Johnson's Russia List
#6262
22 May 2002
davidjohnson@erols.com
A CDI Project
www.cdi.org
[Contents:
1. AP: Russia: Nuclear Arms Deal Finalized.
2. AP: Bush Gets Along Well With Putin.
3. Reuters: Putin shows Bush hometown of brilliance and madness.
4. Washington Post editorial: Mr. Putin in Perspective.
5. RIA Novosti: RUSSO-AMERICAN SUMMIT IS TO ADOPT STATEMENT ON
CO-OPERATION BETWEEN PEOPLE.
6. Kommersant: US Ambassador Alexander Vershbow, How Not To Do
Business in Russia.
7. Luba Schwartzman: ORT Review.
8. Vremya Novostei: YESTERDAY'S AGENDA. Interview with defense and
foreign policy analyst Nikolai Zlobin.
9. Moscow Times: Yulia Latynina, Slavneft Shows FSB in Power but
Impotent.
10. Trud: Alexander Protsenko, ONE PERCENT OF AMBITION. Development
again depends on exports of raw materials.
11. Dan Yergin: Commanding Heights: the Battle for the World Economy
on video.
12. Radio Free Euope help wanted ad.
13. Los Angeles Times: John Daniszewski and Paul Richter, Sounding
Out Russia on Hussein. Policy: U.S. has hinted that it is willing to
assure that Moscow's interests won't be compromised if Putin were to
back an ouster of the Iraqi leader.
14. Wall Street Journal: Guy Chazan, Summit Is Expected to Extend
U.S., Russia Ties Beyond Arms.
15. Los Angeles Times: Robert Hunter and Sergey Rogov, NATO, Russia
Can Get Far With Small Steps. One way to pursue common interests would
be sharing anti-terrorism data.
16. Reuters: Embracing the West, Putin risks looking lovelorn.]
********
#1
Russia: Nuclear Arms Deal Finalized
May 22, 2002
By ANGELA CHARLTON
MOSCOW (AP) - A landmark U.S.-Russian agreement slashing each nation's
nuclear arsenals by two-thirds has been finalized, the Russian Foreign
Ministry said Wednesday, a day ahead of President Bush's arrival in Moscow
to sign it.
``The text ... is fully ready for signing,'' the Foreign Ministry said in a
statement, following meetings in Moscow between U.S. Undersecretary of
State John Bolton and Russian Deputy Foreign Minister Georgy Mamedov. No
details of the final agreement were announced.
Bush announced last week that the deal had been reached after months of
tense negotiations, but U.S. and Russian officials have been scrambling to
work out final details in recent days.
Bush arrives in Moscow on Thursday. On Friday, he and Putin are to sign the
deal, which foresees cuts in each country's arsenal to 1,700 to 2,200
warheads from the current 6,000 each is allowed.
U.S. officials have said that the deal could be the last arms reduction
agreement between the two countries, which are increasingly working as
partners rather than foes. But Russian officials say the 30-year-old
U.S.-Russian arms control efforts should continue.
``I'm convinced that we will continue to work with the American side,
including preparation of additional agreements on increasing ...
transparency'' of nuclear weapons cuts, Mikhail Lysenko, head of the
Russian Foreign Ministry's security and disarmament department, said
Wednesday.
A second accord to be signed by the two presidents on Friday, a declaration
on shared political and security priorities, is still being negotiated,
said a high-ranking Russian diplomat who spoke on condition of anonymity.
That document will include a meaty section on cooperation in the missile
defense field, including early missile warning systems and other measures
to increase ``predictability and trust,'' the diplomat said.
No joint work on a missile defense system is foreseen at this point, the
diplomat said.
The Treaty on Strategic Offensive Reductions is the centerpiece of this
week's summit. Foreign Ministry spokesman Alexander Yakovenko said the deal
covers warheads and delivery vehicles, ``and everything connected to
reducing strategic offensive weapons,'' according to the Interfax news
agency. U.S. officials have said the agreement would only address warheads.
Russia remains concerned about the Pentagon's plan to stockpile some of the
decommissioned weapons rather than destroy them.
Bush hailed the agreement in an interview with Russia's ITAR-Tass news
agency and ORT television released Wednesday.
``That's going to be important to show the world that we're no longer
enemies, we no longer have stockpiles of these horrible weapons,'' Bush was
quoted as saying.
Bush praised his relationship with Putin, saying, ``If there was no
personal chemistry, or the chemistry were bad,'' the two wouldn't have met
four times over the past year.
U.S.-Russian relations had been strained before the two presidents' first
meeting last June, largely over Washington's missile defense plans and
Russia's nuclear cooperation with Iran. The two countries had also engaged
in a tit-for-tat expulsion of about 50 diplomats for alleged spying. Ties
improved dramatically with Putin's backing for the U.S.-led anti-terrorism
campaign.
********
#2
Bush Gets Along Well With Putin
May 22, 2002
By ANGELA CHARLTON
MOSCOW (AP) - The personal chemistry between President Bush and Russian
President Vladimir Putin could help end international conflicts, Bush said
in an interview with Russian media released ahead of his Thursday arrival
in Moscow.
Bush also hailed a landmark nuclear arms control deal that he and Putin are
to sign at their meeting Friday, slashing each nation's arsenal by two-thirds.
``I want us to codify the substantial reduction in nuclear offensive
weapons. That's going to be important to show the world that we're no
longer enemies, we no longer have stockpiles of these horrible weapons,''
Bush said in the interview with the ITAR-Tass news agency and ORT television.
Bush had initially resisted Putin's call for the warhead cuts to be written
into a formal legal document, but later relented.
ITAR-Tass released English excerpts from the interview Wednesday morning
that it said were from official White House transcripts, and ORT was to
broadcast the full interview Wednesday night.
Bush praised his relationship with Putin, saying, ``If there was no
personal chemistry, or the chemistry were bad,'' the two wouldn't have met
four times over the past year.
``When the two great countries get along and show friendship ... it can
help calm troubled parts of the world,'' he was quoted as saying. ``I like
him, I trust him.''
Putin's telephone call of support for Bush soon after the Sept. 11 terror
attacks ``meant a lot to me,'' Bush said. ``His call was very comforting
and very important.''
U.S.-Russian relations had been deeply strained before the two presidents'
first meeting last June, largely over Washington's missile defense plans
and Russia's nuclear cooperation with Iran. The two countries had also
engaged in a tit-for-tat expulsion of about 50 diplomats for alleged
spying. Ties improved dramatically with Putin's backing for the U.S.-led
anti-terrorism campaign.
The centerpiece of this week's summit is the arms control deal, which
foresees cuts in each country's arsenal to 1,700 to 2,200 warheads from the
6,000 each is now allowed. Russia remains concerned, however, about the
Pentagon's plan to stockpile some of the decommissioned weapons rather than
destroy them.
********
#3
FEATURE-Putin shows Bush hometown of brilliance and madness
By Peter Graff
ST PETERSBURG, Russia, May 22 - It is 7:00 p.m. and Valery Gergiyev,
mercurial maestro of Russia's Mariinsky theatre, is already due on stage to
raise the baton for Shostakovich's sixth symphony, but has only just finished
a gruelling rehearsal.
He bursts into his office, still in rehearsal clothes, unshaven, drenched in
sweat and smelling like a bear, surrounded by functionaries trying to get his
attention. A young press secretary pipes up that he agreed to meet a reporter
an hour ago.
"Interview? What interview? On what topic? Who are you? When did you call?
What am I supposed to be talking about?"
"Bush..." the reporter says.
"Bush? What Bush? Which Bush? Bush. This is two great men! This is a huge
topic! You must be more specific! What do you want to know?"
St Petersburg, Russia's imperial capital and President Vladimir Putin's home
town, is gearing up to welcome U.S. President George W. Bush with the mix of
unmatched artistic brilliance and edge-of-the-abyss disorder that make the
city a metaphor for Russia at its finest and most exasperating.
The summit headlines will be written in Moscow, when the two presidents sign
a solemn nuclear arms reduction treaty. But the meeting's heart will come
later, when they travel here on Saturday.
Amid streets mapped out 300 years ago by Tsar Peter the Great as his capital
for a European empire, Putin will make the case that Russia deserves to be
accepted as part of the West.
Petersburg residents say it is a job Putin was born to carry out.
Provincial-born Boris Yeltsin, Mikhail Gorbachev and the Soviet Communist
leaders that preceded them were never at ease here.
"Foreign dignitaries always came to the Hermitage. What is different now is
that Putin shows them around himself," said Mikhail Piotrovsky, director of
Russia's greatest museum.
Putin will lead Bush through the Hermitage on Saturday as he has done with
Tony Blair, Jacques Chirac and Gerhard Schroeder.
"Putin is the first leader since the Tsars who can show off the museum
himself. He has known it since his childhood. Just like he is the first
leader who speaks foreign languages."
MAESTRO RHAPSODISES
Like other Petersburgers, maestro Gergiyev is quick to rhapsodise volubly
about the city, even as the audience mills about the lobby upstairs waiting
for the concert to start.
"Petersburg is the result of the idea Peter the Great had for a modern
capital, including a capital of art, including bringing culture, bringing the
world to this country," he tells the reporter in animated bass English.
"And then Petersburg gave back to the world. A lot of poets, a lot of
painters, a lot of musicians, artists, composers, museums, and then a
fantastic amount of architecture was created here, a fantastic amount of big
literature was created here."
It has become commonplace to compare Putin to Peter, who dragged his country
into modernity by imposing strong centralised government and adopting
practices of the West.
But ask a Petersburg native why the city is important politically today, and
you inevitably get a more philosophical answer.
Its geometrically planned streets and canals, its grand architecture built in
straight lines and circles, make it the most deliberately intellectual of
cities.
It is haunted by history, sheltering the ghosts of a 900-day Nazi siege
during World War Two, when hundreds of thousands starved to death in its
streets. Bush, said to be reading up on the brooding 19th century novels of
Fyodor Dostoyevsky, will discover that Petersburg has a tendency toward
madness.
Many of Russian literature's characters -- and several of its authors -- have
been driven insane by Petersburg's ferment of ideas, its poisonous climate,
its dark, wet winters and the month-long mass insomnia of summer's white
nights.
"Those who aren't destroyed by it become stronger," said Vladimir Kotelnikov,
deputy directory of the House of Pushkin, Russia's top centre for literary
scholarship. "Call it a vaccine that gives immunity to Russia's innate
disorder."
That has helped Putin resist the fate of other high-flying provincials who
moved to Moscow and were ground down under the pressures of the capital,
Kotelnikov said.
"Whatever you think of Putin, he has not changed. It is interesting,
anthropologically. His gestures and mannerisms remain the same. Compare it
with Yeltsin (from the Urals city of Yekaterinburg), who seemed to
deteriorate before our eyes."
PETERSBURG VS MOSCOW
City authorities are trying to spruce up Petersburg ahead of the 300th
anniversary next year. There is scaffolding all everywhere.
But to a visitor, the pace of reconstruction never quite seems to keep up
with the corrosion brought on by the Baltic Sea air. Watching the city's
elegant architecture slowly lose the battle with decay is the essence of
Petersburg's charm.
Petersburg people have little time for brash, commercial Moscow. Moscow, they
point out, produces pop stars who wear sequins and dyed fur. Petersburg's
night clubs mint gravelly-voiced rockers whose songs carry inscrutable
political messages.
But Moscow has boomed over the last decade -- its centre rebuilt with flashy
casinos, shopping malls, parks and churches. Petersburg, like the rest of
Russia, has mostly grown poorer.
While Moscow has begun to outgrow the gangland violence of the early 1990s,
Petersburg has become Russia's contract-killer capital. The Interior Ministry
said on Tuesday it was setting up a special organised crime unit for the city.
Still, Petersburg's slower pace of change has brought blessings. One is
Gergiyev's Mariinsky, the opera and ballet theatre still known in the West by
its Soviet-era name, the Kirov, where Bush will see Tchaikovsky's
"Nutcracker" ballet.
Moscow's equivalent, the Bolshoi, has been wrecked by commercial disputes,
lazy programming and management shake-ups, while the Mariinsky has kept top
talent and staged bold premieres with New York's Metropolitan Opera and
Milan's La Scala.
RAUCOUS BUT CHARMING
Russia is not yet the West. In February, Finnair complained that Mariinsky
musicians had been in a drunken fistfight on a flight to New York, and
another Petersburg orchestra was kicked off a flight to Los Angeles to spend
a night sobering up.
But the Bushes should prepare to be thoroughly charmed by the 49-year-old
Gergiyev, who ends his interview with an unprompted aria in praise of the
American First Lady.
"We are quite impressed with Laura Bush because she obviously pays enormous
attention to education, to what will happen to young people around the
world," he announces. "Less violence and more enlightenment. This is what we
all want, and this is what we believe Laura Bush is devoted to."
Seven minutes past seven. Interview over.
At barely twenty past he has changed into a black shirt and trousers, and
emerges onto the stage to lead a programme of two Shostakovich symphonies and
an hour of Russian opera.
The orchestra is technically superb and supple, ripping through
Shostakovich's gleeful ninth -- written in the months after victory over the
Nazis -- with palpable delight.
Nearly four hours later, a jubilant audience files out into the night. It is
still light, but the city is lashed by freezing rain. It's enough to make you
crazy.
********
#4
Washington Post
May 22, 2002
Editorial
Mr. Putin in Perspective
THE ANNOUNCEMENT of two important security agreements between Russia and
the West and the approach of this week's summit meeting between President
Bush and Russian President Vladimir Putin have triggered a round of
euphoric rhetoric. It is widely proclaimed that Mr. Putin is leading Russia
to "join the West"; the Bush administration's ambassador to Moscow, Sandy
Vershbow, last week spoke of the United States and Russia "increasingly
becoming allies in the full sense of the term." Certainly the new
agreements, on reductions of nuclear weapons and cooperation between Russia
and NATO, are welcome, even if both offer more in political symbolism than
in substance. So is Mr. Putin's willingness to cooperate with the war on
terrorism. But before the lovefest in St. Petersburg gets fully underway,
it's worth pointing out that, in both foreign and domestic policy, Mr.
Putin's state continues to differ dramatically from the democracies that
are genuine U.S. allies.
The Russian leader has been given enormous credit for dropping his
resistance to further NATO expansion in exchange for a new mechanism for
including Russia in alliance decision-making. Yet, even as he has
negotiated this deal, Mr. Putin has been stepping up Moscow's efforts to
establish political and economic dominion over the European and Central
Asian countries outside the alliance, ranging from Ukraine, Belarus and
Moldova in Europe to Armenia, Kazakhstan, Kyrgyzstan and Tajikistan. To
preserve its influence at the expense of the West, Russia is backing
corrupt, anti-democratic and anti-Western forces all through this
"near-abroad"; Mr. Putin is single-handedly propping up Europe's last
Stalinist dictator, Alexander Lukashenko of Belarus. Russian troops
continue to occupy bases and strong points in the sovereign states of
Moldova and Georgia, despite promises to pull out. And Mr. Putin continues
to wage the brutal and bloody military campaign he initiated against
Chechnya in 1999, rejecting Western calls for a political settlement.
Mr. Vershbow, like other Bush administration officials, speaks of Russia's
"integration into the Western family of democratic nations." But Russia
under Mr. Putin has become less, rather than more, democratic. Media
organizations that questioned the Chechnya war were crushed and silenced;
critical intellectuals have been intimidated by a series of bogus espionage
trials. Provincial governments have been stripped of authority and power
recentralized in Mr. Putin's Kremlin. Business tycoons have learned that
while monopolistic practices are still tolerated, political disloyalty is not.
Mr. Putin's admirers argue that he is ahead of his elite in cooperating
with the West, and so cannot easily control these clashing policies or
others, such as Russia's continuing sales of nuclear technology to Iran.
But Mr. Putin's personal stamp is as much on Russia's handling of Belarus
and Chechnya as it is on relations with NATO; it's just that the latter
gets much more attention in the West. That doesn't mean his moves toward
strategic cooperation with Mr. Bush are not genuine. But Mr. Putin's
policies make more sense, and no longer seem so contradictory, if they are
understood not as the revolutionary steps of a Russian Thomas Jefferson but
as the more pragmatic efforts of a hard-headed former KGB officer to
restore Russian influence in the world by the best available means. Some
days that means collaborating with the world's most powerful democracy,
which in any case Russia is too weak to oppose; on other days, it means
trampling on democrats and democratic values both abroad and at home.
There's nothing wrong in Mr. Bush's striking deals with such a leader, or
in doing as much as possible to make Russia more like a Western democracy.
But it is wrong, and dangerous, to suppose that "joining the West" is Mr.
Putin's plan.
*******
#5
RUSSO-AMERICAN SUMMIT IS TO ADOPT STATEMENT ON CO-OPERATION BETWEEN PEOPLE
MOSCOW, May 22, 2002 /From a RIA Novosti correspondent/ -- A statement on
co-operation between people will be adopted during the Russo-American
summit, this was disclosed to a RIA Novosti correspondent on Wednesday by
official spokesman for the Russian Foreign Ministry Aleksander Yakovenko.
According to him, both sides plan to discuss "concrete measures concerning
the development of bilateral relations in the cultural, educational and
other spheres, promotion of youth and parliamentary exchanges, contacts
between Russian and American public organisations".
"All the mentioned points will be reflected in the statement on cooperation
between people," the high-ranking diplomat said.
The US Ambassador to Moscow Alexander Vershbow earlier expressed the hope
that an agreement concerning the simplification of visas issuing process
would be reached during the Russo-American summit. Particularly, it is very
important for the youth generation, he said. "It is necessary that the
youth take more active part in the development of relations between the two
countries," Vershbow stressed.
Russian Deputy Foreign Minister Aleksei Meshkov also spoke for addressing
the questions of simplifying travelling between Russia and the US.
According to him, "it is necessary to have more contacts and exchanges
between the two nations, mutual recognition, exploration and enrichment of
cultures." "Thus we will consolidate mutual trust, which will be an
impartial addition to security and stability, concerning the relations
between both countries," Meshkov concluded.
*******
#6
From: Johnson Eric A
Subject: FW: Op-Ed
Date: Wed, 22 May 2002
Hello Mr. Johnson. Attached please find the original English-language
version of an op ed by Ambassador Vershbow that ran in Kommersant
yesterday. We hope that you will be able to run it on Johnson's List.
Thanks. All the best. EAJ
Op-Ed Piece on Investment Disputes or "How Not To Do Business in Russia"
In his recent address to both houses of the Russian Parliament, President
Vladimir Putin rightly observed that countries today are engaged in a tough
competition for markets and investments, and that Russia would need to
fight for its place in the "economic sun." It is important to remember that
direct foreign investment is not just a transfer of money -- it also brings
innovations in technology and management that lead to greater competitiveness.
There are a number of things a country can do to enhance its attractiveness
to foreign investors. Investors want, after all, to make money, and
governments can help by creating conditions of stability and fairness in
which investors have a chance to use their skills and resources to benefit
both the country and themselves. The Russian government has made some
commendable strides in improving the investment climate, such as tax reform
and de-regulation. These steps and the recent recovery of the Russian
economy have spurred interest among potential investors in my country and
elsewhere. But a country's reputation among investors also plays a very
important role. This works in two ways -- companies look to the
experience of other investors before committing themselves to an
investment. In addition, in many cases, a company will start with a small
investment to test the waters, before committing more significant funds.
At either stage, investors' experiences are critical. Governments do not
need to guarantee that investors make money, but they do need to guarantee
fair treatment, so an investment can succeed or fail on its own merits.
Many foreign investments have succeeded in Russia, and I'm pleased to say
that U.S. companies are consistently among the leading investors here.
With Russia's immense resources, its scientific-technological skills, and
the resourcefulness and hard work of its workers, it has tremendous
potential, and American businessmen recognize that. However, it is
disappointing to note that Russia is still performing far below its
potential in attracting investment. (U.S. investment in Russia at $6.3
billion is still about at the same level as our investment in tiny Costa
Rica.) There are many reasons why this happens, but one is the number of
cases of unfair treatment that some investors have experienced. These
disputes scare off others who might otherwise consider investments in
Russia. To put it bluntly, capital is a coward -- investors will go
elsewhere until they have greater confidence that they will be treated
fairly and that they can defend their interests in court if they are not.
Let me provide one case in point. The Russian Government has said it wants
to develop Russia's high-technology potential, and this strikes me as a
sensible long-term policy, given Russia's capabilities. Sawyer Research
Products is a small company from Cleveland, Ohio that is a world market
leader in producing and marketing quartz crystals, used in cellular phones,
radios, and other electronic applications. In 1994, the company started
investing in a bankrupt quartz glass facility in Gus-Khrustalniy in
Vladimir region. It subsequently invested $8.2 million in getting
production in this plant restarted, and by 2000 the factory was exporting
high-quality quartz to the most demanding markets in Japan and South-East
Asia. The result of this investment and Sawyer's infusion of technology,
management, and marketing expertise was that 130 local workers had good
jobs, and Russia had a competitive, world-class, high-tech export.
Although Sawyer had faithfully met all its contract obligations, jealous
local interests initiated legal action by the local prosecutor, and in June
2001 these interests evicted Sawyer from its facility and seized inventory
and equipment belonging to Sawyer. Sawyer has continued with court
actions, pursued a negotiated settlement with its challenger, and attempted
to work with the Russian government to find a resolution, but to no avail.
Neither the Russian government nor courts have taken action to oppose this
seizure of a foreign investment. Meanwhile, I hear that the current
occupants of the plant are unable to maintain the quantity or quality of
quartz production, and its owners are reduced to dumping quartz in China.
A once promising high-technology market is being lost, perhaps forever, for
a Russian producer and its community.
Sawyer is not the only U.S. investor to experience significant difficulties
and see its investment seized or damaged. Two U.S. investors in
Northwestern Russia had their businesses seized (one by the local
government). They went to court and received favorable judgments from both
international and Russian courts, but now the Russian bailiffs have failed
to enforce these judgments. A U.S. investor in a television network had
its frequency arbitrarily seized by Russian authorities and, despite
repeated promises from the responsible ministry, has yet to receive any
compensation for its losses. Companies that legally purchased license
rights to trademarks and copyrights have seen them revoked by the Russian
government and are told, in effect, "we do not care that you have a
contract, you must pay us again." My staff and I have discussed these
cases with Russian government officials, but have yet to see any
significant action on all but a few cases.
Why should Russians care about these problems faced by U.S. investors? I
believe they should be concerned that they are missing opportunities to
build the kind of competitive, vibrant economy that will benefit them, and
even more so their children and grandchildren. It is wishful thinking to
hope that Russia will attract foreign investment no matter what its
reputation is. Russia has many advantages and strengths, but these are not
going to outweigh the risks investors see -- unless action is taken to see
that investors get a level playing field. Even without the capital and
know-how of foreign partners, Russian producers may well have some
successes, but they will very likely come much more slowly and costly. And
in today's global economy, the race definitely goes to the swift. All
Russians are losing opportunities for the sake of narrow, private
interests, who seem more interested in short-term asset stripping than
developing Russia's future. Is this what the Russian people want?
Our two countries have the capability to achieve a great deal by
cooperating on investments that benefit both sides. Many American
investors see that Russia has great potential. But to reach that
potential, the Russian government needs to take more decisive action to
ensure that foreign investors receive fair treatment. In the lead-up to
the summit meetings later this month, I can think of no more positive
signal for our economic relations than the resolution of disputes that
hinder our mutual economic development.
*******
#7
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 21, 2002
- Final preparations for the Russian-American presidential summit are
being conducted in Moscow and Washington. National Security Advisor
Condoleezza Rice declared that Russia and the US will open a new era in
relations with the Agreement on the reduction of strategic offensive
weapons, which will be signed at the summit.
- Russian Border Troops General Vitaly Gamov and his wife were delivered
to a hospital in the Japanese city of Sapporo with severe burns after
unidentified criminals set fire to their Yuzhny-Sakhalinsk apartment.
- Preliminary discussions of government draft of tax legislation continued
in the State Duma today. The budget-tax committee recommended approving
the draft in the first reading. Four centrist factions sent a protocol
document to the government supporting the package of tax reforms.
- Russian Foreign Minister Igor Ivanov met with his North Korean
counterpart Paek Nam Sun.
- Foreign Minister Ivanov also spoke at the meetings of the State Duma and
Federation Council committees for international affairs.
- Nikolai Kostyuchenko has began his tour of duty as the General
Prosecutor of the Republic of Chechnya. He replaced Vsevolod Chernov, who
finished his rotation and returned to the Rostov Oblast.
- Picketers blocking the highway between Bishkek and Kyrgyzia's southern
regions have freed up the road after the State Comission investigating the
tragedy of March 17th were announced.
- The three Chechen gang members on trial in Pyatigorsk will hear the
verdicts in the near future.
- Russian border troops from the Itum-Kalinin border division thwarted an
attempt by rebels to fight their way from Georgia into Russia.
- Russian President Vladimir Putin chaired a meeting at the Federation
Council with the leaders of regional parliaments to discuss the welfare of
Russian citizens and the socio-economic conditions in the country.
- Another terrorist act has been prevented in Grozny. A bomb hidden under
a kiosk was discovered and dismantled.
- The operation to raise the fragments of the Kursk nuclear submarine has
been delayed until June because of unfavorable weather conditions.
- State Duma Deputy Speaker Lyubov Sliska said that the Duma may accept
the law "On the Sale of Agricultural Land" before the end of the spring
session.
- Candidates have been allowed to begin campaigning for the gubernatorial
election in Krasnoyarsk Krai. Elections will be held on September 8th.
- Russian peacekeepers have been serving in South Ossetia for 10 years
today.
- About 100 Arabs are hiding out in the Pankisi Gorge.
- Most of the forest fires in the Far East have been localized and are
beginning to abate.
- Fishermen in Vladivostok have succeeded in making their point. They
will receive the salaries owed them.
- The musical Notre Dame de Paris premiered in Moscow.
- Theodore Gladkov's Lift v Razvedku [Elevator to Surveillance], a novel
about the Soviet spy Aleksandr Korotkov, has been published.
******
#8
Vremya Novostei
May 22, 2002
YESTERDAY'S AGENDA
Interview with defense and foreign policy analyst Nikolai Zlobin
Author: Alexander Lomanov, Fyodor Lukyanov
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
RUSSIA SHOULD FIND SOME WAY TO PROVE ITS LONG-TERM USEFULNESS TO THE
UNITED STATES. FIGHTING TERRORISM IS GOOD, BUT UNITING AGAINST SOMEONE
WILL NOT LAST LONG. RUSSIA HAS TO FIND SOMETHING WHICH IT CAN DO
BETTER THAN THE UNITED STATES, AND THIS WILL BECOME THE FOUNDATION OF
OUR RELATIONSHIP.
Interview with Nikolai Zlobin of the Center for Defense
Information.
Question: Has there been a breakthrough in our relationship?
Nikolai Zlobin: No, because we have not worked out a new
philosophy of relations. It remains obscure where to go, what we want
from each other. This is not a problem of the United States, this is
Russia's problem, Russia does not have a clear concept of its future.
It is good that Russia has passed the test of reality, having admitted
that it is a junior partner of the United States. Much has been
clarified, there will be no more attempts to pretend that Russia and
the United States are equals, there will be no more grievances. Now
Russia has to define clearly what spheres we can be partners in, and
what can bring success to both of us. It is highly profitable to
cooperate with the United States, but Russia has not come to realize
it yet. Bilateral relations have long remained in the hands of people
controlling arms, counting missiles. This is why the agenda of the
summit - signing an agreement on armament reduction - is the Russian
agenda of yesterday, or even day before yesterday. The United States
is not interested in that. It will reduce arms without this agreement,
even if the Congress does not ratify the agreement.
Question: What is the aim of this visit?
Zlobin: The major aim is to have a good time. And I am not
joking. This three-day visit to Moscow and St. Petersburg may become
the most pleasant of all his trips. The fact that Bush decided to
spend three days of his precious time in Russia is a credit of trust
to the country and the president. Look, neither Europe, not protests
of the world community could make Bush sign the Kioto protocol. He did
not want to sign this agreement with Russia either, but he will do it!
He decided to meet Russia halfway. This is a symbolic and respectful
move toward Moscow, though the topic for discussion is obsolete.
Question: Many are worried that Russia did not manage to sell its
refusal from ambitions and support of the anti-terrorism campaign.
Zlobin: The fact that Putin rendered help without asking anything
played a very important role in improving the image of Russia and
Putin himself, and this effect is going to last long. The very visit
of Bush to Russia is a positive signal to many countries, companies,
capital. If Russia learns to build its relations with the United
States, the profit will be great. Now Russia has a chance to fix its
place correctly for 50 years ahead - but Russia needs political
willpower for that. However, I cannot see any way for consensus on
foreign policies and unanimity of the elites.
The Russian elite does not understand one thing: it would gain a
lot more if it cooperated with the American elite, instead of
confronting it. Many believe that they could earn money as
"professional anti-Americans", as in the 1970s and 1980s. The
situation in the United States is different - one cannot make money by
fighting Russia any longer. Of course, there are people like Zbigniew
Brzezinsky, but they have withdrawn from politics. Sometimes Russian
counter-agents bring them to public notice, simply to justify their
existence. The majority of the US elite views this with fear.
Question: And how can Russia find its place?
Zlobin: It should find something to prove its usefulness to the
United States in the long-term prospect. Fighting terrorism is good,
but uniting against someone will not last long. Russia has to find
something which it can do better than the United States, and this will
become the foundation of our relationship. For example, securing
safety and development of the Euro-Asian region. Unifying processes
will occur in the region, as it was a decade ago in Europe. Russia has
a good chance to take control over these processes - including the
Caucasus, Central Asia, countries of the Asian region. Russia can help
the United States deal with the problems of great public interest.
Securing safety in the world, nonproliferation of arms, fighting
terrorism, securing stability of the oil and energy market,
stabilizing and predicting financial currents, counteracting drugs and
criminality in the region.
Question: And what if China tries to become the regional auper-
state?
Zlobin: Russia can play an important part in it all the same.
Americans are interested in stability and predictability of the
region. Russia should be zone where the west and China could try to
find a common language and settle problems.
If Russia protects its, the United States's and Europe's
interests in that region, then the United States and the west will
stand for Russia's interests in other parts of the world. And gradual
integration with the west will become the basis of the relations.
Russia has traditionally strong positions in India, due to which
the United States could sort out their problems there with less
mistrust. In exchange, Russia can ask for help in securing its
positions, say, in Pakistan. But this is a political risk - it will
have to take someone's side, the United States's side in this case,
sign certain agreements.
Obviously, main problems of the United States are shifting from
Europe to Asia, Euro-Asia, and European countries cannot help us for a
number of reasons. Americans could bring there 300,000 soldiers, build
military bases, but we do not need to do it if we have a good partner
like Moscow.
Question: Does Washington understand that "taming" Moscow is
better than sending soldiers?
Zlobin: Yes, it does. That is why Bush is coming, from the
tactical point of view, the United States does not need Moscow now.
But from the strategic point of view, the US elite realizes that in 5-
20 years Moscow will be playing a leading part in the region. And in
this case the gratitude of the United States will be infinite. We had
better build our relationship by the principle of Euro-atlantic
cooperation: common values, mutual understanding, my missiles - your
missiles.
Question: What do you think about multi-polarity and attempts to
unite several weak states in counteracting the United States?
Zlobin: Even if several dozens of weak states unite, they will
not make a counter-balance to the United States. The idea of
integration with the west wins, excluding a couple of dozens states
which do not accept ideologically.
Question: Many Russians consider Americans cynical - since some
leaders who used to be "bad" have suddenly become friends of the
United States. For example, certain Central Asia regimes.
Zlobin: At present, the Americans have to achieve some practical
military tasks - and they will cooperate with anyone in order to do
so. This is normal, healthy self-interest. But wherever the Americans
appear, problems arise for totalitarian regimes, even if they
cooperate with the United States at first. The Americans have a
missionary mind-set; they sincerely believe in the ideals of democracy
and liberty, on which their nation is based.
Question: It has become quite the fashion to talk about energy
supplies - to Europe, Asia, the United States... Could this become a
supporting framework for our relationship?
Zlobin: Bush knows that Russian politicians would try to raise
this issue, and this puzzles Americans - they are afraid that oil
companies influence the Russian government too strongly. There is a
lobby group in the United States, seeking to continue working with oil
from the Middle East; but there is a problem in Russia - Americans are
scared by how closed-off Russian oil companies are, they do not have
clear rules of the game, sometimes it is hard to find out who owns
them. Under such circumstances US companies cannot take risks;
besides, there are problems of transport and investment. Russia should
offer its products more actively; taking into consideration, however,
that the US political elite is quite skeptical about this option.
There will be no breakthrough in this sphere. Besides, US companies
and the government do not like it that Russian companies try to break
into the European market without letting anyone into theirs. So this
is a question of the long-term prospect.
(Translated by Daria Brunova)
*******
#9
Moscow Times
May 22, 2002
Slavneft Shows FSB in Power but Impotent
By Yulia Latynina
The latest battle has kicked off -- this time over Slavneft oil company.
Roman Abramovich's Sibneft and Sergei Pugachyov's Mezhprombank -- i.e. the
Family and the St. Petersburgers -- are competing for control of Slavneft's
financial flows. You see, the orthodox banker Pugachyov is positioning
himself as a close friend of Putin's and the "financial brain" behind the
St. Petersburg-chekist group.
Neither side has a blocking, let alone a controlling stake in Slavneft. And
so both clans are relying on their administrative resources alone --
thrashing each other with the respective parts of the state they have
privatized.
Slavneft sales, prior to recent events, had been controlled by structures
close to Sibneft, as demonstrated by the criminal suit filed against its
current president, Yury Sukhanov, for selling oil to a Sibneft trading firm
at below market prices.
Mezhprombank previously had no link to Slavneft, making it possible for the
St. Petersburg team to behave in characteristic fashion, accusing their
opponents of diverting funds, robbing the Motherland blind and so on. Such
allegations are most likely true, but are undermined by the fact that the
individuals behind them just dream of replacing Sibneft and doing exactly
the same thing.
What has happened with Slavneft is a classic example of a chekist ploy gone
wrong.
To recap: Mikhail Gutseriyev, head and founder of the Ingush offshore zone,
or BIN, was the previous head of Slavneft. Slavneft's oil was exported
through Sibneft-affiliated traders and the profits divvied up -- so they
say -- between Gutseriyev, Sibneft, former head honchos at the Interior
Ministry and a criminal group close to them.
After the death of the criminal group's leader, the other two weakened
partners were removed from the equation. Shopping your partners, regardless
of who they are, always weakens the one is doing the betraying. The
weakened Gutseriyev became the perfect target for a chekist scheme.
The recent election in Ingushetia was crucial. After the departure of
Ingush President Ruslan Aushev, Gutseriyev needed to get his man in as
successor. Otherwise the money that passed through the BIN offshore zone
(which, they say, was used by Chechen criminal groups to launder money and
support the war in Chechnya), might become a source of major unpleasantness
for Gutseriyev, up to and including criminal investigation.
Gutseriyev's man was to have been his brother Khamzat. One group of
chekists removed Gutseriyev's brother from the election while another
promised Gutseriyev protection. A frightened Gutseriyev was then forced to
appoint Alexander Gnusaryev, a Mezhprombank top manager, to one of the top
positions in Slavneft and send his vice president, Yury Sukhanov, who
represented Sibneft's interests on vacation.
It looked like everything was sorted out. Gutseriyev quit his post. His
replacement was to have been Anatoly Baranovsky, who previously worked in
Rosneft (which is controlled by the security services).
However, instead, at an extraordinary shareholder meeting May 13, the state
voted for Sibneft's man Yury Sukhanov, after which the main wave of noisy
and absolutely pointless attacks against Slavneft was unleashed.
This week I interviewed Boris Berezovsky, a man who is certainly odious and
biased -- however a prejudiced but brilliant mind is sometimes more
profound than an objective but mediocre one. To my question regarding the
prospects of the chekists triumphing in Russia, Berezovsky replied: "Not a
single oligarch has emerged from the chekists' ranks or ever licked the
chekists' boots. This is because the main thing an oligarch has is freedom.
An oligarch is someone who makes decisions himself and bears responsibility
for them. Therefore I would say that the FSB has come to power but is
incapable of doing anything, because they have always been servants." It
would seem that the story with Slavneft corroborates Boris Abramovich's
diagnosis.
Yulia Latynina is a journalist with ORT.
*******
#10
Trud
May 22, 2002
ONE PERCENT OF AMBITION
Development again depends on exports of raw materials
Author: Alexander Protsenko
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
PRESIDENT PUTIN DEMANDED IN HIS ANNUAL ADDRESS THAT THE CABINET
SHOULD SET MORE "AMBITIOUS" ECONOMIC DEVELOPMENT TARGETS FOR 2002-05.
TOMORROW THE CABINET WILL EXAMINE A NEW VERSION OF GROWTH FORECASTS.
LITTLE HAS CHANGED IN IT, HOWEVER, AND WHAT HAS CHANGED IS NOT VERY
RELIABLE.
Tomorrow, the Finance Ministry and the Economic Development and
Trade Ministry must submit to the Cabinet their final (revised)
version of the forecast for Russia's economic development until 2005.
The main thesis is known: this country will not be "catching up with
Portugal" - at least not in these five years. This conclusion is
gathered from the figures finance and economic ministers Alexei Kudrin
and Herman Gref already submitted ("provisionally") to Prime Minister
Mikhail Kasianov on Monday. The overall economic growth target, as
compared with the original version criticized by Vladimir Putin (for
lacking proper "ambition"), has been increased by only 1-1.5%.
In particular, the forecast of GDP growth for this year was only
raised by 0.2% (to 3.6% overall in the year) - and even this figure
was "drawn" at the cost of revising the expected exchange prices for
Russian oil Urals. Originally they reckoned on the level of $20.50 per
barrel, now this mark was raised to $21.5, which is to make oil
companies (and thus the nation) $1.5 billion richer.
The same for the future, in 2003. The Economic Development
Ministry plans extra increase in oil exports by 13-16 million tons,
which at the price of $21.50-22 per barrel will yield an "extra" $2.1
billion of revenue, hence GDP growth will reach 4.4%. (The previous
forecast was based on the oil price of $18.50 per barrel, which
secured annual GDP growth by only 3.4%).
The plans for the economic development in subsequent years do not
impress either. The forecast GDP growth for 2004 is 4-5.4% (the
original version contained the same figures), for 2005 - 5.8% (it was
5.6%). In this way, we will indeed catch up with no Portugal (the
poorest in Europe), let alone more developed countries. Moreover, a
natural question arises: what will happen to these forecasts if global
oil prices do not "wish" to rise to the levels prescribed for them,
but, on the contrary, fall? This is unlikely, as there seems to be
some improvement in the global economy, but there's nothing that can't
happen in our changing world...
Remember also that the president demanded that the government
secure stable economic growth of 6-8% a year. Although there is also a
question: is the nation ripe for such a growth spurt?
Prime Minister Mikhail Kasianov and reformist ministers (first of
all, Alexei Kudrin and Herman Gref) claim: Russia does not need
"inflated figures", but structural adjustments, expansion of economic
liberty, strengthening competition, and raising productivity. This is
exactly what will accelerate the economy to the necessary development
rates. The "percentage game" is dubious for another reason today: next
year is the peak of payments for the foreign debt. These theses are
hard to disagree with. However, don't the ideologues of the present
reforms extend another "transition" for too long?
In actual fact, only two of "inward reserves" was added to the
forecast revised at the demand of the president. The first is
increasing investment in manufacturing (by 7.5%) at the cost of growth
in consumer demand. However, wages and salaries in the country are
growing at more than modest rates - in the present and next years
serious rises are only promised for the military. It is also unclear
how the authorities are going to persuade Russian consumers to by
mostly domestic goods, but not imports. Last year, for example,
imports grew 20% and will grow 11% more this year, experts estimate.
The second "reserve" the government hopes to use is stimulation
of business by relieving it of some pressure from administrative and
law enforcement agencies. The idea is longstanding, "notorious",
therefore the president's address insistently spoke about the
necessity of a real, not alleged, decline in administrative pressure
on business. It is hard to calculate so far how this will look in
reality, or what visible economic effect these measures will have.
These are actually all the innovations. Isn't it too little?
Meanwhile, time is passing by and the national confidence credit
the executive branch gained after the change of president is not
eternal. Or will the Cabinet again point us toward an indefinitely-
postponed "bright future"?
Be the way, in the words of State Statistics Committee head
Vladimir Sokolin, the nation did not get off to a running start this
year; quite the contrary - it began with a deceleration of economic
development rates. While in January-April 2001 industrial output grew
5.6%, this year the growth in the same period only amounted to 3%. The
figures for May are expected to be still worse, as Russia was mostly
on vacation for the first third of May.
(Translated by P. Pikhnovsky)
*******
#11
Date: Tue, 21 May 2002
From: "Dan Yergin"
Subject: Commanding Heights: the Battle for the World Economy on video
Commanding Heights: the Battle for the World Economy is now available in
video. In April, Johnson's List reported on the six-hour PBS series, which
the Washington Post called the most important television series of the last
ten years. Among other things, it tells the story of Russia's transition.
Johnson's List published the full text of the Gorbachev interview and
directed readers to the website for the other extensive interviews. No
doubt to the amazement of hardened Russian analysts, the video has been as
high as number 5 on Amazon. com (at a discounted price of $34.95 for
standard American format) -- ahead of Star Wars the Trilogy and Monsters Inc.
The video is a very powerful teacing tool. Academics are already
integrating the video into their teaching. Professor Thane Gustafson of
Georgetown University, author of Capitalism Russian Style, reports: " I
showed the videotape of the series in my comparative politics class when
it first aired on PBS, and the students were totally absorbed by it. The
television series conveyed the major themes of the course in a very
powerful way. We followed every showing with a lively discussion.
Considering there were over one hundred students in the course, this was a
real tribute to the value of the series as a catalyst and a learning tool.
Many students came up to me spontaneously to say that the television series
had been the high point of the course."
The series can be obtained online from amazon.com or by calling 800-949
870, or go to www.pbs.org/commandingheights
*******
#12
Subject: Radio Free Euope help wanted ad
From: SindelarD@rferl.org (Daisy Sindelar)
Date: Wed, 22 May 2002
Radio Free Europe/Radio Liberty is looking for a Moscow-based Correspondent to
provide frequent hard news stories and features in English (3-4 per week) to
support our broadcast operations. RFE/RL is a private, international
communications service to Central, Eastern and Southeastern Europe; the
Caucasus; and Central and Southwestern Asia funded by the U.S.
Qualifications:
-- A university degree in journalism, international relations, or a related
field, or equivalent practical experience;
-- High-level proficiency in both written and spoken English;
-- Ability to read and comprehend source materials, and conduct interviews in
Russian;
-- Broad knowledge of political, economic, and social structures of Russia and
the CIS, as well as strong general knowledge of international affairs;
-- Minimum of 4 years journalistic experience;
-- Proven ability to write swiftly and concisely under pressure, and to meet
tight deadlines;
-- Demonstrated strong commitment to journalistic integrity and objectivity
To apply:
Please provide detailed CV, with cover letter in English, outlining
qualifications and salary requirements via e-mail to:
Kestutis Girnius
Managing Editor, News and Current Affairs
GirniusK@rferl.org
Deadline is June 1.
RFE/RL is an Equal Opportunity Employer committed to workforce diversity.
*******
#13
Los Angeles Times
May 22, 2002
Sounding Out Russia on Hussein
Policy: U.S. has hinted that it is willing to assure that Moscow's
interests won't be compromised if Putin were to back an ouster of the Iraqi
leader.
By JOHN DANISZEWSKI and PAUL RICHTER, TIMES STAFF WRITERS
MOSCOW -- Can the United States get Russia on board for a war against Iraq
if U.N. sanctions fail to drive President Saddam Hussein from power?
That is one of the intriguing questions to be raised when President Bush
meets with President Vladimir V. Putin in a four-day summit starting
Thursday. The U.S. and Russia are trying out a new, closer strategic
relationship, and American officials are eager to see just how cooperative
Moscow will be in dealing with countries such as Iraq and Iran.
A senior U.S. diplomat, who recently briefed journalists about the summit,
indicated that the Bush administration is willing to make any military
action against Iraq, a traditional Russian ally, significantly more
palatable to Putin by offering assurances that Russian economic interests
will not be harmed. In particular, he hinted that the U.S. would look
favorably on a post-Hussein regime honoring Iraq's $8 billion in debts to
Russia as well as keeping in place lucrative oil contracts and equipment
sales that the Persian Gulf nation has awarded Russian companies.
"Those are things we are prepared to talk about, shall we say, in a
positive spirit, if it helps us get to the common goal of denying Saddam
Hussein the ability to develop weapons of mass destruction," the diplomat
said.
Although Russia has been Hussein's main ally in the many U.N. Security
Council debates on Iraq over the last decade, the deepening friendship
between Moscow and Washington since the war on terrorism began last fall
could herald a shift in Russia's perception of its own interests, the
diplomat suggested.
"I don't think it is foreordained that we will have a parting of the ways
if pressure fails and military options have to be considered," he said. "I
think the Russians, if Saddam blows his last chance, are prepared to say,
'We tried, but there is nothing more we can do.' "
Russian-Iraqi Ties
The Russian-Iraqi business relationship is no small matter here. Some
experts estimate its long-term value at $40 billion, or about two-thirds of
Russia's national budget for this year. Just this week, there were appeals
from the Russian oil industry for Putin to "protect" Iraq from the United
States.
In Washington, National Security Advisor Condoleezza Rice said Monday that
Iraq would be on the agenda of the Bush-Putin meeting but indicated that
the discussion would not necessarily be about military action.
"Since the president hasn't made any decisions on what to do about the
status quo in Iraq, just that the status quo is unacceptable, I think he
will want to consult with Putin on exactly that point," Rice said.
Bush is likely to lay out the U.S. case for ousting Hussein and argue that
Russia would be better off with a successor regime in Iraq that would not
threaten other nations in the Persian Gulf region, another U.S. official said.
But this official said that some of the urgency of winning Russian support
has faded since it became clear that the U.S. is willing to wait because of
renewed efforts at the United Nations to impose a return of weapons
inspectors on Iraq.
John Tedstrom, a former National Security Council aide, said the summit was
a natural occasion for Bush to try to win support on Iraq. Although the
Russians have criticized American talk of a "regime change," Putin shares
Bush's concern about the threat of radical Islam, Tedstrom said.
"Now is the time, in a one-on-one, where you'd get the president to say,
'We need to talk about this seriously, and we need to come together and
support our common interests,'" said Tedstrom, now at the East West
Institute, a think tank in New York
Tedstrom predicted that Bush would seek an agreement in principle on policy
toward Iraq and that the president might ask for Russian help in
intelligence-sharing and overflight rights.
Limits to Guarantees
But Tedstrom doubted that the U.S. would go so far as to guarantee that the
successor regime would repay Iraq's debt to Russia. He said the U.S. was
more likely to promise help getting easier terms on debts Russia owes the
West.
Ivo H. Daalder, a former National Security Council aide now at the
Brookings Institution in Washington, said he believes Russian opposition to
ousting Hussein is already on the wane because of Putin's inclination "not
to oppose things he can't stop anyway."
But Russian Foreign Minister Igor S. Ivanov insisted before a committee in
parliament Tuesday that Moscow still opposes U.S. military strikes.
Putin is under pressure from his own business community to delay any
U.S.-led military action, said Andrei V. Ryabov, an analyst at the Carnegie
Moscow Center think tank.
"It is quite possible, reasonable and logical that Russian oil tycoons
should ask President Putin to try and put in a word of protection for
Saddam," the analyst said, pointing out that the international oil embargo
on Iraq has helped keep oil prices from falling.
Russian oil tycoons understandably are skeptical of any Washington promise
to watch out for their economic interests, Ryabov said. "They can't feel
secure about any guarantees the U.S. administration may give out
now--before the operation starts."
Even if the United States holds sway over the next Iraqi government, it
still might not be able to guarantee Russia's oil activities in the Persian
Gulf nation, he said.
"The big question is whether this [new] government would be stable enough,"
Ryabov said. "There might be terrorists from all over the world converging
on Iraq, exploding oil rigs and committing all kinds of sabotage."
Daniszewski reported from Moscow and Richter from Washington. Sergei L.
Loiko of The Times' Moscow Bureau contributed to this report.
*******
#14
Wall Street Journal
May 22, 2002
Summit Is Expected to Extend U.S., Russia Ties Beyond Arms
By GUY CHAZAN
Staff Reporter of THE WALL STREET JOURNAL
MOSCOW -- Russia and the U.S. say their summit this week will mark a
crucial turning point for a relationship long dominated by Cold War-era
security concerns and now finally shifting to the nitty-gritty of trade,
energy and investment.
But analysts and businessmen say it will take more than a summit to turn
the two into genuine economic partners. Over the past 10 years, U.S. direct
investment in Russia comes to only $4 billion (€4.34 billion) -- roughly
what it invests in China in a year -- while Cold War trade barriers that
limit Russia's access to American markets and steel import tariffs imposed
by the Bush administration lead many in Moscow to mistrust U.S. promises of
an economic alliance.
White House officials say this week's meeting will probably be the last
when arms control -- in this case a treaty slashing Russian and U.S.
nuclear arsenals by two-thirds -- will dominate proceedings. President
Vladimir Putin's strong support for the U.S. post-Sept. 11 has led to talk
of a new strategic relationship based on common interests like fighting
terrorism and weapons proliferation -- and upgrading economic ties.
But instead of getting closer, the two have descended into a bitter trade
war. Russia retaliated against U.S. steel tariffs last month by slapping a
temporary ban on U.S. chickens, stinging an industry that last year sold
poultry valued at about $640 million to Russia , its biggest export market.
Yet on other issues, there is scope for partnership. Russia , the world's
second-biggest oil producer after Saudi Arabia, is trying to position
itself as a potentially more stable source of energy supply than the
volatile Middle East: That is being strongly endorsed by the U.S., which
has welcomed the sharp increases in production recorded by Russian oil
companies over the last two years.
"Diversification of world supplies of oil and gas contributes to a better
global balance," Alan Larson, undersecretary of state for economic affairs,
said in Moscow last week.
One official familiar with summit plans said there would be discussions and
possibly a signed agreement on closer cooperation in the energy sphere. The
U.S., he said, is encouraging more construction of privately owned ports
and pipelines to bring more Russian crude to export. One way of doing that
would be for the Overseas Private Investment Corp. or other agencies to
offer government-backed loans.
Meanwhile, some private U.S. investment is trickling into the Russian oil
sector. Last November, a group led by Exxon-Mobil Corp. announced it would
invest up to $12 billion in an oil-and-gas project off Sakhalin Island in
Russia's Far East.
But such projects are few and far between. "A country with Russia's
economic potential has the capacity to attract two or three times more
investment from abroad than Russia is attracting now," said Mr. Larson. Red
tape, corruption and laws changing with dizzying frequency have deterred
many from investing in Russia .
U.S. trade with Russia meanwhile accounts for less than 1% of its total
trade world-wide, on a par with Costa Rica.
But Russians complain that the U.S. has been slow to remove barriers to
trade. A bill to repeal the Jackson-Vanik amendment, a Cold War relic that
ties Russia's trading status to its policy on Jewish emigration, is bogged
down in Congress. Russian officials also say they have given up hope that
the summit will yield U.S. recognition of Russia as a market economy -- a
move seen as crucial for expediting Russia's entry into the World Trade
Organization.
But some observers say the main economic outcome of the Bush visit won't be
policy changes but more positive sentiment about Russia and renewed
interest in the country from U.S. investors -- including the 120
businessmen accompanying the U.S. president.
"Foreign direct investment is the one area where Russia has shown no
progress since the 1998 financial crisis," said Roland Nash, chief
economist at Renaissance Capital brokerage. "But it's this kind of event
that can drive FDI into the country."
-- Jeanne Whalen contributed to this article.
*******
#15
Los Angeles Times
May 22, 2002
NATO, Russia Can Get Far With Small Steps
One way to pursue common interests would be sharing anti-terrorism data.
By ROBERT E. HUNTER and SERGEY M. ROGOV, Robert E. Hunter, a senior advisor
at Rand and former U.S. ambassador to NATO, and Sergey M. Rogov, director
of the Institute for U.S. and Canada Studies of the Russian Academy of
Sciences
Five years ago in Paris, NATO's leaders and Russia's president ratified an
agreement in which Russia was to have a role in consultations, cooperation
and even, on some issues, common action as an equal with the allies. But
that new relationship foundered during the Kosovo conflict.
Next week, allied leaders meet outside Rome with a new Russian president to
try again.
Is there a difference this time? Or are we seeing just another exercise in
diplomacy designed to mollify Russia as NATO again prepares to admit new
members from Central Europe at its Prague summit in November? On the
surface, some things certainly are different. The old Permanent Joint
Council arrayed the 19 NATO allies on one side of the table and the
Russians on the other. Now all 20 will sit as equals, without the stigma of
"us" and "them." And the list of tasks to be permanently on the agenda
includes countering weapons of mass destruction, which in 1997 was only a
possible issue, and another--terrorism--which had not even been thought of.
Both now matter deeply to the United States and the Western allies;
Russia's help can be crucial.
Still, the new NATO-Russia Council is surrounded by so-called safeguards
that make it not much better than the old council. NATO allies have to
agree before any item goes on the agenda; both NATO and Russia retain the
right to act separately on any item; any NATO ally, on its own, can pull an
item off the agenda. And, of course, NATO retains the sole right to decide
which nation it admits to membership and how it structures and operates its
military forces.
But five years and a major rupture to the global system on Sept. 11 do make
a difference. In that period, Russian and NATO soldiers have worked
together successfully in keeping the peace in Bosnia and Kosovo. NATO
military representatives finally are being received in the Russian Defense
Ministry. With Poland, Hungary and the Czech Republic celebrating three
years of NATO membership, other Central European states feel more secure.
And Russia, though still opposing NATO expansion, is now resigned to it.
Most important, in the wake of Sept. 11, Russian President Vladimir V.
Putin appears to have made a strategic choice to throw in with the West.
This raises the stakes for next week. Neither Russia nor NATO can afford a
second effort that goes off half-cocked, perhaps this time destroyed by
differences over the Middle East (especially Iraq), the Caucasus or Central
Asia.
The stakes also are raised for the possibilities. If NATO and Russia focus
just on the machinery of cooperation and possible common action, they are
likely to be caught up again in political game-playing.
The trick is for both sides to focus more on what they do than on how they
do it. This means not reaching for the moon at first: not trying to define
joint approaches to countering terrorism (when even the NATO allies, much
less the allies and Russia, do not agree on what "international terrorism"
is or what they should do about it) and not trying to coalesce on a policy
against Iraq, where the same fault lines exist among the 20 countries.
It also means not looking toward Russian membership in NATO any time soon.
Neither side wants that; what both should want is for Russia to have a
workable "alliance with the alliance."
And it means starting small, one careful step at a time. Possibilities
include cooperating in civil emergency planning, where NATO and Russia
already have a good track record; conducting joint military exercises,
including in Russia; engaging Russian forces with the existing Polish,
German and Danish corps; creating a Euro-Atlantic regional security
strategy group, also involving Central European states, to develop common
planning, especially for peacemaking and peacekeeping; stationing Russian
officers at NATO military headquarters and NATO officers at Russian
headquarters; creating a counter-terrorism information sharing center; and
expanding the Russian and Central European role in NATO training efforts
like the Marshall Center in Germany.
The importance of this type of effort is not its modesty but its
practicality, its potential for building the mutual trust to turn common
interests into common action. This is the stuff that will validate the
grand hopes that have emerged in Russia's relations with the West since
Sept. 11. Done carefully, deliberately and with wisdom about both problems
and possibilities, this can lead to a dramatic reshaping of Eurasian
security.
******
#16
ANALYSIS-Embracing the West, Putin risks looking lovelorn
By Jonathan Thatcher
MOSCOW, May 22 (Reuters) - Russian President Vladimir Putin needs to emerge
from this week's U.S.-Russia summit with some evidence that ever cosier
relations are not just a case of Washington demands, Moscow yields.
Analysts say he might struggle to show much to impress sceptics at home who
accuse him of giving in too easily.
Billed as the last summit between the two nuclear giants to dwell on the
potential to bomb each other into oblivion, officials are keen to portray
the talks as the very final nail in the coffin of the Cold War --
officially dead 10 years ago.
What could spoil the meeting's cheery rhetoric is Moscow's insistence on
selling weapons and nuclear technology to one of Washington's demons -- Iran.
And there are already grumblings among the Russian political and military
establishment that Putin sold out his country in a landmark nuclear
disarmament deal -- to be signed with U.S. President George W. Bush on
Friday in Moscow.
"Putin needs to demonstrate firstly that his policies (of warming to the
West) get some real results," said Andrei Ryabov of the Moscow-based
Carnegie Endowment for International Peace.
The danger, he saw, was for Russians to see themselves as Washington's
dispensable friend -- useful in the aftermath of the September 11 attacks
in the United States but now not very relevant.
COLD WAR SYMBOLS TUMBLE
The May 24-26 summit begins in Moscow and then moves to St Petersburg, a
watery waste on the Baltic Sea 300 years ago until another Russian leader
-- Peter the Great -- built his capital there to force his backward nation
to look West and modernise.
Putin, a native son of St Petersburg who replaced the irascible if more
charismatic Boris Yeltsin two years ago, has calmly ditched one Cold War
axiom after another as he too forces a somewhat reluctant nation of 147
million to turn West.
Military hawks are unhappy enough with the deployment of U.S. troops -- as
part of Washington's war on terrorism -- on Russia's periphery in parts of
the former Soviet Union.
Rubbing salt in that wound, Putin flies to Rome next week to sign up to a
new relationship with NATO, the organisation set up specifically to counter
the threat of Moscow's Soviet empire.
And the Kremlin is certain to be pushed to end lucrative weapons and
nuclear technology contracts with Iran, part of what the United States now
calls the "axis of evil."
Grigory Yavlinsky, leader of the liberal opposition Yabloko party, warned
of 'revanchism' by the conservative opposition if Russia and the U.S. did
not agree to a new strategic partnership.
"If these steps are not strengthened by a qualitatively new system of
relations with the U.S., it will be bad (for Putin)," he said in an interview.
Seeing no serious threat to Putin now, he said things could change quickly
if the conservative opposition saw its chance.
INTEGRATION THE WAY
Analysts say the former spy-chief, with an eye on re-election in 2004, is
convinced integration is the way to win his impoverished nation security
and hope for a strong economy.
"What it shows more than anything else...is that it is emblematic of a new
relationship with the West in general and the United States in particular,"
said one senior U.S. official of a new treaty to cut long-range nuclear
weapons by two-thirds.
"I think the benefits of that to Russia long term are incalculable," he
added in explanation of why Putin should have compromised so much to get a
pact ready for this week's summit.
But it may be hard for the 49-year-old leader to show that Russia really
benefits immediately.
"Putin will stress success, though there is not that much to show," said
Vyacheslav Nikonov of the Fond Politika think-tank.
One recent opinion poll shows that Russians are turning off Americans,
though analysts note that in a country where most of the population has
trouble just to scratch a basic living, foreign policy is not much of a
vote winner, or loser.
Anyway, other polls show the approval rating for a man that has brought
Russians their first real taste of stability since the Soviet collapse in
1991 is around 70 percent.
ECONOMY MORE A WORRY
More worrying are fears that Putin's efforts to pull the economy up by its
boot-straps are beginning to fade.
It is there as much as anywhere that Russia wants help from membership of
the World Trade Organisation -- it is the last major economy outside the
club -- for foreign debt reduction.
Last month, he very publicly scolded his ministers for being so
unambitious. They have so far only responded with offers to try to very
slightly boost an economy that still depends heavily on oil and other
natural resources.
The old Soviet infrastructure, starved of new investment, is crumbling, a
quarter of the population lives below the breadline, alcoholism and poor
medical services are killing off the population younger, and corruption and
government interference throttle entrepreneurial business.
"We...have to build a post-industrial society and in this there is no
alternative to the United States," said Mikhail Khodorkovsky, head of oil
producer YUKOS, one of Russia's biggest companies.
"That means democratisation. It means getting involved in the process of
globalisation and integration with other developed states."
TRADE TIES STRAINED
Business with the United States is small -- U.S. trade with Russia is about
the same as with tiny Costa Rica.
And even here there have been strains in recent months.
Russia wrought havoc on the U.S. meat industry by briefly banning American
poultry imports this year on health concerns.
New U.S. import tariffs on steel could do the same to the Russian steel
industry which, though a largely rusting relic of Soviet times, remains a
huge employer.
And analysts say the summit, however glowingly officials describe it, will
do little to lure in reluctant investors who are more interested in the so
far slow reforms to the economy.
"From an economic perspective, Putin's rapport with the West hasn't made
much of a difference," London-based head of ING emerging markets research,
Philip Poole said.
"Foreign direct investment is still relatively low. That's not because they
(investors) see Russia as an enemy but because Russians don't want to give
up control (of attractive assets)."
*******
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