Johnson's Russia List
#6100
26 February 2002
davidjohnson@erols.com
A CDI Project
www.cdi.org
[Note from David Johnson:
1. Michael McFaul: re 6098-Vek/McFaul Interview.
2. Reuters: Olympics-Russian athletes return to new fury over judging.
3. Izvestia: Semen Novoprudsky, O SPORTS, YOU ARE WAR. The Winter
Olympics are over - and the rest of the world isn't happy.
4. Financial Times (UK) editorial: Calling Moscow. (re NATO)
5. Reuters: Industrial survivor works on in post-Soviet Georgia.
6. Andreas Umland: Who is Mr. Zyuganov?
7. Katya Shelekhova: Russian Immigration Diary.
8. Vek: Grigori Potapov, REPLACING EVERYONE. What the Kremlin
administrator's revelations mean. Surkov: Russia's existing political and
economic system is temporary.
9. US National Intelligence Council: Annual Report to Congress on the
Safety and Security of Russian Nuclear Facilities and Military Forces.
10. Kennan Institute conference: U.S. Assessments of the Soviet and
Post-Soviet Russian Economy: Lessons Learned and Not Learned.
11. AP: Obituaries in the News: Robert Strausz-Hupe.
12. Financial Times (UK): Nancy Dunne, US, Russia set for uranium deal.
13. BBC: Steve Rosenberg, Fringe benefits for Russia's poor. (re hair)
14. Washington Times: Arnold Beichman, Cardinal rules of politics in
Moscow. (re churches)
15. Reuters: Russia careful on further oil cuts.
16. Reuters: Russia faces dilemma over pace of rouble slide.]
*******
#1
Date: Mon, 25 Feb 2002
From: Michael McFaul
Subject: re 6098-Vek/McFaul Interview
Thanks to all of you who wrote in response to my Vek interview published in
JRL.
I have had many successful interactions with Vek before and even published
there on occasion. The publication of my interview with them this week,
however, had several errors, which I am sure were apparent to anyone who
has ever read my work before. Just to be clear, though, I want to make
several "clarifications" to things published that were either lost in the
transcription or in my bad Russian.
First, I never agreed to the statement, "Bush is acting like a dictator."
That's ridiculous. I was never asked this question (or if I was, I most
certainly did not understand it). Rather, I agreed that some liberties in
the U.S. have been limited after September 11th (and many of those limits,
by the way, I think are necessary).
Second, I never said that the Russia policy would influence in any way
whether or not Bush is elected to a second term. Of course, we all know
that Russia policy plays no role in American electoral politics. I really
do not know where this idea came from.
Third, I -- not the White House -- described events in Russia as a period
of Thermidor. Obviously, in this passage the transcriber worked in the
phrase "human factor" which of course is a Russian term used by Gorbachev
often, but one that I would never use.
Fourth, regarding Bush's State of the Union address, I actually liked many
aspects of the foreign policy section of this speech and have said so in
print elsewhere. What I said specifically in the interview was that I did
not like the "axis of evil" metaphor as it tied together three countries
that should not be linked. I of course have no idea who wrote it, but
"speculated" that Condi Rice had a hand in it. The verb tense of my
statement was lost in the translation.
Fifth, I do not even know the Russian word for "leakage."
Sixth, and most disturbing, I never said that I support Putin's standpoint
on the war in Chechnya. I have written dozens of articles stating exactly
the opposite. I believe that I said that Chechen fighters should severe
their contacts with Osama bin Laden. If that is Putin's policy as well,
then on this small part of his Chechen policy we agree. On all the rest,
we do not. For those who wrote to me asking if I had changed my views, I
most certainly have not and urge you to read own words in my own essays on
the subject.
As to how this particular interview came out the way it did, I still am
quite puzzled.
*******
#2
Olympics-Russian athletes return to new fury over judging
By Ron Popeski
MOSCOW, Feb 26 (Reuters) - Russia's Olympic athletes returned home on
Tuesday to a warm welcome, with commentators making new charges that
"lawless" judges had scuppered many of their hopes and accusing Salt Lake
City organisers of compromising the Olympic movement.
But along with fulminating denunciations was also a realisation that Russia
would regain lost ground against its rivals only if it poured fresh money
into winter sports.
Police tightened security at Moscow's main international airport ahead of
the arrival of two aircraft carrying most of the team which secured only
fourth place in the medals table at the Winter Games.
RIA news agency said fans had urged Russians to go to the airport to praise
performances "in the most difficult of conditions, amid the intrigue of the
International Olympic Committee, the lawlessness of judges and the
hysterical jeering of the American media."
Russian fury reached a new fever pitch over what officials saw as a
deliberate campaign to humiliate athletes and the Russian nation itself.
They said the United States had had to compensate for a loss of confidence
following the September 11 airliner attacks.
A front-page cartoon in Izvestia depicted an aircraft marked "Salt Lake
City Games" ploughing through a likeness of New York's destroyed World
Trade Centre bearing the Olympic rings.
"In its patriotic fury, America has incited hundreds of millions of
ordinary people against it," the daily said.
"Sport has again become a theatre for war. However much one may criticise
the IOC and the biased officials of international sports federations,
America has organised barbaric Games."
Initial discontent focused on the award of a second gold medals to Canada
in pairs figure skating after Olympic officials said judges had acted
improperly in declaring Russia the winner.
Criticism turned to fury at rulings affecting Russian competitors in
freestyle skiing and ice hockey and then the decision to strip
cross-country skier Larisa Lazutina of her gold medal on grounds of doping
violations.
Politicians and cultural figures demanded action to restore Russian medals
and prestige. Russian Olympic officials threatened for a time to take the
team home early but relented and stayed until the end of the Games.
President Vladimir Putin said he agreed with accusations of bias and
criticised both Russian officials for their "passive" stand and the IOC's
new president, Jacques Rogge, elected last year in Moscow, for his
inexperience.
"PROVED RIGHT"
The daily Sport Express said the outcome of the Games had "proved right the
prediction of Soviet propaganda that sport would sooner or later be killed
off by commercialisation."
"Who will predict what the sport of tomorrow will be if its highest forum
has become a place for settling accounts, mutual accusations and cynical
deception?" it said.
"What we got was the most scandalous Olympics in history, anarchy instead
of democracy and judges' plots instead of openness."
But commentators began delving into why Russia had won only six gold medals
in its worst showing ever since the Soviet Union first competed in the
Winter Games in 1956 -- behind Germany, Norway and the United States.
Some said inclusion of sports not practised in Russia was partly
responsible. But most said poor funding was to blame.
"Unless a serious and sweeping state programme is not drafted soon to back
sport, it cannot be ruled out that Russians will give up gold in
forthcoming Winter Games to the French, Austrians or the Italians," wrote
the daily Sovietsky Sport.
The scandals also had a lighter side.
The daily Moskovsky Komsomolets said the Moscow Zoo had named one of its
polar bears after Lazutina to honour its good nature and athletic
capability. It was studying a proposal to name an animal after Rogge but
had yet to decide which one.
*******
#3
Izvestia
February 26, 2002
O SPORTS, YOU ARE WAR
The Winter Olympics are over - and the rest of the world isn't happy
Author: Semen Novoprudsky
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
NO MATTER HOW MUCH THE INTERNATIONAL OLYMPIC COMMITTEE OR CORRUPT
OFFICIALS MAY BE TO BLAME, THE FACT REMAINS THAT THE UNITED STATES HAS
ORGANIZED AND CONVENED A BARBAROUS OLYMPIAD. THESE SMALL VICTORIOUS
OLYMPIC GAMES ENDED IN A VICTORY FOR HUMAN BARBARISM AND
IRRESPONSIBILITY.
The sporting arena is once again a battlefield
America did not want to watch the Olympic Games, preferring
American football and basketball. For the Olympic Games to get an
audience, they had to be Americanized. This has now happened.
The United States did its best to score. When an American athlete
came third, the American media spoke only of the bronze medal - never
even mentioning the other medals. Whenever competitors refused to give
up, they had to be destroyed - by judges or doping-tests. Anything
goes.
These Olympic Games have been a microcosm of the state of the
world. The model of the world: here is the United States and there are
all the rest. The fate of all the rest depends on whether the United
States recognizes their existence. September 11 gave humanity a unique
chance to close ranks around the strongest, to fight an obvious evil -
international terrorism using the smoke-screen of religious and
political slogans. A simple and understandable model of the world
might have arisen: advocates of human rights and democracy all over
the world unite to combat a common evil threatening everyone,
everywhere. The obvious and unquestionable global leader, the United
States, ought to have played a key role in forming this model.
Unfortunately, the world will be different now.
Eager to promote its citizens, America hurt and offended citizens
of other states which might have become its true allies otherwise. It
is impossible to explain to citizens that skier Lazutina and skier
Danilova did take some drugs and ought to lose their hard-won medals
for that. It is impossible to convince anyone that Russian figure
skater Irina Slutskaya was worse than American skater Sarah Hughes:
millions of viewers all over the world saw for themselves that she was
not. Moreover, it will be very difficult for politicians in the
nations populated with offended citizens to persuade the latter that
America is the empire of truth and good, while transnational
terrorists are the evil empire.
America clearly overdid its own patriotism, eliciting the
aversion of millions all over the world. It must have forgotten than
nothing's worse than enraged ordinary people. It is these ordinary
citizens, not their leaders, who start revolutions, topple empires, or
warrant with their silent or public consent explosions of apartment
blocks and abduction by force for the sake of some higher justice.
The strongest ought to be the wisest. But in fact, the strongest
is the most greedy and stupid.
The sporting arena is once again a battlefield. No matter how
much the International Olympic Committee or corrupt officials may be
to blame, the fact remains that the United States has organized and
convened a barbarous Olympiad. These small victorious Olympic Games
ended in a victory for human barbarism and irresponsibility. "O
sports, you are peace," Baron Pierre de Cubertin said in the late
19th century. He was too naive.
*******
#4
Financial Times (UK)
26 February 2002
Editorial
Calling Moscow
The end of the cold war is about to reach an unexpected but logical
conclusion: a permanent place for Russia at the North Atlantic Treaty
Organisation. While the deal has yet to be done, it is increasingly likely
that Nato will offer Moscow a seat on a new decision-making council. The
initiative is a welcome move towards creating a new role for the alliance
and a new forum for dealing with the increasingly complex security issues
faced by the US, Europe and Russia alike.
Forged in the heat of superpower confrontation, Nato remains a powerful
military alliance. But deprived of its defining enemy by the Soviet Union's
collapse, it has struggled to find a new mission. Immediately after
September 11, the alliance's mutual defence guarantee was invoked. But this
unprecedented move was followed by a war in which Nato was left on the
sidelines. The conflict merely demonstrated the US's capacity to go it
alone and the imbalance between American and European forces.
But it would be quite wrong to conclude - as do some of Washington's hawks
- that Nato has outlived its usefulness. The alliance can play a big part
in enhancing global security by providing a forum for like-minded states to
co-ordinate their responses to threats such as terrorism. As in
Afghanistan, military action by one power can be combined with political
backing from the alliance.
Russia can contribute greatly to this process, as it did by supporting the
Afghan military campaign. A permanent place at Nato would help strengthen a
sometimes fragile relationship. It would go some way to assuage Russian
concerns about Nato's planned eastward enlargement, which will probably
include the Baltic states. And it would give President Vladimir Putin a
modest prize he can wave at domestic critics who see his foreign policy as
overly pro-west.
There would rightly be tight limits on Russia's role in Nato. It would have
no veto over military operations and no right to the mutual security
guarantee. Moscow would be involved in decisions on topics such as
peace-keeping operations, exchanging information on nuclear weapons and
anti-terrorist policies.
The proposed arrangements should not be seen as a mere favour to Mr Putin.
Co-operation with Russia is in the interests of the US and western Europe
because it reduces the risk of future conflicts; it eases the way for
nuclear arms reduction pacts such as the one the US and Russia are about to
sign; and it helps extend the space in which Nato states can operate
militarily - as was shown in central Asia.
The new relationship with Moscow should not be allowed to dominate Nato.
But it can be a valuable element in strengthening the alliance to face its
new challenges.
*******
#5
Industrial survivor works on in post-Soviet Georgia
By Margarita Antidze
ZESTAFONI, Georgia, Feb 26 (Reuters) - "Discipline is the main drive in the
working process." In an echo of the heyday of Soviet-era manufacturing, the
slogans daubed on the walls of this huge factory in Georgia urge the
workers to greater effort.
On the surface, the fate of this ferro-alloy plant seems sealed -- like
many others after the collapse of communism, its markets disappeared,
production collapsed and parts of the factory do not work.
But in the new, tough world of market economics, Zestafoni's managers are
trying to buck the trend of industrial collapse and revive the fortunes of
this grey, hulking plant on a windy plain in central Georgia.
This is important, not least for the 2,600 people who still work there and
live in the town specially built near it.
"There is no need to have all these people here," said David Shalikashvili,
deputy head of the plant's supervisory board, walking past the blazing
furnaces and shaking hands with workers made sweaty and dirty by their job.
"But how can we fire them? I know that for many of them it would mean
death. The money we pay them is all their families have for a month," he
said.
The factory, once a link in the chain of plants that supplied the Soviet
arms and steel industry, now has only four working furnaces out of 22 used
in the production of alloys to strengthen steel.
Production is down from 500,000 tonnes of ferro-alloys in its heyday to
42,000 tonnes last year. Much depends on electricity supplies. In 2000,
when power cuts were frequent, output was just 25,000 tonnes.
The plant consumes 120 megawatts of power, but currently receives just 30
to 40 in the winter and 120 in the summer. It wants to build a power
station to add another 35 to 40 megawatts.
PLANT WANTS TO SURVIVE WITHOUT HANDOUTS
While bemoaning the loss of captive Soviet markets, its managers want to
keep going without state handouts or subsidies.
"A hand or a leg cannot operate if the whole body is dead," says Vakhtang
Aslanikashvili, executive director of the plant, speaking of the collapse
of the Soviet Union.
In an effort to wean itself from dependence on Georgia's government,
criticised by investors and many people in the country as corrupt and
unreliable, the plant has dug its own wells to provide a constant water
supply as well as planning to build the power plant.
"We cannot rely on a temporary improvement in power supplies, we need our
own power station," Shalikashvili said. The state has a controlling stake
in the plant, but officials say they need to be as independent as possible
if they are to survive.
The power station will be financed only by the plant, part owned by foreign
investors, who purchased a 46 percent stake in the plant through an
international tender.
The state owns 51 percent and the rest of shares are held by private
Georgian investors, mostly employees of the plant.
The ferro-alloys it makes are of silico-manganese and medium-carbon
manganese. They are used to harden, strengthen and give corrosion
resistance to various types of steel. They are exported to the United
States, Turkey, Italy and other nations.
PLANT GIVES LIFE TO TOWN
Those most interested in the plant's survival and development are the
people in the nearby town, built, like many in the former Soviet Union,
specifically to provide labour for the nearby industrial enterprise.
Constructed in a depressing Soviet style of six to nine storey apartment
blocks, unrepaired and tatty, it has little to offer residents except a few
small kiosks and a small church.
A few Western items -- soft drinks, chewing gum and chocolate bars, unseen
in Soviet times, are on sale.
But on wages of 120 to 130 lari ($60) a month, few families can afford
luxuries. At night-time in winter, there is no electricity and the streets
are dark and deserted.
But local residents are proud of the plant. Some even believe Josef
Stalin's refusal to hand it over to Germany pushed Nazi leader Adolf Hitler
to declare war on the Soviet Union.
"There might have been other reasons that started the war but this was the
main one," said Georgy Kupatashvili, 74.
The life of everyone in Zestafoni is tied to the plant, some for several
generations. "I grew up in a family of workers and all the stories that I
listened to from childhood were about the plant," said one resident called
Manana.
Zestafoni still has a long way to go before it will come anyway near to
recapturing its glory days, but its owners and workers see it as a Georgian
success story, one of few in the post-Soviet nations.
"We survived thanks to investors' support and because we did not steal,"
said Shalikashvili.
*******
#6
Date: Tue, 26 Feb 2002
From: Andreas Umland
Subject: Who is Mr. Zyuganov?
To: davidjohnson@erols.com
Who is Mr. Zyuganov?
On the Reddaway/Aslund/Yanov.... debate on the nature
of the KPRF and Zyuganov:
Of course, those pointing to the often
pro-governmental behaviour of the KPRF in the State
Duma are justified to question the anti-systemic
character of the KPRF. I am not sure though that
partial support for the Russian post-Soviet regime,
and even for Yeltsin is enough to fully disqualify a
party from the extremist camp. Parliamentary factions
are bound to follow conflicting strategies (pork,
survival, logrolling), and not only and always a
strictly ideological line. Zhirinovskii would then
also not be an extremist, and even Barkashov with his
support for Yeltsin might disqualify. We would be left
with hardly more than some extra-parliamentary lunatic
fringe groupuscles as fully-fledged antagonists of
liberal democracy by this way of classifying, and the
whole talk about "Weimar Russia" would obviously be
idle.
Admittedly, things are more complicated with the
"communists." One major reason is that Zyuganov's
party seems to represent rather a peculiarly Russian
form of radical conservatism (or "reactionary
ultra-nationalism") than fascism (revolutionary
ultra-nationalism). Large parts of mainstream Western
- even 19th century US - conservatism have also been
for quite a while decidedly anti-democratic. The
German conservatives, e.g. Hindenburg, were pillars of
the Weimar Republic for a while, and then formed a
coalition with the Nazis. Still, I would grant the
KPRF the ability to transform into some semi-loyal
force as time goes by (though I find the sometimes
used attribute "social-democratic" confusing).
Zyuganov himself though represents a more fundamental
problem - perhaps, less so as a party leader than as
an ideologist and publicist. Some ideas he espouses in
his numerous pamphlets are close to proto-fascism. On
the other hand, I am not so sure that he would behave
like Milosevic, as Yanov suspects, if he became
Russian president. Perhaps, the main danger lies in
the KPRF becoming a coalition partner of some fascist
force. Zyuganov demonstrated such an inclination
repeatedly, e.g. within Aleksandr Sterligov's _Russkii
natsional'nyi sobor_ or Ilya Konstantinov's _Front
natsional'nogo spaseniya_.
In a worst-case scenario, something like the
conservative-Nazi alliance in Germany in 1932-34 could
one day emerge in Russia too with the "communists"
playing the ultra-conservative part. Hitler was first
just _Reichskanzler_ with Hindenburg as
_Reichspraesident_ above him, and many conservatives
in his government, inlcuding von Papen as
Vice-Chancellor. I suspect that, in a crisis
situation, the KPRF could get pushed into a similar
role. So far, fortunately, the LDPR is the only
fascist party represented in the parliament.
It might be worth remembering, however, that five
years before Hitler came to power, his party was a
negligible force, and fascism rather an intellectual
than political movement in Germany. With somebody like
Alexander Dugin (one of Zyuganov's sources) becoming a
kind of court ideologist of both, the legislative
(Seleznev) and executive (Pavlovskii) branches of the
current regime, I am not yet sure that Russia's
proto-democracy can be regarded as having safely
passed the "Weimar stage" in its consolidation
attempt. A number of recent trends, e.g. public
opinion on the US and NATO, the rise of KGB officers,
or changes in political journalism, are quite
dismaying. Where Russia is transiting to seems again
an open question. Though the KPRF can, perhaps, be
accomodated within a consolidated democratic system,
it is, at least, equally suitable for new anti-Western
experiments.
Andreas Umland
2001-2002 Postdoctoral Fellow, Weatherhead Center for
International Affairs, and Research Associate, Davis
Center for Russian Studies, Harvard University,
Cambridge, Mass.
*******
#7
From: "Katya Shelekhova"
Subject: Russian Immigration Diary
Date: Mon, 25 Feb 2002 20:
Hello David,
I would like to offer my article "Russian Immigration Diary" where I am
speaking about my immigration experience and a current state of mind of
many Russian immigrants in the US.
The article was published in New California Media online
http://www.ncmonline.com/content/ncm/2002/feb/0213russian.html
I thought it might be of some interest to your list.
Thank you,
Katya Shelekhova
Freelance Russian/American Journalist
San Francisco, CA
Russian Immigration Diary
New Life, By Katya Shelekhova, Feb 13, 2001
Why did we arrive here, the United States? If someone does not get
accustomed to living here, why nevertheless does one remain? I do not know
how to answer these questions, wherever they hit me-whether it is here or
in Moscow when I go there for a short visit.
Perhaps, the common ground for all of us is a time before the departure,
filled with incessant activity accompanied by a feeling of euphoric
anticipation, yet, at the same time, filled with the uncertainty of our
imminent move into the unknown. But then, when we finally arrive,
adaptation occurs differently for every one of us. During this time, we
already feel the onslaught of nostalgia, which lasts for years. This is the
state of the reseated plant-a feeling of surrealism (as if we are living in
a soap opera)-and simultaneously we ponder "what will occur to me
tomorrow?" Perhaps this is a fundamental reaction to the incomprehensible
circumstances.
Immigration is a serious test of the human spirit. Everything is different
in our new country, as if we have walked through a mirror into a
looking-glass house that is not comprehensible to tourists. The experience
of the tourist is one of a reporter-he is here to gather information about
the place and the events: "I have been there, I have seen it, I was
pleased, I was not pleased." Tomorrow, loaded with his suitcases, the
tourist will return home. The superficiality of his judgments will not
affect his life. Tourism saturates by impressions, immigration forges
nature. Each immigrant has his own pain, each immigrant has his own truth.
Here are the opinions of several of Russians now living here in the Bay Area:
A quality assurance engineer: "For me, Russia is just the place where I was
born. I have no illusions regarding the people and that country. I have
known a few Russians here, and mainly those are the people from the past.
Nothing remained for me in Russia. My whole life is here."
A young woman who came here as a teenager: "I was born in Russia, went to
school there, fell in love, was traveling to the Black Sea and Crimea, many
of my friends are still living there-and I must forget about this? Don't
misunderstand me, I am grateful to America for the opportunities it has
given me, but I am closer to Russia's culture and her people."
A small business owner who has been living here for 20 years:
"Americhka...and why did I leave Russia? Time has passed, I have nowhere to
return. My family, my business-all is here, but my soul aches: what would
my life have been like had I stayed?"
A young software engineer: "I came here to earn money, I don't consider
myself an immigrant, and I will definitely go back. Here many people don't
want to acknowledge that there is nothing for them to do in this country."
A Ph.D. student: "It is always possible to go back to Moscow to drink tea
and have your accustomed lifestyle. However, if you achieve something here
it feels unbelievably good."
A freelance writer: "I am a cosmopolitan in my views. I was born in Russia,
and it will remain a part of me forever. But to me, it is not enough
anymore to live and breathe just by Moscow life. I need a whole world, and
America, San Francisco and New York are my life as well."
Immigration is a state of the soul, where one finds neither refuge nor
rest. Something has moved inside of us. We arrive back in Moscow-but the
feeling does not pass, and it does not pass when we go to Paris or New York
either. It aches, it aches in our heart like the constant sound of a
sorrowful violin.
But now, with the tragic events of September 11, Americans have begun to
feel that same ache. Suddenly, America has grown up. In one day, the safe,
carefree paradise has disappeared.
Last year, I was walking in Moscow and talked with one of my old friends.
Naturally, we discussed what has become the hot topic there: to leave or
not to leave. "New York is so far," he said. "New York? It is right there,
right around the corner" I answered.
The world has become global, with universal immigration. Even those who
have remained in their native lands have moved, because time has changed.
With all of our experiences, we are still behind the times. We search for a
home, but we find that our only home is in our soul, regardless of where we
were born or where we live.
******
#8
Vek
No. 8
February 22-28, 2002
REPLACING EVERYONE
What the Kremlin administrator's revelations mean
Surkov: Russia's existing political and economic system is temporary
Author: Grigori Potapov
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
VLADISLAV SURKOV, DEPUTY DIRECTOR OF THE PRESIDENTIAL ADMINISTRATION
ADDRESSES FUNCTIONARIES OF UNITED RUSSIA - THE NEW PRO-GOVERNMENT
PARTY. THE VERY FACT THAT HE SPOKE AT ALL IS IMPRESSIVE, BECAUSE THIS
KREMLIN ADMINISTRATOR USUALLY REMAINS IN THE SHADOWS.
Vladislav Surkov, Deputy Director of the Presidential
Administration, has addressed functionaries of the United Russia party
at the Bor resort in the Moscow region. Surkov was heard out with due
respect and attention, but the exact meaning of his postulates should
have been taken within a certain context. The very fact that he spoke
at all is impressive, because this Kremlin administrator usually
remains in the shadows.
Surkov's "lecture" concerned the future. Essentially, he
described the existing political and economic system as provisional -
calling it unstable. "We think political stability has arrived. But
this isn't political stability," Surkov said. "It is political fatigue
after the Yeltsin era. The nation wants some rest. Do you think this
is good?"
Surkov suggested forgetting "our monarchic traditions... Parties
ought to participate in formation of the government, federal and local
government bodies. In future, even presidential candidates should be
discussed at the party level... It is much better when a public
organization promotes the nation's top leaders." Addressing United
Russia members, Surkov implied that they are being given a chance - a
chance to become the mechanism of continuity of power in 2008. By
then, all restrictions on membership of political parties will be
abolished for Category A state officials. Surkov emphasized that the
presidential administration would continue to manage the political
process in the foreseeable future.
Surkov's description of the current government was important as
well. Actually, the terms "government" or "executive branch of the
government" were never used. That is probably why few listeners
assigned political importance to the description.
Surkov was harshly critical of liberal economists. Oil wealth is
not eternal, he said, but no one ever asks the question of what should
be done when it's over. "We do not have a plan for building the Russia
of the future. Why not?" Surkov exclaimed. He considers that
liberalism in Russia "is a necessary requirement for development, but
not sufficient in itself." The Russian system needs to be "fine-
tuned", he said, and liberal dogmas "should be assessed properly... We
should be nationalists in the best sense of the term. We ought to be
thinking about Russia. What will happen to it? What will it sell to
the rest of the world? We have a decade, no more. China will catch up
with the United States and Germany in GDP size; but what about us? Are
we going to be at the same level?"
It is reasonable to assume that Surkov was referring to certain
government ideologues who advocate systematic non-interference of the
state in economic processes. Regularly repeating the words "We
think...", the deputy director of the presidential administration
disassociated himself from the fundamentals of economic policy of the
last decade.
On the whole, Surkov's theses and assessments were a complex
answer to the question of attitudes to Yeltsin's reforms. The major
dividing line on the political playing-field nowadays is this
attitude, not membership of clans or teams.
Surkov answered the question simply. He doesn't think much of the
past decade's achievements, and is prepared to strive for different
objectives and entirely different policies. "We should be smart enough
to survive... It's essential to activate mental processes. Parties who
cling to principles too closely do not last," Surkov said.
The president will soon deliver his annual address to the Federal
Assembly. What if Surkov's speech the other day was a kind of test?
There is another detail which might have forced Surkov to come up
with this political manifesto. That same day, a provisional working
group met to discuss amendment of legislation regulating the
activities of presidential envoys in federal districts and the
presidential administration. No one noticed it.
Some excerpts from Surkov's speech.
"IN MY VIEW, THERE SHOULD BE SEVERAL POLITICAL FORCES AT THE FEDERAL
LEVEL PROMOTING A POLICY IN THE INTERESTS OF THE STATE. THAT IS WHY WE
DON'T WANT TOO MANY PARTIES. NOT 300 OF THEM. THREE, FOUR, OR FIVE
PARTIES ONLY. A NORMAL POLITICAL CENTER FORMS THE BASIS OF STABILITY.
CENTRISTS SHOULD CONSOLIDATE THEIR POSITION IN THE PARLIAMENT. THIS
WOULD AVERT THE APPEARANCE OF UNEXPECTED FORCES IN POLITICS. THERE IS
A DANGER OF THIS HAPPENING IN RUSSIA. STABILITY IS FAIRLY FRAGILE."
"THE NEW PARTY SHOULD FINALLY APPEAR. IT SHOULD DISASSOCIATE ITSELF
FROM THE BUREAUCRATIC MACHINE. WHAT IS GOING TO HAPPEN TO YOU UNDER A
NEW PRESIDENT? WE WILL HAVE A NEW PRESIDENT SOONER OR LATER, YOU KNOW.
NO ONE IS GOING TO INTRODUCE PRESIDENCY FOR LIFE, AFTER ALL. A LEFT-
WING PRESIDENT MAY BE ELECTED. OR A RIGHT-WING PRESIDENT. WHAT WILL
THE PARTY DO THEN?"
******
#9
Excerpt
[full report at:
http://www.odci.gov/nic/pubs/other_products/icarussiansecurity.htm}
US National Intelligence Council
Annual Report to Congress on the Safety and Security of Russian
Nuclear Facilities and Military Forces
February 2002
Scope Note
Congress has directed the Director of Central Intelligence (DCI) to submit
to the Congressional leadership and intelligence committees an annual,
unclassified report assessing the safety and security of the nuclear
facilities and military forces in Russia. Congress further asked that each
report include a discussion of the following:
The ability of the Russian Government to maintain its nuclear military forces.
The security arrangements at Russia’s civilian and military nuclear
facilities.
The reliability of controls and safety systems at Russia’s civilian nuclear
facilities.
The reliability of command and control systems and procedures of the
nuclear military forces in Russia.
This annual report is the third responding to this Congressional request.
The report addresses facilities and forces of the Russian Ministry of
Defense, the Ministry of Atomic Energy, and other Russian institutes. It
updates the September 2000 report to Congress.
This paper has been prepared under the auspices of the National
Intelligence Officer for Strategic and Nuclear Programs.
Key Points
Annual Report to Congress on the Safety and Security of Russian Nuclear
Facilities and Military Forces Moscow will continue to devote scarce
resources to maintaining its nuclear forces. Nevertheless, the aging of
Russia's strategic systems and Putin's military reform plan to shift
resources to the general purpose forces probably will result in Russia
having fewer than 2,000 strategic warheads by 2015. Even with ongoing
reductions, Moscow probably will retain several thousand nonstrategic
nuclear warheads in its inventory because of concerns over its
deteriorating conventional capabilities.
Russia employs physical, procedural, and technical measures to secure its
weapons against an external threat, but many of these measures date from
the Soviet era and are not designed to counter the pre-eminent threat faced
today—an insider who attempts unauthorized actions.
Moscow has maintained adequate security and control of its nuclear weapons,
but a decline in military funding has stressed the nuclear security system.
An unauthorized launch or accidental use of a Russian nuclear weapon is
highly unlikely as long as current technical and procedural safeguards
built into the command and control system remain in place and are
effectively enforced. Our concerns about possible circumvention of the
system would rise if central political authority broke down.
Security varies widely among the different types of Ministry of Atomic
Energy (Minatom) facilities and other Russian institutes.
Russian facilities housing weapons-usable nuclear material—uranium enriched
to 20 percent or greater in uranium-235 or uranium-233 isotopes and any
plutonium containing less than 80 percent of the isotope
plutonium-238—typically receive low funding, lack trained security
personnel, and do not have sufficient equipment for securely storing such
material.
Weapons-grade and weapons-usable nuclear materials have been stolen from
some Russian institutes. We assess that undetected smuggling has occurred,
although we do not know the extent or magnitude of such thefts.
Nevertheless, we are concerned about the total amount of material that
could have been diverted over the last 10 years.
In 1992, 1.5 kilograms of 90-percent-enriched weapons-grade uranium were
stolen from the Luch Production Association.
In 1994, 3.0 kilograms of 90-percent-enriched weapons-grade uranium were
stolen in Moscow.
In 1999, we confirmed that nuclear material seized in Bulgaria was
weapons-usable. The material—four grams of highly enriched uranium—likely
originated in Russia.
Although not independently confirmed, reports of a theft in 1998 from an
unnamed enterprise in Chelyabinsk Oblast are of concern. According to
Viktor Yerastov, chief of Minatom's Nuclear Materials Accounting and
Control Department, the amount stolen was "quite sufficient material to
produce an atomic bomb"—the only nuclear theft that has been so described.
Over the last six years, Moscow has recognized the need for security
improvements and, with assistance from the United States and other
countries, has taken steps to reduce the risk of theft.
On their own initiative in 1999, 2000, and in mid-summer 2001, Russian
authorities ordered increased security at nuclear facilities due to
concerns about a reported increased terrorist threat as a result of
Moscow’s campaign in Chechnya, according to official statements and media
reporting.
Since the September 2001 terrorist attacks in the United States, Russian
officials, including President Putin, have conducted a public campaign to
provide assurances that terrorists have not acquired Russian nuclear weapons.
Through the Cooperative Threat Reduction Program and the US Department of
Energy’s Material Protection, Control, and Accounting Program, the United
States continues to assist Russia in improving security at nuclear
facilities. Russia’s nuclear security has been slowly improving over the
last several years, but risks remain.
Russia has announced plans to more than double its capacity to generate
nuclear power over the next 20 years and to begin construction of reactors
with enhanced safety features. Since July 2001, Russian media have
reported increased security measures at a number of nuclear power plants.
Even with increased security measures, however, such plants almost
certainly will remain vulnerable to a well-planned and executed terrorist
attack.
After the September terrorist attacks in the United States, Minister of
Atomic Energy Rumyantsev reported that Russian nuclear power facilities are
protected by special guards patrolling around the clock in addition to
national defense forces. An official of Rosenergoatom reported on 12
September 2001 that security services at the nuclear power plants already
were working a “harsh regime” because of the continuing military actions in
Chechnya and that additional security measures were not necessary.
******
#10
Date: Mon, 25 Feb
From: "JOSEPH DRESEN"
Subject: Conference announcement
The Kennan Institute is pleased to announce an upcoming conference:
"U.S. Assessments of the Soviet and Post-Soviet Russian Economy: Lessons
Learned and Not Learned"
This conference, which is cosponsored by the Office of Net Assessment of the
Department of Defense, will be held on March 27-28, 2002 in the 6th floor
auditorium of the Woodrow Wilson International Center for Scholars located at
1300 Pennsylvania Avenue, NW in Washington, D.C.
The purpose of the conference is to examine how the United States developed
assessments and the mistakes that were made in these assessments of the
Russian economy. We hope to come away from the conference with some lessons
that will improve how assessments are made in the future.
Because of space constraints, attendance at the conference will be by
invitation only. To request an invitation, please complete the request form
following the conference agenda below and direct it to Mr. Joseph Dresen at
(202) 691-4247 (fax) or (dresenjo@wwic.si.edu).
While there is no charge for attending the conference, we regret that we
cannot support any travel or lodging expenses.
AGENDA
U.S. Assessments of the Soviet and Post-Soviet Russian Economy:
Lessons Learned and Not Learned
Day One:
8:30 Coffee and Registration
8:45 Introductory Remarks
9:00 to 11:00 Panel One:
"Revisiting the Estimates and Analyses of the Soviet Era"
Nikolai Petrakov, Market Economy Institute, RAS (confirmed)
Abraham Becker, RAND (confirmed)
Discussants:
Igor Birman, independent scholar (confirmed)
Robert Cambell, Indiana University (confirmed)
11:00 to 11:15 Break
11:15 to 12:30 Discussion
2:15 to 4:15 Panel Two:
"Assessments of Russian Reform Programs"
Mikhail Zadornov, Deputy, Russian State Duma (confirmed)
Mark Medish, Akin Gump (confirmed)
Discussants:
Peter Reddaway, George Washington University (confirmed)
Anders Aslund, Carnegie Endowment (confirmed)
4:15 to 4:30 Break
4:30 to 5:45 Discussion
Day Two:
8:30 to 9:00 Coffee
9:00 to 11:00 Panel Three:
"Understanding the Underlying Social Aspects of Soviet and Post-Soviet Russia"
Yuri Levada, The Russian Center for Public Opinion and Market Research
(confirmed)
Judyth Twigg, Virginia Commonwealth University (confirmed)
Discussants:
Arthur Miller, University of Iowa (confirmed)
Richard Dobson, Department of State (confirmed)
11:00 to 11:15 Break
11:15 to 12:30 Discussion
12:30 to 1:15 Keynote Address
The Hon. James Schlesinger, Chairman, MITRE Corporation, and Senior Advisor,
Lehman Brothers (confirmed)
Location:
6th Floor Auditorium
Woodrow Wilson International Center for Scholars
1300 Pennsylvania Ave., NW
Washington, DC
Directions to the Center and instructions for entering the building can be
found at (http://wwics.si.edu/FORTHCOM/septcal.htm).
Request for Conference Invitation:
Name:
Address:
Telephone:
Fax:
E-mail:
Please indicate which panels you are interested in attending:
Panel 1 ("Revisiting the Estimates and Analyses of the Soviet Era")
Yes ______ No ______
Panel 2 ("Assessments of Russian Reform Programs")
Yes ______ No ______
Panel 3 ("Understanding the Underlying Social Aspects of Soviet and
Post-Soviet Russia") and Keynote Address
Yes ______ No ______
*******
#11
Obituaries in the News
February 26, 2002
Robert Strausz-Hupe
NEWTOWN SQUARE, Pa. (AP) - Robert Strausz-Hupe, former U.S. ambassador to
Turkey, NATO, Belgium, Sweden and Sri Lanka, died Sunday of a stroke and
cardiovascular disease. He was 98.
Strausz-Hupe was also a professor of political science at the University of
Pennsylvania and founder of the Foreign Policy Research Institute and its
journal Orbis.
Born in Vienna, Strausz-Hupe saw firsthand the destruction caused by World
War I. He came to the United States in 1923 and served as an adviser on
foreign investment to financial institutions.
He began writing and lecturing to American audiences on ``the coming war''
after Nazi troops entered Vienna in 1938. He was invited to talk at the
University of Pennsylvania and later took a faculty position there.
Strausz-Hupe wrote several books on international affairs. His first major
work, ``Geopolitics: The Struggle for Space and Power,'' published just as
the United States entered World War II, became a best seller in its genre.
********
#12
Financial Times (UK)
26 February 2002
US, Russia set for uranium deal
By NANCY DUNNE
Agents for the US and Russia have negotiated new terms on a key arms
non-proliferation pact in a deal which appears highly favourable to the US
industry but which has aroused concerns within the sector.
Under the agreement, Russia would drop the price of downgraded atomic bomb
fuel retrieved from dismantled warheads. The deal would lower the Russian
price for low-enriched uranium from Dollars 90 dollars per separative work
unit (SWU) in 2002 by at least Dollars 20 a SWU, according to industry
sources. Shipments, delayed by the negotiations, could resume next month.
Spot prices are now Dollars 105 per SWU. A formula has been agreed under
which the Russian company would gain higher returns if US and world spot
prices rose.
The pact was initialled last Thursday - but has yet to be made public - by
officials from the US Enrichment Corporation (Usec), the privatised US
uranium enrichment company, and the Russian Atomic Energy Ministry and
Techsnabexport, a Russian company.
Usec is the US government's agent for the "megatons into megawatts" pact,
which provides for the sale of 500 tonnes of highly enriched uranium over
20 years. In the first seven years of the deal Russia has earned Dollars
2.5bn, US officials say.
Both governments must still sign the pact. Ron Witzel, a nuclear fuel
consultant with John Longenecker & Associates, said Russia might seek
better terms because of "the lack of responsiveness to changes in the
market". Furthermore, the deal would allow the Russian company to subsidise
the higher-cost operation of the lone US uranium enrichment plant in
Kentucky, operated by Usec.
Mr Witzel said such a subsidy was in direct contravention of the original
agreement signed in May 1993.
The terms of the agreement alarmed some nuclear industry representatives,
who are worried about the potential for high enriched uranium prices.
Richard Miller, a foreign policy analyst and nuclear industry specialist,
yesterday said there was also concern that the high profits to be earned
from the pact could encourage Usec to close its US uranium enrichment
facility. The US would then be dependent on foreign suppliers.
*******
#13
BBC
26 February, 2002, 10:51 GMT
Fringe benefits for Russia's poor
By Steve Rosenberg
Moscow correspondent
In a hairdressing salon on the edge of Moscow, Babushka Nina is hoping to
strike an unusual deal.
The 70-year-old pensioner digs deep into a carrier bag - and produces a
fistful of old hair.
The she starts trying to sell it.
"It's all top quality," she insists. "I never dyed it once."
The hair on offer includes a rather dusty 30-year-old pony tail.
By the time it has all been untangled, though, there is not much left of
Babushka Nina's ancient locks.
Just a few odd strands tied together with an elastic band.
It earns her less than a pound sterling. Still, every little helps.
Small pension
"My pension is small that any extra money comes in useful - even this small
amount," she says.
"Now, at least, I'll be able to treat myself to a packet of orange juice!"
Babuskha Nina is not alone. More and more Russians are trying to earn
themselves a little extra cash by selling their hair.
However, they are not always successful.
Olga, a hair buyer, says a man once tried to sell her horse hair.
"He claimed it was his wife's. When I asked him if his wife had four legs,
he stormed out!" she said.
The hair which is sold embarks on a secret rail journey west.
Hidden among clothes at the bottom of suitcases, it is smuggled across the
border into Ukraine and then driven to the town of Torez.
At a small factory, it is scrubbed with egg shampoo and then hung up to dry.
It's an unnerving sight - row upon row of scraggy ponytails dangling from a
washing line.
Yet these locks could soon be gracing the heads of pop stars and Hollywood
heroes - making those who trade in them rich beyond their wildest dreams.
For Pastor Sergei Bukhanets, from Torez Evangelical Church, it really is
raining pennies from heaven.
He has made a small fortune buying and selling hair from Russia.
He says it's God's will and now 200 of his parishioners have joined him in
the hair business.
Showing off his stockroom, he strokes his hair like a family pet.
"This is natural European hair, best quality in the world, soft and silky
and very expensive," he boasts.
"In west Europe people want to be beautiful and they buy wigs and
extensions and they pay a lot of money for this."
By the time his hair reaches the top salons in London or New York, it will
be worth its weight in gold.
A full head of Russian hair can cost up to £5,000 - the kind of money
Babushka Nina can only dream of.
******
#14
Washington Times
February 26, 2002
Cardinal rules of politics in Moscow
By Arnold Beichman
It was called the "Kulturkampf," the battle of civilizations in the
1870s, a battle which Otto von Bismarck, Prussia's and later Germany's Iron
Chancellor, waged against the Catholic Church and lost.
Bismarck didn't want any competition from another influential
organization, especially one claiming "papal infallibility," to compete
with him for votes in a united Germany. So he introduced laws that could
have crushed the church.
But there was strong opposition to his persecution and Bismarck was
enough of a statesman to know when to cut his losses which he did in 1879.
In fact, he began an attempt to win over the Catholic party to his side;
the Teutonic version of "can't lick 'em, join 'em."
Presently there is another "Kulturkampf" under way, this time in
Russia against the minuscule Catholic Church. But it is not the Putin
government that is prosecuting this war. It is the Russian Orthodox Church,
no longer, as it once was, a Soviet vassal dominated by the onetime
Politburo and KGB that appointed church patriarchs, bishops and priests and
made sure that the church toed the party line.
Both Presidents Yeltsin and Putin have shown the new Russia is
prepared to accept the legitimacy of other faiths including Islam, Judaism,
Buddhism. However, the Russian Orthodox Church is not that tolerant. Most
Russians, slightly more than half of 145 million population, are defined as
Orthodox. Russian Catholics? Perhaps 600,000, although Reuters quoted the
Vatican's estimate of 1.3 million practicing Catholics.
The thousand-year split between the Russian Orthodox and Catholic
churches, which Pope John Paul II, now 81, had hoped to heal in his
lifetime, seems unbridgeable. A papal emissary, Cardinal Walter Kasper, was
scheduled to come to Moscow ("the third Rome," as an Orthodox monk in the
Middle Ages pronounced it) on a peace mission. The senior cardinal is head
of the Vatican Council for the Unity of Christians. But the invitation was
rescinded two weeks ago by the Orthodox patriarch, Aleksy II, when the pope
approved a decision to create four dioceses in Russia. As the patriarch's
spokesman, according to the New York Times, explained in a mystifying
analogy on Russian TV:
"Our attitude towards this step is the same as the Catholics if we
were to appoint an alternative pope in Rome."
Vladimir Zhirinovsky, deputy speaker of the Russian Duma, joined the
Orthodox church dismissiveness arguing that "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."
Rescinding the invitation to Cardinal Kasper means an end to any hope
that Pope John Paul would be invited by the Orthodox Church to visit Russia
even though President Putin has put out a welcome mat for the pontiff. The
more tolerant formerly Soviet Ukraine welcomed the pope last June much to
the irritation of the Orthodox clergy.
The Russian church is fearful that any attempt to reorganize the
Catholic church in Russia means first, active missionary work by Catholic
priests among Orthodox believers. Second, were the pope to be an honored
guest, Russian Orthodox leaders might be asked to return Catholic Church
properties seized in the early days of the Bolshevik Revolution and, later,
by Josef Stalin and handed over to the understandably docile Russian
Orthodox church. V.I. Lenin is on record as having ordered public hanging
of priests in their vestments as a lesson to any possible priestly dissidents.
Part of creating a civil society is the establishment of religious
tolerance but that is a distant possibility in the new Russia.
Arnold Beichman, a Hoover Institution research fellow, is a columnist
for The Washington Times.
*******
#15
Russia careful on further oil cuts
MOSCOW, Feb 26 (Reuters) - Russia, whose decision to cut oil exports has
been vital to an OPEC-led plan to support world prices, said on Tuesday it
would be cautious about making any more reductions.
Russia, responding to pressure from OPEC, agreed to reduce its booming
exports in the first quarter of this year by five percent. The oil cartel
wants more of the same in the second quarter and is sending a top
delegation next week to Moscow to argue its case.
Finance Minister Alexei Kudrin said caution was the name of the game.
"The Russian government is very careful in its policy of limiting exports,"
he told businessmen and investors at a conference organised by the American
Chamber of Commerce.
"We will decide the extent to which a further export reduction is
sensible," he added.
Indicating the range of opinions within the government and oil companies,
he said that imposing any kind of limit on such a key industry as oil was a
bad thing, although energy-dependent Russia was also keen on preventing a
collapse in oil prices.
"We do not intend to enter OPEC and therefore we do not take part in tough
(restrictive) measures, but we would like to have our own kind of parachute
to get through crisis years," he said.
Russia is certain to come under pressure to extend the export cuts when
OPEC Secretary General Ali Rodriguez comes to Moscow for a March 3-5 visit.
But the government has to deal with various constraints, including problems
with a glut of oil on the domestic market which is hitting local producers,
as well as lobbying from influential presidential adviser Andrei Illarionov
to maximise exports.
Illarionov, whose advice to President Vladimir Putin generally gains a
listening but is not necessarily implemented, said last week Russia should
ship as much as possible as the economy had to reap the fruits of oil to
their fullest extent.
Kudrin, steering clear from such a strong line, said any decision would
include an examination of oil prices and domestic factors such as the
balance of payments.
Russia's five percent first quarter oil export reduction involves a cut of
150,000 barrels per day. Officials and oil companies have so far been very
careful in forecasting whether further reductions will be made. Industry
executives and the government are set to meet on the issue in March.
*******
#16
ANALYSIS-Russia faces dilemma over pace of rouble slide
By Andrius Vilkancas
MOSCOW, Feb 26 (Reuters) - As Russia's rouble slides towards new lows,
public debate is raging over whether to allow it to drop faster and force
the economy to be more competitive at the cost of more pain for ordinary
Russians.
On Tuesday, the currency edged nearer 31 to the dollar, hitting a weighted
average 30.8949 in official early trade, a drop of some 2.5 percent this
year in nominal terms. But sharp rises in inflation mean that in real terms
the currency has been appreciating.
For the central bank, defender of the Russian rouble, too rapid a decline
revives the nightmare of the 1998 financial crisis which savaged the
economy and dragged millions of Russians back into poverty.
It fears that if it lets it go, it will again be at the expense of ordinary
people, still haunted by rouble plunges of the past.
But proponents of a weaker currency argue if the rouble stays high, the
economy will be artifically protected and competitiveness further eroded.
"Now it is an issue of policy choice -- whether the government supports the
rouble and therefore supports consumption and people's incomes or keeps the
rouble weaker to stimulate production and competitiveness," said Yulia
Tseplayeva, an analyst with ING Barings.
"None of the choices are easy," she added .
OIL PRICE SLUMP BRAKED GROWTH
The Russian economy recovered strongly from near collapse in 1998, but
energy-dependent growth paused late last year after a slump in oil prices,
dragging exchange rate policy into the limelight.
President Vladimir Putin's economic adviser, Andrei Illarionov, said in a
nationally-broadcast television interview last week that with economic
growth sputtering it was crucial to halt rouble's real appreciation.
He estimated that the rouble had risen in real terms by almost 50 percent
over the past three years because of inflation and that has been eroding
competitiveness of the economy.
"Around three quarters of the competitive advantage which we got from the
rouble's (nominal) devaluation has been wasted," said Illarionov, widely
seen in Russia as an economic liberal.
In a clear swipe at the independent central bank, he said that the policies
of the past 18 months had kept the rouble too high.
"To get it back it to its natural situation it should obviously be slightly
devalued."
Officials at the Finance Ministry -- anxious to boost budget revenues --
have also stepped into the fray, pushing too for a rouble rate that weakens
more in line with rising inflation.
Inflation, which soared to three year highs in January and threatens to
exceed to government's target for the year of 12-14 percent.
But the central bank is unhappy with the public debate among officials over
the rouble, fearing that too fast a fall could trigger a repeat of the 1998
currency crises which brought the Russian economy to its knees.
"When finance ministry experts say the rouble rate should be lower...they
do not think how much they will have to pay for the currency, as if year
2003 does not exist," the Chief of the Bank of Russia Viktor Gerashchenko
told reporters recently.
DEBT SPIKE LOOMING NEXT YEAR
That year is when Russia's heavy foreign debt payments are due to spike,
though officials say they have managed to trim the figure by a few billion
dollars to around $16 billion.
But analytsts said that the rouble had a one-way ticket -- south -- with
prices on country's key export item oil stuck under $20 per barrel and the
central bank's wish to build its foreign currency reserves.
The central bank -- which regulates money supply entirely by intervention
rather than interest rates -- has suggested it would prefer to see around
$40-45 billion in its vaults. Reserves stood at $36.8 billion last week.
"It is clear that the central bank aims to increase its reserves which will
result in high demand for hard currency and will push the rouble lower,"
said Natalia Orlova, an analyst with Alfa Bank.
The budget already assumes an average rouble rate this year of 32 per
dollar and analysts said the central bank will have to choose whether to
let the rate fall further or forget about building up reserves.
"Basically they now have two options: first, to protect the rouble from
depreciation which actually will mean low levels of reserves; or increase
the reserves to their target of $40 billion and in this case the rouble
will fall to around the 34 level by the year end," Orlova said.
*******
Web page for CDI Russia Weekly:
http://www.cdi.org/russia
Archive for Johnson's Russia List:
http://www.cdi.org/russia/johnson
With support from the Carnegie Corporation of New York and
the MacArthur Foundation
A project of the Center for Defense Information (CDI)
1779 Massachusetts Ave. NW
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