Johnson's Russia List
#7197
27 May 2003
davidjohnson@erols.com
A CDI Project
www.cdi.org
[Contents:
1. Financial Times (UK): Stefan Wagstyl and Andrew Jack, Putin emerges as
one
of the winners after Iraq war: The Russian president has kept his ties with
the
US intact, improved his relationship with France and Germany and maintained
his
standing in opinion polls.
2. AFP: Bush and Putin try to smooth over testy ties.
3. Reuters: Moscow says will not back out of Iran nuclear plans.
4. BBC Monitoring: Putin Talks to Press on St Petersburg 300th Anniversary.
5. AP: Decay Lurks Beneath St. Petersburg Facade.
6. CNN: Willy Wo-Lap Lam, China seeks Russian military edge.
7. ITAR-TASS: Medics say Russia first SARS case unlikely to be confirmed.
8. gazeta.ru: Russian children face greater brutality.
9. Moscow Times: Alexei Pankin, No Foothold for Trust in Vicious Media
Circle.
10. Financial Times (UK): Andrew Jack, Legal pitfalls of critical
coverage in
Russia: Andrew Jack reports on the growing trend for companies to sue those
whose
coverage they disagree with.
11. Novaya Gazeta: Irina Gordienko, WHO AND HOW SCRAPES UP THE DOUGH.
WHERE POLITICAL PARTIES GET MONEY FOR THE ELECTION.
12. Vedomosti: Anfisa VORONINA, Towards Parliamentary and Presidential
Elections. CENTRISTS AND SPS JOIN FORCE IN THE FIGHT FOR VOTERS.
13. Reuters: Chechnya's suicide widows are new threat for Russia.
14. Wall Street Journal: Jeanne Cummings, For Russia, Cold War Relic
Becomes
a Game of Chicken. Obscure Jackson-Vanik Trade Rule Remains a Sore Issue for
Moscow.
15. BBC Monitoring: Russian Liberals Protest Military Reform, Want Defence
Minister to Resign.
16. New York Times: Michael Wines, SARS Scare Casts Pall on Las Vegas of
Siberia.
17. Reuters: Russia gains from U.S. monetary loosening-analysts.
18. Smysl: Lidiya Andrusenko, THE KHODORKOVSKY EFFECT. Mikhail
Khodorkovsky is
first among equals in the Russian business community.
19. The Economic Times (India): Ruchir Sharma, Russia: Rising From the
Rubble.
20. FoodProductionDaily.com: Russian snack market still traditional.]
*******
#1
Financial Times (UK)
May 27, 2003
Putin emerges as one of the winners after Iraq war: The Russian president
has kept his ties with the US intact, improved his relationship with France
and Germany and maintained his standing in opinion polls.
By Stefan Wagstyl and Andrew Jack
Vladimir Putin, the Russian president, has emerged, somewhat improbably, as
one of the winners of the Iraq war.
In siding with France and Germany in opposing the US-led invasion, Mr Putin
risked damaging his carefully cultivated friendship with George W. Bush, US
president. But while Washington has made clear its displeasure with Paris
and Berlin, it has dealt gently with Moscow.
Mr Putin has kept his ties with the US intact, improved his relationship
with France and Germany and maintained his record standing in the Russian
opinion polls.
To cap it all, Mr Putin will have the chance to celebrate his achievement
on an international stage this week when he hosts Mr Bush and over 40 other
leaders, who are visiting St Petersburg for the city's 300th anniversary
celebrations.
"This is a very important event, both from the practical and the symbolic
point of view," says Sergei Prihodko, Mr Putin's top foreign policy adviser.
It is a far cry from the frantic pre-war diplomacy, when Russia found
itself opposed to the US and pushed into a troika with France and Germany.
The Kremlin insists it decided its policy on a principle - the defence of a
United Nations-dominated multilateral world order.
But diplomats in Moscow say that Mr Putin's approach was anything but
clear, and included complicated efforts to protect Russian business
interests in Iraq.
However, in the aftermath US officials have decided to treat Mr Putin more
favourably than Jacques Chirac and Gerhard Schroder, the French and German
leaders, because he was a less enthusiastic critic.
The war's end certainly leaves Mr Putin in a better position than seemed
likely a few weeks ago, but the Russian president must still confront
fundamental challenges in establishing a role in the world for his country.
He wants to align Russia more closely with the US and the European Union,
arguing that Russia has common interests with the west in everything from
economic partnerships to fighting terrorism.
He also knows that friendly ties with the west will ease the adoption of
western ideas in Russia.
However, Mr Putin cannot turn Russia into another European ally of the US,
like France, Germany or the UK. Millions of Russians still see their
country as a superpower. So Mr Putin tries to maintain the illusion that
Russia is still a potential challenge to the US.
He preserves links with Soviet-era allies such as Cuba and with states
blacklisted by Washington such as Syria and Iran.
These countries are also buyers of Russian arms, a key consideration in a
country with big military factories.
Mr Putin does not expect the US to treat Russia as an equal. But he wants
respect. And he wants it to be public, so it can be relayed to ordinary
Russians.
The expansion of the Group of Seven leading industrialised countries to the
Group of Eight, including Russia, was a triumph by the Kremlin. As Grigory
Yavlinsky, leader of the Yabloko liberal group, says: "We want to feel
inside the same room."
The St Petersburg celebrations will almost certainly help Russians to feel
that they do indeed belong to the right club.
But there are also some flies in the ointment. First, whatever Mr Putin
might feel, Russia is nowhere near the top of Washington's agenda.
As Bob Nurick, head of the Moscow Carnegie Centre, a think-tank, says: "The
danger is not that anything dramatic will change in the relationship, but
that below the pleasantness on the surface, it will be essentially empty."
Next, the tensions between the US and the EU have stirred up the western
club to which Russia wants to belong. Mr Prihodko says Moscow wants to work
with both partners, but this will be more difficult if there is a
transatlantic rift.
Also, Russia's ties with Iran and other states the US regards as hostile
could threaten links between Moscow and Washington, just as happened over
Iraq.
Finally, with parliamentary elections due this autumn and a presidential
poll next year, Mr Putin will pay more attention to domestic criticism.
He seems assured of victory himself but will try to protect his
parliamentary supporters from attack by communists and other critics of his
west-oriented foreign policy.
As one western diplomat in Moscow says: "This will not be the time for us
to put pressure on Putin."
********
#2
Bush and Putin try to smooth over testy ties
SAINT PETERSBURG, May 27 (AFP) - A failed friendship or just one on the
rocks? US President George W. Bush and Vladimir Putin will have issues when
they meet in the Russian leader's native city for the first time since the
Iraq war.
Tensions seem inevitable at the informal June 1 summit held amid a gala
300-year anniversary celebration of the Russian imperial capital attended
by more than 40 leaders.
"Just getting the relationship back on track is message number one" for the
talks, one senior US official said.
Russian analysts fear Putin blundered badly by opposing the US-led Iraqi
campaign after throwing in his lot with Bush -- despite opposition at home
-- following the September 11 attacks in the United States.
Some US officials say the Iraqi dispute is now behind them. But they add
that complaints about Moscow's nuclear ties to Iran remain and that the
future of Russia's old Iraqi oil contracts is uncertain.
Washington appears to have adopted a carrot and stick approach.
It will mention lucrative cooperation in development of a missile defense
program. Washington will also raise joint ventures in space that Russia can
hardly afford and the United States was forced to scuttle following the
Columbia shuttle disaster.
But US officials say Russia's continuing nuclear cooperation with Iran will
be high on the agenda as will be its defense of Syria -- a country
Washington says is sheltering Hezbollah militants and possibly some former
Iraqi leaders.
They add that Russian concerns about its Iraqi oil interests will be off
the agenda at least until next year. Officials says Iraq's potential
repayment of some eight billion dollars in Soviet-era debt is also out of
US hands.
"We are sensitive to the fact that this is an election year in Russia" and
that nationalist rhetoric from the Kremlin is aimed at public consumption,
a US official here said.
"But when push comes to shove we will defend our interests," said the
official.
Observers here said they feared Putin still felt uncomfortable about
resuming closer ties with the United States. They point out that a recent
state of the nation address by the Russian leader was vague on policy.
This "fuels concern about whether Putin actually has an agenda for the
upcoming talks with Bush or whether he intends to keep the US president
guessing along with the rest of us," the Troika Dialog bank said in a
research note.
"Putin is playing a dangerous foreign policy game," agreed USA-Canada
Institute deputy director Viktor Kremenyuk.
The Bush administration has said that it is not upset with Russia as much
as fellow "peace camp" members like France.
But Russian analysts still remain uncertain about Putin's next move. He has
won little economic compensation for his past link-up with Bush and almost
no diplomatic gain for his pre-Iraq war alliance with France and Germany.
"It is true that Russia gained little economic support from the United
States in return for its backing of Afghanistan," remarked political
observer Andrei Piontkovsky, who often takes a critical view of Putin
policies.
American University in Moscow President Eduard Lazarenko said Putin may
have shifted against the United States because the Bush administration
failed to provide any Iraqi oil guarantees for Russia.
"Russia's position could have been softer if the US had provided such
guarantees," he said. "But this was still a big mistake for Russian
diplomacy."
Russia's policies were difficult to decipher in the run-up to the war.
Putin was silent on the subject for several weeks while his more hawkish
Foreign Minister Igor Ivanov laid on the rhetoric.
That split between the Kremlin and the foreign ministry was in evidence
again last week.
Putin's top Kremlin foreign policy adviser Sergei Prikhodko said the new UN
resolution on Iraq "lays down an adequate basis for safeguarding Russia's
long-terms interests."
But Ivanov warned more sternly that Russia's oil contracts struck under the
Saddam Hussein regime "must be fully implemented."
*******
#3
Moscow says will not back out of Iran nuclear plans
MOSCOW, May 27 (Reuters) - Moscow will not drop plans to build Iran's first
nuclear plant despite growing U.S. pressure over fears Tehran is seeking to
develop nuclear arms, Russia's atomic energy minister was quoted on Tuesday
as saying.
Russia's technology sales to Iran and the construction of the Bushehr power
station have been a major irritant in relations with Washington, adding to
unease over Moscow's refusal to back U.S. military action in Iraq.
"Russia does not see any reason now to review its stance and its role
regarding construction of the first nuclear reactor," Prime Tass news
agency quoted Alexander Rumyantsev as saying after talks with visiting
Iranian nuclear officials on Monday.
Russia says it is providing Iran only with civilian nuclear equipment,
adding that the used fuel from the 1,000 megawatt Bushehr plant will be
shipped back to Russia for reprocessing.
"We will continue to fulfil our duties despite the fact that our position
on this question is different to Washington's official view," Rumyantsev
was quoted as saying.
Iran insists the Bushehr reactor is for civilian power production but U.S.
officials question why Iran, the second biggest oil producer in OPEC, would
need it.
In addition to Bushehr, Iran is developing other nuclear facilities,
including a uranium enrichment plant. In a sign that Moscow may have
started to heed Washington's concerns Russian officials have urged more
nuclear transparency from Iran.
U.S. policymakers are due to gather at the White House on Tuesday to
discuss Iran with the Pentagon reportedly pushing for a tougher stance
including actions that could lead to toppling Iran's clerical leadership
through popular uprisings.
The heat on Iran is likely to be turned up further on June 16 if, as
Washington hopes, the International Atomic Energy Agency signals grave
doubts that Iran's ambitious network of nuclear facilities are merely
designed for power generation.
During a visit to Moscow last month, U.S. Undersecretary of State John
Bolton failed to convince Moscow to curtail nuclear cooperation with Iran
and rein in Russian scientists who Washington says are giving Tehran key
nuclear intelligence.
U.S. President George W. Bush placed Iran in an "axis of evil" alongside
Saddam Hussein's Iraq and North Korea.
*******
#4
BBC Monitoring
Putin Talks to Press on St Petersburg 300th Anniversary
Source: RTR Russia TV, Moscow, in Russian 0000 gmt 27 May 03
[Presenter] St Petersburg, which Peter the Great wanted to become a "window
to Europe", remains to this day the city closest to Europe, which closely
reflects the whole history of the Russian state. This was what President
Vladimir Putin said in a conversation with media representatives of the
northern capital.
[Putin] If you have been following the events, you could see attitudes to
Russia changing for the better. Russia is becoming more transparent, better
understood and easier to forecast. Even though we often criticize ourselves
- and it is only right to do so, because constructive criticism helps us to
work out optimal solutions - our economy, on the whole, is developing not
badly at all. People can see, understand, and appreciate this accordingly.
You might remember that in an address to the German Bundestag some time
ago, I was saying that the shortest and most reliable way for Europe to
become an independent and fully-fledged world power in its own right was to
establish good relations with Russia. Great many people in Europe share
this view.
I really love our city, which is my native city too. And I think many would
agree that its history reflects all the aspects of our country's history as
a whole. It is a great honour to be a citizen of Russia and live in this
city, but at the same time, it is a serious trial, because building our
city was an extremely hard work. But it was always magnificent, even during
its hardest times. It always looked great. I would like to all people
living in this great city to have good lives. Happy anniversary!
The full text of interview is available on Putin's official web site
www.kremlin.ru
*******
#5
Decay Lurks Beneath St. Petersburg Facade
May 27, 2003
By STEVE GUTTERMAN
ST. PETERSBURG, Russia (AP) - In front of the freshly painted hulk of St.
Petersburg's old stock market building, tourists gape at the panorama of
treasures across the Neva river: the ornate Winter Palace, the Admiralty
and the gleaming golden dome of St. Isaac's Cathedral.
Behind the building, a short stroll along back streets leads to a different
picture: A crumbling courtyard littered with broken bottles and crushed
cans, its centerpiece a rusting Russian sedan propped up on stacks of worn
tires. Nearby graffiti curses both America and President Vladimir Putin.
Up on the third floor, past a row of wooden mailboxes, beneath ancient
pipes and beside a door whose paint is peeling away, Anatoly Litvinov
sweeps a pile of grime thick with cigarette butts into a dustpan.
This is the other St. Petersburg: the aging, often decrepit city behind the
facade of Peter the Great's Window on the West.
``It's a nightmare,'' Litvinov said, gesturing at his surroundings.
While Litvinov fought his daily, losing battle Monday, workers in central
squares were busy mowing lawns, laying asphalt and planting flowers for the
party St. Petersburg is throwing to mark its 300th anniversary.
Dozens of foreign leaders are expected for the celebrations, culminating
over the weekend with a Russia-European Union summit and a meeting between
Putin and President Bush.
St. Petersburg is not only world city where fine facades give way to
disorder, grime or squalor. And across Russia, the old tradition of
``pokazukha ( window-dressing)'' - the coat of paint slapped on just before
the leader arrives - persist.
But the grand vistas on the Neva and the orderly lines of St. Petersburg's
main thoroughfares have always set them apart from the often close, jumbled
landscape beyond. The sprucing up that several major landmarks have gotten
for the birthday party has only sharpened the contrast.
Litvinov said the nearby building where he lives was renovated after
decaying for 105 years but that the one where he works has been left more
or less alone. An unfinished fix-up job left a hole in the ceiling of one
apartment - and in the floor of the one above it.
``The celebration hasn't reached my street,'' a woman named Marina told a
news photographer. She gave her address and a short description: ``Complete
destruction.''
Valery, a man in his 60s who was resting after an early jog, put it another
way.
``It's like a woman who gets up in the morning and, instead of exercising,
puts on makeup,'' he said. ``She looks good, but inside she's in bad
shape.''
*******
#6
CNN
May 26, 2003
China seeks Russian military edge
By Willy Wo-Lap Lam, CNN Senior China Analyst
(CNN) -- Much more than symbolism is involved in Chinese President Hu
Jintao's choice for Russia to be the first country to visit in his capacity
as head of state and chief of the Chinese Communist Party (CCP).
The stress that Hu and ex-president Jiang Zemin have recently put on
modernization of weaponry has highlighted the fast-growing military ties
between the two allies.
It is too early to say there is a pro-Russian tilt in the 60-year-old Hu's
foreign policy.
At least for the foreseeable term, the Fourth Generation leader will
continue with the tradition, set by predecessors Deng Xiaoping and Jiang,
of giving top priority to relations with the United States.
However, particularly in the wake of the triumph of Washington's perceived
"neo-imperialism" in Iraq, quite a number of Hu's military and diplomatic
advisers are concentrating on ways to counter-balance America's global
preponderance.
Hu, who arrived in Moscow on Monday, will spend a week in Russia before
heading to France, Kazakhstan and Mongolia.
Highlights of the president's two-day stay in Europe is his attendance at
the Group of Eight annual meeting in Evian, France -- and holding a brief
"mini-summit" with President George W. Bush on the sidelines of the G8
conclave.
While in Moscow, Hu and counterpart Vladimir Putin will play up the two
countries' special partnership of "good neighborliness and cooperation."
In a pre-departure interview with the Russia media, Hu pledged to
"assiduously raise the Sino-Russian strategic partnership of cooperation to
new and higher levels."
Items to be discussed between Hu and his hosts include trade, an agreement
on exporting Russian oil to China -- and hi-tech and defense-related
cooperation.
Particularly after the accident that killed all 70 crew on board the Ming
Class submarine last month, the People's Liberation Army (PLA) is
determined to speed up the upgrading of its arsenal.
Defense modernization was the theme of a special CCP Politburo "study
session" called last Friday, in which the top ruling body vowed to "learn
from the experience of new military developments in the world."
Hu, who is also Central Military Commission (CMC) Vice-Chairman, indicated
the PLA was gunning for a kuayue shi ("leap-forward style") transformation
of defense hardware.
Given that military and hi-tech cooperation with the U.S. and most European
countries has largely stood still since the June 4, 1989 massacre, Beijing
has since the mid-1990s spent billions of dollars on Russian-made fighter
jets and submarines.
It is significant that Defense Minister General Cao Gangchuan, who is in
charge of arms procurement, is the only member of the CCP Politburo to have
been trained in the former Soviet Union.
Closer defense ties with Moscow coincides with a thorough-going
restructuring of the PLA, which is being masterminded by ex-president and
CMC Chairman Jiang.
"Jiang has spent much of the past few months in his power base of Shanghai,
where he is mapping out measures to streamline the forces, including
substantial demobilization," said a military source in Beijing.
"The 73-year-old Jiang hopes ushering the PLA into the IT era will be his
last contribution as senior Chinese leader."
The source said the 2.4 million-strong PLA is due to shed about 500,000
soldiers beginning late this year.
Moreover, the command-and-control structure will be revamped and
centralized with unprecedented powers to be placed in the CMC and units
under its direct control.
Countering the U.S.
It is understood that Jiang, Hu and the generals have been closely studying
what China can learn from the hi-tech wizardry displayed by U.S. forces in
Iraq.
Military specialists traveling with the Hu team will discuss with their
hosts ways in which Russian expertise can help the PLA in areas ranging
from electronics to astronautics.
In a commentary last weekend, the official Xinhua news agency dropped hints
about Sino-Russian cooperation in checking perceived U.S. expansionism.
The article said the two countries should strive to build a "fair and just
global order" against a backdrop of "hegemonism and power politics" on the
world scene.
While in Russia, Hu will also try to breathe new life into the somewhat
lethargic Shanghai Cooperation Organization (SCO), which groups China,
Russia, Kazakhstan, Uzbekistan, Tajikistan, and Kyrgyztan.
Leaders of the SCO countries -- who are meeting in Moscow later this week
-- are set to confirm the establishment of a permanent secretariat in
Beijing as well as the possible admission of new members.
Mongolia, the last leg of Hu's multi-nation tour, is said to be considering
joining the SCO, conceived as a counterweight to NATO as well as "U.S.
hegemonism."
Diplomatic analysts said Hu would face a hard time persuading his SCO
colleagues to adopt a tougher line on the U.S.
In the wake of the war in Afghanistan, countries including Uzbekistan and
Tajikistan have become dependent on American economic and even military aid.
Moreover, the Putin administration has reiterated the priority it is
attaching to American investment and the U.S. market.
And while Moscow played a key role in opposing American military action in
Iraq, its main interest is getting a bigger share of the energy pie in the
war-torn country.
Indeed, while meeting Bush on the fringes of the G8 meeting, the Chinese
president will have to try out a juggling act not unlike that perfected by
Putin.
Hu has already demonstrated his think-big vision by agreeing to attend the
G8 as an observer, which will be a first for a top Chinese leader.
Diplomatic analysts expect Hu and Bush to concentrate on issues including
North Korea, Taiwan, peace in the Middle East, as well as economic and
technological ties.
Cooperation in solving the knotty North Korean nuclear crisis could help
cement a new Sino-U.S. partnership that is anchored on fighting global
terrorism.
Indeed, Beijing's acquiescence in the Afghan and Iraq wars has been
instrumental in keeping traditionally volatile bilateral ties on an even
keel.
However, the analysts say given Hu's strong views on Taiwan, it is possible
the Chinese leader may play the Korean card when putting pressure on
Washington to at least refrain from selling sophisticated weapons to the
self-ruled island.
Yet apart from the SARS outbreak, developments in China that have attracted
the attention of U.S. politicians and legislators in recent weeks tend to
revolve around the relentless build-up of its already formidable army.
Just last weekend, Beijing put its third navigation satellite into orbit, a
hi-tech feat that has major military implications.
The Hu administration's high-profile determination to beef up the PLA
arsenal -- partly with help from the Russians -- could buttress the
arguments of those Bush aides who want to rein in China through arming
Taiwan.
*******
#7
Medics say Russia first SARS case unlikely to be confirmed.
May 27, 2003
ITAR-TASS
Medics in Russia's Amur region say the condition of Denis Soinikov, the
first man in Russia hospitalised with SARS symptoms early in May, has
considerably improved. An intensive therapy course yields positive results,
sources from the local healthcare department told Itar-Tass on Tuesday.
According to the sources, medics tend to believe that Soinikov had not
atypical pneumonia. However, one will be able to say that for sure only
after additional blood tests in Moscow. That will take at least another week.
Soinikov, 25, was taken to the regional hospital for infectious cases May
4. His condition, described by physicians as "stable heavy" until recently,
has changed to "medium heavy with positive dynamics" now.
Experts in Moscow say the tests given to Soinikov did not produce positive
proof for the SARS, but doctors have not revoked the SARS diagnosis so far,
and his blood serum is undergoing additional tests at Moscow laboratories.
Epidemiological situation in the Amur region is fully under control, and
the border-crossing station in Blagoveshchensk at the Russo-Chinese state
border reopened Monday. However, only up to 200 people a day can cross for
the time being. That is not enough to see a business pace of life restored
in Blagoveshchensk. Hotels are still empty in the city, and trade is scarce.
Meanwhile, problems have appeared with medical checkups. Chinese nationals
have started dodging medical examinations, as they have to pay for each one.
*******
#8
gazeta.ru
May 27, 2003
Russian children face greater brutality
By Irina Petrakova
The Prosecutor General’s Office has unveiled the results of a survey of
crimes against minors according to which over 3,000 children were killed in
Russia over the past year. And even though that figure proved somewhat
lower compared to 2001, researchers have established a new trend: murders
of children have grown more brutal.
The PGO has calculated that over the past year the number of brutal
killings of children, which made even the most hardened investigators
shudder with horror, has risen. According to the statistics, in 2002 the
number of murders of children fell by approximately 700 cases (3,272
murders were committed). However, those murders have become more vicious.
For instance, a resident of the Tver Region Nadezhda Arseneva deliberately
took her young children Polina aged 1 year and 7 months and Natalya (2
years and 7 months) into the woods and left them there. Both girls
perished. Arseneva has been detained and charged with premeditated murder.
Another case occurred recently during a family squabble in the capital when
a 45-year-old Muscovite threw his 8-month grandson into the stairwell from
the 5th floor. The baby was hospitalized with grave injuries. Criminal
proceedings have been instigated.
According to the prosecutors, such brutality can be partially explained,
first and foremost, by negative social factors and malevolence.
However, so far investigators have not detected any clear trends. The PGO
experts note only that 10 years ago such brutal crimes against children
were much less common.
The total number of children injured or killed as a result of various
accidents and crimes amounted in 2002 to 94,000, which is 2,000 less than
the previous year.
But that figure does not show the complete picture. According to the
prosecutors, quite often children do not even understand that they are the
victims of crime and do not ask for help. ''Very often there are cases when
children are starved, beaten, or when fathers raped their daughters, with
the child not being able to understand that a crime has been committed,''
the PGO officials say.
Activists from the human rights group The Right of a Child, too, are
convinced that the real number of children who fall victim to crimes is
nearly twice as much as the 90,000 officially registered.
According to the director of the Centre for Promotion of Criminal Justice
Reform, Valery Abramkin, not only harassment, but even some murders are
made to look like an accident. He also noted that in most cases parents of
minors commit the crimes.
For instance, according to the results of an independent survey, conducted
by the Centre, each year some 60,000 children fall victim to rape. Most
frequently, girls under 13 are raped by their own fathers or stepfathers.
''Also, becoming more widespread are cases of mothers killing their
new-born children. Earlier, there were some 500-700 cases that took place
annually. Now those figures are nearly twice as high,'' human rights
activists say.
However, so far, Russian authorities have come up with no new methods of
preventing parents’ brutality towards their children, since the reason
itself for the brutality is not really clear.
There are some children who attempt to protect themselves. For instance,
the only minor pardoned last year by the president was a young female
resident of the Krasnoyarsk Region who was serving a 6-year sentence in the
Tomsk correctional colony. She had been subject to regular beatings from
her stepfather. After one occasion when he beat her particularly severely,
she decided to kill him.
So far, neither the PGO, nor the human rights activists are able to explain
the tendency and to forecast a growth or decrease in the number of crimes
against children. Furthermore, according to experts, in Russia the subject
of violence against children ''is still poorly examined''. Another reason
for that is that the children themselves are reluctant to tell the police
the truth about their parents.
*******
#9
Moscow Times
May 27, 2003
No Foothold for Trust in Vicious Media Circle
By Alexei Pankin
As St. Petersburg seems to be the flavor of the month, I thought I would
kick off my column with something connected to the city founded by Peter
the Great 300 years ago. A few days ago, Rosbalt wire service in St.
Petersburg conducted a survey among the journalists and managers of two
dozen leading St. Petersburg media companies. They were asked which media
outlets, in their opinion, most often carried biased coverage of business
disputes and which they found offered balanced and objective coverage .
Twenty-eight percent of respondents said that Vedomosti provided their
readers with objective information, while 20 percent stated that Kommersant
did. Also mentioned as being unbiased were: Vlast and Dengi magazines,
Expert magazine, Delovoi Peterburg, Peterburgsky Chas Pik, Profil magazine,
Izvestia, Vremya Novostei, Russky Fokus, Interfax, Prime-Tass and The
Moscow Times.
As regards lack of objectivity, Petersburg journalists voted for Novaya
Gazeta (24 percent) and Izvestia (21 percent) as the undisputed leaders.
Exactly the same pair of questions was put to the PR departments of about
50 of Russia's largest companies, as well as to major business
associations. Companies overwhelmingly considered Vedomosti (96 percent)
and Kommersant (83 percent) the most objective publications. After that
came Izvestia, Kompaniya magazine, Rossiiskaya Gazeta, Profil, Gazeta,
Vremya Novostei and Dengi.
Versiya (43 percent), Nezavisimaya Gazeta (30 percent), Novaya Gazeta (27
percent), Komsomolskaya Pravda (22 percent) and Moskovsky Komsomolets (19
percent) were deemed the most biased.
It is interesting that journalists, in their comments, tended to focus on
the demand side: Business disputes involving major players -- according to
one journalist -- get slanted coverage in all media outlets because
companies are prepared to pay a lot of money for this, more to major news
outlets of course, but just about all publications get something and on a
regular basis. Smaller conflicts, on the other hand, are generally covered
objectively, as there is little money in it.
The business community prefers to explain the lack of objectivity by
reference to the low level of professionalism among journalists. The
representative of a major company said, "It's sad but true that scandals
are so much loved by the press in Russia that they wouldn't even spare the
good name of their parents for the sake of a cheap sensation."
A related topic was discussed at a roundtable last week on the mass media
and corporate social responsibility, which included the editors of a number
of publications in the St. Petersburg rating.
"Philanthropic activities are a form of advertising for businesses, and
since that is the case -- let them pay for coverage of them," chimed the
editors.
"But can't companies' socially oriented programs be of interest to your
readership?" I countered. "Even if they are, no one will believe that we
are writing about these things out of the goodness of our hearts,"
responded the editors.
Companies' PR departments, as it turns out, clearly don't think they can
get something for nothing. Instead of thinking up catchy news hooks, they
make a beeline for newspapers' ad departments (or simply start stuffing
envelopes full of banknotes).
Let's not get too bogged down in the question of who is guilty of
corrupting whom -- the main thing is we are caught in a vicious circle.
Lavishly paid zakazukha does not tend to instill trust in readers, and as a
result, the money spent on these "pseudo ads" is wasted. However, even
honest and upright publications are reluctant to write positive articles
about business, fearing that they will be suspected of receiving money for
them. And this total lack of trust on all sides has become a heavy cross to
bear today, at a time when business is taking its first steps toward social
responsibility, and the demand for reliable information, whether it be
positive or negative, is very much on the rise.
Alexei Pankin is the editor of Sreda, a magazine for media professionals
(www.sreda-mag.ru)
*******
#10
Financial Times (UK)
May 27, 2003
Legal pitfalls of critical coverage in Russia: Andrew Jack reports on the
growing trend for companies to sue those whose coverage they disagree with
By Andrew Jack
Bill Browder, the US head of the Moscow-based investment fund Hermitage, is
a long-standing critic of Russian corporate governance. But having launched
litigation against a number of Russian companies in the past, this week he
found himself on the other side of the courtroom.
Yesterday, Sberbank, the state-controlled Russian savings bank, became the
latest in a series of Russian companies to defend their reputations by
taking critics to court both at home and abroad. It is suing Hermitage for
a report earlier this year criticising Sberbank's management.
Sberbank's lawsuit against Hermitage, and separate legal actions against
Russian newspapers Vedomosti (a sister publication of the FT) and Vremiya
Novostei, which reported the critique, are raising fresh questions about
Russian transparency and the nature of business relations between Russian
and western companies and investors.
"Corporate governance is supposed to be improving in Russia, but in fact
people are just more afraid to talk about it," says Mr Browder, head of
Hermitage, as he dismisses the bank's claims for damages, stands by his
analysis and pledges not to be cowed in future research.
His case is not unique. Basic Element, a holding company controlled by the
politically influential aluminium baron Oleg Deripaska, has threatened
action against a number of Russian publications responsible for critical
reporting about its ownership structure and its contested takeover battle
for the paper plant Ilim Pulp, including Expert magazine and the weekly
newspaper Novaya Gazeta.
Like several of its large Russian peers, including Yukos, the country's
largest oil company, Basic Element has also recently launched legal action
against western media outlets on their own home turf. It won a court ruling
last month in Frankfurt against the Frankfurter Allgemeine, and is
currently suing Le Monde in Paris.
A landmark case was concluded in the High Court in London in March this
year, between the exiled Russian tycoon Boris Berezovsky and Forbes
magazine. Forbes agreed in a statement that in an article published in
1996, it had not meant to accuse Mr Berezovsky of being involved in the
assassination of a rival. Mr Berezovsky dropped his action without any
payment of damages.
Kommersant, one of Mr Berezovsky's newspapers, hailed the decision as a
victory, and Peter Aven, president of Alfa Bank, another large Russian
group, warned that journalists must tell the truth. The London judgment, he
said, was important for all of Russian business.
The Russian media has long had problems with objectivity. Some journalists
are paid to write biased articles, and publications are used by their
powerful business owners to further their own interests against commercial
or political rivals.
However, reporters seeking to work scrupulously in Russia struggle with
intense corporate secrecy, the reluctance of sources to speak on the
record, and the absence of reliable legal judgments or effective police
investigations for information.
As Russian companies become richer and more sensitive to their image at
home and abroad, they are increasingly hiring lawyers and public relations
firms to make their case. Much of the media is now on the defensive.
Alexei Simonov, head of the Glasnost Defence Foundation, a media watchdog
in Moscow, points out that domestic lawsuits have been growing sharply
since 2000. Novaya Gazeta was almost forced to close last year after legal
actions imposing up to Dollars 1m fines, for instance.
"The trend has become very popular in the last three years and it has
proved successful," he says. "So why should the litigation which has
arrived at the edge of Russia not now flow beyond the border?"
Yukos threatened a number of legal actions during the 1990s, pursued the
British weekly Sunday Times last year, and is currently suing the press
agency Bloomberg in London.
Konstantin Remchikov, head of Basic Element's advisory board, says: "All
major businesses have realised that reputational capital may be more
important than the value of their assets. Yukos' market value has increased
from Dollars 3bn to Dollars 21bn, without any drastic fundamental change.
They basically became more transparent and understandable."
The legal system can prove double-edged. His company was sued in the US by
a rival, which accused executives of corruption and even making death
threats. A judge recently dismissed the case, and Basic Element has hired
some 30 staff in the US, including a former assistant attorney-general, to
clear its name and lift a travel ban for Mr Deripaska, its chief executive
and joint owner.
Mr Remchikov says Mr Deripaska is innocent of all charges, but was forced
to communicate with criminals while acquiring and cleaning up the metals
industry in Russia, because the sector was highly criminalised. "We want to
say to the world that nothing is proven, and the presumption of innocence
applies to us too."
*******
#11
Novaya Gazeta
No 37
May, 2003
WHO AND HOW SCRAPES UP THE DOUGH
WHERE POLITICAL PARTIES GET MONEY FOR THE ELECTION
Author: Irina Gordienko
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
Central Election Commission Chairman Alexander Veshnyakov was
"sorry" back in 2000 that "the propaganda and financial matters" not
to mention "the necessity to stiffen the legislation and monitor
political parties' finances" were the major problems of the election
campaign. He assured the country then that the system of political
sponsorship in Russia would become "the most transparent in the world,
more transparent even than in the United States" by 2002.
Having listened to Veshnyakov's with the appropriate solemnness,
the Duma passed the law "On political parties". Even that, however,
leaves doubts in "the most transparent system in the world".
There are no rules or laws in Russia nowadays forcing political
parties to publish the lists of their sponsors and masterminds. The
law "On political parties" merely states that "summary financial
reports of political parties should include the data in sources and
the size of installments transacted to their bank accounts." The
provision to the effect that this information should be published in
the media was in the draft law but is not in the law as such.
On the other hand, the reports are to be posted "by the federal
body of registration at a special website". These days, this is the
website of the Science Center of Legal Information of the Justice
Ministry. Visit the website, however, and you will discover reports of
only 6 parties out of 51 registered - People's Party, Democratic
Party, National-Patriotic Forces, United Russia, Conservative Party,
Russian Political Party of Peace and Unity. Sponsors of the rest are a
deep dark secret.
Russian political parties do not rely on rank party members'
money as a rule. The share of membership fees in party finances is
infinitesimal. Gennadi Zyuganov of the Communist Party tells everyone
within earshot that "we have 40 million voters, and whenever necessary
we will call on them... here is money for the party." The Yabloko has
400,000 or 500,000 rubles on some bank account (party fee amounts to
20 rubles a year)... and that is all. The sums are much too small.
Sum total of the federal funds allocated for all political
parties should not be below 0.005% minimal salary multiplied by the
number of votes the party in question polled last time. The minimal
salary now amounts to 300 rubles. It means that sum total approximates
162 million rubles or $5.4 million. Compared to 1999 when participants
got almost 6 million rubles from the election commissions, the growth
of state subsidies for the election cannot be denied. This is but a
replacement of one dependance on another. Some experts say that the
eagerness for state funds "makes political parties resemble junkies."
The law treats private contributions as "other donations not
banned by the law." Where do they come from? Take a look at party
lists. The list of activists of the Communist Party includes Yevgeny
Marchenko (ex-director of the famous Ingush financial company BIN and
currently deputy general director of Presnensky Business Center),
Gennadi Semigin, Chairman of the Executive Committee of the People's
Patriotic Union (before his election into the Duma, he headed the
Center of defense of economic and social interests of citizens), Pyotr
Romanov (ex-general director of Yenisei Chemicals), and
Rosagropromstroi President Viktor Vidmanov.
As far as Unity deputies are concerned, almost every fourth is a
businessman or a member (or candidate for membership) in the Russian
Union of Businessmen and Entrepreneurs. Russian Regions group (headed
by Oleg Morozov, member of the Political Council) controlled by United
Russia cooperates with LUKoil. As for the duets Union of Right
Forces/Anatoly Chubais and Yabloko/Mikhail Khodorkovsky - there are
lots of rumors about them.
Where trade and commerce are concerned, political parties are
permitted to sell souvenirs with party symbols, carry out
informational activities and printing works, not to mention lease of
property and assets.
In any case, party construction aka the sphere of risks depends
on chance.
(Translated by A. Ignatkin)
*******
#12
Vedomosti
No. 86
May 23, 2003
Towards Parliamentary and Presidential Elections
CENTRISTS AND SPS JOIN FORCE IN THE FIGHT FOR VOTERS
By Anfisa VORONINA
Seeking to attract more people to the Duma elections, the
leaders of United Russia and SPS suggest holding the elections
a week earlier, on December 7. Sociologists are sure that this
initiative is spearheaded at the communists, whose disciplined
electorate would come to the polling stations after celebrating
the Constitution Day more willingly than their rivals'
electorates would do.
Under the current law, elections are held on the second
Sunday of the month, when the constitutional term of the
previous Duma expires. This year it will be December 14, the
third day of celebrations of the Constitution Day.
On May 21 the centrists and the SPS submitted to the State
Duma a draft amendment to the law on the elections of the State
Duma, which shifts the elections to the first Sunday of
December.
The draft was signed by Unity leader Vladimir Pekhtin, SPS
leader Boris Nemtsov, Mikhail Bugera of Russia's Regions,
Anatoly Aksakov of the People's Deputy group, and Konstantin
Kosachev of the OVR. "The easier the voting procedure, the
better for the country," said Boris Nadezhdin, deputy chairman
of the SPS faction. In his words, the amendments are designed
to give the voters "a chance to express their will without too
much tension." Sociologists believe that the initiative is
spearheaded at the communists. "The communist electorate is
very disciplined," says Merkator head Dmitry Oreshkin. "Senior
voters traditionally attend elections, are highly politicised
and want their opinion to be known." The electorate of other
parties would come to the polling stations on December 7 more
willingly than they would on December 14. Nadezhdin of the SPS
also thinks "the communists' electorate is less mobile."
Kosachev, who is a member of the Central Political Council
of United Russia, disagreed. He claims that the lawmakers
thought about a more distant future when they advanced this
initiative.
The thing is than in a few years the second Sunday will fall on
December 12, when elections cannot be held by law. "If we
postponed the elections on that day, we would have been accused
of an attempt to prolong our term" said Kosachev.
If the State Duma approved the amendment, the first
session of the new Duma is to be held no later than on the 30th
day after the election, which will be January 7, Orthodox
Christmas. The centrists hope that they would not have to
convene on Christmas day and the president would shift their
first session to late December. Alexander Veshnyakov, Chairman
of the Central Election Commission, said he supported the
initiative because he had suggested shifting the Duma elections
to the first Sunday of December long ago.
But the communists think that holding the elections a week
earlier would not change the outcome. Oleg Kulikov, Secretary
of the Communist Party Central Committee, described the
initiative as "the election itch" that will not help the
Communist Party's rivals. Aleksei Grazhdankin, deputy director
of the VTsIOM National Public Opinion Research Centre, fully
agrees. In his view, shifting the election date would seriously
affect the outcome only if the elections were held in summer.
"Three-day long holidays in winter will hardly affect
attendance," he said.
* * *
According to the FOM Public Opinion Foundation, if the
elections were held next weekend, 21% of the people would vote
for the communists, 19% for United Russia, 7% for the Liberal
Democratic Party, 5% for Yabloko, and 3% for the SPS. The poll
was held on May 17 and covered 1,500 respondents.
*******
#13
FEATURE-Chechnya's suicide widows are new threat for Russia
By Clara Ferreira-Marques
MOSCOW, May 27 (Reuters) - Shakhidat Baymuradova, a rifle slung on her
back, fought alongside her husband in the ranks of Chechen rebels until he
was killed by Russian troops in 1999.
This month, her hair tucked in a hijab or Muslim headscarf, she strapped
explosives to her waist and blew herself up at a Muslim festival where
pro-Moscow officials had gathered. At least 16 people were killed.
Baymuradova, 46, whose first name translates as "martyrdom" in Arabic, was
the latest in a string of female suicide bombers to strike in Chechnya over
the last year -- a frightening new form of rebel action in a decade-old
conflict.
Women have traditionally been excluded from the fighting that has razed
Chechnya, on Russia's southern fringe. Suicide attacks were almost unheard
of in the first years of fighting.
But the "black widows" have become a new threat to Moscow, already shaken
by almost daily losses.
Baymuradova's suicide attack on May 14 -- an assassination attempt on a top
pro-Moscow official who in the end escaped unhurt -- also killed her woman
accomplice.
Two days earlier, another woman was part of an attack in the region's
usually peaceful north, driving a truck packed with explosives into a
government complex.
"We are witnessing an escalation of the violence in Chechnya," said
Salambek Maigov, a rebel envoy to Moscow.
"Seeing that Moscow's promises are empty, people are taking extreme
measures. The Kremlin has finally lost control of the situation in Chechnya."
"BLACK WIDOWS"
Kremlin officials dismiss the women, saying they act in isolation,
bankrolled by mercenaries.
They say a March referendum, which showed overwhelming popular support for
Chechnya remaining part of Russia, showed the region is on track for
Moscow's peace plan which calls for elections for a regional president and
assembly.
"All terrorist acts committed by kamikaze suicide bombers are organised by
Arab mercenaries," Ilya Shabalkin, a spokesman for Russia's anti-terrorist
operations in Chechnya, said after Baymuradova's attack. "They use this
same tactic in Israel."
But Chechen rebel leaders describe the attacks as the illustration of
widespread despair in the region, where they say the much-publicised vote
has had little impact on real life.
"I cannot see any religious meaning behind these actions," rebel envoy
Akhmad Zakayev said by telephone from London. "They spring from a desire
for revenge."
Kheda Yusupova, from the village of Urus-Martan southwest of the Chechen
capital Grozny, said grief made women easy prey.
"These women are motivated only by vengeance, and the rebels use this,"
Yusupova told Reuters. "It is only revenge. All the rewards on this earth
are irrelevant for a person burdened with grief."
The first major suicide attack in the region came in June 2000, early in
Russia's second campaign to contain separatist fighters in the region.
Two women drove a truck crammed with explosives into a police building --
one was Khava Barayeva, a relative of guerrilla leader Movsar Barayev who
orchestrated last year's siege of a Moscow theatre in which 129 people died.
Barayeva's attack was so novel that it was recorded in song by one of
Chechnya's most popular artists.
The idea that women could fight for the Chechen cause did not hit home for
most Russians, however, until the Moscow siege.
Several young women fighters appeared on footage aired on national
television after Russian special forces ended the siege with a powerful gas
before shooting the rebels.
Their faces covered by the Muslim hijab, they lolled dead in their seats.
Most, said hostages who had spoken to them during the siege, had lost men
folk in the war.
In a refugee camp in Ingushetia, on Chechnya's western border, another
refugee, who refused to give her name, said four of her sons had been
captured in Russian raids.
"I have only one son now, who is 11. He thinks only of avenging his
brothers," she said. "Sometimes I would also like to blow myself up in the
middle of a group of Russian soldiers. I would not be sorry for them."
WARLORDS BENEFIT
Zakayev, a spokesman for Chechnya's fugitive separatist president Aslan
Maskhadov, said there would be more bombings as extreme factions of
Chechnya's separatist movement -- including warlord Shamil Basayev --
gained prominence.
"We have said we are ready to talk without conditions," Zakayev said.
"Basayev says Chechnya can only be freed through war."
Maskhadov, in exile since Russian troops poured back into Chechnya in 1999
after three years of de facto independence, long called on the Kremlin to
negotiate. With Moscow's refusal, he now says there is no point in holding
talks.
It is ultimately Chechnya's women who stand to suffer most from attacks
staged by their militant sisters.
Police in the region say they have already received orders to search women
crossing the region's numerous checkpoints.
"Some days ago we got a message telling us to pay special attention to
women in mourning or in Muslim clothes," Ramzan, one of Russia's crack OMON
troops in Chechnya, told Reuters.
"Women should not die this way," he added, shaking his head. "War is a
man's affair. It is our fault these things happen."
*******
#14
Wall Street Journal
May 27, 2003
For Russia, Cold War Relic Becomes a Game of Chicken
Obscure Jackson-Vanik Trade Rule Remains a Sore Issue for Moscow
By JEANNE CUMMINGS
Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON -- When President Bush heads to Russia for a fence-mending trip
this week, he won't be carrying with him one thing President Vladimir Putin
badly wants: freedom from the so-called Jackson-Vanik rule, a Cold War
relic that ties U.S. trade relations to the former Soviet state's treatment
of Jews.
Mr. Bush pledged two years ago to "graduate" Russia from the 1974 trade
restriction. His failure to deliver on the promise has become a source of
humiliation and irritation to Mr. Putin and his senior aides, and it is
certain to be a major issue in this week's meetings. To some Russians, it
is becoming a test of Mr. Bush's true view of the importance of U.S.-Russia
relations.
"This whole history of Jackson-Vanik is already so laughable, it's
legendary," Vladimir Lukin, deputy speaker of Russia's lower house of
Parliament, said in an interview last week. "It leaves the impression that
Congress is either sleeping and only waking up when it needs to help the
president conduct some military action, or that it is [under the influence]
of some strange, narrow-minded lobbyists who don't understand modern
realities."
There has been a flood of Jewish emigration since the 1989 fall of the
Berlin Wall, and the annual certification under Jackson-Vanik that Russian
Jews are being allowed free travel has become automatic. But the law's
continued existence complicates Russia's efforts to enter the World Trade
Organization, and Congress so far has kept it in place, using it as
leverage in trade disputes.
The Russians don't understand why a popular president can't simply insist
that a Congress controlled by his own party free them from Jackson-Vanik.
But inattention to the issue by the White House and tough trade tactics by
Russia have allowed the law to become entangled in a series of trade
issues, including a chicken-parts fight, a pending fertilizer dispute and
differences that arose as a result of Russia's stance before the Iraq war.
As a result, Mr. Putin's emancipation from Jackson-Vanik now may depend
less on Mr. Bush's clout on Capitol Hill than on the outcome of an unusual
chicken-plant inspection regime now under way, led by Russian veterinarians
in the Shenandoah Valley and elsewhere.
Mr. Putin says it is unfair to tie a Soviet-era human-rights law to
Moscow's efforts to expand trade. But members of Congress -- and industry
lobbyists -- are bent on using any lever on hand. "We believe our
government needs to use each and every advantage available to them," says
Bill Roenigk, vice president of the National Chicken Council. "If you give
up a leverage point when you have an issue that needs to be resolved,
that's a missed opportunity."
In 1972, after Moscow imposed a tax on Jewish citizens traveling outside
the country, concerned American activists sought a permanent way to express
U.S. objections. They found it after the groundbreaking 1972 trade deal the
Nixon White House negotiated with the Soviet Union. Washington Sen. Henry
"Scoop" Jackson and Ohio Rep. Charles Vanik's amendment required that all
"nonmarket" nations -- which meant most of the communist states -- provide
evidence each year that they allowed Jews to travel freely, in exchange for
winning normal trade-nation status. In 1975, an angry Moscow voided the
trade pact because of the provision.
Even so, Jewish emigration began to rise. In 1979 there was talk of
"graduating" the Soviets from the annual certification. Then, as now, other
events ended talks.
When the Berlin Wall fell, Jewish emigration exploded, and in 1996
President Clinton permanently granted the new Russia a waiver from
Jackson-Vanik, but the law was still in place. In Mr. Bush's first meeting
with Mr. Putin, in an elegant hotel in Slovenia, Mr. Bush pledged to press
Congress to finally drop the provision.
But the White House waited nearly a year to push for passage of the
legislation. Then, the process came to an abrupt end last spring when Mr.
Putin slapped an embargo on U.S. chicken imports, saying they were tainted
by salmonella bacteria.
Last summer, administration officials thought they had reached an agreement
to end a standoff by allowing Russian government inspectors to come to the
U.S. to survey production plants and certify they meet Moscow's standards.
It was a rare concession by a U.S. industry, but with $660 million of
annual sales at stake, companies gambled that it was worth it.
But protracted negotiations ensued over what standards the U.S. plants had
to meet. Among Moscow's demands: all packaged chicken must be checked for
radiation with Geiger counters; a ban on genetically modified feed corn and
soybeans for chicken destined for Russia ; installation of walls in all
U.S. plants between the evisceration and carving of the birds, to hold down
bacteria; and freezing of chicken parts within 48 hours, as opposed to the
industry standard of 72.
The poultry industry was appalled. So were nearly 200 lawmakers from states
producing poultry, soybean and corn. In letters to the White House, they
let it be known that Russia needed to back off or face trade sanctions -- a
step that would reverse any movement toward normal trading status and the
lifting of Jackson-Vanik requirements on Russia .
A breakthrough came last month when U.S. agriculture officials announced
agreement on the "technical" inspection issues, and surveys of 360 poultry
facilities began. They are expected to be finished by mid-June. By early
July, Moscow will announce which passed muster with the inspectors.
If that goes well, and Moscow shows some flexibility on recently imposed
import quotas, the agriculture community is prepared to ease its objections
to lifting Jackson-Vanik requirements on Russia . That would be a big win
for the White House, but that is hardly the end of the battle for Mr. Bush
and Mr. Putin.
Beyond chicken, the beef, poultry and fertilizer industries are raising
their own issues with Russia that they want ironed out before Congress
helps clear the way for Russia's entry into the WTO. Meanwhile, Democrats
want to ensure protection for labor unions in Russia , and human-rights
groups want to continue monitoring treatment of Russia's Jewish population.
And, finally, House leaders once sympathetic to the president's plight on
Jackson-Vanik now face lawmakers angered by Russia's objections to the Iraq
war and allegations that it may have sold night-vision goggles and
radar-jamming equipment to Saddam Hussein's military.
"That soured the mood on Capitol Hill in terms of doing something nice for
Russia ," says Blake Marshall of the U.S.-Russia Business Council.
--Jeanne Whalen in Moscow contributed to this article.
*******
#15
BBC Monitoring
Russian Liberals Protest Military Reform, Want Defence Minister to Resign
Source: NTV, Moscow, in Russian 0600 gmt 27 May 03
[Presenter] Representatives of the Union of Right Forces SPS are holding
pickets in the Russian capital at the moment. Activists are collecting
signatures in support of the military reform in the Manezh Square, the
Pushkin Square and the Staryy Arbat street, as well as near the Kurskiy and
the Belorusskiy railway stations. SPS leaders intend to collect 100,000
signatures and send them to President Vladimir Putin. The main demand is to
transfer the Russian army to contract manning. Our correspondent Yevgeniy
Ksenzenko joins us from the Manezh Square, where a non-sanctioned picket is
taking place.
[Correspondent] I shall ask the cameraman to show you what is going on in
the square. The picket you see is indeed non-sanctioned. Similar picketing
is taking place all over Moscow now. Representatives of the Union of Right
Forces are collecting signatures against the military reform suggested by
the Russian Defence Ministry. In the Manezh Square, where picketing is
non-sanctioned - I am not sure why the SPS was not allowed to stage a
picket here - SPS representatives are encouraging the passers-by to sign in
protest of the ongoing military reform. The collection of signatures is
also meant to initiate the resignation of Russian Defence Minister Sergey
Ivanov. This is the main demand of the SPS. For the moment, as far as we
know, they managed to collect 10,000 signatures. The campaign started on 21
May. Signatures are also collected via the Internet.
The plan possibly comes from the new party's generator of ideas, Alfred
Kokh, who has become the head of the SPS election headquarters. So far
everything is quiet in spite of the fact that the picketing is
non-sanctioned. However SPS representatives are prepared for any possible
turn of events.
*******
#16
New York Times
May 27, 2003
SARS Scare Casts Pall on Las Vegas of Siberia
By MICHAEL WINES
BLAGOVESHCHENSK, Russia — Nobody would ever mistake the Las Vegas Casino —
"Welcom's You!" cries a crawl of red lights above the door — for a Las
Vegas casino.
There is no faux Great Pyramid, just a nondescript room with seven slot
machines, a roulette wheel and three poker tables. No luxury hotel soars
above the betting parlor. The only floor show is a very drunk prostitute
trying and failing to find her way out the door.
But most of all on this May evening, the Las Vegas is not Las Vegas because
there are no gamblers. At 10 p.m. in downtown Blagoveshchensk, barely a
half-dozen forlorn figures are feeding the slots or placing bets, compared
with 30 on an ordinary night here.
More telling still, only one of them is Chinese. "We like to gamble with
the Russians," the one Chinese man, 21-year-old Li Yanchou, a student at a
Blagoveshchensk teachers' institute, said between bets. "Tourists,
businessmen who have money — a lot of them would like to come here. But
they're not."
That is bad news for the Las Vegas — and for the Casino Macao on the
opposite corner, the Owl a few steps down Lenin Street, the Amursky a few
steps up Lenin Street, the Uzbek Restaurant and Kasino just across Lenin
Street, and a half-dozen others.
Unlikely as it seems, Blagoveshchensk, a down-at-the-heels city of 170,000
in remote southern Siberia, has carved itself a prosperous niche as the
mecca for Chinese gamblers.
Or had, until the ailment a local man was suffering from was tentatively
diagnosed in early May as Russia's only known case of SARS, or severe acute
respiratory syndrome. Faster than you can say "snake eyes," local border
posts snapped shut and the casinos' Chinese clientele all but dried up.
[Local officials have since said the disease was not SARS, but health
officials in Moscow have said they stand by the original diagnosis until
tests prove otherwise.]
"Who could know that this thing would happen?" said the manager of the
Macao, who gave her name only as Svetlana. "Usually we rely on tourists.
Now the only Chinese here are the ones who live in the city."
For Blagoveshchensk residents, it is a piece of uniquely bad luck. With a
falling population, no dominant industry and no sightseeing outside a
handsome but crumbling stock of Siberian log cabins, the city appears to
have but one natural advantage: it sits on the Amur River, with a Chinese
province of 39 million people just 500 yards away on the opposite bank.
Local entrepreneurs made the most of it. The city and outlying areas now
have 13 casinos, with 3 more on the drawing board, all catering to Chinese
patrons. There are far more casinos here than anywhere in Russia, save
Moscow (population: 10 million).
The area's gambling joints pump more than $1.1 million a year in taxes into
government coffers — not as much as the booming gold mining industry, but
enough to make gambling one of the major businesses in Amur Province.
By most estimates, 7 of every 10 Blagoveshchensk customers come from across
the Amur. Gambling is illegal in most of China, and while underground
betting parlors thrive there, a jaunt to Russia is less furtive and perhaps
more fun.
Russia's Far East has larger and more cosmopolitan cities — Vladivostok and
Khabarovsk — that offer not just casinos but also direct air service from
China. By contrast, little Blagoveshchensk does not even have a bridge
across the Amur; incoming gamblers take boats in the summer, drive across
the frozen river in winter and ride hovercrafts in spring and fall, when
ice floes rule out other options.
Yet Blagoveshchensk seems to have captured the Chinese heart.
Part of it, apparently, is that Chinese fear the far higher crime rates in
bigger Russian cities, and part is that in major towns they must compete
for a preferred spot at the tables with sharp-elbowed, high-stakes Russian
gamblers.
"In Khabarovsk and Vladivostok you have to pay an entrance fee to gamble,"
said Marat Makrtchyan, owner of two casinos and president of the Amur
Province Association of Gambling Organizations. "None of the casinos here
charge entrance fees. For us the main clients are the Chinese, and Chinese
of different levels. Low-income Chinese may gamble at one table, and we can
set up a V.I.P. table for rich Chinese. And they feel this atmosphere."
Many come from Heihe, a Chinese city of about 70,000 directly across the
river. But increasingly, Mr. Makrtchyan said, they are coming from big
cities like Harbin and even Beijing, as well as the great population
centers of southern China.
SARS is believed to have originated in southern China, and as the Russian
authorities have focused on the Chinese presence in the border area of
Siberia as a potential entry route for the virus, casinos have been seen as
a potential vector.
Mr. Makrtchyan scoffs at that, although not every casino operator agrees —
the Macao, for example, sprays its gambling hall with disinfectant every
three hours. After all, Mr. Makrtchyan said, European nations have kept
their borders open even as they treat genuine cases of SARS.
"It's a typical Russian attitude — `what if?' " he said. "It's very easy to
destroy established economic links by illiterate steps."
*******
#17
Russia gains from U.S. monetary loosening-analysts
By Andrew Hurst
MOSCOW, May 27 (Reuters) - Russia, basking in a flood of cheap money, may
prove to be a big beneficiary of the United States Federal Reserve's steady
loosening of monetary policy.
As interest rates come down, top Russian companies are borrowing heavily in
dollars as never before to feed ambitious growth plans.
Another side effect of lower U.S. interest rates -- a firming of the euro
against the rouble -- also looks like it can give a boost to Russian
manufacturers who had been struggling to stay competitive while the rouble
steadily gained strength.
"The rouble was strengthening but that changed when the Federal Reserve
loosened policy. The strength of the euro also delays the strengthening of
the rouble," said Peter Boone, an economist at Brunswick Warburg in Moscow.
Lower U.S. borrowing costs have spurred Russian companies to take on more
dollar debt. Corporate and sub-sovereign borrowing jumped to $3 billion in
the first three months of the year, up from barely $500 million in the
first quarter of last year.
"Russia will be the main beneficiary of cheap U.S. money. It is flooding
in," said Boone.
"Russians are able to borrow abroad more cheaply and bring the money into
Russia," he said, adding "there is no doubt this environment is great if
they don't go overboard."
One factor speeding the flow of funds into Russia is a sea-change in
investor perceptions of a country which less than five years ago suffered a
debt default and a virtual collapse in business confidence.
Russia's stunning recovery has also coincided with a big outflow of funds
from the United States as Wall Street falls from favour among many
investors who are prepared to look elsewhere for higher returns.
EURO STRENGTH HELPS RUSSIAN MANUFACTURERS
The euro's 10 percent nominal appreciation against the rouble so far this
year is also seen by analysts as providing a shot in the arm for Russia,
especially the country's hard-pressed manufacturing exporters.
As the rouble firmed against the dollar in recent months, spurred by high
crude prices which have helped Russia's oil-exporting economy power ahead,
manufacturers have taken a battering.
Now a strong euro may give them some welcome relief.
"I tend to think it (the euro's appreciation) has a positive impact," said
Vladimir Drebentsov, a senior economist at the World Bank's Moscow office.
"In Russia, because of its dependence on resource (oil and commodities)
exports, the rouble was appreciating too fast for the rest of the economy
to adjust," he added.
But Russian exporters needed to seize the opportunity that the euro's
strengthening had given them to modernise plant and equipment and get into
shape.
"The euro appreciation provides a breathing space. Hopefully Russian
businessmen will use it. If this happens it will be beneficial. It seems
it's a counterbalance to rouble appreciation," said Drebentsov.
A stronger euro could also boost Russia's appeal as a place to do business
for companies from the euro area.
"A stronger euro relative to the rouble makes Russia a relatively more
attractive investment location for euro-based investors," said Moscow's
Alfa Bank in a research note.
There are costs too. Russia can expect to pay more to service those of its
foreign debts which are denominated in euros.
*******
#18
Smysl
No. 8
May 16-31, 2003
THE KHODORKOVSKY EFFECT
Mikhail Khodorkovsky is first among equals in the Russian business community
Author: Lidiya Andrusenko
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
IT IS ONLY MAY, BUT IT'S ALREADY SAFE TO ASSUME THAT MIKHAIL
KHODORKOVSKY IS THE MAN OF THE YEAR. A MERGER HAS ESTABLISHED
YUKOSSIBNEFT, AN OIL CORPORATION WESTERN ANALYSTS SAY IS WORTH MORE
THAN GAZPROM. AND KHODORKOVSKY ALSO HAS POLITICAL ASPIRATIONS. IN
FACT, KHODORKOVSKY IS IN HIGH DEMAND AT PRESENT.
Mikhail Khodorkovsky will turn 40 this June. He is Russia's
wealthiest citizen (with a personal fortune of $8 billion, according
to Forbes magazine) and one of the world's ten most influential
billionaires. In some ways, Khodorkovsky is a typical Russian
oligarch, with a past that includes the Komsomol and the nomenclatura,
who can boast of some state service (he was deputy minister for fuel
and energy in 1993) and some connections in government.
Khodorkovsky's name, like that of many other Russian business
leaders, is associated with scandals and rumors of suspect deals in
the privatization era. Neither the scandals nor the rumors have marred
his business reputation. Khodorkovsky is first among equals in the
business community, and the regime cannot avoid taking him into
account. That is what makes Khodorkovsky an unusual oligarch. He
belongs neither to Yeltsin's Family nor to the St. Petersburg team. He
stands alone.
Unlike many other oligarchs, who continue to work in the shadows
in Russia, Khodorkovsky supports observing the law - "no matter how
stupid a law may be", he says, because "otherwise you immediately
become a criminal organization." Sincerity and openness in business
dealings have helped Khodorkovsky make YUKOS the most transparent oil
company in Russia. There are now 50 foreigners among YUKOS executives.
The company's auditor is Price Waterhouse Coopers. The interests of
YUKOS in London are represented by Lord Owen, formerly of the Foreign
Office. Prince Charles even named a room at Somerset House after
Khodorkovsky.
Khodorkovsky is sometimes called the Russian business world's
chief PR man in the international arena. And he is. Using his
influence, prestige, and contacts, Khodorkovsky often compensates for
the Russian Foreign Ministry's impotence. Efforts are being made to
set up a pro-Russian lobby in American legislative and executive
government bodies; and we have Khodorkovsky to thank for that, not
Foreign Minister Igor Ivanov. Khodorkovsky openly admits that his
major objective is to facilitate the integration of Russian companies
into the global economy and new markets.
Intellectualization of Russia is another of Khodorkovsky's ideas.
According to Khodorkovsky, "intellect, rather than raw materials, is
our society's main asset" and Russia's only chance. YUKOS is the only
Russian company promoting a large-scale online project: it is
investing $50 million in Pokoleniye.ru.
Fifty regional Internet training centers are to be opened across
Russia by 2005, to make over 250,000 secondary school teachers
familiar with the web. President Vladimir Putin is Khodorkovsky's
companion in promoting computer literacy. After visiting the village
of Kuzkino near Samara, the president gave orders to allocate 2
billion rubles to provide computers for secondary schools. The money
will come from the federal budget and regional budgets. The president
is personally supervising this program.
Khodorkovsky has never been involved in public politics until
now. He says: "Politics is the most lucrative business venture."
Khodorkovsky firmly believes that successful private sector
corporations should help the state establish reliable foundations for
a democratic society and a free market economy. First and foremost,
this concerns the law and observance of the law.
Khodorkovsky is known to hold the belief that the state's legal
and law enforcement systems "generate a sense of insecurity and
uncertainty in individuals and companies, thus doing great harm to
Russia." Khodorkovsky said this, and added his views on how we might
get rid of corruption, at the president's famous Kremlin meeting with
members of the Russian Union of Industrialists and Entrepreneurs.
Putin pretended not to understand, and reminded Khodorkovsky that
YUKOS controlled too much oil and had too many tax problems. This was
a demonstration of the state's intention to keep business on a short
leash.
The leash must be wearing out. Major companies no longer wish to
remain hostages to the Kremlin. They are now ready to dictate their
own terms. Khodorkovsky is positioning himself as an independent and
quite influential politician. Until recently, he did not advertise the
fact that he is funding all political parties except for the LDPR, but
now this is common knowledge.
Observers view this move to establish a powerful parliamentary
lobby (which is only natural, since the regime does not want to play
by the rules companies propose) as a sign of Khodorkovsky's aspiration
to become prime minister. When Khodorkovsky repeated that he would
resign from YUKOS in 2007 and might go into politics, observers
decided that Khodorkovsky is aiming for the presidency as well.
Khodorkovsky demonstrated his disagreement with the Kremlin over
Iraq at the international level. He refused to go to St. Petersburg,
where Putin was meeting with Jacques Chirac and Gerhard Schroeder. It
is said that Putin was annoyed by this.
We shall make no predictions regarding Khodorkovsky's political
future at this stage, especially since he now heads a company that
could become one of the world's leading energy corporations. However,
it is clear that the regime now has a powerful rival. Russia needs
better management than what it has had until now.
As for Putin's statement in 2000 - about doing away with the
oligarchs - that was clearly a reckless thing to say, if only because
the regime itself set up the class of oligarchs, controlled it, and
relied on it whenever necessary. In fact, the business sector and the
public are tired of the Kremlin's periodic declarations of war on the
oligarchs.
*******
#19
The Economic Times (India)
May 27, 2003
Russia: Rising From the Rubble
By Ruchir Sharma
(The author is with Morgan Stanley. Views are personal)
Investing in Russia is typically considered to be analogous to attempts at
making money in the Wild West. Investors either rake it in like bandits or
have their heads handed out to them.
In financial market terms, this binary profile manifests itself in the fact
that since 1995, when the Russian stock market came into being, in every
calendar year the Russian market has either been amongst the best
performing equity markets in the world or right at the bottom of the heap.
The Russian debt default debacle in 1998, where foreign investors lost more
than $ 40 billion, nearly caused a global financial market meltdown. Since
then the country has staged a remarkable comeback. Russian debt and
equities are amongst the highest returning assets in the last three years.
With the economy set to register an economic growth rate of nearly 6% this
year, Russia is currently one of the fastest growing economies in the world.
Its other headline macroeconomic fundamentals, including the debt/GDP
ratio, debt servicing costs, current-account position, make it a standout
in the emerging market universe.
On a more real-time basis, the buzz is back in Moscow. Hotel lobbies are
swarming with jet-lagged businessmen. New swanky restaurants and
night-clubs are mushrooming, some right next to the KGB headquarters.
The spectacularly ugly Ladas are increasingly making way for Mercedes and
BMWs. Slowly but surely, latest international fashion trends are replacing
the otherwise hard to kick 1970s look.
Oligarchs are chanting the mantra of market capitalisation, instead of
asset stripping, thereby finding it less necessary to surround themselves
with gun-toting security personnel. Even the guards at the Tomb of the
Unknown Soldier have a more relaxed demeanour. Last weekend, The Red Square
was the site of a sold-out concert by Paul McCartney, not too long ago
labelled as a 'degenerate' by Soviet propaganda. Next, Aeroflot will start
flying full flights?
Well, all the stars have been remarkably aligned in Russia's favour of
late. Two of the most important global macroeconomic trends in play have
particularly favoured Russia - higher oil prices and the general
abandonment of the dollar. Oil remains Russia's major export while the
change in domestic investor perception of their own country's fundamentals
vis---vis the US has led to a significant return of capital flight in most
emerging markets. With nearly half the nation's wealth estimated to be
stacked away abroad, Russia is naturally a significant beneficiary of the
trend to return home.
But it's precisely because the going has been so good, and given Russia's
remarkable ability to disappoint following a neat streak, that sceptics of
the Russian story aren't yet heading for the foxholes. Their contention
being that once the veil of higher oil prices is lifted the picture beneath
remains as ugly as ever. The IMF, for one, can't help but attribute almost
every improvement in Russia's finances to higher oil prices. Oil exports
are half the total Russian exports, with total economic activity relating
to oil comprising a fifth of the total GDP. At the current level of oil
prices, a one dollar movement changes federal revenues by an estimated
0.35% of GDP.
Despite the best efforts at quantifying the impact of oil prices on the
Russian economy, it is unlikely that the real effect of oil price changes
in the Russian story will be known until oil drops back to below $ 20 a
barrel.
However, in the face of the structural changes, which have indeed taken
place since 1999, it seems unfair to view Russia as a one factor model
economy. There is more to Russia than Saudi Arabia.
As is often the case with many developing economies, the external financial
crisis in 1998 forced a change in mindset. For starters, a consensus was
formed internally that Russia cannot allow the mess of 1998 to be repeated.
Technocrats took over the running of government and drew up a systematic
reform agenda. Putin came to power and soon decided Russia needs to
integrate more closely with the western world. Following the destruction in
their wealth, the all powerful oligarchs decided to shift their game to
creating market capitalisation rather than looting the state.
They became agents of change and along with Putin shaped a new course for
Russia, which included judicial reform, increased transparency, land reform
and rationalisation of the tax structure. With the market in turn rewarding
the changes, the self-interest connection with reforms became even more
apparent and therefore reinforcing.
The problem, though, in analysing the impact of genuine reform is that the
change for good coincided with a favourable turn in global macro trends.
The pure effects of the reform process are therefore hard to measure. In
fact, the still under-developed state of Russia's capital markets and the
current high appetite for Russian assets is leading to a liquidity boom
being superimposed on the emerging Russian structural story, which further
complicates matters. Russia currently has remarkably high negative real
interest rates, with capital rushing back in and the ruble perceived to be
undervalued. The lack of a meaningful banking sector could create all sorts
of related distortions and so reform of the financial sector has to be a
core item on the unfinished agenda.
The outstanding reform agenda is quite large. Russia is still rated as one
of the most bureaucratic countries and corruption is rampant - some of
those new Mercedes find their way into the garages of government officials.
In that regard, Russia remains very much an emerging market, with another
classic emerging market problem now staring it - a slowdown in the reform
process ahead of the parliamentary and presidential elections next December
and March respectively. Looking through the usual emerging market problems
though, hopes are beginning to build, and for good reason, that Russia is
breaking new ground and so this time the gains are there to be built upon
rather than to be blown away.
*******
#20
FoodProductionDaily.com
May 27, 2003
Russian snack market still traditional
A survey of waffle consumption in Russia reveals that traditional
non-packaged snacks remain very popular.
The survey, conducted last month by consulting agency Market Advice, took
into account the snacking preferences of 1,542 respondents in the 13
largest cities of European Russia, excluding Moscow.
It revealed that non-packaged waffles - hugely popular in the Soviet era -
remains the largest sector of the market. These products are largely
produced by domestic bakeries and confectionery firms.
As a result, the Market Advice report confirmed that Russian companies
remain a significant force within the waffle industry.
But as with much in the country, things are beginning to change.
Competition within the waffle market is increasing, and several large
multinationals now operate within the country.
These include the Nestlé group, which has three factories, Cadbury, which
operates a plant in the north west of the country and Danone, which
recently purchased a factory in Moscow. This is resulting in more expensive
glazed and packaged products coming onto the market.
Interestingly, the Market Advice survey revealed that there is
significantly higher awareness of foreign brand products than of domestic
products. For example, 43 per cent of respondents instantly recognised
Nestlé group’s products, while 20 per cent of respondents instantly
recognised both Cadbury and Danone brands.
An impressive 87 per cent of respondents were able to identify a Nestle
waffle product with the aid of a hint.
The Sladko Group was the highest placed Russian brand in terms of instant
product awareness – 10 per cent of respondents instantly identified the
brand.
These findings suggest that while traditional non-packaged snacks still
dominate the market, foreign brand names are beginning to dominate consumer
consciousness through expensive advertising and promotion.
********
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