Johnson's Russia List
#6112
4 March 2002
davidjohnson@erols.com
A CDI Project
www.cdi.org

[Note from David Johnson:
  1. AP: OPEC Delegation Visits Russia.
  2. Christian Science Monitor: Fred Weir, A war on Russian literature, one
book at a time.
  3. The Weekly Standard: Leon Aron, Putin's Progress. Russia joins the West.
  4. Moscow Times: Torrey Clark, Experts' Independence: A Question of Trust.
  5. New York Times: Michael Wines, Russia's Latest Export: Bad Jokes About
U.S. Chickens.
  6. The Russia Journal: Ira Straus, Russia begins fight against Radio Free
Europe’s 
Chechen-language broadcasts.
  7. National Review OnLine: Deroy Murdock, Russians Do Taxes Right. The
flat tax, Russian 
style.
  8. Christian Science Monitor: Robert Bruce Ware, Why American troops are
needed in 
Georgia.
  9. Christian Science Monitor: Fred Weir, US antiterrorist aid to Tbilisi
rankles
Russians.]

*******

#1
OPEC Delegation Visits Russia
March 3, 2002
  
MOSCOW (AP) - OPEC's secretary general arrived in Moscow on Sunday to try
to persuade Russia - the world's second-biggest oil producer - to keep
output reined in to ensure that global oil prices don't resume their
downward plunge. 

Ali Rodriguez, leading an OPEC delegation, was expected to meet Monday with
Prime Minister Mikhail Kasyanov, Energy Minister Igor Yusufov and Deputy
Foreign Minister Viktor Kalyuzhny, who is instrumental in Russian energy
decisions. 

Alarmed by a slide in oil prices, the Organization of Petroleum Exporting
Countries trimmed its collective production by 1.5 million barrels a day
starting in January. Russia, under heavy OPEC pressure, agreed to cut
exports by 150,000 barrels a day during the first quarter of 2002. 

Rodriguez said he was ``hopeful'' that Russia would keep production low in
the year's second quarter, but declined to elaborate. 

Russia relies heavily on revenues from oil exports and has been evasive
about whether it will maintain limited export levels in the second quarter.
Finance Minister Alexei Kudrin has said only that Russia would consider
global demand for oil, which is expected to be lower in the second quarter,
when deciding on future export levels. 

Rodriguez said last week that OPEC is unlikely to adjust production in its
March 15 meeting and said he expects oil prices to remain at current levels
through the first half of the year. Oil prices have rallied recently amid
expectations of a decline in crude oil inventories. 

OPEC in the past has accused Russia of using the cartel's production cuts
to increase its own market share. 

Russia's vibrant young oil majors have been ramping up production in recent
years, which combined with high world oil prices drove the country's
economic growth for the past two years. 

Russia's oil industry produced 102 billion gallons last year, up 7.6
percent from the year before, according to government statistics. Of that,
47.5 billion gallons were exported, up 11.8 percent from 2000. 

Russian companies are now faced with the choice between cutting exports or
boosting them and risking flooding the global market, driving prices down
and spoiling their own business plans. 

On the Net: 
http://www.opec.org 

*******

#2
Christian Science Monitor
4 March 2002
A war on Russian literature, one book at a time
A book-exchange program that encourages readers to trade in certain books
for more 'patriotic' ones reminds some of Soviet times.
By Fred Weir | Special to The Christian Science Monitor 

MOSCOW - From the street corners here, a group of activists is waging a
battle against what they say are the pernicious effects of modern literature. 

"Democracy doesn't mean the open sale of books with foul language, indecent
thoughts about one's country, or pornography," says Vasily Yakimenkov, the
founder of the group, called Moving Together. "True democracy is when a
person can bring in a bad book and exchange it for a good one. That's what
we're doing."
 
While the Kremlin insists it has no connection to the group, Mr. Yakimenko
is a former member of President Vladimir Putin's staff, and one of the
goals of Moving Together, founded last year, has been to build political
support for Mr. Putin among Russia's notoriously apathetic youth.

Well-funded and pro-Kremlin, Moving Together claims a membership of 50,000.
The book campaign, launched earlier this month, aims to persuade people to
hand over their books from a list of targeted authors - and receive in
return a volume by approved "patriotic" writers.

Critics say the operation amounts to old-fashioned book-burning, despite
the voluntary facade. "This is fascism lite," says Viktor Yerofeyev, one of
the modern authors under attack. "I'm sure these are good kids who want to
do something useful for their country, but who gave them the right to
impose cultural standards? I'm really worried about where this is going next."

Yakimenko says the exchange is just an "educational exercise" to help young
people think about the destructive spiritual effects of dark and
pessimistic psychological novels, erotic literature, Marxism, and detective
fiction.

Thousands of people have already turned in their old books at street posts
manned by the group's activists in a dozen Russian cities, he says.

Among the targeted authors is Viktor Pelevin, a Russian Booker Prize-winner
whose widely acclaimed "Generation P" is a dark, philosophical exploration
of the post-Soviet Russian soul. Mr. Yerofeyev, whose psychological
thrillers have been translated into 30 languages, was slammed as a
"pornographer" by Yakimenko during a recent TV debate - because he often
spices his gritty prose with obscene words. Polina Dashkova, regarded by
many as Russia's best writer of detective mysteries, is also on the list,
as is Karl Marx, the intellectual founder of communism. Presumably because
he was a patriotic Russian, Bolshevik leader Vladimir Lenin is not.

The volume being offered in exchange, printed in 10,000 copies by Moving
Together, includes stories by such classical Russian writers as Anton
Chekhov and Soviet-era war novelist Boris Vasilyev.

The books collected in the campaign will not be burned, the organizers
insist, but eventually will be returned to the authors. The 100 or so
copies of Marx's works collected by late February will be sent to the
German city of Chemnitz, formerly known as Karl Marx Stadt. "Let the people
who wrote these books think over why people are asking for them to be
returned," says Yakimenko. "We hope this will gently influence the course
of Russian literature for the better."

If nothing else, the controversy serves as a window into the perplexing and
often contradictory politics of the Putin era. The tough-talking former KGB
agent who came to power two years ago pledged to enact sweeping liberal
reforms - by authoritarian methods if necessary.

Experts say the Kremlin was behind the founding of Moving Together -
Yakimenko was a presidential staff functionary - until just before the
group was founded as a way to mobilize youth support. Before launching its
campaign to prune back Russian literature, the group organized a big
pro-Putin rally in Red Square and later sent out hundreds of youth to clean
the streets.

"We are worried about the state of our country and its social health," says
Konstantin Lebedev, the movement's spokesman. "We choose our actions to
address the problems we see. And the response from the people has been very
warm, very grateful."

But the specter of regimented youth marching in "good causes" reminds some
of the Soviet Young Communist League. And the anti-intellectual overtones
of the book program strike many Russian ears as echoes of Stalinism.

"Not so long ago, artists in this country quaked in their shoes when a
Communist leader said he couldn't understand their work," says Nadezhda
Shapiro, a literature teacher in the Moscow public-school system. "When I
see this idiotic campaign unfolding today, I don't know whether to laugh or
to cry. I hope it does not reflect the mentality of today's leaders. This
possibility is the only aspect of the whole business that scares me."

******

#3
The Weekly Standard
March 11, 2002
Putin's Progress 
Russia joins the West 
By Leon Aron 
Leon Aron is resident scholar and director of Russian studies at the
American Enterprise Institute. 

PRIOR TO September 11, 2001, few would have predicted that Russia would
back the United States so firmly in its response to the terrorist attacks.
Now, after a remarkable show of solidarity and even crucial assistance to
Washington and its allies, the question remains, why did Russia do it? Were
its moves tactical, their effect destined to be short-lived? Or were they
evidence of a deeper transformation of the U.S.-Russia relationship? Might
they actually mean that the other nuclear superpower is moving toward not
just occasional cooperation, but durable partnership with the West, perhaps
even someday an alliance? Before attempting to tackle questions so
fundamental to U.S. national security policy, let us recall what Russia did
after the terrorist attacks: 

SEPTEMBER 11. President Vladimir Putin was the first foreign leader to
reach President George W. Bush on Air Force One. In addition, in a
nationally televised statement to the American people, Putin called the
attacks "a brazen challenge to the whole of humanity, at least to civilized
humanity." He told Americans, "We are with you, we entirely and fully share
and experience your pain. We support you." Further, Russia responded to the
heightened state of alert of the U.S. armed forces by standing down its
troops and canceling scheduled strategic bomber and missile exercises. 

Within hours of the news from America, Russians began to take flowers,
icons, burning candles, handwritten notes, and stuffed animals to the U.S.
embassy on Novinsky Boulevard in Moscow and to the U.S. consulates in St.
Petersburg and Ekaterinburg. This would continue for days. 

SEPTEMBER 12. Putin phoned Bush again to discuss cooperation against
terrorism. The Central Blood Transfusion Station in Moscow announced a
blood drive for the victims in the United States. The station was flooded
with volunteer donors, as were the Russian Red Cross and the Ministry for
Emergency Situations. 

SEPTEMBER 13. By presidential decree, a national minute of silence at noon
commemorated "the victims of the tragedy in the United States." Flags flew
at half-mast, and television programs were interrupted with images from the
World Trade Center and the Pentagon. 

At Russia's instigation, the NATO-Russia Permanent Joint Council condemned
the attacks in the strongest terms and pledged an "intensification" of
cooperation "to fight the scourge of terrorism." 

SEPTEMBER 22. With Russia's blessing, two C-130 U.S. military cargo planes
and 100 U.S. military personnel arrived at an airbase near Tashkent,
capital of Uzbekistan. 

SEPTEMBER 24. In a televised address to his nation, Putin announced that
Russia had agreed to overflights by American and allied planes and to their
use of former Soviet airbases in the Central Asian nations and had shared
intelligence about the "infrastructure, locations, and training facilities
of international terrorists." 

SEPTEMBER 25. Defense Minister Sergei Ivanov announced that U.S. troops
could use military facilities in Tajikistan to launch strikes into
Afghanistan. 

OCTOBER 3. More than 1,000 troops of the U.S. Army's Tenth Mountain
Division landed in Tajikistan and Uzbekistan--the first regular U.S. Army
infantry unit to be deployed on a combat mission in the territory of the
former Soviet Union. 

OCTOBER 3-4. Putin made the first visit to NATO headquarters in Brussels by
any Russian or Soviet leader. After meetings with the secretary general,
Putin announced Russia's "great readiness to cooperate and interact" with
NATO. He also signaled a softening in Russia's opposition to further NATO
enlargement, even including the three former Soviet republics of Estonia,
Latvia, and Lithuania. 

OCTOBER 16. Putin announced the closing of two foreign military bases and
listening posts, at Lourdes, Cuba, and Cam Ranh Bay, Vietnam. 

The Lourdes complex, established in 1964, was Russia's largest military
base and electronic listening post in the Western Hemisphere. It housed up
to 1,600 full-time personnel. In addition to gathering and analyzing U.S.
communications, Lourdes reportedly guided Russian intelligence agents in
North America, provided links to the Russian spy satellite network, sent
instructions to Russian ships and submarines, and tracked U.S. naval
activities in the Caribbean. Russia decided to abandon Lourdes over the
"complete" opposition of the Cuban government, which called the closing "a
grave threat to Cuba's security" and a "special gift" to President Bush. In
Moscow, Communist and nationalist deputies in the Duma were similarly
indignant. 

The Soviet Union, then Russia, had maintained the base at Cam Ranh Bay
since 1979. 

NOVEMBER 14. Putin stated that Russia was "prepared to expand cooperation
with NATO and we are prepared to go as far as the Atlantic alliance is
prepared to go." 

NOVEMBER 14-15. At the summit in Crawford, Texas, Putin and Bush agreed to
reduce U.S. and Russian nuclear arsenals from around 6,000 weapons to
1,500-2,000. 

DECEMBER 7. NATO and Russia agreed to set up a new decision-making council
giving Russia greater say in certain NATO activities. The council replaced
the Permanent Joint Council established in 1997. 

DECEMBER 13. While calling the unilateral U.S. decision to withdraw from
the Anti-Ballistic Missile treaty a "mistake," Putin told his nation that
it did not present a threat to their national security. He went on to say
that the "current level of relations" between the two nations "should not
only be retained, but also used to work out the new framework of a
strategic relationship." 

Despite the end of the ABM regime, Putin reiterated Russia's support for
"radical, irreversible, and verifiable" reductions in nuclear arsenals and
its intent to formalize the agreement reached at Crawford. 

SEPTEMBER THROUGH DECEMBER. Throughout the fall of 2001, Russia--the
largest independent oil exporter, with 7 percent of the world
market--resisted demands by the Organization of the Petroleum Exporting
Countries to reduce exports by 100,000-150,000 barrels a day and thus
shielded the U.S. and Western European economies from the adverse effects
of higher energy costs. Russia's example prompted the other two leading
independent exporters, Mexico and Norway, to follow suit. 

On November 15, after several weeks of intense pressure by OPEC, Russia
promised a symbolic cut of 30,000 barrels per day (or 1 percent of Russia's
daily exports). As the market registered the trivial magnitude of this cut,
the price of crude oil in New York fell almost 12 percent to $17.45 a
barrel, the lowest in more than two years. Eventually Moscow agreed to cut
exports by 150,000 barrels in the first quarter of 2002. But even that cut,
should it materialize, would represent only 2 percent of total production
and would largely reflect increased domestic consumption during the coldest
winter months. 

TO ACCOUNT for this impressive record of sympathy and helpfulness
post-September 11, the American media have offered three principal
explanations, in various combinations: Russia's behavior (a) amounted to a
tactical quid pro quo, (b) was all Russia could do since it "couldn't
afford" military expenditures, or (c) reflected the whim of a single
leader. The first two of these are easily dismissed. 

According to the quid pro quo theory, Moscow was actually pursuing five
short-term objectives. It wanted to prevent the United States from
withdrawing from the ABM treaty; facilitate Russian entry into the World
Trade Organization; prevent or delay the second round of NATO expansion;
reschedule and secure partial forgiveness of Soviet-era debt to the lenders
of the Paris Club; and mute criticism of alleged Russian human rights
abuses in the war in Chechnya. 

More than five months later, not one of those alleged goals has been
attained. The United States has served notice of its withdrawal from the
ABM treaty; no exceptions have been made to WTO membership requirements for
Russia; NATO is expected to announce new members at the end of the year;
the Paris Club has not softened its position about repayment on schedule;
and after a brief lull, U.S. officials are back to criticizing Moscow's
Chechnya policy. If Russia was aiming to secure a quid pro quo, it failed
totally. 

Budgetary pressures have been proffered to explain Moscow's insistence on
radical cuts in U.S. and Russian nuclear arsenals and the abandonment of
Lourdes and Cam Ranh Bay. As for the base closings, Russia paid Havana the
annual $200 million rent for Lourdes in crude oil and spare parts for
obsolete Soviet military equipment--hardly a heavy burden for a country
with a nearly $300 billion GDP. It leased Cam Ranh rent free. 

Whatever the savings, the economic explanation for Russia's willingness to
part with 4,000 nuclear weapons is simply unsound. Nations determine how
much to spend on the military not by consulting balance sheets but by
examining their national priorities, which are shaped by people's or
rulers' passions, such as fear, hatred, or pride. Thus, China, with per
capita GDP about half Russia's, maintains the world's largest army (almost
three times larger than Russia's) and has increased defense spending by
8-10 percent annually over the past decade. The Soviet Union itself, for
that matter, was one of history's most spectacular negations of the
policy-by-affordability theory of military expenditures. In a country with
10,000 nuclear warheads and 4 million men under arms, 35 percent of
hospital beds were in facilities without hot water, and half of schools had
no central heating, running water, or indoor toilets. 

By contrast, the theory that Vladimir Putin's idiosyncratic preferences
explain Russia's course since September 11 cannot be dismissed out of hand.
Putin has clearly made an enormous personal investment in Russia's
policies, from his televised address to the American people, to the
overruling of his own minister of defense on the use of Russian air space
and former Soviet bases, to his highly publicized speeches, statements, and
interviews. 

Yet it is hard to imagine a leader less impulsive than Putin. A former
mid-ranking officer in the Soviet foreign-intelligence bureaucracy, Putin
is no Boris Yeltsin, pushing and pulling the nation toward his vision of
what is good for Russia, sometimes at enormous political and even personal
risk. The cautious Putin takes pride in being a conciliator and
consensus-builder. Mindful of public opinion, he is jealous of his
astronomical public approval ratings. Until he began implementing major
economic reforms in his second year in office, he took care not to alienate
any important political constituency, including the Communists. Abrupt
policy departures are not in such a man's repertoire. 

INSTEAD, the true explanation for Russia's post-9/11 behavior lies
elsewhere. Far from being a startling departure, as the Western press
imagined, Putin's response to the war on terrorism was, in fact,
fundamentally consistent with the 1990s foreign policy of his predecessor,
Boris Yeltsin--the man, after all, who handpicked Putin as prime minister
and heir apparent. This course in foreign policy, moreover, was itself a
product of the Russian nation's new domestic direction--the new course
charted by the anti-Communist revolution. 

Never in the four and a half centuries of the modern Russian state has
there been a Russia less imperialist, less militarized, and less
threatening to its neighbors and the world than the one forged in the
1990s. Between 1992 and 1999, Russia abandoned its empire and underwent a
demilitarization unprecedented for a country not defeated in a war and
occupied by the victors. Defense spending has plummetted from at least 30
percent of GDP to less than 5 percent. By 1995, Russia had repatriated
1,200,000 troops and civilian personnel (plus 500,000 dependents) and
returned to its 17th-century borders. Last September Putin proudly noted
that for the first time in its history Russia was spending more on
education than on defense. 

The army Russia inherited from the Soviet Union was 4 million strong;
today's active duty force of 1 million is slated to be cut by 350,000 by
2003. The president has approved a transition to an all-volunteer force by
2010. 

Russia's relationship with NATO, too, has been gradually transformed. When
NATO was about to expand eastward by admitting--over Russia's strenuous
objections--former Warsaw Pact members Poland, Hungary, and the Czech
Republic, Yeltsin nevertheless chose to sign the NATO-Russia Founding Act
in Paris on May 27, 1997. It committed both sides to "building together a
lasting and inclusive peace in the Euro-Atlantic area on the principles of
democracy." 

Russia's new relationship with the Western powers was severely tested in
the Balkans. Yet Russia supported the efforts of the United States and its
allies to end the 1992-95 war in Bosnia, voted for the U.N. sanctions
against Yugoslavia, and provided peacekeepers. In 1998 Moscow again joined
the economic sanctions against Yugoslavia and voted for the U.N. Security
Council resolution demanding the withdrawal of Yugoslav troops from Kosovo. 

Though angered by the March 1999 NATO bombing of Yugoslavia, and against
the urging of its own nationalist Left, Russia provided no military or
material assistance to Slavic and Orthodox Yugoslavia. After Yeltsin fired
his anti-American, pro-Yugoslavia prime minister Yevgeny Primakov and
appointed former prime minister Viktor Chernomyrdin as his personal envoy
for the Kosovo conflict, Moscow became actively involved in ending the
Kosovo war. By June, the United States and Russia had agreed on a common
negotiating position. After they presented a joint ultimatum to Milosevic
on June 3, Yugoslavia agreed to a settlement. 

As regards nuclear weapons, Moscow first proposed to the United States a
mutual reduction of nuclear arsenals to 1,500 weapons each in August 1999.
A year later it adopted a plan for a unilateral radical downsizing of its
strategic rocket forces. Putin fired his defense minister and the head of
the strategic rocket forces for opposing these reductions. 

YET THE roots of Russia's behavior following September 11 go deeper still.
If Russia's foreign policy has changed, it is because in the past decade
Russia itself has become a changed country. 

In politics, Russian voters decisively chose the pro-reform, pro-Western
Boris Yeltsin over the anti-Western, nationalist Communist alternative in
the 1996 presidential election. They reaffirmed their choice when they
snubbed the "popular patriotic" Left in the December 1999 parliamentary
election, and again three months later when they gave Vladimir Putin a
53-29 percent victory over Communist Gennadi Zyuganov. 

Today, the Duma has a stable pro-reform majority, as reflected in its
268-101 vote of support for the U.S.-led war on terrorism. Not
surprisingly, then, 71 percent of Russians surveyed last October approved
of close cooperation between Russia and the United States in the fight
against international terrorism. A month later only 13 percent of the
national sample thought of the United States as their country's enemy--down
from 48 percent in 1999. 

On the economic front, the revolution Yeltsin led has become irreversible.
Since Yeltsin's resignation on New Year's Eve 1999, the fierce battles of
the mid-1990s over privatization and economic liberalization have yielded
to consensus among the political elite, including the moderate Left, that
prosperity and stability can be achieved only through a market economy and
participation in the world economic system. 

Today, the private sector produces at least 70 percent of Russia's GDP.
Despite all-out opposition from the Communists in the Duma as recently as
last summer, urban land can now be privately owned, bought, and sold. Taxes
on corporate profits were slashed from 35 percent to 24 percent effective
January 1, 2002. A new labor code has made it much easier to hire and fire. 

Other reforms first outlined by Yeltsin in 1997 that are now politically
feasible include the radical restructuring and partial privatization of the
pension system, the phasing out of enormous state subsidies for rent and
utilities, and the introduction of market competition in the supply of gas,
water, and electricity. In the pipeline are banking reforms and the breakup
of state monopolies in rail transportation, gas, and electricity. 

Finally, improvements in the standard of living, interrupted by the 1998
financial crisis, have resumed. Although the main beneficiaries have been
the young, the college-educated, and the urban, millions of Russians have
been given hope for a better life. The average income rose 6 percent in
2001, real wages 20 percent, and pensions 23 percent. There were 18 cars
per 100 households in 1990; 42 in 2001. The produce shortages and
ubiquitous lines of the Soviet era have been forgotten. Fresh and delicious
food is available everywhere. For the first time since the late 1920s,
Russia not only feeds its people and livestock but is a net exporter of
grain. 

In the past two years the number of Internet users has grown 40 percent to
almost one in six Russian households. Because of the profusion of private
institutions of higher education, there were 75 percent more colleges in
Russia and 50 percent more students in 2000 than in 1992. Overwhelmingly
private-sector, the post-Soviet middle class has proved resilient. It has
grown from near zero in 1991 to between one-fourth and one-third of the
Russian population. 

In dealing with both the vociferous anti-Western Left and the Cold War
defense and foreign-affairs bureaucracies, Putin's hand has been
strengthened by economic growth of 4 percent in 1999, 8 percent in 2000,
and 5-6percent in 2001. Introduced on January 1, 2001, the 13 percent flat
tax on personal income--Putin called it "revolutionary" and the "lowest in
Europe"--boosted collection of personal income taxes by 30 percent in the
first half of 2001. 

Meeting with American journalists on the eve of his departure for the
Crawford summit last November, President Putin pointed to the domestic
sources of Russia's post-September 11 policies: 

"If anyone thinks that Russia can again become an enemy of the United
States, those people do not understand what has happened in Russia, what
country it has become. What the Russian leadership is doing today is
dictated not only by the political philosophy of Russian leaders. Russia's
actions are dictated by its domestic situation and public opinion. And the
most important is that an overwhelming majority of the Russian population
want to live [in a country with] effectively functioning democratic
institutions. An overwhelming majority of the Russian population want to
live [in a country with a] social market economy, want to feel themselves
and their country to be an integral part of modern civilization. . . .
People want freely to move around the world, to use to the fullest all the
advantages offered by normal democratic society." 

The Cold War, in other words, is never coming back. The Russian public will
not allow it. To be sure, U.S.-Russian relations will have their ups and
downs. Among the tests ahead are a greater role for Russia in pan-European
security and decision-making as NATO expands, human rights in Chechnya,
censorship of the electronic media in Russia, Moscow's selective
prosecution of environmental activists and scholars for contacts with the
foreign press, and--most urgent of all--the challenges associated with
nuclear arms reductions and the "axis of evil." 

In the post-ABM world, the diplomats will have to reconcile Russia's desire
for minutely negotiated deep cuts in nuclear arsenals with the Bush
administration's preference for informal agreements and its plan to store
rather than destroy the dismantled warheads. 

Washington's policies toward the "axis of evil," meanwhile, are bound to
impinge on Russia as a regional power. Iran, Iraq, and North Korea are all
within Russia's centuries-old sphere of influence. Moscow wants to play a
role, in particular, in the pending review and restructuring of U.N.
sanctions against Iraq and in pressuring Baghdad to readmit weapons
inspectors. 

In addition, Russia is Iraq's largest trading partner, supplying Baghdad
with $700 million in goods under the U.N.-mandated oil-for-food program.
Iraq owes an estimated $8 billion to the Soviet Union and Russia, and
Moscow wants to make sure that debt is honored by any post-Saddam
government. The Kremlin is also under pressure from Russian oil companies
to protect their lucrative contracts with Baghdad. 

Iran, similarly, is Russia's third-largest arms customer (after China and
India). An agreement signed last year could bring Moscow $300 million in
annual sales to Iran for several years--a hefty sum for a starved
military-industrial complex. In addition to conventional weapons, Russia
exports missile and nuclear technology to Iran. Long an irritant in
U.S.-Russian relations, these transfers are viewed with greater concern
than ever by the White House. 

Yet even these pending issues in U.S.-Russian relations, serious though
they are, are essentially short-term--whereas Russia's post-September 11
behavior indicates a profound shift in national priorities, the fruit of a
revolutionary decade. There are good reasons to believe that Russia's
gradual reorientation toward the West over the course of the 1990s reached
a point of no return in the autumn of 2001. At the very least, September 11
made it unmistakably plain that Russia, in its great journey forward, is
fast approaching what Lord Byron in "Don Juan" called the "post-house,
where the Fates / Change horses, making history change its tune." 

********

#4
Moscow Times
February 28, 2002
Experts' Independence: A Question of Trust
By Torrey Clark 
Staff Writer   
 
They provide daily recommendations to thousands of investors and offer
colorful voices of authority that liven up business news -- and they are
supposed to provide independent analyses of companies for investors. 

But sell-side analysts, at least in the West, are coming under increasing
fire for sweetening their commentary to keep and win clients for the
securities side of their investment banking firms. 

In America, for example, "buy" recommendations on Enron, now known as the
largest bankruptcy in U.S. history, kept coming even as the company's share
price plummeted and news broke that it had, to put it mildly, unorthodox
accounting practices. 

One bond analyst who spoke out against the company, Daniel Scotto, claims
he was punished for doing so. Scotto accused his former employer, BNP
Paribas, of firing him for downgrading Enron from "buy" to "neutral" and
later telling clients to sell as the company's margins began to decline.

With all things Enron now in fashion in Russia -- both the Audit Chamber
and the Federal Securities Commission are currently looking at the possible
domestic ramifications of the scandal -- the question arises: Do analysts
in Russia face similar pressures as their American colleagues like Scotto?
The answer is yes, according to analysts and investors interviewed for this
story -- and it is a problem with enough upside to rate it a "buy" if it
were a stock. 

One of Moscow's most colorful analysts, Eric Kraus, says he was fired by
NIKoil, a leading brokerage, for making critical remarks about Sibneft -- a
top oil company that was controversially carved out of the old Rosneft in
the mid-1990s by exiled tycoon Boris Berezovsky and oil and aluminum
magnate-turned-politician Roman Abramovich.

NIKoil denies this, but Kraus insists that his comments in a Moscow Times
story last year, headlined "'Bandit' Sibneft Blasted for Sell Off," got him
fired. 

"Several weeks ago we termed Sibneft 'former bandits.' ... We think that a
rectification is called for -- the term 'former' is now open to serious
challenge," Kraus said in response to learning of the closed-door sale of a
blocking stake in Sibneft by management to "core shareholders," known to be
a euphemism for Abramovich.

The incident illustrates the risk inherent in any capitalist system, in
which information rules and opinions -- right or wrong -- move markets. But
whatever the truth of Kraus' firing, there is a general consensus that the
practice of putting undue pressure on opinion-makers is more of a problem
in the West than in the small and illiquid Russian market, whose total
capitalization is dwarfed by many companies in the West. 

The more blatant type of manipulation -- such as when an investment firm
buys cheap securities to resell and has analysts rate them up -- was more
common before the 1998 financial crash, said an analyst at a major
Moscow-based investment bank who asked not to be named. 

During the Russian stock boomlet years of 1996 and 1997, most domestic
companies cared little about their image, while many investors were happy
to buy into the next big thing, leaping without looking carefully. Since
the crash, many second-tier stocks have either been consolidated by Russian
holding companies or have been ignored, with the same result: illiquidity. 

Investors, once burned, have also become more critical, and investment
banks cannot afford to lose face.

Bernard Black, a corporate and securities law professor at Stanford
University who has written about Russia, said that analysts here are more
likely to rate companies a "sell" than their U.S. counterparts, who give
the lowest rating to less than 1 percent of all companies.

"The environment here is much more caveat emptor," said oil and gas analyst
Steven Dashevsky of Aton Capital. "Judging by what is going on in the
States, the quality and independence of Russian analysts matches or exceeds
that of their counterparts. ... Things missed in the States by analysts
raise questions of conflict of interest as well as competency."

Another issue for investment houses is the available volume of corporate
finance work, such as mergers and acquisitions, initial public offerings
and restructurings, which is far lower than in the West. Although some say
the relative scarcity may only whet investment bankers' appetites, others
say trading activity still carries more weight in making an investment
bank's reputation.

"In Russia, the volume of corporate finance work is minimal. Companies like
Enron, which engage nearly all market participants in their equity and bond
deals, spread fees all over the table," Dashevsky said. 

For that reason, there has been substantially less pressure on analysts
here than elsewhere, said Peter Boone, head of research at Brunswick UBS
Warburg in Moscow. 

In the West, pressures come from all sides -- investment bankers angling
for corporate finance work, issuers who want a good rating and even
institutional investors, who fear being blindsided by a downgrade -- said
Patricia Walters, senior vice president of professional standards and
advocacy at the Association for Investment Management and Research in a
telephone interview from the United States. 

*******

#5
New York Times
March 2, 2002
Russia's Latest Export: Bad Jokes About U.S. Chickens
By MICHAEL WINES

MOSCOW, March 1 — Weary, perhaps, of tolerating American diktats on
everything from steel exports to NATO expansion, Russian officials are
poised to strike a retaliatory blow at one of the United States' soft
spots: its thighs. Chicken thighs.

Agriculture Minister Aleksei V. Gordeyev said today that his office had
stopped issuing permits to import American chicken, the single most popular
item from the United States. Within 10 days, he said, Russia may issue an
outright ban against American chicken. 

The issue, he said, is whether American fowl are too foul for Russians to
eat. "Russia is not a garbage dump for poor quality food," he told the
Interfax news service, "and if specific answers are not received, imports
themselves will be stopped from March 10." 

Mr. Gordeyev's pronouncement capped a virtual drumstick-beat of warnings
from Russian officials that much of American poultry — loaded with
antibiotics, stuffed with hormones and preservatives and generally
unnatural — presents an unacceptable threat to Russian health.

Others suspect the minister may be reacting to pressure from Russian
farmers, who are battling a deluge of cheap American chickens. Still others
believe the government is simply playing good politics, showing the Russian
flag in the face of what most Russians regard as an insulting American
attitude toward them. 
 
The Moscow business daily Kommersant pretty much summed that up today with
an article on the accusations of drug-and-hormone-fed chicken that made a
sly reference to the disqualification of Russian skiers at the Salt Lake
City Olympics: "They banned chicken for doping," the headline read. 

Puns aside — difficult as that is — the chicken flap is no laughing matter
to American farmers, who send more birds to Russia than anywhere else. 

American chicken is so popular that the slang term for it is "Bush legs" —
an allusion to the rush of thighs and legs after the first President Bush
dispatched food aid to hungry Russians in the early 1990's. 

The National Chicken Council, an American trade group, estimates that
Russians consumed a record one million tons of chicken from the United
States in 2001 — in appendage terms, about 1.28 billion legs. 

"Leg quarters are our big items of export," said Richard Lobb, the council
spokesman. "Overseas markets prefer dark meat, and U.S. markets prefer the
white meat." 

One million tons is 8 percent of the entire United States chicken
production, and 61 percent of all the chicken eaten in Russia. More
important, it is a 75 percent increase over the American chicken exports to
Russia in 2000, a statistic that has sent shivers of alarm through Russia's
young poultry industry.

The Russians worry that an American chicken juggernaut threatens to wipe
out a domestic poultry industry that was just starting to recover after the
financial collapse of 1998.

Russian chickens, which not so long ago resembled underfed robins, have
vastly improved in both weight and quality in the last few years, but
producers find it hard to compete on price. In part, that is because the
farms are inefficient: the Agriculture Ministry says fewer than 20 percent
of the chicken farms run at capacity, and nearly 80 percent need
reconstruction. 

Ukraine and Estonia, laboring under the same disadvantage, have moved to
ban American imports in recent months. Russian farmers have complained
bitterly to the agriculture minister about foreign competition, and there
has been talk of a five-point increase in tariffs for imported chicken of
all kinds. 

Something of a propaganda campaign against the evils of American chickens
has also emerged. The Web site www.pravda.ru, an extension of the
newspaper, reported acidly on Wednesday that "Bush legs" are hardly known
for their tastiness. 

"But the majority of Russian people like their inexpensive price, though
they understand that cheap products — especially if they are of American
origin — are not likely to be good for your health," the article said. 

And TVRK Moscoviya, the television channel of the province that includes
Moscow, took a broad shot at American chicken on a recent edition of its
"Farmer's Outpost" program. 

"Take the American chicken-leg quarter, roast it, and what do you have
left? Only the skin and bone," Yevgeny Elizarov, director of the Concoursni
poultry farm, said on the program. "The moisture comes out, but there's no
meat there. The foreign birds are vaccinated against 12 diseases, and we
don't know what they're feeding the birds." 

That was a windup for the coup de grâce: "Have you noticed that they only
sell left Bush legs?" Mr. Elizarov told the camera. "That's because all the
injections are made into the left leg. It's true! That means there are no
right Bush legs on the market, only left ones. It means they don't eat them
themselves, but send them over to us. 

"Bon appétit!" 

*******

#6
The Russia Journal
March 1-7, 2002
Russia begins fight against Radio Free Europe’s Chechen-language broadcasts
By IRA STRAUS

Signs of sanity are breaking out all over the place in Western policy on
Chechnya, even if most of them are still only in a halfway start-up form.

• After years of labeling it a Russian-imperialist slander to say anything
about there being Chechen rebels and international terrorists in Georgia,
the U.S. government and media have suddenly stated that these phenomena do
indeed exist in the Pankisi Gorge and that the al-Qaida terrorists need to
be rooted out. But the United States has not said a word of apology for the
past slurs, or recognized this as an opportunity to improve relations with
Moscow. Instead, it risks falling into playing another geopolitical game
against Russia in the course of trying to root out the terrorists, a game
that would undermine the effectiveness of the anti-terrorist effort and
would meanwhile do far more harm to relations with Russia than any gain
that it could win in relations with Georgia.

• After years of treating Chechnya solely as an issue of human-rights
violations by Moscow, Americans and Europeans are now recognizing an
element of international terrorism and Islamist ideology in the conflict.
But they have yet to make a point of the massive violations of human rights
on the side of the Chechen extremists or to speak in a language about human
rights in a guerrilla war that is even mildly realistic and convincing.

• After years of blaming Moscow for intransigence, the West is now
perceiving some intransigence on both sides. Even if it has yet to admit
the difficulty of making peace with a plural Chechen rebel force, portions
of which have refused to keep the peace under any circumstances, including
when they had de-facto independence from 1996-1999.

• After the U.S. Congress voted for Radio Free Europe/Radio Liberty
(RFE/RL) to start up Chechen-language broadcasts, the Bush administration
and State Department have reportedly tried to prevent the broadcasts.
Richard Armitage is reported to have written that this would give Moscow
the impression "that we have shifted our support to one side" of the war.

Actually, Mr. Armitage is understating the matter. Official U.S. policy is
not neutral: The United States supports the territorial integrity of the
Russian Federation. Such broadcasts would give Chechen separatists an
impression of U.S. support. It would amount to incitement to go on
fighting. And that is how Russians would perceive it – and they would be
right.

RFE/RL broadcasting in the Chechen language was mandated by the U.S.
Congress, in an act that reeked of Russia-bashing for the hell of it. What
would be the purpose of such broadcasting? Not to inform "the people of
Russia," as Fred Hiatt of the Washington Post wrote in a wildly emotional
article on the subject. Russians speak Russian, not Chechen.

Even most Chechens know the Russian language quite well. There would be no
reason for the United States to address them in Chechen – not unless it is
a symbolic expression of solidarity with the idea of breaking away from the
Russian Federation.

In face of the crackdown on independent TV, Russian officials and ordinary
Russians in Moscow need more objective sources of news about Chechnya.
This, indeed, was one of Hiatt’s arguments. However, the news needs to be
provided exclusively in Russian. Broadcasting in Chechen would serve the
opposite purpose: It would further suggest to Moscow that RFE/RL is an
agency that works for the break-up of the Russian Federation – a move that
would be dangerous for the United States.

Indeed, imagine how Americans would react if they believed that the Russian
or Chinese or British government was working for the break-up of the United
States. And if America were relatively weak, and it could see the foreign
country doing things day-in day-out that seemed to lead the United States
toward a break-up – using broadcasts in ethnic languages to foment
separatism, using "democracy" rhetoric as a synonym for opposing the
central authority, promoting a version of states’ rights that would amount
to the abandonment of the union, scolding the United States for such
efforts as it might make at holding itself together and using human-rights
language in a one-sided way, always at the expense of the United States,
never at the expense of those trying to break it apart.

Americans would be apoplectic if any foreign power undertook such a
campaign; they would view such a country an enemy, not just an adversary.
They would support strong repressive measures to fight these influences.
Diplomatic relations would suffer to such an extent they may degenerate
into war. This is the kind of fire the U.S. Congress is playing with.

It is also dangerous for the United States to damage the reputation of
RFE/RL like this. RFE/RL is the most important U.S. agency for providing
information to the Russian people. Precisely because the Russian media are
under threat, RFE/RL needs to enhance its reputation for integrity. This
reputation has suffered since the end of the Cold War for a number of
reasons, but the Cold War is over. Fighting against communism was a noble
fight that won RFE/RL a noble reputation. The same approach does not work
today.

I once met an RFE/RL reporter at a conference in 2000 on proposals for
closer U.S.-Russian strategic cooperation. When I read her report, I
wondered if she and I had been at the same conference. There was almost no
mention of the proposals for strategic cooperation that were developed at
the conference. Instead, she reported the views of a couple of the
participants about the unfitness of the governments on either side to
proceed with those proposals.

One of the proposals at that conference was for greater U.S.-Russia-Indian
cooperation against terrorism and against the Taliban. Who knows what would
have happened if RFE/RL had concentrated on reporting the substance of such
proposals and the arguments for and against them on their merits, instead
of emphasizing the political and bureaucratic obstacles to any action on
any them?

We know today what a price America paid on Sept. 11 for the failure to move
ahead in good time with Russia and India against the Taliban and the
terrorist structures.
 
*******

#7
National Review OnLine
March 1, 2002
Russians Do Taxes Right
The flat tax, Russian style.
By Deroy Murdock
Mr. Murdock is a columnist with the Scripps Howard News Service.
 
Once again, American taxpayers are struggling to complete their tax
returns. They will pay accountants and attorneys some $140 billion this
year to generate paperwork to accompany their checks to the IRS. The
46,900-page U.S. Tax Code governs the whole process, with enough loopholes
to lasso a light breeze. 

Too bad this isn't Russia.

Since January 1, 2001, Russians have enjoyed a 13 percent flat tax. That's
right. The once-Communist superpower now stands to the right of publisher
Steve Forbes on taxes. The former GOP presidential contender staunchly
advocates a 17 percent flat tax.

"Sometimes philosophical seeds fall on interesting ground," Forbes says.
"After Marxism, which was the philosophical equivalent of the IRS code,
something understandable has obvious appeal." 

The old Russian system featured three income-tax rates: 12, 20, and 30
percent. The top rate kicked in at the ruble equivalent of $5,000 in
taxable income. In contrast, the U.S. has six tax rates: 10, 15, 27, 30,
35, and 38.6 percent, the last of which takes hold at $307,500 for married
couples filing jointly.

Russia's single-rate tax is reasonable and comprehensible. Most important,
the Russian government no longer uses graduated tax brackets to punish
those whose incomes improve. Americans should be so lucky.

After just one year, the results of this law already look positive. As
Hoover Institution scholar Alvin Rabushka observes in a February 21
analysis for www.russiaeconomy.org, "the 13 percent flat tax has exceeded
the expectations of the government in terms of revenue. For the vast
majority of taxpayers, its implementation is simple, and no forms need to
be filed." Adjusting for currency fluctuations, Rabushka adds, "real ruble
revenues increased about 28 percent."

This initiative "is establishing the custom of paying taxes in Russia,"
senior Duma member Dr. Konstantin Remchukov told me over lunch last fall.
"It's greatly simplified everything." He says that three years ago, tax
revenue equaled 9 to 10 percent of Russian GDP. By last November, that
number had grown to 16 percent. This follows the supply-side Laffer Curve:
Lower marginal tax rates produce higher revenues as both new and previously
concealed economic activities enter the tax base. No wonder Russia's GDP
grew 5 percent in 2001.

"There was a huge, monstrous non-compliance problem with the old system,"
says Dr. Richard Vedder, an Ohio University economics professor and board
member of the National Taxpayers Union. "People essentially operated in the
underground economy. There were a lot of payments in kind where people were
not paid in cash but in goods to facilitate tax evasion. That problem, from
what I understand, has not totally disappeared but has dramatically
declined in the last year or two."

Beyond the flat tax, President Vladimir Putin has signed legislation to
chop the corporate tax from 35 percent to 24 percent, effective last
January 1. Putin hurled the double taxation of corporate income onto the
ash heap of history. The Kremlin also may offer Russians privately invested
social-security accounts, much as President Bush wants for Americans.
Thanks to actual and potential reforms, Putin expects the average Russian
to "be happy" by 2010.

In two former Soviet socialist republics, meanwhile, flat-rate taxes fuel
progress. Since 1994, Estonia has had a flat tax of 26 percent while Latvia
has enjoyed a 25 percent flat tax since 1995. Both have stimulated growth
and higher revenues.

While ex-Communist states confidently reject progressive taxation, America
remains plagued by Marxian class-warfare rhetoric. A May 28, 2000 New York
Times editorial praised the Russian flat tax's promise to reduce "political
corruption, removing layers of subsidies in the code that officials like to
shower on favored constituents." However, the previous October 30,
Republicans for a U.S. flat tax were "disingenuous, when the basic result
would ease the tax burden on the super-rich," the Gray Old Lady screeched,
her dainty fist clenched overhead.

Senate Majority Leader Tom Daschle (D., South Dakota) complained January 4
that Republicans "have one unchanging, unyielding solution that they offer
for every problem: tax cuts that go disproportionately to the most affluent."

Analyzing all this from his dacha in Hell, V. I. Lenin must be stroking his
beard in utter bewilderment.

Of course, the country that Lenin once misruled still must do plenty to
unravel his legacy. Stronger private property rights, a rule of law and
full respect for free speech are sorely needed. But with its 13 percent
flat tax, Russia now has a far more impressive export than those
interlocking, wooden matrioschka dolls.
 
******

#8
Christian Science Monitor
March 4, 2002
Why American troops are needed in Georgia
By Robert Bruce Ware 

EDWARDSVILLE, ILL. - America's antiterror focus has shifted to the Pankisi
Gorge on the border between the Republic of Georgia and Chechnya. Two weeks
ago, America's war on terror took a dramatic turn when two US military
planes landed in the Georgian capital of Tiblisi carrying counterterrorism
and logistics specialists. Problems in this region present a genuine threat
to global security, and their resolution requires US leadership. But in
this second stage of its campaign against terror, the United States would
be wise to avoid the appearance of acting alone. 
The Pankisi region has been beyond Tiblisi's control for years, but
tensions escalated after 1999, when conflict resumed in Chechnya. As the
Gorge was flooded with new waves of Chechen refugees, it also became a
staging area for militants fighting Russian troops across the border. Soon
it became a center for criminal activities. Two Spanish businessmen, an
Italian sports star, and international relief workers were kidnapped, along
with local Georgians, including priests and policemen. Georgian citizens
began taking Chechen hostages to exchange for their captive relatives.
 
Still, Tiblisi rejected Moscow's proposals for joint military action. The
situation shifted late last month, when reports confirmed that dozens of
Afghan fighters have taken refuge in the Pankisi Gorge, supporting Moscow's
long-standing claims that Al Qaeda and Taliban fighters have been active in
Chechnya. Russian assertions that Osama bin Laden is in the Gorge have been
taken less seriously, particularly by Georgian President Eduard
Shevardnadze. Having long courted a NATO presence, Mr. Shevardnadze is
taking an increasingly bold approach toward rebuffing Russian officials
while encouraging the US to lead a counterterror operation. Washington has
much to gain for several reasons.

First, Georgia could become an important strategic outpost for the US, not
only because of its proximity to hot spots in the Middle East and Central
Asia, but also because it forms a key link in a chain of US military bases
that now encircle Russia.

Second, US troops would be positioned to protect an important petroleum
route that runs through Georgia from Caspian oil fields to Western markets.
Taken together with new opportunities for an alternative route through
Afghanistan and Pakistan, this could freeze current rivals, such as Russia
and China, out of Caspian competition. This may account for Washington's
concerns about a joint Russian-American operation in the Pankisi Gorge.

Moreover, American officials have consistently condemned the brutality of
Russian troops toward Chechen civilians. Since American strategy in
Afghanistan required the separation of militants from civilians, Washington
may wish to avoid entanglement with Russian tactics in an area brimming
with refugees.

The stated US mission centers on the training of Georgian troops, but the
Georgian military is unlikely to succeed without a US combat role,
requiring the deployment of special forces and additional US troops. An
American strategy similar to that in Afghanistan may prove successful, but
before the shooting starts, it's best to consider what the US also stands
to lose.

America is testing its Russian support. Russia's President Vladimir Putin
has been a strong US ally against terrorism, and has voiced support for the
US mission in Georgia. Yet some Russian generals and politicians have
balked at having American troops in the Caucasus. With a base in Georgia, a
complete US military encirclement of Russia could be useful if relations
become confrontational, but those same bases could become a source of
confrontation. Action in the Caucasus is unlikely to go as smoothly as it
did in Afghanistan. And aspirations to control Caspian oil reserves could
backfire. The region is rife with instability, and US action could set off
sparks.

While Caucasian Muslims generally condemn terrorist attacks on the US and
agree that America must respond, they have been critical of American
actions in Kuwait, Kosovo, and Afghanistan. Many have feared that the US
would treat the separatist war in Chechnya like that in Kosovo in order to
intervene in the Caucasus, and some have accused the US of causing the war
in Chechnya to achieve this result. However unrealistic these fears may be,
they will feed on American action in Georgia.

Still, action must be taken if the Pankisi Gorge is not to follow
Afghanistan as a terrorist base. Russia and America have a common interest
in cleaning up the region. Ending Pankisi militancy could contribute to
regional stability and help end the Chechen war. Cooperation will prove
necessary on both sides of the Chechen border. And a US-Russian operation
could help Moscow understand the importance of distinguishing militants
from civilians.

Prior to action in Afghanistan, American officials devoted considerable
attention to multinational cooperation. As the US prepares for the next
step in the campaign against terrorism, it should not forsake a broader
strategy.

Robert Bruce Ware is an associate professor at Southern Illinois
University, Edwardsville, who conducts research in the Caucasus.

******** 

#9
Christian Science Monitor
March 4, 2002
US antiterrorist aid to Tbilisi rankles Russians
Up to 200 US troops are expected to arrive in Georgia by mid-March.
By Fred Weir | Special to The Christian Science Monitor 

MOSCOW - Georgian police have begun to surround the rugged Pankisi Gorge
where suspected Al Qaeda fighters may be hiding out, while Georgia's Army
awaits the arrival later this month of up to 200 US elite troops who will
provide training and equipment for a full military push into the lawless
region. 

Meanwhile, in Moscow, many say that the global war on terrorism has turned
into a campaign to whittle away at Russia's traditional sphere of influence.
 
Last week's announcement that US forces will be deployed to the Caucasus
republic of Georgia hit like a bomb in Moscow. President Vladimir Putin,
who has gambled his political fortunes on throwing Russia's allegiance
behind the American-led global antiterror coalition, was quick to insist
the move poses "no tragedy" for Moscow.

But top Russian experts say that since Sept. 11, US influence has
triumphantly marched through the oil-and-gas-rich former Soviet republics
of Central Asia and is now taking root in Georgia, Russia's southern
bastion for 200 years. Georgia is also part of a proposed pipeline route
that would carry oil from the Caspian Sea to international markets.

"This is only the beginning," says General Makhmut Gareyev, president of
Russia's official Academy of Military Sciences. "The US is establishing a
permanent presence, in a solid ring around Russia."

The escalating crisis around the Pankisi Gorge, where Russia says as many
as 2,000 Chechen rebels and their foreign allies may be operating, reveals
a fundamental Kremlin miscalculation, say a growing number of Russian
experts. Moscow expected that its support of the US-led war on terror in
Afghanistan would translate into American backing for Russia to strengthen
"law and order" in its own backyard. The Kremlin has argued that Chechen
rebels fighting against Moscow are just a branch of the global terror
conspiracy presided over by Osama bin Laden.

Over the past few months Moscow has increasingly pressured Georgia to let
Russian forces move in to clean up the Pankisi Gorge, and has even hinted
it might be ready to do so even without Georgia's permission.

"Moscow has become a prisoner of its own rhetoric," says Sergei Kazyannov,
a senior expert with the independent Institute for National Security and
Strategic Research in Moscow. "We kept saying that Chechen rebels are the
same as Al Qaeda terrorists, and must be dealt with. We assumed the US
would turn a blind eye while we took care of that business on our own
border, in Georgia. Instead, we opened the door for the US to step in. Once
again, the Americans have turned the tables on us, and used the war on
terror to expand their own influence."

Both Georgian and US officials insist that the American special forces, set
to arrive in mid-March, will only be used to train an elite unit of about
1,500 Georgian troops in antiterrorist tactics. Georgia's 20,000-man army
is generally considered to be little more than an armed rabble which has
been spectacularly unsuccessful at maintaining order beyond the capital of
Tbilisi for much of the past decade.

Two Georgian regions - Abkhazia and South Ossetia - have declared
independence and several others - like the Pankisi Gorge - a nest of drug
trafficking and other crime, remain no-go zones for Tbilisi authorities.

Last week Georgian police began setting up roadblocks around the gorge, and
they claim to have arrested several foreigners, including two Saudis and a
Jordanian. But Georgia has launched similar police operations in the past,
with no lasting effect. "Georgia cannot possibly restore law and order to
Pankisi on its own," says Arkady Baskayev, a former top Russian police
commander and member of the state Duma's security committee. "They have
neither the will nor the capability to make any impact on the problem."

About 7,000 refugees from war-torn Chechnya are living in the gorge, along
with hundreds of Kists, a Chechen tribe who are Georgian citizens.

Tbilisi admits that perhaps 200 armed Chechen rebels are in the area;
Moscow claims the number is 10 times higher. There may also be dozens of
Arabs and other foreigners, some of them possibly Taliban and Al Qaeda
stragglers from Afghanistan. But while Russia wants the entire region
subdued, and all refugees repatriated to Chechnya, Georgian officials
express more limited goals.

"Georgia aims to restore order to the Pankisi Gorge using only police
methods," says Zurab Abashidze, Georgia's ambassador to Moscow. "Among the
people living in Pankisi are many Georgians and others whose situation is
unclear. Any return of refugees to Russia must occur voluntarily. If police
operations to not succeed, only then will we decide if a military push is
necessary. But if military forces should be needed, only Georgian troops
will be used."

Russian experts say that if the Georgian Army moves into Pankisi, they will
almost certainly require US air support and reconnaissance, which would
offend Moscow as much as the use of US ground troops.

"The appearance of US forces on our southern border cannot be accepted in
Moscow," says Yury Gladkeyevich, an expert with the Interfax-AVN
independent military news agency. "Georgia cannot restore order on its own,
and it is making a huge strategic mistake by turning to the US for help."

Last week Dmitri Rogozin, head of the state Duma's foreign affairs
committee, warned that if US forces go into action in Georgia, Russia's
parliament will move to extend official recognition to the breakaway
regions of Abkhazia and South Ossetia. Abkhazian leaders, fearful that a
rearmed Georgia may turn its forces against them, have said they are
intensifying efforts to secede.

Even pro-Western Russian legislators voice concern about the spread of
American power into the former USSR. "If Georgian leaders make the mistake
of orienting towards America, it could lead to the downfall of (President
Eduard) Shevardnadze's regime," says Boris Nemtsov, leader of the liberal
Union of Right Forces. "The Americans are welcome to help. But history has
demonstrated repeatedly that Georgia cannot live without Russia."

*******

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