Johnson's Russia List
#6084
18 February 2002
davidjohnson@erols.com
A CDI Project
www.cdi.org
[Note from David Johnson:
1. pravda.ru: LIFE IS GETTING BETTER IN RUSSIA.
2. Reuters: Russia's stats committee revises '00, '99 GDP growth.
3. Interfax: Torpedo explosion may have caused Kursk sinking - Navy
commander.
4. AP: Russian Official Named to New Post. (Klebanov)
5. Itar-Tass: Putin slams government for mishandling electricity crisis.
6. Vremya MN: Mikhail Delyagin, TIME IS FACING PUTIN WITH A CHOICE.
7. Nezavisimaya Gazeta: Anna Zakatnova, PRESIDENT INTRODUCING
NEO-CONSERVATISM.
According to opinion polls, Russian society is still governed by fear.
8. Vek: Vladimir Prokhvatilov, THE PERSONNEL EXODUS. Who is to be the
Richelieu
of Russia?
9. Washington Post editorial: Securing Central Asia.
10. Sally Stoecker: Re: John Erickson.
11. Jonas Bernstein: Re: Anders Aslund. (DJ: Other points of view are
welcome)
12. Financial Times (UK): Andrew Jack, New broom brings change to Gazprom:
Alexei Miller is consolidating control of the Russian gas monopoly.
13. Alice Lagnado: Chechnya aid.
14. The Times (UK): Richard Beeston, Chechen teenage girl 'forced into
suicide
mission'
15. Business Week: Catherine Belton, Investors Return to Russia with Love,
Again. They're flocking to new issues that are far from risk-free.
16. Baltimore Sun editorial: Moscow vs. the Vatican. Schism worsens:
Russian
Orthodox Church feels threatened as Catholics raise profile.
17. Globe and Mail (Canada): Shawn McCarthy, Canada helping Russia bolster
AIDS program.
18. Interfax: Russian liberals seek to up stakes in battle for freedom of
speech.
19. Asia Times: Sergei Blagov, Bold Turkmen project in the pipeline again.]
*******
#1
pravda.ru
February 18, 200
LIFE IS GETTING BETTER IN RUSSIA
Recently, Russian Statistics State Committee has published data about
living standard of Russian citizens. According to these data, number of
citizens with incomes below living wage is gradually reducing.
So, in last quarter of 2001, Russian citizens that are below living wage
made 34,8 million people or 24 percent of the country’s population. While
in third quarter of 2001 they made 39,4 million of people or 27 percent of
the whole quantity of Russian population. According to official data,
during the whole year, the number of poor people was gradually decreasing
in the country – from 36,6 percent at the beginning of the year to today’s
24 percent.
In the meanwhile, the cost of minimal food set increased by 18,8 percent in
Russia and made last December 891 rubles (approximately 29 dollars). While
in Siberia and in the Far East, this food set is more expensive, than in
central regions of Russia. For example in the city of Ulyanovsk, the cost
of the minimal food set makes 759 rubles (approximately 25,3 dollars),
while in the city of Petropavlovsk-Kamchatski – 1,497 rubles (approximately
49,9 dollars). While average cost of living standard in Russia makes 1,574
rubles (approximately 52,5 rubles).
The Statistics State Committee’s data are rather a mathematical values,
than something connected with real life. Really, did anybody try to live
from these sums? Even a single person? Without fruits from dacha or some
country relatives? It is impossible. Though for a villager a sum of about
1,500 rubles is already a progress.
The issue of improving the well-being of the citizens should be
priority-driven for the Russian government. Of course, much is being done
for it. At least, payments are not being delayed in Russian works. Though
the trouble is that if living standard does not seriously increase in the
country, many reforms are doomed to failure. For example the reform of the
housing and communal service.
The low living standard of most of Russian citizen causes many issues of
social and economical character, and it cannot be neglected.
Vasily Bubnov
PRAVDA.Ru
Translated by Vera Solovieva
*******
#2
Russia's stats committee revises '00, '99 GDP growth
MOSCOW, Feb 18 (Reuters) - Russia's 2000 gross domestic product growth
figure was revised up to nine percent year-on-year from 8.3 percent, and
the 1999 figure to 5.4 percent from 3.5 percent, the state statistics
committee said.
The committee's first deputy chairman, Alexander Surinov, told Reuters the
new figures were nearly final but could be revised further to include fresh
data.
"The final estimate will be made when data on budget execution and some
other data are approved and received," he said.
"We included new estimates on industry and made a new count of small
businesses, which also influenced GDP revisions."
The committee's preliminary estimate on 2001 GDP growth is five percent.
*******
#3
Torpedo explosion may have caused Kursk sinking - Navy commander
MURMANSK. Feb 18 (Interfax) - Russian Navy Commander-in-Chief Vladimir
Kuroyedov has said that both he and experts have lost confidence in the
torpedo with which the nuclear submarine Kursk was armed.
At a Monday news conference in Murmansk he did not rule out that the
explosion of such a torpedo caused the sinking of the sub in the Barents
Sea in August 2000, killing all 118 seamen.
Kuroyedov finds the torpedo's fuel - hydrogen peroxide - to be the most
problematic. "The danger lies in the fact that the liquid is in constant
motion and its contact with certain metals may have most unpredictable
consequences," he said.
Therefore, the torpedo has been decommissioned from Russian nuclear
submarines, he said, adding that other countries rejected such torpedoes a
long time ago.
*******
#4
Russian Official Named to New Post
February 18, 2002
MOSCOW (AP) - Deputy Prime Minister Ilya Klebanov, who was one of the most
visible government officials during the Kursk nuclear submarine tragedy and
its aftermath, was named minister of industry, science and technology on
Monday in a move that appeared to be a demotion.
The order relieving Klebanov of the deputy prime ministership was signed by
President Vladimir Putin on the same day that the commission investigating
the Kursk disaster completed its work.
Although officials said they had cleared up questions about the explosion
that sank the submarine in August, 2000, killing all 118 men aboard, no
cause for the blast was absolutely stated at the conclusion of the
investigation.
During the early weeks after the sinking, Klebanov frequently appeared on
television and at public meetings to discuss the disaster that shocked
Russians and left them angry over what appeared to be a slow and less than
forthcoming government response.
Klebanov was among the officials strongly suggesting that that sinking was
caused by a collision of the submarine with another object while it was on
maneuvers in the Barents Sea.
Those suggestions included the theory that the Kursk could have been struck
by a U.S. vessel in the region, but Washington flatly denied the possibility.
Officials since then have said the blast was caused by one of the
submarine's torpedoes, but what triggered the explosion is unexplained.
*******
#5
Putin slams government for mishandling electricity crisis
ITAR-TASS
Moscow, 18 February: President Vladimir Putin believes that interruptions
in electricity supply are the result "not of some objective reasons, but of
poor performance" of some senior officials. Speaking at a meeting with
government members on Monday [18 February], Putin asked them to pay special
attention to that problem.
According to Putin, there are defects in the work of the government in
general and of the defence minister in particular. Aside from it, the
Finance Ministry should respond promptly to emerging situations, and the
head of government should control them.
"All those problems, all that uproar could have been avoided," the
president believes.
He suggested that the Monday meeting with members of the cabinet should be
started with a report by Deputy Prime Minister and Minister of Agriculture
Aleksey Gordeyev. "With spring coming, there are more and more agricultural
problems we have to handle," the president said.
******
#6
Vremya MN
No. 28
2002
[translation from RIA Novosti for personal use only]
TIME IS FACING PUTIN WITH A CHOICE
By Dr. Mikhail DELYAGIN (Economics), director of the
Institute of Globalisation Problems
The political year begins in Russia in August, when
politicians and corporations finish their strategic planning
and the bulk of troubles influencing the future of the country
happen. Consequently, the political intrigue of the forthcoming
parliamentary elections will be determined and evaluated in
August. However, the Duma elections are only a prelude to, a
dress rehearsal of the presidential elections. To streamline
the nascent one-party system and turn it into his powerful
ally, the president should win not only the presidential but
also the parliamentary elections.
Meanwhile, economic slump will continue this year (the
January price hike buried the official inflation forecasts,
with inflation scoring at least 16.3% instead of the planned
12%, as well as the economic growth forecasts, as the figure
will amount to no more than 3% instead of the promised 4.3%).
It will not contribute to the president's victory and hence
will force him to think about the future no less than the
expansion of the planning horizons, which is natural in
conditions of stability.
President Putin has two ways of winning.
The first is more difficult and entails election victory
through the improvement and modernisation of the economy. To do
this, the president will have to expose the problems that
hinder the development of the country and remove them. Since
these problems only deteriorated in the past two years, their
solution will entail a radical overhaul of the management team
with all possible efforts taken to preclude the loss of the
current standards of control of society.
In itself, this is an extremely difficult task. If the
president chooses this way to victory, he will have to fight
against the ineffectiveness of his apparatus, the political
system built to suit the interests of "the new oligarchy" (it
developed under Putin, which means that he will have to fight
his own offspring), and elementary shortage of time.
In addition, the entire global economy may hinder the work
of the president who chooses the way of modernisation. It is
possible that even the most successful modernisation will not
compensate for the negative influence of the global economy's
dynamics on the standards of living in Russia. In this case the
president will fling open new doors for Russia, but the country
will go through them with a new president.
Consequently, the way of modernisation is extremely
difficult and does not guarantee personal survival even in case
of success. The other way, the way of social hibernation, does
not entail any intellectual or administrative efforts or
political outlays and virtually guarantees election victory.
It boils down to the concentration of resources on raising
the living standards of the most important groups of voters so
as to ensure that they vote "correctly." And "after us the
deluge." It was that way that led Boris Yeltsin to victory in
1996 and turned the last four years of his rule into a series
of political and economic crises.
Today movement along this way entails above all the growth
of financial pressure on business and the use of its resources
to raise the current living standards. It entails the sacrifice
of long-term investments in favour of short-term social
assistance.
It is eating the bread that will be baked tomorrow, a policy
that was launched during the Brezhnev stagnation era and came
to a head in the last few years of Yeltsin's rule.
Of course, modernisation and social support are not
contradictory things. Moreover, the latter is a vital condition
of the former, because the deepest renewal of fixed assets is
useless without the restoration of the quality of "the human
potential." However, too much stress on social assistance can
cut short the progress of the country simply by depriving it of
requisite material resources. Vladimir Putin is facing a
difficult choice. When he makes it, we will learn the true
system of his priorities and see what is more important for
him: the preservation of his personal power or the
modernisation of Russia.
A firm stop put to the growth of tariffs of natural
monopolies (which would have been hardly possible without the
president's interference), the conference on economic problems
and certain statements show that the president has become aware
of his personal political dependence on the economic situation.
But he has not made the choice yet and the impossible social
programme, whose forerunners are the turning of the president
into "the best friend of Russian athletes" and a rise of
salaries of the public sector staff (based on the principle "we
make the decision and let the regions wrack their brains how to
fulfil it"), can still bury the future of Russia as effectively
as mass poverty.
The president must have a clear-cut election strategy by
the beginning of the new political year - August 2002. This
means that the choice between the modernisation of Russia and a
"social doping" will be made in spring.
*******
#7
Nezavisimaya Gazeta
February 16, 2002
PRESIDENT INTRODUCING NEO-CONSERVATISM
According to opinion polls, Russian society is still governed by fear
Author: Anna Zakatnova
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
RUSSIAN AND FOREIGN POLLSTERS HAVE LOOKED AT OPINION POLLS OF
RUSSIAN CITIZENS OVER THE PAST TEN YEARS. THEY HAVE COME TO
PARADOXICAL CONCLUSIONS: ALTHOUGH RUSSIANS WILL NOT PROTEST AGAINST
REFORMS THE GOVERNMENT IS TO CONDUCT, THEY WILL AGREE TO THESE REFORMS
UNDER THE INFLUENCE OF THEIR OWN FEARS.
On Tuesday, the analytical report "Ten Years of Russian Reforms
through the Eyes of Russians" was presented in Moscow. This report was
prepared by the Institute of Complex Social Research of the Russian
Academy of Sciences and the representation of the F. Ebert Foundation.
In the course of working on the report sociologists questioned 1,750
respondents in 2001 and then compared these data to results of
corresponding surveys of 1992-2000. The data of the surveys are
paradoxical. On the one hand, Russians are ready to support new
initiatives of the government. On the other hand, external
isolationism and internal conservatism are developing, which makes
society hardly sensible to anything but its own fears.
The sharp increase of conservative spirits in the past two years
is connected with President Vladimir Putin personally: in the period
between autumn 2000 and autumn 2001, the general positive estimation
of his activity increased by 17.4%. Meanwhile, only 14.4% support
everything the president may do, which proves that society does not
expect miracles from the government any longer. Simultaneously neo-
conservatism has been developing in foreign policies too. Since the
middle of the 1990s, the negative attitude toward the West, especially
the US, has been developing. This aggravation of internal isolationism
is accompanied by a negative attitude toward the government, since it
is expected to focus its efforts on solving domestic problems.
According to sociologists, both these factors, together with the
stable economic growth, display the "demand for a strong government
dominating in the political space."
However, in the opinion of sociologists, neither strengthening of
the state nor the relative economic stabilization has managed to
improve the situation surrounding the people's mass consciousness.
Chief of the survey Mikhail Gorshkov has concluded that "stabilization
of the state does not automatically lead to growth of social
security." In other words, ordinary people still fear growth of crime
(57.4%), decline of their standard of living (47.1%), mafia (33.3%),
civil war, and poverty. These five fears have been stable for the past
seven years. Neither internal difficulties of the work of the basic
state systems (such as education, medicine, and social security), nor
foreign problems, nor even radical changes of the political course
(such as dictatorship or breakup of the country) influence public
opinion. The only change in this "top five" is that the fear of war
has slackened a bit and the fear of growth of crime has increased in
the past seven years. In the opinion of Mr. Gorshkov, all these fears
are generated by the lack of protection against the current economic
chaos and absence of confidence in tomorrow.
Sociologists assessing the dynamics of social strata have come to
even more paradoxical conclusions. It appears that even those people
who have gained profit from the economic reforms are displeased with
the society they live in. At the same time, 58.7% of respondents
consider that the way Russia is going now will yield good results in
the future. Thus, Putin does have a potential for conducting reforms,
but people will agree to these reforms under the influence of their
own fears.
(Translated by Kirill Frolov)
*******
#8
Vek
No. 7
February 15, 2002
THE PERSONNEL EXODUS
Who is to be the Richelieu of Russia?
Author: Vladimir Prokhvatilov
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
PRESIDENT PUTIN IS LIKELY TO BE A SUCCESSFUL LEADER ONLY IF HE
MANAGES TO STEER THE SHIP OF STATE BETWEEN STALIN'S GULAG AND THE
CHAOS OF THE TYCOONS. THIS MEANS CHOOSING THE RIGHT PERSONNEL: PUTIN
NEEDS TO APPOINT 2,500 TO 3,000 MANAGERS LOYAL TO HIMSELF, TO ALL KEY
ADMINISTRATIVE AND FINANCIAL POSITIONS.
No doubt, President Putin is in power to stay. The only arguments
are over the methods for putting the country in order and no one
doubts it is necessary. In April 1996 representatives of the
International Monetary Fund and the leadership of the Russian Central
Bank worked out recommendations for the government on sending
emissaries to boards of directors of natural monopolies in order to
allow the state to carry out its policy in them. That time the
attempts failed. The government appointed emissaries, but eventually
they took the side of local managers, or to be more precise they were
bought up.
Only recently President Putin was able to dismiss the
transportation minister and the leader of Gazprom, who in fact had
privatized these state structures and appointed managers who are loyal
to the state. It is also necessary to send such managers to other
largest financial-industrial groups partially belonged by the state in
order to carry out the state economic policy. Apparently, President
Putin will try to gain control of the largest raw material
corporations - at least in order to prevent them from carrying out a
political line opposing the presidential course.
So far the president is satisfied with tycoon's assurances of
loyalty - some of them are ready to finance Putin's next presidential
election campaign.
According to a number of experts, all these assumed intentions of
the presidential team mean that Russia is to go through another large-
scale property redistribution.
As the majority of Russians do not participate in this
redistribution, it is important that the present owners of raw
material and other resources of the country are to be blame for using
the riches selfishly and socially inefficiently. Oligarchy in Russia
is exporting the capital, reduction of the social area, prevailing of
the shadowy economy, and bureaucratic almightiness - it especially
concerns the regional officialdom.
In developed western countries the major points for social and
economic growth are thousands of small and medium-sized service
enterprises, as well as enterprises producing component parts for
large industrial giants, the major aim of which is wining the world
market. These small businesses that surround super-corporations like
grapes cover the vine, are the main forge for real professionals,
ideas, and inventions.
As for the Russian large manufacturers, they set a real dumping
terror on the world market and make personal fortunes with the help of
so-called side contracts via false firms. This is the main reason why
Russia does not have any significant achievement at the world
technology markets. The positive changes in the Russian economy in the
area of vertical integration of the largest companies are at present
very slow and are not well though of. As a result, it may turn out
that the Russian economic cycle will be longer than the political one,
which means political consultants will be no longer able to control
the electorate.
It is not clear if there will be another property redistribution
in the country, but it is obvious that Russia needs to start moving to
a more transparent economy, civilized management, and new production
and trade policy.
Shadowy economy, bureaucratic arbitrariness, and coming out of
gangster groupings to the social sphere are the reaction of the
Russian population to the social faults of Yeltsin's times. A
successful fight against the aforementioned remnants of wild
capitalism in Russia mostly depends not on the theory for curing
social ills but on taking into consideration the interests of the
Russian security structures. It sounds cynical, but this is true as
both slowing down and speeding up of all reforms in Russia have always
depended on the position of the security structures, despite the fact
that the latter will never admit to this.
Paradoxically enough, the layout of the opposing political forces
in Russia somewhat resembles the layout of 75 years ago. It seems to
me that President Putin will be able to be a successful leader only if
he manages to steer the ship of state between Stalin's Gulag and the
chaos of the tycoons. A purely technical measure to do this is
choosing the right personnel: Putin needs to appoint 2,500 to 3,000
managers loyal to himself, to all the key administrative and financial
positions. Currently, the president does not have this many loyal
managers, so like a real professional spy, he has no objections to
purloining staff from elsewhere, like Cardinal Richelieu finally
managed to take the rebellious d'Artagnian and direct his enormous
energy into the fulfillment important state tasks. So in the 21st
century Russian needs not a Stalin, but a Richelieu. No one knows
whether Putin will become such a leader, or whether it will be the
Federal Security Service that will undertake this function.
(Translated by Arina Yevtikhova )
*******
#9
Washington Post
February 18, 2002
Editorial
Securing Central Asia
THE AMERICAN interest in an expanding engagement with the Muslim states of
Central Asia is broader than the military bases those countries are
supplying to U.S. forces. In the 10 years since gaining independence from
the Soviet Union, the five republics stretching from China to the Caspian
Sea -- Kyrgyzstan, Tajikistan, Uzbekistan, Kazakhstan and Turkmenistan --
have themselves become a sinkhole of economic failure and political
repression and, consequently, a growing source of Islamic extremism. Thanks
to their proximity to Afghanistan, these countries now are drawing money
and attention from the Bush administration that, if directed in the right
way, could help save them from becoming one of the crisis zones of the 21st
century. For that to happen, however, the United States needs to carefully
balance its long-term security interests in the region with its short-term
need for bases.
Senior administration officials say they understand this challenge. In a
press briefing last week, the State Department's assistant secretary for
European and Eurasian Affairs, Elizabeth Jones, described a recent tour
through the five republics in which, she said, she underlined to the
Central Asian rulers that "if you want to have the kind of security that
we're talking about, we have to talk in terms of specific improvements in
human rights activities . . . and expanding democratic processes." She said
she warned rulers such as Islam Karimov of Uzbekistan that "without that,
you are simply creating a generation of people who are so disaffected that
they become easy targets for extremist organizations."
The message is exactly right; the problem is how to make it stick. Mr.
Karimov's Uzbekistan, a nation that is in many ways the linchpin of the
region, encapsulates the challenge. Since Sept. 11, Mr. Karimov has worked
hard to make himself indispensable to the U.S. military campaign in
Afghanistan, providing an air base for U.S. planes; in return, the Bush
administration proposes to triple aid to his country, to $150 million. But
Mr. Karimov may also be the greatest single threat to long-term U.S.
security in Central Asia. His brutal and indiscriminate repression of
Muslims in his country has fueled rather than wiped out Uzbek extremist
movements, while his statist economic policy has steadily increased the
country's isolation and impoverishment.
Even as the American military presence has steadily expanded, Ms. Jones and
Secretary of State Colin Powell have pressed Mr. Karimov for a series of
modest political and economic reforms. But the State Department, unlike the
Pentagon, seems to have made little headway. Mr. Karimov staged a
manifestly bogus referendum during Ms. Jones's visit to extend his term in
office; the sole concession he offered -- access by the Red Cross to Uzbek
jails -- also was promised a year ago, but never delivered. So far, he has
not accepted U.S. proposals that he allow the United Nations rapporteur on
torture to visit his country and that he grant legal registration to
independent Uzbek human rights organizations.
Ms. Jones was asked what consequence Mr. Karimov might suffer for rejecting
these steps. She answered that U.S. officials would be "in their office, in
their face, all the time," but would not cut off aid that "goes to
democracy and human rights groups." In fact, it seems unlikely that Mr.
Karimov, a dictator bred in the Soviet mold, would be moved by either
tactic. U.S. leverage lies in the military relationship, the basing of U.S.
troops and planes that Mr. Karimov covets -- and that he no doubt believes
would never be sacrificed by Washington on human rights grounds. For just
that reason, the Bush administration must be prepared to link the
continuance of the military relationship to democratic change, both in
Uzbekistan and in the other states of Central Asia. As useful as the bases
may be for current operations in Afghanistan, a larger U.S. interest lies
in acting now to ensure that Central Asia does not become the next
Afghanistan.
*******
#10
Subject: Re: John Erickson
From: stoecke@american.edu (Sally W. Stoecker)
Date: Mon, 18 Feb 2002
Mine is not a lengthy or detailed expose, but I just felt the need to say a
few words in remembrance of John Erickson.
I just want to say a few words from the heart about the legendary, yet warm
and human scholar of the Red Army, John Erickson.
When I began my dissertation fifteen years ago on the formation of the Red
Army in the interwar period, the first source I went to was John Erickson's
The Soviet High Command. Upon reading that major work--still considered
the classic text on the Red Army--I was both inspired and intimidated. Who
could ever try to improve on such a comprehensive study? Who could ever try
to challenge the author of such a meticulously researched tome, that
spanned so many topics related to the Red Army? My advisor was insistent
that there was plenty of room for more research and helped me to formulate
a thesis that could relate to, but of course not try to replicate
Erickson's monumental work! Many years later, when my book on Marshal
Tukhachevsky and the Red Army was published, I received a note alerting me
to the fact that John Erickson had written a positive review of my new
book! Imagine my elation! When I read the review, which was indeed
flattering, I felt as though I had died and gone to heaven! But of course
I am not alone--many other military historians knew him better than me,
have had similar experiences and their remembrances have appeared in JL
over the past week. I wish that could have met him, but I'm grateful for
what he contributed to the field and the high standards of scholarship that
he set for the rest of us.
Sally W. Stoecker, Ph.D.
Research Professor, TraCCC
American University
Phone: 202-885-3092
Fax: 202-885-1389
e-mail: stoecke@american.edu
website: www.american.edu/transcrime/
******
#11
From: JBernstein92@aol.com (Jonas Bernstein)
Date: Mon, 18 Feb 2002
Subject: Re: Anders Aslund: Response to Reddaway/6073, from JRL #6078,
Anders Aslund's apparent indignation at the Reddaway/Glinski assertion that
a Zyuganov victory in 1996 "would still have been marginally better for
Russia than Yeltsin's reelection" is rather peculiar given some of Aslund's
own writings and comments.
In a New York Times op-ed on February 13, 1996, Aslund predicted
(inaccurately) that Zyuganov would win the first round of voting in the
1996 election and suggested (inaccurately and baselessly, but with clearly
malicious intent) that Yabloko's Grigory Yavlinsky would agree to back
Zyuganov - giving the Communist leader, among other things, "international
respectability" and support in the run-off - in return for the prime
mininster's post. Still, Aslund's bottom line was that the Communists were
"unfortunately ... the only alternative" to Yeltsin, whose presidency
boiled down to "little but excessive violence against his own population,
extraordinary favoritism and corruption." Aslund even went out of his way
to add that neither the Communists nor Yabloko were "deeply involved in the
corrupt big-business interests dominating the Yeltsin and Chernomyrdin
teams." What Aslund did not mention was Zyuganov's and/or the KPRF's
neo-Stalinism, anti-Semitism or any of the other things which now seem to
disturb him so deeply. He even sought play down such concerns, asserting
that a "feared coalition" between the Communists and Zhirinovsky's "extreme
nationalists" appeared to be "a distant threat."
A month later, TIME magazine quoted Aslund as saying he was convinced that
"even if Zyuganov were elected, 80% of the reforms would survive" (TIME
International, March 18, 1996).
*******
#12
Financial Times (UK)
18 February 2002
New broom brings change to Gazprom: Alexei Miller is consolidating control of
the Russian gas monopoly
By ANDREW JACK
Rem Vyakhirev still has a comfortable office at the Moscow headquarters of
Gazprom. But nine months after he was replaced as head of the Russian gas
monopoly, the once mercurial figure has become muted in board meetings, and
most of his former senior colleagues have left.
Since Alexei Miller took over the chief executive suite last May, the gradual
replacement of senior personnel from the "old guard" has been one important
sign of change at the company - partly triggered by concerns of mismanagement
raised by shareholders.
Core assets removed from Gazprom, and curious investments made, are being
reclaimed; non-core businesses accumulated over the years prepared for sale;
and fresh efforts made to tighten financial controls. Most investors, clients
and analysts alike have greeted the reforms with cautious optimism, while
remaining wary about how far and fast the reforms will proceed.
A year ago, minority shareholders - including the state itself with a 38 per
cent stake - were increasingly troubled by allegations of asset-stripping
totalling several billion dollars. There were particular concerns about links
with Itera, an obscure Florida-based company that was growing rapidly thanks
to loans and the purchase of businesses from Gazprom. Both companies denied
any wrong-doing.
PwC, Gazprom's auditor, itself came under criticism for not identifying such
practices in the past. The situation had changed sharply by last summer, when
the company's 2000 annual accounts were released in the wake of Mr Miller's
appointment by President Vladimir Putin, and a series of revelations reported
in the media.
The accounts highlighted a catalogue of "related-party transactions" that had
gone unreported, by which the company had conducted business with entities
partly controlled by Gazprom executives or their families. These included
Sibur, a petrochemicals group, Stroitransgaz, a pipeline construction
company, and Interprokom, which carried out trade in eastern Europe.
A separate report published last summer into the relations between Gazprom
and Itera was also carried out by PwC, in spite of minority shareholder
demands that another auditor be used. It failed to find evidence that Gazprom
executives owned Itera shares, but identified several transactions that
arguably were carried out on non-commercial terms.
There were few immediate signs of response from the new Gazprom management.
The Itera report was never circulated to minority shareholders. The sale of
up to Dollars 1bn in non-core assets was repeatedly promised and delayed.
Communication with the media remained limited. Mr Miller, who appears timid
in public, was rumoured to be losing out to the "old guard" and would be
dismissed.
Yet Mr Miller appears to be consolidating his control. He has been putting
his own people in key positions - from the accounting, finance, legal and
security departments. The head of Gazprombank has been replaced. In one of
the more striking recent examples, Mr Vyakhirev's own son Yuri resigned last
month as head of Gazexport, the principal export sales subsidiary.
The recovery of assets has followed. The Gazprom board acted late last year
on one of the few clear-cut options to recover assets from Itera identified
in the PwC report. It exercised a "call" option to regain a stake in Purgaz,
a gas field operator with significant reserves that it had sold to Itera for
a nominal sum. It began bankruptcy proceedings against Zapsibgazprom, another
former subsidiary.
Most strikingly, it attempted to negotiate the return of Dollars 800m in
loans and to reconsolidate its control over Sibur, an alliance of
petrochemical companies.
When amicable discussions broke down, Gazprom provided information to the
general prosecutor's office in January, which raided Sibur's headquarters and
arrested three top officials.
Yakov Goldovsky, Sibur's chief executive, and his deputy remain in prison,
charged with asset stripping. And Gazprom, while still pushing to negotiate
the return of its money, has instituted bankruptcy proceedings to maintain
pressure on the company.
Boris Fyodorov, a non-executive director of Gazprom who was elected by
minority shareholders and who was one of the most outspoken critics of the
former management, has welcomed the changes.
He says plans are now being developed for centralised purchasing and tenders
that could save the company up to Dollars 2bn a year. The contracts with
Stroitransgaz may be among those to change as a result.
But a number of other reforms at Gazprom remain untouched. Erik Wigertz, oil
and gas analyst with Brunswick UBS Warburg in Moscow, says: "Asset recovery
is good, but it is not going to make or break Gazprom."
Where Gazprom's interests clash with those of the state, the company has lost
out. Price rises have been modest and a broader restructuring has been
deferred.
Meanwhile, there has been little sign of progress by the Kremlin in
implementing planned share reforms.
The promised liberalisation of domestic trading of its shares and the
abolition of the "ring fence" limiting foreigners to purchases of its New
York-quoted American depositary shares have not materialised.
That leads many to fear that the Kremlin and the new management - which sided
with outside investors last year - may now be less concerned about them.
"My concern is that they stop focusing on growing the pie and start thinking
about redividing it," says one adviser to the company.
*******
#13
From: "Alice Lagnado"
Subject: Chechnya aid
Date: Sun, 18 Feb 2001
A big thank you to all those who brought me children's toys, books and
clothes for Chechen kids. My office is full of them.Those who didn't - last
chance this week - secondhand things only. I will collect if necessary. They
will be sent to Chechnya next week and distributed directly to children in
Ingushetia and in Grozny.
Any last contributions call me, Alice Lagnado at work 243 9605, at home 291
6753/290 6260, mob. 8 902 691 7138, up to 12, or email: alice@co.ru
*******
#14
The Times (UK)
18 February 2002
Chechen teenage girl 'forced into suicide mission'
From Richard Beeston in Grozny
A DOE-EYED teenage girl, who was tricked by separatist rebels into
attacking a police station in Grozny, has become the latest case in a
series of suicide-bomb attacks against Russian forces in Chechnya.
Zarema Inarkayeva, who is just 15, is a rarity because she lived to tell
her story after the bomb that she was carrying on February 5 misfired. The
detonator exploded, wounding her in the side, but failed to set off the
explosive charge that was meant to destroy one of the city’s main police
stations.
The tactic is being used increasingly by the separatists, who have been
thrown on the defensive since Russian Armed forces retook the city two
years ago in a bloody assault. Since then there has been a spate of suicide
attacks, most recently in December, when a local police general was killed
by a young woman who detonated explosives strapped to her body, allegedly
to avenge the death of her brother.
Miss Inarkayeva insisted that she had been forced into carrying out her
mission after she was threatened and physically abused and had no idea she
had become a human bomb. Certainly the softspoken Chechen girl I met in
Grozny’s main police headquarters did not seem committed to any cause and
behaved more like a shy high-school student than a suicide bomber.
She claimed that she had been kidnapped at 13 by a man who took her as his
bride. After being kept by his family, she broke away and was befriended by
a young woman, who invited her to stay in one of the city’s bombed-out
blocks of flats, where thousands of people struggle to survive in primitive
conditions without water, electricity or income.
It was here that Miss Inarkayeva met three men, who she said had money,
weapons and a satellite telephone and were clearly connected to the rebel
movement. “They held me against my will and repeatedly threatened me.
Finally one of them drove to the Zavodsky police station and ordered me to
take a bag into the building. It was very heavy and I strained to carry it.
Then I felt the explosion,” she said.
The police believe her story and said that the men who were responsible had
fled.
“She is no terrorist,” Colonel Sultan Satuyev, the deputy police chief of
Grozny, said. “She is just a kid who has been taken advantage of. Frankly,
we do not know what to do with her. If we release her, they could come back
and kill her.”
Unlike the Middle East, where suicide bombers are usually Muslim men
seeking martyrdom, in Chechnya many of the attackers have been young women
threatened or bribed into becoming what the Russians call a kamikaze.
Miss Inarkayeva is probably safer in custody than out on the streets of the
city, where people disappear or are killed with alarming regularity. For
example, Musa Mamedayev, 51, disappeared earlier this month after setting
off after dark to pick up his sister from hospital. A few days later his
bullet-riddled yellow Mercedes was returned without explanation, although
it was clear from the bloodstains that he must have been hit repeatedly and
severely injured. Witnesses said that they saw him being dragged out of the
car and taken away by a Russian military vehicle after his ambush.
When I met Hassan at Grozny’s last functioning hospital, he was covered
from head to toe in bloodstained bandages. His car had broken down and when
he had pushed it to the side of the road, he had accidentally rolled it
over a mine.
“He will pull through,” Hassan Khadjiyev, a doctor, said. “I am worried
about how the rest of us are going to make it. When we fought the Germans
the war lasted four years; then it was over. This one has been going on for
a decade. People keep telling us it will end, but it never does.”
Four Chechen villages remained blockaded yesterday, as Russian officials
accused the separatists of trying to foment dissent among the population in
the run-up to a bitter anniversary for Chechens.
The villages of Starye Atagi, Novye Atagi, Chiri-Yurt and Duba-Yurt were
closed off for security sweeps by Russian forces, an official in the
Moscow-appointed Chechen administration said. More than 60 people have been
detained over the past 24 hours on suspicion of participating in separatist
groups, the official said.
So-called mopping-up operations in towns and villages have angered many
Chechens who say that Russian troops detain men without cause, hold them
for ransom and often torture or kill them. Novye Atagi and Starye Atagi
have been cordoned off for much of this month and residents have staged
protests in Grozny against the operations.
In the village of Oktyabrskoye, residents have held protests every day
since Wednesday, demanding that the Russian military admit responsibility
for the killings of local civilians, the Tass news agency said, citing a
Russian Army spokesman.
He said that the separatists had been urging civilians to hold such rallies
in the days preceding the anniversary of the deportation of Chechens to
Kazakhstan under Stalin, according to Tass.
The Russian military has strengthened security in anticipation of attacks
by separatists on February 23, the anniversary of the date in 1944 when the
deportations took place, though such unrest has not happened in recent years.
********
#15
Business Week
FEBRUARY 25, 2002
Investors Return to Russia with Love, Again
They're flocking to new issues that are far from risk-free
By Catherine Belton in Moscow
After Russia's financial collapse in 1998, the country disappeared from the
global financial map. Investors said they wanted no part of a nation whose
government could so blithely default on billions of dollars in debt, as
Moscow did that year. But that was then. In 2001, the Moscow stock market
jumped 91%, and it's still climbing, while Russian bond yields continue to
drop. Russia, surprisingly, is once again an investment draw.
Proof came on Feb. 8, when Moscow-based juice-and-dairy group
Wimm-Bill-Dann (WBD ) raised $134 million on the New York Stock Exchange
with an initial public offering for 25% of the company. Demand for the
shares outstripped supply 5 1/2 times over. On its first day of trading,
the stock rose 10%. "It really does seem that investor trust in Russia has
returned," says Chairman David Iakobashvili. "We were hopeful, but we did
not expect such high demand."
Wimm-Bill-Dann's big splash may grow into a wave of Russian offerings. A
cross-section of companies, such as brewer Baltika, software purveyor
Information Business Systems, and the country's biggest oil company,
Lukoil, are also considering issuing shares on foreign exchanges this year.
Others, including Russia's No. 2 cellular operator, VimpelCom, gas monopoly
Gazprom, and Alfa Bank are sizing up opportunities to raise money through
international bond issues. "Russia is now back on the radar screens of
global investors," says Philip Poole, head of emerging markets at ING
Barings in London. The bond issuers are looking to lure global investment
funds at big U.S. houses such as Goldman, Sachs & Co. and Merrill, Lynch &
Co. For now, European companies, especially Barings, Credit Suisse First
Boston, and Deutsche Bank--are getting most of the underwriting business.
But are the swirling Russian markets safe for cautious investors? Bullish
analysts insist that Russia is a different place from the chaotic business
casino that rocketed, then fizzled, in 1998. President Vladimir V. Putin
has introduced a measure of political stability, together with reforms that
are pushing some Russian managers to forgo financial skulduggery and
improve transparency. Russia is expecting its fourth straight year of
economic growth in 2002. And growth has been driven not just by a domestic
oil boom but also by vigorous consumer demand, which surged 10% last year.
Spurred by the good economic news--and by warmer ties between Russia and
the U.S. following September 11--both domestic and foreign investors are
venturing in. Daily trading volumes in Russian shares, though still far
below pre-1998 levels, are rising--from $180 million in September to a
recent peak of $300 million. And Russia's benchmark sovereign Eurobonds now
have a smaller spread with U.S. Treasuries than emerging-market powerhouse
Brazil. The Russian government helped drive down the spreads last year when
it produced a budget surplus of $7 billion and reduced its heavy external
debt. At the same time, foreign-currency reserves, at $36.5 billion, have
reached their highest level in a decade.
In December, Moody's Investors Service upgraded Russian government bonds to
Ba3 from B2, bringing its sovereign rating back to a level not seen since
the 1998 default. Russia's top cellular operator, Mobile TeleSystems (MBT
), took advantage of the falling yields by issuing a $250 million
three-year Eurobond in December at 11.25%. It was three times
oversubscribed. A year ago, the yield would have been 16%.
But as ever with Russia, investors face risks. The most immediate for the
country's still oil-dependent economy: that oil prices could sink further
this year. Then there's always the possibility of a scandal involving one
of Russia's poorly regulated companies.
For its part, Wimm-Bill-Dann took no chances with its IPO. In its
prospectus, the company pointed out that its largest shareholder served
nine years in a labor camp after a conviction for a violent crime in 1980.
"We didn't want anyone to find skeletons in the cupboard," says
Iakobashvili. "We feel a big responsibility, and we intend to meet that by
being totally transparent." If others do the same, the Russian market may
finally come of age.
********
#16
Baltimore Sun
February 18, 2002
Editorial
Moscow vs. the Vatican
Schism worsens: Russian Orthodox Church feels threatened as Catholics raise
profile.
EVER SINCE RUSSIA'S Orthodox Church became a separate national body, its
relations with the Roman Catholic Church have swung between bad and worse.
So it's not surprising that Moscow clerics are on the warpath against the
Vatican's decision last week to create four dioceses inside Russia.
This move would seem like a simple organizational matter. After all, it
brings existing Catholic parishes under a formalized hierarchy. The czars
permitted such an ecclesiastical structure in the 18th century.
Today's Russian Orthodox establishment, though, is aghast. It views the new
dioceses as an attack on its franchise as the state-endorsed form of
Christianity. Unless the Vatican is stopped, proselytizing surely will come
next.
Chauvinistic politicians, too, are weighing in.
"A march to the East via the Catholic Church is actually taking place: NATO
expands to the East, the Catholic Church expands to the East," thundered
Vladimir Zhirinovsky, the Russian Duma's deputy speaker.
Even though about half of Russia's 145 million people are nominally
Orthodox, and Catholics number only about 600,000, the religious hierarchy
in Moscow jealously guards its privileges. This has led to government
clampdowns on other "alien" faiths -- from Mormons to Hare Krishnas.
Poor relations with the Vatican are complicated because after World War II,
Stalin permitted the Russian Orthodox Church to take over the sanctuaries
and property of Catholic parishes.
It is commendable that Russia's post-Communist presidents have recognized
Russian Orthodox Christianity, Islam, Judaism and Buddhism as legitimate
beliefs. But if the country wants the rest of the world to take seriously
its attempts to move further toward a civil society of consistent laws and
equitable outcomes, it cannot allow religious intolerance to thrive,
officially or unofficially.
******
#17
Globe and Mail (Canada)
February 18, 2002
Canada helping Russia bolster AIDS program
By SHAWN MCCARTHY
MOSCOW -- Nadezhda Detkova works with some of the most heart-wrenching
victims of Russia's exploding HIV-AIDS epidemic: pregnant women desperate
to avoid passing the deadly virus to their babies.
A year ago, virtually all her patients were intravenous drug users who
contracted the disease from shared needles.
Now, many are young wives who have been infected by their unfaithful husbands.
Most of the women have not developed full-blown AIDS, and Dr. Detkova hopes
drug therapy will help them lead normal lives, working and raising their
families.
Other experts gloomily talk about a looming public-health disaster
overwhelming a poorly funded system, but Dr. Detkova is an optimist. She
says the crisis might be averted through public information and leadership.
"We can't say nothing is changing," she said in an interview. "I am very
hopeful and see trends for the better."
Dr. Detkova was catching one of those glimmers at a ceremony at the Federal
AIDS Centre, which houses her clinic. During a stop in Moscow last week,
Prime Minister Jean Chrétien visited the centre to help launch an HIV-AIDS
program that has received $2.1-million, to be spent over the next three
years, from the Canadian International Development Agency.
The Canadian-Russian AIDS Project will advise Russian agencies how best to
spend their severely limited resources, launch four regional
non-governmental AIDS organizations and lobby Russian politicians to make
the epidemic a priority.
"There's not enough funding and not enough government support for HIV-AIDS
awareness," said Vinay Saldanha, manager for the Canadian project. It's run
out of an old Defence Department building lent to the Russian Federal AIDS
Centre.
A few years ago, HIV-AIDS was nearly unreported in Russia. But over the
past two years, the number of confirmed cases has soared to 180,000, with
2,000 new cases reported each week.
But those are only the cases that have been officially confirmed. Vadim
Pokrovsky, head of the Federal AIDS Centre, estimates that there may be as
many as one million Russians infected with HIV, which often takes years to
develop into full-blown AIDS.
******
#18
Russian liberals seek to up stakes in battle for freedom of speech
Interfax
Moscow, 18 February: Russian State Duma deputy and co-chairman of the
Liberal Russia movement Sergey Yushenkov has suggested launching a vote of
no confidence in the government in the Duma.
Yushenkov made this announcement at the third meeting of the All-Russian
Democratic Conference, organized by Yabloko, in Moscow today. "For our vote
to be finally heard, all democratic forces in our country should go over to
opposition to the authorities. We should launch the procedure for the vote
of no confidence (in the government) precisely because of the state's
information policy," Yushenkov said.
The parliamentarian said he believes "the president is to blame for what is
going on no less than the government, and therefore we just cannot say: We
do not trust the government, but we do trust the president." At the same
time, Yushenkov noted, although the dominance of progovernment factions in
the Duma will likely make it impossible for the vote of no confidence to be
passed, this could at least provide the chance to discuss the problem of
freedom of speech.
The participants in the conference view it as essential to take a number of
measures to guarantee freedom of speech, in particular, to adopt a law on
TV, "which would clearly stipulate who and how broadcasting licences can be
granted", to carry out an inventory of the entire state media sector with
open results that would be available to everybody, to gradually transform
most of the state media into private, and other measures.
Yabloko leader Grigoriy Yavlinskiy said he takes the view that, apart from
public recommendations, political statements should also be made, in
particular, "demands (should be made) that unlawful censorship be excluded"...
*******
#19
Asia Times
February 18, 2002
Bold Turkmen project in the pipeline again
By Sergei Blagov
MOSCOW - Endemic volatility in Afghanistan has long stalled Turkmenistan's
plans to build a potentially lucrative gas pipeline to Pakistan. In recent
weeks, however, with the demise of the Taliban, talk of a new pipeline has
begun to resurface.
Turkmenistan's authoritarian President Saparmurat Niyazov has long
advocated construction of a new gas export pipeline through neighboring
Afghanistan. Even Niyazov's opponents concede that such a pipeline would
serve Turkmenistan's best interests.
The trans-Afghan gas pipeline from Turkmenistan to Pakistan, if realized,
would surely come as a positive development, former Turkmen foreign
minister and opposition leader Avdy Kuliyev said. It would contribute to
regional stability as it would benefit all parties in Central Asia, said
Kuliyev, who is currently based in Moscow.
An increasing number of former Turkmen officials are now based in Russia
and Western Europe, lobbying for democratic changes in their native land.
However, their criticism of Niyazov's dictatorial ways has fallen on deaf
ears so far.
In the meantime, Niyazov is pursuing his pipeline dream. As peace is being
installed in Afghanistan, it is now possible to build a pipeline to
Pakistan, Turkmen state television quoted Niyazov as saying on February 8.
Last Tuesday, Niyazov met Afghanistan's interim minister of energy and
water resources, Muhammad Shaker Kargar, to discuss energy cooperation.
Kargar reportedly confirmed that the interim administration supports the
pipeline plans - also in order to export Afghan gas.
It has been understood that Niyazov plans to raise the pipeline issue with
Afghanistan's interim leader Hamid Karzai in the near future. On Thursday,
Niyazov held telephone talks Karzai and invited him to visit Turkmenistan.
Moreover, on February 8 Karzai announced that he and Pakistani President
General Pervez Musharraf had agreed to revive a plan for a trans-Afghan gas
pipeline from Turkmenistan. Karzai described the project as "very
essential" and "beneficial for the entire region".
Turkmenistan has been keen to reduce its heavy reliance on pipelines
belonging to Russia possibly by construction of new gas export pipelines to
or through neighboring Iran and Afghanistan. Currently, Russian pipelines
are the main outlet for Turkmenistan, which is believed to hold the
fourth-largest natural-gas reserves in the world and heavily depends on
revenues from gas exports. Therefore Russia is well positioned to pressure
Turkmenistan by restricting access to export pipelines.
In October 1997, six international companies and the government of
Turkmenistan formed Central Asia Gas Pipeline Ltd (CentGas). The group was
developing a project to build a 1,271-kilometer pipeline to link
Turkmenistan's abundant proven natural-gas reserves with growing markets in
Pakistan. The group is also considering an extension of the line to the New
Delhi area in India.
The CentGas consortium was to include, either directly or through
affiliates: Unocal Corp, 46.5 percent; Delta Oil Co Ltd (Saudi Arabia), 15
percent; the government of Turkmenistan, 7 percent; Indonesia Petroleum Ltd
(INPEX) (Japan), 6.5 percent; ITOCHU Oil Exploration Co Ltd (CIECO)
(Japan), 6.5 percent; Hyundai Engineering & Construction Co Ltd (South
Korea), 5 percent; and the Crescent Group (Pakistan), 3.5 percent.
The proposed natural-gas pipeline would stretch from the
Turkmenistan-Afghanistan border in southeastern Turkmenistan to Multan,
Pakistan, with a 640-kilometer extension to India under consideration.
Estimated cost of the project is US$1.9 billion for the segment to Pakistan
and an additional $600 million for the extension to India.
The proposed pipeline was to carry natural gas from the Dauletabad Field in
southeastern Turkmenistan at a rate of up to 2 billion cubic feet per day
(20 billion cubic meters per year). The Dauletabad Field has estimated
reserves of more than 700 billion cubic meters.
It has been argued that this project could have sound economic
fundamentals, given the the market needs of Pakistan and India. But in
August 1998 Unocal halted development of the project after US forces fired
missiles at guerrilla camps in Afghanistan in the wake of bomb attacks on
two US embassies in Africa.
Niyazov had long engaged the Taliban in a bid to stem cross-border
instability in order to create favorable conditions for his pipeline dream.
Now, with an internationally recognized government in place in Kabul,
Turkmenistan is apparently renewing efforts to convince other interested
parties that the project is economically feasible and should be carried out.
Moreover, Turkmenistan has taken some practical steps. On February 8,
Niyazov personally inaugurated a $180 million gas-compressing facility at
the Dauletabad-15 gas field. Although the facility is designed to serve
Turkmenistan-Russia gas pipelines, obviously the new unit could serve
another pipeline as well.
According to Niyazov, the pipeline project could be the foundation for a
new commerce corridor for the region, often referred to as the Silk Road of
the 21st century.
However, the project still faces significant economic, political and
commercial challenges. For instance, finalizing mutually acceptable
commercial agreements may prove tricky, while ongoing volatility in
Afghanistan is likely to remain a problem.
The Taliban's demise does not necessarily imply an end of civil strife in
Afghanistan, Kuliyev argues. On the other hand, Niyazov with his long
record of mercurial and questionabe behavior may not prove a reliable
partner in any major international project, he said. However, the current
circumstances may well force Niyazov to be more submissive, Kuliyev stated.
Furthermore, conflicting international interests could also affect the
pipeline project. Both Russia and Iran would like to see Turkmen gas riches
flow across their respective borders, while the US and Turkey might want
the Turkish port of Ceyhan to be the end-point for Turkmen oil and gas.
With such a high-stakes backdrop around the pipeline plan, it could well
remain on the drawing board for quite some time.
*******
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