Johnson's Russia List
#7191
21 May 2003
davidjohnson@erols.com
A CDI Project
www.cdi.org
[Contents:
1. AP: Official: Russia Eyes Missile Cooperation.
2. Interfax: Real number of HIV-infected in Russia could be 1.5 million -
expert.
3. Financial Post (Canada): Kyoto accord awaits Russian roulette: Will
Putin ratify treaty?: Snub may allow Canadian industry to review its targets.
4. Moscow Times: Claire Bigg, 10 Days of Concerts, Water Shows, Lasers.
(St. Petersburg)
5. Dow Jones/AP: Russian Parliament Debates Putin's Amnesty For Chechnya.
6. Jonathan Becker: new book: Soviet and Russian Press Coverage of the
United States: Press Politics and Identity in Transition.
7. Saferworld Publication Announcement: 'The Caucasus: Armed and Divided -
Small arms and light weapons proliferation and humanitarian consequences in
the Caucasus'
8. Kirill Ratnikov (Coudert Brothers): Speech at the Parliamentary Hearings
on the Legal Support of Ownership Rights in the Russian Federation:
Protection
against Hostile Takeovers.
9. BusinessWeek Online NEWSMAKER Q&A: A Russian Oilman's Global Ambitions.
Sibneft's Eugene Shvidler says a recent merger with Yukos has lifted his
outfit into the "supermajors" with the likes of BP and TotalFinaElf.
10. pravda.ru: US Dollar Vs. Russian Ruble. Russians lose interest in
dollar, but they evince no interest in euro.
11. Christian Science Monitor: Brenda Shaffer, By Brenda Shaffer.
(re Nagorno-Karabakh)
12. BBC Monitoring: Moscow daily questions part of Putin's speech on
military capability.
13. WPS Monitoring Agency: POLITICAL FORECASTS [press review]"
THE PRESIDENT'S ANNUAL ADDRESS TO PARLIAMENT: WORDS, WORDS, WORDS...
14. The Electronic Telegraph (UK): Obituary of Alec Flegon. Emigre
publisher who won damages for libel after Solzhenitsyn claimed that he
had worked for the KGB.]
********
#1
Official: Russia Eyes Missile Cooperation
May 21, 2003
MOSCOW (AP) - Defense Minister Sergei Ivanov said Russia is ready to start
talking with the United States about cooperation on a missile defense
system, the Interfax Military News Agency reported Wednesday.
Russia opposed Washington's withdrawal last year from the 1972
Anti-Ballistic Missile Treaty in order to deploy a national missile defense
shield, saying the 30-year-old U.S.-Soviet pact was a key element of
international security.
However, President Vladimir Putin in the end accepted the Bush
administration's decision, saying it was a ``mistake'' that would hurt
global security but would not threaten Russia. The issue is expected to be
on the agenda when President Bush and Putin hold talks in St. Petersburg on
June 1.
``We are prepared to talk with the United States on the theme of
cooperation in the field of anti-missile defense, but attached to the
fulfillment of a number of conditions,'' Ivanov was quoted as saying during
a stopover in Honolulu on his way to Washington.
Ties between Russia and the United States warmed in response to Moscow's
strong support for the anti-terror coalition formed in response to the
Sept. 11 attacks. The war in Iraq then strained relations, but in recent
weeks Moscow has shown signs of wanting to mend ties.
Interfax quoted Ivanov as saying that missile-defense systems ``don't have
to be directed against each other.''
He said that if Washington and Moscow did cooperate, both sides would want
to ``guard their intellectual property.'' He also called for full
transparency in developing the systems, and warned against the
militarization of space.
Ivanov said the process of cooperation on a missile-defense system would
``take at least decades.''
``Tangible results cannot be expected within a year or two,'' Interfax
quoted Ivanov as saying.
*******
#2
Real number of HIV-infected in Russia could be 1.5 million - expert
MOSCOW. May 21 (Interfax) - The real number of HIV-infected people in
Russia could reach 1.5 million, chief of the Russian Federal AIDS Center
Vadim Pokrovsky said at a Wednesday press conference in Moscow.
"Russia has officially registered 238,404 HIV-infected people. However,
experts estimate the real number of such people in Russia as varying from
0.5 to 1.5 million people," Pokrovsky said. HIV-infected people are
difficult to register because "HIV infection may not be accompanied by a
decline in health, and a lot of such people often do not know about their
disease," he said.
Some 3,303 people have died of AIDS in Russia. "In the near future - in
2005-2010 - we will have to expect that more Russians will die," Pokrovsky
said. He noted that most of HIV-infected Russians were infected after 1995,
and therefore the disease has not yet developed in them.
"Some experts are giving this terrible forecast: the number of HIV-
infected people could reach 7-8 million people in Russia within the next 5
to 7 years. The latest demographic studies have shown that in several
years, AIDS will become as routine a reason for death as a car- crash," he
said.
The number of HIV-infected people in Russia has significantly grown in
the past two years, Pokrovsky said. In 2001, the proportion of HIV-infected
people in Russia was 120 per 100,000 people (0.12%), and in late 2002, this
figure had reached 160 per 100,000 (0.16%). In certain regions, such as the
Irkutsk, Samara, and Leningrad regions, and St. Petersburg, the number of
officially registered HIV-infected cases reach 0.5% of the population, and
in certain cities, such as Togliatti, Irkutsk, Orenburg and Norilsk, about
1% of the population is officially infected with HIV.
HIV-infected people in Russia are mainly young men. In a number of
cities, over 5% of men aged from 15 to 30 are HIV-infected.
The number of infected women is also continuing to grow: 24% of the
officially registered HIV-carriers in 2001 were women, while in 2002, this
figure was 33%. "This can be explained by the fact that the sexual
transmission of HIV is growing," Pokrovsky said.
The number of children born HIV-infected is also growing. In 2001,
HIV-infected women bore 1,139 children, and in 2002 - 2,777.
Pokrovsky said the financing of the federal AIDS program is extremely
limited: only 115 million rubles were allotted in 2003. "This budget is
divided into three parts - 40% will go for treatment, 40% for prevention of
HIV transmission from a mother to her child, and 20% for the prevention of
infection among the population. The available money will be enough to
finance only 2% of the HIV-infected people, or even less," he said.
*******
#3
Financial Post (Canada)
May 20, 2003
Kyoto accord awaits Russian roulette: Will Putin ratify treaty?: Snub may
allow Canadian industry to review its targets
CALGARY - Russia's make-or-break commitment to the Kyoto protocol pledged
last summer by its government, is as uncertain as ever, say observers,
clouding the future of the climate change treaty.
"No one knows what they will do the Russians don't know," said Bob Reinstein,
chief negotiator for the United States for the accord. "For Russians, this is
a very complicated economic question."
All eyes are on Russia because its ratification is crucial for Kyoto to come
into force.
The European Union, one of the accord's strongest supporters, is stepping up
pressure on Vladimir Putin, the Russian President, to make good on his 2002
promise to agree to Kyoto.
They hope to get a clear measure of Russia's steps towards the pact at an
EU-Russia summit in St. Petersberg this month. But those following the
"Russian question" believe the country's commitment is very much up in the
air.
And for Canadian industries that fought Ottawa's ratification, they hope a
Russian snub of the agreement could see Canada re-examine its own emissions
goals.
"If [the Russians] aren't in, Kyoto isn't in force," said Rick Hyndman,
senior policy advisor at the Canadian Association of Petroleum Producers.
"And if it isn't in force, that opens up a whole new set of international
discussions about where the world is going to go on the international
agreement on climate change."
The 1997, Kyoto Protocol aims to control climate change by reducing the
emissions of carbon dioxide and methane, gases believed to cause global
warming by trapping the sun's heat in the atmosphere.
The treaty calls for developed nations to reduced emissions to 5% below 1990
levels as early as 2008. But before Kyoto can become binding, it needs
ratification by 55 countries and at least 55% of the global emissions covered
by the treaty.
Currently, the protocol can only account for 43.9% of carbon dioxide
emissions.
Russia's 17.4% is "essential" for pushing the tally over the required 55%
limit, the UN says.
The country, which has seen its emissions plunge since 1990 because of
industrial decline, would also be a critical supplier of "hot air" credits it
would sell to countries struggling to meet their Kyoto targets.
Many countries, including Canada, are counting on such credits.
Experts have warned that if Russia does not ratify in the first half of this
year, it would harm confidence in the accord and stunt development of the
market for emissions trading.
Mr. Reinstein, who works as a private consultant, said it's difficult to say
when or if Russia gets on board.
"It's an economic and political question," he said. "They're getting pressure
from the EU to ratify because if they don't, it doesn't enter in force and
the EU has egg on it's face because this is their great international and
environmental achievement."
Among the many issues, according to Mr. Reinstein, the Russians will weigh
the benefits of selling credits against any possible economic constraints the
protocol might put on their country.
But there is even debate about whether Russia would benefit from global
warming that could arguably make regions of the country more hospitable, he
said.
Indeed, while the UN insists there is little doubt about the negative impact
of greenhouse gas, the Russian chairman of an international climate change
conference scheduled for this fall said only recently it's not clear whether
Kyoto will help or hurt the environment.
But Mr. Reinstein cautioned even if Russia ratifies, there's no guarantee it
will help relieve concern over the all-important carbon credit system.
"In order for the Russians to sell credits, they have to be able to keep
track of their emissions," he said. "They have to have an accounting system
that is not only transparent, but effective. There is some question as to
whether they will be able to meet the threshold requirements to use the
mechanism. If they don't, even if they have the hot air, they can't sell it."
Those working closely with Russian businesses don't expect any decisions
about Kyoto will be made until the government understands how its ambitious
industrial reforms play out. Most notable is Russia's oil and gas sector,
which is becoming an increasingly important world player.
A surging Russian economy could dampen any enthusiasm for the accord,
observers say.
"If conditions and reforms in Russia stay pretty good and if, as we believe,
the foundations for sustainable economic growth get more firmly established
over the next couple of years, the economic growth in Russia will begin to
move them out of the class of nations that are net recipients [of Kyoto
credits]," said Ian Hague, a partner with New York's Firebird Management, an
investment fund active in Russia.
Academics suggest if that were to happen, Russia, even if they signed it,
would drop Kyoto.
"Studies on Soviet participation in international environmental agreements
demonstrate that the country complied with international agreements when it
is strictly in its interest to do, which is a pattern that continues with
Russia," says a Kyoto report by the International Institute for Applied
Systems Analysis in Austria.
Mr. Hyndman said if the Russians back out and derail Kyoto, it would give
Canadian industry the chance to develop more realistic domestic emissions
targets and time frames.
"If you take Russia out, then [most of] the gap between the federal
government and industry and the provinces disappears in terms of policy," he
said. "Most of the problem [between the three] ... is all about the Kyoto
target and buying credits to cover the gap."
Environmentalists admit the Russian foot-dragging is a disappointment, but
still expect the country to ratify. But they also expect Ottawa to abide by
its Kyoto pledge whether the accord proceeds or not.
"I've heard ministers say that regardless of Russian ratification, Canada is
going to move forward," said Alex Boston of the David Suzuki Foundation.
"They are serious about making those emission reductions."
*******
#4
Moscow Times
May 21, 2003
10 Days of Concerts, Water Shows, Lasers
By Claire Bigg
Staff Writer
ST. PETERSBURG -- The airport will be closed, the roads will be blocked,
but those who manage to get to St. Petersburg by train will have a
multitude of events to enjoy in late May and early June -- a street
carnival, concerts, water shows and laser displays to mark the 300th
anniversary of the country's northern capital.
The packed event schedule will span 10 days beginning this Friday, but the
peak of celebrations falls on May 30 and 31, when President Vladimir Putin
is to host official summits of the European Union and the CIS at the newly
renovated Konstantinovsky Palace. The city is expecting 45 foreign heads of
state and an estimated 15,000 official guests, so it is no accident that
the two most spectacular events -- the water and laser shows -- will fall
on those days.
The festivities will have several opening ceremonies, the most high-profile
of them on May 31 after the EU summit. The event will be held with an
imperial twist, as Putin takes up the ceremonial role previously played by
the tsars.
"During the city's 100th and 200th anniversaries, the tsar opened the
festivities and was traditionally handed medals to lay on the grave of
Peter the Great. This year, this rite will also be performed, except there
won't be a tsar but a president," said Irina Ushakova, spokeswoman for the
Tsarskoselsky Fund for Cultural Development, a governmental organization in
charge of organizing some of the biggest events.
The ceremony will be followed by two water shows, including fountains,
music, fireworks and a parade of decorated ships. The timing of the
performances, put on by France's Aquatique Show International, might come
as a pleasant surprise to local residents, who have complained that the
city's birthday bash has been geared more toward guests than Petersburgers.
While the first show -- put on for visiting dignitaries -- is set for 6
p.m., the second show, which will be open to the public, should be more
impressive because it will begin at 11 p.m., after dark has set in.
Most hotels are booked to overflowing, but visitors can look for
accommodations at bed and breakfasts and in the private sector, renting
rooms or flats.
Those who manage to find a perch, will be able to see an international
military choir performing in an amphiteather on the small beach near the
Peter and Paul Fortress, also May 31. For added effect, the embankments of
the Neva and the tip of Vasilievsky Island will be decorated by Eduard
Kochergin, the main set designer of St. Petersburg's Bolshoi Drama Theater.
Two more events likely to draw big crowds are the three nights of laser
shows planned for May 27, 30 and 31 at 11 p.m. and the street carnival on
Nevsky Prospekt slated for this Sunday.
The laser show, staged by Hiro Yamagata, will illuminate the Neva River and
the three bridges along the Palace Embankment and use the facade of the
Hermitage Museum as a screen.
During the carnival, St. Petersburg Governor Vladimir Yakovlev will have
his tie cut off -- an annual tradition to mark the city's anniversary,
which is officially May 27. The carnival will include 40 floats centered
around the theme of Peter the Great, Ushakova said.
Information about the event schedule is available at www.spb300.com.
*******
#5
Russian Parliament Debates Putin's Amnesty For Chechnya
May 21, 2003
DOW JONES NEWSWIRES
MOSCOW (AP)--The lower house of the Russian parliament on Wednesday debated
President Vladimir Putin's proposed amnesty for Chechen rebels who lay down
their arms, with the centrist majority hailing it as an important step
toward bringing peace to the war-shattered republic.
Putin's bill, expected to be quickly approved by the State Duma in all
three required readings, would apply to those rebels who had given up their
weapons over the decade ending Aug. 1 this year. It wouldn't cover
foreigners or Russian citizens guilty of murder, kidnapping, rape or other
serious crimes.
The amnesty also denies pardon to all those who tried to kill federal
police and servicemen - a provision that could be applied later to
persecute already pardoned rebels, according to critics.
Top Russian human rights activists said the measure would create rich
ground for corruption by giving the pro-Moscow Chechen administration and
local security officials broad authority in implementing it. They also
complained that the amnesty would apply to those accused of pilfering
government funds earmarked for rebuilding Chechnya.
Despite the criticism, the Duma's pro-Kremlin majority heeded Putin's call
to give priority attention to the amnesty proposal by scheduling all three
readings for a single day. Some observers said that the Kremlin was trying
to speed up the amnesty's approval in an apparent bid to portray itself as
peace-oriented at next week's summit with the European Union.
Vladimir Kravchenko, the Moscow-appointed top prosecutor for Chechnya, said
that he expected some 400 rebels to seek pardon, the ITAR-Tass news agency
reported.
Duma speaker Gennady Seleznyov called the amnesty an "attempt aimed at
reconciliation and transfer to a peaceful life," although he added the
rebels could hardly be expected to "run in droves to lay down arms."
"The amnesty is the move that would help the process of peaceful settlement
in Chechnya," said Oleg Morozov, the chairman of the centrist Regions of
Russia faction.
Alexei Mitrofanov of the ultranationalist Liberal-Democratic Party called
for shelving the amnesty because of two suicide attacks last week in
Chechnya that killed at least 78 people, days before Putin submitted his
bill. Mitrofanov's proposal only received 37 votes in the 450-seat Duma.
The attacks belied the Kremlin's often-stated assertion that Chechnya was
returning to normalcy, claims that have increased after the allegedly
overwhelming Chechen approval in March of a Kremlin-backed constitution.
The constitution confirms Chechnya's status as part of Russia , and Moscow
portrayed the vote as a key step toward peace.
*******
#6
Date: Tue, 20 May 2003
From: Jonathan Becker <jbecker@bard.edu>
Subject: new book: Soviet and Russian Press Coverage of the
United States: Press Politics and Identity in Transition
In light of the upcoming Bush visit to Russia I thought it might be
useful to provide your readers with information about the recently
released version of my book, Soviet and Russian Press Coverage of the
United States: Press Politics and Identity in Transition. This revised
and updated edition examines Russian press coverage of the United States
through 2002. I provide below a blurb, a list of contents and some
extracts from reviews.
Jonathan A. Becker, Soviet and Russian Press Coverage of the United
States: Press Politics and Identity in Transition (Palgrave).
This book examines changing Soviet and Russian press coverage of the
United States from the emergence of Mikhail Gorbachev through the
presidency of Vladimir Putin. A new afterword focuses on recent
developments in the Russian media and Russian press coverage of the
terrorist attacks of September 11, 2001. Becker argues that due to the
absence of a language to support the reform strategy, the Soviet press
presented positive images of its chief ideological and military
opponent, the United States, as a means of supporting political, social
and economic reform. He suggests that the end of the Cold War and the
emergence of a more self-confident Russia means that the symbolic and
discursive significance of the United States for Russia has diminished.
Introduction
1. Press Systems
2. Soviet Communications Policy
3. Glasnost vs. Freedom of the Press
4. ‘Otherness’, Enmity and Envy in Soviet images of the United States
5. US/Soviet Relations in the Gorbachev Period
6. Changing Images of American Military and Foreign Policy
7. Images of Domestic America
8. The Russian Press and Images of the United States
Afterword: The Russian Press under Putin
Conclusion
Reviews
Throughout this work, Becker demonstrates an exceptional understanding
of Soviet reality and how it has modeled the post-Cold War Russian press
system. Becker's well organized, thorough analysis, combined with a
strong narrative style, offers readers a sophisticated, yet
easy-to-follow text appropriate for advanced undergraduates, graduate
students, and professors…. Soviet and Russian Press Coverage of the
United States is a must-read text for anyone wishing to make sense of
the contemporary Russian press.
--Robyn S Goodman, Journalism & Mass Communication Quarterly
The book is clearly written, contains a wealth of materials and, in view
of the misunderstandings that continue to bedevil American-Russian
relations, is timely.’
--Frank Ellis, Slavonic and East European Review
Becker manages to order a tremendous amount of material into a concise
yet informative study … (that is) particularly valuable for scholars.
Becker’s monograph is also accessible to a wide audience: his care in
translating quotations means the book can be fully appreciated by almost
any reader, making the book a solid investigation into a recent and
critical period in Soviet and Russian history.
--David J. Galloway, Slavonic and East European Journal
Jonathan Becker’s book presents a rare combination of «external»
observation of Russian politics with «internal» understanding of
cultural code that allows him to provide readers with both objective and
empathetic analysis of the recent ideological transformations in Russia.
Thus, while interpreting journalists’ debates he manages - as the
insiders do - to read between the lines, to distinguish carefully what
is meant from what is said, to see which arguments the readers were
persuaded by and to account for complexities of discursive strategies of
different authors. But he also knows how to make sense of the whole of
these debates and to discover beyond their complexities a social fact of
paramount importance, a fact which is not easily seen from within the
milieu: the emergence of the journalists as a new social group with its
own set of values and interests, rules of behavior and strategies of
collective promotion. This stimulating book is an important contribution
to the realistic assessment of where Russia is on its way to democracy.
--Nikolai Koposov, Dean, Smolny College, St. Petersburg Russia
Jonathan Becker
Dean of International Studies
Bard College
Annandale NY, 12504
Tel: 845-758-7378
Fax: 845-758-7043
www.bard.edu
*******
#7
From: Stephen Gethins <sgethins@saferworld.org.uk>
Subject: Caucasus Armed and Divided Publication
Date: Tue, 20 May 2003
You may be interested in this new report by Saferworld, that is now
available on our website at: www.saferworld.org.uk
Saferworld Publication Announcement
'The Caucasus: Armed and Divided - Small arms and light weapons
proliferation and humanitarian consequences in the Caucasus'
This publication is a collective monograph that brings together the case
studies of local experts in the Caucasus focusing on the region's conflicts,
the relationship between conflict and levels of arms possession and the
effects of small arms proliferation there since the break up of the Soviet
Union. It also considers the ways in which new security actors emerged in
the Caucasus and how societies in the region address the issues of personal
and collective security. It also includes a chapter on Russia's policy
towards the small arms issue in the Caucasus. The case studies demonstrate
that there is no single problem with small arms and light weapons but rather
that each area has its own specific 'problems' such as unresolved conflicts,
state weakness, crime and trafficking as well as a range of external
factors.
For more information or to receive hard copies of this report please
contact, Anna Matveeva, Head of Arms and Security - Eastern Europe
Programme, on amatveeva@saferworld.org.uk or on +44(0) 207 881 9290.
Yours sincerely,
Paul Eavis
Executive Director
Saferworld
Stephen Gethins
Project Co-ordinator - South Caucasus
Saferworld
46 Grosvenor Gardens
London
SW1W 0EB
Tel. +44 (0)207 881 9290
*******
#8
From: "Marian Dent" <mdent@pericles.ru>
Subject: Speech from Duma Hearings on May 12
Date: Wed, 21 May 2003
Dear David, I thought the attached file might be interesting to your
readers. The speaker, Kirill Ratnikov, from Coudert Brothers, says you
are welcome to reprint it.
Marian Dent
Dean
Pericles American Business & Legal Education Project
10 Tverskaya Ul. #319
Moscow, 125009 Russia
(7-095) 292-5188
mdent@pericles.ru
www.pericles.ru
Speech at the Parliamentary Hearings on the Legal Support of Ownership
Rights in the Russian Federation: Protection against Hostile Takeovers
May 12, 2003
Kirill Ratnikov
Esteemed chairman, distinguished deputies and guests of the parliamentary
hearings, I represent the international law firm Coudert Brothers. We are
a long-established company and have operated in Russia for 15 years.
Sadly, very few mergers and acquisitions occur in Russia in compliance with
law and the spirit of law and without abuse of right.
An unprecedented wave of "change of ownership" is sweeping over Russia:
both individual industrial companies and holding companies controlling
entire sectors of the national economy are being attacked and taken over.
In practice, the use of judicial authorities and "administrative leverage"
has become the dominant takeover method in Russia whereby a Russian or
foreign owner of a controlling stake may lose his companies and investments
at any time.
For eighteen months we have studied the phenomenon of "change of ownership"
in practice by defending customers and examined takeover models and
techniques. There exist three basic scenarios generally used in
Russian-style takeovers. The scenarios are described in detail in the
Hearing Materials that also include the firm's detailed proposals on the
legislative reform aimed at establishing more detailed laws and reducing
the corruptive potential of provisions of law.
All scenarios of "change of ownership" appear to be a mosaic made up of
allegedly independent acts or omissions of officials and judicial decisions
taken in various regions of Russia. In practice, all of them are always
elements of a single preplanned takeover scheme.
The most typical examples of "change of ownership" in Russia exhibit
elements of organized crime as is well described in the Russian and foreign
press.
For example, the recent attack at Tagansky Meat-Processing Enterprise
involved an attempt to kidnap its deputy general director and his child
which attempt was stopped by Moscow police. According to the press, an
assault upon Magnitogorsky Plant of Mechanical and Assembly Blanks by its
shareholder owning only a 14% stake involved a conflict with employees
which resulted in two head injuries suffered by a worker. And the judge
who made a legally questionable decision was found hung in his garage.
Several publications discuss the suspicious practice of judges. According
the program "Moment of Truth" discussing the case involving the Bratsk mill
and the Kotlass mill, the Kemerovo judge who made the decision (later
reversed) pursuant to which the stake owned by a controlling shareholder
was transferred from the shareholder's stock account has recently moved to
a new eight-room apartment. According to other publications, the same
judge "triggered" another corporate war involving Moscow Refinery and drew
the state represented by the Moscow Government into that war. We do not
give any opinion about such information as it is the responsibility of law
enforcement agencies in Russia to verify and punish.
In Moscow, the "epidemic" of "change of ownership" has virtually become a
catastrophe. According to the press, more than three hundred hostile
takeovers occur each year. The number of takeovers keeps growing. The
Moscow mayor took the initiative to establish a local "hot line" for the
victims of such attacks.
Takeover methods become common. For example, textbooks have been published
which include the following recommendations: if you need a list of
shareholders together with all their details you may "bribe an officer (the
most widely used method)" "by bribing an employee of the relevant registrar
(which is not always as simple as it seems to be," the author notes) or do
it "through the official authorities (such as police, the Federal Security
Service, tax authorities, etc.) authorized to request information from
anyone."
Other recommendations from such textbook include the following: 'it is
necessary ... prior to an attack to reach a "preliminary agreement on
cooperation or on the acquisition of information" with officers of the
Federal Commission for the Securities Market, the relevant tax office, the
local police department or the Federal Security Service.' If such
recommendations are made there should be people who reduce them to practice.
Based on our experience, the rights of owners often have no adequate
protection in modern Russia and foreign and Russian investors are properly
concerned about their investment (which may be taken at any time). The
President properly said in his Message to Russia's Federal Assembly that
"... justice has not become speedy, proper or fair for many businessmen."
Mr. Putin noted that "a war between claimants to property would not stop
even after a judgment is rendered by a court, and such judgment is not
infrequently influenced by interested parties rather than relying on law."
We agree with the President that "shadow justice" is developing alongside
the shadow economy in Russia to support attacks aimed at taking companies
from lawful owners. Foreigners more and more often suffer from "shadow
justice."
We believe that the above factor is one of the main obstacles to the
successful development of market economy in Russia and hinders the reform
of corporate governance. The companies that become open and plan a listing
are more vulnerable to the threat of "change of ownership.' The more
successful you are the higher the likelihood is that somebody will get at
you and ruin you or attempt to destroy you.
We represent Russian and foreign investors whose business was attacked for
the purpose of "change of ownership."
We think that the unsuccessful attempt to attack the Bratsk mill and the
Kotlass mill which was reviewed by the working group of the Property and
Ownership Committee is a milestone event. We have never encountered more
barbarous methods and more flagrant violations of law over 15 years of our
practice in Russia. It is expected that the deputies will express their
opinion in a separate report.
The Ilim Pulp case compels the attention of international business leaders,
the administration of the US White House, the Congress, international
organizations and Russian political and business elite. We hope that
justice will shortly and finally prevail.
In conclusion, I would like to point out with respect to "change of
ownership" that all Russian progressive business community must become the
main fighter against the hostile takeover of property, those who implement
"change of ownership" should be ostracized by the business and banking
community and the Russian Union of Industrials and Entrepreneurs (the
"RSPP") should be proactive. If you do not effectively defend your
property against an attack the takeover scheme will completely deprive you
of control in 15 to 20 days. We believe that a court at the RSPP is not
enough and it is not a solution at all in many cases.
The cancerous growth of "change of ownership" rapidly leads to metastasis.
Russia may very soon become the country in which the rule of law, respect
for, and effective protection of private and public property, healthy
competition and free enterprise are an exception to the rule.
If these fundamentals of any market economy are removed, the economy would
collapse; organized crime, overwhelming unpunished corruption and
unrestrained gangsterism would come to rule, investors would flee Russia,
and, consequently, the population would grow poor and the international
prestige of Russia and Russian business would wane.
We suggest that you approve a message to the President which would address
the problem of "change of ownership" as a threat to Russia's national
security and an obstacle to the attraction of strategic investors to this
country. The vicious practice undermining the fundamentals of the
capitalist society, i.e. stability and protection of an owner's rights,
should be stopped.
*********
#9
BusinessWeek Online
May 21, 2003
NEWSMAKER Q&A
A Russian Oilman's Global Ambitions
Sibneft's Eugene Shvidler says a recent merger with Yukos has lifted his
outfit into the "supermajors" with the likes of BP and TotalFinaElf
Some business bigwigs have trouble attaching a label to themselves. Not so
the always blunt-talking, sometimes wisecracking Eugene Shvidler, president
of Russian oil major Sibneft. "Cutthroat capitalist" suits him fine, he
assured BusinessWeek Moscow Bureau Chief Paul Starobin in a May 16 talk in
Shvidler's wood-paneled Moscow office.
There's no denying the "capitalist" part: On Apr. 22, Sibneft announced a
merger with sister oil major Yukos (YUKOY ) that will create the world's
fourth-largest oil producer, with output of 2.3 million barrels per day.
"The only thing we're interested in is dollars," Shvidler emphasized in the
interview, the first given by a top Yukos or Sibneft executive since the
deal's unveiling. Listen up, investors. Although the deal to put together
YukosSibneft Oil installs Yukos Chairman Mikhail Khodorkovsky in the
driver's seat as the new CEO, Shvidler, 39, will chair the board. And as
part of the core group of Sibneft shareholders that will hold a blocking
stake of 26% in the new company, he'll be playing an important role in
shaping overall strategy.
JOURNEY TO AMERICA. In particular, Shvidler will be practicing his
specialty in financial management. Known for its ample dividends, Sibneft
has one of the best records in Russian business for returning cash to
shareholders. The core shareholders group, with a more than 90% stake, has
of course benefited from this policy, but so have minority investors such
as Moscow-based Prosperity Capital Management. Since Jan. 1 of this year,
Sibneft shareholders have seen their returns increase by nearly 25%,
dividend included. Sibneft's current market capitalization is approximately
$11.5 billion.
Shvidler learned about finance in Fordham University's MBA program, from
which he graduated in 1992, and as a member of Deloitte & Touche's New York
International Tax Group from 1992-94. And oil appears to be in his blood:
His father was a mathematician for the Soviet oil industry in the oil town
of Ufa in the province of Bashkiria, where Shvidler was born in 1964.
A U.S. citizen fluent in English, Shvidler returned to post-Soviet Russia
in the mid-1990s to join business baron Roman Abramovich in the charting of
newly privatized Sibneft. Abramovich, a key member of Sibneft's core
shareholder group, was a schoolmate of Shvidler's at the Moscow Institute
of Oil & Gas in the mid-1980s. Shvidler joined Sibneft as chief financial
officer in 1996 and became president in 1999. Following are edited excerpts
of Shvidler's conversation with BW's Starobin:
Q: So, should Exxon Mobil (XOM ) be running scared of YukosSibneft?
A: Trembling, absolutely. I'm kidding! But the idea is that now, by size --
by physical size of output, reserves, and stuff like that -- we're a
supermajor. There's no doubt about it.
Q: And does Russia now have a national-champion company?
A: It is a national-champion company, the most expensive Russian company.
When we spoke to Prime Minister Mikhail Kasyanov and President Putin
himself, both expressed the idea that we have to promote this company as a
national oil company, in the sense that TotalFinaElf is a national French
oil company and BP (BP ) is a national English oil company.
If we compete for a contract outside of Russia and the others [in
competition] are TotalFinaElf and Chevron (CVX ), when Jacques Chirac is
calling the Kuwaiti government, I want to make sure Putin is calling as
well. And he will be.
Q: Before the merger, there was a lot of speculation that a Western oil
major like TotalFinaElf or Royal Dutch/Shell aimed to buy Sibneft. Was the
problem that it takes a long time for the Western majors to get
sufficiently comfortable to do a big Russian deal?
A: It takes forever -- even though, with the French, we know each other
closely.... The price range was the same for everybody -- around $15
billion -- and it was always on the table. [But] it took me only three
meetings, one hour each, to talk to Misha [Mikhail Khodorkovsky]. We have
known each other for years and years and years.
Q: Khodorkovsky often calls himself a big fan of a strategic political and
economic partnership between the U.S. and Russia, with one goal being
increased Russian oil exports to the U.S. And he's a booster of building a
new pipeline to the northern port of Murmansk, as well as turning it into a
deep-water port to allow very large tankers to ship Russian oil to the U.S.
What's your attitude about all of this?
A: For all of us, it's economics, economics, economics. If Russia builds a
deep-water port, then you are on the water in a big ship, and a big ship
can go anywhere. It doesn't matter if you ship to the U.S., to Canada, to
Japan.... As for Murmansk, we [at Sibneft] are huge fans of the project.
It's going to happen. It will take three years to build it.
Q: Let's focus on your coming role as chairman of YukosSibneft, with your
specialty in financial management. Critics say Yukos tends to sit on too
much idle cash.
A: I would say that [Sibneft's] strategy -- or better to say our
implementation, execution -- was a little sharper. But even though we paid
the highest dividends of all time in Russia, we could have done more.
That's my personal ideology, that the company has to return all the cash to
the shareholders. If the company sees an opportunity to invest more, it has
to borrow the money. If the opportunity doesn't support borrowing, then
it's a bad opportunity.
Q: The YukosSibneft deal calls for Yukos to pay the Sibneft core
shareholders group $3 billion in cash plus sufficient YukosSibneft shares
to give the core group its 26% stake. But the plan for minority
shareholders is still being formulated. Are the minority shareholders going
to be treated fairly?
A: Nobody expects us to do anything less than this.... But there will be
unhappy people. These people are vultures in any case -- the majority of
people who invest in Russia today. It's not mom and pop in Idaho. And
whatever you give them, they say, "Why not more?"
Q: What role is Roman Abramovich going to play at YukosSibneft?
A: Zero. Behind the scenes, he will be one of the largest shareholders. But
now everybody has come to the understanding that it's time to start hiring
professional management.
Edited by Patricia O'Connell
*********
#10
pravda.ru
May 20, 2003
US Dollar Vs. Russian Ruble
Russians lose interest in dollar, but they evince no interest in euro
The interest in the US dollar has been going down since the very start of the
new year. Even most cautious Russians realized that the American money had
brought no profit, but loses to them. Experts point out the increased
interest in the national currency - ruble - thinking that the decreased
interest in the US dollar is a serious tendency. However, everything that
happens in the world has certain consequences, and the dollar demise is not
an exception.
The Central Bank of the Russian Federation has exposed the data pertaining to
the import and export of the dollar cash in Russia. According to the
information from the Central Bank, Russian banks imported $119 million in
March and sent $260 million abroad. This is definitely a record sum for
Russia. As they said in the Central Bank, that was the amount of dollar cash
that had been legally taken out of Russia over the whole 1999. In addition to
that, the year 1999 was an uneasy one from the political point of view: it
ended up with the early resignation of Russia's first President Boris
Yeltsin.
Last year Russian banks exported the monthly average of $93,5 million.
Experts explain this dynamics with the fact that Russian people have lost
their interest in the American dollar. The continuing reduction of the dollar
against the ruble has already resulted in a considerable devaluation of
people's dollar savings. Vladimir Gudilin, the chairman of ROSBANK's currency
department told PRAVDA.Ru in a interview that Russian people convert their
dollars in rubles and then either spend the money, or make more lucrative
ruble deposits. Mr. Gudilin said that it did not mean that Russians were more
attracted to the European currency, euro. Selling dollars and then buying
euros with rubles is a very unprofitable operation in Russia. Furthermore,
there is very little euro cash in Russia for the time being.
Vladimir Gudilin also explained that US dollars made up to 90 percent of the
export profit in Russia. To crown it all, Russia is still a dollar-oriented
country. That is why, the scope of the escape from the American currency is a
lot less as it could be. As a result, a lot of excessive dollars get
accumulated in the country: there is no demand on them and the Central Bank
is unable to buy them. This makes banks get rid of them: a lot of Russian
banks reportedly prefer to send back up to $900,000 from every million
dollars that they receive.
It goes without saying that Russian exporters have to face certain problems
on account of the dollar reduction. If a Russian company receives profit in
dollars, it will be hard for this company to pay services of a foreign
company or purchase some goods for euros. However, some companies have
already managed to obtain very good profit with the help of the dollar-euro
difference too.
Vladimir Gudilin, the chairman of the currency department of ROSBANK, said
that if someone had not managed to get rid of their dollar savings, they
would have to wait a while. Most likely, the tendency is to change during the
second half of the current year, when the dollar is to strengthen against the
Russian ruble. For the time being, the best thing for Russians to do is to
keep their savings both in euros (20-30%) and rubles (30-40$), keeping the
rest in dollars. For the time being, Russian banks keep on taking redundant
dollars back to the USA. However, tons of dollars are expected to return to
Russia already in autumn. According to experts' estimates, the strong ruble
is not good either for the Russian economy or for Russians. Therefore, the
ruble strengthening will not last long.
Matvey Konyushev
********
#11
Christian Science Monitor
May 21, 2003
Righting a UN wrong
By Brenda Shaffer
Brenda Shaffer is research director of the Caspian Studies Program at
Harvard University. She is the author of 'Borders and Brethren: Iran and
the Challenge of Azerbaijani Identity.'
In the past few weeks, the UN's inability to fulfill a variety of security
roles has been the subject of major debate among policymakers and
commentators around the globe.
One failure the UN would do well to reflect on is its virtual abandonment
of the peoples of Azerbaijan and Armenia and its failure to play a
constructive role in resolving the Nagorno-Karabakh conflict between the
two that raged through the early 1990s, killing 35,000 and leaving a legacy
today of more than 1 million refugees - 800,000 Azerbaijanis and 300,000
Armenians.
The conflict emerged in 1988 when Armenia began to lobby for annexation of
the mostly Armenian Nargorno-Karabakh region in neighboring Azerbaijan. Ten
years ago this spring, when the war escalated, creating tens of thousands
of Azerbaijani refugees in a matter of days, the UN Security Council passed
a series of resolutions aimed at stopping it. More resolutions were passed
in 1993 after the fall of Agdam and other Azerbaijani cities created
hundreds of thousands more refugees. These UN resolutions demanded the
"immediate complete and unconditional withdrawal of the occupying forces"
from Azerbaijani territories and expressed "grave concern at the
displacement of large numbers of civilians in the Azerbaijani Republic and
at the serious humanitarian emergency in the region."
Despite the resolutions, the region has languished as more than 1 million
refugees remain uprooted, and one-fifth of Azerbaijani territory remains
occupied by Armenia.
The UN and other external actors have done very little to promote
resolution of this conflict. The Azerbaijani plight seems below the radar
of international attention simply because the Azerbaijanis have resisted
employing violence. Those who trust the laws and institutions of the
international system and wait patiently for resolution of their plight seem
to be neglected.
With the 10th anniversary of the unfulfilled UN resolutions on
Nagorno-Karabakh coming up, a group of concerned researchers at Harvard
approached UN officials to enlist renewed efforts to resolve the conflict.
The standard response has been that Iraq is all-consuming and that the UN
delegated the matter in 1992 to the Conference on Security and Cooperation
in Europe, which later became the Organization for Security and Cooperation
in Europe (OSCE). While it is clearly convenient for the UN to pass the
ball to this organization, the OSCE had no experience in conflict
resolution and no mechanism for enforcing its policies. And simply
enlisting the OSCE in support of conflict resolution doesn't absolve the UN
from its obligation to promote its own resolutions.
The US could benefit much from promoting a settlement. Though its people
are predominantly Shiite Muslim, Azerbaijan is staunchly secular - and it
could play a role in strengthening moderate Muslim forces and solidifying
US relations with them.
Moreover, because Azerbaijan is sandwiched between Turkey, Iran, and
Russia, a US hand in resolving the conflict would be a strategic
opportunity to consolidate its presence in the volatile region, and could
serve as an important example of US efforts to promote the rights of Muslim
populations.
There are reasons for optimism and renewed activity right now. The US and
Russia are interested in cooperating on a solution to the conflict. Europe,
too, is taking an interest in contributing to the conflict's resolution.
Oil development in Azerbaijan is now hitting its stride with growing flows
to the international market, and the region has a shot at economic recovery
if peace prevails. Deep-seated ethnic hatred is, in fact, minimal in both
Armenia and Azerbaijan because both sides tend to remember decades of
peaceful life together in the Caucasus and not just their recent strife.
Armenian and Azerbaijani leaders have met frequently to discuss resolution
of this conflict and on a number of occasions have come close to signing
comprehensive agreements.
The international community should get the ball rolling again and solve
this conflict. The UN should straightaway formulate a plan to activate the
peace process, and attention by the media and others should be paid to this
issue in order to mobilize world leaders to devote resources to solving it.
The leaders of Azerbaijan and Armenia should continue to meet frequently
and maintain their leadership role in the pursuit of peace in the Caucasus.
********
#12
BBC Monitoring
Moscow daily questions part of Putin's speech on military capability
Source: Nezavisimaya Gazeta, Moscow, in Russian 19 May 03
In his message to the Federal Assembly, Russian President Vladimir Putin
reported that "work to develop new types of Russian weapons, new-generation
weapons, is also at the stage of practical implementation... This also
includes the kind of weapon that specialists have placed in the strategic
weapons category. This weapon will make it possible to maintain the defence
capability of Russia and its allies in the long term." At this point in the
speech applause rang out and some deputies and representatives of the
executive even tried to get to their feet although there was no common surge.
Military experts whom Nezavisimaya Gazeta approached could not explain what
the president was talking about. Deputy Prime Minister Boris Aleshin tried to
make good this omission: In conversation with journalists he said that most
probably this was a reference to the "use of an echelonned
'space-air-surface' system".
According to the deputy prime minister, "this strategic basis makes it
possible to exercise the command and control of general-purpose troops and
strategic types of weapons". In other words, the deputy prime minister
himself does not know what kind of weapon the president's speech was implying.
To judge from Boris Aleshin's explanation, this can only mean a system of
automated command and control which in itself cannot ensure the "defence
capability of Russia and its allies".
The phrase "the use of an echelonned 'space-air-surface' system" is simply
meaningless. Of course, an automated system of command and control of
strategic nuclear forces in Russia already exists but there is no system of
command and control of the strategic and conventional forces "in a single
package".
In this connection a speech by Nikita Khrushchev in the early sixties comes
to mind. On that occasion the leader of the Soviet state loudly stated that
"the USSR has developed a blue defence zone".
Khrushchev's announcement caused considerable uproar in the world. Analysts
and military experts abroad could not explain to their leaders what the first
secretary of the Communist Party of the Soviet Union Central Committee had in
mind. It turned out that a mundane printing error had crept into the text of
the speech - the zone in question was not supposed to be "blue", [vernacular:
goluboy] of course, but deep [vernacular: glubokiy].
It is entirely possible that the Ministry of Defence, which was surely
involved in drafting the military section of the Russian president's message,
has also got things somewhat mixed up. Because a brief analysis of the
results achieved in recent years in the arms sphere does not inspire the kind
of optimism that the message exudes.
In particular, if we are talking about antimissile defence and a
missile-attack early warning system (which could be disguised as an
"echelonned 'space-air-surface' system"), it has to be said honestly that the
armaments supplied by industry in 1970-1980 and are coming to the end of
their operational life and that Russia today is unable to recreate this
extremely complex and costly system in its previous form today: The number of
satellites observing the areas where the hypothetical enemy's missile bases
are deployed is diminishing year by year.
In the ballistic missile sphere Russia possesses nothing new apart from the
Topol-M. The Navy's missiles will cease to exist as a class in the
foreseeable future, it seems, because since the death of V. Makeyev, the
general designer of the sea-launched ballistic missile [as published], the
sector has fallen into a very deep crisis.
Perhaps some kind of "wonder weapon" has appeared in Russia? Finally, it
cannot be ruled out that under the leadership of the people at the Ministry
of Defence today the prototype of a weapon has been developed that is based
on new physical principles and is without parallel in the world - something
along the lines of a "death ray". In that case it is necessary to
congratulate the scientists and the military people on their success but the
Russian public is entitled to expect intelligible explanations on the results
and possible consequences of the breakthrough that has been achieved.
********
#13
WPS Monitoring Agency
www.wps.ru
POLITICAL FORECASTS [press review]
MAY 20, 2003
THE PRESIDENT'S ANNUAL ADDRESS TO PARLIAMENT: WORDS, WORDS, WORDS...
"A president of lost opportunities." This expression was used in
one media article devoted to President Putin's annual address to the
Federal Assembly, which finally took place last week.
It is impossible to say that this event did not provoke interest
- on the contrary, the media described the whole ceremony with great
enthusiasm, not omitting the tiniest details.
Among other things, [Nezavisimaya Gazeta] reported that at the
entrance to the Kremlin's Marble Hall, where the President gave his
speech, Federal Guard Service employees examined the papers of the
Senior Deputy Speaker of the Federation Council, Valery Goreglyad, for
no less than 10 minutes... that Pavel Borodin spent a long time
telling jokes in the corridors to Dmitry Rogozin and Andrei
Mitrofanov... and when, before the President's appearance, the
national anthem was played in the hall, it turned out that Federation
Council Speaker Sergei Mironov, was the only one who knew the words.
And then the presidential address itself, as the [Vedomosti]
newspaper informed its readers, "was read out to echoing silence,
broken only a few times by restrained applause". The President had to
speak "to an absolutely silent hall, to an audience which expected a
great deal from the head of state, while at the same time not clearly
knowing what to expect".
Under these circumstances, according to observers, Vladimir Putin
looked like someone performing a task that was necessary, but not very
interesting.
Anyway, as [Vedomosti] observer Olga Romanova claims, "It was
noticeable that the President did not actually want to give the speech
at all." And his Administration, the author claims, did everything in
its power "to let people forget about the presidential address as
quickly as possible".
It is possible that the efforts of those surrounding the
President will not be in vain. Understandably, however, very few
politicians would agree of their own will to pass up such a unique
pretext for mingling with the media.
Representatives of all active forces of the political spectrum,
state officials, public figures, and of course professional political
scientists have already expressed their opinions about the
presidential address in all media, both electronic and print.
As always, it was the centrists that turned out to be the most
optimistic and to have very fitting reactions. As the [Gazeta]
newspaper reported, Boris Gryzlov, Interior Minister and leader of
United Russia, considers the call having been uttered in the
presidential address for "consolidation of the whole of our society"
to be the most important part. And also that for "mobilization of
intellectual resources".
And, of course, "the necessity for development of the party
system and for participation of parties in the formation of strategy
for the development of the State".
As one could have expected, the centrists in particular liked the
thesis on formation of the government by a parliamentary majority.
Gryzlov noted with pride that United Russia ideologues had given this
thought its birth (once again, that is, someone in the Administration
in the Kremlin).
As far as the painful topic of changing of the government is
concerned, the leader of United Russia touched on it with the greatest
possible grace: "The President has said that the government is
assessing the situation correctly, is making decisions correctly, but
does not show sufficient firmness in the execution of them."
Gryzlov's party comrade-in-arms and leader of the Unity Duma
faction, Vladimir Pekhtin, made a more precise statement about
changing of the principle for formation of the Cabinet. He called the
idea of "a government bearing political responsibility" exceptionally
important. The technical Cabinet existing today in Russia, a cabinet
"without a core of ideas", even staffed with "the most splendid
people", as Pekhtin emphasized in an interview for the newspaper
[Vremya Novostei], will unavoidably serve "the interests of
monopolists and the upper bureaucracy".
The leader of the Unity faction in his turn, and with obvious
satisfaction, remarked that many of the ideas of the presidential
address were heard first at congresses of United Russia. Overall, as
the Press noted at the end of the President's appearance, "The
centrists are celebrating victory."
In the meanwhile, the exultation of United Russia clearly struck
a raw nerve in its opponents from the Union of Right Forces (URF).
URF leader Boris Nemtsov even remarked that in his view, there
was a clear overstatement in the part of the presidential address
related to political circumstances. "It was more reminiscent of a kind
of election campaign speech in favor of centrist parties," Nemtsov
said. From the point of view of Nemtsov, the President - the guarantor
of the Constitution - "should be above parliamentary games on the eve
of elections - it was not worthy of him to lower himself to conflicts
between parties" (quoted from [Gazeta]).
In the opinion of [Kommersant], it was no coincidence that a
special section devoted to pre-election party developments was placed
at the very end of the presidential address. In this section, as the
newspaper considers, "Thoughtful Russians will be able to find
practically all that they need to know about the approaching
elections."
It was precisely here that the President revealed his party
sympathies, even if not mentioning actual names and titles of parties.
As Putin stated, Duma members "having the reputations of being
liberals and supporters of progressive economic theories" (there are
only two such factions in the Duma, [Kommersant] clarifies - the URF
and Yabloko) are causing displeasure in the Kremlin, because they
constantly "vote for laws which are detrimental to the federal
budget".
On the other hand, those who "publicly call entrepreneurs thieves
and blood-suckers" (the left, that is), are in reality engaged in
"shameless lobbying of the interests of major companies".
But then, the President has no such complaints about the
centrists - they are engaged in constructive work - the putting into
reality of an "everyday connection between the government and
society". Something not surprising for a party which is run by direct
subordinates of the President, [Kommersant] stressed.
Meanwhile, Irina Khakamada, of like mind with Nemtsov, stated at
the joint meeting of the Civic Debate and Open Forum clubs that the
thesis on formation of the government by a parliamentary majority
inserted in the presidential address was called forth in order to show
the public what kind of "political niche" Vladimir Putin intends to
occupy after 2008, as [Nezavisimaya Gazeta] reports.
It is obvious, you see, that for a politician in the full
blossoming of power, as Putin will be when finishing his second
Presidential term, the question will inevitably arise - what to do
now? Leading the Duma majority in a country having become a
parliamentary republic signifies keeping for himself the role of the
political leader also after his departure from the Presidential post.
Such a scenario was put a long time ago to the President by the head
of the Effective Policy Foundation, Gleb Pavlovsky, who was able, as
people say, to restore his influence in the Kremlin fully.
Admittedly the leader of Yabloko, Grigory Yavlinsky, long having
been considered a politician well informed about the moods existing in
the Kremlin, assesses the idea of a government formed by a
parliamentary majority skeptically. In Yavlinsky's view, this idea at
best will help to draw more electors out to the Duma elections.
"The turn-out may be more significant, if a part of the
electorate believes that the composition of the government depends on
them," as the publication [Gazeta] presents Yavlinsky's words,
"although later people will realize that that's not how it is".
The well-known political scientist Andrei Ryabov, however,
weighing up the prospects of the foundation of a "government bearing
political responsibility", stated to [Gazeta] that, to all
appearances, this idea is gradually "starting to win over the Kremlin
masses". Nevertheless, in Ryabov's opinion, for the time being there
are no particular reasons for rejoicing for the pro-Kremlin parties:
"The President didn't say: 'We have made a decision'. What was
expressed was a certain positive attitude to the idea, which sometime
or other will be put into practice. Not tomorrow and not the day
after, however.
For there are absolutely concrete apprehensions: it is clear
that, if the elections, contrary to expectations, are won by the
communists, talk about governments formed by a parliamentary majority
will promptly stop.
Overall, Ryabov is extremely reserved in his assessments of the
presidential address. By his definition, it is "an election campaign
document, very cautious, and as vague as possible", dedicated
basically to "a strategy framework", basically setting global targets
- "like the overcoming of poverty" or the doubling of GDP by 2010. And
curiously, the author remarks, any kind of directed criticism is
totally absent from it - including criticism directed towards the
government as well.
Naturally, this kind of cautiousness of the President could not
please the left. Gennady Zyuganov spoke out in his traditional style.
In his words, "The country has found itself in a management hole,"
and, if the course is not changed, there will be no way to think, not
just about the doubling of GDP, but also about preserving the level of
the economy today.
"Over the last three years," Zyuganov said, "the rate (of
economic growth - M.K.) has slid from 10% to 4%, and we are still
crashing into that hole. The general impression you get from the
presidential address - we are crawling along the old course. If there
really is stabilization - then it's only the stabilization of
stagnation."
It must be said that the left and the right were united in the
same kind of criticism of the presidential address for being
unspecific and a general "sloganistic" tone. Boris Nemtsov spoke out
in this vein no less harshly than Gennady Zyuganov: "The words are
sort of all the right ones, but who will do this and how - is a
mystery."
In fact, in each annual address, Nemtsov, the thought is
invariably present that, "Russian bureaucracy is weak, greedy, and
uncompetitive. Every year it is confirmed that nothing changes in this
sphere. And who, you may ask, will lower taxes, put the housing sector
into order, and modernize the Armed Forces? Regrettably, I didn't hear
any prescription from the President for how to carry out a repair of
the government machine."
The newspaper [Kommersant] remarks that out of the three large-
scale tasks set in the economic part of the presidential address -
doubling the GDP by 2010, a struggle against poverty, and
administrative reforms - the first two ("practically in the same
formulation") are set and being resolved in China.
Observer of the newspaper compares the course of Russian and
Chinese reforms. According to his calculations, in order to double the
Russian GDP within the scheduled time, the industrial growth in the
country should make up at least 8.5-9% a year. Presidential economic
aid Andrei Illarionov says this level is quite achievable for Russia.
However, Yevgeny Yasin strongly objects to him - while the
[Kommersant] newspaper recognizes him as the most competent Russian
economist. Yasin says the president's plans for a sped up economic
growth are unrealistic. What is the truth?
Illarionov refers to the Chinese experience of accelerating the
industrial growth and explains it with a much lower state spending in
the GDP. By the way, the matter in question is the living standards in
China, which is still lower than Russian. According to Illarionov this
is the clue to the "Chinese phenomenon".
[Kommersant] says, from this standpoint the 32% real income
growth in Russia which causes the president's pride should be admitted
a "mistake and populism".
In fact, if GDP growth has gradually slowed down over past years
while real incomes have increased, the sad conclusion is that real
incomes in Russia are growing faster than the labor productivity. That
is a very shaky basis for a rapid economic breakthrough.
Moreover, Vladimir Putin poses the objective to fight poverty -
[Kommersant] notes that at least a quarter of the Russian population
live below the poverty line - now, without waiting for the GDP to
double.
This is just one discrepancy of the presidential address. Nikolai
Vardul also points out another discrepancy. He notes that the success
of the Chinese economy has one more explanation: the structure of the
Chinese export is much more modern that Russia's oil, gas, and metal
exports. The Russian economy urgently needs a structural change, re-
orientation on processing industries. Undoubtedly, the expected fall
of oil prices after the Iraqi crisis will also contribute to it. Is
such a structural change possible with a simultaneous 8.5% industrial
growth? Nikolai Vardul think it is difficult to believe, especially if
remember that until recently Russia's economic stability has been
based on high oil prices.
According to the author, the requirement to double the GDP is
much more political rather than economic. "First, it is a timely
election slogan - along with the call to fight poverty, it will
mobilize voters."
Besides, this objective is a perfect way to strengthen the
political discipline: it is not an accident that the president has
called on "all authorities to consolidate" in order to fulfill the
objectives.
Third, but also very important, it is a reliable lever to expert
pressure on the government. According to Nikolai Vardul, the president
has reminded Prime Minister Mikhail Kasianov of his notorious
rejection of "breakthroughs", "With such a fear for responsible
choices, we cannot move forward quickly and qualitatively."
However, as Duma deputy Nikolai Ryzhkov writes in the [Vedomosti]
newspaper, the part of the presidential address devoted to the
government has not met the general expectations, "Commentators
unanimously believes that the president will sharply criticize Mikhail
Kasianov's government for failing the administrative reform."
Although the president demanded once again to reduce the
bureaucratic apparatus and its excessive authorities, he did it rather
gently. From now on, Ryzhkov says, the "government together with the
multimillion and utterly corrupted Russian bureaucracy can breathe
with relief - there are no traces left from the president's last
year's anti-bureaucratic and anti-corruption pathos. Moreover, he did
not say the word "corruption" at all.
According to Ryzhkov, the president's attempt to report
"achievements" has failed due to generally known factors of slowed
economic growth, its dependence on the foreign economic situation, and
the reduction of the general competitiveness of the Russian economy.
As a result, the government has nothing to boast about: what can
be considered the achievements of Putin's three-year presidency has in
fact been a sudden result of an accidental coincidence of favorable
circumstances.
That is why, Ryzhkov says, the program part of the presidential
address is actually suspended in the air. "Who is unwilling to return
Russia to the number of the richest, strongest, and the most developed
countries of the world?" Who will reject the opportunity to double the
GDP by 2010, dispute the necessity to fight poverty and to modernize
the army? The author notes sadly, the "Complication is that the
presidential address has not even outlines how to do it."
Vladimir Pribylovsky, president of the Panorama Information-
Research Center, was much harsher in the [Novaya Gazeta] newspaper.
"Almost three and a half years of Putin's presidency, starting from
January 2000, have been lost time for Russia, the time of lost and
wasted opportunities."
According to the author, there are barely any "useful" things
made over this period "except for the flat income tax scale."
Naturally, the president cannot admit it. That is why in the
presidential address every issue was followed by a statement of some
success, mostly imaginary.
From the viewpoint of Ryzhkov, if push aside the intricate and
unneeded rhetoric, the position of the president is as follows, by the
end of this first presidency Vladimir Putin has realized that "the
reforms are being dramatically slowed down by the passivity of the
population and vehement resistance of the bureaucracy and certain
interested groups". That is why he has decided to increase the
political pressure on the state apparatus using parties for forming
the government.
However, if remember that the only chance to participate in the
forming of the parliamentary majority government has fallen to the lot
of the United Russia - the clone of the presidential administration -
it is clear that the cabinet of ministers will still be formed by the
Kremlin.
Nikolai Ryzhkov writes, "The circle has closed and we will return
to where we started. While the president demonstrated very
convincingly that this road is impassable."
However, the vagueness and allegories of the presidential address
noted by the majority of the media gives much space for different
interpretations - which can always be denied if necessary.
In particular, the passage on the parliamentary majority
government seems to be accepted by commentators not quite adequately.
[Nezavisimaya Gazeta] says the majority has decided that this
government will be formed right after the parliamentary elections, at
the beginning of the next year. However, later deputy head of the
presidential administration Vladislav Surkov explained that the new
cabinet of ministers can be formed only after the presidential
elections, no earlier than in the middle of the next year.
In fact, it would be rather strange for the Kremlin to give
favorable starting opportunities for such a well-known and easy to
promote politician as Mikhail Kasianov on the threshold of elections.
At the same time, [Nezavisimaya Gazeta] noted, some certain terms
of the military reform have been mentioned: it was promised to reduce
the army service to 12 months from 2008. The paper adds, "The issue is
that since then, if there are no changes to the Constitution, a
different president will rule the country and he will not have to take
the responsibility for the election theses of his predecessor."
[Nezavisimaya Gazeta] draws the attention of its readers to a
certain "patchiness of the text". For instance, it does not say a word
about the union with Belarus and the "alliance of the four - Russia,
Belarus, Ukraine, and Kazakhstan". At the same time, it mentions the
European-Asian economic alliance, which is a much less important
organization according to the majority of experts.
There are other oddities as well. At the recent meeting with
leaders of the Duma factions, the president made it clear to Boris
Nemtsov that he supported the plan of the military reform proposed by
the Union of Right Forces. However, the presidential address presented
the reform version proposed by the defense Ministry and recently
criticized in the government.
At the same time, [Nezavisimaya Gazeta] says these discrepancies
are easy to explain, "The text made by the president's speechwriters
reflects the hopes and ideas of those who have more access to the
Kremlin."
Overall, [Nezavisimaya Gazeta] sums up, few experts expected the
presidential speech be "by genre and the essence so close to an
election speech rather than a routine plan of work for the year."
The [Vedomosti] newspaper has its own opinion. According to the
newspaper - and regardless of the expectations of the majority of
people - on the threshold of elections, Putin talked to the country
"not as the most likely winner of these elections seeking sympathies
of the electorate". According to [Vedomosti], the president addressed
the people of Russia as "a claimant for one of the first places in the
history of the country if not the top one." To be more precise, he
talked as a leader of the country under whom the country will "make a
historical breakthrough like the one under Peter the Great and Josef
Stalin." The only difference is the absence of blood oceans that were
spilt by the aforementioned historic figures.
From the viewpoint of the newspaper, the parallel is evident:
under Stalin as well as under Peter the Great, Russia broke free from
its external enemies. A similar process is taking place at present -
only the methods of fight have changed from military to economic ones.
Current Russia's competitors are not trying to annihilate the country,
"it is enough for them to push Russia's companies from everywhere
where Russian goods and services may be demanded by consumers."
[Vedomosti] says Putin hopes that Russia will make a
modernization breakthrough in the conditions of civil peace, as the
Russian people are interested in the modernization, "regardless of
class or party membership". This explains the mobilization rhetoric of
the presidential address.
However, this also contains a discrepancy noted by many observers
- a discrepancy between the essence of the planned reforms and the
mobilizational, entirely Soviet-style, methods for their realization.
The president proposed to consolidate political, economic, and
even bureaucratic forces around the idea to restore the power of
Russia. In fact, he has proposed a consolidation around himself,
Sergei Chugaev says in the [Komsomolskaya Pravda] newspaper. How does
this idea get along with the plans to democratize the society?
Apparently, as well as the democratic idea to form the parliamentary
majority government get along with the practice of forming this
government with the help of political consultants from the
presidential administration.
However, there has long been a term for this phenomenon: "managed
democracy" - another Russian oxymoron. Or, in simpler terms, a
fantastic story...
Mavra Kosichkina
(Translated by Arina Yevtikhova and Alexander Mazzucchelli)
*******
#14
The Electronic Telegraph (UK)
May 21, 2003
Obituary of Alec Flegon
Emigre publisher who won damages for libel after Solzhenitsyn claimed that
he had worked for the KGB
ALEC FLEGON, who has died aged 79, was a controversial London-based
publisher of samizdat literature and Soviet trade directories during the
Cold War.
An irreverent and irrepressible emigre from Romania, Flegon was the first
to publish Mikhail Bulgakov's Heart of a Dog and Alexander Solzhenitsyn's
One Day in the Life of Ivan Denisovich; he later published four
Russian-language versions of Boris Pasternak's Dr Zhivago, including one
under a Moscow imprint, lest Russian buyers be accused of importing
anti-Soviet literature. He paid the authors no royalties but said he was
helping them by bringing their work to wider attention. Solzhenitsyn, for
one, saw things differently, and pursued Flegon in the courts for piracy.
In the early 1960s, Flegon also produced the first Soviet Trade Directory
(described by the Soviet Chamber of Trade as a "work of pure imagination"),
followed by Soviet Trade Techniques, Directory of the Soviet Engineering
Industry and Directory of Soviet Hospitals. More dangerously, he smuggled
out Soviet telephone directories to sell in London for pounds 100 a copy.
Although he maintained that his books were designed to promote trade with
the Soviet Union, he was asked to resign from the Society for Cultural
Relations with Russia in 1965.
Resented by some pillars of the Russian emigre community, Flegon also had
many admirers, including grateful readers and those who worked with him.
His remarkable success at repeatedly getting manuscripts out of the Soviet
Union led to the widespread view that he must have had contacts in the KGB;
but in 1987 he won pounds 10,000 libel damages in the High Court from
Solzhenitsyn over an allegation to that effect in the Russian version of
The Oak and Calf. Unable to afford a barrister's fees, Flegon conducted his
case himself, in faltering English.
On the issue of piracy, Flegon argued Solzhenitsyn had broken the copyright
laws of the Soviet Union by publishing the book abroad, so the copyright
"is not valid in any country which has diplomatic relations with the Soviet
Union". But the courts sided with Solzhenitsyn, and in 1971 granted an
injunction to stop Flegon publishing August 1914.
Previously a great admirer, Flegon became one of Solzhenitsyn's severest
critics, especially after The Gulag Archipelago, a history of Stalin's
concentration camps, which Flegon published under the imprint of the Moscow
State Publishing House, with the seal "approved by the Communist Party of
the Soviet Union and the Institute for Marxist-Leninism". To Solzhenitsyn's
fury, Foyle's bookshop in London sold Flegon's pirated version after the
official ones had run out.
Flegon subsequently went on the attack in his book About Solzhenitsyn
(1981), in which he vilified the Nobel prize winner and took him to task
for alleged inaccuracies in The Gulag Archipelago; Flegon based his claims
on correspondence with other survivors. "I'm as anti-Communist as he is,"
said Flegon, "but I don't believe you can fight one lie with another."
Oleg Flegont (he dropped the "t" after defecting in 1956) was born on
January 20 1924 in a village in Bessarabia, a region which was then part of
Romania. His father was in charge of local schools, his mother ran estates
for the local landed gentry. Young Alec made a point of switching school
each year, and in 1940, when the Russians invaded his homeland, he fled to
Bucharest. There he graduated in Literature from the Gorky Institute and in
Electro-Mechanical Engineering from the University of Bucharest, before
going to work for the Romanian Ministry of Agriculture. He was for some
time chief agricultural engineer on Romania's smallest collective farm,
which had one tractor. At the time of the Hungarian revolution, Flegon was
on holiday in Czechoslovakia and he asked that, to avoid the disturbances,
his tour party might return home via Vienna. There he seized his chance to
demand asylum. Planning to go to Canada to farm, he stopped off in London
and stayed. After a spell in a factory in Acton, he went to work for the
BBC's Romanian service.
In 1962 he set up Flegon Press in Greek Street, Soho, to publish a Russian
literary magazine, Student. After reading Solzhenitsyn's novella about life
in a prison camp in the Soviet magazine Novy Mir, he branched out into
books. "At that time Russian emigres wouldn't touch anything that had been
published by the official Soviet press," Flegon recalled. "They regarded it
as propaganda." A series of publishing coups followed, and in 1964 he
claimed to have discovered the underground bard Bulat Okudzhava, after
hearing a Soviet delegation whistling some of Okudzhava's tunes.
Solzhenitsyn was not the only author to allege breach of copyright by
Flegon. In 1967 Stalin's daughter, Svetlana, obtained an injunction to
prevent him from publishing her memoirs, Twenty Letters to a Friend, which
Flegon said he had bought for pounds 5,000 from an English businessman
recently returned from the Soviet Union. "He did not tell me from whom he
bought the manuscript, and I didn't ask." Besides his publishing
activities, which also included music and books about sex, Flegon helped
out with Russian trade delegations.
After the break-up of the Soviet Union, Russian publishers sprang up in his
mould. Beyond the Russian Dictionary, his lexicon of swear words, has been
regularly reprinted in Russia over the years, without any royalties being
paid to the author.
Alec Flegon's first marriage, to a Romanian, was dissolved after his
defection. He married secondly, in 1964, Iris Renner-Gee. That marriage was
also dissolved. He had no children.
In later years he suffered from Alzheimer's Disease. He died at Ealing
Hospital on May 15.
*******
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