Johnson's Russia List
#6231
8 May 2002
davidjohnson@erols.com
A CDI Project
www.cdi.org
[Contents:
1. UPI: No al Qaida in former Soviet Georgia.
2. AP: Friendly media, supporters praise Putin on second anniversary
of inauguration.
3. Luba Schwartzman: ORT Review.
4. The Russia Journal: Alexander Kondorsky, Saving for a rainy day.
5. The Russia Journal: Otto Latsis, Time for economic solutions.
6. Jacob Kipp: "Envy" and anti-Americanism/6227.
7. Jamestown Foundation Monitor: UN CALLS RUSSIA AN "ENGINE OF GROWTH"
FOR THE CIS.
8. Gazeta: Alexander FRENKEL, Natalia RAISKAYA, and Yakov SERGIYENKO,
RUSSIAN ECONOMY TENDS TO GROW FASTER.
9. Yezhenedelny Zhurnal: GAIDAR I DO NOT KNOW ANY OTHER...Yegor Gaidar
is sure that liberalism in Russia will prosper because "there is
economic common sense" in Vladimir Putin's actions.
10. Boston Globe: David Filipov, Russian hockey goon-free. League
cleans up its act, restores some luster.
11. The Jamestown Foundation PRISM: Aleksandr Tsipko, PUTIN'S TACTICS
FOR COMPROMISE WITH THE LIBERALS.]
*******
#1
No al Qaida in former Soviet Georgia
By Pamela Hess
Pentagon correspondent
WASHINGTON, May 7 (UPI) -- The al Qaida terrorist network does not have a
presence in the Republic of Georgia, the Georgian defense minister said
Tuesday, contradicting U.S. official's claims in February that several dozen
terrorists had fled Afghanistan for the forbidding Pankisi Gorge area.
The United States' top diplomat in Georgia, Philip Remler, told a Georgian
newspaper Feb. 11 that the fighters had arrived in Pankisi and were in
contact with an Arab warlord known as Khattab -- Russia's most wanted Chechen
commander -- who in turn was trained by Osama bin Laden himself.
Remler's interview preceded an announcement by the Pentagon that it would
send 150 U.S. Special Forces trainers to help the Georgian military clear out
the Pankisi Gorge, a 90-square kilometer area bordering Chechnya. The 150
American trainers will teach counter-terrorism tactics to four battalions of
Georgian troops.
The first 26 trainers have arrived and are training headquarters staff of the
Georgian military, Defense Secretary Donald Rumsfeld said Tuesday. Germany
and Turkey are also sending military trainers.
But Georgian Defense Minister David Tevzadze said at a Pentagon press
conference with Rumsfeld that al Qaida has no foothold in his country, and
that it would be difficult, if not impossible, for fighters to flee
Afghanistan for Pankisi Gorge.
"You know, actually, for me personally, it is very difficult to believe in
that, because to come from Afghanistan to that part of Georgia, they need to
transverse at least six or seven countries, including the Caspian Sea,"
Tevzadze said.
Tevzadze said the mere announcement of the U.S. military training has
improved the situation in the Pankisi region.
"I'll tell you the situation in Pankisi dramatically improved since the
program -- the train-and-equip program was loudly announced. Yes, it seems
strange even for me, but that's true," Tevzadze said.
The most obvious effect is the ability of law enforcement agencies to work
there, he said.
Tevadze vowed the newly trained troops would be used only in the Pankisi
Gorge region to the northeast and not in Abkhazia, a breakaway province in
the south that sits between the Caucusus Mountains and the Black Sea.
He said his government is committed to finding a peaceful solution to the
troubles with Abkhazia. But practical considerations are also at play, he
admitted.
"I don't have any facilities nearby Abkhazia ... which will be suitable for
these four battalions to be deployed from there," he said.
******
#2
Friendly media, supporters praise Putin on second anniversary of inauguration
May 7, 2002
By ANGELA CHARLTON, Associated Press Writer
MOSCOW - Thousands of students and World War II veterans thronged Red
Square on Tuesday to fete Vladimir Putin on the second anniversary of his
inauguration as Russia's president in a tightly organized, Soviet-style
rally full of glowing praise.
Putin remains widely popular across Russia halfway into his term, and has
gained respect of foreign leaders — despite widespread distrust of the
ex-KGB agent when he suddenly appeared in the Kremlin after Boris Yeltsin
resigned.
But Putin has waged a brutal and ongoing war in Chechnya (news - web
sites), and media and other freedoms have been curtailed on his watch.
Critics say he remains uncertain of where he is leading his vast country.
The students and veterans — estimated by police to number at least 20,000 —
poured out of buses from cities around the country onto Red Square for a
rally organized by the pro-presidential youth group Walking Together.
Walking Together denies ties to the Kremlin, though political analysts
speculate that it is organized by Putin's advisers.
Wearing red or white T-shirts bearing the president's portrait, the
demonstrators chanted "Russia, Russia" while the Russian anthem — which has
the same melody as the Soviet anthem — resounded from huge speakers.
Thousands of police and Interior Ministry troops ringed the crowd while
they listened to speeches in praise of Putin.
Russian media hailed Putin's accomplishments Tuesday, with state-controlled
ORT television broadcasting a flattering package emphasizing the tax
reforms and curbs on the powers of regional leaders that he pushed through
early in his tenure.
The ITAR-Tass news agency ran a list of statistics of his presidency: He
has received 172 foreign guests, made 42 international trips and 41 trips
around Russia, and chaired nearly 2,000 meetings and conferences since his
inauguration.
According to a poll by the respected Romir agency released this week, 71.4
percent of respondents trust Putin. The results were consistent nationwide
and support for Putin was steady among all age, income and education
groups. The poll surveyed 2,000 people. No margin of error was given.
Putin has been steadily popular since he became acting president Dec. 31,
1999 after Yeltsin's abrupt resignation, inspiring paintings, books — and
some warn, the beginnings of a treacherous Soviet-style personality cult.
He was elected president in March 2000 and was inaugurated two months later.
Putin himself was to watch a concert of World War II veterans in the
Kremlin on Tuesday, timed ahead of Thursday's celebrations of Victory Day
to mark the Soviet victory over the Nazis.
******
#3
ORT Review
www.ortv.ru
Compiled by Luba Schwartzman (luba7@bu.edu)
Research fellow at the Institute for the Study of Conflict, Ideology and
Policy at Boston University
HEADLINES,
Tuesday, May 07, 2002
- The Veterinarian Service of the Russian Federation forbade imports of
meat from South Korea, and limited imports of beef from Poland, due to
incidents of foot-and-mouth disease and mad cow disease, respectively.
- Russian President Vladimir Putin and US President George W. Bush
discussed the documents to be signed at the upcoming Russian-American
summit over the telephone.
- The Russian Defense Ministry released official information about today's
MI-8 military helicopter crash in the Altai Mountains. The remains of the
aircraft have been found. The three members of the crew and eight
snowboarders who were onboard died. It is unclear why the athletes were
on the helicopter.
- A concert for World War II veterans was held at the Kremlin today.
Russian Defense Minister Sergei Ivanov congratulated the veterans with the
upcoming holiday. President Putin and other Russian officials attended
the concert.
- May 7th is Russian Radio Day. Despite the development of the Internet
and television, radio remains one of the most reliable sources of
information. Over 900 radio broadcasting licenses were granted in Russia
over the past 5 years. There are over 30 radio stations in Moscow alone.
- Special operations servicemen underwent a competition for the right to
wear the maroon beret. Only four of the 60 contenders will make it.
- Pensions for WWII veterans will be increased by a minimum of 50 percent
on 1 July 2002.
- Final preparations are underway for the May 9 Parade. Concerts and
reunions will be held in many Moscow regions.
- A press conference about Mark Shuttleworth's flight to the International
Space Station was held in Zvezdny.
- The Russian Supreme Court reviewed the appeal of the Defense Ministry
concerning the decision of the Military College of the Supreme Court,
which found Defense Ministry Orders No. 010 and 055 unconstitutional.
That decision has been overruled; the case has been sent to the Military
College for another review.
- Four people died and two were injured in a landmine explosion in the
Ochamchir region of Abkhazia.
- President Putin met with National Reserve Bank Director Aleksandr
Lebedev.
- The all-Russian youth organization Moving Together, now 10,000 strong,
celebrated its 2nd anniversary today.
- Russia dispatched 38 tons of humanitarian aid to Georgia, where 7 people
died and 500 houses were completely destroyed in a recent earthquake.
- Two poachers were detained near the Russian-Chinese border. They were
carrying 32 bear paws -- a delicacy in China -- and a tiger pelt. The two
Chinese citizens were sentenced to 6 years imprisonment. In China, they
would have been shot for killing a tiger.
- Today is the 2nd anniversary of President Putin's inauguration. Putin's
rating has not dropped below 60% in this time.
*******
#4
The Russia Journal
May 6-12, 2002
Saving for a rainy day
By ALEXANDER KONDORSKY
Without a doubt, modern Russia is closer to the world’s well-trodden path
of economic and social development than the Soviet Union ever was, but
there is at least one thing in which the Soviet state was closer to Western
civilization: People did not keep cash at home.
In those days, there was only one place where people could bring their
money for safekeeping – Sberkassa, the state’s one and only savings bank at
the time. Sberkassa’s branches were in every city and village and offered a
rate of interest of 2-3 percent a year, which was quite lavish given that
there was no such thing as inflation in the Soviet Union. Needless to say,
the country then had no stock market because all industries and enterprises
belonged to the state.
There was almost no advertising in the Soviet Union, but for some reason
almost all the advertising that did exist back then was for Sberkassa.
"Khranite dengi v Sberkasse" (Keep your money in Sberkassa) was hammered
into Soviet citizens’ brains.
Although the system was designed so that people received cradle-to-grave
state care and had guaranteed protection from unforeseen circumstances,
Soviets did manage to save quite a lot of money, which is still a mystery
to me.
The fate of these savings was sad – they were frozen in the wake of
economic reforms in the early 1990s, and there is virtually no hope of
depositors getting their money back anytime soon.
The mid-1990s saw a boom of financial pyramids, like Tibet and MMM, which
offered interest rates as high as 30 percent a month but collapsed by 1997,
leaving their most devoted depositors holding the bag. Later, the 1998
crisis dealt another heavy blow to people’s confidence in banks.
As a result, Russians have come to love keeping their savings in cash at
home – stuck inside books, under mattresses and in other hiding places.
Some $10 billion to $50 billion is estimated to be stored in Russian homes
today – from $70 to $340 per person. The United States estimates that,
second only to its own citizens, Russians hold more dollars in cash in
their personal possession than any other people in the world.
Unlike caches at home, the savings in private bank accounts can be assessed
more or less accurately. According to official data, they now total nearly
700 billion rubles ($22.6 billion), or an average of $154 per depositor. Of
that, almost 73 percent is deposited in Sberbank – the state-run successor
of Sberkassa.
As for keeping savings in the stock market, Russia still has a way to go.
In addition to a lack of confidence and the Soviet legacy, there is a
largely technical problem: It is unprofitable for stockbrokers to service
clients willing to invest less than $50,000, keeping all but a very few
Russians out of this investment opportunity.
*******
#5
The Russia Journal
May 6-12, 2002
Time for economic solutions
By OTTO LATSIS
The world economy has once again played into the Russian government’s hands
at just the right moment. After more than two years of high prices for oil
and other Russian exports, and low prices on many imports, everyone was
asking when the luck would run out. And when prices for oil, metals and
other exports began falling, Russia’s good fortunes seemed at an end.
The government then took an appropriately cautious approach and based its
forecasts for 2002-03 and budget calculations for this year on an expected
3 to 4 percent GDP growth. But now Economic Development and Trade Minister
German Gref has announced that the budget forecast for 2003 is being
revised because the government now expects GDP growth of 5 percent.
There are several reasons for this. First, growth picked up a little in
March compared with previous months, and this raises hopes for a more
optimistic result in 2002. Inflation isn’t growing as fast now, and the
International Monetary Fund has also revised its forecast for 2003, now
expecting Russia to show 4.9 percent growth in GDP.
This good, if not particularly significant, news, came just at the right
moment for Gref and his ministry, which is responsible for economic
strategy and forecasts. There would seem to be little difference between 4
percent and 5 percent growth. Both figures are neither especially bad nor
particularly good, and the 1 percent difference will not influence Russia’s
place in the world or resolve the economic and social problems it faces.
But this 1 percent does make a political difference. During his recent
meeting with scientists in the Siberian city of Baikalsk, President
Vladimir Putin expressed his dissatisfaction with the midterm economic
forecast (to 2005). The government agreed with the Gref ministry’s forecast
of GDP growth at around 4 percent over the next four years. But Putin said
this forecast lacks ambition. He later repeated these words in his annual
address to the Federal Assembly.
Putin’s words sounded uncharacteristically sharp, and the media began
speculating about the government’s imminent resignation. Certainly, the
government had to produce some reaction to the criticism from above. Trying
the old Soviet state-planning trick of raising the numbers on paper while
changing nothing in practice is more dangerous than doing nothing at all.
But reacting seriously would mean coming up with a program of rapid and
difficult reforms that would take more time and authority than the
government has. It would have to hold serious talks with parliament, trade
unions, business representatives and with Putin himself.
So, the small upward revision to the growth forecast has given the
government the chance to show the public and the political establishment
that it has listened to Putin and already begun taking measures. What’s
more, GDP growth of 5 percent is the minimum set out in the government
strategy through to 2010, so the revision enables the government to avoid
criticism that its midterm strategy means abandoning its own long-term
strategy.
Now that it has some respite, the government can think about its ambitions.
Not everyone understands that Gref has done no more than make a useful
political gesture, and that all the hard work is still to come. A little
history doesn’t hurt here.
Despite three successful years of growth, from 1999-2001, Russia’s GDP
today is only 65 percent of its peak level in 1989. Had Russia’s economy
grown at levels near the world average, its GDP would be double that of
1989 by now. Instead, it is now just two-thirds of that figure.
Russia’s per-capita GDP puts it well behind the United States and western
Europe. It also trails a long way behind Poland, the Czech Republic and
Hungary, which began market reforms at the same time, and it even is left
in the dust by the former Soviet republics of Estonia and Latvia. If
Russia’s GDP grows at an unhurried 3 to 4 percent a year for the next
several years, it will find itself even behind China, which, when it began
its reforms, had a completely impoverished economy.
When he began his presidential campaign in December 1999, Putin said Russia
needed 8 percent annual GDP growth over the next 15 years in order to catch
up with Portugal and Spain – not the wealthiest countries in the European
Union. To catch up with today’s Britain or France, Russia would need growth
of 10 percent a year. Average annual growth of 4 percent would keep Russia
in the ranks of third-rate countries with below-average per-capita GDP.
At the time Putin made these statements, economic adviser to the president,
Andrei Illarionov, who is known for his criticism of government economic
policy, hadn’t yet joined the Kremlin. But Gref’s team was already busy
preparing a reform program for Putin. It was most likely Gref who gave the
president the GDP figures, calling for growth rates of 8 to 10 percent.
These are realistic figures. In fall 1999, the international consulting
firm McKinsey & Co. published a report based on a study of 10 sectors of
Russia’s economy that concluded that the country could achieve sustainable
10 percent annual growth without relatively modest investment. Dozens of
countries in recent years have proved that this can be done, and Gref’s
team made that its goal, too, receiving Putin’s approval. But this model
for growth depends on reform – of taxation, banking, pensions, housing and
utilities, the military, the judicial system, labor, health and education.
The Cabinet, headed by Prime Minister Mikhail Kasyanov, approved Gref’s
program and reform proposals and made them the government’s official
strategy. But the 8 to 10 percent growth the program called for has since
become a cautious 5 percent, and reforms have also turned out to be
measured and unhurried.
This has kept society at ease, and export earnings have helped raise
pensions and public-sector pay, but none of the strategic tasks Putin set
has been resolved yet. Will the government now find solutions?
*******
#6
From: "Jacob Kipp"
Subject: "Envy" and anti-Americanism/6227
Date: Tue, 7 May 2002
I was a Red Sox fan for all of my childhood and hated the Yankees. If
Vladimir is right I had a bad case of envy. It did not carry over into other
areas, and I suspected that fans of most other American and National League
fans shared my sentiments. Yankee Stadium was enemy territory. We lamented
the "Ruth curse," rooted for National League in the series, and loved Ted
Williams. We admired the Yankees as individuals and cursed the club as those
"damn Yankees" -- we would have made a deal with the devil for just one
season. OK, so you think we suffered from an inferiority complex and envy.
Yes, but it hardly explains anything more than sports. It is not evidence
of some endemic Russian inferiority complex as the source of current
anti-Americanism.
Vladimir suggests that after 11 September that anti-Americanism in Russia is
on the rise and cites the Olympic skandaly as evidence of this sentiment. I
agree on the rising tide of anti-Americanism but wonder whether we can tie
it directly to 11 September. There certainly was a great deal of sympathy
among Russians after the event. Among national security elite that has been
much second-guessing of Putin in not opposing American presence in Central
Asia and the Caucasus but this has hardly moved outside the policy class.
As for the Olympics, I am reminded of a scene in the film, "Bread and
Chocolate", when the Italian guest worker who has done everything to hide
his Italianness to pass in Switzerland, cannot resist screaming in support
of the Italian national team in an international soccer match. Was it envy
that drove him to that or national pride? Are the two related? I think that
for most Russians pride had more to do with the popular sentiment than envy.
That the games were in America and that US media always casts the games as a
confirmation of American power and superiority might have helped to direct
such popular sentiment against the United States. Yes, "Many of them
totally ignored any factor that mitigated America's culpability." But this
is hardly uniquely a Russian sentiment. Fans around the world are usually
irrational about their teams' defeats and tend to blame others. Vladimir
does point out that President Putin, both the author of the current alliance
in the war on terrorism and a sports enthusiast, spoke his mind on the
skandaly. Putin castigated unfair judging. Does this make him Machiavellian
employing a short of reverse "ping-pong diplomacy?" As for Cold War
metaphors, I heard that on our media regarding the judging. The Polish
judge was some how under Moscow's ideological [?] thumb. And the French
judge collapsed under Russian pressure.
Sports excite passions. But lets not make too many policy connections at
this point. Popular passions over the games in February are very hard to
link to sentiments over steel quotas and "Bush-legs."
There is anti-Americanism and it has grown since 11 September but it is
complex and contradictory. I think the explanation is better made in terms
other than envy zavist' . That complexity deserves our attention. There are
a range of motives from various parts of the society. Current
anti-Americanism in some circles is just simple hatred [nenavist']. Reading
Dugin's Eurasian movement's statement on Day of the Sportsman (22 February)
leads one to conclude: What else would you expect from these enemies of
Russia. We told you that long ago. Some have said there is no ideological
foundation for anti-Americanism in Russia. Dugin's answer would be the same
as Lenin's to another such question: "Est' takaya ideologiiya." Reading
Zhirinovsky during the skandaly and you would have concluded that it was the
same old anti-Americanism, but there is this curious problem that he
embraced a US-Russian alliance back in December 2001. That Sovetskaya
Rossiya said something bad about the United States should come as no shock.
It is a dog bites man story. Sovetskaya Rossiya and Zavtra compete for the
most anti-American rhetoric in every number.
As to the others, I would suggest that bashing America is just good domestic
politics. There is little cost for the opposition and not much risk. Blame
problems on the United States and pass the buck. A unanimous Duma vote
condemning foreign media coverage was a safe vote with no political
consequences. Even the majority vote in the Duma for a boycott was
sentiment and not policy -- populist posture. When I worked for a state
legislator we called them "cheap thrills."
I would note that anti-Americanism in the 1990s came in peaks and valleys
from different parts of Russian society. There was one peak in 1995 during
NATO's bombing of Bosnia; another came during the economic meltdown of
1998; the third came in 1999 over the NATO air campaign against Yugoslavia.
In each case a wide range of opinion saw the United States as acting against
Russian interests. Many liberal allies of the United States from the early
1990s did not like the idea of bombing Yugoslavia without an
internationally-recognized mandate from the UN. They opposed US policy but
not the United States. They read Zbigniew Brzezinski book and concluded that
US foreign policy intended the further dismemberment of Russia. They cheered
the dash to Pristina. But then that sentiment began to decline. The issue is
what is driving anti-American sentiment now? Is it Putin's manipulation of
the media? Is it national envy? Is it a complex of motives that a opinion
poll can hardly describe? We need to take it seriously. It is a grave threa
tto the current political-military cooperation between Washington and
Moscowin the war on terrorism.
I note that Vladimir identifies Vassily Aksenov as "a famous liberal writer"
but does not note that he is also an exile and émigré from the Soviet Union
to the United States who has written with insight on the problem of
emigration and what happens to the individual in that transition from one
culture to another. In Search of Melancholy Baby explores this absurd
situation of being a Russian writer in America. Therefore, his sentiments
would seem to be a bit more complex than Vladimir suggests.
******
#7
Jamestown Foundation Monitor
May 7, 2002
UN CALLS RUSSIA AN "ENGINE OF GROWTH" FOR THE CIS.
The government apparently feels that President Vladimir Putin's criticism
of it for projecting "insufficiently ambitious" economic growth figures is
unfair. An unnamed high-level government official quoted today said: "The
rate of growth is not set by directives. To force people to translate
ideological presidential instructions into a concrete figure is to drive
oneself into a blind alley" (Vremya Novostei, May 7).
It should also be noted that many, if not most observers in the West do not
share Putin's gloomy mood about Russia's economy. Indeed, Fitch Ratings,
the international rating agency, announced last week that it had upgraded
Russia's long-term ratings from "stable" to "positive." The agency said it
expected that "under President Putin's leadership, the Russian authorities
will continue to introduce and implement structural reforms that are vital
to raise living standards and diversify the economy" (RBK, May 2; see the
Fortnight in Review, May 3).
The United Nations Economic Commission for Europe (UNECE), meanwhile,
released its "Economic Survey of Europe, 2002 No. 1" last week. It called
Russia "an engine of growth" for the Commonwealth of Independent States.
The report said, among other things, that Russia's economy has "changed
dramatically for the better" in the four years since the August 1998
financial crisis and that three years of "strong growth" have "improved the
welfare of the population and boosted public confidence, both domestically
and internationally." The report praised Russia's government for trying "to
break with the stop-go policies of the past and to accelerate systemic
transformation and market reforms," noting that "[p]robably more sweeping
and comprehensive legislative and regulatory reforms were introduced in
Russia in 2001 than in any other year since the start of economic
transformation." It singled out for praise reforms that "reduce the level
of taxation and seek more transparency and uniform treatment of taxpayers,"
pension reform and the new Land Code permitting the free sale of
residential land along with measures to de-bureaucratize the economy, fight
money laundering and liberalize the labor market. "Most of these reforms
are marked by the spirit of economic liberalization: they are aimed at
fostering entrepreneurship and developing the infrastructure of the market
economy in Russia," the report stated. "It can be expected that they will
contribute to higher levels of economic activity in the future." The UN
report noted, however, that Russia's strong reliance on oil exports is a
"mixed blessing." It urged that this dependence be reduced, with the
long-range goal of transforming Russia's economy into "a knowledge-based
economy whose exports are not dominated by primary commodities but by
technology intensive, high value added manufactured goods" (UNECE press
release, May 2).
Such factors help explain why Russia's economic performance is well off its
high, reached in 2000, when its GDP grew by more than 8 percent. According
to the CIS's statistical committee, industrial growth for CIS states in the
first quarter of this year compared to the first quarter of 2001 is as
follows: Armenia, 13.9 percent; Kazakhstan, 12.1 percent; Azerbaijan, 10.1
percent; Moldova, 8.8 percent; Tajikistan, 5.4 percent; Ukraine, 3.1
percent; Russia, 2.6 percent; Belarus, 2 percent; Georgia, 1.2 percent.
Industrial output in Kyrgyzstan shrank by 11.9 percent. There were no
statistics on industrial output for Uzbekistan and Turkmenistan for the
first quarter of this year (Kommersant, May 7).
*******
#8
Gazeta
No. 8
May 2002
[translation from RIA Novosti for personal use only]
RUSSIAN ECONOMY TENDS TO GROW FASTER
Alexander FRENKEL, Natalia RAISKAYA, Yakov SERGIYENKO,
Economics Institute of the Russian Academy of Sciences
After a protracted period of slow economic dynamics, the
tendencies towards faster economic growth are manifest more and
more clearly in Russia. According to preliminary tallies, the
output of products and services in the key sectors (i.e.,
industry, construction, agriculture, transport and retail
trade) increased by 3.6 percent over the first four months of
this year, as against the respective period of last year.
Meanwhile, the indicator over the first quarter was 3.3
percent, and over the first two months of this year even less -
2.9 percent.
The situation in industry repeats the overall dynamics of
the development of the Russian economy. According to the data
of the State Statistics Committee (Goskomstat), over the
January- February period and in the first quarter of this year
industrial output grew by a mere 2.1 and 2.6 percent,
respectively.
According to the results of the first four months of this year,
industrial output increased (by preliminary tallies) by 3.7
percent. As it was a month ago, non-ferrous metallurgy keeps
the first place in growth rates, with an 8.1 percent output
growth.
The "leader" is closely followed by the food industry and the
fuel sector. According to the results of the January-April
period, they grew by 7.3 and 5.9 percent, respectively.
Machine- building and metal-working made a breakthrough in
April coming fourth in the race. Just several months ago, there
was production decline in the sector. According to Goskomstat
data, production fell by 2.9 percent over the January-February
period of this year. However, according to the results of the
first quarter, machine-building and metal-working registered
some, albeit tiny, growth - by 0.7 percent. Meanwhile, the
overall indicator over the first four months of this years
surged to 5.2 percent (by preliminary tallies).
Positive trends were registered in four other sectors,
i.e., in the production of building materials, in the light,
lumber, wood-working and pulp and paper industries, as well as
in the chemical and petrochemical industry. By preliminary
tallies, output in these sectors grew by 5.1, 2.4, 1.0 and 0.8
percent, respectively, over the January-April period. Positive
dynamics in the light industry are especially remarkable
considering that production fell by 0.7 percent in the first
quarter of this year.
Meanwhile, ferrous metallurgy and power engineering
registered negative production dynamics in the first four
months of this year: output in these sectors dropped by 0.6 and
4.4 percent, respectively.
In analysing the reasons which led to a noticeable
improvement of the economic situation in industry as a whole,
we could single out two factors behind the present-day economic
revival. These are, of course, the restoration of our foreign
trade positions, and a rise in prices on world markets. For the
national industry, this was manifest in an increase in exports,
which is a recognised vehicle of accelerated economic growth in
Russia. Whereas in late 2001 and early 2002 we saw a decline in
exports (8.5 billion dollars in November and 8.2 billion
dollars in December 2001; 6.8 billion dollars in January and
6.8 billion dollars in February 2002), in March Russian exports
amounted to 7.1 billion and in April - to 7.2 billion dollars.
However, this is only 81 and 82 percent of the last year's
indicators.
Another major factor behind the present economic revival
is consumer demand dynamics. According to preliminary
estimates, people's real disposable incomes grew by 8.5 percent
and retail trade turnover - by 9.3 percent over the
January-April period of this year. However, the fact that these
indicators exceed industrial growth rates by more than two
times is not so important as the structure of the final demand.
Over a long period of time, the main tendency on the
consumer market was the continuous strengthening of the
positions of imported goods and the consequent ousting of
Russian-made products. It seems the situation is changing now.
Over the first four months of this year, imports reached 16.2
billion dollars in money terms, i.e., 3.7 percent up from last
year. Meanwhile, imports grew by 5.8 percent in the first
quarter (by preliminary tallies).
At the same time, it is yet too early to speak about any
final turn in economic development trends, since investments in
fixed assets are growing too slowly. Over the first four months
of this year, they grew by a mere 1.8 percent, which is far
below industrial growth rates.
Polls conducted by the Russian Economic Barometer (REB)
agency show that 34 percent of enterprises were planning to
purchase new equipment this April, which is more than the March
indicator by two percentage points.
Meanwhile, in May we expect a drop in the number of
companies purchasing equipment - to 31 percent. In addition, we
expect a whole number of indexations of natural monopolies'
prices resulting in growing production costs in industry.
Enterprises are going to make consumers pay for this. According
to the data of REB polls, 79 companies are planning to raise
their selling prices in May (in April, 77 percent of companies
were going to do this).
However, against the background of the so far unstable
economic development trends and a relatively low level of
optimism in industry, this might have a negative effect on
economic growth.
*******
#9
Yezhenedelny Zhurnal
May 7, 2002
GAIDAR I DO NOT KNOW ANY OTHER...
Yegor Gaidar is sure that liberalism in Russia will prosper because
"there is economic common sense" in Vladimir Putin's actions
Author Alexander Ryklin
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
YEGOR GAIDAR COMMENTS ON THE PUTIN ADMINISTRATION'S PERFORMANCE -
ESPECIALLY AS IT RELATES TO THE ECONOMY. HE DOES NOT BELIEVE THAT 8%
GROWTH IS AN ACHIEVABLE TARGET, BUT HE PRAISES THE PRESIDENT AND THE
CABINET FOR HAVING A CORRECT UNDERSTANDING OF ECONOMIC POLICY AND
KNOWING WHAT NEEDS TO BE DONE.
An interview with liberal economist Yegor Gaidar
Question How would you assess the effectiveness of the current
regime?
Yegor Gaidar What the Cabinet and the president have done over
these last two years in the economic sphere is important, in my
opinion. This is more than could have been expected. The problem is
that the results of structural reforms - especially economic growth -
require some years, not months, to elapse after the reforms. The
economic growth of 1999 is a corollary of the reforms of the early
1990s. What was done in 2000 and 2001 will have an effect on economic
development of Russia after 2005.
Question The president demands 8% growth. Is it possible?
Yegor Gaidar It is not. There is nothing the Cabinet can do to
ensure economic growth of 8% this year. But the president is a
politician, under constant pressure from society and the media.
Question If the demanded economic growth is impossible, what do
you think will happen to the reforms?
Yegor Gaidar Fortunately, I perceive economic common sense in
what the president has been doing. He is like Reagan in this respect.
He has a correct understanding of how the economy works and what
should be done. So far, he has supported the necessary economic
reforms in Russia, and I hope that he is not going to withdraw that
support. As a politician, he understands what the public wants. And
the public wants everything to be fine, and wants it now. Playing
along, Putin is forced to follow the principle formulated by
Academician Stanislav Strumilin in the late 1920s (my friend Vladimir
Mau is fond of quoting it). "I'd rather stand for high rates of growth
than sit [meaning be jailed - Tr.] for low ones," Strumilin once said.
Question But this way we will never "catch up with Portugal" -
as presidential economic adviser Andrei Illarionov would like Russia
to do.
Yegor Gaidar I don't think it matters. Any speculation that we
will never bridge the gap reveal absolute ignorance of economic
history.
Question You say that what has been done has exceeded your
expectations. But is what has been done so far sufficient?
Yegor Gaidar I'm a realist. It is impossible to do everything
right away. Virtually nothing has been done to optimize budget
expenditures. Unfortunately, the reforms are usually implemented when
it is impossible not to initiate them anymore, and not when they are
needed. The system of state finances management inherited from the
Soviet Union has remained virtually intact. Spending is included in
the federal budget because it is left over from last year's budget,
not because money must be spent for the purpose. Civil servants still
have numerous privileges, expensive and unnecessary (like cars, state
dachas, and medical services), and most Russians get a mere pittance
by way of salaries. Along with that, the bureaucratic apparatus is
outrageously large. Military reforms have never been initiated, as if
everything in the army were all right and we had all the time in the
world. All delays and excuses are used. Everything is done to create a
situation where abolition of deferral will be the only option left the
government. That's sad.
Question Citing the lamentable condition of the military
reforms, Boris Nemtsov went into opposition to the regime...
Yegor Gaidar He gave his personal opinion. The party has not
made a decision like that.
Question Do you think this Nemtsov's statement may create
problems for the government? The situation is paradoxical. The Kremlin
is pursuing what looks like a liberal policy and liberals make
statements such as this...
Yegor Gaidar I think that everything will be all right. Putin is
a level-headed man, sufficiently level-headed not to change his
economic policy, despite what some prominent leaders of the Union of
Right Forces might be saying.
Question You described the situation in Russia as a post-
revolutionary stabilization accompanied by centralization of power.
Does this jeopardize liberal ideals and values?
Yegor Gaidar Liberal ideology doesn't call for a radical
reorganization of life. When life is not up to liberal ideology, it
doesn't mean that life has to be immediately changed.
Question There is a widespread opinion that economic growth is
attributable to oil prices.
Yegor Gaidar There is more to the successes Russia has had than
oil alone. Reorganization of the national economy and improvement of
management are the major factors. Compare how Russian oil companies
were managed in the early 1990s and how they are managed now. The
difference is staggering. Take the state of affairs in food industry a
decade ago - and now. What counts is that resources are flowing from
the non-market sector, poorly managed and inefficient, into the market
sector, efficient and properly managed.
Russia doesn't need oil prices above $23-24. High prices are
great for budgets only in the short term. They become a serious
obstacle to long term development of the nation. The Dutch disease is
a serious evil, there are no easy ways of dealing with it. The
macroeconomic policy of the government and the Central Bank is an
attempt to fight it. I can only applaud what has been done by them in
this respect.
Question Investment is not flowing into Russia, despite
deregulation of the national economy and a liberal policy pursued by
Moscow.
Yegor Gaidar It's all right. It's all right that we did not get
substantial investment in 2000 and 2001, when oil prices were high.
Question What is needed to promote the reforms?
Yegor Gaidar Priorities of big business have undergone
substantial changes. Four years ago, big business didn't give a damn
about structural reforms. They were only interested in state funding
and individual benefits. Business leaders know nowadays that
capitalization of their companies depends on the investment climate.
The value of their assets matters to them them. They want to know how
much they can rely on by way of credits, or at what price their assets
may be sold at the New York Stock Exchange. Russian business has
proved capable of investing money, influence, and effort into
improvement of the investment climate. This is significant progress,
this is something unthinkable only five years ago. This is an
important precondition for continuation of the reforms. But the
president and the government should go on supporting the reforms too.
this is what really counts now. Unfortunately, this is the only
guarantee of continuation of the reforms we have. Primakov had his
chance to become the president and there would have been no liberal
reforms under him, believe me. Under him or under Luzhkov. They became
possible with Putin at the helm.
Question Reorganization of natural monopolies is one of the
major problems. How can we introduce market mechanisms of price
formation in the electricity sector and avoid social upheaval?
Yegor Gaidar There will be no revolutions in Russia over this
issue, I assure you. The solution in the electricity sector has been
found. We will have to separate the monopoly part from the competitive
part. We will single out the networks that are relatively simple in
terms of management, the networks where nobody will replace the state.
The state will have to control the cost price there. And lt the
generating companies compete.
Question The parliamentary election is coming. Back in 1999 the
Union of Right Forces scaled the 5% barrier mostly because it
supported Putin. What will it be like this time? Will the Union of
Right Forces support the government now?
Yegor Gaidar The election is scheduled for December 2003. It
will be clear by then what the government is doing. If it is a
reasonable economic policy, we will support them.
Question What about Chechnya?
Yegor Gaidar Chechnya is a grave problem, a problem without
simple solutions. Unfortunately. It's like the Mideast problem. We
will decide the matter of our attitude towards the authorities at the
congress on the eve of the parliamentary election.
Question New liberal parties - Boris Berezovsky's party, for
example - are appearing in the political arena. What is this? A split
that harms the development of liberalism as such?
Yegor Gaidar These days, the level of consolidation of the
liberal part of the political spectrum in Russia is higher than ever
before. For the time being, I don't view Liberal Russia as a serious
political rival, even though it includes a lot of people who have my
sincere respect.
(Translated by A. Ignatkin)
******
#10
Boston Globe
May 7, 2002
Russian hockey goon-free
League cleans up its act, restores some luster
By David Filipov, Globe Staff, Globe Correspondent
YAROSLAVL, Russia - The crowd screamed, held up banners, and did The Wave,
egged on by the cheerleaders and the Jumbotron, backed by a brass band that
could barely be heard over the din in the ultra-modern Arena 2000 Ice Palace.
The fans in this hockey-mad central Russian city who were smart enough to buy
tickets before they sold out started roaring well before the game began.
Hundreds more milled outside, hoping somehow to get in. Tens of thousands
more watched the live television broadcast in packed bars and at home.
Russian professional hockey is experiencing a revival, and nothing said it
better than the raucous scene at Game 1 of the recent championship series
between eventual champion Yaroslavl Lokomotiv and AkBars of Kazan. The teams
featured not only young Russian players eager for the chance to make the jump
to the National Hockey League, but also European players who have come here
to play because the pay, and the level of play, is better than at home.
With booming attendance, higher salaries, and state-of-the-art facilities
such as Arena 2000, ice hockey seems to defy Russia's persistent image of a
country mired in post-Communist decline.
''In America, everyone thinks Russians play in barns, but it is no longer the
case,'' chuckled Vladimir Shalaev, vice president of the Russian Professional
Hockey League. ''Hockey in Russia is back. This is the best hockey in
Europe.''
It has not always been this way.
Not long ago, Russian clubs played to empty arenas and teams barely had
enough money to pay for uniforms, airfare for road games across Russia's nine
time zones, or player salaries. As with much of Russian business in the mid
1990s, hockey was intertwined with a murky world of shadowy characters and
gangland connections, as contract disputes often ended up with contract
murders. The flow of the former Soviet Union's stars to the NHL, which
started in the late 1980s, turned into a flood and deprived Russia of its top
players.
The result was lackluster play and a lack of public interest. It was a bad
time for a sport that is as Russian as borscht and blini, the way baseball
goes with hot dogs and apple pie in the United States.
''Now if people in the US know anything about Russian hockey, it is probably
some vague notion of faded glory and current criminality,'' said Daniel
Satinsky, a Boston businessman who represents the Russian Professional Hockey
League in the United States. ''However, this is not really the situation
today.''
Several years ago, Satinsky said, a group of club owners began a struggle to
throw out criminal elements and turn the league into a professional,
legitimate operation.
Sports had become merged with organized crime in the 1990s after the Kremlin,
having run out of money to fund the programs that made the Soviet Union an
Olympic juggernaut, allowed nonprofit sports groups to import tobacco and
alcohol duty-free for resale in Russia. The scheme made hundreds of millions
of dollars, but it also put teams in the hands of the gangsters who ran the
lucrative booze and cigarette businesses.
The president of Russia's Ice Hockey Federation, Valentin Sych, was cut down
in an apparent contract hit in 1997. In December 1998, St. Petersburg hockey
player Nikolai Nikitin was shot dead in another apparent contract killing.
To put an end to the killings and dirty dealings, Shalaev said, the league's
new leaders had to first make a push to make teams' finances transparent and
legitimate. ''We decided we wouldn't let any questionable elements into
hockey,'' Shalaev said in a recent interview.
The task proved more complicated than expected. Getting owners to account for
their earnings to auditors was one thing. But protecting players from shady
characters turned out to be another problem, especially after a US
Congressional investigation in 1997 found that ''a significant percent'' of
Russian players coming to the NHL were being intimidated and forced to pay
protection money to criminals from Russia.
Shalaev recalled when a police inspector called league offices to inform him
that the agent for one prominent Russian player was being investigated for
dealings in drugs and prostitutes. The league set up rules for licensing
agents, and had a big impact on getting a law on agents passed in the Russian
parliament. The result, Shalaev said, is that there is ''no hockey mafia in
Russia.''
''It's not bulletproof glass,'' Shalaev said, pointing to the windows in his
modest office in the Russian Olympic Committee building. ''I have no
bodyguards and never have and never will.
''This is our biggest achievement in Russian hockey, that there are no
criminals.''
Exodus subsides
Young Russian stars are still leaving for the National Hockey League -
Atlanta Thrashers right wing Ilya Kovalchuk, formerly of the Moscow Spartak
club, was the No. 1 pick in the NHL's 2001 amateur draft. But some Russians
who have played in the NHL have opted to come home, where they are afforded
salaries and star status similar to what they had in America. Forward Andrei
Kovalenko, who played nine years in the NHL and was with the Bruins in
2000-2001, last year signed a contract with Lokomotiv reportedly worth
$250,000-$500,000 annually. Lured by the possibility of such lucrative deals,
second-tier European players, such as Lokomotiv's Czech star forward Jan
Benda, have come to Russia.
''All the young stars want to play in the NHL,'' Shalaev said. ''The best
players are there. But there will no longer be the same rate of departure
that there was. We want there to be some good players here, too.''
No one can say exactly how much Kovalenko's contract pays him. In Russia,
contracts are kept secret by teams, a legacy of the days when mobsters
extorted cash from players.
But observers here agree that the shakedowns of players have waned. In the
Russia of President Vladimir Putin, power has moved out of the hands of
shadowy oligarchs and criminal chiefs known here as ''thieves in law'' and
into the hands of political and business interests whose origins may be no
less shadowy but who walk the Kremlin line. Teams are owned by huge concerns
such as the metallurgy complex that powers the Urals city of Magnitogorsk,
whose club, Metallurg, was a semifinalist in this year's tournament.
''If a bandit tries to bother a player in a town like Magnitogorsk, they'll
throw him in the river,'' said Alexander Petrov, the hockey beat writer for
the Moscow newspaper Vyorsty, adding that the PHL, as Russians call their
hockey league, could someday be as successful here as the NHL is in North
America.
Although the league has prospered, it is not yet profitable. The companies
that own teams and local governments lavish money on their players and
facilities, but so far, the returns from advertising and ticket sales have
been too paltry to cover burgeoning payrolls.
Most arenas seat 3,000-5,000 spectators, and the price of a ticket rarely
exceeds $5. Television coverage provides little or no income. Satinsky said
the PHL is trying to find corporate sponsors who would like to reach Russian
consumers through Russian professional hockey. Before that help arrives, the
league may have to lose some teams, said Alexei Zhuk, a sportswriter for the
influential Kommersant business newspaper.
''Russian hockey is on the rise,'' Zhuk said. ''The players are getting paid
more than in other European countries, and the stands are always full,
especially in the provinces. But despite this most clubs are having financial
problems.''
Olympic factors
Boris Mayorov, president of the Moscow Spartak team, said if the league had
12 well-managed teams, Russia would perform a lot better at the Olympics. The
Russian team's disappointing third-place finish in Salt Lake City this year
had little to do with the PHL. The team was made up almost entirely of NHL
standouts. Only one player was from a PHL team.
To gauge the quality of PHL play, Shalaev pointed to the surprising
performance at the Olympics of the fourth-place Belarus team, which finished
ahead of the Finns, Swedes, and Czechs, teams that featured NHL stars.
Belarus's squad was made up of players from the PHL, Shalaev said.
''None of them are stars in our league,'' he said. ''They aren't even our
best players.''
For most Russians, who still view Olympic success as the litmus test for
hockey players in their country, it is difficult to gauge the effect of the
PHL's resurgence on the overall quality of Russian hockey.
One of the main priorities of the league, Shalaev says, is developing young
players to replace the stars who have headed off to the NHL. Each PHL club
runs a special school for 500-700 children. In addition to a grade school and
high school education, the kids learn to play hockey. The idea is to develop
stars for the future, but also to keep kids out of trouble.
''Not every player will play professional hockey, but they will not go to
drugs, either,'' Shalaev said. ''Instead of handcuffs, we want to put skates
on them.''
Globe correspondent Lidia Vereshchagina contributed to this report from
Yaroslavl.
*******
#11
St. Petersburg Times
May 7, 2002
Anti-Extremism Bill Is Only the Beginning
By Vladimir Kovalyev
LAST week, President Vladmir Putin introduced a draft law in the State Duma
intended to combat extremism. The draft would subject those found guilty of
forming a group with the purpose of committing crimes against people based on
the victims' social, religious or racial background to imprisonment for up to
four years or to a fine of about $1,000 - 100 minimum wages.
While a law of this kind should have been passed long ago, I still think that
it's better late than never. My question is: Will it do anything to change
the situation in Russia with regard to racism and hate crimes?
It's a good question in a country where a significant portion of the
population react positively to news such as skinhead attacks in outdoor
markets on people from the Caucasus - litsa kavkazskoi natsionalnosty, or
faces of Caucasian nationality, as these people are referred to here.
It's not a big secret that many Russians, particularly those living in larger
cities like St. Petersburg and Moscow, feel negatively toward those - Russian
citizens or not - who come from the south of the country. One only has to
count the number of ads for apartments for rent that contain the line "calls
from people from the Caucasus will not be accepted," to get a sense of how
widespread these attitudes are. It's alright to buy fruit and vegetables from
these same people in the city's markets, as long as nobody has to rent them a
place in which to live.
There's a degree of hypocrisy in this and, I think, in the government
introducing the new legislation as well.
My question for the government is: Who helped propagate this negative image
in the first place? You can't suggest that a set of people are untrustworthy,
liars and terrorists without sending extremists the message that harming that
same people is somehow officially sanctioned.
When people like Putin and Moscow Mayor Yury Luzhkov emphasized that they
were "not excluding Chechen involvement" after the bombing of apartment
buildings and a subway underpass in Moscow in 1999 and 2000, without also
emphasizing that there is no actual proof or evidence to support this
position, it just feeds this kind of attitude.
Xenophobic attitudes are not restricted to people from the Caucasus either. I
hear a good number of Russians voice negative attitudes about anyone not from
here. Foreigners should be disliked, as the explanation goes, because they
have a higher standard of living here or because they try to apply their own
attitudes to Russian lifestyles
I was in a cab with two Swiss journalists recently and the driver, in
Russian, told me that the two should "have the s**t beaten out of them." He
couldn't give any specific reason - he just hates foreigners. In a gesture of
magnanimity, he did accept the money they gave him for the ride.
In another example, I got a call on April 21 from a British friend who is in
St. Petersburg for a year to study. She told me that she had been warned by
people not to leave the student's dormitory that day because there was a
dangerous skinhead situation in the city. Listening to a friend talk about
being afraid to go outside because of this type of xenophobic hatred really
made it plain to me that it is an issue that has to be addressed.
The introduction of the new legislation is a step in addressing this issue.
At least the government is confirming that the problem does exist and could
get out of control if measures are not taken to deal with it.
But, I'm not sure that introducing laws and penalties is the most effective
solution - especially if the punishment is meted out by a government that is
involved in creating the problem.
I think that government figures have to act responsibly in making comments
concerning people and groups that are not ethnic Russian, and people from the
Caucasus in particular.
The derogatory use of the word chyorny, or "black" for people from the
Caucasus has only been strengthened by the attitude of the government over
the last few years. I'm afraid that, if the government doesn't seriously try
to deal with the problem - both by enforcing the new law, if it is passed,
and by changing its own way of doing things - then the victims of these
attitudes may just decide to deal with the problem themselves.
*******
#12
The Jamestown Foundation
PRISM
A monthly on the post-Soviet states
April 2002 Volume VIII, Issue 4, Part 2
PUTIN'S TACTICS FOR COMPROMISE WITH THE LIBERALS
By Aleksandr Tsipko
Aleksandr Tsipko is a senior associate at the Russian Academy of Sciences'
Institute for International Economic and Political Research and a columnist
for Literaturnaya Gazeta.
One of March's more significant events was the decision of the press
ministry's competition commission to return the rights to the sixth TV
channel to the team headed by Yevgeny Kiselev. Officially, a competitive
tender resulted in a victory for Media-Sotsium, which is made up of three
groups: (1) oligarchs close to the Kremlin, led by Anatoly Chubais, who are
guaranteeing the funding of the project; (2) the political heavyweights,
ex-premier Yevgeny Primakov and chairman of the Russian Union of
Industrialists and Entrepreneurs, Arkady Volsky; and (3) Yevgeny Kiselev's
team of journalists, comprising staff from Vladimir Gusinsky's NTV. It was
probably necessary to create this complex amalgam, a sort of political
sandwich, in order to reconcile the interests of the Family with those of
Putin. Clearly, in Russia today, the fate of a mainstream TV channel could
not be resolved without Putin's intervention, either direct or indirect, in
the competition. He was undoubtedly the central, decisive member of the
jury. Russia has always had a monocentric system, even under Yeltsin. There
can be no doubt either that the bankruptcy proceedings against Boris
Berezovsky's TV-6 were also conducted at Putin's instigation.
All this gives substance to the claim that the competition commission's
decision on the fate of the sixth TV channel was primarily political. More
than this, the decision was a model of its kind, as a reflection of Putin's
current psychology, objectives, tactics and strategy. It shows who Putin's
current allies are and who he's prepared to upset.
BEHIND THE DECISION
Let us look, first of all, at the psychology behind the decision. It is yet
another manifestation of Putin's recent Hamlet syndrome. With few
exceptions, he is currently incapable of saying a definite "yes" or "no" on
any single question concerning his personnel. Stories of Putin's iron will
and his determined pursuit of his objectives were clearly exaggerated. In
recent months Putin seems effectively to have given up his earlier policy
of decisive, headlong action in favor of preserving the status quo and
trying to surround himself with people with whom he is likely to agree.
Here are just a few eloquent examples. Putin disbands the Clemency
Commission headed by the well-known liberal and rights activist Anatoly
Pristavkin. But, at the same time, he appoints this same Pristavkin as one
of his advisers. He sacks the chief of staff of the Northern Fleet, Vice
Admiral Mikhail Motsak, following the findings of the enquiry into the
causes of the loss of the Kursk. Then he unexpectedly appoints him to a
senior government post as first deputy to the presidential envoy in the
North-Western Federal District.
It's exactly the same with the Kiselev team. First, for some far-fetched
legal reason they are forced off the airwaves. But then the same team, with
a bit of padding, is hailed as a creative, gifted collective, and declared
the victor in the race to win the same channel back again.
Putin, both as an old KGB hand and as a generally guarded man, will not
have forgotten the past, or how Kiselev and his team gave him such a
pasting on Gusinsky's NTV during the presidential election campaign in
early 2000. And to be honest, no one could have forgiven the Gusinsky
team--Kiselev, Igor Malashenko and Andrei Cherkizov--for their off-handed
arrogance and the personal insults with which they peppered their reports
on Putin as a presidential candidate. I don't think that Yevgeny Kiselev
will ever be a friend of Putin. The Itogi presenter dropped clear hints, in
early 2000, of a connection between the Moscow apartment house bombings and
the beginning of the presidential campaign.
But it is now clear that Putin, whatever his feelings and antipathies, is
simply not in a position to clear the TV screen of all his
detractors--Yevgeny Kiselev and all those who remained loyal to him. And
this is because Kiselev and his team have the backing of the liberal
community of the West and, more particularly, the United States. For the
West, forcing the old NTV and then Berezovsky's TV-6 off the air still
looks like an infringement of freedom of speech. Putin has to bear this in
mind. The impression now is that he will refrain from making any serious
move that might cause trouble with the USA or give them grounds to accuse
him of violating freedom of speech or the democratic rights of the people.
Putin declined to comment even when Radio Freedom began broadcasting in the
Chechen language, which is surely a direct interference in Russia's
internal affairs.
At least until George W. Bush visits Russia in May, Putin is unlikely to do
anything that might damage his standing as a Westernizer or interfere with
his ambition to establish a special, amicable relationship with the G-7
leaders.
At the same time, Putin needs to bear in mind that Kiselev and his team
have the backing of the oligarchs led by Anatoly Chubais. The idea of
creating a consortium of big business leaders to provide financial backing
for the Kiselev team was quite a surprise for Putin. He was troubled by the
consortium's inclusion of key oligarchs from the Family, including
Abramovich, Deripaska, Mamut and even an associate of the Petersburgers,
Fridman. At first, Putin and his inner circle even tried to apply pressure
to the signatories; Putin saw the creation of this consortium of the
wealthiest people in Russia as a mutiny and a hostile act. Hence his first
attempts to take the wayward oligarchs in hand.
But no one except Potanin would renege on the deal. And, after weighing up
all the pros and cons, Putin decided to make his peace with the
"mutineers." For the political elite, and especially for the big
businessmen involved, this was proof that Putin could be opposed and that,
at least at present, he is not in a position to do anything to alter the
balance of political forces in the country. Putin seems to have reached the
same conclusion himself. The Kiselev saga probably showed him that he
currently has no administrative, political or financial resources with
which to stand up to the Family, especially when it is acting in concert
with the liberal elite and big business. The old Kremlin elite, combined
with the Liberal party led by Anatoly Chubais, is now simply beyond Putin's
grasp. So is there anyone Putin can rely on other than those who have
helped out Kiselev?
THE FAMILY OLIGARCHS
It seems at least that Putin has recently restored good relations with the
leading oligarchs of the Family. In Krasnoyarsk, he gave his support to the
aluminum king, Oleg Deripaska, who, through his father-in-law, Valentin
Yumashev, recently became a relative of Yeltsin. Deripaska, by some
accounts, has taken over the key position in the business bloc of Yeltsin's
'family', which was earlier held by Roman Abramovich. In a significant
concession to the oligarchs and the Yeltsin elite as a whole, Putin decided
to sack the chairman of the Central Bank, Viktor Gerashchenko, and replace
him with a Chubais man, the former first deputy finance minister, Sergei
Ignatiev.
But Putin has not put himself completely in the hands of the Family. In the
battle for the sixth channel, he managed to solve his tactical problems
without any loss of face. Boris Berezovsky has finally lost control of the
Kiselev team and the sixth channel. Putin has managed to break the haughty
Kiselev, who now publicly maintains that he is no longer in touch with
either Vladimir Gusinsky or Berezovsky. And it is quite possible that this
former GRU officer might now serve Vladimir Putin just as zealously as he
once served Gusinsky and Berezovsky. But will Putin want to have dealings
with Kiselev, now that he's finally on his own? It's common knowledge that
when our intelligence services, like the Americans, have broken their
enemy, they want him out of their sight and will eventually throw him on
the scrap heap.
Furthermore, Putin has managed to take out an insurance policy in the
formation of the Media-Sotsium organization. Everything possible has been
done to prevent Kiselev's team from using the sixth channel to launch a
direct attack on the president. This is why the old apparatchiks and
representatives of the communist nomenklatura--the head of the Russian
Chamber of Commerce, Yevgeny Primakov, and the head of the Union of
Industrialists and Entrepreneurs, Arkady Volsky--were included amongst the
founders of Media-Sotsium. These 'heavyweights', however upstanding, and
however liberal their thinking, will still not oppose the will of the
president in a crisis. And should Putin need to find legal grounds for the
destruction of Media-Sotsium, he can rely on Primakov and Volsky to revoke
their signatures so as to invalidate Kiselev's victory in the tender.
POLITICAL STRATEGY
But Putin's motives in deciding to award the sixth channel to the Kiselev
team were more to do with politics than tactics. And politics on the grand
scale--a whole strategy, in fact.
First, and most important, Putin has always chosen to rely first and
foremost on the liberal elite in the construction of his policies. This is
probably because it is to the liberal elite in Russia that the overwhelming
majority of the expert community, the overwhelming majority of the big
businessmen and the overwhelming majority of the Russian press all belong.
Russia, unlike the rest of Western Europe, such as England, France and
Germany, has no real right-wing conservatives or real right-wing
traditionalists. The conditions in which right-wing conservatism might have
flourished were wiped out by our Bolshevik revolution. It will be very hard
for Putin to win the 2004 presidential elections if he dares to fall out
with the liberal elite.
So, what Putin was actually doing in this instance was gritting his teeth
and opting not so much for the Kiselev team as for the liberal elite. He
had until then been maneuvering back and forth, pursuing a liberal economic
policy based on the support of the traditionalist masses, who dreamed of a
firm hand and a great Russia and dreamed, too, of giving the oligarchs
their comeuppance. It would be fair to say that Putin's liberal policies
now hinge instead on a corresponding liberal force--not the masses, of
course, but the intelligentsia. All that we've seen in recent days shows
how precious the opinion of that "minority" in Russia is to Putin at the
moment. This minority is no more than 10 percent of the population, who
continue to subscribe to the ideas and attitudes of the old NTV, who
enthusiastically supported the Za Steklom series and who wanted Kiselev's
team to win the contest.
Ultimately, this tactic, though risky, is justifiable. Yeltsin held on to
power for so many years after October 1993 with the backing of no one but
the liberal elite in the later years. Kiselev's victory, approved by the
Kremlin and the Family, also marks the defeat of all those who don't share
his convictions and views and who were openly pleased at both the overthrow
of the old NTV and the expropriation of Berezovsky's TV-6. As always in
Russia, another victory for the Westernizers amounts to another defeat for
our pchvenniki (men of the soil), our Russophiles. In this instance, it
meant defeat for the Petersburg siloviki (the ex-KGB and military cadres)
and for the communists. See how the Duma committees, cleansed of
communists, have been falling into the hands of the liberals of the Union
of Right Forces and Yabloko.
The whole story of the TV contest has shown that the Petersburg siloviki
simply have no standing on information and ideological issues. Despite all
their ambitions and influence, they didn't even put up a fight for the
sixth channel. They were unable to gather a professional team around the
banner of their so-called statist ideology. In Russia now, as it was ten or
fifteen years ago, it is much easier to staff a 'pro-western' project than
a "great Russian power" (derzhavny) project. Sergei Pugachev, the Orthodox
banker behind the new Petersburgers has likewise failed in his plan to
establish a statist PR machine. The persistent rumors on this matter remain
unconfirmed.
And though great power ambitions and patriotism are proclaimed by Putin as
a type of state ideology, there is no corresponding propaganda and material
base to underpin it. On TV, all our patriots look like amateurs, taking the
responsibility upon themselves.
Finally, in giving his support to the Kiselev team, Putin showed that he
couldn't care less what the leaders of the Communist Party or the 30
percent of the population who vote for them in the elections, think of him.
It is already apparent that by opting instead for the 10 percent of the
population who sympathize with Kiselev's ideas and creative style, Putin
has placed himself in direct opposition to the overwhelming majority, who
regard liberal television as "enemy propaganda."
So, the Kiselev team's victory in the contest for the sixth channel is
symbolic of Putin's definitive return to the domestic and, to an even
greater extent, foreign policy agenda of Boris Yeltsin. Like Yeltsin, Putin
has embarked on open confrontation with the Communist Party and the Left.
Like Yeltsin, Putin is pursuing a liberal economic policy. It might
legitimately be said that Putin is handling the liberalization of the
Russian economy even more decisively and rigorously than Yeltsin. And most
importantly, as for Yeltsin, Putin's main ally in the re-election process
turns out to be the liberal elite.
Yet it must be understood that, in choosing to rely on the minority, Putin
is taking the old Yeltsin path of confrontation with the "majority." This
means that the problem of national harmony and civilian consensus in Russia
is being shelved indefinitely. But, in my view, Putin had no alternative in
the current circumstances. And, for the time being, there are no serious
threats to Putin's liberal agenda.
*******
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