Johnson's Russia List
#6569
25 November 2002
davidjohnson@erols.com
A CDI Project
www.cdi.org
[Contents:
1. Reuters: Russian big business could stifle start-ups-EBRD.
2. Reuters: EBRD sees strong E.Europe growth, warns on EU strains.
3. Time Europe: Yuri Zarakhovich, Meet The Second Richest Man In Russia.
Who is Roman Abramovich? And what's he up to in Chukotka, a desolate province
in Russia's far north?
4. Newsweek International: Victor Erofeyev, The War on Books.
Russian writers are reminded of the bad old days
5. Kommersant: Interview with Christof Ruehl, chief economist for the World
Bank in Moscow, on the shadow economy.
6. Darlene Reddaway: Re: Journalism Query in 6530 and answer in 6531.
(advertising)
7. J. Rohozinska-Michalska: Re: 6565-The Prague Racket. (re Belarus)
8. AFP: As europhoria dies down, NATO candidates face hard work.
9. UPI: Ira Straus, Mending NATO's Mess.
10. UPI: Russia identifies hostage-taking suspects.
11. AFP: Media watchdog urges Putin to stop pressure on media covering
Chechnya.
12. BBC Monitoring: Russian TV shows missile-carrying trains saved by Putin.
13. Montreal Gazette: Michael Mainville, Red-hot Russians party on.
But AIDS epidemic could cool the fever.
14. BBC Monitoring: Russian Communist leader responds to tycoon's
proposal of
election alliance. (Zyuganov)
15. BBC Monitoring: Ukraine should choose both Europe and Russia -
reformist
leader. (Viktor Yushchenko)]
*******
#1
Russian big business could stifle start-ups-EBRD
By Andrew Hurst
MOSCOW, Nov 24 (Reuters) - The power of Russia's big business elite could
snuff out opportunities for small firms to flourish if it is not reined in,
the European Bank for Reconstruction and Development said on Sunday.
Economists worry that Russia, which relies on oil exports, is doing little
to diversify its economy by encouraging people to set up small companies --
a major engine of growth and job-creation in East European countries such
as Poland.
"The spread and strengthening of vertically integrated business
conglomerates may constitute a barrier to enterprise reform," said the EBRD
in its annual report. "Restraining their influence will be necessary to
ensure the effective implementation of reforms."
Russia is heading for economic growth of more than four percent this year,
fuelled by privately-owned oil and metals producers at a time when most
western economies are barely expanding at all.
However, the bank, which was set up to help the former Soviet bloc make the
transition to market economics, painted a picture of an economy in which
giant businesses and monopolies hold sway and shut out upstart competitors.
"Large enterprises typically enjoy privileged regulatory treatment by the
regional and local authorities and the degree of monopolisation remains
large," it said.
"Entry by new firms, especially small and medium sized businesses, is
extremely difficult and the inflow of FDI (foreign direct investment)
remains limited," said the EBRD.
Russia's west-leaning President Vladimir Putin quickened the pace of reform
over the past two years, bringing a sweeping shakeup of taxation and
restoring private ownership of farmland for the first time since the early
years of the Soviet era.
NEW TAX CODE EXPECTED
But Putin has had more trouble creating a fertile environment for small
business to take root, free from harrassment by corrupt bureaucrats, while
powerful tycoons lobby against reforms that might threaten their interests.
The government was expected to introduce a new tax code and accounting
procedures for small entrepreneurs next year but the report said newly
introduced laws simplifying licensing and inspection requirements have "not
yet greatly impacted upon these areas."
Russia was also preparing to join the World Trade Organisation, a move seen
by the EBRD as a potential catalyst for a fresh wave of reform. But the
bank added: "There is growing opposition from protected industries."
"Deeper integration with the world economy would accelerate restructuring,
promote investment and build a constituency for reform. Early accession to
the WTO at fair terms will be central to this process," said the EBRD.
Meanwhile, the pace of privatisations of state firms, which has flagged
this year, was expected to quicken in 2003 with a revenue targed from asset
sales of 51 billion roubles, the bank said. "The privatisation programme
for 2003, recently approved by the government ... envisages the partial or
full privatisation of over 1,000 companies," it added.
The EBRD also called for a speed-up in the pace of banking reform to ensure
a bigger flow of funds to "the real economy."
*******
#2
EBRD sees strong E.Europe growth, warns on EU strains
By David Chance
LONDON, Nov 24 (Reuters) - Eastern Europe will withstand the global
economic downturn in 2003 and is set to grow strongly, outstripping the
euro zone, the EBRD, the region's development bank, said on Sunday in its
annual economic report
However, the European Bank for Reconstruction and Development warned that
the economic discipline required by European Union membership would pose
big problems for the eight east European states which hope to join the EU
in 2004.
The EBRD "Transition Report" forecast the nine advanced states of Central
Europe and the Baltics, of which all but Croatia are EU candidates for
2004, would grow by a weighted average of 3.7 percent in 2003 compared with
a forecast of 2.2 percent in 2002.
Compared with OECD forecasts of growth of 0.8 percent this year and 1.8
percent in 2003 in the euro zone, these figures looks positively dynamic,
but EBRD Chief Economist Willem Buiter cautioned accession countries they
needed to do much better to catch up with living standards in western Europe.
"While most countries are enjoying moderate growth rates and inflation is
on a downward trend, there is no room for complacency," Buiter, a former
member of the Bank of England's Monetary Policy Committee, said.
"The majority of countries in this region have levels of gross domestic
product per capita that are well below the EU average and, in most cases
their unemployment rates stand at double-digit levels," Buiter said.
The average income of accession countries is just 40 percent of the EU
average, well below the 60-70 percent average for Greece, Portugal and
Spain when they joined the EU in the 1980s.
That means accession countries - Poland, Hungary, the Czech Republic,
Slovakia, Latvia, Lithuania and Estonia - have to grow rapidly to catch up.
Slovenia, the eighth, is already at EU income levels.
The eight all face huge spending demands to meet EU rules -- the
environment alone will cost up to 108.415 billion euros over 10 years --
and will also strive to meet the constraints of eventual euro membership,
which limits budget deficits.
Buiter said these aims may be unreachable.
"...The degree of fiscal tightening that would be indicated by a strict
interpretation of the Stability and Growth Pact budget criterion may be
excessive from the point of view of successful real convergence."
At the same time, in the run-up to membership of the euro, central banks in
countries which want to join would have to engineer a temporary monetary
contraction to bring inflation below the eurozone threshold of not worse
than 1.5 percent more than the three best performing economies.
Polish, Hungarian, Slovak and Czech central banks have battled against hot
money flows from portfolio investors seeking to take advantage of juicy
financial returns in the run-up to EU membership, forcing their currencies
higher.
BALKAN BOOM, CIS CONCERNS
The Balkans, after years of slow reform and poor growth due to the breakup
of Yugoslavia and wars in the region, is finally showing sustained levels
of growth and attracting substantial levels of foreign direct investment.
The EBRD forecast Balkan countries are expected to grow 4.1 percent in
2003, up from 3.6 percent this year.
However, growth in the the Commonwealth of Independent States, the ex-USSR
minus the Baltics, is expected to fall to 4.0 percent, down from 4.4
percent this year as the easy growth from oil and gas and the post default
and devaluation Russian boom runs out of steam.
The EBRD said Russia and Central Asia needed to accelerate reforms to
improve on pitifully low levels of foreign direct investment.
It said that for Russia, the problem was not a lack of savings but a poor
investment climate.
******
#3
Time Europe
December 2, 2002
Meet The Second Richest Man In Russia
Who is Roman Abramovich? And what's he up to in Chukotka, a desolate
province in Russia's far north?
BY YURI ZARAKHOVICH/AMGUEMA
Amguema is a sorry sight. a village of 600 native Chukchi people in
Russia's far north, some 100 km above the Arctic Circle, it looks like a
handful of undersized building blocks tossed across the featureless tundra.
Most people in Amguema herd reindeer for a living, most houses do not have
hot water or indoor plumbing, and until very recently the electricity
supply has been sporadic at best. Other than vodka, radio is the only
source of entertainment. But amid the desolation, several dozen brand- new
two-bedroom wooden houses are now under construction, complete with hot and
cold running water, a bathtub and even an indoor toilet. How did they get
here?
Thank Roman Abramovich, the 36-year-old Governor of Chukotka, the Russian
province just across the Bering Strait from Alaska in which Amguema lies.
Olga Kymytyul certainly does. The middle-aged nurse nearly weeps as she
bows to the Governor during a recent visit. "Thank you for everything you
have done for us," she gushes. Abramovich, a tall, slightly stooped man
with a short, carefully trimmed beard, accepts her thanks with a peculiar
mix of bashfulness and indifference. He flashes a shy smile, but seems to
be looking through the woman rather than at her.
What Abramovich has done for Amguema over the past three years is
remarkable. He has paid for the construction of 46 new homes, at $50,000 a
piece; he has financed the village's first-ever guesthouse and public
bath-barbershop; he has overhauled the district's only boarding school; and
he has spent an additional $200 to $300 million of his own money — "I can't
really tell how much exactly," he shrugs; "I wouldn't know myself" — all
across Chukotka to build everything from hotels to cinemas to supermarkets.
He has even made sure the salaries of public sector workers are paid on
time. "It's a revolution!" enthuses Alexander Maximov, a local Amguema
official.
So who is Roman Abramovich, and why is he throwing so much money at a
frozen province of just 73,000 souls? He is "probably the most politically
influential" of Russia's new tycoons, says Anatoli Chubais, former chief of
staff to President Boris Yeltsin and now CEO of RAO UES, Russia's
electricity monopoly. Not content to be hugely rich but largely unknown
outside Russia's political and business élite, Abramovich decided to become
a public figure by adopting Chukotka as his personal project. Critics say
he wants to control the region's natural resources, or perhaps use Chukotka
as a springboard to a political career in Moscow. But Abramovich offers a
simpler explanation: "It's a new endeavor for me. I've never run a
territory. I've never talked publicly to people. I've got to try it just to
see whether I like it."
Born in Saratov on the Volga River in southern Russia, Abramovich lost his
mother to illness when he was 18 months old and his father to a
construction accident when he was not yet four. Adopted by his father's
brother, Abram, he first lived with his uncle's family in Moscow, then
spent most of his adolescence in the northern region of Komi with his
maternal grandparents. Abramovich attended the Industrial Institute in the
city of Ukhta in Komi, but his education was interrupted when he was
drafted into the Soviet army.
Abramovich's big break came in 1992 when Boris Berezovsky, then the most
powerful of the moguls, befriended the promising young man and brought him
into the Yeltsin coterie. Nine years later, when Berezovsky fell out of
favor with the new Putin regime, Abramovich took over his erstwhile
patron's assets in the oil industry. Now Abramovich controls more than 80%
of Sibneft, the fifth-largest Russian oil giant; 50% of Rusal, the Russian
aluminum monopoly; and 26% of Aeroflot, Russia's national airline, among
other holdings, through Millhouse Capital, registered in Britain. Earlier
this year, Forbes magazine listed Abramovich as the second-richest man in
Russia, worth about $3 billion. "Abramovich is the real financial genius of
the bandit-capitalism epoch," says Mikhail Krutikhin, an oil and gas
analyst with RusEnergy.
Abramovich clearly knows something about capitalism. He's now fighting to
acquire a controlling influence in tvs Television, one of four national
channels in Russia and one of the few broadcasters that still dares deviate
from the government line. The Kremlin is keen to snap up the station as
part of its effort to control the media. Abramovich also looks set to
extend his holdings in the oil industry. Sibneft is now poised to bid in
the upcoming privatization of Slavneft, one of the two oil companies that
are still state-controlled. The Slavneft privatization, scheduled for next
month at a starting price of $1.7 billion, will be the largest in Russian
history, with some 5% of the country's oil production at stake.
With so many businesses to look after, Abramovich could easily remain at
his 42-hectare country estate near Moscow with his wife and four children.
Instead, he spends several days a month shivering in desolate Chukotka. His
foray into Chukotka may be part of a pattern of top oligarchs taking
control of Russia's territories. Regional Governors wield enormous power
both locally and nationally, and they control the exploitation of their
territory's natural resources. In January Khazret Sovmen, a key player in
the goldmining industry, became President of the Republic of Adygea in the
Russian North Caucasus; and in September Alexander Khloponin, owner of the
Norilsk Nickel company, gave up his position as Governor of Taimyr to
become Governor of the Krasnoyarsk Kray region, the industrial powerhouse
of Siberia.
Abramovich seems to be enjoying politics so far, and he may actually be
good at it. When he arrived in 1999 as Chukotka's Deputy to the State Duma,
the province's mining industry had collapsed, unemployment was rampant, and
fuel and food supplies were scarce. The Moscow rumor mill attributed his
sudden interest in politics to a Russian law that shields Duma members from
criminal prosecution. But his interest didn't wane even when a similar law,
shielding regional Governors, was rescinded in 2000 just as Abramovich was
campaigning in Chukotka. Simply by moving to the province, he added some
$30 million in tax revenues to Chukotka's meager budget of $65 million.
Then he started doling out cash: he footed the bill to send 8,500 children
from Chukotka to the Black Sea for a holiday; he brought urgent supplies of
sugar, rice and butter to starving families in native Chukchi villages; he
partially financed holidays for Chukotka residents in mainland Russia. But
when Abramovich realized that more of his money ended up lining the pockets
of local officials than was acceptable even by Russian standards, his aides
say, he decided to run for Governor.
In December 2000, Abramovich won 92% of the popular vote as his main rival,
then Governor and former Soviet-era boss of Chukotka Alexander Nazarov,
withdrew one week before election day. The other two candidates couldn't
compete with all the benefits Abramovich was offering. As important as the
food, fuel and free vacations was the hope residents of Chukotka had that
some of his entrepreneurial flair would rub off on them. Once elected,
Abramovich nominated Nazarov Senator from Chukotka to the Federation
Council (the Russian parliament's upper house), thus giving credence to the
theory that they had cut a deal.
When he became Governor, Abramovich brought in about 80 aides from Sibneft
to run Chukotka. These bright young things toil in Anadyr for three weeks a
month, then spend a week back home in Moscow. They have proved capable
administrators, but aren't quite sure what they're doing here. "I never
told them what the master plan is," Abramovich admits. "They are just
following the leader." They may not follow much longer. According to one
aide, dejection is replacing the team's original gung-ho spirit because "we
don't see the end purpose of all this." They do not know how long
Abramovich plans to stay on as Governor, or whether he'll continue to foot
the bill for Chukotka when he decides to move on.
There is also tension between Abramovich's crew and the locals. "All these
barber shops, cinemas and restaurants, we do just for ourselves," says one
aide. "The locals simply do not need it; it's not their way of life."
Longtime residents are put off by what they perceive as arrogance. "I was
so encouraged when they moved in and started doing things," says Galina
Lenskaya, 50, a psychologist. "I wanted so much to be a part of this new
effort. But they turned me down, because they don't want any of us. We're
grateful for the good things they're bringing, but we feel brushed off."
There are signs that Abramovich may be contemplating such a career. Twice
in recent months Sibneft has clashed with Yuri Luzhkov, the city's current
mayor, over control of the Moscow oil refinery. On both occasions, when
municipal authorities refused to recognize Sibneft's right to the refinery,
Sibneft cut its supplies of crude — leaving the Russian capital close to
paralysis. Each time, Abramovich resolved the conflict through personal
talks with Luzhkov. Given Abramovich's close links with the Putin
government — and Putin's distaste for Luzhkov — a move to Moscow seems
logical. But Abramovich is reticent about his political ambitions and
influence, insisting that he just has "friends among the people who have
been or are in the Kremlin."
On his last night in Anadyr before returning to Moscow, Abramovich attended
a concert by Machina Vremeni, a popular band he had brought by charter
plane all the way from Moscow to perform at an indoor skating rink he paid
to build. Tapping his feet to the rhythm, the Governor sang along with the
lyrics to one tune about a puppeteer who controls his "so-human-like
dolls." Given Abramovich's wealth and influence — not to mention his
evasiveness about his plans — one can't help wondering what strings he'll
be pulling in years to come.
*******
#4
Newsweek International
December 2, 2002
The War on Books
Russian writers are reminded of the bad old days
By Victor Erofeyev
They say everything new is something old and long forgotten. In Russian
cultural life, this year saw the discovery of a Soviet principle that had
faded from memory: literature can be “useful”—or “harmful” and “dangerous.”
THE DISCOVERER, IN THIS case, is the youth organization Idushchie
Vmeste (Walking Together), which claims 100,000 members. Like its
ideological younger brother, the Soviet Komsomol of the Stalin era, it’s
openly supported (and allegedly financed, though Walking Together and the
Kremlin deny it) by the administration of President Vladimir Putin. In a
country where the media have recently been skillfully repressed, the root
of Russia’s woes has thus been identified. To wit: “harmful” literature
that corrupts the people and undermines the moral foundations of the state.
Who produces this poisonous literature? Wearing white T shirts
adorned with Putin’s image, the activists of Walking Together have focused
on a trio of prominent writers, myself among them. From the newspaper
Izvestia, I’ve learned that Walking Together apparently sees me as Cultural
Enemy No. 1 in the new Russia. The most concrete expression of that
distinction came on April 17, as I was signing my new book in the Moscow
bookshop on Tverskaya Street. Eight storm troopers turned up to disrupt the
presentation, scuffling with my readers and shouting, “Get out of the
country!”
I keep good company, it seems. Early this year the members of Walking
Together erected a stack of the books of Victor Pelevin at the door of his
apartment. (He’s the author of such novels as “Generation P”—which stands
for Pepsi—that are much admired by younger readers.) All bore a stamp,
RETURN TO THE AUTHOR. It turns out they had been collected at booths where
people could exchange “dangerous” books such as his for a specially
produced volume of Russian classics.
Walking Together has also targeted the novelist Vladimir Sorokin.
First the good citizens of this neo-fascist organization delivered iron
bars for the windows of his house. (Vasily Yakimenko, who quit Putin’s
administration to head Walking Together, announced on the group’s official
Web site that his followers will not rest until Sorokin is in jail; to
start the process, a state tribunal recently held an “independent” expert
analysis to demonstrate that Sorokin’s works were pornographic.) Then, in
June, they constructed a huge, fake toilet in front of the Bolshoi Theatre
and filled it with chlorinated water. They proceeded to dump Sorokin’s
books into it, destroying them in protest against his signing a contract to
produce an opera at the Bolshoi. A seriously alarmed Sorokin told me that
any young idiot could knife him in the street “in the name of the
president.” Suddenly, I realized life was becoming reminiscent of what I
experienced as a dissident under the communists, when I was thrown out of
the Union of Writers, in 1979, for my role in producing the uncensored
literary almanac “Metropole.”
I have just published my collected works in 11 volumes, but
this—along with the books of Pelevin, Sorokin and others— provides only
more ammunition for our opponents. Their attacks on us have, in fact,
boosted sales, but none of this is amusing. Publishers are beginning to
grow cautious; now they may well wonder whether it’s worth publishing a
“dangerous” writer’s new book. The problem is that we represent a new form
of Russian literature. The basic premise of traditional Russian writing is
best summed up by Bazarov, the central character of Ivan Turgenev’s novel
“Father and Sons”: “Man is good, circumstances are bad.” Our new literature
has the effrontery to tell us that bad circumstances are created by the
Russian people. Apparently, this rude suggestion tarnishes the “clean,”
uplifting patriotic image that Walking Together projects.
In early September I wrote an open letter to Putin, published on the
front page of the liberal daily Vremya MN . I called on the president to
halt the persecution of writers, branding it a “protracted barbarity.” At a
press conference two weeks later, Putin replied. He rather testily
distanced himself from both the persecuted writers and Walking Together,
saying the two sides should sort things out between themselves. This was a
sly maneuver: a confrontation between a handful of writers and a
well-disciplined mass movement can hardly be called equal.
Will there be another round of this battle? Two weeks ago, Walking
Together sent a letter to the government’s publishing ministry demanding
that all books with dirty words be pulled from stores across the country.
The appeal has been ignored, so far, but in a country as unpredictable as
Russia, anything can happen—good, bad or appalling. This unpredictability
still offers the hope that Putin’s decisions can be influenced by national
and international public opinion. Paradoxically in Russia, which defeated
Nazi Germany but lost the cold war, fascist ideas attract a significant
section of the young in the very same way they did in the Weimar Republic
after the first world war. What draws supporters to Walking Together is a
yearning for strong authority, personified by Putin, and widespread
nationalist sentiment. God forbid that by persecuting us “dangerous”
writers they will make us so famous we shall be obliged, as German writers
once were, to seek refuge from our fame abroad.
******
#5
Kommersant
11 November 2002
[Interview with Christof Ruehl, chief economist for the World Bank in Moscow]
[Kseniya Nechayeva] How do you define the shadow economy?
[Christof Ruehl] This concept covers two forms of economic activity which
are not accounted for in official statistics, including the calculation
data of tax revenue. The shadow or invisible economy covers both
unaccounted economic activity (the so-called black market) and
partially-accounted economic activity (the grey economy). If an employee
in a registered company receives part of his wages in a plain envelope, we
say that that worker is involved in grey economic activity. Here I
would draw a distinction between the "black market" and the "grey economy"
on the one hand and illegal forms of activity, which are in essence
criminal (such as contraband drugs), on the other. Although such illegal
forms of activity are also part of the shadow economy, they are connected
with problems that lie outside the economic sphere as such.
[Nechayeva] According to data from the State Committee for Statistics,
the shadow economy makes up twenty to twenty five percent of Russia's GDP.
Does the World Bank have any figures for the scale of the shadow sector of
the Russian economy?
[Ruehl] Not as yet. Assessing the scale of a shadow economy is a very
complex task in so far as those involved in the shadow economy, of course,
do not have any desire to show the scale of their activities. At present
the State Committee for Statistics is adjusting the size of GDP 23 percent
on the side of growth in order to take account of the shadow sector, but
other experts think that the shadow economy's share in GDP stands at 40 to
50 percent. But if we compare the situation in Russia with that in other
countries, for example Italy, where the official figure for the shadow
economy is estimated at 17 percent, I would rather settle on an indicator
of 40 to 50 percent than accept the published figures. I hope we will
soon be able to present more accurate assessments. A project has been
started jointly by us and the Economic Analysis Bureau (which also carries
out research on this issue on the instructions of the government of the
Russian Federation) and the Higher School of Economics to study the shadow
economy and this will allow us to understand the role of this phenomenon
and its scale and structure better.
[Nechayeva] In the World Bank's last economic report it is said that the
shadow economy is absorbing the labor force that has disappeared from
statistical surveys. Where are all these people going to?
[Ruehl] For the most part they are leaving traditional sectors of the
economy, large- and medium-sized enterprises which are recorded in detail
statistically, and transferring to small business and the area of retail
trade and services. Of course, the shadow economy leads to a decrease in
the collection of tax revenue, and a decline in economic indicators and so
forth. These factors alone are sufficient to make us begin to do
something about the shadow economy and try to assess its size. However, I
would say that the significance of the shadow economy is defined by two
much more weighty reasons. First of all, many of those involved in the
shadow economy are busy in new sectors that are increasing more and more in
significance for the development of the market economy. They have moved
out of sectors whose role will decline over time. At regional level the
shadow economy is playing a large role in areas where there is an influx of
labor and not in places which the labor force is leaving. In other words,
the shadow economy reflects the action of market forces and these forces,
in their turn, reflect the general dynamics of structural changes that are
needed for deeper diversification in the Russian economy. In a certain
sense the shadow economy virtually reflects changes towards a more steady
economic structure and this is a positive step. However, diversifying the
economy is easier under open conditions rather than in a semi-legal
position when you try to remain unnoticed and are easily open to blackmail
or extortion. In other words, diversification will go ahead any way, but
it will proceed more slowly than it would, given clean, competitive
conditions. Secondly, although the shadow economy does reflect reserves
for future Russian economic growth, it also limits the use of these reserves.
[Nechayeva] It appears then that the shadow economy facilitates growth in
the official economy even if this is not confirmed by the statistics. So
why should it restrict potential growth in the Russian economy in the future?
[Ruehl] I have just mentioned the reasons for this. The outflow of the
labor force from the official sector of the economic to the shadow sector
tells negatively on the setting up of effectively working enterprises in so
far as certain resources must be allocated to their not being detected.
Often this leads to restrictions in the size of an enterprise, holds its
growth back, hinders people's access to work and is an obstacle to
implementing technical modernization. Often such a situation suits firms
that have adapted to semi-legal conditions, that is, firms which invest
more resources in maintaining good relations with civil servants. These
firms would not necessarily survive under conditions of open competition.
As a result, it is difficult for potentially more efficient "clean" firms
to compete. In other words, competition, one of the basic factors of
economic growth, becomes deformed. On the other hand, the shadow economy
does not guarantee a rise in tax revenue flowing into the state budget,
which uses many resources from tax revenue for building roads and other
kinds of infrastructure and therefore this leads to increased costs for the
official sector of the economy. That is, the shadow economy leads to a
general rise in the tax burden. And finally, the system of informal
relations set up in the shadow sector has become the main stumbling block
on the path to implementing government reforms aimed at improving the
business climate in the country. The interests of privileged groups and
corrupt state civil servants have become a strong obstacle on the route to
reform.
[Nechayeva] If the shadow economy accounts for 40 to 50 percent of GDP,
can you estimate how far data on economic growth have been lowered because
a part of the economy remains in the shadows?
[Ruehl] Again I must say that I cannot as yet. We know that a
significant portion of the shadow economy is concentrated in the service
sphere which has great potential for sharp rise in productivity and
achievement of high growth rates. But we do not know how productive the
shadow sector of the economy is. Is the shadow economy able to compete
successfully because the cleverest entrepreneurs are involve in it, or
because taxes, social security contributions and the like are not paid
there? We do not have an answer to this. As far as the issue of
increasing or reducing the size of the shadow sector is concerned, data
relevant to this are very superficial and fragmentary. According to
suppositions from the State Committee for Statistics, the share contributed
to GDP by the shadow economy is reduced partially as a result of such
measures as carrying out tax reform and deregulating the economy and in
part thanks to a growth of the official sector of the economy. However,
in order to find a fuller answer to this question we must carry out more
detailed research.
*******
#6
Date: Sun, 24 Nov 2002
From: "Darlene L. Reddaway"
Subject: re: journalism query and answer in JRL 6530/6531
Sender: "Darlene L. Reddaway"
Re: Journalism Query in 6530 and answer in 6531
Martine Self asked in JRL 6530 why there was so little advertising in
Russian newspapers. Fred Harrison gave the simple answer in JRL 6531 that
"Most advertising is disguised as news content," fueled by greedy
journalists and editors who get paid cash to write news stories about
various products.
This simple answer has ignored some of the realities of the Russian
advertising world. After having spoken with Russian ad specialists who
work in advertising placement departments of mass media organs and with
those who place ads for clients via these advertising departments, I would
like to add the following facts to fill out the answer to this question.
First of all, it is not strictly true that Russian newspapers are lean on
open advertising due to the greed of journalists and editors. There reasons
for lack of ads in certain papers that are based in both federal law and
the profile of the individual publication.
Russian law restricts advertising content in newspapers and publications
that do not have an expressly stated advertising purpose to not more than
40%. For television, the law requires that ad blocks within programs can
appear after an interval of no less than 15 minutes, and the total add
content of all ad blocks should not exceed 10% of the length of the
program. This would mean, for instance, that for a 30 minute program, only
two ad blocks of 1-1/2 minutes each would be allowed by law. However, it
seems that the last law is violated often enough, and no one seems to be
inflicting fines.
You can view these laws by going to www.yandex.ru and searching for
advertising law. They are both in English and Russian. You can also find
the laws regarding mess media conduct in this same way.
Russian law also requires that ads be paid for out of profits. Well, if you
have not yet made a profit, then you have no legal funds to place an open
and legal advertisement, which creates a catch 22. Because to make profits,
you need to advertise; in order to advertise, you need to already have a
profit.
According to one source in mass media advertising, this particular law in
itself spawns a whole shadow ad market. Those with no real profit often
funnel pre-profit funds through manufacturing or other concerns, which
funds are returned to the original company under some other guise in cash,
which they then use to place an ad through an ad company that exists for
only a month -- and leaves no traces.
Beyond governmental restrictions, the number of ads in a Russian newspaper
depends on the Russian newspaper and its profile.
It is true that "hidden ads" (skrytye reklamy), that is, ads disguised as
news content, are a large part of advertising strategy here in Russia,
although expressly forbidden by Russian federal advertising law. But this
is not only because Russian journalists are greedy.
I spoke with Dmitry Ganibalov about this question. He was the main
organizer of the All-Russian Open Russian Advertising Festival and
Journalist Competition Award for three years in a row, starting in 1998.
Dmitry, who has worked in Russian advertising for 15 years, in fields
spanning TV, newspapers, billboards, metro, etc., immediately asked me:
"Which newspapers was Martine Self looking at?" Dmitry pointed out that
some publications, like the Russian "Cosmopolitan" regularly sport 80% ad
content. But Cosmo is a special case, with registered rights to place so
many ads, and a matching profile. But even if you look at a paper like
"Argumenty i fakty," you will find that it has plenty of ads.
Dmitry listed at least four categories of newspapers: 1) business, 2)
informational, 3) entertainment, and 4) advertising. The approach of each
of these types of newspapers to ads is different. Trade papers like
Kommersant are generally picky about the ads that they place. Informational
papers, those dealing with news and other kinds of information, like
Izvestiia and Pravda, usually carry a wider range of ads, but depending on
the internally determined profile of the paper, the paper may chose to
limit the number of ads it places in order to retain a certain image in the
eyes of the public.
Papers centered on entertainment as a rule will allow themselves more
breadth in advertising quality and quantity. And of course, then there are
the advertising sheets that arrive free in your mail box that are nothing
but ads.
One reason that Dmitry gave as to why those who place ads resort to "hidden
ads" is because the advertising departments in most newspapers
and other channels of the mass media are bureacratically-heavy and not very
flexible or willing to serve the needs of their clients. They sport very
rigid price lists and are not keen on negotiating advertising packages that
are more attractive to those placing ads. And they are usually staffed by
people who have no knowledge of the advertising world and its needs.
Because the prices are so rigid and sometimes very high in the advertising
departments, and because the staff are so deaf to advertising realities, it
is often easier for ad placers to approach journalists and editors, who for
$100 or so, will agree, for instance, to write some news report about
certain market conditions, comparing products, and pronouncing all products
of a certain type bad but a certain one. Or perhaps they will write an
article that a new kind of food product has appeared in the city, and that
it is a wonderful food product, without naming the brand specifically, but
in the corner at the bottom of the page will be a very cheap ad with the
brand name of that particular food product.
These kinds of "hidden ads," although forbidden by Russian law code, are
hard to prosecute if they are well written, for journalists after all have
to report on business and new items that appear in the city.
Dmitry said that in this lamentable state of affairs, the journalists and
editors are simply stealing from their newspaper or editorial concern, and
keeping from it its due profits. But he did not feel that this was the main
method of placing ads. There are those who would like to do business in an
honest and above board manner -- if only the laws governing this nascent
industry were a little more favorable, and the mentality of the old way of
doing business in Russia would fade away a bit faster.
Dmitry's conclusion is borne out by a whole host of statistics. At the end
of 2001, Oleg Volkosha, the director of TNS/Gallup AdFact, declared that
Russia was the fastest growing ad market in Europe. Of this 2001 market, TV
earned 37.5% of the ad market with an ad volume of 480 million dollars;
newspapers earned 24.2% of the market at a volume of 310 million dollars;
and journals earned 12.5% of the market with 160 million dollar volume, as
reported by the Russian Association of Advertising Agencies.
******
#7
From: "J. Rohozinska-Michalska"
Subject: Re: 6565-The Prague Racket
Date: Sun, 24 Nov 2002
J. Rohozinska-Michalska
Historian/Former Director Belarus Programme for Freedom House
(N.B. The opinions expressed are the writer's and in no way reflect those of
Freedom House)
Mr. Laughland rather misses the point when he suggests that Belarusian
President Alexander Lukashenka should be alternately pitied and applauded
for having the gumption of standing up to the Western bullies. There is
little new in the statement that big western powers frequently coerce
smaller, weaker states to do their bidding - or buy their military hardware.
It is also true that Russia is far from being a model of democratic virtues
while the West casts a blind eye what can most delicately be called Russia's
shortcomings. True too is that President Lukashenka is a popular leader in
his country; the OSCE not recognising the 2001 presidential elections as
free and fair notwithstanding. However, a little perspective is in order.
President Lukashenka is simply a dictator. Since being popularly elected in
1994 he has systematically dismantled the mechanisms of checks and balances
to presidential power and concentrated all power in the hands of the
executive - essentially his own. His policies may have spared Belarus from
the severe shocks and hardships that rocked other post-Soviet states but the
question is at what cost? The relative stability has been achieved by
maintaining the country in a state of suspended animation, which cannot
continue indefinitely. And it is doubtful that additional hardships, such as
heating fuel shortages, will chill the air in the presidential palace.
Since Lukashenka is such a man of the people then there is no reason he
shouldn't share the burdens experienced by his co-nationals. Belarusians
need visas to travel to almost every European country. They are frequently
denied visas because there is a high risk that they will not want to return
home, since cleaning toilets with a doctorate degree abroad is more
profitable and has a greater future than working in one's specialisation at
home. Of course this is assuming that one can raise the money needed to
travel to the capital and apply for a visa. The majority of Lukashenka's
citizen cannot.
If various human rights and opposition groups tend to exaggerate the level
of oppression it is because the very plain truth is often not sexy enough
for anyone to pay attention to. Given the fact that most westerners have no
idea where Belarus is it is unlikely that the country would get any
attention at all. Wages, which in the countryside are approximately USD 7,
being paid in potatoes, if at all and lack of running water in homes don't
quite tend to grab international headlines. And, contrary to Mr. Laughland's
assertions, the charges levelled against the President aren't quite that
absurd - just because they are unsubstantiated. Hitler never signed any
orders either.
The point remains that opposition figures have disappeared without a trace
and given the level of control the President exercises (of which he is very
proud) it is not a far stretch to suspect he had a hand in it. This is aside
from testimony directly implicating the president. Whether it was four or
fourteen who disappeared seems less important than the fact of their
disappearances. Recently passed legislation regulating religions is hardly
the model of tolerance and speaking Belarusian to a policeman can indeed
result with a knock on the head since it is considered politically
provocative. There is a low, constant buzz of oppression, though perhaps
more difficult to pinpoint is no less destructive to the social fibre.
It is said that people get the leader they deserve. True that Belarus'
citizens chose their President but choice implies that there were clear
options. Lukashenka's core supporters are over 50, live in rural areas and
have a low level of education - as elsewhere their votes are conservative
and they fear change. Moreover, the second World War continues to be used as
a benchmark for the quality of life. In response to the question: "How is
life?" a common is answer is: "Bad, bad - but it was worse during the war".
Though independent media does exist state-controlled media, which is little
more than propaganda for the regime, penetrates everywhere. After several
years (not counting the preceding decades of Soviet propaganda) people who
have only the faintest notion of the concepts of market economy, democracy,
etc. have learned to fear them.
Most importantly one must remember that President Lukashenka does not
subscribe to any ideology. He just as readily bans demonstrations by the
Communists as by the nationalists. It is not a matter of being anti-NATO or
pro-independent but of survival by any means necessary and at whatever
costs - mainly at the cost of Belarus' citizens. As a consequence of his
policy of retaining the status quo Belarus has become an impoverished
isolated pariah in the middle of modern Europe. In the long run President
Lukashenka is a destabilising element. When he eventually leaves power he
will be leaving a country in shambles, one facing far more serious reforms
and social dislocation and with no native force capable of taking over. The
removal of the dictator will not solve Belarus' problems, but it will at
least give the country a chance to start collecting itself.
Any support for this regime and its leader(s) is reminiscent of reports from
the Soviet Union over seventy years ago praising the true workers' paradise.
It is a dangerous fiction and one particularly perilous for the citizens of
Belarus.
*******
#8
As europhoria dies down, NATO candidates face hard work
PRAGUE, Nov 24 (AFP) - Seven former Soviet bloc countries may be elated at
their new invitations to join NATO, but officials warn that they have much
work to do before joining the transatlantic military alliance.
Like the three other ex-communist countries which joined the West's premier
military club in 1999, they face a mammoth task to upgrade their armed
capacities.
"We fully understand that today's decision marks not the end, but rather
the beginning of a new era," said Lithuanian President Valdas Adamkus,
whose country was among three Baltic states to receive a NATO invite last
week.
"No matter how convincing our achievements are to date, there is still much
to be done," added Adamkus. Lithuania is seen as the best prepared of the
Baltic members-in-waiting, with an army of 15,000.
NATO Secretary General George Robertson told beaming leaders from NATO's
future members at the Prague summit Thursday they they had already achieved
much.
"All aspirants have been faced with tough and difficult decisions. It is a
reflection of their political determination to join NATO that they have met
this challenge," he said.
But he warned the leaders of Bulgaria, Estonia, Latvia, Lithuania, Romania,
Slovakia and Slovenia they had much work to do and could not expect "a free
ride".
The invitees appear well aware of the tough challenge ahead.
"Talks with NATO are only beginning and there is serious work still ahead,"
said Arnold Ruutel, the president of Estonia, whose Baltic country of just
1.4 million people has an army of 4,100.
"We are going to get down to work today with discipline and perseverance,"
said Mircea Geoana, the foreign minister of Romania, which with 21.7
million inhabitants is the biggest NATO member to be. Its army of 100,000
will be trimmed before it joins NATO.
Geoana said Romania wants to follow in the footsteps of Poland, which along
with Hungary and the Czech Republic became the first former communist bloc
country to join NATO in 1999.
"Romania is taking Poland as its role model, its progress and its
development, because we want to represent for the south east of Europe what
Poland represents for the north," he said.
In a sign of the challenge ahead for NATO's new invitees, all three current
ex-communist bloc NATO members, and in particular Hungary, have struggled
to fufill their obligations towards the alliance they made when they joined.
Candidate countries are putting around two percent of their gross domestic
product into upgrading their militaries
The chief of Romania's army, General Mihai Popescu, said Bucharest would
"quickly draw up a strategy for acquiring military equipment which is
compatible with NATO's armies."
As in most of the countries invited to join NATO almost everything has to
be changed.
"Even the rifles have a different calibre compared to those used in NATO,"
he said.
"The needs of our army are complex and range from fighter planes and
warships, but we also need telecommunications equipment."
Dimitar Tzonev, the spokesman of the Bulgarian government, said that Sofia
also has to make big efforts.
"We reaffirm our determination to continue all the reforms necessary to
become full NATO members," he said.
In Slovenia, which emerged from the former Yugoslavia, the authorities also
have a lot of work to do convincing a public opinion which is sceptical
about the wisdom of joining NATO.
"In view of the international realities, to remain a neutral country would
represent an abnormal attitude," Slovenian President Milan Kucan said,
while indicating he was in favour of the organisation of a referendum on
entry into the EU.
Bruce Jackson, president of a non-governmental organisation helping NATO
candidates, said the candidates do not only face challenges in the military
domain.
In particular he pointed to corruption, which he said posed a threat to
democracy and internal stability.
******
#9
Commentary: Mending NATO's Mess
By Ira Straus
WASHINGTON, Nov. 24 (UPI) -- The expansion of NATO at this month's Prague
Summit gives pressing urgency to the need to streamline and carefully
reexamine the Alliance's top-level decision-making procedures.
Until recently, the debate on NATO had a surrealistic quality. No one was
asking what strategic benefits or forces the new Eastern European members
could bring to the alliance; instead it was simply asked whether their
minuscule militaries could fit into NATO technical standards.
No one was asking how to secure the good behavior of new members after they
joined, only how to tighten up the standards to be met prior to accession.
No one was worried that the new members might try to obstruct strategic
cooperation with Russia; only after the terrorist attacks on New York City
and Washington of Sept. 11, 2001 did it really start to dawn on U.S. and
Atlantic Alliance policymakers that Russia's strategic help was really needed.
Previously, terrorism and nuclear proliferation were treated as
hypothetical dangers. And no one was then paying attention to the damage
the increase in membership might do to NATO's capabilities for making
decisions that are timely, relevant, and robust. NATO simply "ruled" that
its 1999 expansion had not done any harm to decision-making, and so ruled
out any serious discussion.
Sept. 11, 2001 changed all that. NATO's Secretary-General, Lord George
Robertson of Britain, faced with a terrorism crisis, came into his own as a
world leader. He shifted emphasis from expanding the membership to
transforming the structure of the Alliance, building more flexible
capabilities, and building cooperation with Russia, the only ex-communist
country that could help in the new war.
Robertson called for developing greater flexibility in the political and
military structures of NATO, so that NATO would be able to focus on the
tasks of the new era and adapt to the fast-changing challenges of a
fast-moving enemy. He called for "modernizing" the decision-making
processes of NATO, so they would be flexible enough that NATO could go on
making decisions expeditiously no matter how many new members it might
take. He changed the watchword of the Prague summit from the Enlargement
Summit to the Transformation Summit.
The Pentagon chipped in with the idea of a NATO rapid reaction force. NATO
adopted the plan in Prague.
Democratic Sen. Carl Levin of Michigan, Ranking Member of the Senate Armed
Services Committee, raised the question of expulsion of members who behave
badly. The behavior of the three new Eastern European members was in some
respects opposite to what it was supposed to have been. Yet NATO membership
was a one-way street with no way back.
Levin was not impressed by warnings that Russia might get a power of de
facto veto if the West talked more with it: all that was at issue was
taking Russia's views "into consideration", and this was not, he said,
"tantamount to giving Russia a veto." However, Levin asked whether it was
safe for NATO's own members to have a right of veto. If a new member went
bad and became a dictatorship, he warned, it could veto everything NATO does.
There is a confusion behind the talk of a veto in NATO. It is usually said
by NATO that all decisions are made by consensus, implying that each member
has a right of veto. In reality there is no legal requirement of consensus,
nor right of veto. Nevertheless the official view is partially true: the
common NATO practice does try to reach a consensus at least for public
consumption and so gives each member a de facto veto. The use of the veto
is strongly discouraged, but it does retain a phantom existence as long as
NATO retains the rhetoric of pure consensus. The ambiguous status of the
veto makes the prospect of too many countries around the table a very real
danger, but also a danger that can be overcome fairly quickly since no new
treaty would be needed.
Former Secretary of State Madeleine Albright has pointedly brought up the
danger of too many members for the present forms of decision-making. She
has called on NATO to reconsider its reliance on consensus, warning that it
would water itself down to a debating club if it too many new members into
an unreformed Council structure.
During the 1997 first round of NATO expansion, when Albright had been in
office, she had supported expansion without linking it to reform, thus
handing a de facto veto power to three Eastern European countries. They
have proceeded since the Sept. 11, 2001 attacks to use their role in NATO
to obstruct the Alliance from its strategic goal of building close
cooperation with Russia. Today Albright proposes doing without consensus.
A working group sponsored by the Stanley Foundation and the Woodrow Wilson
International Center has also recommended moving beyond consensus. Weighted
voting, once treated as belonging to a different world, is now entertained
as a preferable method. This accords with the suggestions made some time
ago by David Abshire, former US ambassador to NATO.
In NATO as in the 15-nation European Union, widening requires deepening.
NATO is a dozen years behind the EU in facing this problem, but it has one
advantage: it can change its procedures without having to make treaty
amendments. The NATO Council controls its own procedures. Ambassador
Theodore Achilles, the main U.S. author of the NATO Treaty, used to explain
that Article 9 of the Treaty, which sets up the Council without specifying
its procedures, was no oversight: it was a deliberate step to make sure
that NATO would not be hamstrung, like most international organizations,
with a right of veto.
There are a number of options for decision methods beyond consensus. The
first of them is simply a more flexible interpretation of consensus itself,
by taking the onus off NATO to wait for a consensus, and putting the onus
instead on individual countries to compromise and fall in quickly with the
main tendency of discussion. This has already been partly implemented.
However, it can succeed in the long run only if NATO has an option of
moving on to other methods in the event that a country persists in
obstructing consensus.
Such other methods include: consensus minus one or two; voting by country;
and weighted voting, in which every country is given a weight based on its
population. This last method, if held in reserve for use only when
consensus proves unworkable, would be the most realistic. It would mimic
the power weight that every country de facto already has in NATO; it would
simply make the weights explicit, and would not allow a small minority
weight to obstruct the workings of a large majority.
There is still time for NATO to adopt such procedures, or to write them
into the protocols of accession of the new members. The discussion has
begun late, but it remains to be seen whether it is too late. The question
is whether the necessary corrections will be made in the coming months,
before the protocols are sealed and the new members take their seat at the
table. On this question hinges the future of the Alliance.
(Ira Straus is U.S. coordinator of the Committee on Eastern Europe and
Russia in NATO)
******
#10
Russia identifies hostage-taking suspects
MOSCOW, Nov. 24 (UPI) -- Russian law enforcement officials Sunday disclosed
the identities of the three men being held in connection with the Oct.
23-26 hostage incident at a Moscow theater that left over 130 people dead,
the Interfax news agency reported.
The captives were also suspected of being behind last month's car-bomb
blast near a McDonald's restaurant in southwest Moscow that killed one
person and wounded seven others.
The two suspects -- 30-year-old ethnic Chechen Khampash Sobraliyev and a
Kazakhstan native Arman Menkeyev, 39 -- were captured Friday in the village
of Chernoye in the Balashikha district of the Moscow region.
The third suspect, 36-year-old Yuri Yankovsky, a resident of
Orekhovo-Zuyevo outside Moscow, was captured in an apartment in western
Moscow the same day.
All three will remain in custody for at least 10 days pending the filing of
official charges.
According to unnamed law enforcement sources, the men were suspected of
organizing the October raid on a theater in central Moscow by 41 Chechen
commandos that took more than 850 theatergoers and actors hostage.
The raid ended in a draconian and dramatic fashion after 58 hours when
elite Russian security forces pumped an incapacitating gas into the
building and then moved in, killing the entire terrorist group, including
18 female suicide bombers; however, a large number of hostages succumbed
after inhaling the gas.
The notorious Chechen warlord Shamil Basayev, who claimed responsibility
for masterminding the raid, reiterated his threats against Russia on Sunday
in an open letter to NATO, the Organization for Security Co-operation in
Europe, and to leaders of Western democracies, seeking their assistance in
order to force the Russian troops' withdrawal from Chechnya.
In the letter, quoted by the German newspaper Welt Am Sonntag and other
Western European media, the warlord demanded the creation of a
100-kilometer (62 mile) demilitarized zone around Chechnya following
pullout of the Russian troops, as well as the release of all Chechens
currently held in detention centers throughout the province. Basayev also
asked Western leaders to step up their pressure on Russia to comply with
their demands. Otherwise, he added, the rebels would continue their
campaign of terror.
"We are warning (Russia): We regard all military, economic and strategic
structures as our legitimate military targets," threatened Basayev.
Russian President Vladimir Putin's special envoy on human rights in
Chechnya reacted immediately, calling the letter an "ultimatum" and
condemning its contents.
In an interview with Ekho Moskvy radio, Abdul-Khakim Sultygov, an ethnic
Chechen himself, called on Russia's western partners to join Moscow in the
fight against Chechen terrorism.
Chechen police commander Maj. Gen. Said-Selim Peshkhoyev, dismissed the
threat, saying, "Basayev and his guerrillas are not able to carry out
large-scale terrorist acts."
Usman Ferzauli, a self-styled leader of pro-independence Chechnya's
representation office in Copenhagen, distanced himself Sunday from
Basayev's words, which he said were in no way related to the province's bid
for independence led by former Chechen leader-turned-rebel Aslan Maskhadov.
"We have voiced our attitude (on the issue) a number of times before and I
am repeating our stance once more," Ferzauli told Ekho Moskvy in a
telephone interview from Denmark.
"You can't gain anything with threats and terrorist acts. Unfortunately,
the actions of the Russian side in Chechnya force (the rebels) to take
similar measures and make similar threats," he said.
Meanwhile, the spat over Denmark's hosting of a forum on Chechen human
rights issues and its refusal to extradite a top Maskhadov envoy to Moscow
threatened to worsen bilateral ties further as Moscow reportedly stalled
its borders' Customs' clearance of Danish exports to Russia.
On Sunday, a Danish industrial giant, the Danfoss Group, halted exports to
Russia after Russian Customs did not clear their trucks.
Russia's former chairman of the State Customs Committee, Valery Draganov,
described the actions of the Customs service as a "serious mistake," saying
that a "Customs war (between the two countries) is intolerable."
Draganov, currently a deputy in the State Duma, added that he believed
Customs hadn't received any instructions from Russia's government to stall
the clearance of Danish goods and called the incident a "series of
coincidences, or perhaps the irresponsibility of the junior rank Customs
officials."
******
#11
Media watchdog urges Putin to stop pressure on media covering Chechnya
November 24, 2002
AFP
Media watchdog Reporters Without Borders (RSF) on Sunday urged Russian
President Vladimir Putin to stop pressure being exerted on the Russian and
foreign media over their coverage of the Chechnya conflict.
"In the space of just a few weeks, Russia has sunk into straight
censorship," the organisation's secretary-general Robert Menard wrote in a
letter to Putin.
"Parliament adopted an anti-terrorist law allowing prosecution of any
journalist who reports on the Chechnya situation, several media have been
penalised for their coverage of the recent Moscow theatre hostage-taking
and now the authorities are criticising and censoring the foreign media for
reporting on Chechnya," he wrote. "We ask you to veto the amendments to the
anti-terrorist law and put an end to the pressure being exerted on the
Russian and foreign media for reporting on Chechnya."
Russia has taken an increasingly intransigent line on the breakaway
republic since a hostage crisis in Moscow last month that left 128 people
dead, but is under pressure from Western capitals to reach a political
solution in Chechnya where it sent troops to put down a separatist
insurgency in October 1999.
Earlier this month, the Russian parliament passed an amendment to the
anti-terrorist law which bans the media from printing or broadcasting news
"that hindered an anti-terrorist operation" or was "opposition propaganda
against an operation or an attempt to justify such opposition."
RSF (Reporters Sans Frontiers) said the amendment's "vague terms gave the
government power to prosecute any journalist or media outlets reporting on
terrorism or the war in Chechnya."
The organisation outlined several examples of pressure on media outlets by
Russian authorities.
It said that the Russian embassy in Germany had written to the head of
German public television network ARD, complaining that German media
coverage of the hostage siege was "shocking, totally unacceptable and
disgraceful for a public institution."
The letter suggested it might not cooperate with ARD in the future, RSF said.
The organisation also said that an airport in the republic of Ingushetia,
Russian security agents seized four video cassettes of footage about
Chechen refugees from the Moscow correspondent for Norwegian public
television network NRK.
It said the film was later returned to him but two of the cassettes had
been partly erased.
*******
#12
BBC Monitoring
Russian TV shows missile-carrying trains saved by Putin
SOURCE: Ren TV, Moscow, in Russian 0955 gmt 17 Nov 02
Presenter: There are disagreements among the military as to which part of
the military machine we have inherited from the Soviet Union needs to be
destroyed and which part of it Russia cannot do without.
Correspondent: Although it looks clumsy and slow, this missile system is a
highly mobile and mighty weapon. Only six months ago, under a directive
from the defence minister and the chief of the General Staff, these
missile-carrying trains were supposed to be scrapped. However, at the
Russian president's personal instruction, the destruction of nuclear
missile trains was suspended.
Nikolay Solovtsov, Strategic Missile Troops Commander: The president of the
Russian Federation, or the supreme commander, has ruled that the missile
division armed with a combat railways missile system should remain within
the force composition of the Missile Troops and continue to be on alert
duty as a missile division till 2006.
Correspondent: The decision was taken by the president and by the Security
Council after it became absolutely clear what Russia's response to the US
withdrawal from the ABM Treaty should be. Clearly, this is the most real
and reasonable decision for our country to take, because Russia is not
creating its own global anti-missile defence system and therefore reserves
the right not to destroy heavy nuclear missiles with multiple warheads.
Besides, the decision to scrap these systems was taken prior to the US
withdrawal from the ABM Treaty.
We can show you a unique operation of preparing the railway missile system
for an imitation launch. The designers of the system have thought of every
possible detail. First this rod is pulled out, it moves the wires of the
contact power-supply system aside. Then the roof of the railway carriage is
lifted and the container with a missile is put in a vertical position. The
system is ready for launch.
And now have a look at how it all happens in an operating mode. Everything
is done ten times quicker. What you are seeing now is the last operational
launch practice of the railway missile system from the Plesetsk test range
which was carried out about 10 years ago.
Aleksandr Sinkevich, regiment commander: The launch was successful. All
warheads hit their targets. The Missile Troops chief commander assessed the
launch as excellent and listed me, as the commander of a regiment within
the launch combat crew, first.
Correspondent: The results of that launch exceeded the forecasts not only
of Russia's probable enemies, but of the designers of the missile system,
too.
Aleksandr Panenko, technical supervisor: It is not by chance that the
Americans have nicknamed this missile the scalpel. In terms of accuracy, it
has no equivalents in the world. When we conducted practice launches from
the northern test range, then eight warhead sections hit the stake and two
had a deviation of figure beeped out - which is of course a very good result.
Correspondent: Incidentally, the phrase "to hit the stake" can be
understood literally. If you position a stake on the Kamchatka test range
and use it as a target for the missile, the latter - having covered an area
of 8,000 km - will hit that very stake. In order to understand what it
looks like in reality, we are now showing you video footage of a launch of
a similar ballistic missile.
What you see now is unique video footage of the warhead being delivered to
Kamchatka. The name indistinct seismic acoustic station registers the fall
of the warhead to the given spot. Now the warhead and its fragments need to
be located.
Unidentified helicopter pilot: There it is. Can you see it? These is
marshland all around here: that is why the crater is smaller.
Correspondent: This larch was chosen as the practice target. All the
flattering descriptions of the accuracy of the missile system have been
proven right.
Eduard Khizhnyak, unit commander, standing by a crater near the larch: This
is where the object Russ: izdeliye fell. How accurate was the object's fall
in the target area of the Kura field? Well, I cannot give you the exact
figures but, as you can see for yourselves, the missile practically hit the
very stake it was fired at.
Correspondent: As of today, the combat railway missile system Russ: BZhRK
remains part of the force composition of Russian armed forces. Its future
will obviously depend on how the military reform proceeds.
Presenter: You may have noticed that our report showed the nuclear train in
motion. In order for us to film the train as it covered a distance of only
a few hundred metres, the day before the filming the commanding officers
contacted Washington to inform the American side that the train would be
set in motion exclusively for a TV programme and that it would not leave
its servicing area.
What does this detail signify? Of course, it shows an unprecedented level
of trust between two former adversaries. And also it shows that nuclear
targets are increasingly becoming more abstract, and quite different
methods of combat are required to deal with the real adversary. One can
hardly use warheads to hit terrorists, can one?
Video shows the nuclear train in motion, being prepared for practice launch.
********
#13
Montreal Gazette
November 24, 2002
Red-hot Russians party on
But AIDS epidemic could cool the fever
By MICHAEL MAINVILLE
Freelance
It's a Friday night at the Hungry Duck, the most infamous of Moscow's
hedonistic night clubs. It's crowded with young Russian women plied with
free alcohol and male strippers. Men aren't allowed in until 11 p.m., but
when the doors open they rush in, eager to pounce.
By 1 a.m., the Hungry Duck is a madhouse. Pounding music drowns out all
talk, topless women dance on tables and couples grope openly in every
corner of the club. On the bar in the centre of the room, two male
strippers empty bottles of champagne over the naked body of a young female
patron.
For many young Russians, a night at the Hungry Duck - or any of the dozens
of similar clubs scattered across Moscow -- embodies the freedom they enjoy
since the fall of communism.
Unfortunately, it's clubs like these that experts say are the next breeding
ground in a growing AIDS epidemic sweeping across Russia.
"The next wave is coming and it's coming soon," said Arkadiusz Majszyk, the
UNAIDS representative in Russia.
"And it's going to hit the heterosexual community, because in Russia sex is
freedom and safe sex is unknown."
AIDS experts say Russia's epidemic, so far mostly confined to the country's
intravenous drug users and small gay community, is crossing over to the
heterosexual population.
In a country where the young have embraced sex as a symbol of their freedom
and the government has done little to raise awareness of the dangers of
AIDS, they fear Russia is facing a crisis of horrendous proportions.
"People do not understand that HIV and AIDS are a real danger," said Vadim
Pokrovsky, director of the Moscow-based Centre for AIDS Prevention and
Treatment and the country's leading AIDS researcher.
"But if nothing changes, Russia will be facing the same scenario as Africa.
"Some of the drug users are very active sexually, and sex is also the main
way for woman drug users to get money for their drugs," Pokrovsky said.
"And this is acting as a bridge to the heterosexual community."
And now that the bridge has been crossed, the epidemic is expected to balloon.
If current infection rates continue, Pokrovsky said, millions of Russians
will have AIDS within two decades.
"The best scenario would be 2 million deaths in 15 years," he said. "The
worst is that up to
7 million deaths are possible in the next 15 to 20 years."
Experts see few reasons for optimism because Russians have so far shown
little interest in taking AIDS seriously.
The misperception is that this is a problem only for injecting drug users,
said Vinay Saldanha of the Canada AIDS Russia Project.
"You very often hear an average Russian saying: 'I sleep around, but none
of my partners are drug users, so I have nothing to worry about.' "
Experts say the government bears much of the blame for this attitude.
The Russian government has allocated a meagre 185 million rubles ($9
million) to combat HIV and AIDS this year - slightly more than one ruble (5
cents) per Russian citizen.
Most of that money goes into treatment, but still only 500 AIDS sufferers -
mostly in the Moscow region - are being treated with retroviral drugs. Only
a pittance is spent on prevention programs, and efforts to introduce sex
education and AIDS awareness into the high-school curriculum have failed.
"The argument the Russian government gives is simple: if there are not
enough syringes in hospitals to treat young children, if the old babushka
who has lived through so much is without support, why should we spend money
on drug users?" Majszyk of UNAIDS said.
"The arguments are strong, but they are also shortsighted."
In fact, most of the money being spent on HIV and AIDS in Russia is coming
from international sources, such as UNAIDS and the Canada AIDS Russia
Project, which has received $2.1 million in funding from the Canadian
International Development Agency.
The three-year project is aimed at raising AIDS awareness among officials,
developing local non-governmental organizations and improving medical
techniques.
And experts say more money is available from international sources, if only
Russia were interested in claiming it.
The World Bank has offered Russia a five-year, $50-million (U.S.) loan to
combat HIV and AIDS, but the government has refused to take on any more
foreign debt.
It has also refused to apply for money from the UN Global AIDS Fund, which
Saldanha said could provide up to $100 million U.S. to fight AIDS in Russia
with few strings attached.
"The problem," he said, "is that Russia doesn't want to be seen to be
begging to the international community."
Pokrovsky has been particularly critical of the government's spending
priorities, such as when it spent $200 million U.S. last year to raise the
sunken Kursk submarine.
"When the government had to find money to raise the Kursk - no problem -
but not when it comes to AIDS," he said. "In my opinion, the millions of
people who are going to be affected by AIDS are much more important than
one submarine."
There are some signs that Russian society is starting to grasp the full
scope of the problem.
This month, 5,000 people turned out for a Live Aid-style pop concert in
Russia's western enclave of Kaliningrad to raise money and awareness in the
struggle against AIDS.
Among those in attendance was Russian first lady Lyudmila Putin.
Still, experts said it's unlikely her husband, President Vladimir Putin,
other top officials and the Russian public will wake up to the epidemic
before it's too late.
"Russians are still far from the point of view that this epidemic affects
them, even if it hasn't infected them," Saldanha said.
"And, unfortunately, that isn't going to change until the epidemic spreads
more widely among the heterosexual population and more members of society
actually start getting ill."
- - -
AIDS in Russia
Because of the isolation its citizens suffered under communism, AIDS came
late to Russia. As recently as 1994, no country in the former Soviet Union
had registered more than a few cases of HIV infection.
The Russian Federation has the fastest-growing rate of HIV infection in the
world. There are officially 218,000 HIV cases, but experts estimate the
real number is closer to 1 million. About 41,000 new cases have been
registered this year.
In less than a decade, Russia's HIV infection rates have surpassed those in
North America and western Europe. Nearly one per cent of Russians age 15 to
49 are believed infected, compared with 0.3 per cent in Canada and 0.6 per
cent in the U.S.
Most of those infected are in the country's growing community of
intravenous drug users. As the main route from opium-producing countries
like Afghanistan to western Europe, Russia has become a dumping ground for
cheap heroin. With needle-exchange programs rare and methadone treatment
illegal, HIV is rampant among drug users. In 1999, 95 per cent of cases of
HIV infection were among intravenous drug users.
But that proportion is slowly falling, and experts are worried. In 2000,
only 3 per cent of HIV transmissions were from heterosexual sex. In the
first eight months of this year, that jumped to 11 per cent.
******
#14
BBC Monitoring
Russian Communist leader responds to tycoon's proposal of election alliance
Source: Nezavisimaya Gazeta, Moscow, in Russian 21 Nov 02
Russian Communist leader Gennadiy Zyuganov has articulated his attitude
towards possible alliances in the December 2003 parliamentary elections.
All the indications are the appeal is addressed to exiled Russian tycoon
Boris Berezovskiy, who suggested in an article published by Russian
heavyweight broadsheet Nezavisimaya Gazeta on 20 November that Communists
and liberals should stand against the Kremlin together. Having rejected
siding up with "plunderers of the country" and "disfavoured oligarchs",
Zyuganov, however, did not mention Berezovskiy directly and made it clear
that negotiations are possible with those who possess sufficient resources
and are going to render specific assistance to the Communists. The
following is the text of Zyuganov's statement published by Nezavisimaya
Gazeta on 21 November:
As preparations for the federal election campaigns of 2003 and 2004 are
moving ahead, the CPRF [Communist Party of the Russian Federation] and the
people's patriotic forces have recently received all kinds of proposals of
alliances and coalitions. When we created the People's Patriotic Union of
Russia [NPSR] back in 1996, we declared our readiness for a broad alliance
with all patriotic forces, with all those who did not take part in the
ruining of the state, the pilferage of its national wealth, and the
destruction of its economic and defence potential.
Only we presented society with a real socioeconomic programme for
extracting the country from crisis, an alternative draft budget that could
have given an impetus to the development of the production sector and
guaranteed the population's survival, proposals to set up a union of
Russia, Belarus, and Ukraine and regarding ways to settle the conflict in
Chechnya. It is no accident that, according to all-Russia public opinion
polls, 70-90 per cent of the population backs the proposals offered by the
CPRF for a nationwide referendum - those regarding land, nationalization of
natural rent and key defence sectors, a guaranteed subsistence level for
all citizens, and limitation of tariffs for municipal and housing services
and electricity.
It is obvious that public sentiments have inadvertently shifted to the
left. Even disfavoured oligarchs admit that the CPRF is currently the sole
democratic and opposition force in Russian society preventing the country's
slide towards a police state. In essence, they have become convinced of the
high probability of the CPRF's and the people's patriotic forces' victory
in the 2003-2004 federal elections. For this very reason some plunderers of
the country are feverishly trying to put on patriotic masks in order to
conceal their participation in the robbery of Russia and to cover up their
dealings in Chechnya, Georgia, and the Baltic states, which run counter to
national security interests.
We can clearly see certain forces' efforts to link some or other politician
hated by the people to the image of the Communist Party and the people's
patriotic forces. And we will not let anyone to distract society's
attention from the CPRF's momentous initiatives and programme provisions
and shift it to meaningless intrigues surrounding lofty statements by
disfavoured oligarchs.
Time and again attempts are made to impose on us terms and conditions for
the formation of electoral alliances, which would bring the CPRF under more
or less obvious, but nonetheless strict control by forces that are foreign
and alien to Russia. We are aware of these plans. And we are going to nip
them in the bud resolutely. Our terms for alliances, including electoral
ones, are simple:
1. An alliance is conceivable only with those who do not prattle about
politics for the sake of self-advertisement, but are capable of actions
serving the well-being of the entire people and Russia's national and state
interests and are taking such actions.
2. The main criterion is: Do potential allies approve the CPRF's proposals
offered for a nationwide referendum and are they ready to support them -
yes or no?
3. Who are those who offer their alliances to the CPRF: Who are they, what
resources do they possess, what specific assistance are they going to
render the CPRF and the NPSR, and, in particular, are they ready to
cooperate with us in the future Duma?
4. Whether we will find a particular ally acceptable will also depend on
what he HAS ALREADY done in practice to support the CPRF and the people's
patriotic forces.
5. An alliance is conceivable solely with those forces whose own demands do
not run counter to the Communist Party's key objectives.
6. We advocate openness of any alliances free from hush-hush dealings.
Alliance relations should be transparent for the country and for vast
groups of voters.
7. No preliminary conditions can be voiced to the CPRF.
The CPRF and the people's patriotic forces are aware that the current
extremely difficult socioeconomic situation in the country and new
geopolitical betrayals of Russia's interests stemming from the Kremlin's
actual agreement to NATO enlargement through accession of republics that
formerly belonged to the USSR require political will and unity of action
from all citizens with statesmanlike and patriotic mentality. We are ready
for this kind of dialogue and cooperation, but not with plunderers of this
country wearing patriotic masks in order to continue robbery and pilferage
of national wealth and to ruin the Russian state.
[signed] Gennadiy Zyuganov, chairman of the CPRF Central Committee,
chairman of the NPSR.
[dated] 20 November 2002.
*****
#15
BBC Monitoring
Ukraine should choose both Europe and Russia - reformist leader
Source: UNIAN news agency, Kiev, in Ukrainian 1114 gmt 23 Nov 02
Warsaw, 23 November: It is time for Ukraine to change the postulate which
has been basic for many years: "either we go to Russia or to Europe".
Ukraine has to choose the following formula: "both Russia and Europe". The
leader of the Our Ukraine bloc, Viktor Yushchenko, said this addressing
"The European direction of Ukraine" conference in Warsaw today.
"We need comfortable and loyal relations with Russia, as Ukraine has
colossal interests there," Yushchenko said. Europe is also interested in a
mutually beneficial and tolerant partnership between Ukraine and Russia. At
the same time, Yushchenko said, Ukraine views the West as a market "with
unique global opportunities, and it would be a great mistake for the
political elite to ignore it," so Ukraine has to choose European
integration and European values.
Yushchenko believes that Ukraine has disappointed its strategic partners,
notably "Russia, Poland, Washington and Brussels; they don't see any
logical consistency and don't see a stability of the course which would be
approved by Europe".
*******
Web page for CDI Russia Weekly:
http://www.cdi.org/russia
Archive for Johnson's Russia List:
http://www.cdi.org/russia/johnson
With support from the Carnegie Corporation of New York and
the MacArthur Foundation
A project of the Center for Defense Information (CDI)
1779 Massachusetts Ave. NW
Washington DC 20036