Johnson's Russia List
#6561
20 November 2002
davidjohnson@erols.com
A CDI Project
www.cdi.org
[Contents:
1. Moscow Times: Natalia Yefimova, SPS Pins Siege Deaths to Negligence.
2. Novaya Gazeta Digest.
3. Izvestia: Sergei Yastrzhembsky, RUSSIA AND NATO IN THE SAME BOAT.
Moscow's view on NATO expansion and guidelines.
4. RIA Novosti: HIGH TECH IS RUSSIA'S FUTURE: VLADIMIR PUTIN.
5. Reuters: Russia, China may ink oil pipe deal next month-source.
6. Interfax: Mass media CEOs ask Putin not to sign amendments to law on
mass media.
7. Izvestia: Yevgeny Bai, PRESIDENT GEORGE W. BUSH: BIN LADEN HAS HIS
CONCERNS IN CHECHNYA. President Bush's interview on the eve of his European
tour.
8. Moscow Times: Peter Rutland, Monitoring the Census: Moscow to Marii-El.
9. Vremya MN: CAN WE TRUST THE RESULTS OF THE RECENT CENSUS?
10. RFE/RL: Michael Lelyveld, Putin Aide Sharply Criticizes Russian
Electricity Monopoly At U.S. Conference.
11. St. Petersburg Times: Irina Titova, Kursk Memorial Design Chosen.
12. The Electronic Telegraph (UK): Julius Strauss, Chechens' envoy 'was
framed by Russians.' (Zakayev)
13. The Electronic Telegraph (UK): When it's suicide to join Russia's armed
forces. Julius Strauss in Ishnya hears a sailor's chilling story of his
brutal
life as a navy conscript.
14. Wall Street Journal: Craig Karmin, Russia , Once the Wild Frontier,
Enjoys
a Renaissance in Stocks.
15. Asia Times: Brian Kenety, In with Iraq, out of NATO.
16. pravda.ru: Who Needs the WTO? It is better not to let foreign
businessmen
into the country now than have to drive them out later with guns.
17. AFP: Russian Communist leader blasts Putin's economic policy.
18. Reuters: Miniature "bourgeois" dogs make comeback in Russia.]
*******
#1
Moscow Times
November 20, 2002
SPS Pins Siege Deaths to Negligence
By Natalia Yefimova
Staff Writer
After conducting its own probe into the handling of last month's hostage
crisis, the Union of Right Forces party, or SPS, blamed the death of 128
captives on officials in charge of organizing the rescue effort, the
party's leadership said at an extraordinary meeting Tuesday evening.
However, party leaders were careful not to point the finger at specific
officials and acknowledged that the investigation was unlikely to lead to
any disciplinary measures.
"The main reason for the rise in casualties among the hostages ... was
negligence on the part of officials responsible for organizing first aid
for the victims and their transportation to inpatient care units, and for
the general coordination of activities aimed at saving people after the
raid," said a resolution passed Tuesday after the commission in charge of
the probe presented its findings.
The resolution identified a dozen fatal flaws in the operation, including
an "unacceptably" long wait for medical care, secrecy about the type of gas
used in the raid and a lack of coordination between commandos and rescue
workers, including the absence of a health care professional to coordinate
efforts on-site. The document also condemned rescuers' failure to properly
sort victims and immediately assess their condition, inadequate preliminary
treatment and overcrowding at hospitals.
"It was absolutely obvious that the goal of saving people was secondary;
the primary goal was to eliminate the terrorists," commission chairman
Eduard Vorobyov quoted one expert involved in the investigation as saying.
The commission, made up of nine SPS members and 11 experts, met seven times
to review audio and video recordings, as well as press publications.
Commission members also interviewed people who participated in the rescue
operation.
Of the 11 experts, only four agreed to make their names public. SPS leader
Boris Nemtsov said this was due to "understandable" concerns and that
attempts to intimidate the experts had been "even greater than expected."
He did not elaborate.
Nemtsov also said that he has given the investigation results to President
Vladimir Putin, who said "the information was very close to what he knew"
already.
Nemtsov said he had not been left with the impression that Putin would take
action.
A source familiar with the meeting said the president's response had been:
"Why agitate the country?"
Last week Putin promised to appoint an official to look into unanswered
questions about the siege, Yabloko leader Grigory Yavlinsky told The
Associated Press on Friday.
Although Nemtsov said that the negligence unearthed by the probe included
grave criminal offenses, SPS refused to try to identify the officials who
were guilty, saying that such matters should be left law enforcement and
the courts.
"We are not investigators of the Prosecutor General's Office," Nemtsov said.
The party's leaders voted to make the commission's findings public, but
chose not to submit them directly to the prosecutor's office.
SPS officials repeatedly said that they had no complaints about the work of
special forces troops who raided the theater where Chechen rebels held some
800 people hostage Oct. 23-26, or of medical personnel at hospitals where
the victims were treated.
Another SPS leader, Irina Khakamada, said the roots of the hostage-taking
-- which required more than 40 armed rebels to stockpile arms and
explosives in the heart of Moscow -- were inextricably linked to problems
in law enforcement and the military, including widespread corruption and a
decrepit agent network. Khakamada added that there were powerful interests
among both rebels and federal officials who had vested interests in seeing
the war in Chechnya continue.
Earlier this month, the State Duma voted against two resolutions -- one
from SPS and one from Yabloko -- calling for the creation of a
parliamentary commission to investigate the theater siege and rescue
operation.
*******
#2
Novaya Gazeta Digest
No. 85, Monday, 18 November 2002
Compiled by Luba Schwartzman (luba_sch@hotmail.com)
Research analyst at the Moscow office of the Center for Defense Information
* LEADING ARTICLE. “Hostilities will not end as long as the civilian and
military mafia controls large sums of non-budget funds for the
‘counter-terrorist operation’,” contemplates our correspondent, Yuri Baulin,
in “How Much Does a Day of the Chechen War Cost?” The third Chechen War has
begun. In early November, the defense minister officially announced the
conduct of a major special operation. How much money was spent on the first
and second wars? Our correspondent had to gather the information from open
official sources bit by bit to create the picture of the financing of the
war in Chechnya. According to official information, 80,000 people are
involved in it -- in reality, there are many more. Along with the General
Headquarters, there are 17 other command centers of various power organs.
By the most modest estimates, the unreported and top secret personnel
involved in the Chechen war adds up to at least 20,000 people. These
numbers are not comparable with the limited presence of Soviet
forces in Afghanistan. Accounting Chamber Chairman Sergei Stepashin
reported that the state budget does not cover these expenses. So what
Kremlin clause finances the suicide of the Caucasus? Despite the law on the
media, no one was willing to tell the journalist how much the Chechen war
costs, but the General Headquarters did admit that the anti-terrorist
operation in Chechnya costs a lot of money. Spending in a non-budget war is
uncontrolled. It’s heaven for the uniformed and civilian mafia. A morsel
of 330 billion rubles in unreported assets is no trifle. Is it any wonder
the war has dragged on for so long? The security services should ask that
question. But the greatest losses are human lives. The first Chechen War
took the lives of 100,000 people. Western and Russian statistics for the
second war differ significantly...
* ISSUE THEME. The war and ourselves. Comedian Mikhail Zadornov publishes
his visions about how the war will end once peace becomes more profitable
for our benefactors under the heading “If no one needs it, is it in the
interest of the Motherland?” One military official set the diagnosis as:
“Chechnya is out hemorrhoid!” Our famous comedian, aware of the faults of
domestic medicine, consulted a passing eastern Mahatma -- how do we fight
this sickness? How do we get rid of it forever? Start at the head. The
cause of the hemorrhoid is always in the head. Therefore, you need to ask
the head whether it wants the treatment. If the Himalayan Wiseman felt
Russia’s pulse today, looked it in the eye, had a heart-to-heart with it, he
would have found the primary cause of all of its sicknesses to be nerves,
physical exhaustion. There are no muscles for the thin layer of fat that is
the “new Russians,” who look so comic on the dystrophic body of the Russian
economy. “Treating” Chechnya is profitable for our “poor practitioners:” It
is lucrative when necessary, and raises ratings at the right time. The
officials are the ones who can’t do anything... They go into the government
to avoid working. If they lose their positions they become nobodies. The
military started the war. To launch a war one needs to be able to make
decisions. The only thing our generals always knew how to do is salute at
the right time. The Russian army was always invincible when protecting its
Motherland and its honor. The Chechen war is different. This war is not in
the interest of the people, but in the interest of the government. How do
we end the war when so many people are living off it? The president needs
to intervene here and tell his entourage that the plan will receive major
funding -- but to warn them that they can only steal 10%, the way it’s done
in civilized countries. Otherwise the civilized countries won’t forgive us
our debts...
* SPECIAL REPORT. A series of publications on business empires begins with
an article by Moisei Gelman, the editor-in-chief of the Promyshlennye
Vedomosti newspaper. The legislative and economic conditions for the
unlawful seizure of property have been created in Russia. A whole industry
of such “business” has developed, and it involves many government officials,
senators, deputies, and security service officers. The “Tyumen Oil Company”
became an instrument for the subsequent acquisition of another’s property.
How do they launder the profits? How do they become billionaires? Read
“Mining Power from an Oil Well.” The government suffered great financial
damage, and a criminal case involving the company was initiated and then
dropped... Why doesn’t the healthy and pragmatic segment of the business
community unite, serving as the nucleus of the civil society and, together
with the government, chase the foxes out of the chicken coup?
* SPECIAL REPORT. In cities like Kimry, drug experiments are conducted. R.
Sarkisian, the head of a foundation for the fight against narcotics was
killed in Kimry. He was the one who, despite pressure from the General
Prosecutor’s office refused to give false testimony against the Tri Kita
case investigator, P. Zaitsev. Our special correspondent Sergei Shargunov
visited the city, which is in the Tver Oblast. His article, “Guinea Pig
City”, which appears in the “Game Without Rules” column, investigates the
narcotics business, which has become a major part of life in cities like
Kimry, Orsk, Yamburg, Chapaevsk, Khimki... Young people become the victims
of drugs every day, and the government is helpless. In Tver, the head of
the Interior Ministry department for the fight against narcotics was
detained on suspicion of... distribution of narcotics. In Yamburg, police
officers push drugs to schoolchildren. Moscow’s annual turnaround of
narcotics is worth a billion dollars. Our correspondent met with various
people in the know in Kimry who asserted that the drug dealers have help
from big officials.
* ISSUE DETAILS. Was the death of “Meshcherskaya Nov” editor a murder, or
an accident? “The Witness They Didn’t Look For,” an article by Foundation
for the Protection of Glasnost representatives Ruslan Gorevoi and Vladislav
Bykov shows that Leonid Kuznetsov died under strange circumstances. The
deceased had many influential enemies who would be happy if he happened to
die. A former Trans-Baikal deputy commander for political affairs, the
editor-in-chief often crossed the interests of big directors and
businessmen. He developed his paper on the principles “don’t lie, don’t
embellish, don’t whitewash the government, don’t turn the newspaper into a
tool for making money.” Leonid Ivanovich was absolutely honest; he was
trusted like no one else. While examining the circumstances surrounding the
journalist’s death, the Foundation for the Protection of Glasnost found that
he had been hounded for 5 years, harassed with telephone calls and letters.
The Foundation lucked out -- it managed to do something the police officers
and investigators could not. It found a witness. There are reasons to have
safety concerns. It’s obvious that the law enforcement officers do not want
to learn the truth.
PRESSURE POINT. Maria Maksimova presents a portrait of a XXIst century
urchin in “Living by Our Side.” Their story begins in the Yeltsin years, in
the “times of trouble” which determined the fates of many homeless children,
for whom there is no “light at the end of the tunnel.” And yet they are
children. Children who are both, experienced beyond their years, and
amazingly naïve. Children who have only heard of the huge and diverse world
outside the bounds their imaginations... At best they will end up in some
criminal organization; at worst -- on the side of the road as bums.
A PORTRAIT OF A PHENOMENON. We are now reading the same thing they are --
colorful trash that passes the censorship of an imaginary market. In “We
Have Caught up with America,” Columnist Elena Dyakova tells our readers
about the “social programming” of the average person through the
totalitarian entertainment. A reader and his choice of future reading
materials are molded by what he reads. The shadow has found its place.
This formation of this demographic product of the cultural revolution was no
less artificial than the infamous “sovok.” It is no less limited and no
less effective. Through the pulp fiction of the 1990s -- memoirs of the
stars, thrillers, trashy novels -- we are merging with the column of honest
workers on a stairway going down...
* ALSO IN THE ISSUE. The law on currency regulation is one of the few
exceptions, since this regulation is largely responsible for bribes,
corruption and chaos -- in “Money behind the barbed wire” by Yulia Latynina.
The exeunt of Chechens out of Russia continues -- a conversation with Mark
Zakharov. The amendments to the law on the languages of the Russian
Federation, drastically limit the rights of the peoples of Russia to create
their own written languages and develop their native languages. A Muslim
woman is building a Christian Orthodox church in a settlement in Udmurtia.
Contact information for the Novaya Gazeta Digest (in Russian)
(095) 923-9485
www.novayagazeta.ru
********
#3
Izvestia
November 20, 2002
RUSSIA AND NATO IN THE SAME BOAT
Moscow's view on NATO expansion and guidelines
Author: Sergei Yastrzhembsky
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
AS NATO PASSES THROUGH REFORMS AND ADAPTS ITSELF TO ACTIONS MEANT TO
COUNTER NEW CHALLENGES TO SECURITY, IT IS NECESSARY TO UNDERSTAND THAT
THE EFFICIENCY OF THESE STEPS WILL INCREASE ALONG WITH THE EXPANSION
OF COOPERATION WITH RUSSIA.
Trends implying drastic changes in the geopolitical situation,
the nature and scale of threats to security of the entire civilized
community are beginning to dominate worldwide. Almost all
international institutions, created during the Cold War proved to be
unprepared for this quickly changing situation, especially NATO. Not
only the Alliance has lost its main threatening object and the
subject, for the sake of which its machinery has been operating, but
also manifested maladjustment to opportune responses to qualitatively
new challenges to security, the events which followed September 11
proving that. Moreover, it is apparent that NATO member states and
Russia are facing the same challenges to their security.
In our opinion, NATO is still in the power of inertial thinking.
It is hard for the organization to discard the shackles of stereotypes
used to perceive its own security and traditional fears, which have
settled since the Cold War. The expansion model seems to be a vivid
example of such inertia.
Assessing the bloc's tendency for expansion from the viewpoint of
Russia, it is primarily necessary to single out its psychological
aspect. In our opinion, remaining a powerful state Russia doesn't pose
a threat to NATO member states, although many Western states were
beware of that during the Soviet epoch. Fundamental alteration of
priorities in foreign policy of new Russia, holding a line for
cooperation with the West, Russia's striving to integrate into the
world economy - all of this has sharply narrowed the space available
for maneuver for the remaining disciples of the "threat from the
East." In our opinion, in the military sense, the previous wave of
joining NATO didn't cause any substantial changes of the threat for
Russia. It is our hope that the current phase of the expansion shows
the same results.
However, in relation to the psychological aspect, this very phase
will enhance negative perception of NATO's inner processes in the eye
of the Russian public opinion. Entry of former Soviet republics into
NATO and approximation of the bloc's borders straight to the Russian
borderline will create a serious negative effect in Russia.
I repeat: the psychological aspect seems to be the most
disturbing factors, clouding assessments rapprochement between Russia
and the West.
I'd share another recipe for alleviating such discomforting
feeling. Russian citizens are very sensitive to policies of some
Baltic states in relation to Russian-speaking population, our
compatriots. Nowadays, the following issue is under discussion: if
NATO, as is asserted in the West, is called beyond all to protect
democratic institutes and should, respectively, take into account the
domestic policies of its new members and contenders, why it is
accepting the states, carrying out discrimination policies against
some population groups? It is our hope that on joining NATO these
states won't adopt their own charter but would be holding to
regulations of conduct, common for all members. In other words,
joining the NATO is supposed to change the status of ethnic
minorities.
The further expansion as such won't change the problem of NATO's
self-identification. Moreover, many experts seem to arrive at a
conclusion that the bloc consisting of 26 member states will be unable
to function as an integrated structure and adjusted military
machinery. More likely, expansion will cause disunity and smaller
controllability of the Alliance. Even in the current composition the
US didn't use the bloc's potential while carrying out an operation in
Afghanistan. Creation of a "united fist" in case of military action
against Iraq is also doubtful.
Mechanisms of international coalitions, flexible structures are
becoming more valuable nowadays. It turned out that the states able at
rendering specific kinds of aids in the cause of combating certain
threats, rather than traditional allies, are more useful. In this
connection I want to recall that it was Russia to offer the most
efficient assistance for the process of the anti-terrorist operation
in Afghanistan and give its fundamental support in the negotiations
between the US and a series of former Soviet states.
As latest events show, activities similar to Italy decisions made
in May seems to be the most adequate development model for NATO. The
Rome declaration between Russia and NATO, creation of a new council -
the political body of "Twenty" format, mirror the state-of-the-art
quality of relations between Russia and NATO member states. The
mechanism of joint elaboration, adoption and execution of decisions,
in which Russia participates as a full-fledged member of the new
NATO's security body, has been the core.
As NATO passes through reforms and adapts itself to actions meant
to counter new challenges to security, it is necessary to understand
that the efficiency of these steps will increase along with the
expansion of cooperation with Russia.
(Translated by Andrei Ryabochkin)
*******
#4
HIGH TECH IS RUSSIA'S FUTURE: VLADIMIR PUTIN
REUTOV, Moscow region, November 19, 2002. / RIA NOVOSTI /- Vladimir Putin is
positive Russia's future is in high technologies.
"Russia is rich in mineral resources and fossils, yet its future is in high
technologies," the Russian president said Tuesday following a conference,
which was devoted to issues related to military-technological co-operation
and the drive to employ young specialists to the Russian military-industrial
sector.
Russia can well boast its rocket and space sector, the sphere that promises
Russia a bright future, according to the president.
Coca-Cola will never be bottled at the factories of that branch, said
Vladimir Putin.
Funds to be allocated by the budget will be enough not merely to keep the
branch afloat, but to develop it as well, assured the Russian head of state.
A mere 15 percent of the rocket and space industry works for national
defence, indicated the Russian leader. "The government financing /of the
defence section/ must be enough to keep it afloat and develop it," said
President Putin.
85 percent of the rocket and space products are dual-purpose technologies,
went on the president. This calls for a proper management of production,
scientific effort and broad co-operation, said the president.
The president congratulated the rocket and artillery troops on their holiday
- Rocket Troops and Artillery Day is marked on November 17.
*******
#5
Russia, China may ink oil pipe deal next month-source
SHANGHAI, Nov 20 (Reuters) - Russia and China are close to a deal to build
a $1.7-billion crude oil pipeline from eastern Siberia to northeast China,
sources close to the Russian company involved in negotiations said on
Wednesday.
Russia's second-largest oil producer, YUKOS, and the state-owned China
National Petroleum Corp have completed a feasibility study on the project
and could sign a deal as early as next month, a Beijing-based source told
Reuters.
The pipeline would be crucial to China which aims to reduce reliance on
imports from potential hot spots in the Middle East.
The 2,400 km (1,500 mile) pipeline, which could be under construction next
year, would transport about 20 million tonnes of crude a year when finished
in 2005.
Russia, the world's second largest oil exporter, is striving to locate
markets for its remote eastern Siberian fields as the country's crude
output continues to boom.
"Technical details aren't a problem, it's a matter of winning
administrative approval now," the source said.
"We've finished the feasibility report. Both governments are scrutinising
it and it's awaiting approval," he said.
YUKOS's chief representative in China, Sergei Prisyazhniuk, confirmed the
two sides -- which had been thrashing out thorny details like prices and
contractors -- were close to an agreement, but declined to elaborate.
CNPC officials could not be reached for comment, but YUKOS sources said
CNPC, China's flagship energy producer, had sent a delegation to Moscow to
discuss a variety of energy deals.
Analysts say Russian supply will be key in coming years as China, worried
that 60 percent of its imports originate from the Middle East, hunts for
alternative energy sources.
The pipeline, running from Angarsk near Irkutsk in Siberia to China's
industrial northeast, could supply 30 million tonnes of oil a year from
2010 to 2030.
China, the world's fastest expanding major economy, imports about a third
of its oil needs and by some estimates that could leap to nearly half, or
about 75 million tonnes, by 2005.
Russian oil major YUKOS said in September it expects its oil output to show
double-digit expansion in 2003, from about 1.4 million barrels per day at
present.
*******
#6
Mass media CEOs ask Putin not to sign amendments to law on mass media
MOSCOW. Nov 20 (Interfax) - The leaders of Russia's leading mass media
outlets have signed an address to Russian President Vladimir Putin in which
they ask him not to sign the amendments to the law on mass media. The
amendments have already been passed by the State Duma and approved by the
Federation Council.
On Wednesday, this address was approved by the Industry Committee, which
includes the CEOs of Russia's leading mass media, the Media- Soyuz, the
Russian Union of Journalists, the National Association of TV and Radio
Broadcasters, the Glasnost Defense Foundation, and some other media
organizations.
The new version of the law on mass media limits the activity of the mass
media in emergency situations.
*******
#7
Izvestia
November 20, 2002
PRESIDENT GEORGE W. BUSH: BIN LADEN HAS HIS CONCERNS IN CHECHNYA
President Bush's interview on the eve of his European tour
Author: Yevgeny Bai
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
ON THE EVE OF HIS EUROPEAN TOUR, PRESIDENT GEORGE W. BUSH WAS
INTERVIEWED AT THE WHITE HOUSE. A REPORTER WAS PRESENT FROM EACH
COUNTRY THE PRESIDENT IS PLANNING TO VISIT. HIS RESPONSES COVERED NATO
EXPANSION, CHECHNYA AND TERRORISM, AND THE IRAQ SITUATION.
On the eve of his European tour, President George W. Bush was
interviewed at the White House. A reporter was present from each
country George W. Bush is planning to visit in the course of his tour
(besides Russia, these are the Czech Republic, Lithuania, and
Romania). Izvestia's US correspondent Yevgeny Bai represented the
Russian press.
After Bai asked Mr. Bush the first question, there was a pause.
The question was about Chechnya, while the president seemed to be
expecting the Russian journalist to ask him about the purpose of his
visit to St. Petersburg.
George W. Bush: You haven't asked the question I was expecting,
but I'll answer it anyway (laughing). I'm going to Russia to make it
clear to Russia and to Vladimir Putin they have nothing to fear from
NATO expansion; that having the Baltic states as NATO members will be
favorable for Russia. Without a doubt, I accepted Vladimir's
invitation to visit St. Petersburg. It is very important for me to
make this trip and explain to him why I think NATO expansion is a
positive development for Russia.
During the meeting, the president emphasized several times that
NATO's mission now is fundamentally different from what it was in the
years of the Cold War. George W. Bush said: "Russia is not a threat,
and therefore the military strategies of NATO need to be changed to
recognize that new reality. The Warsaw Pact doesn't exist. However,
there is a threat to all of us in the form of international and global
terrorism, which we must be able to deal with."
Question: Mr. President, does it seem to you that following the
recent events - the hostage-taking in Moscow and Osama bin Laden's
audiotaped message, in which he publicly praised those who organized
the hostage-taking - that America has gained a clearer view of the
threat posed by Chechen terrorism? Do you agree with President Putin's
statement that the Chechen terrorism threatening Russia and bin
Laden's terrorism threatening America are of the same nature?
George W. Bush: First of all, I'd like to say that in Vladimir
Putin I've found a reliable associate in the cause of combating
terrorism. He understands how high the stakes in this conflict are. So
do I. I know that during the hostage crisis in a Moscow theater he
found himself in a precarious situation. All of the 800 people could
have been killed then. He made some very tough decisions. People try
to blame Vladimir, they ought to blame the terrorists. They're the
ones who caused this situation - not President Putin. Undoubtedly, the
hostage-takers were killers, just like those who attacked America.
Yes, we are standing against a common threat, which we must jointly
repulse. To the extent that there are al-Qaida members infiltrating
Russia, they need to be dealt with, they need to be brought to
justice. When Osama bin Laden is praising these Muslim attacks from
Chechnya, this proves that he has his own concerns in Chechnya.
We are involved in an effort in Georgia - trying, on the one
hand, to facilitate dialog between Shevardnadze and Putin; and, on the
other hand, developing a joint strategy for fighting al-Qaida
terrorists who may be hiding in the Pankisi gorge. At the same time,
during my meeting I will continue to talk to Vladimir about the need
to protect and recognize the rights of minorities in any country, and
at the same time deal with terrorism. I hope he can find that balance.
(protection of ethnic minorities' rights. - ed. note) It is my strong
conviction that he can.
The next question was related to the talk of the day: the Iraq
situation.
Question: Do you think Russia's support of the UN Security
Council's resolution has brought the positions of Washington and
Moscow on the Iraq issue closer? What are you planning to tell the
Russian president regarding your further steps in Iraq?
George W. Bush: I greatly appreciate the joint work on the
resolution. The UN Security Council sent a clear signal to Iraq that
we expect it to disarm unconditionally. Simultaneously, the Security
Council has staked its authority. Does it make sense that it had
passed 16 resolutions previously, with which the Iraqi regime hadn't
the slightest wish to comply? It is my hope now that this
international body has approved an important document, which will
force Baghdad to act. We are gaining a real means of disarming Iraq,
and we are very glad that doing this jointly is a success.
I'll tell Vladimir that the core of the endeavor is obtaining
full disarmament on the part of Iraq, rather than sending
international inspectors into Iraq. I hope doing this peacefully is a
success. However, everything now depends on Saddam Hussein. He must
admit whether or not he possesses weapons of mass destruction. I'll
tell Putin about my determination. If Saddam disobeys the demands of
the resolution, we'll then consider our further steps. If military
action is necessary, as I've said before, we will consult our allies
on this point. I repeat: hopefully, disarmament of Saddam will be
obtained peacefully; unless this happens, we will head the coalition
of associates which will pursue this goal by different means. One way
or another, Saddam Hussein will be disarmed.
(Translated by Andrei Ryabochkin)
*******
#8
Moscow Times
November 20, 2002
Monitoring the Census: Moscow to Marii-El
By Peter Rutland
Peter Rutland, a professor of government at Wesleyan University in
Connecticut and editor of the Jamestown Foundation's "Russia and Eurasia
Review," contributed this essay to The Moscow Times.
Last month's census, the preliminary results of which were presented on
Friday, was billed by President Vladimir Putin as the most important
political event of the year. That claim, alas, has been overshadowed by the
terrible "Nord Ost" hostage-taking.
The hope was that the census would signal the stabilization of Russia. The
drama of transition could give way to the sober accounting of the nation's
human resources. Russians were told that it was their patriotic duty to
take part in the census, to seize the opportunity to "write themselves into
history." In a country that was sorely lacking a national idea, a unifying
goal, some in the Kremlin apparently viewed the census as not just a
routine administrative exercise, but as a chance to rally public loyalty
behind the new state.
Also, in more practical terms, a census was urgently needed. Russia has
seen tremendous disruption of its social and economic fabric over the past
decade: rising mortality rates, plunging living standards and shifts in
family structure. According to Nationalities Minister Vladimir Zorin,
one-quarter of the population have changed their place of residence since
1989, when the last census was conducted. During that time Russia has
absorbed some 7 million immigrants from other countries of the former
Soviet Union. In order to target public spending on health and education to
meet the requirements of this rapidly changing society, the government
urgently needs an accurate picture of social conditions.
Will the census satisfy these pressing political and social demands?
Unfortunately, there are grounds for doubting the reliability and utility
of the census. Certain media outlets, for some reason, harshly and at times
hysterically criticized the census from the outset.
A more sober assessment by a team of specialists assembled by academician
Valery Tishkov, head of the Institute of Ethnology, did reveal some grave
concerns. Under Tishkov's direction, 25 "correspondents" monitored the
census in regions across Russia, especially those with large populations of
non-Russians and/or migrants. I was one of a dozen French and American
scholars who joined these correspondents and was sent to the republic of
Marii-El for monitoring duties. We all met in Moscow on completion of the
census to review our findings.
The decision to make the census anonymous, and voluntary, for respondents
flies in the face of standard international practice, and fundamentally
erodes the reliability of the results. Many people were double-counted
because of vagueness about what should count as one's permanent place of
residence, while probably an even larger number were not counted at all. In
most of the North Caucasus republics, including Chechnya and Dagestan,
correspondents reported a strong desire by indigenous peoples to boost
their numbers in the census by fair means or foul, to increase their
political visibility in Moscow -- with a view to boosting the future flow
of federal subsidies. In these regions, the census was treated as a
political event akin to an election.
Still, the regional monitors generally found that there was less anxiety
surrounding the census in the provinces than in Moscow. People were more
willing to open their doors to census takers, and there seemed to be fewer
refusals than in the capital (where some 10 percent of respondents seem to
have declined to participate). A surprisingly high proportion of forms were
competed by census takers over the phone -- another departure from
international practice. Part of the problem was that census officials were
told to compensate for the missed people by working from Interior Ministry
registration records. Some even completed census forms for missing families
by gathering information from their neighbors.
There was much political controversy around the sections of the
questionnaire devoted to ethnicity. One welcome move was that people were
allowed to make a free choice of their ethnic identity, rather than pick
from a fixed list. State Statistics Committee chairman Vladimir Sokolin
said people could list themselves as "Martians" if they wanted to, a
comment that seemed to trivialize the issue. However, people were asked to
record their "national belonging," a cumbersome formulation that had not
been used before. People were not asked their religious identity. Instead
of being asked for their "native language," as in previous censuses, people
were asked first if they spoke Russian (a somewhat redundant question) and
second what other languages they could speak. Confusingly, enumerators were
anyway instructed to ask people the "native language" question, and to
check a discrete "reserve" box at the bottom of the form. Given that the
question was not printed out on the form, it seems that in practice many
enumerators were not told to ask the question, or simply did not bother.
Russia desperately needs to know exactly how many unregistered refugees and
migrants there are in the country, but census takers were given little
incentive or encouragement to go out of their way to count this population.
Compromises in the construction of the form and its administration reflect
political pressures in the run-up to the census. The State Statistics
Committee seems to have bent over backward in a bid to avoid controversy,
and in the process tied itself in knots. Religious leaders successfully
urged that no question be asked about religious affiliation, so an
important chance to map the scope of the various denominations was lost. In
Tatarstan, as is well-known, there was a vigorous campaign by the
republic's authorities to count as many Tatars as possible, and to resist
the listing of separate subgroups within the Tatar community (such as
Christian or Siberian Tatars).
In the south, Cossack groups mounted a campaign to persuade Cossacks to
list themselves as a separate nationality (in part because they expected
state funding to follow). In an address to Tishkov's team, Zorin stressed
that respondents were free to choose their own nationality, but went on to
say that he considered the Cossacks to be a Russian "ethno-cultural" group,
and not an "independent nationality" in its own right, seemingly
contradicting the idea of free choice.
The specialist demographers from France and the United States in Tishkov's
team seemed to think that the census was flawed, but usable. After all,
other nations' censuses suffer from similar problems, to a greater or
lesser extent. Reliable estimates of the actual demographic composition of
Russia will be derived not from the census alone, but through triangulation
with other data sources, such as birth records and -- better still --
school enrollments. In the meantime, one can expect the political hot air
swirling around the census to resume with the return to politics as usual.
*******
#9
Vremya MN
No. 209
November 2002
[translation from RIA Novosti for personal use only]
CAN WE TRUST THE RESULTS OF THE RECENT CENSUS?
The statisticians are being accused of presenting
incorrect data and understating the results of the recent
census. How fair are those accusations? Sergei KOLESNIKOV,
state secretary, deputy chairman of the Russian State
Statistics Committee answers the questions posed by Alexandra
SAMARINA, Vremya MN correspondent.
Question: Some politicians accuse your committee of
"losing" more than 2 million people in your statistical data.
It's a very serious miscalculation. Is there any reason why we
should trust those estimations?
Answer: The results of the census published by mass media
today are simply preliminary estimates in some regions and
absolutely rough data nation-wise. Inquiry schedules from all
parts of the country will be still coming to the territorial
bureaus of the State Statistics Committee until November 30,
2002. Later on, they are going to be processed automatically.
It's worth to mention that according to preliminary estimates,
the figures are not lower, but higher than the official
registration data. That is to say, if the official statistics
show the Russian population to be 143.3 million people as of
early October, 2002, the new results might give us additional 2
million people. However, I have to reiterate - those are just
preliminary estimates, which are not based on real count of
census schedules. We are going to have trustworthy data on the
overall population, its distribution among rural and urban
areas, gender ratio, etc., only in the first quarter of next
year.
Question: Some sources claim that in Moscow less than 60
percent of the population participated in the census. Even
Moscow authorities admit that the results are miserable.
Answer: City officials have calculated the population of
Moscow to be approximately ten and a half million people. The
current registration data shows a smaller number. We believe
that the figure given by the authorities is closer to reality
and the present population is a bit larger than officially
registered.
The claims that only 56 percent took the census are absurd
because in that case the Moscow government wouldn't have come
up with ten and a half million figure. The fact that they
announced this number means that at least the majority of the
population participated in the census.
Question: Have the Russian government discussed the
results of the census?
Answer: We informed the government about the results of
the census on November 14. The census work done by executive
authorities and institutions of local governing received
positive evaluation. At the same time, we should learn certain
lessons from this experience. For instance, both the
legislative measures supporting the census process and the
current registration system have to be improved in the future.
*******
#10
Russia: Putin Aide Sharply Criticizes Russian Electricity Monopoly At U.S.
Conference
By Michael Lelyveld
Russian presidential adviser Andrei Illarionov denounced the country's
electricity monopoly at a recent Harvard University conference, attacking the
management's record and restructuring plan. Officials also saw a mixed year
of achievement for the country's economy, with continued growth but also
problems of competitiveness with heavy reliance on oil and gas.
Boston, 19 November 2002 (RFE/RL) -- A raucous row between a top adviser to
Russian President Vladimir Putin and the country's electricity monopoly
marked a normally placid investment conference last week at America's Harvard
University.
In a dinner speech on 15 November, Putin economic aide Andrei Illarionov
sharply criticized the Unified Energy Systems (EES) power giant and its
restructuring plans before an audience of about 400 that included a
delegation of company officials.
Illarionov said: "It looks like those people just forgot that they are
management, not a group of bandits [who] captured the company. And this
management is hired and can be fired, and completely forgot about it. And
such is [an] absolutely inappropriate, vulgar, and boorish attitude."
The economist was referring specifically to a debate held earlier during
Harvard's Sixth Annual U.S.-Russian Investment Symposium, when critics
accused the utility of selling off assets too cheaply. But Illarionov made
clear that his remarks also applied generally to conduct at the huge company,
which employs 668,000 people.
He said: "We have heard many times that [EES] is the largest company in the
world. It is true. But at the same time, the most ineffective company in the
world."
Among many complaints, Illarionov said EES management led by chief executive
and former privatization minister Anatolii Chubais had lowered the company's
market value by 48 percent during Putin's term in office, while the value of
all other major Russian companies rose. He accused the company of trying to
set up a "super-monopoly" under the guise of breaking EES into generating,
transmission, and supply systems to attract investment capital.
Illarionov said the intent was to create a monopoly over power, not only in
the sense of electricity but also "in the sense of might, in the sense of
control, [an] economic and political one."
Shortly afterward, the EES contingent, including Deputy Chief Executive
Sergei Dubinin, broke into sarcastic applause in an attempt to bring an end
to the speech. Chubais, who was scheduled to address the conference, canceled
his appearance, citing family reasons. Dubinin promised to address concerns
over asset sales raised at the conference by independent board member
Aleksandr Braniss. But he declined to name the prospective buyers for
generating companies, citing confidentiality, the Reuters news agency
reported.
Questions of monopoly reform and its consequences stole much of the spotlight
at the three-day conference. Although Russia's State Duma passed the
power-sector-restructuring law in its first reading last month, Illarionov
has continued to fight the plan supported by EES, which is 52 percent
state-owned. In bringing the dispute to the conference, Illarionov and EES
essentially exported their feud to a foreign investment audience.
Chubais himself has been a major cause of suspicion because of his infamous
1995 loans-for-shares plan, which distributed many of the nation's valuable
enterprises to powerful oligarchs. Although EES shares have dropped over the
past two years, they have risen by about 60 percent since late September,
when Chubais announced a moratorium on asset sales.
Monopolies also figured in a debate over Russia's bid to join the World Trade
Organization. The European Union has been pressing Moscow to raise its cheap
domestic gas prices to world market levels as a condition of membership to
avoid an unfair advantage for Russian exports. U.S. Ambassador Alexander
Vershbow told the conference that Washington backs the EU view. But Russian
representatives remained adamantly opposed.
Grigorii Tomchin, chairman of the Duma Committee for Economic Policy and
Entrepreneurship, said: "This is our competitive edge, and you've got to
understand that. We will never commit a ritual suicide through this type of
liberalization. It may happen after there's a real restructuring of natural
monopolies, or it may not result ever."
In an informal poll conducted during the WTO session, few members of the
audience believed that Russia would gain membership by the end of either 2003
or 2004.
But in an interview with RFE/RL, Anders Aslund, a senior associate at the
Carnegie Endowment for International Peace, said Russia could join before
raising gas prices. Aslund said: "The WTO demand is really quite simple. It's
just that you make a plan for how soon you do it. The negotiation is over how
fast."
The outlook that emerged from the conference was mixed.
Yurii Isaev, deputy economic development and trade minister, read off an
impressive list of the country's achievements, including a 4 percent growth
in gross domestic product, a 25 percent rise in hard-currency and gold
reserves, and a 25 percent increase in foreign investment so far this year.
The government has also initiated a long-awaited series of legal reforms and
greater awareness of corporate-governance issues.
The bad news includes the continued heavy dependence on natural resources and
lagging productivity. Last week, Prime Minister Mikhail Kasyanov also voiced
dissatisfaction with the country's investment climate, the RIA-Novosti news
agency reported. Officials were stung by Russia's low ranking in two
investment studies last week.
The World Economic Forum rated Russia 64th out of 80 countries in growth
competitiveness, while it placed 135th out of 156 nations on the "index of
world economic freedom," compiled by the Washington-based Heritage Foundation
and "The Wall Street Journal."
In a video interview at the conference, Mikhail Khodorkovskii, chief
executive of the Yukos oil company, spoke of Russia's improved outlook for
sovereign risk. Khodorkovskii said ruefully: "I'm hoping that our country
will get an investment grade rating. Who knows? We might even squeak up to
134th place in the economic freedom league table."
*******
#11
St. Petersburg Times
November 19, 2002
Kursk Memorial Design Chosen
By Irina Titova
STAFF WRITER
A design for a monument to be erected in St. Petersburg's Serafimovskoye
Cemetery to the 118 sailors who died when the Russian submarine Kursk sank on
Aug. 12, 2000 was selected Friday from a group of 11 submissions. But the
selection was not everyone's first choice.
The submission by architects Nikita Sokolov and Gennady Peichev comprises a
black granite cube - symbolizing the ocean depths - with its top shaped to
imitate the restless surface of the Barents Sea, where the submarine sank,
and a stormy petrel - a kind of sea bird - flying above the waves as a symbol
of tragedy.
The front of the monument will bear the date of the tragedy and the
coordinates where the boat sank due to the explosion of a torpedo on board.
The names of the crew members are to be engraved on the back of the monument.
The jury of eight consisted of representatives from the St. Petersburg
Architects' Union, the St. Petersburg Economic Development, Industrial Policy
and Trade Committee - which is responsible for erecting the monument - and
the Kursk Memorial Foundation.
According to Zarifa Ivkina, an assistant at the Architect's Union, the jury
members from the Kursk Memorial Foundation, who were expressing the views of
the families of the crew members, preferred another submission. "However,
from a professional point of view, the specialists involved disagreed with
the choice," she said.
While some of the family members present agreed that, while they had
preferred another of the contestants, the ultimate choice had caused no
bitterness. Vladimir Mityayev, whose son Alexei was an officer on the Kursk
and who was a member of the jury, said he was not offended by the different
opinion of the majority of the jury.
"The most important thing is to preserve the memory of the Kursk sailors,"
Mityaev said, adding that the Kursk relatives also had divergent opinions on
the best monument.
*******
#12
The Electronic Telegraph (UK)
November 20, 2002
Chechens' envoy 'was framed by Russians'
By Julius Strauss in Moscow
Russia's campaign to extradite a leading Chechen separatist from Denmark
has been set back by disclosures that authorities in Moscow fabricated
evidence against him.
Russian prosecutors have been seeking to extradite Ahmed Zakayev, the
Chechen separatist movement's ambassador-at-large and a leading aide to the
rebel president, Aslan Maskhadov, for more than two weeks.
Mr Zakayev was arrested at a Chechen conference in Copenhagen after Russia
requested that Danish police seize him because of his alleged links to
gunmen who took more than 700 theatre-goers hostage in Moscow last month.
But the Russians have failed to provide evidence of any links between Mr
Zakayev and terrorism and Denmark has said that it would release the
Chechen if no proof was given. Now further information has been disclosed,
casting a shadow over the flimsy case presented against Mr Zakayev by Russia.
A key component of the evidence documented by Moscow centres on the alleged
kidnap and murder of two Russian Orthodox priests while they were
travelling in Chechnya in 1996. The Russian charge sheet, which has been
leaked to a Moscow newspaper, reads: "Both priests were killed under
unknown circumstances."
But one of the priests, Father Filipp, emerged this week to confirm that he
is alive. He said there was no evidence that Mr Zakayev was involved in his
kidnapping.
"I had a discussion with Zakayev the day before I was kidnapped," Fr Filipp
said. "I even spent a night at his house. But is that a reason for accusing
him?'
"The clumsy attempt to link my name with the name of Zakayev is nothing
more than an attempt to drag the Church into the political arena."
The attack by Fr Filipp, whose secular name is Sergei Zhigulin, tarnishes
Russia's image further at a time when it is struggling to build credibility
as a leading ally of the West's war on terrorism.
President Vladimir Putin has expended considerable political capital to try
to persuade the West that the Chechen cause is an intrinsic part of a
global war by militant Islam. European leaders are not convinced and
suggest that Russia's human rights abuses in the southern republic mean
that it is at least equally to blame for the conflict.
Since the Moscow hostage crisis, which ended in the death of 128
theatre-goers and more than 40 rebels, Mr Putin has put huge pressure on
the Chechens inside and outside Russia.
Several countries have been pressured into closing Chechen cultural centres
and turning back refugees. Some Chechens, desperate to find a haven have
even applied for asylum in Kazakhstan, the place to which they were exiled
by Stalin in the 1940s.
Meanwhile, media outlets that speak out against the Russian government's
policies in Chechnya risk official censure. The head of state television in
Tatarstan, an autonomous Russian republic, was sacked this week for
allowing a discussion programme on the Moscow siege.
Among opinions expressed were some calling for Russia to end the war in
Chechnya.
*******
#13
The Electronic Telegraph (UK)
November 20, 2002
When it's suicide to join Russia's armed forces
Julius Strauss in Ishnya hears a sailor's chilling story of his brutal life
as a navy conscript
A teenage sailor who deserted in Russia's Far East more than a year ago has
arrived home with chilling tales of sadism, beatings and suicides.
Alexander Yevdokimov, 18, penniless and on the run, hitchhiked and walked
more than 4,000 miles across Russia to get away from his unit after seeing
a colleague hang himself.
At night he slept by the roadside or in cheap doss-houses. He spent the
long Siberian winter in a deserted logging cabin, selling cedar nuts he
gathered to pay for food. By the time he reached home - a village four
hours from Moscow - his mother was dead and his father had given up hope of
seeing his son alive again.
Bullying in the Russian army has been a problem for decades but since the
fall of communism, low morale and poor pay have made it endemic.
The Union of the Mothers of Russian Soldiers, formed to protest at
conditions in the armed forces, estimates that 3,000 recruits a year kill
themselves. On one day this week alone, a soldier in Russia's Far East
killed a guard and then shot himself and police hunted an armed deserter in
woods near Moscow.
Many mothers pay doctors huge bribes to declare their sons unfit to serve.
The current rate is about £3,500. Universities are crammed with students
who have little interest in their subject but find it is the only way to
put off military service.
Mr Yevdokimov has painted a picture of a regime so brutal that even
volunteers soon deserted or attempted suicide. Those who serve the
mandatory two years without carrying away deep psychological scars are the
exception.
He signed up as a naval cadet in the spring of last year. "I could have
legitimately avoided the draft because my mother was an invalid," he said.
"But the navy said they would make me into a real man."
With other recruits he was transported across Russia to Vladivostok in a
train journey that took two weeks. There he was one of 15 recruits who
joined a submarine hunter in Russia's Pacific Fleet. The beatings began the
day the ship left port. The older sailors hit him with fire hoses and the
second-year recruits - "grandfathers" in Russian military parlance - joined
in with boots and fists.
Mr Yevdokimov said: "I had always dreamed of sailing but the reality was a
nightmare. I was beaten every day. They wanted me to serve them, they
wanted to make me a slave."
Within weeks one of Mr Yevdokimov's fellow recruits, a skinny boy from the
central Russian town of Kostroma, hanged himself with a length of rope he
found on deck.
Others wounded themselves to get a few precious days on shore in a military
hospital. Mr Yevdokimov said: "I saw a whole ward full of young soldiers
and sailors who had slashed their wrists." When recruits spoke to officers
they were told they had no right to complain.
Mr Yevdokimov escaped early one morning when the ship was in port. "I
didn't have a penny," he said. "But I had 16 months left and I knew I
couldn't face it. In normal conditions I would have been proud to serve.
But the conditions were not normal."
From Vladivostok he fled to Ussurysk, a few miles away. He said: "I began
by selling cedar nuts that I found in the forest. When I had collected a
few hundred roubles I would hitchhike with the lorries and then try to find
work."
In this way he travelled along the southern perimeter of Russia, past
China, Mongolia and Central Asia.
When summer came Mr Yevdokimov travelled the length of Siberia through
Irkutsk, Krasnoyarsk and Novosibirsk to European Russia.
Back at home, he realised he would have to turn himself in. Without
identity documents he had no chance of getting a job or evading the police.
Last week the local military prosecutor ruled that he must return to serve
the 16 remaining months.
*******
#14
Wall Street Journal
November 20, 2002
Russia , Once the Wild Frontier, Enjoys a Renaissance in Stocks
By CRAIG KARMIN
Staff Reporter of THE WALL STREET JOURNAL
Two months before Russia's financial collapse in 1998, a local brokerage
firm called Renaissance Capital hosted what some recall as the last blowout
party dedicated to Moscow's infamous cowboy capitalism.
Renaissance entertained hundreds of investors at the 18th-century Kuskovo
palace, hiring models dressed in period costumes and flying in a U.S.
water-ski team to perform stunts on the estate's lake. "Even today," says
John Haskell, president of Vostok Fund, a U.S. money-management firm
specializing in Russia , "people still talk about that party."
Stephen Jennings cringes at the thought. The 42-year-old co-founder and
chief executive of Renaissance has spent much of the past four years trying
to erase that sort of image of his firm -- and of Russia . After initially
focusing his image-makeover efforts on Moscow, Mr. Jennings is taking his
message abroad. In recent conferences for investors in the U.S. and Europe,
Mr. Jennings has been trying to convince people burned by past problems in
Russia that it is now a smart place to put their money.
He likes to say that even if the elite's profligate ways and the country's
catastrophic debt default sent the economy into a tailspin, they also had a
cathartic effect. Russia has vastly improved its tax collection and boosted
foreign reserves while reducing debt. Major Russian companies have
converted to Western accounting standards.
Some investors have noted the change. Moscow has been the top-performing
stock market over the past two years: up 82% last year in dollar terms and
ahead 35% this year, though the market is still down about 20% over the
past five years. Even among U.S. investors, money is starting to trickle
back for the first time since the country's financial crisis; foreign
investors now account for around 20% of the total money invested in Russian
stocks.
The market gain reflects a recent jump in oil prices, which has buoyed the
big energy companies that make up much of the Moscow market, and a slowly
growing recognition that Russia is in the early stages of an economic
overhaul.
Yet Mr. Jennings would be the first to concede that generating broad
interest in Russian stocks is no summer stay at the dacha. For many U.S.
investors, the image of decadent parties among cronies is still a tough one
to erase. And with many investors already leery of the risks related to
emerging markets, exposure to Russian stocks still strikes some as a
foolhardy bet.
"People who had been in emerging markets from the beginning never lost as
much money as they did in Russia ," says Mr. Jennings, a New Zealand native
who has spent the past 10 years in Moscow. "There was a level of anger and
bitterness, even among veteran investors who had thought they'd seen it all."
Mr. Jennings's uphill battle helps illustrate why emerging markets have
such a hard time reattracting investor capital and attention once their
reputation has been sullied. Investors abandoned Mexico, for instance,
after the government devalued the peso in 1994, and they fled South Korea
in 1997 during the Asian financial crisis. A series of sometimes-painful
reform efforts by both countries have lured back foreign fund managers and
sent these two markets climbing. Now, Russia is trying to convince the same
foreign investment community that it, too, deserves a second look.
Plenty of skepticism remains. Most global investors don't own a single
Russian stock, and even some big investors comfortable with emerging
markets take a pass on Russia .
California's Public Employees' Retirement System, or Calpers, rated Russia
dead last in its rankings of emerging-market countries, based on a number
of political and financial criteria, including market regulation, ease of
trading, and government stability. Meanwhile, Vanguard Group, the largest
index-based mutual-fund group, excludes Russia entirely from its
custom-made index funds.
Gus Sauter, a Vanguard emerging-markets portfolio manager, says Russia
falls below his firm's minimum standards when it comes to the technical
processing of shares. "Russia has been improving," he says. "But it's not
quite there yet."
Even investors who own Russian stocks tick off a litany of their own
concerns: a weak banking system, frequent treatment of foreign investors as
second-class citizens, and limited investment opportunities beyond a dozen
or so mostly commodity-based companies. More than half of the market
capitalization of Moscow's benchmark RTS Index comes from oil producers
Yukos and Lukoil and oil and gas company Surgutneftegaz, making the market
vulnerable to any sharp fall in energy prices.
Mr. Jennings doesn't dispute these shortcomings. Instead, he argues that
Russia's valuations -- cheap even by emerging-markets standards -- mean
that investors are getting paid for their risk. More importantly, he says,
Russia is making progress even as other developing countries in Asia and
Latin America stagnate. So Russian stock prices will continue to rise, he
says, as investors recognize this trend.
"Russia is a growth story and a restructuring story," he says, adding that
the country's budget surplus and foreign reserves are at a high. "There
will be a lot of bumps along the way, but there is a lot of momentum behind
it."
In a sense, Renaissance would like to believe its own comeback story is
unfolding the same way. During the depths of the financial crisis -- after
the currency was devalued, the government defaulted on its debt, and the
stock and bond markets virtually collapsed -- the firm had a near-death
experience. Its revenue tumbled 90% in six months, prompting it to slash
its staff of 600 people to fewer than 100.
But Russia's meltdown also marked a turning point for Renaissance. Most
foreign brokerage firms closed their doors and have yet to return. That
meant Renaissance was able to hire away top Russian bankers from places
like Morgan Stanley, Citigroup Inc.'s Salomon Smith Barney and J.P. Morgan
Chase & Co.
Back on its feet now with 160 employees, the company also has quietly
parted ways with its controversial co-founder, Boris Jordan, an American of
Russian descent who had been the most visible and flamboyant member of
Renaissance. He left the firm shortly after the default, taking the
private-equity business, called Sputnik, with him.
Renaissance has returned to profitability: It made $30 million last year
and expects to exceed that figure for 2002, Mr. Jennings says. That's down
from the nearly $100 million the firm made at its peak in 1997, a level
Renaissance may have a hard time reaching until more investors believe
there's a compelling reason to invest in the Russian market.
But there are recent signs that this day may be getting closer. Over the
summer, Renaissance was able to attract scores of investors to its annual
Moscow conference without the lure of exotic models or flashy water skiers.
The firm's conference in New York last month drew nearly 150 people. And at
least some U.S. fund managers seem ready to look beyond the firm's
turbulent past.
"People had warned me off doing business with Renaissance because of
concern about transparency and ethics," says Mr. Haskell at Vostok, who
opened a trading account with the bank last month. "It's not the same firm.
They have changed with the times."
******
#15
Asia Times
November 20, 2002
In with Iraq, out of NATO
By Brian Kenety
PRAGUE - As Prague prepares to receive 46 leaders for the NATO summit on
Thursday and Friday, it is thinking also of the two not invited.
President Alexander Lukashenko of Belarus has been denied an entry visa
while President Leonid Kuchma of Ukraine looks set to arrive, though he has
not been invited.
The NATO (North Atlantic Treaty Organization) military alliance has made it
clear in recent weeks that the two Eastern European presidents will not be
welcome at the summit, the first to be held behind the former Iron Curtain.
On the face of it, the two presidents are being kept away because of their
human rights record. Lukashenko has long been a pariah in the West because
of his autocratic rule, marked by frequent crackdowns on dissent and media
freedom. Kuchma faces difficulties domestically and abroad over his alleged
role in ordering the murder of opposition reporter Heorhiy Gongadze, whose
headless body was found in a forest two years ago.
Neither Belarus nor Ukraine are NATO members, but both are members of the
Euro-Atlantic Partnership Council (EAPC), a consultative body to NATO which
is due to meet in Prague on the second day of the summit on Friday. The two
leaders are being kept out although under NATO rules each EAPC member is
allowed to choose its own delegates.
But it is no coincidence that both leaders have been accused of links with
Iraqi President Saddam Hussein. Belarus is a member of NATO's Partnership
for Peace program, but stands accused of training Iraqi military officers
in operating air defense missiles. Kuchma faces allegations that he
violated United Nations sanctions by approving a US$100 million sale of the
Kolchuga early warning radar system to Iraq.
The Czech hosts are being careful to single out the leaders, not their
countries. Foreign Minister Cyril Svoboda says that his government does not
want Lukashenko to use a visit to Prague to "legitimize his position" in
Belarus. But he has said members of a Belarus delegation would be given
visas. From Ukraine, he says Foreign Minister Anatoliy Zlenko has been
invited in place of Kuchma.
The West is keen to maintain good relations with Ukraine to help preserve
its fragile independence from Russia. Ukraine is the fourth-largest
recipient of US aid. But the US has suspended $54 million in aid over the
Kuchma controversy.
Kuchma has denied US allegations that it was his voice on a tape recording
authorizing the sale of the military equipment to Iraq. After talks with
Russian President Vladimir Putin in Moscow over the weekend, Kuchma visited
China seeking "proof" that he never sold weapons technology to Iraq. Kuchma
says that all Ukrainian officials would boycott the meeting if he was
barred. "If the president does not go, no one will go," he says.
Earlier this year, a court in the Ukrainian capital Kiev began to
investigate Kuchma over his role in the murder. In September tens of
thousands of people took to the streets calling for him to stand down.
These were the largest demonstrations since Ukraine's independence from the
Soviet Union in 1991. NATO officials in Brussels say that Western leaders
would boycott any session that Kuchma might attend.
In parallel with Kuchma's objections, the Belarus government has strongly
attacked the Czech government for denying an entry visa to Lukashenko. "The
Czechs will lose their position in Belarus for a long time, if not for
ever," the Belarus foreign ministry said in a statement. "This
unprecedented decision, forced on the Czech side, is one in a series of
undisguised pressure on Belarus. It shows that Czech foreign policy is not
independent and demonstrates what disregard Prague has for EAPC decisions
in which it has taken part."
Lukashenko immediately recalled the ambassador to Prague, Vladimir Belsky,
for consultations. He also threatened to open his country's borders to the
West. That, he says, would force Europeans to "crawl and ask for our
cooperation on drug trafficking and illegal immigration". He added, "We
will not defend Europe from the flood."
There is some dispute whether Belarus and Ukraine should be clubbed
together. "People do not see Ukraine and Belarus as being in the same
league," Chris Donnelly, special advisor for Central and Eastern European
Affairs to the NATO secretary general, told a conference last week.
Jiri Sedivy, director of the Prague-based Institute for International
Relations, said that the Ukrainian president was every bit as suspect as
Lukashenko. "Kuchma cooperates more with Iraq now than with NATO," he told
delegates at a meeting organized by the Czech civil society initiative
Forum 2000 Foundation last week.
(Inter Press Service)
*******
#16
pravda.ru
November 19, 2002
Who Needs the WTO?
It is better not to let foreign businessmen into the country now than have
to drive them out later with guns
Governmental PR in Russia is obviously on the decline. Despite the fact
that so much was said and published about incorporation into the WTO, the
situation is still vague. The government either doesn’t know itself why
Russia needs to be incorporated into the WTO, or for unknown reasons,
conceals information from the nation. In this situation, lobbyists express
their thoughts rather distinctly. There is a suspicion that much time will
lapse before Russia enters the WTO. Is there anyone to explain how Russia
will profit from entering the WTO?
Today, the RF Chamber of Industry and Commerce held an extended session of
its committee for financial markets and credit organizations. Executive
secretary of the Chamber Igor Yurgens told journalists that the central
lobbyist organization of the country decided that access to the Russian
market should be restricted for foreign companies, no matter what those
liberals in the WTO may say about it.
Indeed, what’s the use of rich and aggressive foreign rivals to Russian
companies? Capitalism in Russia is too young to compete on equal terms with
monsters reigning over the world. Russia’s economy is currently a bleeding
wound after the privatization schemes and redistribution of property. No
matter what sphere we look at, all of them are very vulnerable: the banking
sector, insurance market, telecommunications, consulting, hotels, and
international transportation.
Russians are not idiots. We also have considerable experience in forcing
undesirable foreigners from out of the country. This experience is
especially great under Russian Aluminum Director Oleg Deripaska, the main
opponent to Russia’s entry into the WTO. In fact, there is much fuss about
the problem already; Russia hasn’t yet learned how to settle problems
without cries and protests. It is better not to let foreign businessmen
into the country now than have to drive them out later with guns.
However, foreign businessmen won’t keep quiet, and they still seek to enter
the Russian market. Thirty three countries of a total number of the 65
members of the working group created especially for Russia’s entry into the
WTO evince great interest in entering the Russian market. Negotiations are
currently especially active with the USA, the European Union, Canada,
Japan, Norway, Switzerland, Australia, South Korea, and several Eastern
Europe countries.
Igor Yurgens says that these countries are especially interested in
Russia’s financial sectors (insurance, banking, securities). Thank God that
Russian negotiators are strong as steel concerning these problems. There
are more than enough legal restrictions to be used to restrict the activity
of foreign companies.
Kira Poznakhirko
PRAVDA.Ru
Translated by Maria Gousseva
*******
#17
Russian Communist leader blasts Putin's economic policy
November 19, 2002
AFP
Russian Communist leader Gennady Zyuganov, the strongest challenger to
Vladimir Putin, has lauched a stinging attack on the president's policies,
accusing him of kowtowing to Washington and leaving the country "in ruins".
Zyuganov, a distant also-ran behind Putin in the 2000 presidential
election, lambasted the Russian president's economic policy late Monday
after a one-on-one meeting between the two men at the Kremlin.
"I told the president that the government cannot cope with today's
problems... that if the economic policy that is being pursued by the
government is not radically changed shortly, we will have serious problems
next year," Zyuganov told the Interfax news agency. The Communist party
chief criticized the Russian economy's exaggerated dependence on oil
exports and said he wanted the 2003 budget to be increased by 500 billion
rubles (16 billion dollars, euros).
"The budget proposed by the government depends entirely on oil. If world
oil prices drop tomorrow, we will not be able to avoid a (foreign debt)
default and other catastrophes," Zyuganov said.
His comments came as Zyuganov tries to stage a political comeback in the
wake of last month's Moscow theatre hostage crisis and ahead of legislative
elections scheduled for late 2003 and a presidential vote in 2004.
Earlier Monday, the Communist leader criticized developments in Russia
following the demise of the Soviet Union in 1991 and lashed out at Putin's
leadership.
"Ten years of reforms and three years of Putin have left us in ruins," he
said.
Zyuganov also blasted the Russian president's foreign policy.
"Putin has no policy toward the north, south, east or west -- he just goes
with the flow (of Washington)", said Zyuganov.
"He gives up one thing after another (to the West) and he does so
cynically. He has given up everything, while still trying to show the best
side of his face to the public," he added.
Zyuganov has made such comments in the past but his latest assault echoes
public confusion over the Russian leadership's role in the death of 128
civilians in last month's hostage crisis.
Most of the victims died as a result of a bid by Russian security forces to
free some 800 people held captive in a Moscow theater by Chechen rebels.
While the Communists are the single largest party in the Duma, pro-Putin
forces have united to form a dominant majority that has enabled the Kremlin
agenda to sail through parliament, often without much debate.
Zyuganov's public rating has hovered near 20 percent for several years,
while Putin has a popularity rating of over 70 percent.
******
#18
Miniature "bourgeois" dogs make comeback in Russia
ST PETERSBURG, Russia, Nov 20 (Reuters) - At $1,000 for two kilograms (4.4
lb) they are cheaper than gold, but miniature dogs have become a novel way
for Russia's newly wealthy to flaunt their riches.
Practically unknown in Soviet times when they were condemned as being
"bourgeois," miniature dog breeds have been making a comeback.
Nina Nasibova, a breeder in the former Tsarist capital of St Petersburg,
has created a new kind -- the "Petersburg Orchid."
"The fashion for small dogs is growing. Before, people bought huge dogs to
guard their house and family, but now things are changing and people want
little dogs," she said on Wednesday.
Her new breed stands 24 cm (9.5 inches) tall in its designer socks, and
would not have survived long under the leadership of Leonid Brezhnev.
"In the Brezhnev years, there was only one state breeder to produce new
kinds of dog. But they would only produce dogs that were useful to people,
like shepherds or hunters," she said.
"Decorative dogs were seen as bourgeois and useless."
*******
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