Johnson's Russia List
#6104
28 February 2002
davidjohnson@erols.com
A CDI Project
www.cdi.org
[Note from David Johnson:
1. Reuters: U.S.-backed Chechen broadcasts put on hold.
2. RIA Novosti: COMMUNITY ACTIVISTS APPEAL TO PUTIN TO COMMEMORATE SERFDOM
ABOLITION ANNIVERSARY.
3. Interfax: Yeltsin receives liberal figure. (Nemtsov)
4. Reuters: U.S. discounts Russian fears on Georgia mission.
5. RIA Novosti: EMERGENCE OF AMERICAN SERVICEMEN IN GEORGIA MAY CAUSE
COMPLICATIONS IN RUSSIA-U.S. RELATIONS. (Arbatov)
6. Interfax: Duma likely to raise issue of recognizing Abkhazia's
independence -
Rogozin.
7. RIA Novosti: AMERICA'S WAR ON TERROR EXTENDS TO FORMER USSR.
8. BBC Monitoring: Russia and USA rumoured to have done deal over Georgia.
9. Nezavisimaya Gazeta: Ada Gorbacheva, They Can Rush into a Burning House,
but They Don't Want to Give Birth. Russian women continue crippling themselves
with abortions.
10. RIA Novosti: COMMUNISTS NOT TO COME BACK TO RUSSIAN TOP, SAY EXPERTS.
11. Andrew Yorke: re 6103-Latynina.
12. Dale Herspring: Klebanov.
13. Wall Street Journal: Therese Raphael, Power and Press Don't Mix.
14. Izvestiya: Igor Poroshin, Back in the USSR. ('Petty-Minded' Russian
Olympic
Protests Undo Diplomatic Gains)
15. RFE/RL: Michael Lelyveld, Caucasus: Will Russia's LUKoil Join The
Baku-Ceyhan Pipeline Project?
16. strana.ru: Russian Banks "Channel for Money Laundering." Loose control
lets hot money fly.]
*******
#1
INTERVIEW-U.S.-backed Chechen broadcasts put on hold
By Elaine Monaghan
WASHINGTON, Feb 27 (Reuters) - The head of U.S.-funded Radio Free
Europe/Radio Liberty said on Wednesday its board had agreed to put
Chechen-language broadcasts on hold following calls from the Bush
administration that clearly sought to avoid ruffling Russian feathers in the
aftermath of Sept. 11.
President Thomas Dine told Reuters in a telephone interview that the
broadcasting had fallen victim, for now, to "new complexities in the Russian
relationship," which has gained momentum from a shared interest in fighting
terrorism.
"I am concerned by the decision, but I understand the complexity of the
U.S.-Russian relationship," he said, of the bar on the broadcasting that
Congress mandated to start by Feb. 28 in order to provide unbiased coverage
of the region.
Moscow has been slammed for the scale of the bloodshed in the two conflicts
it has fought with independence-minded Chechens since the end of Soviet rule
and for failing to investigate alleged atrocities by its forces.
It has also been criticized for limiting access to Chechnya by reporters, a
policy it says is for their own protection.
Congress mandated the Chechen broadcasts in budget plans for 2001 and 2002 in
a bid to fill the gap in coverage.
President George W. Bush congratulated the station on its 50th anniversary in
May 2001, saying its reporters had helped win the Cold War and wishing them
success in years to come.
Now the Bush administration says it fears Chechen broadcasts would hurt its
ability to maintain dialogue with both the Russians and political
representatives from Chechnya.
READY TO GO
Dine said nine Czech-based reporters poised to start broadcasts in Chechen
and two other related regional languages on Thursday would cover their beats
for the Russian service instead. Russian is widely understood throughout the
region.
"I've asked our people in Prague just to keep working on things, and we're
not going out yet," he said.
"Yesterday my board, in consultation with the administration, asked me to
delay. The administration wants to deal with Congress on this, so I have to
wait."
A prominent Russian media analyst who asked not to be named said Moscow had
threatened to close RFE/RL's Russian office, fearing the Chechen broadcasts
would fuel separatism.
Apparently sensitive to such fears, Deputy Secretary of State Richard
Armitage requested a delay in December to the broadcasting board that
oversees RFE/RL.
"A perception that we have shifted our support to one side or the other would
hurt our ability to engage both sides further. These broadcasts would create
that perception," he wrote in the letter, a copy of which was obtained by
Reuters.
The Kremlin says the Chechen guerrillas are backed by Osama bin Laden. It
found a more willing ear in Washington on this point since bin Laden's
followers were accused of carrying out the Sept. 11 attacks on America.
Moscow clearly saw the campaign for Chechen broadcasts, led by Republican
Senator Jesse Helms of North Carolina, as an attempt to meddle through a
media outlet whose broadcasts it tried to block as U.S. propaganda in Soviet
days.
Armitage wrote that he appreciated the desire of Congress to provide
"unbiased" news coverage in the north Caucasus, but he said the
administration would discuss with Congress to delay or suspend the service.
RFE/RL broadcasts throughout Europe, the Caucasus, Central Asia and the
Middle East, and its claims 35 million listeners.
It says its mission is to boost democratic development and market economies
"in countries where peaceful evolution to civil societies is of vital
national interest to the U.S."
*******
#2
COMMUNITY ACTIVISTS APPEAL TO PUTIN TO COMMEMORATE SERFDOM ABOLITION
ANNIVERSARY
MOSCOW, February 27. /RIA Novosti/ - A group of political and cultural
activists appeal to Russia's President Vladimir Putin to make the serfdom
abolition anniversary a national day, and restore a Kremlin monument to
Emperor Alexander II.
February 19 of the Julian calendar, or March 3 according to the Gregorian,
when, in 1861, Alexander signed his "epoch-making manifesto which liberated
the peasantry from centuries-long slavery" deserves to be a red-letter day,
they say in an open letter to the federal President.
The new holiday will "give the nation another reason to look back at
undeservedly forgotten pages of history, and think why the Russian destiny
took particular turns".
"To celebrate the date means not merely to get a closer look at our past but
to take care of Russia's future because problems which made Alexander II
issue his manifesto have not been settled to this day--farmers have not yet
fully implemented their landholding right," the letter goes on.
It calls to restore the Kremlin statue of Alexander II. Money to erect it was
collected nationwide. Bolsheviks pulled down the monument in spring 1918,
points out the letter.
The document is being circulated by executive committee PR of the Union of
Right Forces. Among its signatories are Boris Nemtsov, Union leader; Leonid
Parfenov, anchor of Namedni (The Other Day), popular news review of the NTV
television company; Edward Radzinsky, known prosaist, playwright and
historical researcher; parliamentarian Alexander Fomin; and Theodore Shanin,
Rector of the Moscow-based Higher School of Social and Economic Sciences.
********
#3
Yeltsin receives liberal figure
MOSCOW. Feb 27 (Interfax) - The first Russian president, Boris Yeltsin,
received leader of the Union of Right Forces Boris Nemtsov at his country
home in Barvikha-3 near Moscow on Wednesday.
Nemtsov told Interfax that the meeting lasted for over two hours.
Yeltsin is "in perfect physical shape and absolutely in the know regarding
everything that is happening. I have not seen him like that for a long time,
for some 10 years," Nemtsov said.
On the subject of appointments and dismissals in the top echelons of power
Yeltsin said that the Kremlin "should surround itself not so much with loyal
people as professionals."
According to Nemtsov, Yeltsin favorably regarded his suggestion that the
Federation Council be elected by direct vote. "Not everyone should be
appointed from the Kremlin," Nemtsov quoted the former president as saying.
According to him, Yeltsin is very alarmed by the state of freedom of
speech in Russia. "I tolerated any criticism, and today it is difficult to
make even a justified remark aloud," Nemtsov quoted Yeltsin.
Regarding the Olympic Games in Salt Lake City, Yeltsin reportedly said
that "all the bureaucrats in sports who failed to protect our athletes should
be fired."
Nemtsov told Interfax that when they discussed the situation in right-wing
politics, Yeltsin told him to push ahead more boldly.
He said he presented Yeltsin with a bronze bust of Russian Emperor
Alexander II, saying that the bust of the liberator tsar should stand on
Yeltsin's desk. Yeltsin "appreciated my gift, saying that he understood what
I am implying," Nemtsov said.
********
#4
U.S. discounts Russian fears on Georgia mission
February 27, 2002
By Richard Balmforth
MOSCOW (Reuters) - Russia warned the United States, its ally in the
anti-terror alliance, against deploying troops in Georgia Wednesday, but a
U.S. diplomat played down hints of a rift over what Washington said was a
training mission.
In Georgia, senior U.S. army officers met Georgian officials and said
Washington would equip their armed forces to help defend the country's
borders. Officials have dismissed suggestions U.S. forces could take part
in joint military operations in the former Soviet republic.
Russian Foreign Minister Igor Ivanov was critical of reports that
Washington was poised to send elite forces to train Georgian troops and
suggested that Moscow had tried and failed to talk Washington out of its
planned move.
"We think it could further aggravate the situation in the region which is
difficult as it is," he said in televised remarks. "That is our position
and Washington is well aware of it."
Ivanov's quick reaction indicated the Kremlin was not prepared to accord
its former Cold War foe the same leeway in Georgia, a direct neighbor, as
it did for the campaign against Afghanistan in former Soviet Central Asia.
There was immediate speculation in Russia and elsewhere that U.S. troops in
Georgia would help its army root out Islamic rebels said to be entrenched
with Chechen separatists in the lawless and remote Pankisi Gorge.
U.S. DIPLOMATS DISCOUNT DIFFERENCES
But a senior U.S. diplomat said he did not believe Ivanov's remarks applied
to the planned American mission.
"I read (Ivanov's remarks) in part as an effort on the Russians' part to
draw a line under any notions of combat forces going in to actually do
military operations in Georgia," the diplomat told reporters on condition
of anonymity.
"So essentially he is ruling out something that we're not actually planning
to do." The mission, he added, was "about training the Georgian forces and
we'll be providing them some equipment."
In Washington, State Department spokesman Richard Boucher did not comment
on Ivanov's remarks but stressed there were no plans for a U.S. deployment
of combat troops to Georgia and that Russia had been kept informed of
Washington's plans.
"In doing this, we are working for the stability and the security of the
Caucasus. We believe that Georgia's ability to handle these types of
problems on its own is also in Russia's interest," Boucher said.
U.S. officials said Tuesday they were dispatching crack forces to Georgia,
a mountainous country that shares a long land border with Russia, to help
train troops there as part of its anti-terrorism campaign.
President Bush, speaking in North Carolina, said any aid to Georgia would
have to be formally requested and limited to military equipment and
technical advice. He said he believed rebels in the Pankisi Gorge were
linked to fugitive Osama bin Laden's al Qaeda network of Islamic extremists.
There was no immediate comment from President Vladimir Putin who, until
now, has given Bush full support in the anti-terror drive following the
Sept. 11 hijacked airliner attacks.
PUTIN WANTS MORE ACTION
But Putin told a meeting of his Security Council that the situation in
Chechnya, where Russia is fighting its second post-Soviet war against
rebels, had "stabilized considerably."
Russian forces, however, still had to "crush the leaders of armed groups,
the supply of weapons and financing by clans and the influx into Chechnya
of foreign mercenaries, including from adjacent areas."
Ivanov, for whom the U.S. plan represents a personal policy defeat, did not
say why Russia felt the U.S. presence would make the security situation in
Georgia worse.
He balanced his comments by saying the U.S. decision vindicated Russia's
charges that Georgia had become a hotbed of terrorism -- a reference to
Chechen separatist rebels.
Putin, risking unpopularity among military hawks, allowed U.S. troops to
use air bases and facilities in Uzbekistan, Tajikistan and Kyrgyzstan --
also regarded as strategically important for Moscow -- for operations in
Afghanistan.
But analysts said the historical and emotional bonds Russia has for the
Transcaucasus, which for more than 200 years has been a stamping ground for
Russian troops, played a big part.
The sudden dispute with Washington comes at an awkward time for Putin who
is to host Bush at a summit in Moscow and St Petersburg in late May.
*******
#5
EMERGENCE OF AMERICAN SERVICEMEN IN GEORGIA MAY CAUSE COMPLICATIONS IN
RUSSIA-U.S. RELATIONS
MOSCOW, February 27. /From a RIA Novosti correspondent/ -- Alexei Arbatov,
deputy chairman of the State Duma defense committee, believes that the
emergence of American servicemen in Georgia may provoke complications in
relations between Russia and the United States.
If the United States is going to cooperate with Moscow in the struggle
against international terrorism, other spheres, it "should hold consultations
on the placing of its troops and conduct of army operations near the Russian
borders", stressed the deputy. "More so that an interaction would lead to
greater efficiency", he added.
Behind a possible involvement of American servicemen in the antiterrorist
operation in the Pankisi gorge stands, in Alexei Arbatov's opinion, "above
all the desire of Georgia to have close links with the United States". For a
long time Tbilisi has been talking of its desire to join the North Atlantic
Treaty Organisation but, by virtue of certain reasons, it is not coming true,
even in a long perspective. Now one more reason has sprung up. The Russian
side, said Alexei Arbatov, has already declared its suspicions that Al-Qaeda
militants are hiding in Pankisi. "Since Georgia does not want to give Russia
an opportunity to eliminate the terrorists, the United States has got a
pretext to take the holding of an operation in its hands", stressed the Duma
deputy.
*******
#6
Duma likely to raise issue of recognizing Abkhazia's independence - Rogozin
MOSCOW. Feb 27 (Interfax) - If reports that U.S. military experts have
arrived in Georgia are confirmed, the Russian State Duma may raise the issue
of recognizing Abkhazia's independence, Chairman of the State Duma
International Affairs Committee Dmitri Rogozin told Interfax on Wednesday.
"Reports that U.S. military experts have arrived in Tbilisi need to be
looked into," Rogozin said, noting, however, that he had learned from German
colleagues that American servicemen arrived in Georgia on February 21 and 22
on board two planes from Stuttgart.
"Reports about U.S. servicemen's arrival in Georgia have raised a wave of
emotions among State Duma deputies in Moscow and in the regions, and many of
them have demanded an early convocation of the Committee for International
Affairs attended by government officials," Rogozin said.
"If U.S. experts have arrived in Georgia at the invitation of the Georgian
authorities and if the Russian leadership was not informed of this in
advance, the Duma may very well raise the issue of recognizing Abkhazia's
independence," he said.
"Georgia is falling apart before our very eyes," he continued. "The
arrival of American experts, or special forces - this is still to be checked
- is sure to anger both Russia and Abkhazia," he said.
In the wake of reports concerning American advisors in Georgia, the recent
suicide by Secretary of the Georgian Security Council Nugzar Sadzhaya looks
slightly different than it did, he said, adding that "as an upright person,
he may have taken this step aware what the outcome of the U.S. presence in
Georgia may be."
There is another interpretation of the tragedy - "he was helped in ending
his life, as his position on the issue was well known," Rogozin said.
*******
#7
AMERICA'S WAR ON TERROR EXTENDS TO FORMER USSR
MOSCOW, February 27, 2002. /Vladimir Semyonov, RIA Novosti Political
Observer/. - The US military have dropped a bomb in the global media by
acknowledging its presence in the former Soviet republic of Georgia. Their
mission, powers, and, last but not least, strength is not quite clear yet.
But the fact remains, the government in Tbilisi has confirmed it, and it has
both positive and negative implications for each of the three parties
involved - Russia, Georgia, and the United States.
The positive implication for Russia is that by the same token, Washington and
American media have acknowledged the presence of international terrorists in
the territory of Georgia. Now the link between Chechen separatists and
international terrorism has become apparent to the whole world, and further
criticism of Russia's actions in Chechnya from abroad will be both pointless
and misplaced.
However, Moscow certainly won't feel too well emotionally about foreign
military presence in another Commonwealth of Independent States member
country, and President Putin's policy of rapprochement with the West may come
in for some sharp criticism on the fringes of the domestic political scene.
It's important to bear in mind, however, that the deployment of the US
military in Georgia will do nothing to make the foreign policies of the
government of that country less Russia-friendly - they're already as
anti-Russia as can be.
By giving the green light to the US military presence, Georgian policymakers
must have sought to boost foreign aid. But a country that may or may not have
harbored bin Laden has got so much notoriety worldwide that no amount of
subsidies can repair it.
The US, by marching into Georgia, has gained a foothold in an exciting new
region, which is potentially crucial to transit of Caspian and Central Asian
energy resources. The construction of the Baku-Ceyhan pipeline, which is
generally believed to have been the ulterior motive behind the increasingly
heavy US involvement in Georgia, now becomes quite feasible. It is
noteworthy, though, that the economic viability of the project has always
been problematic in the past.
More importantly, America has made a bid to consolidate its hold on the
region in a country whose government can barely control much of its own
territory, and one which terrorist guerrilla bands can roam freely, often
aided and abetted by the authorities, as was the case of Chechen warlord
Gelayev. The point is, this consolidation may prove highly costly in both
financial and political terms.
At this point, the extension of the US war on terror into Georgia, a CIS
member state, looks like its involvement in the Philippines, monitoring,
advising, and inspiring behind the scenes.
The problem is that militarily, politically, and culturally, there is a world
of difference between Georgia and the Philippines.
The Philippines has for much of its history stuck with the US, even if it
meant being a client state to a regional powerhouse. More happily, the US and
the Philippines fought side by side against Japanese aggressors during WWII.
The US is home to millions of Filipino immigrants, and most urban Filipinos
are fluent English speakers. Georgia, too, has a rich history of being part
of an empire. However, it was a different empire.
In the Philippines, international terrorism and separatism are represented by
the same group of people in the south of the country. In Georgia, these two
factors are distinct. The US can help resolve the Pankisi problem, and it
will be important for Russia, Georgia, and the Caucasus as a whole. But the
prospect of US military advisors engaged in a war against Abkhazia or South
Ossetia - both breakaway regions within Georgia - is something unthinkable.
Georgia's immense problems can only be managed peacefully - and only Russia
can help there.
*******
#8
BBC Monitoring
Russia and USA rumoured to have done deal over Georgia
Source: Ren TV, Moscow, in Russian 1100 gmt 27 Feb 02
[0146] ["24" presenter Vyacheslav Dukhin] The main news story today is the
report by some media that American commandos are heading for Georgia or are
already there, who are allegedly going to combat terrorists and armed rebels
from the Al-Qa'idah grouping. Reports have appeared that the USA is opening a
new front in the fight against terrorism. Officials in Tbilisi [Georgian
capital] have hastened to refute this information. At the Georgian Defence
Ministry they stated that it was a visit by military experts, with whom
agreement will be reached on the training and preparation of a Georgian
subunit which will be involved in the fight against terrorist in the Pankisi
gorge.
[Correspondent Isa Goyzen] Will they let American commandos into the Pankisi
gorge or not? Officials in Georgia, Russia and the United States give evasive
answers. But it looks as if the issue has already been resolved. They will
let them.
[passage omitted: quote from New York Times on 200 commandos going to
Georgia. First Deputy State Security Minister Irakli Alasania says that there
are no foreign commandos in the Pankisi gorge and no relevant political
decisions have been taken.]
[Correspondent] But many politicians in Georgia are already commenting on the
possible deployment of American, and some sources say German, commandos. They
say that this is natural, the outcome of [Georgian President Eduard]
Shevardnadze's anti-Russian policy.
[Vakhtang Rcheylishvili, deputy speaker of the Georgian parliament]
Naturally, the Georgian leadership has become divorced from reality. It has
not properly assessed the role and significance of the Russian state on a
world wide scale, on a Euro-Asian scale, on a Caucasian scale, and has built
its policy on the incorrect premise that it can resolve its problems, provide
peace, stability and security for Georgia, without Russia.
[Correspondent] It looks as if it will not be Tbilisi that decides whether
Georgia should be friends with Russia or not. In an interview with Interfax a
Georgian expert, who wished to remain anonymous, says that some kind of
unofficial agreement exists between the USA and Russia: Russia is agreeing to
the Americans carrying out an operation against terrorists in the Pankisi
gorge, and in exchange it gets control of [the Georgian breakaway republics]
Abkhazia and South Ossetia. In Georgia it was not expected that events would
turn out like this, and now they are putting forward new initiatives.
[Rcheyshvili] We have to determine the steps we take precisely. Firstly, we
have to give Russia a guarantee that its troops in the Caucasus will not be
squeezed out because they are replaced by other foreign troops. That is, I
reiterate that , if we are going to move in a NATO direction, then that
movement should be in tune with Russia.
[Correspondent] American military advisers have already arrived in Tbilisi.
The deputy head of the presidential apparatus, Aleksey Volin, has said that
this news will be examined in detail at the CIS countries' defence ministers'
meeting in St Petersburg today [27 February]. The politicians are assuring us
that not a single American soldier will be in Georgia without the agreement
of Russia.
Asa Goyzman, RENTV.
[Video showed Georgian servicemen on duty, interviews with Georgian
officials, aerial views of mountain scenery.]
*******
#9
Nezavisimaya Gazeta
February 27, 2002
They Can Rush into a Burning House, but They Don't Want to Give Birth
Russian women continue crippling themselves with abortions
By Ada Gorbacheva
(therussianissues.com)
Russian women don't want to have children. Most families have only one or two
children. Many Russians prefer not to have kids at all. Despite the fact that
having small families is a common trend in all developed countries, Russia is
the absolute leader in this respect: its birthrate is nearly two and a half
times lower than in Europe. The 19th-century Russian poet Nikolai Nekrasov
described Russian women as brave and courageous, capable of doing anything
from stopping a galloping horse to entering a burning house. This
characteristic equally applies to contemporary Russian women. They can even
go to Chechnya to search for their missing sons, but in general they don't
want to give birth to children. Why is this?
A falling birth rate is one of Russia's troubles. The average life span is 10
or 14 times shorter than in Europe and the infant and maternity mortality
rate is 3-4 and 2.5-4 times higher than in other countries, respectively.
Europe is also concerned with a low birth rate and is trying to increase it
by paying allowances per each child and lowering taxes to future parents.
Germany, where the birth rate is as low as in Russia, pays the impressive sum
of 1,000 Euros to unmarried mothers for each child. We know that everything
is different in Russia. Russian Labor Minister Alexander Pochinok is very
proud that allowances paid to new mothers have been doubled. In real terms,
it means that single mothers will be paid, if at all, 140 rubles
[approximately $4.69] a month instead of 70.
The low birth and high mortality rates have led to a constant decrease in the
population since 1992. Demographers predict that the process will continue,
although they don't think that the worsening social and economic situation is
the only reason for the falling birth rate. Improved social and economic
conditions will not make Russian women give birth to more babies. The
birthrate in this country has been declining since the 1920s. If there is no
way to increase the birthrate, the mortality rate, among mothers and infants
in particular, can be reduced.
Everybody knows that children's health depends on their parents' health, the
course of pregnancy and the actual birth process. However, most pregnant
women have poor health. Only 30% of mothers-to-be go through normal labor,
while the figure stands at less than 20% in some regions.
Abortions have become another national drama for Russia. The low birthrate is
a scourge in all developed nations. However, they don't use abortions as the
main means for family planning. Most women in developed countries use
contraceptives to prevent unwanted pregnancy. There are 15 abortions for
every 85 deliveries in Germany. In Russia, seven out of ten pregnancies end
in abortion. One out of ten women under 19 has had an abortion. More than
2,000 teenagers under 14 have them every year.
Banning abortions will not increase the birthrate. That will only lead to a
growing number of illegal and criminal abortions, maiming women completely or
even causing death. The number of abandoned children will also grow.
With such a large variety of birth control pills, preventing pregnancy by
means other than an abortion does not seem to be a problem. It just couldn't
be simpler. Even the Russian Orthodox Church allows the use of
contraceptives. However, the number of women using contraceptives in Russia
is three times lower than in other European countries. Russia doesn't produce
modern hormonal contraceptives and foreign contraceptives are too expensive
for most women. Besides, far from all Russian women seem to know about
contemporary birth control methods, while nearly all women, including girls
under 14 years old, know about abortions. According to statistics, 1,269
young girls had abortions in 2000 (the figures for 2001 are not yet
available). Many of them came from well-to-do families and could afford
contraceptives, but simply did not know anything about them.
Russia is in urgent need of a sex education program. Of course, the best way
would be for teenagers not to have sex. Unfortunately, Russia keeps up with
Europe in this respect. In Europe, teenagers also have an sex early, but
unlike their Russian peers they know how to prevent unwanted pregnancies and,
consequently, abortions. Perhaps, all the previous Russian sex education
programs failed because they were not put together correctly. Perhaps, they
were tactlessly implemented by unqualified people. The first lessons on
sexual education in Swedish schools are held during religion classes where
children are taught to respect family and the opposite sex.
Russian teenagers become criminally responsible at the age of 14. However, no
one talks to them about responsibility for maternity or parenthood in a
broader sense. Russian teenagers just don't feel it.
*******
#10
COMMUNISTS NOT TO COME BACK TO RUSSIAN TOP, SAY EXPERTS
MOSCOW, February 27 /from RIA Novosti's Nikolai Makarov/ - A recent
parliamentary election brought Communists back to office in Moldova. The
sensation will certainly not repeat in Russia--at any rate, within a few next
years, experts concluded at a conference, Parties and Voters: The Latest
Trends, which gathered in Moscow today.
As opinion polls show, the Communist electorate never exceeds 30% of the
total franchised population, though the party goes at all lengths to build up
its popular support. The public rating of Gennadi Zyuganov, party leader, has
come down to 10-12%, said Alexei Makarkin of the Centre for Political
Technologies.
He expects Zyuganov to run in the nearest presidential race--and lose again.
Public confidence in the Communist Party is shrinking, announced Elena
Bashkirova, ROMIR research crew leader. A mere 6.5% of Muscovites intended to
vote communist--as against 27% preferences for the Centrist political party,
United Russia, says an opinion probe the ROMIR made this month.
*******
#11
From: Andrew Yorke
Date: Wed, 27 Feb 2002
Subject: re 6103-Latynina/Petersburgers Fail
As ever, Yulia Latynina provides a colourful account of business-state
relations.
But is it accurate? Certainly, it makes more interesting reading when Latynina
asserts that "nobody is interested in reducing taxes" or that Aleksei Miller
has
achieved as little as is humanly possible in his new post at Gazprom.
What a shame that the truth is rather more mundane, so Latyinina chooses to
shun
it. If nobody is interested in reducing taxes, then why has income tax
(both personal and corporate) been reduced? If Miller has been so ineffectual,
then why has Boris Fedorov, the champion of minority shareholders at Gazprom,
been making so many positive statements recently about Miller and the changes
that have already been introduced?
This is not nit-picking, it is a plea for more objective journalism. I for one
am tired of reading articles about Russia that don't let the facts get in
the way of a good story.
*******
#12
From: "Dale Herspring"
Subject: Klebanov
Date: Wed, 27 Feb 2002
I am not certain how far I want to carry things, but I would like to suggest
that Klebanov's demotion is not necessarily a negative action -- for him or
the defense sector. For some time, Putin has been trying to reorganize this
sector -- and it has not gone well so far. Not surprising given the
bureaucratic opposition that comes up every time any one tries to reform the
system.
Having said that, and realizing that two is not very significant from a
statistical standpoint, I think we should keep the following in mind. First,
Putin showed in the case of Sergei Ivanov his proclivity to appoint someone
in a high level position to take on institutions that are hard to deal with.
Second, the defense sector is high on Putin's list of priorities when it
comes to reform. He may be on the verge of getting the military to accept a
meaningful reform (we will know more after March 15), and it is clear that he
believes the military-industrial sector needs major overhaul.
My point -- as was noted in the Monitor on 27 February -- is that this could
end up making Klebanov stronger politically, and permit him to focus his
attention on a smaller, but critically important piece of the pie.
In short, I would not underestimate Putin when it comes to trying to get at
such hard to deal with institutional structures.
*******
#13
Wall Street Journal
February 27, 2002
LONDON LETTER
Power and Press Don't Mix
By THERESE RAPHAEL
There's nothing like having a mirror held up to you. And there's nobody
better at it than the Russians. They had a half-century of practice
deflecting Western sanctimony about human rights by pointing out all the
little warts on the face of Western civilization.
So the few American participants who were present at a recent conference on
press freedom in Moscow should not have been surprised when the tables were
abruptly turned. Taking their cue from Press Czar Mikhail Lesin, Russian
officials and occasionally sympathetic journalists pointed to the British
Broadcasting Corporation as proof of the merits of state-owned media. What's
wrong with Russia going that route?
Well, let's look at the route. Britain's media sphere as a model for Russia
is an interesting concept. It wasn't long ago that British officials, under
the 1911 Official Secrets Act, could face criminal penalties for leaking
official information if it was deemed damaging, or journalists could face
penalties for receiving the information. Nor was the BBC the model of
editorial independence some claim for it today.
The BBC began service in the 1920s as part of the general post office and
governed by a committee of politicians and civil servants. "In its early
days, the BBC had to fight against huge political resistance to be
independent from ministers and civil servants," says Ian Hargreaves, Director
of the Center for Journalism Studies at Cardiff University. "Ever since, it
has been in and out of trouble, especially in the 1980s when Margaret
Thatcher's ministers dubbed it the Biased Broadcasting Corporation." Now we
begin to understand what the Kremlin finds so appealing here.
Indeed, the 1990 Broadcasting Act, passed by the Thatcher government to try
to straighten out what was seen as a left-wing bias in the BBC -- requires
that all licensed broadcasters in the U.K. report the news with "due
impartiality." The BBC was accused of being soft on Moammar Quadaffi in Libya
and too close to neutral in the Falklands war. The Keith Vaz controversy last
year -- in which a Labour government minister dogged by allegations of
impropriety requested and was given breathing space by BBC journalists -- has
done nothing to dispel the notion that bias still creeps in.
That argument alone ought to be the end of discussion in Russia . The Kremlin
has a record of being hands-on -- or hand-cuffs on -- when it comes to media
companies it doesn't own, never mind just those it does. To a good many
Russian biznesmyen, and that includes the Kremlin as a major media and
industrial owner, the term passive shareholder sounds a lot like the
definition of a foreign investor. Indeed the idea that a quasi-democracy with
10 years experience under its belt, run by a former KGB chief, can make a
detached and impartial provider of public broadcasting isn't serious.
And yet the mirror doesn't lie all the time. The BBC may have a long
experience in public-service broadcasting. It may be one of the best brand
names in the business and operate in one of the world's most civilized
democratic societies. It may even be -- quite often is -- very good. Indeed,
its staff have traditionally exuded the pride and professionalism of the
French civil servant. But the concept of public ownership of the media has a
lot to answer for in today's multi-channel digital age.
The only real justification for state-owned media is to redress a market
failure, an argument that was made with some persuasiveness back in the
stone-age of broadcasting, just after World War II. Back then too, the BBC,
like a good auntie, gave you what was good for you -- programming that was
educational and entertaining; news reporting that was more public interest
than human interest.
Not only do we like a higher ratio of junk food-to-greens these days, today's
broadcasting world is a giant buffet rather than a fixed menu and no one has
to finish what Auntie serves up if it doesn't please. Today some 45% of
British households pay for multi-channel services; but within a few years, it
will be two-thirds.
To adjust to this reality, the BBC -- like American public broadcasters --
has had to satisfy popular tastes and change the menu so that it is in many
cases difficult to tell it apart from commercial television. Which raises the
question, what's the point? Especially since it is funded by a hefty
television tax to the tune of some 2.4 billion pounds a year ($3.4 billion).
Two years ago the BBC was promised an additional pounds 200 million to get
into digital broadcasting without even having to come up first with a plan
for how the money would be spent. The argument for this largesse was that the
BBC needed to move beyond the analogue age or it would be unable to compete.
And yet, the digital age is also the era of globalization and the BBC can no
more compete with the AOL Time Warners of the world than the National Health
Service can compete with the privately supplemented French health system.
When a playing field is made uneven by government ownership, a well-meaning
government is forced to use its regulatory levers to try to even it out a
bit, producing further distortions. In the name of ensuring that British
citizens had access to a diversity of sources of information and
entertainment, Britain developed a complex and overly burdensome regulatory
environment, including a law restricting anyone with a 20% or greater stake
in the national newspaper market from owning more than 20% of any terrestrial
broadcaster. These rules benefit the BBC by sheltering it from more
competition; but hurt everyone else. (These and other limits, notably on
foreign ownership, are another useful mirror held up by Russians.)
In this case, the distortion may finally be put right. The 20% rule has
frustrated Rupert Murdoch's attempts to break into terrestrial television in
Britain. The government's decision in the coming months on whether and by how
much to loosen the reins will no doubt be made with an eye on the potential
of Mr. Murdoch's mass circulation Sun tabloid and the influential Times of
London to impact the next election. Government naturally seeks to influence
the media where it can.
The BBC has had much to teach media professionals over the years. But its
successes should be seen as the exception that proves the rule that
state-owned broadcasting works at cross-purposes with a market-based
democracy. It is in the diversity of Britain's wider media that relevant
lessons for Russia might be found -- if the Kremlin were interested.
*******
#14
'Petty-Minded' Russian Olympic Protests Undo Diplomatic Gains
Izvestiya
26 February 2002
[translation for personal use only]
Article by Igor Poroshin: "Back in the USSR"
Hardly had the new generation of Russian
politicians managed to elevate sport to the rank of state policy than
along came Olympic disappointment, which suddenly illuminated the full
acuteness of the problems facing the country. And not just sports
problems. When setting serious political tasks, how can you avoid a
failure to carry them out? Where is the dividing line between plans and
pie in the sky? For what -- if we return to the Olympics once again --
is Russian officialdom really to blame, and what was predetermined by the
new world alignment in which we by no means have a front seat? Those are
questions which apply not only to the authorities. And perhaps not so
much to the authorities as to society as a whole. This means that we
cannot do without an open debate. Today Izvestiya is publishing a
polemical article by Igor Poroshin, which we are planning to discuss on
our www.izvestia.ru site, and we will definitely be returning to this
topic in the newspaper.
Salt Lake City -- For us these Olympics began with some bad news.
Just a day before the Olympic flame was lit there was a report that the
result of a dope test against Russian skier Natalya Baranova had come
back positive. And at the very first press conference journalists would
see the first unintelligible attempt by Russia's sports functionaries to
protect an athlete, they would hear the first unsubstantiated allegations
against competitors, they would hear the first lies. This would then
become the style of Russia's official press conferences. "Where is
Baranova now?" Viktor Mamatov, the head of the Russian delegation, was
asked. "She has left Salt Lake City," was the reply. Baranova spent all
of the two weeks in Salt Lake City, visiting friends. She was removed
from the Olympic Village at the decision of sports officials. To keep
her away from journalists.
When the massive pairs figure skating scandal broke, Russian officials
kept quiet, they grinned proudly, and when the dictaphones were switched
off they said that the Canadians were telling lies and that the
investigation into the figure skating judging was aimed at digging up
dirt. But they were soon to arm themselves with the Canadians'
experience.
The Olympics went on, medals were awarded to other people. Something
had to be done. And then the Russian officials began to continue what
the Canadians had started, began to emulate them. That emulation was
nasty.
The defense of the Canadian pair -- Sale and Pelletier -- whatever may
have been behind it, was brilliantly organized and followed all the rules
of a legal inquiry. Nobody assailed the world with accusations and
curses. The Canadians and a sympathetic America put forward arguments
and sought out the facts. There was a cast-iron legal basis for the
unprecedented decision to award a second gold medal to Sale and Pelletier
-- the admission by judge Le Gougne.
Russia decided to hit back at the Canadians -- but it came to nothing.
On the day of the repeat medal ceremony a very strange statement signed
by Lev Kofman, head of the Russian Freestyle Federation, was distributed
at the press center. It was not exactly a protest but a statement, a
piece of paper with letters that in terms of its quality carried no more
weight than the angry comments of a fan in the visitors book on some
Internet site -- Kofman complained that the judges had given the bronze
medal to a Canadian rather than to Olga Koroleva, and he asked for the
principles behind the constitution of judging teams and the principles
underlying the judging itself to be reexamined. Kofman is a professional
in his area, he would not think of issuing statements. He was telephoned
by Russian National Olympic Committee President Leonid Tyagachev, who had
been watching the events on TV, and was told: "Lodge a protest."
The Olympics continued, we failed to get "our" reward. Four days
before the games ended, Germany, Norway, and the United States -- our
main rivals in the medals race -- were so far ahead that Russia was no
longer able to catch them even if we had had the most successful of
finishes.
When storm clouds gather there is going to be a storm. If we lose out
in sport, expect to be told the name of the enemy who has brought this
defeat about. There was nothing mystical about expecting the time to
come when clear-sighted people would discover the specter of an
anti-Russian plot.
That specter was aroused Thursday morning [21 February], when we lost
the most anticipated, most predicted gold -- the Russian female
cross-country ski team was disqualified from the relay when the
hemoglobin in Larisa Lazutina's blood was found to be above the permitted
level. A few hours after this news was announced all the top leaders of
Russian sport -- National Olympic Committee President Leonid Tyagachev;
Pavel Rozhkov, chairman of the Russian Federation State Committee for
Physical Culture and Sports; International Olympic Committee Vice
President Vitaliy Smirnov; Viktor Mamatov, head of the Russian delegation
at Salt Lake City; and Anatoliy Akentyev, president of the Russian Skiing
Federation -- appeared in the main conference hall. For some unknown
reason deputy and polar explorer Artur Chilingarov was also seated around
the table. I later had to spend a long time trying to explain to a
foreign colleague who he was. But I could not answer the question of why
he had attended the press conference.
Having said that, there was little clarity in the introductory remarks
from the head of the Russian National Olympic Committee. It is quite
impossible to quote directly here from what he said. When put down on
paper, his speech disintegrates into elements that have no syntactic or
semantic connection with each other. Having said that, it is possible
that the president of the Olympic Committee was very upset.
Tyagachev talked about the extreme injustice that had been shown
toward Russian athletes in Salt Lake City. As proof he cited what he saw
as four incontestable pieces of evidence of the existence of an
anti-Russian plot. The decision to award a second gold medal to the
Canadians in the figure skating, the judges' verdict in the freestyle
aerials competition, the disqualification of the Russian team from the
ski relay, and -- quite unexpectedly -- the umpiring in the quarter-final
hockey tournament match between Russia and the Czech Republic.
Unexpectedly because after the match none of the participants said a word
about the umpiring. It might be thought that Tyagachev had been watching
a different game entirely. That follows from what he said -- "We were a
man down throughout the second period." In the second period the Russian
team was a man down for four minutes. That is one-fifth of the period.
Nobody has taken the gold medal away from Berezhnaya and Sikharulidze.
I feel terribly sorry for our women's ski team. But none of the press
conference participants explained just who had broken the rules in
respect of our people and in what way. Absolutely all the teams went
through the blood hemoglobin test. It was Lazutina who was picked.
Lazutina failed the test.
Tyagachev's argument disintegrates and does not stand up. And then,
who drew up that argument, who has an interest in undermining the might
of Russian sports -- Norway, Germany, or the United States, whose teams
have moved out of our reach at the end of the 10 days of the Games? Or
is Austria encroaching upon us in an attempt to overtake great Russia at
least in terms of its medals total? Or is all this just a trick played
by a poor magician who wants to cover up the real reasons for our
failures at Salt Lake City behind talk of an anti-Russian plot?
I asked Tyagachev about this and, instead of an answer, received a
question in reply:
[Tyagachev] What country are you from?
[Poroshin] From Russia, not the Soviet Union.
[Tyagachev] Then hand the microphone over to somebody else instead.
I don't want you attending these press conferences any more. [Tyagachev
ends]
Attempts were then made to prevent the journalists from speaking. The
people seated around the table spoke in turns. Tyagachev stated that if,
explanations were not received from International Olympic Committee
President Jacques Rogge within 24 hours, the Russian team would leave
Salt Lake City. Rozhkov used the phrase "alternative games." Smirnov
said that never in his life had he seen the kind of umpiring there had
been in the Russia-Czech Republic match -- people may find it surprising
how little Vitaliy Georgiyevich has seen in his 20 years of running the
Russian National Olympic Committee. The polar explorer Chilingarov
loudly called everything that had happened "unprecedented disrespect,"
and called for the ski relay to be rerun Saturday -- which finally made
the meeting smack of a bar-room discussion of a sports event.
The press conference proved to be just about as successful -- not a
single protest by the Russian delegation was upheld, because they were
all formulated on the principle that "we are unhappy we lost." Here is
an extract from the protest about the judging in the ladies singles
figure skating signed by Valentin Piseyev, president of the Russian
Figure Skating Federation: "Slutskaya was undoubtedly the best in the
short program, but was placed second." Piseyev also has a good knowledge
of figure skating, he said that there was no point in lodging a protest,
that the judges had made their decision, but Tyagachev insisted.
For this alone the Canadian pair will remain in the memory of most of
the world as heroes who sought justice and got it. Whereas we will be
remembered as scandalmongers and petty-minded people. Take the following
phrase from the Los Angeles Times about the hockey semi-final between
Russia and the United States: "Each time a Russian player headed for the
sin bin, we wondered with our hearts in our mouths whether the Russians
would lodge a protest after the match."
At the Olympics we have appeared to be the very caricature of the
Russian bear. We have given him a manicure. He has no claws. He is
only able to roar. Nobody knows what he is roaring about. And it is not
a matter of translating it into English, it is unclear even in Russian.
Since almost none of the 400 journalists attending the press conference
understood what the Russian sports officials were saying, each of them
was free to interpret what happened in their own way. Some, like the New
York Times, jokingly recalled Nikita Khrushchev's shoe, while others did
not see the funny side at all.
It is striking, but in the space of an hour a group of dreary
tongue-tied comrades virtually nullified everything that had been
achieved by Russian diplomacy over the past two years. Putin was not
applauded by the Bundestag. He did not visit Bush's ranch. We will now
have to show the whole world that we are not bears. We will have to go
to the ranch again.
On the last day of the Olympics we lost out definitively and
irrevocably. Larisa Lazutina and Olga Danilova were disqualified for
doping following the 30 km race. Once again there was a press
conference, once again it was the same old faces. Once again the same
things were said, but without any passion, without any aggression,
without cursing the world.
This campaign has been lost. This group is unlikely to ever assemble
again in the same form. We hope that they will be replaced by relaxed,
educated, and smiling people of the Foreign Ministry school who are able
to explain things in at least two languages -- Russian and English; who
are able to base their defense of our athletes (and athletes need to be
defended even if they are guilty 100 times over) using their knowledge of
the law rather than the language of old Pravda editorials. They will
have a development strategy and a strategy for fighting for Russia's
rightful place in the world sports movement.
This new sports elite will have to set very many things right, it will
have to change the world's mind about very many things. It is hard to
recall a time in recent years when our country has struck the world as so
unsympathetic. Probably this was the case back when it was known by a
different name -- the Soviet Union.
*******
#15
Caucasus: Will Russia's LUKoil Join The Baku-Ceyhan Pipeline Project?
By Michael Lelyveld
While Russia's LUKoil prepares to take a stake in the Baku-Ceyhan pipeline in
March, the Russian government has yet to give its public approval for the
deal. Moscow may have tacitly allowed negotiations to go ahead, but some
officials are making it clear that they still oppose the move.
Boston, 27 February 2002 (RFE/RL) -- Even with a deal in the works, Russia
continues to send mixed signals about whether it will join in sponsoring the
Baku-Ceyhan pipeline, raising questions about Moscow's strategy for the
U.S.-backed project.
Russian support for the pipeline from Azerbaijan's Caspian oil fields through
Georgia to Turkey's Mediterranean port of Ceyhan would mark a major turning
point in cooperation between the two powers.
So far, there has been no official word from the Russian government about
whether it will approve participation of Russian oil companies in the $2.75
billion project, which is due to start construction in June.
As the weeks pass and the deadline approaches, Moscow's silence may soon be
taken for acquiescence that Russian companies are free to pursue their
interests in a plan that it once fiercely opposed.
Talks with at least one Russian company appear to be in final stages. The
president of Azerbaijan's state oil company SOCAR, Natik Aliev, said that
LUKoil is likely to sign an agreement for a share in the pipeline in March.
The Interfax news agency quoted Aliev as saying, "We are satisfied with the
pace of negotiations with Lukoil for the company to join the sponsorship
group for the project to build the export pipeline."
On 25 February, the head of LUKoil operations in Azerbaijan, Fikrat Aliev,
confirmed that Russia's largest oil company plans to buy a share of 7.5-8
percent of the project from SOCAR, the Turan news agency said. LUKoil's
president, Vagit Alekperov, spoke in similar terms in January.
But the latest statement from a Russian government official still leaves room
for uncertainty. Speaking recently in Moscow, Russia's Caspian envoy, Deputy
Foreign Minister Viktor Kalyuzhny, said that he "personally, as a Russian
citizen, is against the construction of this pipeline," according to Interfax.
On the one hand, the wording might mean that although the government has
given its tacit assent, Kalyuzhny continues to oppose the pipeline as a
private matter. It might also mean that the decision has yet to be made, and
Kalyuzhny is arguing against it in the public interest.
Although the official position is unclear, Kalyuzhny seemed to leave no doubt
where he stands on the question of any non-Russian development in the region.
Interfax quoted him as saying, "The Caspian belongs to the Russian market."
Such sentiments were widespread when Azerbaijan announced its first offshore
development with foreign partners in 1994, but they have slowly faded with
the recognition that CIS nations have the right to pursue their own course.
Similarly, LUKoil has been careful to stress in the past that it would only
join the Baku-Ceyhan project with approval from the government, which owns
15.5 percent of its shares. But in recent weeks, that cautionary note has
also gradually vanished from reports on the talks.
Even so, Kalyuzhny's comment on Russian control of the Caspian may be a sign
of the fallout that President Vladimir Putin will face if he formally
announces support for Baku-Ceyhan. The political resistance may account for
the long lag in acknowledging that negotiations are well under way.
More curious is the resistance to the project on economic grounds. Since last
year, Kalyuzhny and other Russian officials have argued that Baku-Ceyhan is
not "economically viable," instead of attacking it for political reasons.
The concerns include questions about whether the pipeline will attract enough
oil to fill its capacity of 1 million barrels per day. Some of the arguments
are self-fulfilling, in light of the fact that Russia can influence transport
decisions, both with its own oil companies and those of neighboring
Kazakhstan.
In December, LUKoil said a new study by Britain's BP oil company had found
that the pipeline's profitability would be 24-24.5 percent, a margin that
might be more than enough to silence the official critics. BP is the operator
of the project and leader of the sponsorship group. Yet, the questions have
not only come from officials.
Two weeks ago, the chief executive of Russia's second-biggest oil company,
Yukos, sent his own mixed message on the pipeline project. Mikhail
Khodorkovskii told the Reuters news agency: "Personally, I am for the
Baku-Ceyhan pipeline. In recent times, the Russian government has looked
somewhat more favorably on this project." Yukos has reportedly been
considering a 12.5 percent stake in the project.
But Khodorkovskii added, "I am not convinced of the economic soundness of the
Baku-Ceyhan pipeline." In other words, unlike Kalyuzhny, Khodorkovskii favors
the route personally and politically. But he has the same doubts about the
economics. This appears to be where logic breaks down.
Despite the repeated questioning about economic viability, there is a more
basic question that has yet to be addressed. Why would BP invest in a project
if it was not economically viable? For that matter, why would LUKoil, or
Yukos, or any oil company?
Khodorkovskii's public doubt about the economics could be nothing more than a
bargaining tactic, or it may be a way to please officials like Kalyuzhny. But
either way, the arguments about politics and economics will have to be
settled in the next three months.
*******
#16
strana.ru
February 26, 2002
Russian Banks "Channel for Money Laundering"
Loose control lets hot money fly
Scandals blight nation's economic development, says World Bank official.
A top World Bank official in Moscow has pointed to Russia's ill-famed banking
system as a conduit for illegal money going through the laundering process in
foreign financial institutions.
The charge was laid in an exclusive interview with the Strana.Ru website by
World Bank Chief Economist in Russia Christof Ruehl.
His warning was delivered to website correspondent Galina Bazina on the eve
of an international conference convening in London to discuss the global
problem of money laundering.
It came as officials from the Russian Central Bank, the State Duma, and
organized-crime fighters from Ukraine prepared to meet international police,
customs, and banking authorities' delegates now discussing the challenge of
stopping hot money reaching the capitals of Britain and other nations.
In frank replies, Ruehl focused on whether banking and professional secrets
were now things of the past, on new Russian legislation to fight money
laundering, and on action that commercial banks could take to halt the flow
of ill-gotten gains.
His most telling observation looked squarely at what has long been damned as
the most ungoverned and scandal-hit sector of Russia's financial community.
Responding to the observation that the absence of a well-governed banking
system in Russia would not support the transfer of illegal funds, Ruehl took
the opposite view. "Money laundering easily becomes a problem if the
financial sector and banking regulation is weak, and the authorities have
difficulties in enforcing it," the official said.
"This is the case in Russia, with its multitude of banks and with relatively
little experience in regulating modern payment systems."
But Russian banks were not the only culprits, he said. "A large number of
banks in this country have links with institutions abroad, and are tied into
the international payment and transfer systems. They can thus easily be used
as entry points for illegitimate transfers."
Accounts open to scrutiny did not mean an end to banking confidentiality, he
insisted. "Ideally, a convergence of laws and regulations across countries is
required to protect privacy to the extent required, while at the same time,
ensuring that an internationally agreed-upon amount of information disclosure
takes place.
"If national laws call for registration of names of people depositing or
withdrawing certain large payments in cash in a European Union country, then
this national legislation will make sense only if it is extended to
neighboring countries.
"A short trip over the border, which in this European Union example would not
even involve crossing a marked border, solves the problem for those with
criminal intent."
Scandals involving Russia channeling suspect money blighted the nation's
economic development, Ruehl said. "Financial systems by their nature are
fragile creatures. Any potential abuse of such a fragile system will hamper
its normal functioning. Creating instability and blocking the smooth and
efficient functioning of a banking system is even more of a danger when the
system is just in the process of being rebuilt, and in need of functioning
calm and uninterrupted to rebuild the trust which has been lost."
"This is why the Russian financial sector, just like any another, is much
better off without news of financial irregularities," the official said.
Commercial banks in Russia could take three steps to help control the
problem, Ruehl added. Using international accounting standards would generate
transparent operations allowing the banks themselves, their shareholders and
the regulatory authorities to see what was going on.
It would be "natural" for banks to insist that international regulations
"were unified to the highest extent possible."
"This is in a bank's own interests in order to avoid loosing customers to
places with different and perhaps less stringent requirements," Ruehl went on.
Banks also had to be willing to cooperate with the authorities, he said,
coupled with "the authorities' ability to engage in effective and discrete
intervention where required."
The official's warnings reflected another caution, delivered in Moscow
Tuesday by a senior executive of accountants Ernst & Young. In a publication
given to delegates of an American Chamber of Commerce conference, partner
Barry Eden wrote that while Russian companies and banks could not be charged
with sponsoring terrorists, "Russia's financial system is thought to be used
to launder large amounts of money generated by bribery, drug cartels, and
illegal international arms trading."
As American, British and West European financial institutions saw the soaring
cost of meeting a round of anti-laundering initiatives after the terror
attacks on New York, "they are sure to shift some of the burden onto their
Russian correspondent banks," Eden observed.
"For that reason, it is now becoming essential for Russian banks and
corporate treasuries to understand how international anti-money laundering
regulation works, and how it is going to impact their business as early as
spring 2002."
Organizers of London's Stop Money Laundering conference this week say it is
estimated that between $US 300 billion and $US 500 billion in proceeds from
serious crime is laundered each year.
"Measures in major financial markets to detect and prosecute laundering are
driving it toward less-developed markets linked to the global financial
system," a briefing paper said. Emerging markets opening their economies and
financial sectors would become "increasingly viable targets" for money
laundering activity, delegates were told. If left unchecked, the process
"could criminalize the financial system and undermine development efforts."
There was evidence "of increasing cross-border cash shipments to markets with
loose arrangements for detecting and recording the placement of cash in the
financial system, and of growing investment by organized crime groups in real
estate and businesses in emerging markets," the document 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
Washington DC 20036