Johnson's Russia List
#6090
21 February 2002
davidjohnson@erols.com
A CDI Project
www.cdi.org
[Note from David Johnson:
1. Reuters: Russia cool on US aid to Georgia in lawless gorge.
2. Trud: Vitaly Golovachev, HOW TO OVERCOME POVERTY? Russia is still
poverty-stricken - when will this end?
3. Interfax: Russian population decline gathers pace.
4. Interfax: Murderers of TV figure, Duma deputy established - official.
5. Moscow Times: Vladimir Kovalyev, Bribes Hand Over Fist, Only a Handful
Charged.
6. NTV: INTERVIEW WITH YABLOKO PARTY LEADER GRIGORY YAVLINSKY.
7. Financial Times (UK): Andrew Jack, Russian group ready to bid for
Berezovsky's TV channel.
8. RIA Novosti: RUSSIA'S STATE DEBT REDUCED ALMOST THREE-FOLD.
9. Interfax: Russia's dependency on oil declining - premier.
10. RFE/RL: Michael Lelyveld, New Hope For Gazprom Reform?
11. New Book from the Carnegie Endowment: Kazakhstan: Unfulfilled
Promise, by Martha Brill Olcott.
12. Kommersant: Musa Muradov, ANNA POLITKOVSKAYA WAS SORTING OUT SOME
FINANCIAL PROBLEMS...according to the Federal Security Service.
13. Reuters: Fashion twins win with hammers, sickles and spice.
14. AFP: Admen recruit Stalin for sales pitch.
15. Los Angeles Times: Brenda Shaffer, The U.S. Needs Russia to Help
Contain Iran.
16. Asia Times: Sergei Blagov, Moldova's political upheaval has neighbors
on edge.
17. Reuters: Poorest ex-Soviet states in line for debt relief.]
*******
#1
Russia cool on US aid to Georgia in lawless gorge
MOSCOW, Feb 21 (Reuters) - Russian officials reacted coolly on Thursday to
suggestions the United States could help Georgia root out suspected al
Qaeda fighters thought to be hiding in a lawless gorge near Russia's
separatist Chechnya region.
"Russia and Georgia should destroy this terrorist centre in the Pankisi
Gorge together," General Anatoly Kvashnin, chief of Russia's military staff
told Interfax news agency on Thursday.
An American role was "unlikely," Kvashnin said.
Russian media in recent weeks have speculated about a military intervention
by Moscow's forces in the region, which Russia says is used as a conduit to
support Chechen rebels.
Interfax also quoted an unnamed senior Foreign Ministry official as saying
"the participation of a third state in a matter that involves bilateral
relations and problems is far from obvious."
Russia and the United States had discussed the Pankisi problem in only
general terms, in the light of the war on terrorism launched by the United
States in response to the September 11 attacks on New York and the Pentagon.
On Wednesday, a senior U.S. official said Washington was looking at ways of
helping Georgia tackle the problem, but added that did not include
enlisting Russian help to crush followers of Osama bin Laden thought to be
holed up in the area.
Georgia has struggled to get to grips with drug-smuggling and kidnappings
that have plagued the zone since Russia launched a second military campaign
in Chechnya in October 1999.
But the ex-Soviet republic has bristled at attempts by its former imperial
master Russia to force it to crack down on the territory, and complained
about interference in its affairs.
Separatist rebellions mean the Georgian authorities exert no control over
large areas of the country, including South Ossetia and the province of
Abkhazia, which borders the Pankisi Gorge. Tbilisi has accused Moscow of
aiding Georgian separatists.
Frustrated, Moscow reintroduced visas for Georgians travelling to Russia,
in an effort to push Tbilisi into taking action against what it says are de
facto rear bases for rebels fighting its forces in Chechnya.
Earlier this month the U.S. charge d'affaires in Tbilisi told a Georgian
weekly the United States wanted to help create an anti-terrorism force
within the Georgian Defence Ministry.
The remarks were the first public comment by a U.S. official linking
international terrorism to the Pankisi region, and fuelled speculation that
Washington was mulling intervention in Moscow's traditional sphere of
influence.
*******
#2
Trud
February 21, 2002
HOW TO OVERCOME POVERTY?
Russia is still poverty-stricken - when will this end?
Author: Vitaly Golovachev
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
THE GAP BETWEEN RICH AND POOR REMAINS ABNORMAL IN RUSSIA. DESPITE
ALL THE POSITIVE CHANGES SINCE AUGUST 1998, ALMOST A QUARTER OF
RUSSIANS STILL LIVE BELOW THE POVERTY LINE. DECLINES IN REAL INCOMES
LOOK ALARMING AGAINST THIS BACKGROUND.
Prime Minister Mikhail Kasianov has signed Cabinet resolution No.
252 "On establishing the per capita subsistence minimum for the fourth
quarter of 2001". Each quarter, the Labor Ministry and the State
Statistics Committee provide the Cabinet with relevant calculations.
However, only the Cabinet can determine the official poverty line. In
October-December 2001 this amounted to an average of 1,574 rubles per
capita per month.
This figure in itself says little, of course. It is important to
compare it with family budgets of Russian citizens. So the average per
capita income in the fourth quarter was 2.15 times the subsistence
minimum, while the average total wage was 2.26 times greater. These
were the best indicators for the whole period since the financial
collapse in August 1998. Since that time, the situation in the social
sphere has changed quite notably. Sixty-four million people found
themselves below the poverty line in the first quarter of 1999
(according to the present computation principles). If average yearly
indicators are compared, many fewer Russians are living in poverty
this year.
However, it is not yet time to celebrate victory. After all,
almost a quarter of Russian citizens are still living in poverty.
While giving the substantial positive changes their due, one should
not ignore alarming trends: in January, May, July, September, October,
and November last year and in January this year real incomes either
declined against the previous month or remained at practically the
same level. The average per capita incomes of eight million Russian
citizens were under 750 rubles a month (10-25 rubles a day) last year.
In other words, these families lack money even for a minimal range of
foodstuffs. Another nine million citizens had from 750 to 1,000 rubles
"per head". These 17 million people can be referred to as the most
needy.
Fourteen million people with incomes upwards of 9,000 rubles a
month are the opposite side of the coin. This is about $1,000 for a
family of three. The stratification of society still remains enormous,
despite the positive moves. The richest ten percent get 31.6% of all
monetary income, according to the State Statistics Committee. It is
only 2.3% for the poorest ten percent. The gap dividing the poor from
the rich was even greater last year. The average incomes of the
richest ten percent were 13.74 times higher than those of the poorest
ten percent in 2001, and 13.54 in 2000. In developed nations, it is
seen as a danger signal if this indicator exceeds the level of ten.
(Translated by P. Pikhnovsky)
*******
#3
Russian population decline gathers pace
Interfax
Moscow, 21 February: Russia's population shrank by an estimated 864,600 or
0.6 per cent in 2001 to 144.0 million as of 1 January , 2002, the State
Statistics Committee reported on Thursday [21 February].
The country's population fell by 740,100 or 0.5 per cent in 2000. The
decline in population accelerated last year because of a sharp drop in net
immigration, which offset only 7.7 per cent of the natural decrease in
population, the statistics committee said.
*******
#4
Murderers of TV figure, Duma deputy established - official
MOSCOW. Feb 21 (Interfax) - Investigators probing the murders of TV
personality Vladislav Listyev and Duma Deputy Galina Starovoitova have
established the perpetrators of the crimes.
"The people who committed these crimes have been established and placed
on the federal and international wanted lists," Col. Andrei Shilovsky,
section chief from the criminal investigation department of the Russian
Interior Ministry, told a Thursday news conference.
*******
#5
Moscow Times
February 21, 2002
Bribes Hand Over Fist, Only a Handful Charged
By Vladimir Kovalyev
There has been a lot of talk lately about how Russia is finally coming to
grips with its notorious corruption problem. People are saying that
officials are now taking fewer bribes and are even afraid of prosecution.
Last December, the head of a local company that received a grant from City
Hall told me in a private conversation that he hadn't paid a single kopek
for his victory.
Nonetheless, Prosecutor General Vladimir Ustinov said in his recent annual
report that the results of the recent anti-corruption drive are poor and
that it is possible "to count on one's fingers" the number of officials
charged with bribery.
But still the talk continues. An American businessman I know told me that
"it looks like" officials are taking fewer bribes in the wake of President
Vladimir Putin's statements against corruption.
"They still take bribes, but they don't do it openly anymore. You can't
just give money like you used to. Instead, you have to do it secretly," he
said. "This doesn't mean that Russia will become like Finland immediately,
but it does seem like things are moving in the right direction."
Now, I'm no businessman, but I still can't help but think that my friend is
engaging in a bit of wishful thinking. Other businessmen that I know have
told me that in some regards corruption has become worse, especially in
areas now controlled by the so-called allies of the president.
"I would distinguish between those [officials] who belong to the old team
and those from the circle of people who have been brought to power by the
new president. Those new ones have lost all sense of decency whatsoever,"
one Russian businessman told me.
Even City Hall officials admit that bribery is a problem and will continue
to be one. "The government has existed for a long time with this social
illness, which is impossible to combat. It existed before Putin and with
Putin it looks the same," said Alexander Afanasyev, Governor Vladimir
Yakovlev's spokesman.
OK, if you want to take that attitude, let's look at the Chinese
experience. If anyone can take a longer view of state corruption than the
Russians it is the Chinese, right?
I read recently that in Beijing alone, more than 1,000 officials have been
charged with corruption in the last three years. And $48 million has been
returned to state coffers.
Meanwhile, Ustinov reports that the Russian budget loses as much as $15
billion annually because of official corruption. And according to the
Higher Economics School, bribery amounts to 4 percent of the country's GDP,
a figure comparable to economic growth over the last year.
And still, you can count the number of officials charged with bribery on
your fingers.
Vladimir Kovalyev is a reporter for The St. Petersburg Times.
******
#6
TITLE: INTERVIEW WITH YABLOKO PARTY LEADER GRIGORY YAVLINSKY
[HERO OF THE DAY NTV PROGRAM, 19:30, FEBRUARY 18, 2002]
SOURCE: FEDERAL NEWS SERVICE (http://www.fednews.ru/)
Anchor: Good evening, and this is Hero of the Day Program
live. I am Savik Shuster. The third session of the All-Russia
Democratic Conference was held in Moscow today. The idea of holding
the conference was first suggested by the leader of Yabloko party
Grigory Yavlinsky. He is with us in the studio today. Good evening,
Grigory Alexeyevich. And with your permission, my first question
will be not about freedom of expression, but about changes in the
composition of the government. Ilya Klebanov, a Vice-Premier, is no
longer a vice-premier, he is just a government minister, under a
presidential decree. Could you comment on this personnel decision?
Yavlinsky: Honestly, I would like the President to comment on
this personnel decision. I can merely guess, while the President
knows the exact reason why he has shifted deputy chairman of the
government to a lower post as far as I understand. My guess is, of
course, very simple. It is connected with the Kursk affair and
perhaps with some other major failures. But such events should be
accompanied by a detailed explanation from the President or at
least the Prime Minister so that they should tell us about the
reasons and what a person has been punished or fired for. Or
demoted. Then it will make sense. As long this is not being done,
it has a distinct Byzantine character.
Q: From what you say one can conclude that the authorities do
not want to be open, they want to proceed as they like and so
freedom of expression is becoming a problem in the country. But on
the other hand opinion polls show that most people in the country
are indifferent to the problem of freedom of expression.
A: Well, this is because society is unable to clearly
formulate what it means. Today the majority of people, if you ask
them about freedom of expression, will assume that they will again
be showing some such programs as "Behind a Glass" or some vulgar
entertainment programs or some low-grade political programs. That
is why they will tell you they are against. And if you tell them
that you seriously want to discuss, for example, why prices are
growing and not conceal the government's problems in the process
and speak about mounting inflation in the country or you want to
seriously discuss the problems in the army, or what is really
happening in Chechnya. Go out and ask people if they are against an
open and full discussion in the spirit of political free expression
the import of nuclear waste into the country and you will hear a
different answer.
I belong to that part of society, and the polls put that at 56
percent of society, who do not trust the mass media. So, we cannot
speak about full freedom of expression.
Q: Going back to your meeting today I was not present at the
meeting but judging from what I saw on television that meeting
developed into a defense of two oligarchs who have lost control of
their mass media outlets. Does freedom of expression boil down to
that?
A: Well there were some remarks about it on the part of some
participants, but what you saw on the screen was deliberately
chosen. This is manipulation of public consciousness. Actually, the
issues discussed there today were quite different. A fundamental
issue was discussed, an issue that is very important for our
development. The issue is, does Russia have the constitutional
right of free expression?
Present were practically all the political parties of the
democratic spectrum that exist in the country along with civil
organizations, including highly respected civil organizations and
human rights groups. And there was a consensus that there is no
freedom of expression and it was said clearly that the political
institution of free expression is not just an opportunity to come
and shout something on television or to show some obscenity.
Politically it means the possibility for all the civil and
political forces of any importance to systematically present their
points of view and communicate with the citizens and with the
voters on the most serious of topics. On such topics as I have
listed to you.
Freedom of expression means, among other things, the
possibility to learn as much as possible of the truth about what is
happening in Chechnya, what is happening in the army, what is
happening to the environment, and what is happening to the economy.
There is no such possibility in Russia today.
Q: Tell me -- and this is my personal question -- I was fired
from Radio Liberty for doing football on NTV and when I joined NTV
at the invitation of the new administration there I saw a strange
picture: before the new administration came government officials
never came here, but after I came to work here, democrats have
stopped coming here. How do you account for such behavior? I have
no questions about the government, I am not surprised, but why are
the democrats and the liberals not taking the opportunity to air
their views?
A: There were two reasons. One reason was a sharp change of
views on one and the same problem, the view that you expressed more
than once in such an apt and clever way when you worked for Radio
Liberty and the somewhat different position, to put it mildly, on
the dispute between managing entities -- there was such a
discrepancy between these positions that it produced a very mixed
impression on many of those who would have liked to come here and
speak.
And the second reason is the format of the program. You see,
the obsession with television ratings resulted in even political
programs having a kind of format in which it is simply impossible
to discuss serious problems. They look more like a discussion on
the Kazansky train station.
Q: You are a politician and you are fighting for votes. You
should be interested in a high popularity rating of all the
programs on which you appear.
A: Yes, but I am also interested in not on the programs in
which it is impossible to express your point of view or explain
your position or seriously challenge your opponents over their
arguments. As a politician, I do not want to be on a program which
doesn't allow you to do anything but simply shows that you are
present. There is no need for that.
Q: Let us leave personal matters aside because we may have no
time to speak about the substance. The basis of the independence of
the media from the authorities is economic independence. Is that
true?
A: Yes.
Q: So, you as a modern person who heads up a modern party,
understand that this is the bedrock foundation. Why is it that you
are putting forward ideological slogans criticizing the authorities
instead of arguing that it is high time the mass media should be
put on a normal economic footing?
A: What we are advocating and we are introducing a law in the
State Duma which I have discussed with the President in detail is
public television in Russia. That is, television financed by
society and controlled by society, the kind of television they have
in all the countries of the world. It is not about private
channels. They say that journalists on private channels depend on
their owners. Yes, they are, it is a universally known fact and
this is the case everywhere.
Q: Everything depends on how clever the owner is.
A: Yes, and on the ability of the journalists. These are the
two components. I am speaking about society as a whole. You know
that politics in Russia is promoted by channels 1 and 2. These
channels should be publicly owned.
Q: But we hope that we too could contribute our mite.
A: Yes. But these two channels are supported by the money of
my voters of whom there are millions in Russia and who are entitled
to hearing the views of those whom they have elected on all the
main topics and all the main problems of the country. Besides, it
is a matter of security.
Q: Have you met with understanding on the part of the
President?
A: Yes, I have no doubt about it. It is also an issue of
security because how else can the citizens learn about
environmental problems or disasters around them? How else can the
citizens learn about what is happening in the country? From where
will the President learn what is happening to the economy, to the
army and what is taking place in Chechnya? It is also very
dangerous for the legitimately elected authorities if a country has
no independent media owned by the whole society.
At present Russia stands in front of this gate and it is not
moving further.
Q: And from the point of view of the opposition. The
opposition, especially on such matters as the media and the freedom
of expression, should be united. I mean the liberal democratic
opposition. Why is it not united? Why is it that SPS and Yabloko
seldom see eye-to-eye on this?
A: As for the democratic conference today, there was expressed
a united opinion that we have no freedom of expression. But our
differences with SPS sometimes happen.
Q: So, the answer is a flat no.
A: No, as a political institution freedom of expression does
not exist. It is not implemented. There are topics on which you can
never get the truth from the media. Not because the journalists
don't know something, but because this topic is censored.
Q: What is needed, an amendment to the Constitution, like in
the United States?
A: What is needed is the political will and besides
corresponding laws that will create genuine public television.
Without a political will it would be very difficult to achieve. And
the justification that journalists are not performing well and that
we don't have the right sort of society does not explain the
absence of freedom of expression in our country.
Q: So, it is the political will that is needed?
A: The political will and corresponding laws.
Q: But chiefly the political will of the Kremlin?
A: The Kremlin, of course. The Kremlin and those political
forces that will insist and succeed in persuading the Kremlin to
move in this direction.
Q: Do you believe in this?
A: I will work towards this. It is not a question of faith.
I am a politician and not a religious man.
Anchor: Well, if Yavlinsky is going to work toward that end we
will go on working. Good bye.
*******
#7
Financial Times (UK)
21 February 2002
Russian group ready to bid for Berezovsky's TV channel TV6 LICENCE MOVE
SEEN AS A VICTORY FOR MORE PRO-WESTERN BUSINESS ELITE:
By ANDREW JACK
A group of leading Russian businessmen are making a joint bid for the
broadcasting licence held by the television station TV6 - majority owned by
exiled businessman Boris Berezovsky.
Anatoly Chubais, head of UES, the Russian power company, is co-ordinating a
bid with influential "oligarchs" including Oleg Deripaska, head of Russian
Aluminium, Roman Abramovich, the principal shareholder in the oil group
Sibneft, and Andrei Melnichenko of MDM bank.
The move will pitch them against alternative bids expected from the banker
Sergei Pugachev, who already supports a traditionalist Moscow television
station linked with the Orthodox Church, and another project for the
restoration of aSoviet-style all-sports channel.
Andrei Ryabov, a political analyst from the Moscow Carnegie Centre, said he
saw the bid as a victory for Russia's more pro-western business elite
against the more hardline traditional military and security forces which
have gained a strong foothold in the Kremlin under Mr Putin.
The tender, due to be decided on March 27, was triggered by a court ruling
to shut down TV6 in late January formally requested by Lukoil, a 15 per
cent shareholder, on the grounds that the station was insolvent.
Mr Berezovsky, TV6's 75 per cent shareholder and the exiled businessman and
former politician, has become an outspoken critic of President Vladimir
Putin, leading some analysts to suggest that Lukoil's action could be
politically motivated.
A successful bid by Mr Chubais's group would give the Kremlin a chance to
demonstrate that it was not trying to attack freedom of speech by
centralising the media under its direct control.
Mr Ryabov said the bid could be an attempt by Mr Chubais, one of the
leaders of the liberal SPS political grouping, to take the initiative
against the hardliners in the Kremlin, and boost his party's popularity
ratings, which have halved since the 1999 parliamentary elections to about
4 per cent, or less than its liberal rival Yabloko.
********
#8
RUSSIA'S STATE DEBT REDUCED ALMOST THREE-FOLD
MOSCOW, FEBRUARY 20, 2002 /from a RIA Novosti correspondent/ -- Over the past
three years, Russia's state debt reduced almost three times in percentage to
the gross domestic product (GDP), vice-premier and finance minister of Russia
Alexei Kudrin reported. Speaking in Moscow Wednesday Kudrin noted that as of
January 1, 2002 Russia's state debt accounted for 51.9 percent of GDP.
The vice-premier assured that the trend to reduce the state debt will be
continued this year, which will allow to cut it to 45 percent of GDP.
According to him, in 2001 a long-term debt strategy of Russia was developed.
Its objective is to reduce expenditure on state debt repayment and service in
2001-2005 as well as its diminishing to 40 percent of GDP by the year of
2005.
The vice-premier noted that last year the market of the state national debt
regained its lost positions in investors' trust for the first time after the
1998 crisis. In 2001, auctions to place state securities were held monthly.
Overall, 18 auctions were held, including six auctions to place medium-term
government bonds due after 2003.
********
#9
Russia's dependency on oil declining - premier
Interfax
Moscow, 20 February: The oil sector and world oil prices account for about
30 per cent of the influence that external factors exert on the Russian
economic situation, Prime Minister Mikhail Kasyanov told the heads of
leading Russian oil companies in Moscow on Wednesday [20 February].
As recently as three years ago, the Russian economy was said to be 80 per
cent to 90 per cent dependent on oil exports, he said.
In 2001, Russian oil output increased by 7.7 per cent and the amount
processed grew by 4.5 per cent, Kasyanov said...
********
#10
Russia: New Hope For Gazprom Reform?
By Michael Lelyveld
Despite a change in management at Russia's Gazprom, a top official has
indicated that the monopoly will continue to resist exports by independent
producers. As Russia's gas output keeps falling, the government seems unable
to open the country's gas sector and implement competitive reforms.
Boston, 20 February 2002 (RFE/RL) -- Hopes for reform in Russia's energy
sector rose and fell quickly after Gazprom recently called for steps to open
the country's gas market to competition for the first time.
Speaking during State Duma hearings on 11 February, Gazprom's deputy chief
executive, Aleksandr Ryazanov, said the monopoly favors a free market that
gives independent producers access to its pipeline network.
So far, Russia's privatized oil companies have been largely prevented from
selling their gas through Gazprom lines, except to Gazprom-controlled
petrochemical plants.
Under the proposal, Gazprom and independent producers would each put up 50
billion cubic meters of gas to be sold on the domestic market through a
trading exchange.
Ryazanov said, "That way, 100 billion cubic meters could be sold at
unregulated prices, and [the exchange] would give us an idea where the price
should be," AP reported.
While independent producers complain about barriers to markets, Gazprom's
concern is that the government keeps its domestic tariffs too low. The
company, which is 38 percent state-owned, sees the exchange as a way to raise
prices over time and attract investment.
Gazprom hopes the new market leads to a doubling of domestic tariffs in four
to five years. But even then, rates would still be less than half those in
Europe.
Ryazanov argued that some independent producers like the gas trader Itera are
already selling some of their gas within Russia at unregulated prices, a
privilege that Gazprom does not enjoy. He suggested that Gazprom will
continue to oppose access for independent producers to the lucrative export
market until it gets the same benefit of unregulated tariffs at home.
Ryazanov said, "When our conditions become equal, it will be possible to
speak about gas export by independent producers," the RBC news service
reported. The condition is a major catch in Gazprom's plan for reform.
Some commentators saw Gazprom's offer as little more than a ruse. The
industry newsletter "Petroleum Argus" portrayed the argument as a sign that
Gazprom wants to keep the independents out of the export market for good.
The newsletter quoted unnamed observers as saying, "Gazprom hopes that if
prices become more favorable on the domestic market, independent producers
will be less interested in the export market." The condition means the
independents would only be allowed to sell domestically for a fraction of
Gazprom's export revenues, although they would have the same costs.
Gazprom's refusal to open its market fully to competition comes at a time
when its output has been falling steadily due to lagging investment. Although
the giant monopoly owns one-quarter of the world's gas reserves, it has been
unable to raise financing. Production has dropped each year since 1998, in
spite of Russia's economic growth.
In 2001, Gazprom still produced eight times more gas than all other Russian
petroleum companies combined. But the incentive of export opportunity could
spark far greater production among the independents, which would more than
make up for Gazprom's decline.
In a recent analytic note, the Moscow-based United Financial Group (UFG) said
Ryazanov's statements "probably indicate that management has started to give
in to pressure to liberalize the domestic gas market." UFG, which is headed
by former Finance Minister Boris Fedorov, represents minority shareholders in
Gazprom.
But Ryazanov's position on export access may be more remarkable for how
little change it represents.
Ryazanov, who was named to his post in November, is part of the new
management team at Gazprom under Chief Executive Aleksei Miller. Huge changes
were expected at the monopoly in May, when President Vladimir Putin pushed
out long-time Gazprom chief Rem Vyakhirev and put Miller in his place.
But Ryazanov's statements to the Duma suggest that Gazprom's new management
may be just as protective of its exclusive export position as the old one
was, even if that protection comes at Russia's expense. Although the faces
have changed, Russia's biggest taxpayer and heir to the Soviet-era gas
ministry still seems to be guarding its empire jealously.
While Russia may lose the incentive to increase gas production, there should
theoretically be no question about whether competition will take place. In
July, Prime Minister Mikhail Kasyanov signed a decree on gas sector reform
that included open access to Gazprom pipelines and the division of the
monopoly into production and distribution. That plan has since been virtually
ignored.
By contrast, the privatization of Russia's oil industry, while controversial,
has at last led to growth in the industry after years decline. Meanwhile,
Gazprom seems determined to preserve its power, even if it cannot maintain
production. Putin has not even considered privatization as a possibility.
Gazprom's ability to resist an erosion of its power raises three basic
questions that seem to have no easy answers. The first is, who runs Gazprom?
The second is, who runs Russia? And the third is whether Russia is more than
the sum of its resources. In other words, can the government reform powerful
monopolies to promote economic growth?
Despite Putin's popularity, he has been either unwilling or unable to change
the structure of Gazprom. The real reason is a mystery, but the monopoly may
simply be either too large or too strong.
So far, Putin and Miller have made little difference from their predecessors
in altering the relations between the government and Gazprom. But there are
new hopes for changes in June, when a group of Putin loyalists is expected to
be appointed to the Gazprom board.
If change does not come soon after that, it will be even harder to explain.
*******
#11
From: "Marc Fellman"
Subject: Carnegie book release
Date: Wed, 20 Feb 2002
New Book from the Carnegie Endowment
Kazakhstan: Unfulfilled Promise, by Martha Brill Olcott
"A decade ago few Westerners had heard of Kazakhstan... After independence in
1991, Kazakhstan started to appear in the Western news-first when the United
States helped the Kazakhs dismantle their nuclear weapons, and later when
Chevron and Exxon/Mobil signed agreements to develop major Kazakh onshore and
offshore oil reserves. Now the country's vast size, its oil and gas, and its
pivotal location make it of strategic importance to the United States, our
Western allies, and Kazakhstan's two powerful neighbors: China and Russia."
-Jessica T. Mathews, Foreword to Kazakhstan: Unfulfilled Promise by Martha
Brill Olcott
Kazakhstan: Unfulfilled Promise by Martha Brill Olcott explores Kazahkstan's
evolution as an ethnically diverse and strategically vital nation. Ten years
of independence and a flirtation with democracy have left economic reform
mired in corruption and a regime entrenched in a family-based, authoritarian
system of rule. Olcott makes an insightful and compelling presentation of the
challenges Kazakhstan poses to the United States and international
institutions. The book is for those interested in Kazakhstan and the details
of its state-building efforts, as well as those concerned with the process of
transition from communism to independent statehood in the successor states of
the USSR.
William Courtney, former U.S. ambassador to Kazakhstan and Georgia, calls
Kazakhstan "a bible for understanding the country, written by a preeminent
scholar." He elaborates, "In a decade of independence, [Kazakhstan] has
pursued far-sighted cooperation with the West and Russia to lessen nuclear
dangers and welcome investment to develop its huge energy resources. But, as
Olcott eloquently argues, most people in Kazakhstan live in misery and will
escape it only if democracy and the rule of law gain a foothold. Noting that
corruption and despotism have ruined other mineral-rich countries, Olcott
shows how Kazakhstan can avoid this fate."
Martha Brill Olcott, a preeminent authority on transition and security in
Central Asia and the Caucasus, is a senior associate at the Carnegie
Endowment and a professor of political science at Colgate University.
Kazakhstan: Unfulfilled Promise by Martha Brill Olcott
Published by the Carnegie Endowment for International Peace/February 2002/320
pages
$24.95/paperback: 0-87003-188-0 (plus tax and shipping)
$44.00 clothbound: 0-87003-189-9 (plus tax and shipping)
To order, call: 1-800-275-1447 or 202-797-6258 or visit www.ceip.org/pubs
"In clear, forceful prose, Olcott gives us the best up-to-date account of a
transition to modernity that appears to have lost its way."
-Ronald Grigor Suny, University of Chicago
"For years anyone interested in Kazakhstan has had no trouble picking the
very best book on the subject: The Kazakhs by Martha Olcott. Now, at last,
there's a real rival: shrewd and sensitive to the deep problems of
post-Soviet politics, and-of course!-by Martha Olcott."
-Stephen Sestanovich, former ambassador at large and special advisor to the
Secretary of State
To read an excerpt from Kazakhstan, visit: www.ceip.org/kazak
Table of Contents
Foreword, Jessica T. Mathews
Acknowledgments
List of Acronyms
1. Introducing Kazakhstan
2. Reluctantly Accepting Independence
3. The Challenge of Creating Kazakhstanis
4. Trying Pluralism and Abandoning It
5. Economic Development or Stealing the State?
6. A Divided Society
7. Can Kazakhstan Regain Its Promise?
Appendices
Notes
Selected Bibliography
About the Author
Index
The Carnegie Endowment for International Peace
Map: Republic of Kazakhstan
*******
#12
Kommersant
February 21, 2002
ANNA POLITKOVSKAYA WAS SORTING OUT SOME FINANCIAL PROBLEMS
...according to the Federal Security Service
Author: Musa Muradov
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
THE FSB CLAIMS THAT THE NOVAYA GAZETA NEWSPAPER REPORTED ON CERTAIN
INCIDENTS IN CHECHNYA IN ORDER TO IMPRESS ITS SPONSORS, INCLUDING THE
SOROS FOUNDATION. THE REPORTS WERE BY ANNA POLITKOVSKAYA, ALLEGING
VIOLENCE AGAINST CIVILIANS. THE NEWSPAPER'S EDITOR IS THREATENING TO
SUE THE FSB.
Novaya Gazeta newspaper intends to sue the Federal Security Service
FEDERAL SECURITY SERVICE (FSB) SPOKESMAN ILYA SHABALKIN ACCUSED THE
NOVAYA GAZETA NEWSPAPER YESTERDAY OF USING THE SCANDALOUS TRIPS OF
JOURNALIST ANNA POLITKOVSKAYA TO CHECHNYA "TO SORT OUT ITS OWN
FINANCIAL PROBLEMS AND DISPUTES WITH FINANCIAL ESTABLISHMENTS."
SHABALKIN MENTION THE SOROS FOUNDATION, WHICH HAD ALLEGEDLY SPONSORED
POLITKOVSKAYA'S TRIPS. NOVAYA GAZETA IS NOW THREATENING TO TAKE LEGAL
ACTION AGAINST THE FSB.
The most serious scandal involving Politkovskaya flared up in
spring 2001 when federal servicemen detained her in the village of
Khattuni, Vedeno district. Politkovskaya had come there to listen to
the complaints of local residents. The united federal group claimed
then that Politkovskaya lacked the mandatory special permit enabling
her to work in the area of hostilities. The journalist denied all
accusations, claiming that the military was attempting to conceal from
the public some instances of violence against civilians held in pits
on the territory of the unit.
Politkovskaya's next conflict with the federal forces occurred on
February 9 when the journalist traveled to the Shatoi district to
investigate the deaths of six villagers of Nokhchi-Keloi in the
mountains. According to Novaya Gazeta, all these men were shot by GRU
special forces and their van was burned in an attempt to erase all
traces of the war crime.
Commenting on Politkovskaya's scandalous revelations, FSB
spokesman Shabalkin said that the journalist was visiting Chechnya in
order to settle problems with some foundations and establishments
allegedly sponsoring these trips. According to Shabalkin, the Soros
Foundation paid $55,000 to Novaya Gazeta within the framework of the
Hot Spots Project. The journalists' trips to Chechnya were financed
using this money. Shabalkin says that the newspaper received the first
installment ($14,000) in December 2000 and was expected to provide its
preliminary report on the use of the money in July 2001 and its final
report by late 2001. The reports were never submitted, Shabalkin says,
and the Soros Foundation officially informed Novaya Gazeta of its
intention to suspend sponsorship. That was when Politkovskaya kicked
up the scandal - for the sake of the newspaper's sponsors, claims the
FSB.
However, officials from the Soros Foundation explain that
Politkovskaya's journalistic activities, much less her trips to
Chechnya, did not have anything to do with the grant. Military
observer Vyacheslav Izmailov manages the Hot Spots Project, and the
foundation has no complaints concerning Izmailov or his competence as
project coordinator.
According to Izmailov himself, his project is not directly
connected with the newspaper. It aims to discover the whereabouts and
negotiate the release of POWs and hostages, to assist Chechen orphans,
evacuation of the elderly from the area of hostilities, etc.
When informed of Shabalkin's statement, Novaya Gazeta Editor-in-
Chief Dmitry Muratov promised to take legal action. "If we win the
case and force the FSB to pay, we will give the money to the Soros
Foundation for its projects," Muratov said.
*******
#13
Fashion twins win with hammers, sickles and spice
LONDON, Feb 20 (Reuters) - Hammers and sickles, stars and spice proved a
winning combination for Georgian-born twins on Wednesday as Tata-Naka went
back to the Soviet Union for their London catwalk collection.
Communist iconography decorated bags and belts as models draped in diaphanous
black or white dresses with woollen cuffs, collars and hems thrilled the
audience on the penultimate day of London Fashion Week.
The only identical twins in British catwalk fashion, Tamara and Natasha
Surguladze, brought an intriguing mix of faded Russian grandeur and modern
cut to the catwalk schedule for the first time as winners of London Fashion
Week's "New Generation" award for fresh talent.
Imperial ballskirts swathed in bands were matched with heavy knits to keep
out the cold, while models tramped up the runway in slouched boots, with
leather bags slung over their shoulders.
For evening, the look was less favourable to the Soviet cold. A floating
sheer dress carried sequined detail across the chest, another was clasped
together by a shining hammer and sickle, as thick leather belts ensured
models' modesty.
A Soviet-style passport invited hundreds of guests to the day's "must-see"
show.
******
#14
Admen recruit Stalin for sales pitch
AFP
February 20, 2002
Stalin is cool. Stalin sells. Stalin is the advertising industry's latest
wheeze for promoting goods and services as varied as hotel rooms and mobile
telephones.
The mustachioed dictator with the twinkling eyes has been recruited in the
sales pitch for the Sovietsky Hotel, a four-star establishment on
Leningradsky Prospekt just outside the city centre built, it reminds us, on
Uncle Joe's orders.
"One day, Stalin gave the order: build a hotel and astonish Europe," a firm
male voice sings to a stirring military air in its promotional video.
The red flag with its hammer and sickle insignia flutters proudly in the
wind, and the years fall away.
State-owned but now privately run, the Sovietsky has little doubt that its
unique selling point is its Stalinist heritage, and the red neon hammer and
sickle on the outside, and the abundant portraiture of Stalin and Lenin on
the inside, feature prominently in the seven-minute video.
An English-language version has been prepared for the foreign tourist
trade, and a sound spot with the same motifs is broadcast regularly on
local radio.
The appeal to foreign visitors is explicit. The video's theme song states
that Stalin had the hotel built "so that Europe's bourgeoisie can live in
comfort in the capital."
It omits to mention that Stalin's secret police virtually ran the place,
that secret passages still riddle the building, and that the bugs -- the
electronic kind -- were only finally removed in the early 1990s.
"Sixty percent of our clients are German, and Stalin attracts them. They
often stand and gaze at his portrait, perhaps because he reminds them of
the Hitler era, when they were a major power," the Sovietsky's manager
Valery Maximov said with a disarming lack of tact.
As for the Russians themselves, "the well-to-do don't care about Stalin,
and the middle classes react quite favourably: they're fed up with the
chaos, and they remember that under Stalin there was order. They all
support (President Vladimir) Putin, who used to be a security chief,
precisely because he seems to be bringing some sort of order," Maximov said.
Similar reasoning appears to be behind the promotion for a newcomer to the
Moscow skyline, the skyscraper Triumph-Palace residential block, whose
architecture is an explicit echo of the "seven sisters," the massive
multi-layered Stalin-era piles that punctuate the city landscape and whose
best-known examples are the foreign ministry building and the Ukraina Hotel.
The terminology used by the constructor Don-Stroy to describe its
residences is "domy osobovo naznacheniya", or special purpose houses,
another echo, this time of security service language. Much of the publicity
resounds like a triumphalist May Day speech from the days when dialectical
materialism ensured that the Soviet future would be radiant.
"There's a lot of tongue-in-cheek in all this, of course," said one
advertising executive who preferred not to be named.
"But Russians still look back fondly on the achievements of the Stalinist
era, and on the buildings built to celebrate the victory over fascism."
Stalinist propaganda was based on a mixture of exhortation and terror --
the dictator used to think nothing of browsing over a list of names of
former colleagues, wielding a pencil to decide who was to live and who to
die -- and even this finds an echo in a poster seen recently in
bus-shelters, urging citizens to pay their taxes.
It portrays in silhouette a man in a peaked cap of the kind favoured by
Stalin, sternly instructing his countrymen to cough up.
"It's a joke," the adman said. "It's a way of laughing at those years to
make sure they don't come back."
And the mobile phones? Salesmen say the latest chic is to have the ring set
to produce the Soviet anthem -- restored as the Russian anthem last year
with a new set of words.
*********
#15
Los Angeles Times
February 21, 2002
The U.S. Needs Russia to Help Contain Iran
By BRENDA SHAFFER
Brenda Shaffer, research director at the Caspian studies program at Harvard
University, is the author of "Partners in Need: the Strategic Relationship
of Russia and Iran" (The Washington Institute for
President Bush didn't leave much room for interpretation when he declared
Iran a part of an "axis of evil." What wasn't clear was whether the U.S. is
willing to go beyond tough rhetoric and take concrete steps to stop Iran
from obtaining weapons of mass destruction.
One of the ways for the United States to prevent Tehran from developing
these weapons is for Washington to address one of the sources of Iran's
proliferation advances: Russia. Over the past decade, various government
ministries and defense companies in Russia have contributed significantly
to Iran's advancement toward acquisition of these weapons.
Washington is beginning to forge a new strategic framework for its
relations with Moscow. This new deal should require that Russia curtail its
cooperation with Iran in areas that could enhance Tehran's ability to
acquire weapons of mass destruction. For the U.S. to succeed on this front,
it must understand the importance that Russia attaches to its relations
with Iran and offer significant trade-offs that will help Moscow. After the
collapse of the Soviet Union, a momentous opportunity emerged for
U.S.-Russia cooperation. There are different explanations as to which side
is more at fault for the failure of this partnership to develop. It is
clear that both failed to demonstrate significant consideration for the
other's security needs and continued to interact in a competitive manner.
American policymakers have been upset with Russia's cooperation with Iran
in areas that help Tehran acquire nuclear weapons. Russian leaders have
been disappointed by Washington's promotion of the expansion of the North
Atlantic Treaty Organization into Eastern Europe and its decision to
unilaterally pursue a national missile defense system.
However, it is now time for a new and mutually beneficial strategic deal
between Russia and the U.S. An important component would be the issue of
proliferation in Iran.
In the last 11/2 years, Russia has shown signs that it recognizes that it
has some common interests with the U.S. on energy and security issues.
Russia's refusal in November to cut back its oil production in accordance
with OPEC demands has prevented the world economy from plummeting deeper
into recession. In addition, Russia has removed its active opposition to
the building of the Baku-Ceyhan pipeline for transport of Caspian oil.
On security issues, not only has Moscow mobilized full-fledged support for
the war on terrorism, it has permitted an extensive U.S. military presence
in Central Asia. The Russian government also has made efforts to establish
export controls to rein in some of the proliferation activities of Russian
companies.
Russia, however, has not been willing to compromise its cooperation with
Iran. Moscow views its neighbor Iran as an important partner in maintaining
stability in the Caucasus and Central Asia, and Tehran plays the leading
role in minimizing Muslim backlash against Moscow for its military
campaigns in Chechnya. Iran and Moscow also see each other as important
"poles" in maintaining a multi-polar international system and preventing
U.S. hegemony. Thus, Moscow will be reluctant to endanger its relations
with Iran, especially if it appears that Russia is reacting to U.S. pressure.
But a strategic reformation that includes concessions by Washington on
issues of the highest order that affect Russian national security--such as
missile defense and further expansion of NATO--ultimately could lead to an
important change in the nature of Moscow's cooperation with Iran.
As part of a new deal with Russia, the U.S. should focus on preventing the
transfer of a limited number of sensitive items that could contribute most
seriously to the advancement of Iran's nuclear weapons programs. The U.S.
should not oppose all military cooperation between Russia and Iran, such as
pacts on conventional weapons. The U.S. should not do anything to weaken
political relations between Iran and Russia, and instead focus only on
proliferation issues. Washington would benefit from initiating quiet
diplomacy with Russian President Vladimir V. Putin on the issue of Iran,
without making it seem like a Russian concession to U.S. demands.
Bush has signaled to the world that he wants to get tough with those who
dabble with weapons of mass destruction. The administration now needs to go
beyond words and threats and work intelligently with Russia to contain
Iran's drive for such weapons.
*******
#16
Asia Times
February 21, 2002
Moldova's political upheaval has neighbors on edge
By Sergei Blagov
MOSCOW - As Moldova's nationalist opposition organizes unauthorized rallies
against government plans to bring the country closer to Russia, Moscow has
warned that protests could create a conflict situation in southeastern
Europe.
Since early January, thousands of people have demonstrated in downtown
Chisinau against government plans to make Russian another official
language, along with Moldovan, which is nearly identical to Romanian. The
protesters also reject the introduction of Russian as a mandatory foreign
language, as well as the introduction of Moldova's history instead of
Romanian history, in Moldovan schools.
Some two-thirds of Moldovans are ethnic Romanians, while the rest are
Russian-speaking minorities. Russian was the only official language until
the breakup of the Soviet Union in 1991. And although more than nine-tenths
of the population can speak Russian, the language remains a divisive issue.
On Tuesday, Moldovan President Vladimir Voronin publicly voiced concern
over the protests in Chisinau. He was reacting to the call by protesters
for the violent removal of Moldova's government. Voronin said that instead
of enlisting students, which is technically illegal, the protesters should
have initiated a referendum, which would been more in line with democratic
norms. However, he pledged not to use violence to stop the protests.
The authorities employed a number of maneuvers to deal with the opposition.
This year, the government introduced a temporary ban on the pro-Romanian
Popular Christian Democratic Party to prevent it from campaigning for
April's local elections. The government banned the party for 30 days on
January 22, accusing it of organizing unauthorized rallies. Although the
ban would have expired by election day, it meant the party could not
participate in the campaign, which officially began on February 7. While
banned, the party could not access its bank accounts, organize rallies or
take part in elections.
Subsequently, the Council of Europe asked Moldova to explain how the
restrictions on the party complied with articles in the European convention
covering elections, freedom of expression and association. On February 8,
the government backed down and canceled the temporary ban. However, the
authorities then moved to cancel the election. On Wednesday, Voronin urged
Moldova's citizens and political parties to follow the ruling of the
country's Constitutional Court, which had canceled the early local
elections due on April 7. However, it is understood that the Court's
ruling, announced on Tuesday, is likely to entail more protests by the
Moldovan opposition.
Incidentally, on Tuesday, the World Bank warned Moldova's authorities that
it must cancel plans to nationalize privatized companies or risk losing
US$115 million in loans.
At present, the right-wing opposition Popular Christian Democratic Party is
not exactly influential, holding just 11 of 101 seats in a parliament which
is controlled by the Communist Party, which has 70 seats. However, the
nationalist opposition hoped to boost its standings during the local
elections in April. According to Moldova's constitution, the president is
elected by the parliament.
The Kremlin, which still has troops on Moldova's soil, reacted
energetically to support Voronin and lash out at nationalist protesters.
Moscow believes that anti-Russian protests by Moldova's "radical
nationalists is detrimental to civil concord in multinational Moldovan
society", the Russian Foreign Ministry said in a statement on Tuesday.
"Protest organizers and their foreign backers must fully realize that their
action could create yet another conflict situation in Southeast Europe,"
the statement said. Such developments "should not be allowed", Moscow warned.
Moldova's major Slav neighbor, Ukraine, also became worried over possible
instability in Moldova. On Tuesday, Vladimir Radchenko, head of Ukraine's
Security Service, visited Moldova to discuss bilateral security cooperation
and to deliver a personal message from Ukrainian President Leonid Kuchma.
The mass protests come as a first serious test for Voronin's pro-Russian
administration after less than a year in office. Last April, Moldova's
Communist Party achieved an impressive comeback, the first throughout all
the post-Soviet states, riding to the top off popular disillusionment over
painful market reforms. On April 4, Moldova's Communist Party leader,
Voronin, was elected the country's third president since independence in
1991. Voronin, 61, an ethnic Russian, masterminded the revival of Moldova's
Communist Party in 1993. He pledged to join an economic and political union
between Russia and Belarus.
The communists are popular with Moldova's Russian-speaking minority, the
elderly and others nostalgic for the perceived economic security of the
former Soviet Union, which collapsed in 1991.
Moldova's economy has shrunk by some 70 percent since independence in 1991,
to become the poorest country in Europe. Most of the 4.5 million population
of Moldova, which is sandwiched between Ukraine and Romania, survive on
less than $1 a day
Among his electoral pledges, Voronin promised to make Russian the second
official language of Moldova, along with Romanian. The idea, presumably,
was to help find a solution to the Trans-Dniester problem. Trans-Dniester,
a region of 700,000 populated mainly by ethnic Slavs in eastern Moldova,
declared itself independent in 1990 fearing that Moldova, dominated by
ethnic Romanians, would seek to reunite with neighboring Romania, from
which most of it was annexed in 1940.
Moldova tried to subdue the separatists by force and some 1,500 people died
in a war in Trans-Dniester before Russian forces intervened and the
fighting ended in 1992. About 2,000 Russian troops are still stationed in
the separatist region and Moscow still makes its presence felt.
"There will be no Moldovan aggression against the Trans-Dniester region,"
General Boris Sergeyev, commander of the Russian troops in Trans-Dniester,
told Russian TV-3 channel on Tuesday.
Moldovan officials would like Trans-Dniester to be a region with a special
status inside Moldovan territory, but the leader of Trans-Dniester, Igor
Smirnov, still demands a separate state.
Voronin's "Russophone" administration pledged to heal the wounds of the
bitter dispute with separatist Trans-Dniester. However, the government's
moves to make Russian another official language have not worked so far and
the Trans-Dniester authorities remain defiant. On the other hand, Moldova's
nationalists used Voronin's pro-Russian gestures as a pretext to lash out
his administration.
Therefore, Moldova's case arguably indicates that ill-calculated ethnic
policy moves, coupled with the country's unsolved economic problems, could
spark a political crisis and ethnic divide. It remains to be seen whether
Moldova could learn from its recent history and avoid the violent conflict
of early 1990s.
(Inter Press Service)
*******
#17
Poorest ex-Soviet states in line for debt relief
By David Chance
LONDON, Feb 20 (Reuters) - Some of the poorest countries of the former Soviet
Union could see their debts cut by up to two thirds and be given more grants
and loans in exchange for economic reforms under proposals lenders will
consider this week.
The likes of Armenia, Georgia, Kyrgyzstan, Moldova and Tajikistan, which have
$4.3 billion in debts, could join the Heavily Indebted Poor Countries debt
scheme according to proposals from the World Bank and IMF to be discussed in
London.
Without debt relief, economic reform and more grants and loans, these
countries, which have levels of poverty comparable to those of some African
countries, will not have enough to spend on basic healthcare and education,
said a report for the meeting.
"The impact of the debt on the budget remains a matter of concern in all
countries except possibly Armenia, and some debt flow rescheduling may be
required if social expenditures are not to be squeezed," said the
International Monetary Fund/World Bank report.
Of seven countries to be discussed at meetings between creditor countries and
the bank and fund, Armenia, Georgia and Kyrgyzstan have debts in net present
value terms in excess of 150 percent of exports, an economically
unsustainable level.
For Georgia, Kyrgyzstan, Moldova and Tajikistan, the level external debt to
government revenues is in excess of a crippling 250 percent, while for
Armenia it is 168 percent.
The other two countries to be discussed are oil-rich Azerbaijan and
Turkmenistan, as part of a regional approach aimed at setting an agenda for
poverty alleviation in the region in which three ex-Soviet states border
Afghanistan.
"One of the fallouts of 9/11 (the terror attacks on the U.S.) is that there
is a new willingness to look at this region," said a spokesman for the World
Bank.
The consultation papers says it is key however that this interest translates
into new money for the struggling countries as much of the bilateral grant
aid for the five poorest countries has been scaled back and loans were not
made on sufficiently concessional terms.
RUSSIANS KEY TO DEBT DEAL
Any meaningful debt reductions will have to secure the agreement of the
Russians, who account for 14 percent of the $4.3 billion of government and
government-guaranteed debt owed by Armenia, Georgia, Kyrgyzstan, Moldova and
Tajikistan.
Russia has typically not been involved in sovereign debt discussions as a
creditor, but as a debtor.
"It is vital for any package put together to involve Russia," said a European
official involved in the talks.
Discussions could include reductions in Russia's debt to the Paris Club of
sovereign creditors in exchange for Russia writing off the debts of the five
countries, or debt for environment swaps and debt for energy swaps.
Bilateral debts owed to the Paris Club of sovereign creditor countries
excluding Russia are 10 percent of the total and another four percent is owed
to other countries.
CONFLICT, POLICY MISJUDGEMENTS MADE SITUATION WORSE
As in parts of Africa, some of the problems in Armenia, Georgia and
Tajikistan have been caused by prolonged armed conflict since the fall of the
Soviet Union, the study said.
The less developed countries of Central Asia and Moldova also suffered from
the 1998 Russian financial crisis.
Policy mistakes and lack of reform, mismanagement of the energy sector and
corruption have also led to a burgeoning of debts and economic problems.
Kyrgyzstan for example had no debt when the Soviet Union broke up and now has
almost $1.7 billion.
But the report said the international financial community also misjudged the
situation, overestimating the ability of the newly independent states to
change their economies and in the belief that the poorest parts of the former
Soviet Union would follow the same path as the economies of eastern Europe.
"The international community, including the Fund and the Bank, underestimated
the difficulty of transition and the gestation period for structural and
institutional reforms," the report said.
*******
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