't afford here if life is
to continue normally."

The 9,000 inhabitants of this town, five kilometres (three miles) from
Chechnya's capital Grozny, have been desperately awaiting money from Moscow
to start rebuilding on the ruins of their homes.

Abdulayev has no money to pay what is left of his workforce, so they get paid
in the form of potatoes, carrots and cabbage.

"It's still better than nothing," he said. The local people subsist on
humanitarian aid brought up with huge logistical difficulties from Ingushetia
by non-governmental organisations.

"We've no great hopes of seeing this war over soon," said Arbi, a young man
just back from a refugee camp in the neighouring Russian minority republic of
Ingushetia. "The Russians don't want to talk to our president (Aslan
Maskhadov)."

Moscow refuses to recognise Maskhadov as Chechen leader, though he was
elected in 1997 in what it regarded at the time as a fair vote.

"The Russians will take decades to beat the Chechens," Arbie said, adding:
"Only when the Chechens are all dead."

Meanwhile there is no work here for him. "The only people who get any money
here at all are pensioners," he said.

*******

#4
Moscow Times
August 27, 2001
Attention Turns to the CIS
By Pavel Podlesny

President Vladimir Putin's visit to Ukraine last week and the informal
summit of CIS leaders in Sochi earlier this month are as good a reason as
any for considering the problems of integration among former Soviet
republics and Putin's approach to the issue.

The main dilemma for the Kremlin is that the stated strategic goal of
Russian foreign policy in the early 1990s — creation of an economically and
politically integrated association within the framework of the CIS — was
never fulfilled.

By the end of the 1990s, the post-Soviet space had split into several
groupings. The two main ones are the Eurasian Economic Community, formerly
known as the Customs Union (Russia, Kazakhstan, Belarus, Kyrgyzstan and
Tajikistan), and the alliance GUUAM (Georgia, Ukraine, Uzbekistan,
Azerbaijan and Moldova). GUUAM has been been weakened by political
instability in Georgia and Ukraine, and by the appearance of a Communist
government in Moldova, but still limps on.

There are also the Russia-Belarus Union, neutral Turkmenistan and the
Central Asian Economic Community comprised of Kazakhstan, Kyrgyzstan,
Tajikistan and Uzbekistan.

Yet despite these alliances, members of the CIS have distanced themselves
not only from Russia but from one another. Trade between CIS countries has
declined sharply in the past 10 years, from $139 billion in 1991 to $59
billion in 2000.

There are several reasons for such disintegration. To a large extent,
Russia itself is to be blamed. Its policies have lacked consistency, an
understanding of Russia's own national interests and a reasonable
assessment of its own possibilties.

Meanwhile the economic costs of integration have become an ever growing
burden for Russia. Today, the CIS countries' debt to Russia is more than
$5.5 billion and Russia has no reasonable hope that it will ever be repaid.

But the main problem is that Russia continues to be a donor to most CIS
countries, with no choice but to keep on giving. A destabilizing situation
in one CIS country or another, for instance Ukraine, would be even more
costly for Russia.

Russian experts estimate that through direct or indirect subsidies to the
"near abroad," Russia loses 3 percent to 4 percent of its gross domestic
product, or nearly the amount it spends on defense or health. It is also
twice as much allocated for law enforcement bodies and security and about
10 times the amount the state spend on science and technology.

Another complication stems from the vast differences in the pace of
economic reform in the various CIS countries and the unwillingness of local
political elites to sacrifice the privileges and status attained since
their country became independent.

Given the situation, with Putin's coming to power, changes in Russia's
strategy toward the CIS were practically inevitable.

Already Putin has made the CIS a priority and is taking a more active
approach. It is worth noting that on his first foreign tour as head of the
state, Putin traveled to Minsk, London and Kiev, thus stressing the
importance of the Slavic triangle.

Russia's current leadership plans to continue multilateral efforts in areas
where the conditions are favorable. Today the most fruitful soil seems to
be in cooperation on security, particularly coordinated efforts against the
threat of Islamic extremism looming over Central Asia. Russia and the
Central Asian countries have made concrete progress in such cooperation,
especially in regard to Russian weapons supplies to the region and the
formation of joint Russian-Central Asian peacekeeping forces.

But Moscow's main push will be in developing bilateral relations. Lately,
relations have improved significantly with Ukraine, Azerbaijan, Moldova,
Uzbekistan and Turkmenistan.

Improved bilateral relations will help preserve the CIS as a whole, mainly
by providing a forum for discussing specific economic and political
questions such as energy distribution, security and stability in the former
Soviet Union.

Pavel Podlesny heads foreign policy research at the USA and Canada
Institute. He contributed this comment to The Moscow Times.

******

#5
Russian beer to hit U.S. stores

MOSCOW, Aug. 26 (UPI) -- A Russian beer maker clinched a deal with
U.S.-based ABC Service International company to export beer to the United
States from mid-September, Interfax news agency reported Sunday.

The American firm, which earlier specialized only in imports of Russian
timber, will now expand trade with Russia by partnering with Afanasy-Pivo
joint-stock company to bring the Russian brew to the U.S. market.

The initial shipments of the Afanasy brand will total 320,000 bottles a
month, Konstantin Sokolov, a spokesman for the beer maker told Interfax.

The scope of further deliveries will depend on the subsequent demand of
the U.S. market, Sokolov said.

The brand will be introduced to U.S. consumers at a brew fair in Las Vegas
from Sept. 9-12, 2001.

After the fair, the beer will go to retail stores across the United
States.

Afanasy-Pivo makes around a dozen different brands of draft and stout beer
covering 2 percent of Russia's beer market and 4 percent of the market in
Moscow.

In 2000, the brewery invested around $12 million into reconstruction of
its facilities in order to raise output to 10 million liters (2.6 million
gallons) per year.

The same year, an additional $6 million was invested into a bottle-making
facility producing annually 100 million bottles.

In the first half of 2001, the company made 3.5 million liters of beer
increasing by 74 percent its output over the same period in 2000.

By the end of this year, Afanasy-Pivo plans to put out 7.5 million liters
(925 million gallons), surpassing last year's figures by 2.4 million.

******

#6
Walker's World: Oil, Russia and OPEC
By MARTIN WALKER, UPI Chief Political Correspondent

PERIGORD, France, Aug. 26 (UPI) -- This week's decision by the Russian
government to sabotage OPEC by increasing its oil production launches us all
onto a fascinating economic experiment that might just help the world
economy turn the corner from stagnation back to growth.

The White House economic adviser Lawrence Lindsey is not the only expert
who reckons that the American slowdown was caused as much by last year's
jump in the oil price as by the collapse of the dor.com bubble. Analysts at
the Buba, Germany's central bank, reckon that energy costs explain a lot of
the difficulties in Europe's biggest economy, which is highly dependent on
imported oil and gas. The inflationary threat implicit in higher oil prices
has been repeatedly cited by the European Central Bank to justify its
reluctance to cut interest rates, despite anguished appeals from German
industry.

A year ago, oil was trading at $37 a barrel. Two months ago, it was still
trading at $30 a barrel. Last week, it was down to $26. During the boom
years of the 1990s, it was usually below $20 a barrel.

The OPEC countries have been trying to nudge the price up, cutting
production quotas three times so far this year, and reducing their daily
output by about 13 percent.

Now Russia has come to the rescue, increasing their daily output by about
500,000 barrels a day, with more to come. Analysts at Germany's Deutsche
Bank now reckon that oil exports from Russia and Kazakhstan will increase by
as much as 45 percent by 2005, helping to keep world prices down.

Lower energy prices cut industrial costs and should help corporate
profits, just as this week's announcement of 'stabilization' from Cisco,
that giant of the high-tech sector, suggests that the American slowdown has
bottomed out.

Thanks, Russia. But before getting carried away with optimism, it is worth
looking at the dynamics of the Russian government decision. And make no
mistake, despite the freeing of much of the Russian economy from state
control, the energy sector remains under the Kremlin thumb. It was not
independent Russian oil executives who decided to open the spigots and let
the oil flow. It was the government.

The key announcement came last week from Igor Yusufov, the new Minister
for Fuel and Energy, who told a Moscow press conference that Russia would
"take its own export decisions in the national interest, without regard to
OPEC "

Since energy accounts for more than half of Russia's export earnings, the
oil and gas industry is of high strategic interest to the Kremlin. For the
past five years, Russia has been pumping around 6 million barrels a day, a
figure which should increase to 7 million barrels by the end of this year.
All of the increase is going to exports.

And despite the conventional wisdom that Kremlin and political
interference is the Russian energy industry's biggest problem, a number of
smart decisions have been taken over the past five years. Two of the most
useful were the decisions to break the bottleneck on Russia's oil export
capacity by authorizing new pipelines.

Just five weeks from now, the most important new pipeline will start
sending oil from Kazakhstan's Tinghiz oilfield to the Russian Black Sea port
of Novorossisk. Both Exxon Mobil and Chevron are involved in the Caspian
Pipeline Consortium which financed and operates the pipeline. And by the end
of this year, another pipeline from the oilfields of northern Siberia to the
Baltic port of Primorsk will help reach the 2005 target of increasing
Russian oil exports by 30 percent.

This means serious money for the Russian economy, and for the Russian
government's revenues. At $25 a barrel, an extra million barrels a day is an
extra $9 billion a year.

Russia has thus avoided the temptation of cooperating with OPEC to screw
higher prices out of the West's industries and consumers, and shown its
perception of its real strategic interest -- which is with the West.

Where does this leave OPEC, some of whose more fiery members seemed to
think that they could recreate the glory days of the 1970s, when the oil
weapon was first deployed in the wake of the 1973 Yom Kippur war, and get
rich while also pressuring the West to back away from Israel? And where does
this leave Iraq, where Saddam Hussein was hoping to use his oil to break
free finally from the sanctions that have kept him on short rations since
the Gulf War?

It leaves the OPEC nations thinking again about the risks of trying to
operate a cartel while lacking a monopoly of the oil supply. And if a lower
oil price helps fuel a return to growth in Europe and North America next
year, while locking a more prosperous Russia even more firmly into the
Western economic system, Russia's President Vladimir Putin should be a very
welcome guest at next summer's G8 summit in Canada.

******

#7
Christian Science Monitor
27 August 2001
Russia's reds in from the cold
Banned in 1991, back with a vengeance in 2001, Russia's Communists
rebound as political force.
By Fred Weir
Special to The Christian Science Monitor

MOSCOW - Ten years ago, the hammer and sickle appeared headed for history's
dustbin. The Communist Party, the force that had ruled the USSR for seven
decades, was outlawed and dispossessed by Russian President Boris Yeltsin,
who had just defeated a coup attempt by a gang of Kremlin hawks.

At the time, Mr. Yeltsin said the move was final, and Russia would shift
into a democratic era minus the party that had long led - and symbolized -
the USSR.

But, far from sinking into oblivion, Russia's Communist Party quickly
rebounded. Today, it is the country's largest political organization, runs
about 40 percent of regional governments, and controls a third of the seats
in the national parliament.

"How can you destroy an idea that is so deeply rooted in Russian society
and culture?," says Vladimir Lakayev, second secretary of the city of
Moscow's powerful Communist Party organization. "Yeltsin only strengthened
the party with his constant attacks."

Following the collapse of the USSR, a group of left-wing members of
parliament challenged Mr. Yeltsin's anti-communist decrees in Russia's
Constitutional Court.

In the stormy trial in 1992, the Kremlin's lawyers argued that the party
should be banned for leading Russia down a tragic path. They charged that,
during its rule, the Communist Party supervised mass murders, built the
vast gulag prison camp network, and systematically suppressed human rights.

The court concluded, however, that grassroots believers in communism had
the right to organize. Reviving in 1993, the Russian Communist Party grew
swiftly, claiming to have 600,000 members today.

"Our party preserves the best traditions of the Soviet Communist Party,
including its ideology and principles," says Mr. Lakayev. "But, unlike
Soviet times, when most members were just opportunists, all those who join
us now are sincere activists."

Despite its Marxist-Leninist rhetoric, the new Communist Party demonstrates
little taste for radicalism. It has won local elections and done well in
national votes.

But there's less show than before: unlike its revolutionary founders,
today's party faithful take to the streets only to celebrate Soviet-era
holidays, such as May Day, and they are careful to confine such action to
low-key parades and speeches.

"This is not a party, but a vestige of the Soviet state," says Svyatoslav
Kaspe, a political analyst with the independent Russian Public Policy
Center. "It is a cultural club, where people fondly remember the good old
days and venerate the symbols of Soviet times. As a political force, it is
deeply conformist and not at all a threat to the regime."

The party's latest public campaign is to change the name of the central
Russian city of Volgograd back to Stalingrad, to honor the great battle won
there by Soviet forces in World War II.

"This is nostalgia raised to the level of a political crusade," says Mr.
Kaspe. "But, even if they win, it will alter nothing essential."

Most of the post-Soviet Communist Party's members are, in fact, elderly
people who fought in World War II or grew up in the tough years of
reconstruction and the subsequent struggle toward global superpower status.

But many experts say that the stubborn pride of lifelong Communists, and
widespread nostalgia for the Soviet Union, do not fully explain the party's
phoenixlike recovery.

"The original cause of communism was capitalism, and Yeltsin created one of
the nastiest versions of capitalism ever seen," says Boris Kagarlitsky, a
left-wing sociologist in Moscow. "It shouldn't be surprising that people
who were experiencing harsh impoverishment and social humiliation would
turn to the party that symbolized resistance to capitalism."

During the initial post-Soviet period, hyperinflation destroyed the savings
of millions of ordinary Russians. Crooked privatizations of state assets
put vast wealth in the hands of a small minority, while most people fell
into poverty. A 1998 financial crash, brought on by Kremlin incompetence,
slashed the buying power of already meager wages by two-thirds.

A popular joke of the mid-'90s asked: What has Yeltsin accomplished in a
few years that the Communists couldn't in 70 years? The answer: He's made
Communism look good.

Yeltsin's penchant for refighting his historic battle with communism,
rather than building a viable new democratic movement, also played into the
Communist Party's hands. In 1993, he mobilized tanks and troops to blast
away the "Communist-dominated" - but freely elected - legislature.

In subsequent parliamentary elections, the Communists roared back, often
taking a quarter or more of the votes. In 1996, the awkward and lackluster
Communist leader Gennady Zyuganov captured more than 40 percent of popular
support in a dirty campaign that narrowly reelected Yeltsin.

"Yeltsin liked confrontation, it was his political style," says Mikhail
Ilyin, deputy editor of Polis, an independent Moscow-based journal of
political studies. "But this had a polarizing effect on society. In effect,
he forced people to choose between him and the Communists, and that did
nothing to broaden the country's political choices."

However, Russia's current president, Vladimir Putin, could succeed in
killing the Communist Party with compromise where Yeltsin's antagonistic
approach failed.

A former KGB agent, Mr. Putin has restored many old symbols, such as the
Soviet anthem. He has pledged not to remove Bolshevik founder Vladimir
Lenin from his Red Square mausoleum, though Yeltsin threatened repeatedly
to do so. Under Putin, military spending has been hiked and old Soviet
allies, such as Cuba and North Korea, are back in favor. Perhaps most
important, pensions have been significantly raised.

But how far Putin is ready to go in pleasing the Communists remains to be
seen. A public appeal signed by Mr. Zyuganov and 42 other leading
Communists last week urged the Kremlin to purge Yeltsin-era officials and
give more power to the secret police in order to "cure a sick state."

"Traditional values are very important for Russians, and this accounts for
the endurance of the Communist Party," says Mr. Ilyin.

"But few want to really go back to the past," he says. "Putin will probably
respect the Communists as long as they stay in their place."

******

#8
Financial Times (UK)
27 August 2001
Islands of contention
Russia's eastern border has become a test of her relations with China
By Robert Cottrell

Field glasses clamped to his chest, moustaches flaring defiantly, Count
Nikolai Muravyov stares out across the Amur river towards China while at
the foot of his statue nervous young couples pose for wedding photographs
on a summer afternoon.

Khabarovsk, where Muravyov planted his military command post in 1858, is
the fortress and keystone of the Russian far east. It is still a garrison
town. Every young man on the street, in or out of uniform, seems to have
the shaved head and heavy build of an army boy.

On a hot day, you can smell China in the air. It is there in the lazy
river, in the flat sandy banks, in the scudding hydrofoils taking Russian
shoppers on visa-free day trips to the market town of Fuyuan.

For those who cannot go to China, a little bit of China will come to them.
In the suburb of Viborgskaya, the Khabarovsk authorities have set up a
regulated market the size of an aerodrome where hundreds of Chinese traders
run makeshift stalls. Their main lines are the counterfeit branded
tracksuits, dirt-cheap electronics and melt-in-the-rain sports shoes that
China gave up selling to the west 20 years ago. But here there is still
money to be made - at least, to judge from the presence of a grandiose
Chinese restaurant, the New Century. The king prawns sell for $30, rather
more than the average Russian weekly wage.

Close as China may be, there can be no doubt about the country on this side
of the river. Khabarovsk has the elements common to almost all Russian
cities: an Intourist hotel, a sprawl of prefabricated high-rise apartment
blocks, a smoke-belching power station on the skyline and a few graceful
older buildings built before the revolution. It may be east of Beijing,
north of Osaka and in the same time zone as Sydney but it is Russian to a
fault.

It is here because Muravyov ordered its creation and because he signed a
treaty with China staking Russia's claim to a great curve of Asia, starting
east of Lake Baikal, running on to Khabarovsk and then south to
Vladivostok, taking in the Pacific coast above the Korean peninsula. An oil
painting of that occasion, the signing of the treaty of Argun in 1858, is
the pride of the Khabarovsk history museum. It shows Muravyov in a
magnificently swagged and braided silver uniform, surrounded by advisers in
black frock coats and white starched shirts. They confront a huddle of
elderly mandarins in pigtails and wispy beards. Muscular Europe triumphs
over decadent Asia.

By and large, China has come to accept the land grab. In July, it signed a
"treaty of neighbourliness, peace and friendship" with Russia in which both
countries said they renounced territorial claims on one another. Both
promised to draw a line under a long history of border disputes, the most
recent of which brought them to the brink of all-out war on the Amur river
in 1969.

But, in a nice piece of diplomatic legerdemain, the treaty also declared
its opposite. It said two sections of the 4,259-km border had yet to be
agreed and would remain the subject of negotiations. The more delicate of
these points lies within Count Muravyov's iron gaze, in the river off
Khabarovsk. It has become the most conspicuous physical test of China's and
Russia's real willingness to trust and compromise.

It consists of two islands, Bolshoi Ussuri and Tarabarov, lying just off
Khabarovsk where the Amur and Ussuri rivers meet. Russia took them, along
with other strategic islands in the Amur and Ussuri, when it fortified the
border in the 1930s, despite claims that they lay on the Chinese side of
the river.

Looking at Bolshoi Ussuri from the Khabarovsk bank, it is easy enough to
see the problem. The island dominates the city, with

Tarabarov beyond it. If China had its way, the stare of Count Muravyov
would be met by the no less defiant stare of Chinese soldiers and farmers a
mere 200m away. For the Russians of Khabarovsk, it is much more comforting
to have the Chinese border safely out of sight, some 30km to the west, with
guard posts and barbed wire.

Looking at a map, many people would come to the same conclusion as the
Chinese government. The islands are Chinese. But for Russia to admit as
much would be a big concession in a place where even small concessions are
scarcely possible.

Russians in the far east worry about China to the point of paranoia. An
opinion poll conducted last year in Primoriye, the province around
Vladivostok, to the south of Khabarovsk, found 74 per cent of the
population expected China to annexe all or part of their region "in the
long run".

Half the respondents to another poll thought that Chinese immigrants
already made up 10-20 per cent of Primoriye's population. But official
data, even allowing for an equal measure of illegal immigration, suggest a
figure no higher than 3 per cent - less than a third of the proportion at
the start of the 20th century. President Vladimir Putin himself, during a
visit to Siberia last year, warned that "if we do not make a real effort,
even the indigenous Russian population will soon speak mostly Japanese,
Chinese and Korean".

Russia fears its own weakness here, as much as China's strength. Fewer than
8m people populate the trackless expanses of the Russian far east. More
than 100m are packed into the provinces of China just across the border.
And as the Russian population shrinks because of emigration and a high
mortality rate, the fear of encroachment grows.

The economic imbalance is equally striking. Ten years ago Russia's economy
was as big as China's. Today China's economy is three times bigger, even if
per capita incomes in China are still lower. All China really wants to buy
from Russia are oil and weaponry. The Chinese troops across the border are
armed with Russian-made weapons that are newer and probably better
maintained than those of Russia's own forces.

There is an imbalance, too, in individual enterprise. Chinese small traders
cross to Russia, legally and illegally, with their suitcases of cheap
consumer goods. They take work in construction and agriculture. They do
jobs that Russians cannot and will not do, competing in Primoriye with even
cheaper labour from North Korea. The Russians say they take away jobs and
bring in crime - the complaints that all local people make about
immigrants. In the end, the Chinese are guilty of being Chinese, in a
country short of Russians.

As for the Russians, they are guilty, like many other great powers down the
centuries, of imperial over-reach. When they seized and settled Siberia and
what is now the Russian far east from the early 17th century through to the
mid-19th century, they increased their country's size and resources but
also its vulnerability. These chilly expanses could be made to pay for
themselves when their mines and forests were worked by serf labour or by
the prisoners of Stalin's gulags. But without such forced labour, Russia
has far more territory here than it will ever manage or populate adequately.

You will need a strong nerve and a stiff drink, of course, to argue that
sort of thing in Khabarovsk. Geopolitics are not popular here when they
start to catch Russia itself on the defensive. It is an article of faith
among Russians that their country covers a seventh of the world's land mass
and 11 of its time zones - and they are not planning to give any of those
time zones away easily.

The people of the Russian far east may fear they cannot hold these lands
for ever. But for the moment there is a border - and they plan to keep it
there.

*******

#9
BBC Monitoring
Russia: Former Media-Most editor to launch new magazine in mid-September
Source: Ekho Moskvy news agency, Moscow, in Russian 0725 gmt 26 Aug 01

[No dateline as received] It is expected that a new weekly magazine led by
the current chief editor of the Real Itogi magazine [set up after the
takeover of the Media-Most media holding by Gazprom-Media in April 2001],
Sergey Parkhomenko, will be launched in mid-September 2001. The news has
been announced by Sergey Parkhomenko himself in a live interview for Ekho
Moskvy radio.

The new magazine will have the straightforward title of the Weekly
Magazine. Parkhomenko believes this title has a style of its own. "It is
trendy and postmodernist in a way to call a jacket a jacket and to call a
magazine a magazine. People will get used to it," he said. "This country
will have a Magazine, the right magazine. There are good and bad magazines
but very few magazines that one could call right", Parkhomenko explained.

He added that the Weekly Magazine will also be published in the Internet.
"Gradually, the current web-version of the Real Itogi magazine will become
incorporated into the new publication and the Weekly Magazine will replace
the Real Itogi," Parkhomenko said.

Parkhomenko expressed the hope that the newly created magazine will be
distributed not only through retail outlets but through subscription as
well. He is sure that "neither a daily paper, nor weekly magazines, nor
monthly publications can exist without subscription". Parkhomenko said the
editorial staff of the new magazine would do their best to make sure the
Weekly Magazine gets distributed not only in Moscow but also in the
regions. "The Weekly Magazine, unlike a newspaper, lives longer than a day
and can be used to unite the country's information space. Therefore the
Weekly Magazine's mission is to be a central federal publication
distributed across the country," Parkhomenko said.

********

#10
Russians flock to ravaged Abkhazia's beaches
By Rosalind Russell

SUKHUMI, Georgia, Aug 26 (Reuters) - Knocking back a shot of vodka, the
sunburnt, big-bellied tourist in tiny swimming trunks turns on his bar stool
and surveys the scene in front of him with satisfaction.

Gentle waters lap the pebbly shore, girls in string bikinis bask on wooden
sunbeds, children splash happily in the shallows.

This is former Soviet Georgia's breakaway republic of Abkhazia, which fought
for its independence in a bitter 1993 war that left at least 10,000 people
dead.

Georgian forces and some 250,000 Georgian civilians were driven out and
Abkhazia declared itself a sovereign nation. But eight years on, it is still
not recognised by any state.

Sanctions were imposed, trade links with northern neighbour Russia cut, and
the republic's famous mandarin oranges tumbled unharvested from the trees.

Now Abkhazia is trying to rebuild its shattered economy using its most prized
resource: a coastline of unspoilt, sub-tropical beaches sandwiched between
the Black Sea and the Caucasus Mountains.

Tempted by cut-price deals, Russian tourists are flocking back to the same
resorts where Soviet Communist Party bosses once enjoyed their summer
vacations.

"Where else am I going to go, Hawaii?" said one Muscovite taking an evening
stroll along the water's edge.

Abkhazia's department of tourism said around 65,000 Russians came on holiday
to the 130-mile (200 km) strip of territory in 2000, and the number this year
is expected to be higher.

BORDER GUARDS TURN BLIND EYE

Under Russia's sanctions regime, Russian citizens are officially only allowed
to travel to Abkhazia if they are visiting relatives.

But border guards seem to turn a blind eye and Abkhazian tourism officials
are there to help busloads of sun-seekers cross the frontier.

"We have to help them cross the border. I cannot tell you the ways we do it,
but we use unofficial ways to get them across," said Valery Ashuba, deputy
head of the department of tourism.

The wait at the border can last for hours, but once across, tourists can take
advantage of the cheapest hotels along the Black Sea coast. There's also the
rain forest to explore, spectacular underground caves and an ancient
monastery.

The snappily-named "17th Party Congress Resort" -- with sea views, a swimming
pool, solarium and other sporting activities -- offers full-board
accommodation for just $19 per night.

Abkhazia was a part of Georgia in Soviet times but many Russians seem to view
Abkhazia as their own.

Mercenaries from Russia's north Caucasus region backed Abkhazian forces
during the war, and Georgia says the separatist fighters were also helped by
regular troops and arms from Russia.

Now, a 1,500-strong Russian peacekeeping force is deployed in Abkhazia, often
joined by their families in summer.

"It's not like going abroad, everyone speaks Russian and we can buy the
things we like," said Vera, the wife of a Russian soldier, relaxing under a
parasol.

But despite the swelling numbers on the beaches, Abkhazia is not the place it
was when Stalin, Brezhnev and Gorbachev built their holiday dachas here.

SCARS OF WAR

The capital Sukhumi is littered with ruins of buildings destroyed by war that
the government can afford neither to rebuild nor pull down.

The buildings that remain -- once elegant, neo-classical residences painted
in yellows and pinks -- are bullet-riddled and dilapidated. Some serve as
offices of state with national flags hoisted above.

"We had a war which completely destroyed our economy and our infrastructure
and traumatised the population," said Abkhazia's "foreign minister" Sergei
Shamba. "It left a deep scar."

Abkhazia's population is estimated at a mere 150,000, and many live in deep
poverty. White United Nations vehicles race along otherwise quiet streets --
a constant reminder of how far the territory is from normality.

A contingent of U.N. military observers has been stationed in the territory
since late 1993, and the threat of renewed violence still lingers.

Georgia has not relinquished its claim to the region and says the quarter of
a million Georgians who fled must be free to return.

Pro-Georgian guerrilla groups, such as the "Forest Brothers" and "White
Legionnaires," and an Abkhaz militia are blamed for ambushes and kidnappings.
Stray landmines claim lives each year.

But that all seems far away from Sukhumi's beach, where some families return
every summer.

The Russian sanatorium, with a disco and beach-front restaurants serving beer
and mussels, is fully booked.

"We've been coming here for five years, said Lena, a blonde 18-year-old, on
holiday with her parents and younger sister.

"At the beginning it felt strange and we were afraid, but now we feel safe."

*******

#11
BBC Monitoring
Premature to require Russian president to be party nominee - newspaper
Source: Nezavisimaya Gazeta, Moscow, in Russian 23 Aug 01

Russia's Central Electoral Commission is mulling a radical reform of the
law governing presidential elections that would oblige candidates for head
of state to be nominated by a political party. But, according to the
Nezavisimaya Gazeta newspaper, the commission will have to exercise caution
as incumbent president Vladimir Putin, standing for re-election in 2004,
has distanced himself from all parties on the Russian political scene. In
any case, his choice would be limited to two "more or less realistic"
options - Unity and the Union of Right Forces, but neither is suitable in
practice. Then there is the tricky problem of resolving the president's
relationship with the party leader. The following is the text of the
article by Olga Tropkina, published on 23 August under the headline
"Veshnyakov looking for chief of staff for Putin - Central Electoral
Commission wants president of Russia to be obliged to belong to a political
party". The subheadings have been added editorially:

The Central Electoral Commission (CEC) is preparing amendments to the law
on presidential elections in Russia to be submitted to the State Duma
possibly as early as November this year. The purpose of the amendments to
the document that regulates the election of the state's top official is to
bring it into line with the law on political parties.

In addition to introducing purely editorial amendments which have to be
made to all election legislation because of the adoption of the law on
parties, the CEC is now thinking about how expedient it may be to make
radical alterations to the law on presidential elections.

Party nominees

Strangely, even quite recently many people were quite keen to tighten up
the document in a serious way. In one interview with Nezavisimaya Gazeta,
Aleksandr [CEC Chairman] Veshnyakov stated that the CEC might draw up
amendments under which only political parties could nominate candidates for
the presidency. At the moment this privilege is accessible to ordinary
voters too: it is sufficient to gather together an initiative group,
preferably involving persons enjoying respect and prestige in society - as
happened for example with the nomination of Vladimir Putin, when several
governors and figures from the arts and culture joined the "support group"
- and then collect signatures without much difficulty from a potential
electorate across all of Russia's territory.

In its enthusiasm for "transposing" world experience into Russian political
reality, the CEC really does intend to introduce such an amendment. CEC
Chairman Aleksandr Veshnyakov did admit in conversation with Nezavisimaya
Gazeta's correspondent, however, that it is still premature to talk about a
serious tightening of the procedure for nominating candidates for president
and that the amendments are still at the stage of being drawn up. He said
that the opportunity for individual voters to make nominations would
probably remain, but that in this sense political parties "would be given
the advantage". Veshnyakov did not say precisely what kind of advantage he
meant.

Putin's choice

However, it is obvious that this CEC still has a lot of thinking to do
before deciding which option for amending the law on presidential elections
to propose to Putin for submission to the State Duma. Because if political
parties can still be cultivated on the Western model, then the "particular
features" of the Russian presidency will hardly allow the CEC to introduce
so hastily the kind of radical changes which, if adopted, would start to
operate at the very next election for head of state. If only because the
CEC is in no doubt that the next president of Russia will be Vladimir
Putin. In the event that the amendment is adopted, Vladimir Putin will
immediately have to choose a political party which can nominate him as
candidate for president. In this sense the American experience, whereby a
future President has to go through all stages of the party process, is
certainly not applicable to Russia.

It is one thing for Putin to have hastily admitted his attachment (as a
citizen) to Unity before the 1999 Duma elections. It is quite another for
him to join a party in advance of his own election in 2004. Because right
now the president is trying to distance himself from any political party
(even Unity).

Comical possibilities

And if the amendment is adopted, the president's choice of parties to which
to attach himself is not so wide. Even though there are many more more or
less serious organizations (in terms of the number of votes they attract)
in Russia than in many other countries, trying to imagine Putin as the
"nominee" of each of them makes it clear that as of today this is simply
impossible.

It would look simply comical for Vladimir Putin to be nominated by the CPRF
[Communist Party of the Russian Federation], the LDPR [Liberal Democratic
Party of Russia], Fatherland or Yabloko. Although, of course, nothing is
impossible and the two last-named structures would agree to any terms just
to see Putin in the role of their candidate for president.

Two real options

The current head of state has only two more or less realistic options: the
present "party of power", Unity; and the Union of Right Forces [SPS], which
is close in terms of attitudes and ideology. It goes without saying that
these and others would fight to the death for Putin. Because Putin as
candidate for president nominated by any structure would automatically be
associated in the voters' mind with that party's slogans and ideology and
would generally be a great "trademark".

Despite its extremely successful development (which sometimes raises doubts
that it will actually go the way of previous "parties of power"), Unity is
nevertheless not suited to this role, if only because of the history of its
highly "unnatural" birth and the label that is stuck fast to it of being an
"amorphous" structure without an ideology, which will take Unity many years
to shed.

The same applies to the SPS. Witness the complaints made against Vladimir
Putin by the SPS in recent times. As well as the "constructive opposition
to the government" written into all official documents of Nemtsov's party.
If Putin were nominated by the SPS, that would effectively mean an
acknowledgement of SPS complaints and a promise to "put them right". That
is simply impossible to imagine.

Party discipline

The silliest part of it all is that, in becoming a member of a party, the
president would effectively become subordinate to its leader. Because to
have a head of state who is simultaneously the leader of a party is a
nonsense. In that event Vladimir Putin (or any other candidate) would be
subject to party discipline. It would mean that Putin's party leader would
be either Boris Nemtsov or Sergey Shoygu. It is simply impossible to
imagine either of these insistently recommending something to Vladimir
Vladimirovich on the party's behalf.

So it is quite hard right now to expect the CEC to include party membership
among the demands made of a candidate for president. At least until the
moment when Russian parties "grow" in a natural way to be like their
foreign colleagues and are able to offer the voter as potential head of
state a person who really can stake a claim on victory. Judging by the
results of the last presidential election, this is not going to happen soon.

********

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