Johnson's Russia List
#7193
22 May 2003
davidjohnson@erols.com
A CDI Project
www.cdi.org

[Contents:
  1. Interfax: Russia's GDP could triple by 2020.
  2. Russian Regional Report: POLITICAL HUMOR AND DEMOCRACY.
  3. AP: Putin: Russia Eyes Cooperation With U.S.
  4. Nezavisimaya Gazeta: Alexei Meshkov, THE G-8 SHOULD NOT REPLACE THE 
UNITED NATIONS. But participation expands Russia's involvement in global 
affairs.
  5. RIA Novosti: HEAD OF RUSSIAN CENTRAL ELECTION COMMITTEE GIVES ADVICE 
TO PARTIES IN VIEW OF ELECTION CAMPAIGN.
  6. Moscow Times: Nikolai Petrov, Ominous Silence on Federal Reform.
  7. The Times (UK): Robin Shepherd, Capital of tsars restored on tide of 
sleaze. (St.Petersburg)
  8. RIA Novosti: RUSSIA BECOMES ONE OF MOST ATTRACTIVE MARKETS FOR LARGE 
INTERNATIONAL INVESTORS.
  9. Reuters: Russia could be on cusp of mortgage boom.
  10. Dow Jones: Geoffrey Smith, Russia's UES Shares Soar As Strategic 
Buying Resumes.
  11. Moscow News: Alexander Soldatov, Patriarch-in-Waiting? The issue of 
successor to Patriarch Alexy has been gaining new urgency within the 
Russian Orthodox Church (ROC). One likely hopeful is Metropolitan Cyril. 
  12. The Times (UK): Robin Shepherd, Putin's driving ambition links Moscow 
with Vladivostok along longest road.
  13. pravda.ru: The Caucasian War Was Over 239 Years Ago, But It Is Still On.
  14. New York Review of Books: Christian Caryl, The Real St. Petersburg.
Window on Russia.]
 
*******

#1
Russia's GDP could triple by 2020

MOSCOW. May 22 (Interfax) - In accordance with the optimistic scenario of
Russia's economic development set forth in the energy strategy for the
period to 2020 approved by the government today, Russia's GDP will increase
by 230% by 2020 against 2000, Russian Deputy Prime Minister Viktor
Khristenko told reporters. 
   In accordance with the moderate scenario, Russia's GDP will increase by
150% by 2020. 
   "By 2020, Russia's power consumption will go down 40-50% in accordance
with the optimistic scenario," Khristenko said. The decrease in power
consumption is one of the key elements of Russia's energy strategy, he said. 
   Even with such "large-scale tasks, the structure of the energy balance
will not change considerably," he said. In particular, the share of gas in
the fuel consumed in Russia will remain at the current level of some 50%,
he said. 

*******

#2
From: r-r-r@sipo.gess.ethz.ch (Russian Regional Report)
Subject: Russian Regional Report: 21 May 2003
Date: Wed, 21 May 2003 

Russian Regional Report
(Vol. 8, No. 8, 21 May 2003)
A bi-weekly publication jointly produced by the Center for Security
Studies at the Swiss Federal Institute of Technology (ETH) Zurich
(http://www.isn.ethz.ch) and the Transnational Crime and Corruption
Center (TraCCC) at American University, Washington, DC
(http://www.American.edu/traccc)

POLITICAL HUMOR AND DEMOCRACY

JOKES INCREASE AS THE REGIME CLAMPS DOWN. Russians have always had a
cynical attitude toward politicians. During the Soviet era, the leaders
called on their people to do things that they had long since stopped
believing in. Moreover, the men at the top had grown decrepit and
slipped into senility, lacking even the ability to combine two words
without a written text in hand. Their very appearance provoked a form of
humor driven by feelings of contempt and pity.
	Unfortunately, this cynicism could not be expressed through open
protest. Thus was born the practice of telling jokes about the country's
bosses in the kitchen, a feature of all totalitarian societies. 
	Many researchers see this cynicism as a destructive
characteristic of the Russian intelligentsia, which is inclined to
oppose anyone in power. Such nihilism weakens any system. Some believe
that the cynicism and lack of patriotism among the intelligentsia was
one of the main causes of the 1917 revolution.
	Admiration for politicians has not grown in the post-Soviet era.
The corruption, electoral manipulations, and incompetence of those who
replaced the Communists are too obvious. Therefore, it is completely
understandable why Russians have a belief that politicians and sperm
share a common characteristic in that they both only have one in a
million chance of becoming human. 
	During the period of the greatest freedom in the early 1990s,
political jokes essentially vanished in Russia. The very reason for
their existence disappeared. It was no longer necessary to whisper
together in the kitchen if people could go out onto the street and shout
whatever they felt like. Therefore, it is possible to argue that the
number of jokes about one or another leader is an indicator of the
degree of freedom under them. 
	In this regard, Vladimir Putin is threatening to break the
record set by the all-time joke leader - Leonid Brezhnev. But, if jokes
about Brezhnev were mainly making fun of his senility, then Putin is
generally the positive hero of the jokes about him. Previously, Stalin
and Yurii Andropov featured favorably in such stories. This correlation
is something else to consider in examining the mysterious Russian soul,
which simultaneously, with the very presence of jokes, protests against
the regime and apologizes for its chief. In doing so, the focus was
usually on brutality. One characteristic joke about Andropov notes that
after Brezhnev's death, Andropov sent out Stalinist-style squads to
movie theaters looking for people who were supposed to be at work.
Andropov dreamed that Brezhnev's ghost came to him and said, "Be
careful, Yurii Vladimirovich! The people will not follow you!" "Then
they will follow you, Leonid Ilich!" Andropov answered Brezhnev.
	Jokes about Putin began to appear in the middle of his term and
reached a peak when he launched a crackdown on NTV in 2001, which in and
of itself was symptomatic. These jokes can be divided into three main
groups: Putin's past (Petersburg and the KGB), Putin-style freedom and
democracy, and Putin the person. 
	Initially, jokes focused on Putin's victory in the 2000
election. According to one, the Americans sought help from the chairman
of the Russian Central Electoral Commission Aleksandr Veshnyakov when
they could not determine a winner between US presidential candidates
Bush and Gore. After conducting a thorough study, Veshnyakov declared
Putin the winner. In another joke, a major advised his soldiers, "If you
are for Putin, put a check next to his name on the ballot. If you are
against him, place an "x" in that spot." 
	A more philosophical approach to the elections featured a crow
and a fox.

A crow is sitting on a tree branch with a piece of cheese in his mouth.
Then a fox walks past:
"Crow, Crow, are you politically sophisticated?"
The crow remains silent.
"Crow, Crow, are you going to vote in the presidential elections?"
The crow again remains silent.
"Crow, Crow, will you vote for Putin?"
The crow could not restrain himself, opened his mouth, and cried,
"Yeess!" The cheese fell out of his mouth, the fox grabbed the cheese,
and ran away satisfied. The crow sat on the branch and thought, "If I
had said 'no,' what would it have changed?!"

	It is interesting to compare this joke with a similar one from
the Brezhnev era (when there was only one candidate on the ballot).
Brezhnev goes to a farmer's market and sees a Georgian selling a
watermelon. "Choose!" the Georgian suggests to Brezhnev. "How can I
choose, when you have only one watermelon?" Brezhnev asks dumbfounded.
"There is only one of you and we choose you," the Georgian answered.
Comparing this joke with the one about Putin shows that current
conditions require a much more subtle philosophical examination than one
that focuses on elections without choices and empty shelves.
	Putin's previous work in the KGB is fertile grounds for jokes.
In one, he arrives one hour late in Berlin for a meeting with Schroeder
and announces with pride that he managed to lose his tail. In another,
after the recent attack on the Pentagon burned many documents, Putin
expressed his condolences to Bush and offered to replace the lost
documents with copies he had. (Jokes about September 11 appeared right
away in Russia, but generally are considered improper in the US). 
	Jokesters generally give Putin high marks for his foreign policy
successes (especially in comparison to other presidents, such as
Ukraine's unpopular Leonid Kuchma):

Putin is flying in a plane with Belarus President Aleksandr Lukashenko.
Lukashenko asks Putin:
"If we die in a plane crash, where would they shed more tears -- in
Russia or Belarus?"
"In Ukraine."
"Why?"
"Kuchma is not with us!"

Russians also like to compare their president to the American president.
One such joke plays off of the idea that everything in Russia is the
opposite of the way it works in the rest of the world. "Bush won the
elections to start a war. Putin started a war to win the elections." 
	Jokes about Putin's conceptions of civil society abound. Here
there are many analogies with the jokes about Andropov. For example, one
wag has it that Andropov loved to collect jokes about himself,
ultimately filling twenty prison cells.
	Once, Putin was asked if he planned to develop democracy in
Russia. "I do," he said, "only this democracy will differ slightly from
the democracy in the west. For example, in the way that an electric
chair differs from a regular chair." Another joke has a journalist
asking, "Mr. Putin, do you intend to follow the development of civil
society in Russia?" Putin replied, "I haven't followed anybody for ten
years!"
	These are just a few examples of the enormous number of jokes
about Putin currently circulating in the country. If earlier, Lukashenko
had the most jokes told about him among the current Slavic presidents
(not surprisingly given the repressive nature of his regime), then now
Putin is likely to pass him. This trend suggests that the center of
political life has again returned to the kitchen. Whether Putin is
responsible for this change or it is simply a swing in the pendulum away
from the wide-open freedom of the early 1990s back to stability is a
question for a future research project. But the fact remains: political
jokes are again popular in Russia. Such barbed commentary was always an
indicator that something was not quite right with democracy in the
country. - Petr Kozma in Moscow

*******

#3
Putin: Russia Eyes Cooperation With U.S.
May 22, 2003

MOSCOW (AP) - In a sign that Moscow wants to set the stage for a summit,
Russian President Vladimir Putin sent a note to President Bush saying that
Russia is interesting in expanding cooperation with the United States in
all directions, the Kremlin said Thursday.

There is ``much more substance uniting us than issues over which
disagreements remain,'' Putin wrote in the letter, which was delivered to
Bush by visiting Russian Defense Minister Sergei Ivanov.

The note emphasized that ``the Russian-American strategic partnership meets
the interests of the entire international community, because it works for
the benefit of global stability and security,'' the Kremlin press service
said.

The two nations' relations soured over Iraq, but Russia has shown
increasing signs of trying to mend ties, particularly ahead of the
Putin-hosted presidential summit in St. Petersburg on June 1.

On Wednesday, Russian Foreign Minister Igor Ivanov said Russia would
support the U.S.-sponsored U.N. resolution on Iraq in the Security Council
on Thursday. Russia's pledge of support was in strong contrast to the
steadfast opposition ahead of the U.S.-led war.

Also this week, Defense Minister Ivanov signaled that Russia was ready to
start talking with the United States about cooperation on missile defense,
a key military aim of the Bush administration. 	   

*******

#4
Nezavisimaya Gazeta
May 22, 2003
THE G-8 SHOULD NOT REPLACE THE UNITED NATIONS
But participation expands Russia's involvement in global affairs
What does Russia gain from membership of the G-8?
Author: Alexei Meshkov
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
LEADERS OF THE WORLD'S EIGHT MOST ADVANCED NATIONS ARE MEETING IN 
EVIAN, FRANCE, ON JUNE 1-3. THEIR ANNUAL SUMMIT IS TRADITIONALLY 
PRECEDED BY A MEETING OF G-8 FOREIGN MINISTERS - AND THAT MEETING 
OPENS IN PARIS TODAY.

     The establishment of the G-8, including Russia, is one of the 
most vivid symbols of overcoming the global political and ideological 
divisions of the Cold War era. It confirms that radical changes have 
taken place around the world, that Russia has an entirely new 
relationship with its partners, and that democratic changes and 
economic reforms in Russia are irreversible. The G-8 Kananaskis summit 
even released a joint communique on Russia's role in the organization, 
and voted to have Russia chair the summit in 2006.
     What does membership of this informal club give Russia? First and 
foremost, activity within the G-8 expands Moscow's abilities in global 
politics. Russia and other G-8 members work together on a broad range 
of foreign policy, socio-economic, environmental, humanitarian, and 
other issues shaping the world.
     Needless to say, neither Russia nor other countries view the G-8 
as some sort of global government. It should not - and cannot - 
replace the United Nations with its Security Council. At the same 
time, the G-8 plays the role of driving force in a number of major 
spheres for the international community. It is an active generator of 
ideas. Moreover, its contribution to solutions to a great many key 
international problems cannot be overestimated.
     The recent war in Iraq placed the world at a crossroads, facing a 
choice which will define the future world order. The choice is as 
important for the G-8 as it is for the rest of the world. Will the G-8 
become an informal global ministry for emergencies and post-conflict 
management? Or will it retain the role of a forum where collective 
solutions to international problems are found on the basis of 
democratic principles?
     Russia is convinced that solutions to the problems the 
international community is facing should be sought collectively. The 
events in Iraq are further evidence for the priority of cooperation - 
within the framework of the G-8 as well - in strengthening 
international security and stability. Moreover, all tasks of stable 
global development which the G-8 traditionally handles should aim at 
maintaining peace and security around the world.
     New challenges are coming to the foreground now that the threat 
of a global nuclear conflict is over. The challenges are global in 
nature: international terrorism, trafficking, organized crime, illegal 
arms deals, illegal immigration, proliferation of weapons of mass 
destruction, financial-economic and other crises, threats to the 
environment, and so on.
     The G-8 can play a significant role here. It may be added that 
our G-8 partners supported Russia's draft resolution at the UN General 
Assembly on establishing a global system of dealing with new 
challenges and threats, adopted last December.
     The forum is also active in the sphere of arms control and 
nonproliferation of weapons of mass destruction. The Kananaskis summit 
agreed to find $20 billion for Russia over the next decade for 
dismantling its weapons. To be more exact, Russia's priorities in this 
sphere include chemical disarmament and dismantling old nuclear 
submarines.
     Russia places considerable importance on its dialogue with G-8 
partners on key issues in global economics. Recognition of Russia's 
growing role as a factor in the stability of economic development and 
the chance to analyze global economic processes are of paramount 
importance for Russia. It also helps to optimize Russia's economic 
policy. Cooperation with G-8 partners aims at integrating Russia into 
the global economy and international trade.
     Complete integration into G-8 financial and economic structures 
is a priority for Russia. (For the time being, these structures 
usually operate in G-7 form.) It should be achieved as soon as 
possible, because Russia is to chair the G-8 in 2006, and this 
position confirms that Russia is a key participant in the processes of 
developing international cooperation.

*******

#5
HEAD OF RUSSIAN CENTRAL ELECTION COMMITTEE GIVES ADVICE TO PARTIES IN VIEW OF 
ELECTION CAMPAIGN 

MOSCOW, May 21. /From RIA Novosti correspondent Nikolai Makarov/. - During 
the State Duma election campaign political parties should behave decently, 
checking their actions against the election legislation, said chairman of the 
Russian Central Election Committee Alexander Veshnyakov in a conversation
with 
journalists. 

"In this case, no party, irrespective of its name and programme, will have 
any problems," he emphasized. Veshnyakov recalled that in compliance with the 
amended election legislation, there was an exact mechanism of
accountability for 
violations in pre-election propaganda and financing of the campaign. 

"If someone is too easy about the procedure of financing the election 
campaign, they may get in serious trouble," he pointed out. 

In the middle of June the Central Election Committee intends to hold a 
regular meeting with leaders of some political parties to discuss the
procedure of 
pre-election propaganda and financing the campaign, the chairman said. 

The elections to the State Duma, the lower chamber of the Russian parliament, 
are due in December. 

********

#6
Moscow Times
May 22, 2003
Ominous Silence on Federal Reform
By Nikolai Petrov  
Nikolai Petrov, head of the Center for Political and Geographical Research,
contributed this comment to The Moscow Times. 

An attentive reader of the president's address might note that it mentions
neither federalism nor federal reform directly. The federal districts come
up once in passing, presidential envoys do not get a mention at all and the
Federation Council itself gets a nod only when the president addresses his
audience. And barely a word is said on municipal reform. 

There is something mysterious in this pattern of omission, especially if
one takes into account that at the end of April, literally right before the
address was penned, the president met with all his envoys and with the
leaders of the Federation Council. At the first meeting, having thanked all
his appointees for their work, Putin described the tasks they still faced
-- which included introducing stricter oversight of state spending and
switching regional parliaments to the party-based distribution of seats. At
the second meeting, he noted the Federation Council's importance as a
filter for flawed laws, the passage of which was "dictated by local or
corporate interests."

One possible explanation for dropping federal reform from the long
presidential list -- which included military, administrative and tax
reform, economic reform, land reform, pension reform, reform of natural
monopolies and communal housing -- could tentatively be dubbed the
"phenomenon of the Sahara lumberjack." The old joke goes like this: After
its victory in an international wood-chopping competition, a team from the
Sahara desert is asked how they could have won, given that there is no
forest in the Sahara. One of the team members, eyes lowered, responds:
"There's no forest now." 

The same idea is expressed a little more harshly in the saying, "You don't
discuss rope in a house where someone hanged himself." In other words,
federal reform has come to its logical end -- the dismantling of
federalism, "keeping the state in one piece despite its immense size,"
re-establishing its unity. As a result, the Russia of the president's
address appears to be a tightly centralized state.

Another explanation is also possible: Federal reform continues, but since
it is directed first and foremost against independent regional leaders,
specifically against those -- as a recent United Russia conference showed
-- on whom the Kremlin is placing its bets, the authorities decided not to
"spook the geese" before the elections. In this case, when the president
says that work to delineate powers between the center and the regions, as
well as "to create viable and financially secure local government," has
only just begun, it can be considered a veiled threat. 

These explanations are not mutually exclusive, and the truth most likely is
to be found in some kind of combination. 

I would like to draw attention to another aspect: Federal reform as it was
being implemented was only partially about relations between the center and
the regions. It was primarily about power. And more about power at the
national level than at the regional level. And it is no coincidence that
Putin's presidency began precisely with this. By creating federal districts
that he fully controlled, Putin set the stage for taking control over the
military, security and law enforcement bodies -- first in the regions, then
in Moscow. In this sense, the changes of leadership in the Defense Ministry
and the Interior Ministry in spring 2001 and the personnel shake-ups in the
remaining "power structures" this spring are links in one chain, which
began getting strung together three years ago in May 2000. One can even see
a similarity between the creation of the districts "from nothing" and the
creation of new special services -- the Financial Monitoring Committee and,
now, the State Committee for Fighting Narcotics -- headed by former
colleagues of the president. 

Putin's trademark style of working with personnel is to create new
institutions that initially duplicate the functions of existing ones and
subsequently take power away from them. 

The recent replacement of Viktor Cherkesov with Valentina Matviyenko, like
Sergei Ivanov's transfer from the Security Council to the Defense Ministry
two years ago, could be evidence that the federal districts have to a large
extent served their purpose. At least their initial purpose, which required
the personal participation of generals loyal to Putin. Even if this is the
case, the districts will most likely not disappear, but the day-to-day work
with personnel -- particularly in the regional power structures -- will be
carried out at the level of the deputy presidential envoys, while the
envoys themselves become more like figureheads. Time will tell.

Overall, it can be noted that while the public part of the federal reform
-- i.e. the implementation of Dmitry Kozak's projects through the work of
the government and parliament -- has floundered, the less publicized
"presidential" part, involving establishing total control over the power
structures in Moscow and the regions, has been moving forward steadily. 

Take, for example, the past year: The Tax Police -- who had been well fed
by the governors ahead of elections -- was replaced with Viktor Zubkov's
"financial intelligence service" and Viktor Cherkesov's anti-drug agency.
At the same time, in every city and hamlet, the presidential envoys were
given supervisory offices, as well as coordinating centers masquerading as
so-called public reception points. Moreover, these receive autonomous
funding from specially created funds. But on these points the president's
address was silent. 

********

#7
The Times (UK)
May 22, 2003
Capital of tsars restored on tide of sleaze
From Robin Shepherd in St Petersburg
  
HANDS behind his back, head held high, the 10ft tall bronze statue of
Andrei Sakharov recently unveiled in St Petersburg was intended as a
shining symbol of the new Russia’s break with the old: the father of the
Soviet hydrogen bomb turned Nobel Peace Prize- winning dissident, honoured
in the month that this most political of Russian cities celebrates its
300th anniversary. 

Like many events attending the anniversary, however, it has not quite gone
according to plan. In a poignant snub to President Putin, as he welcomes
more than 40 heads of state in the city later this month, Yelena Bonner,
Sakharov’s widow, has objected to the statue. 

She says that Mr Putin’s increasingly authoritarian Government is an insult
to her husband’s most-cherished ideals. For a man whose watchwords were
peace, progress and human rights, the slaughter in Chechnya, she says,
would have been appalling. 

In one respect, however, the Sakharov memorial can be counted as a success.
It has, at least, been completed on time. While 7,000 workers toil day and
night inside scaffolding across the city, there are now real fears that
restoration work on some of the most famous landmarks, such as the Smolny,
St Isaacs and Kazan Cathedrals and the Mikhailov Castle, will not be
completed in time for the celebrations. 

The mooted reasons are as illustrative of modern Russia as the controversy
surrounding the Sakharov statue. 

The preparations have been dogged by corruption, disorganisation and
political infighting. Since the beginning of the year, 17 separate criminal
cases have been launched for embezzlement totalling £3.6 million. Another
£9 million has gone missing from the St Petersburg road fund. 

With a total budget of more than £480 million earmarked for restoration
projects over the past two years, the potential for corruption was always
going to be high. But Soviet-style bureaucratic inefficiency has intruded
as well. The Audit Chamber has said that, inexplicably, money allocated for
roads has been spent on buying foreign grass for lawns. 

No fewer than 28,000 passport and visa irregularities have been uncovered
in connection with illegal migrants in the city. As a result of the
discovery, workers on some of the restoration projects are being deported
at a time when the city needs them most. 

The darker aspects of modern Russia have even seeped into the preparations
for the anniversary, in the form of a power struggle between Mr Putin, St
Petersburg’s most famous living son, and the city’s Governor. Vladimir
Yakovlev came to office in 1996, ousting Anatoly Sobchak, Mr Putin’s
political mentor and the man for whom he worked after leaving the KGB. Mr
Putin has never forgiven him. In a move that has hampered co-ordination,
the ever-centralising President has sent a new envoy to protect the
Kremlin’s interests, showcasing her as a possible replacement in elections
due next year. Mr Yakovlev has accepted the inevitable. He has abandoned
plans to run again. 

Trapped amid the intrigue and the corruption are the five million people of
St Petersburg. They appear to be disillusioned. According to a recent
opinion poll, almost three quarters think that the preparations for the
celebration have been mishandled. 

“It’s all about lining people’s pockets. It’s all about power,” said
Nikolai Ivanovich, a redundant steelworker who now earns his living as a
taxi driver. “What is in it for us?” It is a gloomy appraisal for a
birthday party. But as St Petersburg celebrates its finest moment for
decades, the authorities have been anything but accommodating to the city’s
residents. There are rumours that locals in the city centre have been told
to stay indoors during the ceremonies for security reasons. 

There is a widespread feeling that the people have not been invited to the
party. “It is usual for us. We are not the most important people at this
event,” Marina Petrovna, a 45-year-old teacher, said as she stood outside
the Hermitage art museum. “Of course it’s nice that they’re doing the city
up, that has to be said.” 

It is easy to see what she means. The dark interior of modern Russia is
concealed in St Petersburg by the city’s outward splendour. Established in
1703, when Peter the Great laid the foundation stone for the Peter and Paul
Fortress, the city is a triumph of man over nature. It lies on the same
line of latitude as Alaska and the most southerly tip of Greenland. Built
out of swampland on the Neva River Delta, its palaces, fortresses and
churches stand on more than 40 islands linked together by drawbridges in
some places and picturesque, low-lying stone car bridges in others. The
centrepiece of the city, dubbed “The Venice of the North”, is the Winter
Palace, now home to the Hermitage. 

Lying at the bottom of Nevsky Prospekt, it was home to every Tsar of Russia
apart from Paul I until the Romanov dynasty was overthrown in February
1917. It is this mixture of awkward but spectacular geography,
architectural splendour and turbulent political history that gives St
Petersburg its unique sense of time and place. The seat of the Tsars and
the birthplace of global communism, it was here that almost a million
people died in the 900-day siege of the Second World War. 

Rising proudly out of the vaporous mists of the Neva, St Petersburg is a
testament to cruelty, suffering and heroism. Against such a backdrop, town
hall corruption, Russia’s legendary penchant for bureacracy and Mr Putin’s
machinations are unlikely to be quite enough to spoil the party. 
  
******* 

#8
RUSSIA BECOMES ONE OF MOST ATTRACTIVE MARKETS FOR LARGE INTERNATIONAL
INVESTORS 

LONDON, May 22. /From RIA Novosti correspondent Alexander Smotrov/. -
Russia is becoming one of the most attractive markets for large
international investors. 

This opinion was voiced in an interview with RIA Novosti by experts of the
London International Adam Smith Institute that on Thursday holds in London
an international conference titled "Investment in Russia: Blue Chips Today
and Tomorrow". 

The forum is meant to help potential investors to determine the most
perspective industries of the Russian economy and to better understand the
Russian business culture, the organizing committee reported on Wednesday. 

One of the conference's main tasks is to present the most advanced and
attractive for potential investors companies "presenting different sectors
of the Russian economy and not only the well-known oil industry," the
organizers explained. 

High-ranking representatives of Russian enterprises of non-ferrous
metallurgy, automobile production, food industry, energy and
telecommunications are expected to speak at the conference. 

The conference will discuss such issues as investment attractiveness of
Russian companies, new possibilities for investment in Russian consumers'
sectors, including food industry, retail trade and automobile production,
the possibilities of investment in the energy sphere and Russian
telecommunications. 

Apart from this, the forum's participants will give their assessment to the
foreign capital markets and determine the needs and outlook of Russian
enterprises. 

********

#9
FEATURE-Russia could be on cusp of mortgage boom
By Vlasta Demyanenko

MOSCOW, May 22 (Reuters) - The idea of taking out a loan to buy an
apartment would have been unthinkable 10 years ago for Russians used to
paying a tiny percentage of their earnings in state-subsidised rent.

Today new apartment blocks are springing up all over Moscow and bankers say
mortgages could become a multi-billion dollar market if people allowed a
desire to move out of crumbling old buildings with creaky plumbing and dank
stairwells to outweigh their fear of taking on new debt.

So far Russians have taken out only around $700 million in mortgage
credits, but President Vladimir Putin said at the start of the year that
mortgages should be one of the country's economic priorities.

"I think we are talking here about thousands of credits a year," said
Artyom Eiramdzhants, chairman of the PIK holding firm, which invests in
apartment construction in Moscow and has a mortgage programme of its own.

The Russian economy expanded 4.3 percent last year and the government hopes
for at least the same growth in 2003. Household incomes have nearly reached
pre-1998 economic crisis levels.

"Now we have the basic conditions to launch an effective mortgage system,"
Yelena Klepikova, vice president of the National Reserve Bank (NRB), told
Reuters.

"Stable borrowers have appeared, the legislative basis for mortgage lending
is finally being formed and potential investors who can become a source of
long-term funds are appearing."

NRB plans to launch a mortgage programme from May.

Only about 30 of Russia's 1,300 banks now offer mortgages with the leaders
being the country's largest, state-controlled bank, Sberbank, Raiffeisen
Bank of Austria and the Russian-U.S. bank DeltaCredit.

Bankers say only about 44,000 Russians have mortgages. Government research
shows millions of families need to move but only five to seven percent can
do so without borrowing.

Bankers say that five to 20 percent of households have enough post-tax
salary to satisfy a reliable borrower's criteria, although not all would
take on a credit burden.

PEOPLE SCARED OF DEBT, TAXMAN

"The main thing slowing the development of the market is people's fear of
taking out loans," said Raiffeisen bank board member Alexander Koloshenko.

"Secondly, not everyone wants to state their earnings for the previous
three years."

Many Russians and local companies prefer to hide their real salaries from
the taxman. It was only in 2001 that the income tax rate was changed to a
flat 13 percent from a progressive system with a top rate of 35 percent.

Firms also got a new, lighter payroll tax system that year.

While the three market leaders are ready to offer credits for 10 to 15
years, smaller ones, which have limited long-term funds, offer loans for
two to three years.

Eiramdzhants said these short-term credits suit Russians who are scared of
long-term debt.

"People like to try to repay credits as soon as possible and forget about
debt," he said.

Another factor slowing mortgage growth is Russian legislation which can
make it difficult for lenders to repossess a property even if its owners
cease to make interest payments, say bankers.

Russian mortgage borrowers cannot be thrown out of their homes if a child
under the age of 16 is living on the premises and it is the sole residence
of the owners.

Many banks say they do not have sufficient long-term resources and are
pinning their hopes on a new bill on mortgage-backed securities which the
lower house of parliament has passed in the first of three required readings.

The inflow of fresh money will allow banks to lower interest rates, which
at 10-15 percent a year are several times higher than in developed countries.

Government support for an influx of new companies could also cut rates by
several percentage points, bankers say.

"I am very optimistic about this business," said DeltaCredit president
Nikolai Chitov. "It is a much-needed service."

********

#10
Russia's UES Shares Soar As Strategic Buying Resumes
May 21, 2003
By GEOFFREY T. SMITH
Of DOW JONES NEWSWIRES

MOSCOW -- Shares in the world's largest electricity company, RAO Unified 
Energy Systems of Russia (R.UEN), broke through 20c for the first time in
three 
years, as strategic buyers jockeyed for position ahead of the monopoly's 
break-up.

UES shares rose 12.6% to close at 21.4c following a newspaper report of key 
changes to the company's long-term strategy document that will allow 
shareholders to use their holdings of UES shares as currency in auctions
for the 
company's lucrative generation assets.

Market participants and analysts said much of that buying appeared to come 
from the same strategic investors who appeared last fall. Speculative
domestic 
money, much of it freed up by profit-taking in oil and gas stocks, jumped on 
the bandwagon, they added.

The draft proposal on share-based auctions represents a
departure from the previously-proposed restructuring of UES, a
vertically-integrated company 51% owned by the Russian government.
According to Derek Weaving, an analyst with United Financial Group in London, 
auctions could greatly speed up the arrival of a competitive generation 
market and, consequently, the investment desperately needed to guarantee
Russia's 
future electricity supply.

Legislation passed last February meant that, when UES and its regional 
subsidiaries are broken up into generation, grid and supply companies, all 
shareholders have the right to receive pro rata allocations of shares in
what will be 
hundreds of new companies. The industry is then supposed to consolidate
through 
the free trade in these shares between portfolio investors and long-term 
strategic investors.

The drawback of that, said Weaving, is that the process might take five 
years, during which the state will remain the majority owner of almost all
the 
generation companies and, hence, unable or unwilling to compete with itself.

"Auctions could change that almost overnight," he said.

The most obvious beneficiaries of auctions would be strategic investors, who 
will get a more direct route to the assets they want most, and the
government, 
which will use the same mechanism to achieve its stated aim of increasing its 
stake in the Federal Grid Company to 75%.

However, portfolio shareholders may benefit too. UFG's Weaving says that over 
the last few months, strategic buyers of both UES and its regional 
subsidiaries, or energos, "have shown themselves willing to pay significant
premiums 
over fair value" for given assets. If they indulge that habit at auctions,
UES's 
remaining shareholders will be the winners.

The crucial point is whether the auctions will be well enough organized to 
guarantee competitive bidding.

Bill Browder, chief executive of Hermitage Capital Management and a long-time 
skeptic of the UES management team, acknowledged that, if organized properly, 
an auction system could benefit everyone.

However, he noted that the many variables in an auction, - timing, bidding 
conditions, eligibility and so on - make it difficult to create equal
conditions 
for all. Someone, generally, has a vital information advantage, he argued.

"The only base case we feel comfortable with is still pro rata distribution," 
Browder said.

UES chief executive Anatoly Chubais has twice presided over fiercely 
controversial privatizations with auctions at their heart - first, as head
of the 
agency that organized Russia's first privatizations in the early 1990s,
then as 
prime minister during 1996-7, when much of Russia's oil and minerals sector
was 
sold off at knockdown prices to well-connected insiders.

"Given Russia's track record with organizing and managing the redistribution 
of assets through the use of surrogates such as vouchers, we have little 
confidence in the fairness of such a process," Hartmut Jacob, an analyst with 
Renaissance Capital, said in a research note.

A UES official countered that the market's reaction to the draft is a clear 
vote of confidence. The stock has risen 27% since the newspaper Vedomosti 
published leaked details of the draft last Friday.

Speculation was intensified Wednesday by a report in the same newspaper 
suggesting that UES shareholders might also be allowed to take control of
its hydro 
power stations. President Vladimir Putin, however, has said these will stay 
at least 51% in state hands.

The auction proposal is incorporated in a new draft of UES's exhaustive '5+5' 
strategy document, mapping out a 10-year reform process for the whole of 
Russia's electricity sector. The document is due for discussion by UES's
board 
Friday.

********

#11
Moscow News
May 21-27, 2003
Patriarch-in-Waiting?
The issue of successor to Patriarch Alexy has been gaining new urgency within 
the Russian Orthodox Church (ROC). One likely hopeful is Metropolitan Cyril 
By Alexander Soldatov
 
What happened at a session of the ROC Holy Synod on May 7 has already been 
dubbed "staff revolution," which occurred almost at the top of the Church 
hierarchy. In a situation where the aged Patriarch Alexy II has been sick for 
more than six months now, rarely appears in public, and hardly ever holds 
services anymore, such radical reshuffles suggest that the issue of 
succession is very high on the ROC agenda.
Shakeup

The Synod made two key personnel decisions: Metropolitan Methodius (Nemtsov) 
was sent from Voronezh, where he had served for 21 years, to Kazakhstan, 
while Metropolitan Sergius (Fomin), head of the Moscow Patriarchate 
Administration of Affairs and the patriarch's de-facto deputy for 
administration, was sent to Voronezh, retaining his position as chief of the 
administration department. Other personnel changes are less conspicuous, but 
taken together, they greatly strengthen the position of Metropolitan Cyril 
(Gundyaev), a hierarch considered to be the most influential figure in the 
ROC, after the patriarch.

Such ranking hierarchs as Metropolitans Sergius and Methodius are rarely 
shuffled in the ROC. Under Alexy II (he has been patriarch for the last 13 
years), such high-level personnel changes have been made only once - 
immediately after the patriarch was elected.

So much in the lineup of forces within the ROC hinges on hierarchs of this 
caliber that disturbing the balance between them is fraught with a wholesale 
disruption of church life. Furthermore, high rank (say, the status as a 
permanent member of the Synod) usually guarantees a stable position. On the 
other hand, the patriarch's prolonged incapacitation with little indication 
of when he may recover is also rather an unusual situation. The Church 
administration has to adapt to it somehow and, there is no hiding it, think 
hard about the lineup of forces in elections for a future ROC leader.

Who Gains the Upper Hand

Until recently the problem of "succession to the patriarch's throne" could be 
reduced to the collision between two metropolitans - Cyril and Methodius. 
Both have a substantial financial base, connections in the top echelons of 
state power, and extensive religious/political experience. Metropolitan Cyril 
is believed to have an edge over Methodius in that he wields control over a 
powerful staff - the Department of External Church Relations - that has 
concentrated in its hands virtually all of the ROC's contacts with the 
outside world. On the other hand, Metropolitan Methodius does not have a 
reputation as a "liberal politico" with secular habits, and therefore has a 
more traditionalist image, which is vital to striking a sympathetic chord in 
the Church masses' hearts. The figure of Metropolitan Sergius has until 
recently been mostly in the shadows. Metropolitan Methodius' banishment to 
Kazakhstan makes Sergius the protagonist of the struggle for the patriarch's 
legacy. Sergius has every chance of inheriting the image that is associated 
in Church consciousness with Metropolitan Methodius.

Yet Metropolitan Cyril's positions have strengthened more than Metropolitan 
Sergius'. First, Metropolitan Methodius was a more formidable opponent. He 
has extensive connections within the financial and political elite and knows 
how to handle the media (a whole "church journalistic pool" was created in 
Moscow - in effect, Metropolitan Methodius' own PR department). Second, it 
could soon transpire that Metropolitan Sergius finds it hard to juggle his 
assignment in Moscow as head of the administrative department with 
supervision of the large Voronezh diocese. So Metropolitan Sergius might have 
to resign his more influential position.

Plans and Programs

Obviously, from the vantage point of the powers that be, the candidacy of 
Metropolitan Sergius (as well as of Metropolitan Methodius) ensures a greater 
predictability of ROC leadership. In the past decade Metropolitan Cyril has 
shown himself as an avowed follower of his mentor metropolitan Nikodim, 
committed to implementing the latter's program in a new political 
environment. Metropolitan Nikodim's ideal was a strong and independent Church 
as a "subject of international law" and therefore not within the complete and 
unconditional jurisdiction of the country's secular authority. This must be 
why Metropolitan Nikodim so admired the Vatican, which, politically, does not 
directly depend on anyone. Having set up ROC missions in international and 
European organizations in Brussels, Metropolitan Cyril also seeks to position 
the Moscow Patriarchate as an independent and influential player in 
international, in particular European, processes. It was on Metropolitan 
Cyril's own initiative - without any say-so from the secular authorities - 
that ROC representatives now make it a point to figure in all the hot spots: 
ROC delegations were constantly flying to Yugoslavia in the course of the 
Kosovo crisis and now, shortly before the war in Iraq, Bishop Theophanes, 
Metropolitan Cyril's closest associate, flew to Baghdad. Clearly, Baghdad is 
not part of the ROC's immediate church interests. Therefore, Metropolitan 
Cyril sees the Church as a full-fledged player in purely non-religious, 
political processes.

Metropolitan Sergius has none of this (incidentally, unlike Metropolitan 
Methodius, who also had a program of his own). This is why his candidacy 
arouses interest among those state officials who would like to see the ROC 
not as a viable economic entity or independent subject of international law, 
but as "custodian of the Russian spiritual and cultural legacy," or the 
state's internal and foreign policy instrument. Within the ROC, Metropolitan 
Sergius could also count on a certain measure of support - resulting from the 
general rejection of Metropolitan Cyril's image as too liberal to the ROC's 
liking.

*******

#12
The Times (UK)
May 22, 2003
Putin's driving ambition links Moscow with Vladivostok along longest road
From Robin Shepherd in Moscow
 
IT WILL be the longest stretch of road inside a single country in the
world. When 1,350 miles of gravel highway are completed next spring,
drivers will be able to make the ultimate road trip: Moscow to Vladivostok. 

The journey of 5,300 miles will dwarf America’s legendary Route 66, that
runs from Chicago to Los Angeles and the West Coast, which is a mere 2,400
miles. 

From Moscow the road will lead across European Russia, over the Ural
Mountains, through the vast forests of central Siberia, around the southern
tip of Lake Baikal and along the Chinese border, ending eight time zones
later at the warm waters of the Sea of Japan in Vladivostok. 

The Soviet and later Russian authorities have long dreamt of completing the
missing link between the city of Chita, 200 miles northwest of the border
intersection between Russia, China and Mongolia, and Khabarovsk, 400 miles
north of Vladivostok. 

The road has been mooted since the mid-1960s, but the plan was repeatedly
shelved because of the cost and climatic conditions. Several towns along
the route can now be reached easily only by train or air. 

Under a decree issued by President Putin the first stage will see the
gravel-covered through-road open by the end of March next year. By 2008
that road will have a hard surface. Apart from its length, the
Chita-Khabarovsky highway presents formidable civil engineering challenges.
The mainly mountainous route will need more than 250 bridges, many of which
will have to be built from scratch. 

It will cross up to 50 different types of soil, including some permafrost.
Throughout the year temperatures range through 100 degrees Centigrade, from
more than 40C to below -50C. 

“It is important to keep the thermal balance so the road does not fall
through,” said Igor Slyunaev, the Deputy Transport Minister, who is in
charge of the project. 

“This calls for great courage on the part of the design organisations and
the contractors, the people who work on the road in such hard conditions,
to fulfill the directive of the President on a project linking the central
part of Russia with the Far East.” 

Siberia has been a communications problem for centuries. Before the
transSiberian railway, which was completed in 1916, most journeys were
possible only by boat or horse. 

Some projects in the region have fallen foul of the region’s harsh
environment in spectacular fashion. One stretch of the 2,000-mile
Baikal-Amur mainline railway — from the north of Lake Baikal to the Amur
region to the east — collapsed into a summer swamp when the permafrost
melted after forest clearances. 

Construction of the railway was begun in the 1930s by Stalinist slave
labourers and was completed only two years ago. Large parts of Siberia are
now populated by the descendents of Stalin’s labour camps. 

When completed, the new road link will represent a symbolic victory for Mr
Putin’s ambition to bring the country into the modern age. Since Russian
settlers expanded into Siberia in the 18th and 19th centuries, generations
of Russian leaders have sought to improve communications to consolidate
terroritorial gains and, latterly, to exploit the region’s huge natural
resources. 

Officials said that the road link would also provide much-needed
competition for the transSiberian railway, allowing the transportation of
cars and other goods by road from Japan to European Russia. Powerful oil
companies are also hoping to persuade the Government in Moscow to allow the
construction of new pipelines to China. 

The road plan envisages more than £79 million in financing by the European
Bank for Reconstruction and Development, with an overall budget in excess
of £1.2 billion. 

The longest continuous road route in the world is the Pan-American highway
system, which runs 16,000 miles from Argentina to Alaska, but it is broken
by a boat journey in Central America. 

Until now the longest national road in the world was the Trans-Canada
Highway, which runs 4,860 miles from St John’s in Newfoundland to Victoria,
British Columbia. 

An Antarctica route will be the most remote road: the 1,000-mile stretch
that will connect the McMurdo base on the Ross Sea coast with the South
Pole base is scheduled to be completed in 2004-05.  

*******

#13
pravda.ru 
May 21, 2003
The Caucasian War Was Over 239 Years Ago, But It Is Still On 
The reality remains the same: an act of terrorism was prevented in Chechnya 
yesterday 

Today is the mourning day for the victims of the Caucasian war, which took 
place in 1817-1864. The war lasted almost for 50 years, it was over on May 
21st, 1864, when Russian troops took the settlement of Kbaad (currently the 
resort of Krasnaya Polyana). That was the last center of highlanders' 
resistance in the West Caucasus. May 21st was the date, when Grand Duke 
Mikhail Nikolayevich, the tsar's governor-general in the Caucasus, announced 
that the war was over. 

It just so happened that this day is not an important date in Russia. 
However, there used to be a special badge produced in the tsarist Russia - 
"The 50th Anniversary of the End of Caucasian Wars." However, people 
celebrate the date in the republics, which border on Russia's Stavropol 
region, in the republic of Adygeya, for example. 

The Caucasian war and the Chechen war have been made rather mythological by 
our historians and journalists. The two wars have been represented as 
liberating and fair wars that were waged by the highlanders. It is still 
believed that Caucasian nations wage a "holy war for freedom, for the 
retrieval of the Islam's role among Muslim people." That is why, Shamil 
Basayev is invincible, the Chechens are invincible too. 

Current events in Chechnya are often called the new Caucasian war, regardless 
of any reasons for such an association. It is rather surprising that Kremlin 
image-makers have not attempted to do anything about the mentioned date. The 
State Duma is going to consider the presidential draft law "About the Amnesty 
in Connection with the Approval of the Constitution of the Chechen Republic." 
State Duma deputies are going to consider this issue today. The amnesty is 
supposed to be granted towards the people, who have committed dangerous 
actions in the former Chechen-Ingush autonomous republic during the period 
from August 1st, 1993, till the day, when the Duma's decree comes into legal 
effect. 

However, there can be direct historical associations found in the Caucasian 
military campaigns. Baron Fyodor Tornau wrote in his memoirs: "The conquering 
of the northern mountainside was completed. There was a goal to move over to 
the south-western side in order to clean the riverside on the way to the sea 
and to prepare it for populating." The end of the war did not let those plans 
come true. Notorious politician Vladimir Zhirinovsky from the Liberal and 
Democratic Party of Russia set out a project like that more than a hundred 
years after Caucasian wars ended. Zhirinovsky and another member of his 
party, Aleksey Mitrofanov, put forward an idea to resettle the undesirable 
Chechen population to an adjacent state. Did they mean Georgia, Abkhazia or 
the Pankissi Gorge? 

Writers have made their contribution to the issue as well. Some researchers 
believe that Tolkien's hobbits lived on the territory of Chechnya, that 
hobbits were actually Vakhabits. To crown it all, they believe that Tolkien's 
The Lord of the Rings trilogy is a prophecy of the Caucasian War. Chechen 
President Jokhar Dudayev's death, researchers believe, can be considered the 
starting point. This allows to recognize Bilbo Baggins as Mahmud Esambayev, 
Gollum is Boris Berezovsky, Sauron is Boris Yeltsin, of course, Gandalf is 
Bin Laden, goblins are Interior Ministry officers, orcs are paratroopers. 
Vakhabits' major goal is to destroy the Land of Mordor and to seize the Ring. 

No matter what history and forecasts might say, the reality remains the same. 
The Caucasian war is still on. 

Valentina Lezvina 
Stavropolskaya Pravda 

*******

#14
From: Christian Caryl (CCaryl@compuserve.com)
Sent: May 21, 2003 
Subject: NY Review article

New York Review of Books
www.nybooks.com
May 29, 2003
Review
The Real St. Petersburg
Window on Russia
By Christian Caryl
Christian Caryl is the Moscow Bureau Chief of Newsweek.

Dostoevsky: The Mantle of the Prophet, 1871-1881
by Joseph Frank
Princeton University Press, 784 pp., $35.00

Sunlight at Midnight: St. Petersburg and the Rise of Modern Russia
by W. Bruce Lincoln
Basic Books, 432 pp., $18.50 (paper)

Russia in the Age of Peter the Great
by Lindsey Hughes
Yale University Press, 602 pp., $18.95 (paper)

Peter the Great
by Lindsey Hughes
Yale University Press, 285 pp., $29.95

St. Petersburg: A Cultural History
by Solomon Volkov,translated from the Russian by Antonina W. Bouis
Simon and Schuster, 598 pp., $26.50 (paper)

Natasha's Dance: A Cultural History of Russia
by Orlando Figes
Metropolitan Books, 729 pp., $35.00

Prince of Princes: The Life of Potemkin
by Simon Sebag Montefiore
St. Martin's, 672 pp., $45.00

1.

In 1873, Fyodor Dostoevsky sat down at his desk to write a few impressions
of everyday life in his home town of St. Petersburg. Read today, these
sketches come as something of a shock. Few of the great figures of Russian
literature are so closely identified with Petersburg as Dostoevsky, and
yet, as his observations demonstrate, he was far from being a booster for
the city. In his youth, as his biographer Joseph Frank points out in
Dostoevsky: The Mantle of the Prophet, 1871-1881, Dostoevsky had regarded
Petersburg's mélange of architectural styles as inspiring proof that the
Russian capital had succeeded in absorbing the best of European culture.
But now, as his mental eye roams over the cityscape, all he can see is the
"lack of character of the idea and all the negativity of the essence of the
Petersburg period from its very beginning to its end." The architectural
aspirations of generations of aristocrats and emperors, tirelessly striving
to imitate the best European models, Frank writes, have resulted in

nothing but an enormous, modern hotel.... Here we see the businesslike
approach, Americanism, hundreds of rooms, an immense commercial enterprise;
one sees immediately that we, too, have railways and we have suddenly found
ourselves to be businessmen.

Then as now, needless to say, accusing something of American commercialism
was not exactly to award it one's vote of confidence. Elsewhere around the
same time, in his letters and in his magnificent serial self-exploration
called Diary of a Writer, Dostoevsky expands on his diagnosis of his city's
fundamental alienation from "Russianness." He rails against the "corrupted
Petersburg intelligentsia," a sorry lot who stand at odds with
"incomparably more genuinely Russian people." He recalls his youthful
sighting of a government courier, clad in Western clothes and "polished
Petersburg boots" as he sat in his carriage on a Petersburg street,
brutally beating his peasant driver. "The son of such a courier may be a
professor, perhaps-a patented European," notes Dostoevsky sarcastically.
Again and again he obsessively circles back to the primal cause of this
fatal schism in Russian national life, which turns out to be embodied in a
single man, the eponymous founder of the imperial capital. It was none
other than Peter the Great, Dostoevsky argues, who struck the fatal blow
against the nation's cultural continuity with his decision to impose
European-oriented modernization on traditional society. 

In so doing, Peter opened up a profound divide between the peasantry and an
upper class who adopted the accoutrements of European culture and society
as a way of sealing their own claim to rule. It was Peter's
institutionalization of serfdom that made peasants the property of their
masters, stripped them of their freedom of movement and action, and
provided the precondition for the comfortable life of the social elite. "We
lack culture (which exists everywhere)," Dostoevsky writes in a letter,
"and we lack it because of the nihilist Peter the Great." The nihilist
Peter the Great? Small wonder that Dostoevsky reserved such sentiments for
his private correspondence. Surely the royal family of the Romanovs, whom
Dostoevsky was otherwise eager to please, would have taken offense at this
identification of their most illustrious ancestor with the rootless
socialists of the late nineteenth century.

Dostoevsky was not alone in accusing St. Petersburg of embodying the
soullessness of a country that had lost its primal way. The habit of
badmouthing the city started almost the day it was born. No sooner did
Peter announce his decision to build the new capital than his
traditionalist foes began denouncing it as a creation of the "Antichrist"
who was determined to destroy God's chosen path for Orthodox Russia. For
these critics, the floods that frequently threatened the young St.
Petersburg were well-justified manifestations of the dawning Apocalypse.
But conservatives weren't the only ones. Some of the deepest doubts came
precisely from the new caste of Europeanized intellectuals who emerged from
Peter's capital. Alexander Pushkin's poem "The Bronze Horseman" -in which
the city's talisman, the famous bronze equestrian statue of Peter cast by
Etienne-Maurice Falconet, comes to life and terrorizes a run-of-the-mill
Petersburger who dared to indict the works of the Tsar-seized on a paradox
that would preoccupy future generations of Petersburgers. By opening his
"window on to Europe," the poem suggests, Peter heroically defied the
forces of nature in a grandiose display of imperial will, and in so doing
laid the groundwork for a glorious synthesis of sophisticated European
forms and tumultuous Russian creativity. But precisely in the vastness of
its ambition this was a project that left little room for the vagaries of
individual fate. Those who lived in Petersburg rarely forgot that the
construction of the city that began in 1703 had claimed the lives of
thousands of slave laborers through malnutrition, disease, and
ill-treatment.

A few years later Nikolai Gogol wrote bitterly of Petersburg that the "idea
of the city is emptiness taken to the highest degree." W. Bruce Lincoln, in
Sunlight at Midnight: St. Petersburg and the Rise of Modern Russia, writes
that in a willful subversion of the rationalist instincts that governed the
city's design, Gogol saw instead a malevolent surrealism, a nasty flicker
of false appearances. "The devil himself lights the street lamps only in
order to show that everything is not really as it seems." A half-century
later the Symbolist Andrei Bely, in his brilliant novel St. Petersburg,
used the same themes to transform his version of the city into the perfect
avatar of modernist estrangement.[1] Again and again, in a leitmotif that
remains strikingly stable through the ages, its critics describe Petersburg
as a stage set, a virulent abstraction, a string of European façades
populated by actors aping European mores.[2] By the turn of the twentieth
century the disquiet inspired by St. Petersburg had even rea
ched the Tsar himself. Nicholas II, the last emperor to inhabit the
capital, detested the city for reasons quite similar to Dostoevsky's: it
was too European, too far from the country's peasant roots.[3] Ironically
enough, Vladimir Lenin despised Petersburg precisely as the seat of tsarist
tyranny -which didn't stop his heirs from renaming the city in his honor.

2.

These bad reviews are unlikely to be repeated much during this year, when
St. Petersburg will mark its official tercentenary amid grand pomp and, one
fears, rather tacky circumstance. Leaders from the G-8 countries (including
the US president) and the European Union will arrive for summits and
schmoozing during the official ceremony in May. They will convene at the
Konstantinovsky, a one-thousand-room tsarist monstrosity just outside the
city that President Putin has transformed into an "international conference
center" at an estimated cost of $200 million. The grounds include a
man-made island, a network of canals, and a pier on the Gulf of Finland.
Putin recently appointed a special overseer to monitor the project after
allegations that much of the money was being misappropriated. There will be
visits by dignitaries from the countless cities that have planned
associated cultural events, from New York to London to the European
Cultural Capital of Graz, Austria. The only people missing, perhaps, will
be the Petersburgers themselves. (In a wonderful reenactment of Petrine
arrogance, the mayor of the city has already informed his citizens, or
subjects, that they would be better off getting out of town during the
festivities.) And we can be sure that all the well-wishers, as befits any
benchmark birthday celebration, will have only good things to say about the
city and its history. 

They will almost certainly dwell on its history of immense cultural
achievement, invoking the imposing buildings of the Hermitage, one of the
world's great art museums (and not only that); the Mariinsky Theater, with
its surfeit of superior opera and ballet; and the seductive enfilades of
the great rococo and neoclassical palaces rambling along granite-paved
canals or the steep embankments of the immense Neva River. They will point
out that most of what we think of as the Russian musical canon-the names of
Mussorgsky, Tchaikovsky, Rimsky-Korsakov, Prokofiev, and Shostakovich all
come to mind-emerged from Petersburg conservatories and concert halls. They
will recall, perhaps, how Russian literature got its start as St.
Petersburg literature, and how the two, indeed, largely overlap: first the
early pathbreakers, Lomonosov and Derzhavin; then Pushkin, Gogol,
Dostoevsky; the luminous Silver Age poets Aleksandr Blok, Anna Akhmatova,
and Osip Mandelstam; and the two great talents of postwar Russian letters,
Joseph Brodsky and Andrei Bitov. 

Tony Blair might dwell approvingly on the Anglomania of Petersburg's
cosmopolitan elite in the late nineteenth century or, more adventurously,
on the English mercenaries and con artists who made their way to the place
under Peter and his successors. Jacques Chirac could choose to talk about
Di-derot's sojourn in the city under Catherine the Great. And-though it is
hard to imagine him doing so-George W. Bush could ruminate about the
impossibility of imagining twentieth-century American culture without the
contributions of Brodsky, George Balanchine, Igor Stravinsky, Vladimir
Na-bokov, and Mikhail Baryshnikov-all Petersburgers who capitalized on
their home city's inbred cosmopolitanism to launch new careers abroad.

All of which is true enough. One would hope, though, that some of the
well-wishers will at least consider the costs of this extraordinary output.
The natural catastrophes-the floods and the fires and the vicious storms-
that so unnerved Petersburg's early citizens paled in comparison with later
famines, wars, and tyrannical caprice. Often it is the political tragedies
that stand out. For all his enlightening intentions, Peter's own management
style had its share of psychopathy. He loved putting his friends and
subordinates through ritual humiliations, and he had his own son tortured
to death.[4] 

Catherine's era exulted in artistic magnificence and international
intercourse (in every sense of the word), but it also presented a brutal
spectacle of government as organized crime. First the philosopher-empress
seized power from her own husband in a putsch, then later acquiesced in his
murder.[5] President Chirac would be well advised to skirt the touchy
subject of his countryman the Marquis de Custine, whose
mid-nineteenth-century visit to Petersburg produced an analysis of Russian
despotism that still remains eerily topical.[6] World War I pushed
Petersburgers into starvation, strikes, and revolution, but the losses
would be even greater in the civil war that followed. By 1920 the city's
population had fallen to 35 percent of pre-revolutionary levels. Yuri
Annenkov, an avant-garde Petersburg artist who later emigrated to Paris,
recalled:

It was an era of endless hungry lines, queues in front of empty "produce
distributors," an epic era of rotten, frozen offal, moldy bread crusts, and
inedible substitutes. The French, who had lived through a four-year Nazi
occupation, liked to talk of those years as years of hunger and severe
shortages. I was in Paris then, too-an insignificant shortage of some
products, a lowering of quality in others, artificial but still aromatic
coffee, a slight reduction in electric energy and gas. No one died of
hunger on icy sidewalks, no one tore apart fallen horses, no one ate dogs,
or cats, or rats.

And even this was tame compared with what was to come. The nine-hundred-day
siege that began in 1941, when most of the population of the city then
known as Leningrad found themselves trapped by Hitler's invading forces,
would take around one million lives. People endured horrors so nightmarish
that open discussion of the details (concerning cannibalism, for example)
would be banned for decades after the war.[7] 

The temptation is to write off these cases as random breakdowns, the brutal
tricks of history played on an undeserving victim. But one of the reasons
for the persistence of the polemic over Petersburg, and the tenacity with
which it clings to the city's cultural products, is precisely the sense
that this dark side was an intrinsic part of the city's history. St.
Petersburg wasn't just an exercise in urban planning. It was a party
program, a utopian mission, a work of political performance art. War was a
prerequisite of the city's founding, and casualties were factored in from
the start.[8] By putting his new capital on territory captured from a great
European power, Sweden, on the shore of a European sea, Peter gave radical
form to his plans to transform his hitherto marginal and cloistered country
into a modern, expansionist empire. The construction of his capital was
also an act of nation-building. The forms of the city would reflect the
aspiration behind its creation -hence its strenuous gigantism, its copycat
French and Italian architecture, its ministries and academies and museums
tailored to examples borrowed from the Prussians or the Dutch. 

To be sure, high culture had less of a part in the Tsar's calculations than
his determination to use European technology-and particularly military
know-how-to improve Russia's economy and boost its international status.
His Westernizing impulses were not always benign. Compelling his citizens
to shave off their beards and wear Western-style clothes was relatively
harmless; but his reforms also subordinated the aristocracy to the
patrimonial state, intensified state supervision of the Orthodox Church,
and (as bemoaned by Dostoevsky) deepened and codified serfdom-all measures,
one might argue, that would prevent the growth of European-style
institutional arrangements for centuries to come. In so doing, Peter set a
pattern of authoritarian modernization that would offer inspiration to many
of his heirs. Subsequent Russian leaders from Catherine the Great to Stalin
would cite Peter's example to legitimize their own modernization
efforts-and to undermine their opponents, invariably to brutal effect.

Still, for Russians who thought that the West had something positive to
offer their country, Petersburg was the lodestar of their hopes. If
visiting Europeans were often dazzled by the city's beauty and the
extravagance of its self-celebration, Russians tended to feel challenged
but often also inspired by its rampant cosmopolitanism. Not surprisingly,
where you stood on the question of Petersburg often reflected where you
stood on Russia. As Orlando Figes argues in Natasha's Dance, 

The opposition between Moscow and St. Petersburg was fundamental to the
ideological arguments between the Westernizers and the Slavophiles about
Russia's cultural destiny. The Westernizers held up Petersburg as the model
of their Europe-led ideas for Russia, while the Slavophiles idealized
Moscow as a centre of the ancient Russian way of life. Petersburg became a
fulcrum of Russia's endless self-examination and struggle to define a
stable identity- and that is a story that is not over yet.

3.

Recently I went to see a senior Moscow politician, a former aide to Boris
Yeltsin who was deeply involved in the first Chechen war. As we sat in the
huge, sparsely furnished office in the headquarters of his tiny political
party, the Muscovite told me that it was hopeless to expect today's
government officials to find an end to the current war in Chechnya. It was,
he insisted, a matter of biography. "I went to college with people from the
Caucasus. I have family ties to the region. I lived there for a while. So I
understand how Chechens and other people in the area think." But this was
not true, he argued, of Vladimir Putin and his entourage. "These people who
are in power now have no idea about that part of the country. They don't
understand that you can only comprehend the Caucasus with the heart. And
how could they? They're all Petersburgers. They're people who think and
don't feel." He snorted. "What else can you expect from a bunch of soulless
robots?"

Comments of this sort are frequent in Russia these days, and the reason is
clear enough. Today, for the first time since Lenin moved the capital to
Moscow in 1918, St. Petersburg is once again preeminent. Thanks to the
presidency of Vladimir Putin, a St. Petersburg native, the city has been
experiencing an extraordinary political rehabilitation. When Putin returned
to Russia in 1990, after his years of service in East Germany as an officer
of the Soviet KGB, he made a quick career as the right-hand man of the
city's reformist mayor, Anatoly Sobchak. Putin would remain in the city
until 1996, when Sobchak failed to be reelected, and it is safe to say that
Putin learned most of his lessons about practical politics during his stint
in St. Petersburg's city government. 

Since his rise to the presidency a little more than three years ago, Putin
has been diligently working to shore up his hold on power by bringing in
trusted allies from home. Today his Petersburg cronies hold virtually every
key position in the national government-to the extent that it's almost
easier to list the positions they don't occupy than the ones they do. The
heads of most of the "force" ministries-the Federal Security Service (the
former KGB), the police, the army-are all Petersburgers. Petersburgers also
run the national electricity monopoly, the natural gas giant Gazprom, the
Central Bank, and the Finance Ministry, the Economics Ministry and
associated reform think tank. In the Kremlin itself, Petersburg is
represented by Putin's personal economic adviser and a young lawyer
entrusted with legal and administrative reform-but also by a group of
career KGB officers who serve as Putin's gatekeepers and political fixers.
And the list doesn't end there.

One could, perhaps, bend the rules a bit and include two people who have
not made the move to Moscow, instead using their positions in Petersburg to
recast themselves as Russia's most formidable cultural impresarios. Mikhail
Piotrovsky, the director of the Hermitage, has brought his bewildering
mountain of a museum to new vitality by embracing Western corporate
sponsors as well as home-grown oligarchs, and he has done so with a
ruthless adaptability that has yet to find its equal elsewhere in the
country. The only cultural figure to come close to his entrepreneurial élan
is Valery Gergiev, the brilliant conductor and artistic director of the
Mariinsky Theater (the erstwhile Kirov). In the course of the 1990s Gergiev
used his musical skill and manic organizational talents to transform the
Mariinsky into Russia's premier musical theater. More recently he has set
off a huge public debate in Petersburg with his plans to entrust the
theater's urgently needed renovation (and the parallel construction of a
huge new cultural center on a nearby island) to the extravagantly
avant-garde American architect Eric Owen Moss. Forced to compromise after
the original plans met with harsh criticism, Gergiev agreed earlier this
year to a new competition that will include several international
architects. But no one doubts that Gergiev will get his project in the
end-not least because he enjoys Putin's personal support.

The rise of the Petersburgers has already become the stuff of sarcastic
commentary. One hears sly references to the "Northern Alliance" or the
"Varangians" (i.e., the Scandinavian princes invited to restore good
governance in chaotic Rus in the Middle Ages). Some of the talk reveals a
mixture of envy, fear, and scorn. In one joke, a man enters a crowded
Moscow trolleybus. Another passenger turns to him and asks, "Do you work in
the Kremlin?" "No." "Did you ever work in the KGB?" "No." "Are you by any
chance from St. Petersburg?" "No." "Well, in that case, get off my foot."
Muscovites trade vengeful stories of the newcomers' provincialism.
"Petersburg was a cosmopolitan place before the revolution," a Moscow
friend insists, "but in Soviet times it might as well have been the deepest
backwater." There were no dissidents worth the name in Leningrad, say the
Petersburg skeptics (ignoring that the poetry of Mandelstam and Akhmatova,
among others, was implacably dissenting by its originality); others point
out that the local KGB was particularly famed for its brutishness. The last
Soviet show trial of dissidents took place in the city in 1986, and the KGB
officer who handled the case, Viktor Cherkesov, has just been appointed by
Putin to head a new federal anti-drug agency.

If you ask members of the "Northern Alliance" themselves, needless to say,
they will treat you to long, loving disquisitions on why they represent a
more refined species of Russian. They will explain to you why their city's
geography-just a few miles from Russia's only direct border with the
European Union-has left internationalism in their blood. Chronologically
they prefer to focus on the late 1980s and early 1990s, when Leningraders,
and then Petersburgers, supplied important inspiration for Russia's
democratic revolution.[9] It is only logical, says this camp, that their
soignée aristocrat of a city, the home of Russia's last two Nobel Prize
winners, would give birth to people like the reformer Sobchak or Dmitry
Likhachev, the elegant professor of literature and Gulag survivor who
served as a distinguished model and inspiration for Russian intellectuals,
or prominent liberal economists such as Anatoly Chubais and Sergei
Vasiliev, who were important in formulating the privatization efforts of
Boris Yeltsin.[10] 

Those who adopt this argument tend to skate over the point that Sobchak,
Chubais, and some other putative democrats later became implicated in the
general climate of mid-1990s malfeasance, and were accused of acts of
corruption. Similarly, these days Petersburg is known less as a bastion of
Westernizing cosmopolites than for its reputation as Russia's "criminal
capital," a place where residents discuss mob hits with the blasé
connoisseurship of soccer fans. The current administration of Governor
Vladimir Yakovlev has a wide reputation for venality and corruption. Some
rumors even implicated him in the 1998 murder of Galina Starovoitova, a
much-beloved liberal politician from the city. Typically, the months
preceding the tercentenary have been marked by widespread reports that
budget funds earmarked for the restoration of architectural landmarks have
been misused. The extent to which Putin himself had dealings with gangsters
during his Petersburg period remains a subject of lively but inconclusive
dispute.

And yet perhaps both sides-Petersburg's fans as well as its critics -have a
point. In the world beyond stereotypes, of course, it is entirely possible
to be both a Nobel Prize winner and an anti-democrat (such as Zhores
Alferov, a physicist and unrepentant Communist who was the last
Petersburger to win the prize[11] ). It is also possible to look toward
Europe and admire its economic power while retaining deep skepticism about
the extent to which European-style political institutions can be
transplanted into a Russian setting-especially if, like the Petersburg
political elite, your economic pragmatism has been tempered by a deep
aversion to political risk ingrained by the long history of Stalinist
purges specifically targeting the city.[12] 

One former Petersburg dissident, the journalist Lev Lurie, described to me
his own brushes with the Leningrad KGB in the 1970s and 1980s. The secret
policemen all understood, he explained, that the Soviet Union's economy was
a total failure, and some of them spoke openly of the need to move toward a
market system-right down to the creation of private restaurants and shops,
heresy by the standards of the time. But, he added, their attitude was
motivated by purely pragmatic considerations. "It had nothing to do with
democracy. Democracy didn't interest them at all." What interested the
secret police was efficiency and, perhaps, the opportunity to make some
money for themselves on the side.

Now, after the turmoil of the 1990s, that same version of "pragmatism" is
embodied in Putin and his Petersburg team. Question them a little more
closely, and you won't hear many of the "Westernizers" in his entourage
pleading for greater 
democratic freedoms-just as the "Chekists," the KGB veterans, seem to have
few problems embracing neoliberal economics. After all, both sides
understand perfectly well that they can only make Russia strong and
prosperous by establishing an efficient market economy. But they also
believe that trying to conduct political liberalization at the same time
will lead (as it arguably did over the last decade) to corruption,
administrative chaos, and organized crime that will conspire to subvert
economic reform. Confronted by this dilemma, they have resorted to an
updated version of the Russian model of top-down modernization exemplified
by Petersburg itself. They have given priority to economic reform while
going slow in improving democratic institutions; they have supplanted what
some Petersburgers describe as the messy "romanticism" of the Yeltsin
period, its improvisations and messy compromises, with a cool and ruthless
"managed democracy" that has little time for such apparent luxuries as
press freedom, independent parliaments, or peace in Chechnya. Still, there
is one significant difference this time around, and one could describe it
with a single word: modesty. Russia is beset by ecological disasters,
mismanagement, and a decline in transport facilities and other
infrastructure. It is threatened by AIDS and a dwindling birthrate, and
dramatically dependent on trade with an interconnected world. In those
conditions there can be no talk of sublime new ambitions of the kind that
once inspired Peter to found his new capital on the shores of the Baltic
Sea. A pity, some might argue. Still, perhaps it is not a bad thing that,
nowadays, someone has to think about the costs, and not only indulge in
dreams of grandeur.

Notes
[1] Katarina Clark writes about this aspect of Bely especially well in
Petersburg, Crucible of Cultural Revolution (Harvard University Press,
1995).
[2] Lindsey Hughes, a leading chronicler of the Petrine era, notes:
"Peter's methods succeeded in creating Westernized pockets in Russia,
notably St. Petersburg, that giant theatrical set where Russian "actors"
mimicked foreigners, but lost no time in fleeing the public eye, shedding
the restricting "German" costumes, and relaxing in capricious garments and
comfortable old traditions" (Russia in the Age of Peter the Great, p. 468).
Two and half centuries later, in the 1960s, a group of Leningrad artists
dressed up in period costumes and wandered at night around the sets of a
film version of Crime and Punishment that was being shot in the city,
"getting a feel for the vanished Petersburg" (Solomon Volkov, St.
Petersburg: A Cultural History, p. 486).
[3] See, for example, Orlando Figes, A People's Tragedy: A History of the
Russian Revolution (Viking, 1996), p. 8: "Nicholas made no secret of the
fact that he much preferred Moscow to St. Petersburg." He and his father,
Alexander III, "considered Petersburg, with its classical architectural
style, its Western shops and bourgeoisie, alien to Russia." See also Figes,
Natasha's Dance, p. 201.
[4] For an especially vivid account of Peter's torturing of his son, see
Paul Bushkovitch, Peter the Great: The Struggle for Power, 1671-1725
(Cambridge University Press, 2001).
[5] According to Simon Sebag Montefiore in his luridly entertaining
portrait of the period, Prince of Princes, Alexei Orlov, one of the
heavyweights at court, bore the nickname "Scarface."
[6] Astolphe de Custine, Letters from Russia (New York Review Books, 2002).
[7] Harrison Salisbury's The 900 Days: The Siege of Leningrad (1969; Da
Capo, 1985), remains an exemplary account. For a more recent account of the
siege, see The Battle for Leningrad, 1941- 1944, by David M. Glantz
(University Press of Kansas, 2002).
[8] As Lindsey Hughes points out, Peter tried to reroute all of Russia's
northern trade through the city even though there were other places more
suited to the task, and the resulting economic dislocation had incalculable
effects. The better part of his famous fleet- another nation-building
project one Soviet historian described as the "eighteenth-century
equivalent of a space program"-had fallen apart within years after his
death. The devil-may-care waste and brutal voluntarism of these efforts
foreshadowed the Gulag.
[9] British journalist Bruce Clark described Leningrad/St. Petersburg as
"the laboratory of ideas"-and not only benign, democratic ones-that
profoundly shaped the late 1980s and early 1990s in Russia. See An Empire's
New Clothes: The End of Russia's Liberal Dream (Vintage, 1995).
[10] See David Hoffman, The Oligarchs: Wealth and Power in the New Russia
(PublicAffairs, 2002), for a vivid account of the formative Leningrad days
of Chubais and Vasiliev.
[11] He won in 2000. Brodsky got his prize in 1987.
[12] One name often mentioned in this particular context is Aleksei
Kosygin, one of the few survivors of the 1949 Leningrad Affair, when most
of the local Party leadership was shot. Kosygin would go on to run
Khrushchev's cautious economic reform program. For many members of the
political elite, Kosygin's (and Khrushchev's) failure showed that economic
reform could only succeed under conditions of tight political control. The
Leningrad Affair, like the 1934 murder of the Leningrad leader Sergei Kirov
which triggered the Great Terror of the 1930s, was motivated by Stalin's
lingering hatred of early Party rivals, including Trotsky and Zinoviev, who
first gained fame there.

********

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