Johnson's Russia List
#6564
22 November 2002
davidjohnson@erols.com
A CDI Project
www.cdi.org

[Contents:
  1. Reuters: Tennis-Russians fit and confident ahead of Davis Cup final.
  2. Reuters: Russian regions want more independence from Moscow.
  3. Reuters: Russia says volunteer army switch to start 2007.
  4. The Economist (UK): The conflict in Chechnya. A chance of peace?
In the aftermath of the Moscow hostage crisis, Chechnya may yet change.
  5. Novaya Gazeta: The Expenditures Are Typical of War Rather Than an 
"Operation."  Interview with Alexei Arbatov. (re Chechnya)
  6. Reuters: Bush says will respect Russian interests in Iraq.
  7. THE WHITE HOUSE: FACT SHEET: NATO-Russia Relations.
  8. Moscow Tribune: Stanislav Menshikov, BUSH IN SAINT PETERSBURG.
With compliments from Prague.
  9. RIA Novosti: $200-$350 BLN FLED RUSSIA OVER PAST DECADE.
  10. AFX: OECD says Russia faces fiscal, current account imbalances if 
oil prices plunge.
  11. The Times (UK): Michael Binyon, Kremlin enjoys the fruits of its 
foreign policy.
  12. Russian Life magazine: Daniel Rancour-Laferriere, WHO ARE THE 
RUSSIANS?
  13. Toronto Star: Gordon Barthos, Raising new Chechen radicals.
  14. AP: Peace Group Seeks Talks on Chechens.
  15. BBC Monitoring: Chechens blame West for "hypocrisy", vow to 
continue war.
  16. gazeta.ru: 'We're governed by the mafia.' (interview with Duma
deputy Shashurin re government corruption)
  17. Reuters: Ukraine approves Kuchma's man as prime minister.
  18. Reuters: Slavneft end of an era for Russian oil sell-offs.]
    
*******

#1
Tennis-Russians fit and confident ahead of Davis Cup final

MOSCOW, Nov 21 (Reuters) - The Russian team are all fit and confident as they 
make their final preparations for next week's Davis Cup final against France 
in Paris, the country's tennis chief said on Thursday.

"We have no problems so far, everyone is fit and ready to go, so we're 
looking forward to the Paris final," Shamil Tarpishchev, president of the 
Russian Tennis Federation and their Davis Cup captain, told Reuters in a 
telephone interview from Monte Carlo.

"Everybody is just going around their business."

"(Yevgeny) Kafelnikov has been training here since the beginning of this week 
and (Marat) Safin arrived yesterday from Moscow, so he too had his first 
practice today," he said.

The Russians are making their final preparations at the Monte Carlo Country 
Club for the best-of-five clash at Bercy sports hall in Paris, which starts 
on November 29. They plan to arrive in Paris on Sunday.

Tarpishchev said that along with Safin and Kafelnikov, Russia's top two 
players, they also have Andrei Stolyarov and Denis Golovanov. Mikhail 
Youzhny, who has had some back problems recently, will join the team in Paris 
next week.

"It's too early to tell right now what kind of shape our top two guys will be 
for the final, but Kafelnikov looks fine at the moment and Safin had been 
working out in Moscow since he returned from Shanghai," Tarpishchev added.

The Russian number one failed to advance to the semi-finals at the 
season-ending Masters Cup in Shanghai after losing all three of his group 
matches.

The Russians desperately want to bring the country their first ever Davis Cup 
trophy after losing back-to-back finals in 1994 and 1995 in what could be 
Kafelnikov's last year on the ATP Tour.

*******

#2
Russian regions want more independence from Moscow

MOSCOW, Nov 21 (Reuters) - Russia's powerful regional bosses urged the 
central government on Thursday to ease its increasingly tight grip on the 
country -- a tactic Moscow hopes will help bring law and order to its 89 
often unruly regions.

"There is a general trend in Russia towards deeper centralisation," said 
Nikolai Fyodorov, president of the central Russian Chuvashia republic.

"I will tell the president today our aim is to construct a strong federal 
state, not an empire, and only a rational form of decentralisation is 
feasible here," he told reporters in Moscow.

Along with other regional leaders, Fyodorov was in Moscow to attend a meeting 
with President Vladimir Putin to discuss local self-government.

Putin, concerned with the extent of regional autonomy and the fractious 
nature of the country, has used his time in power to clip the wings of 
Russia's regional leaders who had amassed huge powers in the 1990s under 
former President Boris Yeltsin.

Regional governors have often been accused of regularly flouting federal laws 
and running their territories as fiefdoms.

"Moscow is often not able to solve its own problems, so how can we expect 
them to be able to solve ours?" Fyodorov said.

Under current legislation, the regions are governed by a number of bilateral 
agreements with Moscow that often reflect the political clout of the more 
powerful regional bosses, leaving some regions with more autonomy than others.

A Kremlin commission is now working to replace these agreements with laws 
that would decree power-sharing rules applicable for all provinces and 
stipulate control rights over state assets, funding mandates and tax revenues.

"The president understands very well that centralisation works when a country 
is mired in a major political or economic crisis, but this is not the case 
anymore," Viktor Tolokonsky, head of the central Novosibirsk region, told the 
news conference.

"We must fulfil our responsibilities ourselves if we want real economic 
growth in this country."

According to earlier draft proposals, the Kremlin reserves the right to 
impose temporary direct rule over a region in case of a serious economic 
crisis.

Putin was elected in early 2000 on a platform of restoring strong central 
control. Within weeks of taking office, he announced radical plans to oust 
regional leaders from the Federation Council upper house of parliament and 
replace them with less influential figures.

********

#3
Russia says volunteer army switch to start 2007
November 21, 2002
By Jon Boyle

MOSCOW (Reuters) - Russia said Thursday it would start the wholesale switch 
of its largely conscript army to a mainly volunteer force in 2007, but 
experts said the reforms ducked tough questions facing the ailing military.

Ministers approved a three-stage plan presented by Defense Minister Sergei 
Ivanov, a close ally of President Vladimir Putin, that called for more 
funding, better training and higher pay for a hi-tech force of professional 
soldiers.

The 2004 budget would give extra cash to fund more volunteer units, but 
Ivanov was noncommittal about reducing hugely unpopular conscription which 
army generals want to keep.

"The priority (for the move to volunteers) will be the infantry, paratroopers 
and marine infantry, because they are in the frontline of counter-terrorist 
operations," Ivanov said.

They are part of permanent combat readiness units comprising some 166,000 
soldiers. "I think this is a very ambitious plan, but in principle it is 
possible to fulfill  it."

Military experts were caustic about the changes.

"This is not reform this is a sabotage of reform, because it doesn't change 
the essence, the posture of Russia's forces. Their numbers are the same more 
or less," said Pavel Felgenhauer, an independent Moscow-based analyst.

ANTI-TERRORISM FOCUS

Putin wants to transform Russia's bloated, impoverished and demoralized 
military into a force able to respond to the security threats of the 21st 
century.

He has ordered a revision of Russia's security doctrine -- expected next 
spring -- to reflect the absence of a major external threat to Russia after 
the Cold War and the global trend to concentrate on fighting terrorism.

That mirrors a debate within Russia's erstwhile rival NATO, now a Russian 
ally in the fight against terrorism, whose summit this week aims to ensure 
the security pact remains relevant.

Liberal leader Boris Nemtsov, who has been pushing for radical cuts in troop 
numbers to fund a volunteer force, criticized the Defense Ministry for trying 
to delay the move to a fully professional armed forces until after 2011.

"It's impossible to have such a long lead time, because Putin won't be 
president in 2011 and no program that goes beyond the term of a president has 
ever been fulfilled," he said.

"The army will already be in a state of collapse (by then), so we need to 
start reforming it in 2003-04."

Putin is expected to win comfortable re-election in 2004 for a second and 
final four-year term.

The Pskov 76th Paratrooper Division, which expects to have 80 percent of its 
7,000 soldiers serving as volunteers by next September, is acting as guinea 
pig for the reforms.

However, its $84 million switch-over is already straining this year's $9.6 
billion military budget, raising questions about Russia's ability to fund a 
volunteer army. Nemtsov estimated the changes would cost an extra $1 billion 
a year.

"The main question is where can we find a lot of money to pay for a volunteer 
army," said Vadim Solovyov, managing editor of the Nezavisimaya Gazeta 
Military Review.

He added Ivanov's changes would achieve little because "you have to reform 
the armed forces in their entirety. Only that will release the funds 
necessary for the move to a voluntary army."

To fight terrorism effectively required well-trained, mature, professional 
soldiers who were unlikely to be attracted by a monthly wage of $150, he said.
   
*******

#4
The Economist (UK)
November 23-29, 2002
The conflict in Chechnya  
A chance of peace?
In the aftermath of the Moscow hostage crisis, Chechnya may yet change 
SPUTNIK CAMP, INGUSHETIA 
 
THEY live in neat rows of boxy green tents, in makeshift rooms partitioned
with fibreboard in abandoned barns, in the houses of local families paid to
take them in; they sit and wait out their days or look for work nearby or
make the perilous journey back and forth to their old homes. But among all
those who have fled the fighting in Chechnya, the refrain is the same: “We
just want to live like normal people,” says Azamat, a 21-year-old at the
Sputnik camp, home to over 6,000 people, near Ingushetia's border with
Chechnya.

At the height of Russia's second campaign against separatist rebels in
Chechnya, which it began in 1999, there were 230,000 Chechen refugees (or
“internally displaced persons”, since they are inside Russia) in
Ingushetia. Now there are 110,000—a ninth or a tenth of the Chechen
population, depending on whether you believe aid agencies' estimates or the
possibly inflated results of a recent census. Some have returned to
Chechnya only to go into camps there. Others have ventured back to Grozny,
the capital, where life struggles to regain some normality despite sporadic
fighting and a military curfew. 

Aerobics and exile

Though cramped, living conditions are not so bad. There are electric lights
and roaring gas stoves, library tents and shop tents and school tents and
aerobics tents. Groups of children with UNICEF's support travel to Moscow
or even abroad to take part in competitions or perform concerts. But
families are fragmented, the future unknown. Life is in suspended animation. 

Aid workers have been bracing for a new influx, fearing a wave of
repression after Chechen rebels took a Moscow theatre and its audience
hostage last month. There are a few ominous signs: small army bases have
been dug in right at the edge of the camps and some residents report
harassment from the soldiers. In Moscow the police have been cracking down,
sometimes brutally, on Chechens and other people from the Caucasus. But
refugees and foreign aid workers who have been to Chechnya recently say it
has not much changed. The army seems to be obeying President Vladimir
Putin's instructions to exercise restraint.

In fact, Mr Putin seems to be using the hostage crisis to get more direct
control in Chechnya—but not through force. It allowed him to discredit
Aslan Maskhadov, Chechnya's last elected president and now its rebel
leader, as a partner for peace talks on the grounds that he might have had
a part in the theatre attack. (Russia is trying to extradite Akhmad Zakaev,
Mr Maskhadov's foreign envoy, from Denmark, where he was arrested after a
conference.) Mr Putin has also reshuffled most of the government officials
responsible for Chechnya, except for Akhmad Kadyrov, the head of the
Chechen administration in Grozny. This, says Nikolai Petrov, an analyst in
Moscow, is designed to give Moscow more control over the region's finances,
clipping Mr Kadyrov's wings.

He will be needed, however, to administer the next phase, which Mr Putin
announced shortly after the Moscow hostage affair. In March or April next
year there will be a referendum to adopt a constitution that will reiterate
that Chechnya is part of Russia, formally negating its self-declared
independence a decade ago. A few months later there will be a presidential
election. Mr Kadyrov is a likely contender, but his own credibility is low
both in Moscow and in Chechnya. Someone who is loyal to Moscow but has
popular support too would doubtless do well. That might be a Moscow Chechen
or, more likely, a recognised local politician.

The referendum and maybe the election, too, could be rigged; Russia tightly
controls outside scrutiny of Chechnya, and public opinion is unknown. “The
magic of the place is that we can't quantify anything,” says an aid worker.
But it may not be necessary. If the army's brutal excesses against
civilians can be curbed, if the rebels do not grow stronger, and above all
if Mr Putin's project promises some kind of return to normality, the
Chechens—at least those who have known the refugee's life—may take what is
on offer. And that would allow Mr Putin, shortly before his own re-election
bid, to rescue some shreds of success from a policy towards Chechnya that
so far has failed. 

*******

#5
Novaya Gazeta
November 18, 2002
The Expenditures Are Typical of War Rather Than an "Operation"
translated by
www.eng.yabloko.ru

Interview with Alexei Arbatov by Irina Gordiyenko

Alexei Arbatov, member of the State Duma commission for reviewing federal
budget expenditures allotted to defence and security issues of the Russian
Federation, told us about the specifics of the formation of the "budget of
war".

Question: Is there a separate item in the federal budget reflecting
expenditures on the anti-terrorist operation in Chechnya?

Alexei Arbatov: No, there is no such item.

Q: What are the sources of financing?

Arbatov: First of all from the budgets of those departments taking part in
this operation. They are allotting the funds. For example, the Armed Forces
have a division located in Chechnya and, correspondingly, everything
required by this division (fuel and oil, ammunition, provision of undeclared
payments to the military) is made from corresponding items of the national
defence budget. This also holds true for the interior ministry, the Federal
Security Service, etc.

Q: Alexei Georgievich, is it possible to trace the exact figures for every
definite department or is such information a state secret?

Arbatov: It is absolutely impossible to trace this on the basis of publicly
available information, as it is impossible even to learn how the funds are
distributed by types of the Armed Forces, inside the departments: currently
the budget does not dispose of such a list. Only these departments know how
much money has been transferred, what it was transferred for and there the
funds are.

Q: Are these figure published anywhere?

Arbatov: This is not a question of whether they are published or not: the
problem is that they simply don't exist. To calculate the costs of the
operation in Chechnya, at least in military terms, you have to take a
calculator and, based on all the information on internal expenditures for
each, department, separate these items and calculate. This is tedious work.

In general it is possible to calculate the total expenditures on the war in
Chechnya - and I call this a war, rather than an anti-terrorist operation.
It is another problem that this is not simply top secret information - a
definite figure simply does not exist here, as these costs represent a pool
of different items and different types of expenditures.

Q: Have extra-budgetary funds been allotted for such an operation?

Arbatov: No, as far as I know. But if you mean the programme for restoring
Chechnya's  economy, there are definitely funds for these purposes. But if
we are speaking about the [military] operation, there are no such funds.

Q: Why there is no separate item in the federal budget for the [military]
campaign in Chechnya?

Arbatov: There are two reasons.  First, at present our budget classification
does not envisage such an expenditure item. This is incorrect, and the
departments [and ministries] suffer: they have to transfer the money
allotted to them on the military operation, rather than their own needs
(catering of the troops, military training, purchases of machinery, etc.).

In principle, such an item should be introduced to budget classification,
but this involves  serious and complex calculations. Often this is
impossible technically. But it is still not that difficult to have a budget
for some basic expenditures, for example, payment for personnel, expenses on
fuel and  the functioning of the machinery. We should find the information
for all troops, the departments participating in the operation, to sum it
all up and determine the costs of the war.

Certainly, there are approximate figures for such expenditures. According to
unofficial estimates, during the military actions in autumn 1999 - winter
2000 (the capture of Grozny and landing of troops there), we spent about RUR
20-30 billion a year. When the active military operation stage was over, the
costs definitely contracted and now amount to RUR 10-15 billion a year. This
is a large amount, moreover it should be borne in mind that a complete
transfer of all the separate types of troops on a contract basis would cost
us RUR 8 billion. In other words we could begin the transfer to an army on a
voluntary contract basis for the whole of the army.

Q: Alexei Georgievich, don't you think that some people are simply profiting
from this situation, as it is possible to conceal theft and embezzlements of
large amounts?

Arbatov:  This is an interesting idea. I can assume that there are financial
abuses in Chechnya, but as a deputy of the State Duma I cannot speak about
this issue without clear facts. Facts are needed here. However, it is
possible to maintain such suspicions. Based on experience of the first war
we know that money was stolen, in particular related to the programme to
restore Chechnya's economy.. Seven billion roubles simply vanished: and
still nobody can explain where this money went. In terms of prices, this
amounted to USD1 billion. Theft occurred and we have no grounds for
believing that this is not happening in the present campaign.

Q: Is this theft being investigated now?

Arbatov: No investigations have been  held on the operations in Chechnya
recently. The Audit Chamber of the Russian Federation works on the basis of
instructions from State Duma deputies. However, I highly doubt that the
State Duma in its present composition could issue such instructions, which
is a great pity.

*******

#6
Bush says will respect Russian interests in Iraq

ST PETERSBURG, Russia, Nov 21 (Reuters) - U.S. President George Bush said in 
an interview broadcast on Thursday that Washington would respect Russian 
economic interests in Iraq if President Saddam Hussein were removed.

Bush, interviewed by Russia's NTV television on the eve of talks in St 
Petersburg with President Vladimir Putin, said he was well aware of Russia's 
longstanding interests in Iraq, with extensive cooperation in the oil sector 
extending back to Soviet times.

The United States, he said, hoped Saddam would agree to give up dangerous 
weapons Washington maintains he holds without force having to be used.

"If he does not disarm on his own, we will disarm him in the name of peace. 
We naturally want to observe the interests of all sides. We do not intend to 
impose anyone or assume the country's leadership," Bush said in remarks 
translated into Russian.

"If a regime change does take place, we will work to form a new leadership in 
the country which will recognise the rights of all citizens and maintain 
Iraq's unity. We fully realise that Russia has economic interests in Iraq, as 
do other countries. Of course, these interests will be taken into account."

Russian oil majors have billions of dollars in contracts at stake, with 
rights to ship Iraqi crude under the U.N. oil for food programme, oil 
services contracts and investment deals. The latter are frozen due to U.N. 
sanctions.

Bush, who meets Putin on Friday after attending the Prague NATO summit, has 
said he favours a "regime change" in Iraq, meaning the removal of Saddam.

But Washington agreed to work for passage of a U.N. Security Council 
resolution this month to allow international inspectors to return to Iraq to 
determine what arms Baghdad holds.

Moscow led resistance to U.S. demands for a resolution allowing automatic 
recourse to use of force against Iraq if it was deemed to have hindered the 
weapons inspectors' work.

It has urged Iraq to cooperate with the inspection teams which returned this 
week.

*******
  
#7
THE WHITE HOUSE
Office of the Press Secretary
(Prague, Czech Republic)
November 21, 2002

FACT SHEET

NATO-Russia Relations

At their Rome Summit in May 2002, NATO and Russia created the
NATO-Russia Council (NRC) as a major instrument of an emerging, new
strategic relationship. The events of September 11, 2001, have alerted
NATO and Russia to the new threats of the 21st Century, challenges we
should face together. In the NRC, Allies and Russia can work as
partners for consensus-building, consultations, joint decisions, and
joint actions.

At the Rome Summit, the 20 leaders approved a workplan for the NRC, a
set of initiatives in areas including counter-terrorism, civil
emergency planning, crisis management, and non-proliferation. The work
of the NRC is centered on specific, practical projects where
NATO-Russia cooperation can make a real contribution to our common
security. The NRC is designed to be a mechanism for action.

Some of the projects undertaken or underway in the NRC include:

-- a completed large-scale civil-emergency planning exercise (850
participants from 30 countries) in Noginsk, Russia. The NRC is
currently studying lessons learned;

-- assessments of terrorist threats to the Euro-Atlantic Area,
including al-Qaida, and the threat of chemical and biological weapons
from non-state actors;

-- experts meetings on the role of the military in combating
terrorism;

-- defining concepts for theater missile defense, including the
potential for collaborative work on TMD systems;

-- nuclear experts consultations;

-- a defense reform seminar to assist new democracies in managing
their transitions;

-- practical cooperation in logistics, air transport, and air-to-air
refueling (an area of Russian expertise and NATO shortfalls in
capability);

-- joint training and exercises focusing on the areas of peacekeeping
and force protection;

-- cooperative airspace management.

*******

#8
Moscow Tribune
22 November 2002
BUSH IN SAINT PETERSBURG
With compliments from Prague
By Stanislav Menshikov

Before and during the NATO summit in Prague George W. Bush went out his way
to mollify Vladimir Putin. The Russian president has been consistently
opposed to further NATO expansion eastward, particularly against including
the three Baltic states. Putin has many times questioned the claim that NATO
expansion helps strengthen security in Europe. On the contrary, it
solidifies the "sanitary cordon" effectively dividing Europe into two parts.
It helps exacerbate the issue of Kaliningrad - Russia's western enclave deep
in NATO territory. Some new members, including the Baltic states, are not
part of arrangements limiting conventional arms and there are no legal
restrictions on deploying nuclear weapons there. In short, NATO expansion is
a minus for Russia's national security, whichever way one looks at it.

To show his opposition Putin refused to attend the Prague meeting. Later he
instructed foreign minister Igor Ivanov to be present and participate in
joint Russia-NATO committees. But that does not change Kremlin's basic
negative attitude. In political parlance, the West has to pay for Moscow's
decision not to raise hell.

Bush apparently understood that need. In his recent statements he stressed
the fact that Russia is not an enemy any more, but a friend. "I am going to
Russia to make it clear to Russia and to Vladimir Putin they have nothing to
fear from NATO expansion: Russia is not a threat, and therefore the military
strategies of NATO need to be changed to recognise that new reality: The
Warsaw Pact does not exist, but there is a threat to all of us in the form
of international and global terrorism, which we must be able to deal with".

Whether these assurances will be trusted in Moscow is doubtful. There are
two opposite views in the Russian political and military elite on these
matters. One is the traditional approach according to which the country has
to keep an effective defence shield capable of deterring NATO and the US.
Another is that Russia should do everything possible to promote integration
into NATO and treat it as a kind of protector rather than a potential enemy.
The trouble with this second approach is that it is not realistic. While
there is some co-operation with NATO, mutual integration is certainly not on
the books. Even if Russia wanted to, NATO does not.

Russia might be a newly found friend to Bush but not, for instance, to the
Baltic political elite, which still thinks in terms of the "Russian Bear".
Also Havel of the Czech Republic, the Polish and Hungarian leaders would
hate to integrate with Russia in one military alliance. Therefore, Bush's
friendly escapade towards Russia should be most rightly addressed to the new
NATO members, not to Vladimir Putin.

Bush did make an important point when discussing Chechnya. For the first
time, his accent was not on making peace with the separatists, but on
fighting terrorism emanating from that republic. He noted that Osama bin
Laden in his recent audiotaped message had praised the latest terrorist
attacks, including the one in Moscow. "To the extent that there are al-Qaida
members infiltrating Russia, they need to be dealt with, they need to be
brought to justice". Bush offered support to Putin for his handling of the
hostage crisis in a Moscow theatre. "He made some very tough decisions.
People try to blame Vladimir, they ought to blame the terrorists, They are
the ones who caused this situation, not President Putin".

Saying that on the eve of going to Saint Petersburg can be considered a
statement of principle and a major shift in US policy versus Chechnya. It
will certainly be appreciated in the Kremlin.

Bush said very little about Iraq, and his tone was not too aggressive. That
does not mean that he has changed plans for a military take-over in Baghdad.
As a stated US policy objective, it is only a matter of time before it
happens. For some reason, Bush badly needs Putin to be on his side when it
happens. His friendly gestures towards the Russian president are certainly
meant to induce him to support America.

As stressed in this column a number of times, Russia is opposed to war in
Iraq not only for economic, but mainly for geopolitical reasons. It wants to
maintain a belt of friendly nations on its southern fringe. Iraq was an
American client a few decades ago when the Baghdad Pact under the US aegis
spread from Turkey to Pakistan. Not any more. A comeback would be highly
undesirable.

To convince Putin that Iraq is a real threat Bush had to bring to Saint
Petersburg hard evidence that Saddam is indeed close to producing a nuclear
bomb. Even then, Russia would prefer to dispose of the threat by political
means. Working together with the US, that should not be difficult to
achieve.

But at this writing we do not even know whether Bush is prepared to discuss
Iraq with Putin in such terms. Perhaps, he still wants to act unilaterally.
Why then pretend he values Putin's views?

********

#9
$200-$350 BLN FLED RUSSIA OVER PAST DECADE 

MOSCOW, November 21 /from RIA Novosti's Yelena Fyodorova/ - According to 
Georgy Boos, Vice-Speaker of the Russian State Duma, or the lower 
parliamentary house, $200 to $350 billion have fled Russia over the past 
decade. 

Nearly 90 percent of the above sum is corporate funds, which have been 
invested in the West, according to Mr Boos. 

On Thursday, the Duma vice-speaker addressed a round-table meeting arranged 
by the Izvestia daily. The problem discussed was the repatriation of private 
capital. 

Georgy Boos believes the problem should be resolved by means of new 
anti-corruption arrangements, by streamlining and establishing a liberal tax 
and banking systems, and currency regulations. Mr Boos particularly advocates 
a complete abolition of the obligation to sell foreign currency receipts for 
legal entities and of a permission to exit the country with no more than 
$10,000, the sum that does not require an appropriate paper from a bank. 

*******

#10
OECD says Russia faces fiscal, current account imbalances if oil prices 
plunge  
November 21, 2002

PARIS (AFX) - Russia could encounter major inroads in its budget surplus and 
current account balance if oil prices were to fall substantially, the OECD 
warned. 

The OECD predicted in its twice-yearly Economic Outlook report that Russian 
economic growth, fuelled by domestic demand, should fall to 4 pct this year 
from 5 pct in 2001. 

In 2003, it said, large public sector wage increases and "repression" of 
energy and transport prices ahead of legislative and presidential elections 
should stimulate domestic demand that could spur an increase in momentum to 
4.5 pct. 

The OECD added, however, that it is unlikely such demand could sustain real 
GDP growth at its current pace beyond 2003. As a result, momentum is expected 
to fall back to 3.5 pct in 2004. 

The organization said domestic demand and a stronger exchange rate would 
continue to stimulate import growth, thereby cutting into Russia's large 
current account surplus. 

The surplus, projected to come to 27.5 bln usd this year, should narrow to 
18.5 bln in 2003 and 10 bln in 2004. 

At the moment, surpluses in both the budget and the current account should 
serve as a buffer if oil prices were to fall, according to the OECD. 

The report warned, however, that in the medium term "there is an increased 
risk that a large fall in oil prices could lead to serious fiscal and current 
account imbalances." 

********

#11
The Times (UK) 
November 21, 2002
Kremlin enjoys the fruits of its foreign policy 
By Michael Binyon 

As Nato leaders meet in Prague to accept seven new members, Russia's Foreign 
Minister tells Michael Binyon why Moscow no longer views the alliance's 
eastward expansion as a threat 

Russia no longer considers Nato enlargement to be a menace because the 
alliance has undergone a radical transformation from a Cold War instrument to 
a defence against global terrorism and other 21st-century threats, Russia's 
Foreign Minister told The Times yesterday. 

Igor Ivanov, who will meet Nato leaders during their Prague summit, said that 
President Bush had redefined Nato's mission along lines that Russia had long 
been urging. 

"We have one common enemy -global terrorism -and we must stand together 
against this," he said. 

"We must not focus on mythical and theoretical threats, but on those real 
problems now being tackled by the Nato-Russia Council." Since that council 
was set up six months ago, it had proved its worth, he said. Already both 
sides had agreed common anti-terrorist measures, worked out joint principles 
on peacekeeping and were discussing ways to rescue crews of stricken 
submarines. 

"They have shown that this is not simply yet another mechanism, but something 
that works constructively for everyone," he said. "We don't hold empty 
discussions, but talk about what can be most effective." 

If Nato had not changed, or had kept to its old strategies, Russia would view 
the alliance's proposed enlargement right up to Russia's borders with grave 
concern, he said. 

But now he believed that even the inclusion of the Baltic states would be 
positive. It would force them to adapt to agreements on conventional forces 
in Europe and would underline the doctrine of military restraint. 

Mr Ivanov's views contrast starkly with the relentless opposition to any Nato 
encroachment on its borders that Moscow was forcefully expressing until just 
six months ago. 

Nato and terrorism will be at the centre of the brief summit meeting Mr Bush 
will hold with President Putin in St Petersburg tomorrow. Mr Ivanov said that 
two hours would be enough for the talks, as both sides kept each other fully 
and regularly informed. But they would also focus on Afghanistan, Iraq, 
weapons of mass destruction and the gamut of US-Russian relations. 

Mr Ivanov spoke of Iraq with a robustness that will please the Americans and 
alarm President Saddam Hussein. He said that the unanimous UN Security 
Council resolution authorising new weapons inspections had strengthened the 
council, adding: "We should all be very satisfied." 

And he gave Iraq a clear warning that Russia fully backed its complete 
disarmament, the destruction of all weapons of mass destruction and the 
setting up of monitoring devices to prevent any new ones being made. 

He also insisted that Russia had taken every possible measure to ensure that 
no key weapons components or uranium could be smuggled to Iraq, or to any 
other country or terrorist organisation. 

Mr Ivanov was in a jaunty and relaxed mood. The past month has produced a 
string of successes for Russian foreign policy that have boosted his 
standing. 

As well as reaching agreement on an Iraq resolution with Washington, Russia 
has enhanced its relations with the European Union through a deal on the 
vexed question of Kaliningrad, the Russian exclave that will be isolated 
after the EU enlarges. 

Russia long resisted the imposition of visas for Russians crossing EU 
territory to and from Kaliningrad. Mr Ivanov said that the final compromise 
resolved three separate demands: the EU's requirement for tough external 
border controls; Lithuania's sovereignty; and Russia's insistence that it 
should have unimpeded access to Kaliningrad. 

He admitted that the deal did not immediately give Russia all it wanted, but 
took the sharpness out of Moscow's relations with the EU. 

He hoped that the deal could be built on so that ultimately there would be a 
completely visa-free travel arrangement between all Russia and the EU. Moscow 
is also aiming for an equally ambitious common free trade area with the EU. 
He said that EU enlargement would mean that at least 50 per cent of Russia's 
trade would now go to the EU. "So we're actively working on new economic 
relations," he said. "Our long-term aim is a common economic space, and the 
main element of this is a full free trade zone." Mr Ivanov said that the 
spate of agreements that Russia has concluded with other countries was the 
"harvest" of a new foreign policy based on harmony and consensus. For the 
first time in decades Russia had no enemies. It should use this unusual 
opportunity to do two things. 

First, it should redouble reform efforts at home: "We can focus all our 
energies internally without being distracted by the outside world." 

Secondly, Russia should launch a concerted diplomatic offensive to persuade 
other countries to help to build a "new world order". In the meantime 
Russia's overwhelming priority was the fight against global terrorism, and 
there could be no let-up. 

*******

#12
Russian Life magazine
WHO ARE THE RUSSIANS?
Daniel Rancour-Laferriere
Daniel Rancour-Laferriere is Professor of Russian at the University of
California, Davis, and author of Russian Nationalism from an
Interdisciplinary Perspective: Imagining Russia (2000, available from
Mellenbooks.com).

Russia is the largest country in the world in terms of sheer geographic
space.  But who are the people who live in this huge country?  As it turns
out, the question is not an easy one to answer.

The citizens of Russia are termed Rossiiane.  However, not all Russian
citizens are ethnic Russians - russkie.  It is true that ethnic Russians
are in the majority, an estimated 82% of the population today.  But there
are significant numbers of other ethnic or national groups in Russia too:
Tatars, Chechens, Kazakhs, Ukrainians, Armenians, Finns, Germans, Jews,
Buriats, Bashkirs, and many others.  Currently there are over 100 different
ethnic or national groups in Russia.  Russia is thus a land of great ethnic
diversity.  Complicating matters further is the fact that, in past
generations, large numbers of people from these various minority groups
have assimilated, that is, they have taken on ethnic Russian identity.  For
example, in late tsarist times it was possible for Jews to become ethnic
Russians by being baptized into the Russian Orthodox Church.  Some
non-ethnic Russians married ethnic Russians and brought their children up
as ethnic Russians.  Some non-ethnic Russians simply russified their names.
 And so on.  All this means that many people who call themselves ethnic
Russians today have mixed ethnic ancestry.  As a southern Russian proverb
has it: Papa turok, Mama grek, a ia russkii chelovek (Papa is a Turk, Mama
is a Greek, but I'm a Russian).

Many famous Russians are of mixed ethnic background.  Poet Aleksandr
Pushkin descended from a German on his father's side and an Ethiopian on
his mother's side.  General Mikhail Kutuzov was of German ancestry.
Historian Nikolai Karamzin was of Tatar background.  The Tatar connection
is especially frequent.  "Scratch a Russian and you'll find a Tatar," says
the proverb.  Consider some fairly well-known "Russian" names of
Tatar/Turkic origin: Arakcheev, Artsybashev, Berdiaev, Kochubei, Muratov,
Musin, Saltykov, Tiutchev, Sheremet'ev….  The list could be extended.

In Russia today there are some Russian nationalists who are disturbed by
the great ethnic diversity of their country.  They proclaim slogans such as
"Russia for the Russians!" (Rossiia dlia russkikh!) or "Beat the Yids, Save
Russia!" (Bei zhidov, spasai Rossiiu!).  There is a fear in some circles
that the ethnic Russians will become outnumbered by the "aliens"
(inorodtsy).  Some of these people understand that ethnic Russians are not
defined "by blood," and they accept the fact that one can "become" a
Russian.  They even encourage assimilation.  Evgenii Troitskii writes, for
example: "Russians do not give birth much, one has to become one.  A
Russian is one who loves the Fatherland and who really wishes for its
prosperity and glory."

Other nationalists, however, such as members of the Russian National Union
Party, insist that one is a Russian "by blood."  They worry about
ethnically-mixed marriages, and they are concerned about "the purity of the
gene pool of the Russian Nation."  However, there is no such thing as an
ethnic Russian "by blood," and Russians do not have any definable "purity
of the gene pool."  Modern genetics has not found any gene or genes that
define Russians.  In fact, no ethnic, national, or racial group on this
earth can be defined genetically.  Genetic differences between individuals
tend to be much greater than genetic differences between psycho-socially
constructed ethnic, national, and racial groups.  Racism is both morally
and biologically unfounded.

Who, then, are the Russians (in the ethnic sense of russkie)?  Given the
history of assimilationism in Russia, and given the biological
impossibility of defining Russians, I would like to suggest an answer that
works in at least 99% of the cases: Russians are people who identify
themselves as Russians.

*******

#13
Toronto Star 
November 20, 2002
Raising new Chechen radicals
By GORDON BARTHOS
Gord Barthos writes the Star's editorials on foreign affairs. 

Russia has lost Chechnya. 

When Russian commanders summarily execute prisoners, torture them, terrorize 
villages, hold people for ransom, rape and loot, it is folly for President 
Vladimir Putin to pretend that he's upholding the law against a tiny, 
mutinous band.

His attempt to crush separatism in the war torn Caucasus republic is creating 
radicals faster than his army can kill them.

Even Akhmad Kadyrov, the head of Putin's puppet administration, acknowledges 
as much. "I can't look my fellow villagers in the eye" as people continue to 
disappear, he admits. 

Putin's current crackdown was sparked by the hostage taking in Moscow by 
Chechen extremists that left 128 hostages and 41 rebels dead. But he's been 
waging this campaign since 1999, to little effect.

And Chechens have balked at Russian domination for centuries.

Even "moderate," war-weary Chechens no longer trust Putin. "And since the 
trust is lost, support for the rebels will only grow," says Fandas Safiullin. 
He's a member of Russia's duma, or parliament, for Tatarstan.

Safiullin dryly notes that "there were about 3,000 rebels at the beginning of 
the campaign" in 1999. "Now we are told that up to 15,000 have been killed, 
while about 3,000 remain.

"That means these 15,000 rebels supported us in 1999. 

"We turned them into rebels."

There's wisdom in those words.

Yet Putin continues to scorn Chechnya's elected president, Aslan Maskhadov, 
as a "murderer and terrorist" who's in league with extremists. He rules out 
peace talks. He seeks to impose a made-in-Moscow solution, while conducting 
"broad and tough" operations against separatists.

He forgets, perhaps, that his predecessor Boris Yeltsin urged Russia's 
subject peoples in 1991 to "claim as much autonomy as they can absorb." The 
Chechens merely took him at his word and tried to break away.

So Russia's 150 million people are now battling a nation of 1 million. Over 
three years this war has cost Russia $10 billion, and more than 4,000 
soldiers' lives.

Putin hopes to harry the rebels into the mountains. Then force Chechens to 
vote on a Russia-friendly constitution to cement Chechnya in the federation. 
And finally hold regional elections with rebels barred from taking part.

This will merely dump gas on the fire.

A better approach, favoured by Russian liberals, would be to invite the 
Chechens to form an Afghan-style constituent assembly to negotiate peace with 
Moscow, hammer out a deal and put that to a referendum. The Chechen group 
wouldn't have to be large.

It could include Maskhadov and a small clutch of influential clan leaders. 
They'd all have to agree for peace to stick. If Maskhadov is sidelined, 
Russia will have only young, militant extremists to negotiate with.

The United Nations could grease this process, and the European Union could 
bankroll reconstruction.

That's how Bosnia, Afghanistan, Kosovo and East Timor were stitched together. 
A Mideast peace would be done the same way. So would Cyprus.

The Chechens would have to agree, Kosovo-like, to freeze their republic's 
status within the federation for the foreseeable future, but with eventual 
separation not utterly ruled out. They're amenable to that.

Maskhadov and the others would also have to break, credibly, with terror. And 
impose order.

Chechnya became lawless under Maskhadov after 1997. That encouraged 
extremists to try to foment rebellion in Dagestan and elsewhere, and to bomb 
Moscow.

That crisis swept Putin into the Kremlin on a pledge to preserve Russia's 
integrity against Islamic rebels who would create a "caliphate" across the 
Caucasus, and to fight terror. For him, these are non-negotiables.

But between Putin's hard line and Chechen dreams of independence, there's 
room for compromise and democratic assent.

As Chechnya's sole duma representative Aslambek Aslakhanov says, "This chain 
of war and hatred has to be broken." That won't happen at gunpoint.

Putin has tried to dictate who may speak for the Chechens, with this result: 
The man he chose can't look his neighbours in the eyes.

*******

#14
Peace Group Seeks Talks on Chechens
November 21, 2002
By JUDITH INGRAM

MOSCOW (AP) - Expanding NATO. Disarming Iraq. Hunting down terrorists. With 
so much ground to cover during their brief meeting Friday, President Bush and 
President Vladimir Putin might not dwell on the Russian leader's least 
favorite subject: the Chechen war.

Bush told some East European journalists in Washington this week that he will 
raise Chechnya with Putin, a leader he also considers a friend.

But Russian peace advocates are skeptical that Bush and Putin will discuss 
the war seriously during their lightning-quick meeting outside St. 
Petersburg. They contend the United States has done little to push the 
Kremlin to initiate a peace process in Chechnya because Washington has been 
so focused on the war on terrorism and is reluctant to alienate Putin, who 
has become a valuable diplomatic partner.

``We see a silent deal between the United States and its president and Russia 
and its president: 'You support us in the anti-terrorist operation and 
sanctions against Iraq, and we'll close our eyes to what's going on in 
Chechnya,''' said Ivan Rybkin, a former Russian Security Council chief who 
has spearheaded efforts to jump-start talks with Chechen rebels.

In an interview aired Thursday on Russia's NTV television, Bush said Chechnya 
was an internal issue but he would encourage Putin to solve the conflict 
peacefully.

``Our position with Chechnya is we hope it can get solved peacefully, that 
this is an issue within Russia. And I will continue to work with Vladimir 
Putin as best I can to encourage him to have a peaceful resolution with the 
Chechen issue,'' Bush said, an NTV transcript said.

Chechen rebels last month seized about 800 hostages in a Moscow theater. 
After 58 hours, special forces stormed the building, resulting in the deaths 
of 41 rebels and 128 hostages, most of them felled by gas used to knock out 
the attackers.

The Kremlin said the attack ended any hopes for a political solution to the 
Chechen conflict and ruled out talks with separatist leader Aslan Maskhadov, 
who was elected president of Chechnya in 1997. Russia has accused Maskhadov 
of complicity in the theater raid.

Condoleezza Rice, Bush's national security adviser, told reporters Thursday 
she was certain the two presidents would discuss Chechnya on Friday, and that 
Bush would push for a peaceful resolution despite the theater attack.

``He will encourage the Russians to work toward a political solution with the 
Chechen people, because there are aspirations there that need to be 
understood and need to be met,'' Rice said. ``He will ask the Russians to 
work to make certain that human rights are upheld and that humanitarian 
conditions in Chechnya are addressed.''

In Bush's interview on NTV, he also assured Russia that its economic 
interests in Iraq will be honored if a U.S. military operation topples Saddam 
Hussein.

``We have no desire to ... run the show, to run the country,'' Bush said. 
``And we understand that Russia (has) got interests there, as do other 
countries. And, of course, those interests will be honored.''

On Chechnya, Putin nudged open a door to negotiations last year, but said the 
only topic would be the terms for the rebels to disarm. The rebels wanted to 
discuss their demands for Chechen independence. The differing conditions 
torpedoed the single official meeting between the two sides.

Informal talks this summer spurred peacemakers' hopes that official contacts 
could start this fall, said Chris Swift of the American Committee for Peace 
in Chechnya.

The Kremlin also offered encouraging signs, including indications of 
willingness to deal with rebel leaders' allies.

Rybkin discussed his peace efforts with State Department and National 
Security Council staffers in Washington last month.

``They were politely silent,'' Rybkin said. ``As I understood it, they didn't 
want to interfere.''

Moscow has put foreign countries on notice they will be judged according to 
their attitude toward the Chechen war, and started with Denmark, accusing it 
of collaborating with terrorists by letting a Chechen conference proceed 
after the hostage crisis.

Putin underlined the Kremlin's uncompromising stance in Brussels last week by 
challenging a French reporter who seemed to sympathize with Chechen civilians 
to come to Moscow for a circumcision that would ensure ``you'll have nothing 
growing back afterward.'' But he softened his approach the next day, telling 
reporters in Oslo that Moscow would try to use models of conflict resolution 
used elsewhere.

*******

#15
BBC Monitoring
Chechens blame West for "hypocrisy", vow to continue war 
Source: Kavkaz-Tsentr news agency web site in Russian 20 Nov 02
 
The Chechens may strike any military, industrial and strategic facility in 
Russia. The next generation of Chechen fighters will be even more obsessed 
with revenge, the statement of the Riyadus-Salikhin reconnaissance and 
sabotage battalion of martyrs addressed to NATO member states says. The 
statement blames the West for " hypocrisy and double standards" and lists 
Chechens' conditions for ending the war.". The following is the text of a 
report by Kavkaz-Tsentr news agency web site; subheadings have been inserted 
editorially:

10 November: The editorial office of the Kavkaz-Tsentr news agency has 
received a statement addressed to heads of NATO member states, the UN and 
other international organizations and signed by the commander of the 
Riyadus-Salikhin [reconnaissance] and sabotage battalion of martyrs. The 
editorial board is publishing this statement without any changes.

To heads of NATO member states , to international organizations - the UN, the 
OSCE, the Parliamentary Assembly of the Council of Europe, and the European 
Union

Explanation: "By this statement we express the stance and opinion of the 
fighters of the Riyadus-Salikhin battalion of Chechen martyrs."

International stance on war in Chechnya hypocritical

"The world is a witness to the most inhumane and cruel war imposed on the 
Chechen people, a war without any rules and conditions. This war is being 
waged by the Kremlin regime under the pretext of fight against terrorism. 
Such a propaganda campaign has not been able to deceive even the most 
gullible people, after the Russian military started to bomb towns and 
villages, trying to exterminate as much of the CRI [Chechen Republic of 
Ichkeria] civilian population as possible. A great number of villages and the 
Chechen capital, city of Dzhokhar, have been razed to the ground. Since the 
very beginning of the hostilities, Russian criminal generals took the CRI 
civilian population hostage. They issued orders to open fire at refugees' 
columns, markets, passenger buses, funeral processions, schools and mosques. 
Pellets, cluster and vacuum bombs, salvos from guns, napalm and chemical 
weapons have been and are being used against the civilian population. 
Simultaneously, forests, pastures and arable lands are being destroyed. Fire 
is being opened at herds of cows and sheep from helicopters and planes. 
Forest paths and roads are being mined. This is all being done in the 
vicinity of populated areas. Women, children and domestic cattle get blown up 
on mines.

The Russian military are trying to deprive the surviving civilian population 
form means of subsistence. Thus, the Chechen people have been put in 
conditions when there is no other alternative to retaliatory hostilities 
against Russia. At the same time, the Chechen people have the moral right to 
use the same methods practised by Russian generals.

Now we have to openly describe your stance in this issue. Your stance is a 
hypocritical one based on a policy of double standards and it is clearly a 
pro-Russian stance.

Despite the fact that you yourselves describe the war that the Russian 
military-criminal regime is waging as "a crime against humanity", despite the 
fact that by your own criteria [Russian President Vladimir] Putin and Russian 
generals are military criminals, you are continuing to finance the Kremlin 
regime ([former US Secretary of State] Madeleine Albright's statement). The 
German special services hand over materials to the Kremlin on Chechen 
resistance forces, and the Western governments give Putin a top-level 
reception. On the basis of what arguments and what morality are you going to 
explain to peoples such a stance ?

The West's double standards

When in 1979 the Red Army invaded Afghanistan, you described it as an army of 
aggressors waging a barbaric war. What has changed in this army since then? 
We are currently fighting against the remnants of the very same Red Army. Now 
its only difference from the previous army is that it has no ideology, 
morality or belief. Today this is an army of marauders and killers and its 
members do not behave like human beings. And you should thank God that this 
army has not yet broken into your cosy well-tended European home. Not yet! 
[exclamation mark as published]

You have assumed the function of world judges and legislators. You are 
foisting on the world an order and values that you invented. You define which 
countries are outcasts and which ones are not, which regimes have the right 
to exist and which ones do not. You dare to define what rights a human has 
and you set the entire world against those who you think violate them. You 
appropriate the right to define who is a terrorist and who is not.

Under your scheme, Putin and Russian criminal generals, who are destroying 
everything living on the Chechen land, are not terrorists and are not wanted 
by Interpol. And in contrast, leaders of Chechen resistance are described by 
you as terrorists. You are not specifying what their wrongdoing. This is not 
convenient for you. The misdeed of some them is that they are defending the 
freedom of their people, and the misdeed of others is that they fought 
against the very same Red Army. They fought in Afghanistan, Tajikistan, 
Bosnia, Ichkeria [Chechnya] and Dagestan. We remind you that this army 
destroyed two million Muslims in Afghanistan, 250,000 in Tajikistan, and 
500,000 in Bosnia, while the statistics of mass killings in Chechnya have not 
finished yet.

Thanks to your efforts, numerous obstacles are being created for Chechens in 
the whole world. Even unhappy women and children who are trying to save 
themselves from genocide cannot obtain the refugee status and leave Russia. 
Tell us - under what criteria has East Timor become the object of your 
increased attention and protection with the very first disturbances, and in a 
matter of days you have sent international military contingent there? On the 
basis of what principles does Karabakh have to be separated from Azerbaijan 
without fail? And at the same time, the Chechens do not have the right to 
restore their lost statehood that they have been fighting for on their own 
for several centuries.

You describe as separatism and terrorism the fight of the Chechens, and the 
genocide being conducted by the criminal Kremlin clique as Russia's internal 
affair.

Prompted by Russian propaganda, you are trying to blacken Chechnya, 
describing it as a criminal zone.

First, what did you expect from the population of the territories on which 
you have purposefully destroyed all industrial and agricultural facilities, 
factories, schools, hospitals and facilities for children? At the same time, 
you have enforced an economic, political and information blockade. You knew 
perfectly well that some people out of the population which have survived 
such a barbarian war are bound to turn to criminal ways of making their 
living.

Second, what per cent of the population have to be considered as criminals so 
that they can leave the international community with no choice but to 
sanction the genocide of all people as the only way to solve the problem? If 
the international community has adopted such a law, then Russia does not have 
the right to live because no post-Soviet country can match its level of 
crimes. If "human rights" professed by you do not contain this law, then do 
they include the right of the Muslim people to live? How many Chechen women 
and children do the Russian generals have to exterminate in order for the 
Council of Europe to be squeamish about sitting in the same building with the 
Russian representatives?

We warn you

We address you not because we recognize your policy towards the Muslim 
people. And not because we expect any help and assistance in our just 
struggle against the Russian barbarian aggression. We address you in order 
not to let you say in the future that we had not warned you about the 
inevitable outcome.

Russia has lost this war, just like it lost the war in Afghanistan and the 
first Russian-Chechen War of 1994-1996. You know that. But the Russian 
generals have yet to realize that. The eventual crisis of Russia will be 
harsher than all crises of the past decade taken together. When the Russian 
military-political system becomes completely paralysed as a result of the 
war, you, the representatives of the international community, will hurry to 
actively intervene with peaceful initiatives and plans for a political 
settlement. The main objectives of your plans will be to save Russia from 
total defeat, and to create in the North Caucasus a controllable zone of 
chronic instability. It is very likely that your plans will not succeed and 
the events get out of control. Your plans and belated initiatives will prove 
useless.

Chechen conditions for Russia

Therefore, we suggest that you bring under control the Kremlin's political 
schizophrenia. You have some lever on the Kremlin regime. You know this well. 
We suggest that you demand the following from the Russian leadership:

1. To immediately put an end to the military operations and launch a peaceful 
political process with the legitimate leadership of the Chechen state to 
settle the Russia-Chechen relations.

2. To immediately free thousands of civilians, including hundreds of Chechen 
women and children. The civilians were detained by the Russian aggressors in 
the Chechen Republic of Ichkeria and are kept in the Russian prisons, 
concentration and filtration camps.

3. To extradite to the Chechen leadership the sadistic colonel Budanov, who 
is a rapist and a murderer, as well as other military criminals.

4. To fully compensate to the Chechen state the moral and material damage by 
rebuilding the Chechen economy destroyed in the course of the two wars.

5. To unconditionally withdraw all the Russian occupying forces from the 
territory of the Chechen Republic of Ichkeria, leaving the ammunition, arms 
and military hardware for the Chechen Armed Forces.

6. To pull the Russian troops 100 km away from the border with the Chechen 
Republic of Ichkeria, creating a demilitarized zone.

7. To bring to book the criminal and terrorist regime of the Kremlin and its 
ringleaders in an international court similar to that of the "Nuremberg" 
court.

Chechens reserve the right to attack any facility in Russia

If the international community considers our suggestions unjust and 
unacceptable, then we reserve our right to force Russia to comply with these 
conditions.

We also warn that the Chechen mojahedin have the right and the capacity to 
launch attacks against the territory of the aggressor-country. These strikes 
will be similar to the strikes that the Russian military, with consent of the 
Russian public and the international community, has launched and continues to 
launch on the territory of the Chechen Republic of Ichkeria. We also warn 
that all military, industrial, and strategic facilities on the Russian 
territory, to whoever they belong, are a legitimate military target for us.

We also warn that the next generation, which will take our place, is a 
generation of tens of thousands of orphans whose fathers and mothers were 
killed by directives of the Kremlin regime. It will be a generation, about 
which you do not know anything. It will be a generation for which exacting 
revenge will become the most effective way to deal with Russia and its allies.

[Signed] The commander of the Riyadus-Salikhin reconnaissance and sabotage 
battalion of martyrs

*******

#16
gazeta.ru
November 21, 2002
'We're governed by the mafia'
By Marina Sokolovskaya  

The State Duma deputy Sergei Shashurin has revealed in an interview with
Gazeta.Ru just how deeply rooted corruption is in Russia and it seems set
to continue. On November 20 the State Duma reviewed and rejected for the
second time a draft law on the responsibility of state officials
particularly in taking steps to recover damages inflicted by economic
crimes. The first draft was reviewed and rejected in spring of this year. 

Is it true that in the past seven years you have gathered, and currently
keep, lots of evidence of financial wrongdoing? Some say, the list of those
involved in those misdemeanours takes up 17 pages… 

Why should I keep them? All the documents have long been sent to the
prosecutor’s office. 

And what about the prosecutor’s office? Do you mean to say it takes no
action? 

This is exactly what this is all about. And that is why I have submitted
the bill. Look, since perestroika very strange processes have been going on
in the country. Enormous sums leave Russia annually. Those whose duty it is
to prevent that outflow of capital are aware of that, yet nobody takes
concrete measures. 

They are aware of the bank accounts where the money is, of the financial
schemes that the funds go through, of the names of all the high-placed
officials who took part in embezzling state assets. But over all these
years no action has ever been taken. 

And why have you personally put forward this bill? 

I witnessed and took part in those events. I can recount many things that
many others would prefer to forget. For instance, in 1992 the treaty on the
delimitation of powers between Tatarstan and Russia was being elaborated
with Grigory Yavlinsky, Galina Starovoitova and Sergei Shakhrai all working
on it. 

The president of Tatarstan Shaimiyev supplied several thousand tons of oil
to them to sell on. The oil was exported to Asia. Mutual accounts were
settled in cash payments and personal computers. But shortly afterwards the
director of the firm “Computerservice” named Nail, who had acted as an
intermediary, was killed. The computers, as you can probably guess,
disappeared. Yavlinsky was forced to go into hiding for a month, guarded by
the special services. 

The same thing happened in the financial speculations of Yegor Gaidar. In
1992 with the help of the Central Bank of Russia he carried out a brilliant
machination worth 4 trillion roubles, as a result of which the so-called
“Chechen inflated money” emerged. 

How do you know this? 

As I have said, I witnessed the whole process with my own eyes. Besides, I
am a member of the anti-corruption commission and conduct probes. At that
time, in the early 90s, I was a member of the council for land reform. 

And have you got the evidence to substantiate these charges? 

The best evidence is in the criminal case instigated against Gaidar. 

What happened to that money? 

It was converted into gold, diamonds and other raw materials and taken out
of the country. 

How far? 

To Romania, England, Germany, South America, Australia. There was 786 tons
of gold alone. That was the remains of the ‘Communist Party’s gold’. There
were also precious stones from the Gokhran (Russia’s State Depository for
precious metals and gemstones). 

What about the logistics? How was it all carried out? 

On board the military’s commercial Il-76 jets based in Tatarstan. The
pilots have already testified about the quantities of gold flown out of the
country. 

And now those funds lie dormant in foreign bank accounts? 

Not exactly. For instance, using that gold as security, the Okhotnyi Ryad
shopping complex in central Moscow, the Radisson Slavyanskaya, the Avrora
and the Marriott hotels were all built. And at that point of the
investigation the names of high-level officials began to surface. And then
law enforcers found themselves in a conundrum. 

Who exactly can you name? 

Yuri Luzhkov, the Tatar president [Mintimer Shaimiyev], the ex-president of
Yakutia [Mikhail] Nikolayev], [Security Council chief Vladimir] Rushailo,
former Interior Minister Kulikov, former vice-premiers Yegor Gaidar and
Viktor Chernomyrdin. 

Later, the names of the former chiefs of the Central Bank Viktor
Gerashchenko and Sergei Dubinin surfaced. Do you remember the famous
‘Harvest’ case? 

How do I know all that? At that time I used to work at the council for land
reform. And there, in certain circles where everyone knows each other,
people did not even care to conceal such things. Funds were being
transferred through Agrobank, Promstroibank. Later Agrobank’s manager
Likhachyov was killed. Also, they specialized in gold. It was transported
from Yakutia and Magadan in 1994-1995. Obviously, there were victims. 

It sounds as if there was some huge conspiracy among top state officials,
something like a Masonic lodge… 

In 1992 ‘the Order of the White Eagle’ was established. A gold-miner called
Vadimir Tumanov was elected the grandmaster of the order. Later all the
afore-mentioned people entered that order. Later, they were joined by
[General Alexander] Lebed, [pop-stars] Pugachyova and Kobzon. Nemtsov and
Yavlinsky are directly involved in it. And from the criminal sphere –
Taivanchik, Yaponchik, Tarantsev. 

Are you sure these are not just all allegations? A pretty terrible picture
seems to be developing. 

I worked with Vadimir Tumanov for 15 years. All that happened right in
front of me. They were urging me to join the order from the very first day
that it was formed. The entrance fee was $10,000 at that time. I refused.
In the meantime, the order grew to an unprecedented size. It was awarded to
Boris Yeltsin. Ruslan Aushev received it in Liechtenstein. So, see for
yourself, what kind of organization it was, if one of the main instruments
of that community were the Chechen rebels. And all Chechen money was
laundered in the banks of Vladikavkaz, Makhachkla and Chechnya. 

As far as I understand, you knew all that but preferred to keep quiet? 

I did not only know what was going on, I was involved. I believed that it
was all being done with the goal of strengthening Russia. That is why I did
not consider myself to be doing something wrong. 

When did you start thinking otherwise? 

Some 4-5 years ago. I met former deputy prosecutor general Katyshev several
times, later with Vassily Kolmogorov. And in time I grew more and more
convinced that those people are involved in the concealment of crimes. I
told Kolmogorov, that his daughters, so to say, enjoy the fruits of that
gold in Switzerland and in England. 

Wasn’t he aware of that? 

Of course, he was. I told him that looking him straight in the eye. And
then he asked me what he should do in this situation. I suggested arresting
the murderers. 

Excuse me, but whose murderers? 

Well, when those, so-called, operations were being carried out, no
intermediaries were left. 

And who were those intermediaries? 

Well, for instance, the well-known mob bosses Silvestre and Globus. I have
a Lincoln left by Silvestre. 

Did he bequeath it to you? 

No. I bought the Lincoln with the help of Tumanov, and it so happened that
earlier that car belonged to Silvestre. 

Then there was another intermediary – Agrobank’s manager Likhachyov, who
was also killed. And then, there was [State Duma] deputy Golovlyov. 

And what has Golovlyov got to do with all this? 

You see, with the help of the Chechen funds, privatization projects were
being implemented in the Chelyablinsk Region. Thousands of tons of metals
from Chelyabinsk metallurgical works were stolen…with the help of my
documents. 

So, again, you knew everything, but kept silent? 

That how it goes. Before meeting Vassily Kolmogorov, in spring this year,
I, in the presence of the 400 State Duma deputies, told Ustinov that I have
$14 billion in my accounts. Sliska was presiding over the session. And on
the following day I went to Ustinov and he calmly offered me my share of
that gold. Provided, however, that I keep silent about all the other cases.
I refused. And told him that my share and the rest of the money should be
returned to Russia. 

Why be so such altruistic? 

I did not know when it happened, but they were using my documents and
powers of attorney. 

You can withdraw that money now. 

For that the political will of our government is needed. And the Justice
Ministry of Belgium has frozen those accounts. 

Are you not afraid of the consequences of your revelations? 

And what is the sense of being afraid? 

And why do they tolerate you if they are so ruthless? 

Because they cannot withdraw that money. In other words, the government
cannot withdraw that $14 billion from Belgium. Though, all the people I’ve
mentioned get dividends there. 

Do you mean Gaidar and Luzhkov, as well? 

They still do; and not only them but all the others, as well. 

And nobody is concerned about it but you? 

The probe is continuing. That is why today it is vitally important to pass
the law that would put an end to the capital outflow and punish those
guilty. In this case, the Prosecutor General Ustinov, and Kolmogorov are
involved. All four Interior Ministers are implicated in corruption. 

And what about the deputies? 

Why, of course! Take for instance, Vladislav Reznik. On the advice of Boris
Berezovsky he formed the financial part of Unity. The deputies Kovalyov and
Kulik of the OVR [Fatherland-All-Russia] are not innocent either. 

Are they pleased to see you when you meet them? 

They turn away. Once I caught Kulikov in the lift and asked him: ‘Why don’t
you sue me?’ But they prefer to tolerate me and keep quiet. Luzhkov sued me
once, but lost. I had claimed that his wife was purchasing stolen property
and making plastic chairs out of it. 

Or, take for instance the leader of the Regions of Russia faction Morozov –
Shaimiyev’s protege. And those deputies are under pressure from the
leadership of those republics. Who can talk about independence where they
are concerned? 

In all fairness, one should also mention Nikolai Ryzhkov, whose name also
came up in a criminal case 

Basically, everyone is in on it? 

Yes, that is so. One could say that we are governed by the mafia. 

Hold on a minute, and what about President Putin? 

He is having a hard time of it. He is surrounded by the likes of Rushailo
and Voloshin. Many people who have ties with the mafia serve in the
Interior Ministry. And the Prosecutor General’s Office is largely infected.
Basically, everything is bad. The courts are not protected, poorly financed
and partially dependent on regional leaders. 

The president has stopped the disintegration of Russia by force, starting
with Chechnya. I saw in Putin striving towards the consolidation of the
country. But at the same time I saw the shell he is locked up in. The new
law, even if it is never passed, will bring about a public response. For
the first time in 7 years I am able to name officials implicated in
corruption. And this will subsequently give the president an opportunity to
ask the prosecutor why no measures are being taken. 

No measures are being taken to investigate other crimes either. Take for
instance, Kholodov’s case. The true motives behind the journalist’s murder
were absolutely different from what the public knows. 

I wanted to talk about it. I was officially charged of the murder attempt
on Yeltsin in 1993. And then I said that I would tell the court of the arms
sales. A week later Kholodov was blown up and I was told that the same
would happen to me. Well, what’s the use in talking? During the 1st Chechen
war the rebels healed their wounds at regional party dachas. And within a
kilometre or so, Rushailo was holding a meeting discussing how they should
be eliminated.  

******

#17
Ukraine approves Kuchma's man as prime minister
November 21, 2002
By Elizabeth Piper

KIEV (Reuters) - Ukraine's parliament voted in a tough regional governor as 
the ex-Soviet state's new prime minister Thursday, appointing the man 
President Leonid Kuchma hopes will shore up support for his ailing leadership.

Viktor Yanukovich, a governor from eastern Ukraine's coal-producing Donetsk 
region, won 234 votes in the 450-seat parliament despite an opposition 
boycott over what it said was his lack of democratic credentials.

With wide experience of ironing out differences between rival business groups 
or "clans" in his region, Yanukovich is seen as Kuchma's only hope of 
bringing order to Kiev's political landscape and thwarting opposition calls 
for his resignation.

Kuchma, in Prague for a NATO summit, is under pressure to step down after 
Washington alleged he approved the sale of an aircraft detection system to 
Iraq in breach of U.N. sanctions.

"I am ready to work with this parliament. I believe we have one state, one 
people and politicians must work for this state and for the people," said 
Yanukovich, a Kuchma ally who has been touted as a potential successor to him.

The former director of a state-owned transport company won an early victory 
in parliament, when the normally fractious body voted in favor of increasing 
budget spending and revenue despite government protests and funding groups' 
advice.

Analysts said they would now be watching who Yanukovich appoints to sit in 
the cabinet for signs of whether he will boost stalled reforms or stick with 
more conservative policies.

ECONOMIC GROWTH

Kuchma sacked his government Saturday and named Yanukovich as his preferred 
prime minister after criticizing the previous incumbent, Anatoly Kinakh, for 
failing to adequately finance cultural and social policy.

A fractious parliament and weak government under Kinakh made Kuchma more 
vulnerable to calls for his resignation.

Yanukovich, 52, said his experience in Donetsk meant he would guide Ukraine 
on the road of development with a firm hand.

"In Donetsk we have a team of like-minded people," he told deputies, 
eliciting shouts of dissent from the opposition, which see the Donetsk region 
as one of Ukraine's most criminalized.

"And I think that the Ukrainian people have long waited for such a team."

Yanukovich, imprisoned twice in his youth and brought up in a children's 
home, also vowed to boost economic growth but gave little clue as to how he 
would break a long-standing deadlock between the cabinet and parliament to 
push through reforms.

Yanukovich, previously unheard-of in much of Ukraine but known for his strong 
style of rule, also re-stated the country's hope of pursuing a "European" 
development path, which has been somewhat derailed due to the arms 
accusations.

Kuchma has faced some of the largest street demonstrations in Ukraine's 
post-Soviet history and has been criticized by the West and snubbed by NATO 
over the detection system allegations, which he has repeatedly denied.
   
*******

#18
Slavneft end of an era for Russian oil sell-offs

MOSCOW, Nov 21 (Reuters) - Russia is nearing the end of privatising its oil 
industry with the sale of Slavneft next month, but the country still has huge 
and lucrative oil reserves to offer investors in the longer term, analysts 
said on Thursday.

Russia plans to sell a 75-percent stake in 320,000-barrel-per-day producer 
Slavneft on December 18 and almost all the Russian private major oil 
companies will join the battle to carry off the prize, despite a record 
starting price of $1.7 billion.

Nost of the country's remaining oil industry stakes are expected to remain 
under government control to protect local economies and maintain good ties 
with allies Russia kept from the Soviet era, but the longer term potential 
for selling acreage remains.

"I don't see any big privatisation project in Russia after Slavneft is sold. 
But the acreage Russia can offer in Western or Eastern Siberia, the Caspian 
Sea or Arctic shelf is simply massive," said Paul Collison from Brunswick UBS 
Warburg.

Total oil reserves in Russia are classified as a state secret. BP's 
statistical review estimates Russian oil reserves at 50 billion barrels, but 
the U.S. Geological Survey puts them second only to Saudi Arabia at 130 
billion.

After the Slavneft auction the Russian state will be left with full control 
of 320,000-bpd Western-Siberian producer Rosneft, Russian-Vietnamese venture 
Zarubezhneft, stakes in regionally controlled Volga producers Bashneft and 
Tatneft, and a 15-percent stake in Russia's top oil firm LUKOIL.

Together they represent only one tenth of Russia's 
eight-million-barrels-per-day output. Production has boomed in recent years, 
driven by the fast growth in Russia's private oil majors.

FEW STAKES TO SELL

Russia is still several years away from forging the kind of pro-investment 
natural-resource legislation that will send Western majors rushing to pay 
billions for its oil reserves.

And in the short term the country is seen likely only to sell off its stake 
in LUKOIL, a deal which could bring in at least $2 billion while having no 
major impact on the giant's operations or its shareholder structure.

But Russia, which depends heavily on oil revenues, may need extra money in 
2003 when it has a $17-billion peak in debt service payments.

Rosneft could be the next oil asset to go on the block if urgent revenues are 
needed, but analysts say the firm's social and political role has risen since 
Russia made an abortive attempt to sell it at the height of the 1998 
financial crisis.

"The government now needs Rosneft to represent state interests in 
production-sharing deals, supply northern regions with fuel and solve social 
problems in Chechnya," said TIB Bank analyst Vladislav Metnyov.

The sell-off of other assets seems to be even more politically sensitive, 
however. "Zarubezhneft is a political rather than an oil venture," Metnyov 
added.

Zarubezhneft operates only in Vietnam, a rare Soviet-era ally which still 
keeps close political and economic ties with Moscow. Zarubezhneft operates a 
260,000-bpd offshore venture with the state Vietnamese firm Petrovietnam.

The two remaining state oil firms, 480,000-bpd Tatneft and 240,000-bpd 
Bashneft, do not directly belong to the federal government and are controlled 
by powerful regional governors.

Analysts said those firms could theoretically return to the federal fold as 
President Vladimir Putin attempts to curb the powers of regional elites, 
which blossomed under Putin's predecessor Boris Yeltsin, but added it could 
take years.

EMERGING MARKET EXCEPTION

Western majors have always been cautious about Russia's privatisations, in 
which insider dealing was common, and Slavneft is likely to be sold to a 
domestic player.

But analysts said the state's decision to make the auction fully transparent 
could have a major impact on the Western majors' future plans in Russia, a 
country which could help hedge their risks against volatile supplies from 
OPEC nations.

"Russia is a formidable exception among the emerging markets states, such as 
Brazil or Mexico, where the level of state oil involvement is much more 
direct," said Brunswick UBS Warburg's Collison.

"Today Russia shares the Western approach, recognising that the state is 
usually a bad manager and the sector grows better in private hands. It now 
wants to control the industry only through tariffs, taxes and transport 
monopolies, such as (state oil pipeline monopoly) Transneft," said Metnyov.

Collison said this was very similar to the U.S.-style approach. "But compared 
to what is still available in terms of oil reserves on the developed and even 
emerging markets, Russia's positions are simply unique," he said.

******

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