Johnson's Russia List #7277 5 August 2003 davidjohnson@erols.com A CDI Project www.cdi.org [Contents: 1. Nikolai Zlobin: Russia and America: The Post-Iraq Relationship. 2. Luba Schartzman: TV1 Review. 3. New York Times: Anne Nivat, A War Russia Loses By Winning. 4. Rosbalt: Victims of Political Repression Remembered on Solovetsky Islands at Site of First Soviet Labour Camp. 5. Andrei Sitov: AMERICA: BACK IN THE USSR? A specter is haunting the US. 6. Vedomosti: AN AMNESTY IS HARMFUL...according to World Bank economist. Is capital flight getting worse because of the YUKOS affair? (Christopher Rul) 7. Nezavisimaya Gazeta: YASIN: THE YUKOS CASE IS DANGEROUS. An interview with Yevgeny Yasin. 8. Financial Times (UK): Andrew Jack, Suitors turn blind eye to Yukos crisis. Western oil groups are undeterred by probes into the Russian giant. 9. Toronto Star: Stephen Handelman, Oligarchs cry uncle as Putin cracks down. 10. Igor Biryukov: re 7275-Starobin/Enigma of Russia. 11. Prospect: Jeremy Putley, Into the Russian night. David Satter's account of Russia's criminal state is savagely bleak. Did the state really kill hundreds of its own people to justify the second Chechen war? 12. Moscow Times: Valeria Korchagina, A Whiz at Black PR Stirs Up a Storm. (Stanislav Belkovsky) 13. Arab News (Saudi Arabia) editorial: Islamophobia in Russia. 14. New York Times; Sophia Kishkovsky, A Homecoming for Balanchine. 15. St. Petersburg Times: Greg Walters, Russia Still Hesitant on Ratifying Kyoto. 16. Nezavisimaya Gazeta: Valery Tsygankov, UNITED RUSSIA IS THE RICHEST AND THRIFTIEST PARTY. It does not spend party funds on conferences or publicity. Major political parties submitted financial reports for 2002. 17. Gazeta: WHO IS TAKING A BITE OF THE APPLE? The list of potential political forces behind Yabloko Sans Yavlinsky. 18. The Times (UK): Robin Shepherd, Blow to freedom as son follows Azeri President.] ******* #1 Russia and America: The Post-Iraq Relationship An Interview with Nikolai Zlobin The following is based on a discussion that aired on the Russian radio station "Ekho Moskvy" on July 31, 2003. Nikolai Zlobin is the director of Russian and Eurasian Programs at the Center for Defense Information in Washington D.C., and editor-in-chief of the Washington Profile News Agency. In your opinion, how do Americans feel about Russia, now that the military campaign in Iraq is almost over? I would say they feel sympathy and indifference, although some things do bring out emotions. In part, The American public was not very pleased with the realization that Russia is not as much of a reliable ally as the US thought. An unreliable friend is worse than a reliable enemy. When you arrive in Russia, you get the impression that from Moscow's point of view, the US is deeply concerned with figuring out ways to make life in Russia more difficult. There is a certain sense of paranoia. But when you come back to Washington, it's very rare to come across someone talking about Russia, or to get an official, like, say, Wolfowitz, to say something about Russia, because the issue is so insignificant to them. That's a fact of life, and whether you like it or not is a different issue. I wouldn't exaggerate the directions American policy takes as a manifestation of some anti-Russian policy. That's just not the case, and believe me, Russia today, unfortunately, occupies a very insignificant place on the political map of America. And Iraq was the cause? But Russia was simply defending her economic interests. Isn't that only natural? Regarding Russian policies in Iraq, I agree with those who say there was no coherent economic policy on Iraq whatsoever - just like there wasn't a coherent political stance. Everyone, Washington including, was caught off guard at the amount of improvisation, which changed every day and every week. Various politicians made various statements, but no one knew what the Kremlin wanted, or what Russia would do: some spoke about the impossibility of a veto in the Security Council, others said the veto was inevitable. For a nuclear power, for a country as large and respected as Russia, improvisation in foreign policy is unacceptable. Iraq showed that Russia has no strategic, economic, political, or even intellectual coherence in its foreign policy - only improvisation. Yet Russia and the US are returning to the period of mutual understanding that began after September 11. Is that still an important tendency? Two things, in my opinion, bring Russia and the US closer together, and Iraq has already showed this, in part. Russia and the US both see their foreign policy primarily from the viewpoint of their national security. The others, especially the Europeans, do not. Their foreign policy is based on socio-economic, ideological, educational, and cultural factors, and God knows what else. Russia and the US (and the latter especially after 9/11) are both two countries that have placed military security at the forefront of their foreign policy. Here we have an opportunity for maneuvering and discussion between Moscow and Washington. Secondly, I think that Russia is very close to the US in their understanding of international terrorism. We both view international terrorism as a sworn enemy, one that must be fought to the bitter end. This is in contrast to the Europeans, who see international terrorism as a criminal structure. I would add, and they fight it with law enforcement measures. Yes. That's why it's difficult for Americans to come to terms with Europeans. But Russians - remember "we'll wipe them out in the outhouse" - are easier to find a mutual language with. The issue is a wide-scale war against terrorism. Americans are for such a war, and in fact they are already conducting it, which annoys the Europeans. I wouldn't say that Russia and the US have common threats - just a similar approach to these threats. It's not surprising that Moscow will repeat, every once in a while, that Russia is not interested in an American defeat. What is the response to that in the US? I would agree completely that the fate of the US, and support of the US, is extremely important to us. I would only make two comments on unipolarity. One often encounters, especially n Russia, the idea that a unipolar world is something to struggle against. But one cannot simply build a multipolar world if it's not there. You cannot build one by force - it's not a political decision. It is a reality. If it's not there, it's not there, and it's pointless to fight that. And the second factor is the danger that America will overstretch its forces too thin. And that's where, by the way, arises the idea within the American political elite to build functional pro-American models like Japan in 1945-46. Iraq was chosen as such a model in the Middle East not only because of the economy. Do you believe in the possibility of democratizing the Arab world in a Western image? There is not a single Arab country in the region that has a democratic market-based government. And Americans dream about creating such a country. Iraq is the best choice in this plan. In case of success, it will be difficult for neighboring countries to uphold their current regimes. Look at what happened in Asia after the emergence of Japan. Hong Kong, Taiwan, Singapour, China - they all began changing. People used to say about that nothing could be changed in Japan, that it's a medieval country of. And look - half a century later, it's the second largest economy in the world. That's what America is trying to do in Iraq. Many in Moscow would disagree; they might say America is only furthering its own interests. What should Russia do to protect its economic interests in Iraq? Interests, including economic interests, are either immediate or strategic. The inability to protect strategic interests is a problem for Russia. If short-term political sympathies and antipathies prevail, there is a great danger of losing this economically profitable region completely. Russian interests in Iraq should not be intertwined with the figure of Saddam Hussein, which is what happened. No one argues that Russia and the US should unite efforts in safeguarding national security. But how? Security is such a broad concept. That's true, and I'll give you an example of how complex and contradictory the problem of provding national security truly is. Security is not just soliders and missiles. Look at Bush's recent visit to fight AIDS in Africa. Why did he go? It's simple: AIDS in Africa is most common in the army and police forces, among youg people in Africa. What would happen if Africa was left without armies and police forces? It would mean the appearance of terrorism, possible destabilization, and a national security threat to Russia and the US. Many analysts in Moscow think that Russia has no reliable allies. What do you think? This is true, Russia has practically no reliable friends on the international scene. No one will jump to defend her. Why is the US, after all, with all their drawbacks, with all the negative things Russians could say about her foreign policy, closer to Russia than many others? But who if not America - China, Europe? Europe would not move a finger to help defend Russia, particularly on the southern border. China has even more of a sit-and-wait approach. Japan? Of course not, Japan is too upset at the inability to resolve the islands issue. And what do you think about this idea: Russia would close herself off, and in this Eurasian apostasy relinquish the North Caucasus, her influence in the Middle East, etc - in order to guarantee national security. The Soviet Union was a Eurasian power, and look what happened. And the downscaling of Russian territory, I think, would be detrimental not just for Russia, but for the entire world. And I know that Washington is extremely interested in strengthening Russia precisely from the viewpoint of the Kremlin being able to control regions that no one else can control. And if Russia leaves…if not Russia, then who? And the problem of global security and stability would just hang in the air, and this would damage US national security. Americans, by the way, are very interested in strengthening the Russian army, so that the army can fulfill all the functions it's supposed to. They're interested in strengthening the armies of Central Asia, and they are spending a lot of money on creating armies and police enforcement in the region. It's the same in Iraq - Americans are solving the problem of their own national security by creating national armies in other states. Because if the army is not there, who will fight terrorism? Who will control the borders? ******* #2 TV1 Review www.1tv.ru Compiled by Luba Schwartzman (luba_sch@hotmail.com) Research Analyst, Center for Defense Information, Moscow office HEADLINES, Monday, August 04, 2003 - Russian President Vladimir Putin is on an official visit in Malaysia. He will discuss political issues, economic and military and industrial cooperation, including cooperation in military and civilian aircraft construction with Malaysian leaders. - On the eve of his visit to Malaysia President Putin conducted a number of meetings. He discussed the recent terrorist act in Mozdok with government officials, aid to the victims of the terrorist act with President of North Ossetia Aleksandr Dzasokhov and Deputy Prime Minister Galina Karelova, and the legislative basis for the work of the law enforcement organs with General Prosecutor Vladimir Ustinov and Supreme Court Chairman Vyacheslav Lebedev. - Supreme Court officials believe juries will improve the court system. The first jury trial begins in the Moscow City Court today. The defendant, 25-year-old Igor Bortnikov, is accused of murder. - Akhmad Kadyrov has officially begun his election for the position of President of the Republic of Chechnya. - In North Ossetia, an official Day of Mourning is held today for the victims of the Mozdok terrorist act. - Two individuals suspected of participating in the planning of the Mozdok terrorist act have been detained. - Deputy Prime Minister Galina Karelova reported that the Russian government will pay 100,000 rubles to the families of those who died in the Mozdok Hospital terrorist act and 50,000 to those who were injured. - A wooden cross and a black marble block have been installed in front of the Mozdok military hospital. 64 of the people wounded in the terrorist act remain in hospitals throughout Russia. - A soldier deserted his garrison in the Moscow suburb of Chekhov and attacked a motorist with a knife. - Two Russian Emergencies Ministry helicopters are being used to fight forest fires in France. - 20 people were injured in a political demonstration in the center of Tbilisi, Georgia. - 15-year-old Aleksandra Pets won the open marathon swim across the Amur Bay. - The prestigious hockey award, the Stanley Cup, is in Moscow tonight. - An International Viking Convention began in St. Petersburg. ******* #3 New York Times August 5, 2003 A War Russia Loses By Winning By Anne Nivat Anne Nivat is author of "Chienne de Guerre: A Woman Reporter Behind the Lines of the War in Chechnya." GROZNY, Russia To hear Russian officials, what's happening in Chechnya is not a war: it is a phase in an antiterrorism operation that has reached such a point of "normalization" that control was switched last week from the Federal Security Bureau, which handles war operations, to the Interior Ministry. After all, the Russians say, the Chechen people rebuffed the Islamic separatists by voting overwhelmingly in March to remain part of Russia, and they will vote again in October, this time for a Chechen president. Chechens agree -- but in their own way. "What's happening in this country is not a war," they say. "It is much worse than a war, with many more civilian casualties." I hear this repeatedly on buses, in markets and during conversations wherever I travel in this tiny, battered republic. For them, the switch to the Interior Ministry is merely cosmetic -- the soldiers and checkpoints remain -- and the coming election won't be a fair one. But these voices are not being heard in the rest of Russia: the Kremlin has so restricted news coverage of Chechnya that outsiders have little idea what is happening here. (To get into Chechnya, I had to disguise myself as a Chechen woman, wearing a scarf and long skirt, and pray that I wouldn't be questioned closely at checkpoints.) Chechyna intrudes upon Russians' minds only when rebels attack outside the republic -- as they did on Friday, when a truck bomb exploded in Mozdok, 35 miles across the border from Chechnya, killing at least 41. Grozny, the Chechen capital, has been a ruin since the Russians invaded the first time, in 1994; the only repaired buildings are the ones housing government offices. Suicide bombings are frequent. Shootings occur nightly, and raids for rebels take place daily. Soldiers are everywhere, and so are members of a militia belonging to the Moscow-appointed head of the local government, Akhmad Kadyrov, who isn't popular but hopes to win the presidential election. Electricity and water services are sporadic; schools aren't in session because there are no teachers. The few jobs available involve working for the Russians, and most Chechens won't take them for fear of being considered collaborators. There is an atmosphere of stalemate: the Russians and the rebels can't negotiate, and neither side can win. For their part, the rebels say the fighting will not end soon. "And we are ready for it," said an aide to a rebel field commander I met in a village in neighboring Ingushetia, used by the rebels as a rear base. "Since we have split up into mini-groups of five, our units are very flexible. We need less than three days to reunite with our commander. So far, the Russians have been very good at pretending things are going well for them. We will do our best to destroy that claim." Among the Russian troops, low morale is rampant. About 100 Russian soldiers die here every month, the government says. "We are here only for the big money they are paying us," Pvt. Andrei Kosnikov, 23, muttered as he examined my car at a checkpoint near Grozny. Near the entrance of his base someone has written: "We are tired of killing the Chechen people for nothing. Our pay is blood money!" The soldiers have also been forced to contend with a new trend, suicide bombings and other attacks committed by young Chechen women. Nineteen women were among the separatists who took 700 people hostage at a Moscow theater in October. "My sister went for her own jihad," explained a 19-year-old girl, conservatively dressed in a headscarf and cloak, whose sibling was a perpetrator of the theater attack. We spoke in the kitchen of a relative's house in the countryside, as her family has lived as nomads since their house in a village southwest of Grozny was dynamited by the Russians in revenge for her sister's actions. "She sought revenge by escaping to paradise," the girl told me. "And I am willing to do the same if nothing changes." Her friend, 21-year-old Tamara, added: "We women are now acting because nobody else is reacting and no one cares about Chechnya." Terrorist acts are signs of desperation, and as the situation in Chechnya stagnates, suicide attacks by young Chechen women, and others, will continue. Lyoma Sharmurzayev, director of Lamaz, a nongovernmental group based in Ingushetia, told me he believed that the only solution was to build up some sort of civic forum, a non-state organization that would seek a way of mediating this conflict that would involve a broad representation of the civil society. So far, he has been unable to convince either the Russian authorities or the rebels to consider it. The Chechens I've talked with are longing for an end to the war, but their sympathies are clearly with the separatists. Although at the start of the fighting in the early 1990's there were Russian supporters here, that support was driven out by hatred as the war dragged on. It seems as if there is not a single family who has not lost someone in the conflict. The Chechens now consider the Russians invaders who are incapable of following the rules of war by making efforts to spare civilians. Is there hope for peace anytime soon in Chechnya? On this trip, at least, I haven't seen any -- and for the Chechens, the Russians' claim that a presidential election will put an end to the fighting is as dubious as the war itself. ******* #4 Rosbalt Victims of Political Repression Remembered on Solovetsky Islands at Site of First Soviet Labour Camp MOSCOW, August 5. A commemorative festival entitled Days of the Politically Repressed will be held on the Solovetsky islands from August 6-9, marking the 80th anniversary since the labour camps were opened here. As a Rosbalt correspondent was informed by the press office of the Moscow administration today, the festival is being organised this year by the Solovetsky nature reserve, the Memorial centre of Saint Petersburg, the international Memorial organisation in Moscow and also the Moscow administration. The first labour camp was opened on the Solovetsky islands in 1923. A whole network of such camps were later set up by the NKVD, which Russian writer Alexander Solzhenitsyn later termed as the GULAG Achipelago. The idea to hold a commemorative festival to remember the victims of political repression arose in 1998 and several former prisoners and their relatives were invited to the event as well as leading human rights' activists, historians and journalists. More than 100 guests from Russia and Ukraine are expected to attend this year. They will visit the Solovetsky Kremlin and the Church of the Ascension which was used as an intimidating isolation cell during the days of Stalin. Also, a new exhibition will open on August 6 in the Solovetsky Museum containing the names of all the former prisoners who were shot on the islands. ******* #5 From: Andrei SitovDate: Mon, 4 Aug 2003 Subject: AMERICA: BACK IN THE USSR? AMERICA: BACK IN THE USSR? A specter is haunting the US. By Andrei K. Sitov Andrei Sitov is the Washington Bureau Chief for ITAR-TASS News Agency of Russia. The views exressed in the article are his own. For the past 20 years I've been covering the US first as a Soviet and then as a Russian reporter. Since the end of the Cold War my country has been trying to become more like America. Meanwhile the US, especially after 9/11, increasingly resembles the old Soviet Union. Please consider: - The US acts as if it believes it knows what's best not only for the Americans but for the rest of the world and shows a willingness to force this belief down other people's throats. For a while - until the terrorist attacks - its "elite" even toyed with the ridiculous notion of an "end of history". This is an idea common to all totalitarian regimes (some scholars say it is rooted in the Armageddon prophecy in the Bible). At least Fukuyama's version did not envision a blood bath. - The US continues to define its national greatness through military strength - as witnessed by the new National Security strategy. The Soviet Union always used to do that; Dr. Rice told me she thought it would be a grave mistake for Russia to act in a similar manner. To me it seems to be an example of "do as I say, not as I do". - The US shows a dislike for international agreements across the board - from arms control to the International Criminal Court and from Kyoto protocols to tobacco trade. The Soviet Union also seemed to comply only with those international obligations that it liked. To be fair, as Secretary Powell pointed out to me, Americans don't break agreements - they either don't sign them or withdraw from them. - The US now liberates other nations without being asked. The Pentagon advisor Mr. Perle told me that "there are more important things than national sovereignty". Of course the late Soviet leader Leonid Brezhnev had a "doctrine of limited sovereignty" named after him. Mr. Perle also said the US always leaves the lands it occupies. I shared that opinion with a Mexican colleague; he begged to differ. - The US has a curious relationship with its allies. It often carries their water for them - and gets resentment and ridicule in return. The Soviet satellites used to pay lip service to their "unbreakable alliance" with the USSR and sneer behind our backs. They also had a higher standard of living. The transatlantic partners of the Americans say the US is indispensable (Secretary Albright was actually vain enough to repeat it publicly; when I challenged her, she said "other countries call us that"). In the meantime the Europeans at least once in the last decade managed to get the US actually go to war for them - in former Yugoslavia. They also believe they live in a much better and more civilized way than the Americans do. Personally I think the Americans (like the Soviets in the past) have only themselves to blame for this situation. They get what they asked for and shouldn't complain about it. - The US conducts a large-scale propaganda effort that may not always be entirely truthful. It uses purely totalitarian slogans such as "Who's not with us is against us". The government effort is directly coordinated by the White House though a special office that sends out "Daily Messages" with key talking points (in Soviet days this was a standard operation procedure for the Kremlin; it is still used in some post-Soviet states). The latest press conference of President George W. Bush was by his own admission orchestrated (this was written before the press conference on July 30th which was also carefully staged - AS); the White House was never really challenged on it. The press seems to have accepted new rules of the game which generally conform to the so called "patriotic consensus". The coverage of the war in Iraq by "embedded" journalists (even we at ITAR-TASS had one at an air carrier) was a perfect example. The reporters were filing directly from the front lines. Yet it seems nothing that the government wouldn't want to be known made it to TV screens and newspaper pages. At least one myth - the Jessica Lynch story in the original propagandistic version - flourished for a surprisingly long time. There's at least one genuine taboo in American journalism: admitting that the 9/11 highjackers were personally brave and committed to their murderous cause. - The US now has a new "super agency" - the Department of Homeland Security - whose name is best translated into Russian as an equivalent of the old KGB. It also has some of the KGB functions. A color-coded system of alerts adds to the feeling of permanent anxiety, the expectation of new threats from external and internal enemies. Internal security has been tightened dramatically. Borders are being sealed off; the rules of immigration and international travel are hardened. Spying and informing on your neighbors - a staple of any totalitarian regime - is encouraged. A government-run "total information awareness" system has been created. It's reportedly designed to hold the amount of data - much of it on private citizens - equal to all the Internet pages over the past 5 years. - The US government seeks and receives additional powers to interfere into people's lives both through new laws and a more restrictive application of old ones. It runs a detention camp at a legal no-man's land in Guantanamo, Cuba. The foreign detainees including some Russians have no legal status and allegedly can be held indefinitely. Some of the detainees are now nearing a trial by military tribunals potentially facing death penalty. - As a result of all of the above the doctrine of containment created to confront the Soviet Union is now increasingly applied by the outside world to the US - in practical policy if not in name. On numerous occasions people from the third world and even Europe told me they wished the USSR was back - not for its own sake but as a counterbalance to America. I believe the Soviet Union collapsed largely because it was not telling the truth about itself either to its own population or to the world. The Russians do not like to think of themselves as losers in the Cold War (after all they peacefully rejected communism and won their freedom). But generally speaking, from a moral standpoint, losing may actually be preferable to winning. If you lose, you have to ask yourself why it happened and face your own shortcomings, weaknesses and lies. Meanwhile the illusions, propaganda and lies of the winning side are usually justified and reinforced. Besides, current American policies seem to give comfort to a number of less than democratic nations around the world including some former Soviet states. Americans may not recognize their own country in my description. I know for a fact that many Russians also refuse to believe it. After all America embodies the best values and ideals that we wanted to make our own when we started our post-communist transition. That is exactly why I'm worried about the seeming "Sovietization" of America. If not yet a reality, it's a dangerous trend, a spooky "specter". And I think the Americans would be well advised to recognize the threat and take it seriously. They have everything they need to defeat it while safeguarding their legitimate security interests and to win back the confidence and admiration of their friends and partners around the world. ******* #6 Vedomosti August 5, 2003 AN AMNESTY IS HARMFUL...according to World Bank economist Is capital flight getting worse because of the YUKOS affair? Author: Anastasia Onegina [from WPS Monitoring Agency, www.wps.ru/e_index.html] CHRISTOPHER RUL, SENIOR ECONOMIST FOR THE WORLD BANK IN RUSSIA, SAYS THAT INVESTORS ARE NOT WORRIED BY THE YUKOS SCANDAL. THEY ARE WORRIED BY THE FACT THAT OTHER VIOLATIONS DATING FROM THE 1990S ARE NOT BEING INVESTIGATED. THE ECONOMIST SAYS AN AMNESTY FOR PRIVATIZATION DEALS WOULD BE HARMFUL. The value of the YUKOS oil company has fallen by over $6 billion (to $26.3 billion) since Platon Lebedev's arrest on July 2. State officials worry about the impact of the scandal on the investment climate. "Such matters [the YUKOS case - Vedomosti] inevitably affect the market," Economic Development Minister Herman Gref has said. Last Friday, he complained of capital flight from Russia. He added that the "YUKOS situation" has speeded up capital flight, which is usually high in the third quarter of the year. Christopher Rul, senior economist for the World Bank in Russia, considers all these fears exaggerated. Rul does not think that capital flight is any worse then usual. Rul attributes reduction of the gold and hard currency reserves of the Central Bank by $1.1 billion to debt servicing ($438 million is to be paid to the IMF and World Bank, and $321 million for Eurobonds) and to increased demand for foreign currency across Russia before the summer vacation season. "Consider all factors carefully, and you may even end up with an influx of capital rather than capital flight," Rul said. "There may be some negative effect with regard to investors who planned to come to Russia, but this is not something that can be expressed in figures." Rul believes investors are worried by the possible legalization of such deals, not by the YUKOS scandal. "Irreversibility of privatization or an amnesty for all deals is bad from the point of view of support of free market reforms," Rul said. "Unless the matter is settled, it may eventually become political. Particularly criminal deals should be annulled." ******* #7 Nezavisimaya Gazeta August 5, 2003 YASIN: THE YUKOS CASE IS DANGEROUS An interview with Yevgeny Yasin Author: Yevgeny Mazin [from WPS Monitoring Agency, www.wps.ru/e_index.html] YEVGENY YASIN, HEAD OF THE SUPREME SCHOOL OF ECONOMICS, WAS PRESENT AT THE BIRTH OF ECONOMIC REFORMS IN RUSSIA. YASIN NO LONGER HOLDS ANY STATE OFFICE, BUT REMAINS A PROMINENT ECONOMIST COMMANDING GENERAL RESPECT. HIS OPINIONS AND EVALUATIONS MAY BE CHALLENGED, BUT ARE NEVER IGNORED. Question: What is happening in the national economy these days? Yevgeny Yasin: The latest events, especially the YUKOS case, are extremely dangerous. I take it as a sign of the civil treaty and accord made in 2000 being disrupted. All this undermines the trust that is essential for economic development on the basis of private enterprise. And that is something that is quite important for the development of the national economy. Take the pretext itself. The incident over which Lebedev was arrested concerns terms of an investment tender in 1994. Menatep was supposed to invest some substantial sums in restructuring the Apatit company, but never bothered to do so. It should be mentioned here that according to the law effective at the time, an enterprise became property of new owners as soon as certain sums, quite meager sums, were paid. Even before the investment, that is. The legislation did not stipulate any sanctions or guarantees for the investments. A presidential decree to the effect that ownership transfer takes place after the investments appeared only in 1997. Eventually, the State Property Ministry abandoned the whole idea of investment tenders, because the state was not in a position to monitor fufillment of obligations. Neither was there a law making owners honor their promises and obligations. There were 261 investment tenders in 1994, and only fourteen in 1997. Question: Isn't it natural for a state to try to regain what it lost at a time when it was weak? Yevgeny Yasin: Our problem is that there are no rules in relations between business and government. In fact, some rules are specified by the Constitution and the law; but there is also the Russian tradition of feudalism. Once you are elevated into the corridors of power, you are supposed to become wealthy and kick out all your rivals in order to remain where you are forever. This is something typical of Latin America, you know. In my view, this is a situation where there is encroachment regarding redistribution and there is a conflict between the bureaucracy and major corporations. In the absence of rules, business and government are bound to clash every now and then. Rules are needed. If you ask me, this is a clear message to Russia that it needs a true division of powers; that administrative resources should only be used within the framework of the law. The use of money should become more civilized as well. We need a proper law on lobbying and other legislation restricting oligarchs' ability to bribe civil servants and lawmakers. ******* #8 Financial Times (UK) August 5, 2003 Suitors turn blind eye to Yukos crisis Western oil groups are undeterred by probes into the Russian giant By Andrew Jack Potential suitors are continuing to voice a strong interest in the Russian oil group Yukos as the scandal surrounding the company escalates. Over the past month eight investigations have been launched by the Russian authorities into Yukos and related companies - and none against other large groups that allegedly indulged in equivalent business practices over the past decade. Many observers see a clear political motive. Yukos, Russia's largest oil company, has been warning of the risks to the country's improved business climate and to the strong pace of economic growth generally over the past four years, if attacks against it continue. But, in the middle of the controversy, ChevronTexaco was this weekend the latest company to hint that it is interested in taking a significant stake in Yukos. "They are engaged in talks and probably seriously," says one Moscow oil executive. Shell, Total and ExxonMobil have all been studying the Russian oil sector in recent months with a view to acquisitions, joint ventures, asset swaps, greenfield developments and the purchase of minority stakes in existing groups. Leading western oil groups are seeking new zones for expansion and Russia has emerged from a period of post-Soviet chaos as a tempting and under represented territory in their portfolios. "The risk for the majors is not that of being in Russia but of not being in Russia," says Steven Dashevsky, head of research at Aton, a Moscow brokerage. "Russia has low production costs, a large share of proven and potential unproven reserves, and low valuations. Within five years, it could offer them their single greatest competitive advantage." At the same time, the scope for foreign predators within Russia is shrinking fast. BP's joint venture with TNK announced this year raised the interest and profile of Russia among its competitors and removed from consideration one of the principal acquisition targets. When Mikhail Khodorkovsky, head of Yukos, unveiled a merger with rival Sibneft soon after, that removed the two other leading Russian candidates from the hands of potential purchasers. Many analysts saw the deal as a pre-emptive gesture to prevent a foreign group from acquiring Sibneft. Such investments from abroad potentially provide additional "political protection" to Russian companies, making it more difficult for the government to pressurise them. That is one reason Yukos could be happy to hear of Chevron's interest. However, the scale of the combined YukosSibneft group is so large that few foreign oil companies have the resources to acquire even a minority blocking stake. Chevron, which already has substantial exposure in the region through the Tengiz project in Kazakhstan, would prove particularly stretched. How far it or others would want to take a stake in Yukos, particularly while the investigations continue, is more open to question. It depends on how far potential acquirers believe the underlying reason for the current crisis is the political threat represented by Mr Khodorkovsky and how far it is a broader attempt to redistribute the ownership of business assets, or to limit foreign investment. Attacking Sibneft, which is controlled by the powerful businessman Roman Abramovich, would suggest a far broader destabilisation of Russia's business environment, creating even greater dangers for foreigners. However, for those who interpret the situation as Mr Khodorkovsky's punishment for becoming too influential a lobbyist and political counterweight to the Russian authorities, Yukos or other potential acquisitions could still progress quickly. "These deals survive or die on their own terms," says the oil executive. ******* #9 Toronto Star August 5, 2003 Oligarchs cry uncle as Putin cracks down By Stephen Handelman Imagine living in a country where the rich offer to pay more taxes. Wishful thinking? Not in Russia, at least, where the head of the country's most powerful business group suggested just that last week. He also volunteered, on behalf of his billionaire members, to pour more money into the Kremlin's favourite charities. The unexpected benevolence of Arkady Volsky, who runs Russia's Union of Industrialists and Entrepreneurs, contained, however, an unmistakable whiff of self-interest. For the past six weeks, Russia has been in turmoil over a government crackdown on leading industrialists, including Mikhail Khodorkovsky, the oil tycoon who is considered the country's richest man. There was little doubt the offer was intended to appease the powers that be, and perhaps head off more drastic moves. The crisis started June 21 with the Moscow arrest of a minor official in Yukos, Khodorkovsky's oil firm, on charges related to embezzlement and murder. Then, on July 2, Platon Lebedev, a key Yukos shareholder, was hauled away from hospital in handcuffs and charged with fraud related to a murky 1993 buyout of a state fertilizer firm. It was soon Khodorkovsky's turn. After the 39-year-old tycoon was brought in for questioning (he wasn't charged with anything), Moscow's conspiracy spinners went into overtime. They painted the affair as a struggle between the country's modernizing pro-Western business leaders and the evil, old-thinking forces inside President Vladimir Putin's increasingly authoritarian government. "Today they come for Yukos," worried one Russian businessman. "Tomorrow they will come for us." It got worse. The recovering Russian economy went into shock with the news, as the stock market plunged nearly 20 per cent. The panic spread from Russia's elite business circles, through Moscow-based Western media, to Western investors, who began to rethink their Russian expansion plans. It was an exact repeat of the furor created by earlier government harassment of two other once-prominent tycoons, Boris Berezovsky and Vladimir Gusinsky. But interestingly enough, ordinary Russians kept their cool. In a poll taken at the height of the affair, 53 per cent said they hadn't heard of it. Considering that most Russians have a hard enough time making ends meet - and those who do think about their country's new rich invariably believe they are criminals anyway - this raises some awkward questions. Russia's embattled billionaires may have replaced the old regime's Soviet dissidents as pro-democracy symbols in the minds of some Western champions, but they don't quite live up to the billing. The Russian oligarch is a blend of 19th-century robber baron and 21st-century computer-savvy CEO. Although some (such as Khodorkovsky) have made a point of reforming themselves, they operate in an incestuous, corrupt and often deadly world of insider dealings with authorities. They live, in fact, in a different country from most Russians, as they move from their limousines to luxury apartments in Moscow to their country estates in England and France. There's nothing wrong with such wealth, but the oligarchs' unbridled control of vast concentrations of capital, in a country where many people lack dependable electricity, endangers a fragile, evolving market democracy like Russia's. The specific reasons for the crackdown may never be known. Some observers point to Khodorkovsky's attempt to buy a state-owned oil company, which would give him decisive control over a key resource. Others point to his funding of opposition parties, which supposedly breaks a private understanding between Putin and the oligarchs in March, 2000 not to investigate the shadowy origins of much of their wealth, in return for keeping out of politics. Or, as critics both in Russia and abroad suggest, it may be thuggish political power at work. But it is also reasonable to assume this is a legitimate (though questionably timed) battle against corruption and mafia-style business tactics. Putin, who will run for a second term next year, has repeatedly promised to rein in the oligarchs. And his popularity rating now is a stunning 78 per cent. The oligarchs have powerful allies. Khodorkovsky counts among his friends Henry Kissinger and Condoleezza Rice. This fall, Putin travels to Washington. President George W. Bush, under pressure from corporate contributors with large Russian interests, might be persuaded to lobby for the oligarchs in the name of free enterprise. That would be a mistake. But if he did, Putin would be right to refuse. Instead of 11th-hour backroom deals (or higher tax payments), the new Russian courts should be allowed to do their work. The most important contribution Western critics could make right now is to reiterate that no one is above the law. ******* #10 From: "Igor Biryukov" Subject: Regarding Paul Starobin's 'The Enigma of Russia' in Johnson's Russia List #7275 Date: Mon, 4 Aug 2003 I disagree with Mr. Starobin's analysis of recent Russian developments. Clearly his is a Russophile and I can sympathize with his concerns about Russia's future. But I believe his analysis is not correct. First of all, Mr. Boris Berezovsky, whom he quoted as an authority in Russian affaires has a dubious reputation in both Russia and abroad. Mr. Starobin may ask his colleagues from the Forbes magazine. Berezovsky financial acumen didn't protect him from political ostracism and legal trouble in Russia, which was for the most part a fruit of his own poor judgment. His name was entered into Interpol's International search list, which didn't improve quality of his Cassandra-like gloomy predictions of future of Russia he had been making for the last four years. I think Berezovskys analysis is unreliable. Moreover, I am convinced that his own future is bleaker than Russia's. Secondly, and most importantly, I disagree with Mr. Starobin reading of events. Mr. Putin's struggle is not with progressive entrepreneurs, with ostensibly Western liberal values. From my perspective, it is a struggle with 'comprador' type commodity-oriented capitalism, epitomized by Mr. Khodorkovsky. Clearly this type of primitive capitalism, where both state and population depends on sales of natural resources is a dead-end for Russia. One doesn't have to have a Ph.D. in economics to realize this. Not only it has already made Russia dependant to a dangerous degree on sales of natural resources, but it made it financially depended on capricious world oil markets. Overall, Mr. Khodorkovsky, a billionaire and a poster boy of Russian business, is one of 'compradors', whose role is a facilitator of sales of Russian oil. Third, there is nothing unusual about any state taking on 'oligarch' of Mr. Khodorkovskii caliber. If you look at the US history, the demise Mr. Rockefeller was for the most part his own fault due to shady deals and rigging of the markets during the rise of Standard Oil. No doubt, fears of concentration of the big chunk of countrys oil market and therefore political clout in one hands also played a role. Rockefeller ambitions were considered threat to both public and government interests. Braking up of Standard Oil by Theodore Roosevelt and demise of Rockefeller created a huge controversy at a time. But in the long run, it didn't not damage US economy, but rather was a boon for consumers and spur for competition and innovation. As far as Mr. Khodorkovskys legal trouble, it is a little strange that it is occurring now. But for me, it was even stranger to hear Khodorkovsky promises to support the Communists in the upcoming Parliamentary elections in Russia. That sounded to me nothing short of a lunacy. If the billionaire who promises to support Communists runs into trouble, everyone should be glad he does. ******* #11 Subject: Book review Date: Mon, 4 Aug 2003 From: "jeremy putley" The following is a book review I wrote for the August 2003 Prospect. Into the Russian night August 2003 David Satter's account of Russia's criminal state is savagely bleak. Did the state really kill hundreds of its own people to justify the second Chechen war? Jeremy Putley Book: Darkness at Dawn Author: David Satter Price: Yale University Press, £22.50 Foreign criticism of Russia tends to produce a charge of anti-Russian bias. This did not apply, of course, when Solzhenitsyn wrote ten years ago of Russia's "ugly new ulcers" - the "nascent capitalism, fraught with unproductive, savage and repulsive forms of behaviour, the plunder of the nation's wealth, the likes of which the west has not known." It is the savage aspects of Russia's deformed capitalism that constitute a large part of David Satter's gloomy indictment. Satter paints his picture using personal testimonies of selected victims to illustrate the case that Russia has degenerated into a criminal state, and the result is so compellingly bleak that you wonder if he has overdone it. If you ask most Russians about their lives, they will say that the picture of criminal anomie is one they do not recognise, since their daily life is happy and normal, like life in other countries, and moreover Russia is a great country with a currently booming economy. They, no doubt, would accuse Satter of anti-Russian bias. But they have escaped dealings with the civil authorities, had not many savings to lose, and have so far escaped the depredations of organised crime. The victims of criminality, a minority but a substantial one, are witnesses to the other side of the picture, and their experiences are now on the record. There is another story in the book and its implications have yet to be fully realised. It is darker and more sinister than all of the others: the 1999 apartment bombings. Satter narrates the story with great skill. In brief, after a plot to blow up a residential apartment building in Ryazan, south of Moscow, the perpetrators were traced and found to be operatives of the Moscow FSB (successor to the KGB). The head of the FSB, Nikolai Patrushev, himself confirmed their identities. Subsequently, he claimed that the Ryazan bomb was "a training exercise." The operation in Ryazan was identical to four previous bombings which had killed 300 people. Satter arrives at the appalling conclusion that the Russian leadership itself was responsible for the bombings of the apartment buildings. The Ryazan bomb was intended to be the last and worst in a series of atrocities to be attributed to Chechen separatists. The purpose was to provide an impetus for the start of the second Chechen war, which was announced by Putin on the day in 1999 when the Ryazan explosion was due to have occurred. No one who reads Satter's account of the events will find it possible to believe the training exercise explanation. The only serious question is whether Putin, who was the prime minister at the time, knew of the intended explosions beforehand; there can be little doubt that Patrushev knew. There are omissions from Satter's catalogue of crimes, including the murders of liberal politicians such as Galina Starovoitova, assassinated in 1998. The most recent political murder, of Sergei Yushenkov, co-chairman of the Liberal Russia party, on 17th April 2003 (too late for inclusion in the book), was especially significant. Yushenkov was not tainted by financial or other connections, and was a member of the unofficial commission investigating the 1999 bombings. Also omitted from the accounting are the war crimes in Chechnya, documented by the Crimes of War project, Human Rights Watch, and the other human rights organisations that have reported from Chechnya. So is the ludicrous failure of the judicial system in the notorious Budanov murder trial, in which a senior Russian military officer was ordered psychiatric treatment instead of a jail sentence for strangling a teenage Chechen girl to death. (Written before the finding that Budanov was guilty of murder and sentenced to a ten year prison term.) Satter concludes with a brief consideration of the three dangers that Russia faces-dictatorship, economic collapse, and depopulation. These three horsemen are already in the saddle. For the sake of the honest people of Russia-to whom the book is dedicated-we must hope for a different, better future. ******** #12 Moscow Times August 5, 2003 A Whiz at Black PR Stirs Up a Storm By Valeria Korchagina Staff Writer Stanislav Belkovsky, the political analyst behind a report suggesting that the oligarchs are planning to turn Russia into a parliamentary republic, is an educated master of black PR and probably working for the special services lobby in the presidential administration, other political analysts and his former employer Boris Berezovsky said. The "State and Oligarchy" report, released by Belkovsky's Council of National Strategy think tank in mid-June, is credited with helping trigger the Yukos crisis. It warned that Russia is "on the verge of a creeping oligarchic coup" that could seek to remove Putin from power. "He is well educated. He is creative, but creative when it comes to black PR. ... And he doesn't overprice himself," Berezovsky said of Belkovsky in a telephone interview from London. Berezovsky said he most recently hired Belkovsky to work on a campaign to unite "patriotically minded" political forces. He said the campaign was never finished and Belkovsky is no longer working for him. Belkovsky called a rare news conference last week in an attempt to distance himself from growing media speculation that he is one of the people behind the monthlong attack on Yukos by law enforcement authorities. Among the media reports, the Kompromat.ru web site published what it claimed were transcripts of Belkovsky's conversations with the president of state-owned oil major Rosneft and officials in the presidential administration. The alleged conversations indicated that Belkovsky was playing a role in the Yukos attack. Belkovsky said the transcripts were fake. He said his think tank acts entirely on its own accord and has not been in contact with law enforcement authorities, the presidential administration or President Vladimir Putin himself. "I would actually very much like if there were some kind of mechanism to discuss or implement our ideas. But there isn't one," he said in an interview. He said he is not on anybody's payroll and earns most of his salary through political consulting in the regions. Belkovsky, who at his news conference clearly took delight in tossing out quotes from the likes of Sigmund Freud and Niccolo Machiavelli, insisted that his only goal is to help Russia come up with ideas on how to solve problems such as the growing poverty gap between the rich and the poor. Berezovsky poured scorn on Belkovsky's statements, saying he is well aware of how Belkovsky works from personal experience. He said he is convinced Belkovsky is connected to the so-called chekist wing in the Kremlin believed to be orchestrating the Yukos attack. The attack is thought to be part of a political and financial struggle ahead of State Duma elections in December. Political analysts agreed with Berezovsky, saying the Council of National Strategy appeared to have been set up specifically to serve special interest groups in political power struggles. "Of course he is working for you-know-who," said a respected political analyst on condition of anonymity, referring to the chekists. Belkovsky worked in relative obscurity until the "State and Oligarchy" report surfaced in June and, aside from breaking into the limelight of big politics, he has managed with the report to stir up Russia's small community of political analysts. According to Belkovsky, the Council of National Strategy counts among its members a number of prominent analysts who largely backed the report. However, many of those named by Belkovsky strongly denied supporting him or his work. "He is a provocateur. And the whole thing smells bad," said Lilia Shevtsova, a political analyst with the Carnegie Moscow Center whom Belkovsky identified as a member of the Council of National Strategy. Shevtsova said she attended a Council of National Strategy meeting once about a year ago but decided not to participate because she felt uncomfortable not knowing exactly what the think tank was hoping to achieve and where its funding was coming from. She said that among other things Belkovsky appeared to be trying to undermine the credibility of the analytical community, which she called dangerous. Even a Council of National Strategy co-founder -- Kremlin-connected political analyst Sergei Markov -- seems to be losing faith in the think tank. Markov said that while he had generally agreed with the "State and Oligarchy" report, he had strongly objected to some of its content before it was released. His complaints, however, were not taken into account, he said. "I am not sure what I am going to do now," he said. "I am considering walking away from the council." ******* #13 Arab News (Saudi Arabia) August 5, 2003 Editorial Islamophobia in Russia In Russia, Islamophobia is never far from the surface, but it is worse than at any point since the fall of communism — and the government is doing nothing to stop it. It resurfaced with the war in Chechnya, and has increased with every new attack attributed to Chechen terrorists — the 1999 Moscow apartment block bombings, last years’ theater siege in the capital, and most recently last month’s suicide attack by two female bombers at a rock concert which left at least 15 dead — except that it is not just Chechens who are blamed. All the country’s Muslims have become the target of Russian hate and fear. Russian Islamophobia is now rampant; even the press join in, with pictures of local Muslim leaders deliberately positioned next to ones of Osama Bin Laden. Russian Muslim leaders talk of a “wave of reprisals” sweeping over the community since the rock concert bombing, with police seeing every Muslim female in religious attire as a “shahid terrorist”. That certainly was the case two weeks ago when a Muslim woman from London, wearing a head scarf, was thrown out of a cafe in central Moscow; her complaints to the police only resulted in being detained herself. Far from doing anything about it, the Russian government is as guilty — all the way up to President Putin. While at times he has said Islam has no links with terrorism and is a peaceful religion, there have been occasions when he has been blatantly anti-Muslim, linking the war in Chechnya to a wider one between Islam and Christianity. Last year he told a French reporter that “if you are a Christian, you are in danger,” and suggested the reporter be circumcised. Those who try to counter the anti-Muslim trend are themselves in danger. A journalist in the Orenburg region, Farid Nugumanov, found himself under investigation as a possible terrorist and lost his job when he wrote an article criticizing a decision to build an Orthodox church next to the Muslim cemetery in his Muslim village. The situation is now so bad that a week ago the co-chairman of the Russian Council of Muftis demanded action from the Russian authorities to end to the harassment and incitement of ethnic hatred. We echo that demand. But other than that there is almost nothing people here can do. We cannot help Russia’s Muslims materially; to do so would result in them being accused of being in the pay of foreign organizations. There are some 20 million Muslims in the Russian federation; seven of its states have Muslim majorities. It does not take a great deal of intelligence to realize that if the system continues to demonize them, they will become alienated. Far from solving Russia’s separatist problems, it is going to make matters much worse. ****** #14 New York Times August 5, 2003 A Homecoming for Balanchine By SOPHIA KISHKOVSKY ST. PETERSBURG, Russia, Aug. 2 — Crowds of Russian ballet lovers are abandoning their dachas this week and braving a heat wave to see the New York City Ballet perform at the Maryinsky Theater, home of the Kirov Ballet. Patrons of the company have flown in en masse from New York, arriving with a sense of history. For this is George Balanchine's hometown, and the visit is the first by the company — Balanchine's company — since 1972, when the choreographer himself made the trip. Audiences and critics have responded enthusiastically, with packed halls, prolonged applause and curtain calls. The engagement began on Wednesday, featuring all-Balanchine and all-Jerome Robbins programs on alternating evenings, with a Balanchine matinee today. "The Maryinsky has been dancing Balanchine since the beginning of the 1990's," Yulia Yakovleva, a critic for the newspaper Kommersant, wrote, using the familiar name for the Kirov Ballet here, "and never once could one have suspected that it can be like this." The occasion was the opening-night performances of Balanchine's "Serenade" and "Symphony in C," both of them now part of the Kirov repertory. "That `Serenade' is incredibly erotic," Ms. Yakovleva wrote. "And `Symphony in C' is provocatively theatrical." The review concluded, "Not bad for a ballet company that many regarded as half dead up until now." When Balanchine, who died in 1983, visited St. Petersburg in 1962 and again in 1972, adherents of Soviet Socialist Realism were shocked by his plotless Neo-Classical ballets, which grew out of his training at the Imperial Ballet School and the freedom he found as an émigré. But devotees of the avant-garde underground were enthralled. Today City Ballet, founded by Balanchine with Lincoln Kirstein in 1948, has returned on something of a mission, said its artistic director, Peter Martins. "We want to show that his art is alive and well and thriving still," he told reporters here. Some longtime fans of the Kirov, remaining true to their dancers, were less impressed. "I didn't feel any emotions," said Irina Daskovskaya, her tone that of a strict schoolteacher, as she stood in the theater's foyer after "Serenade." "They did their job, but it didn't stir up any enthusiasm. It was cold. Compared to the Maryinsky, they're worse." Larissa Abyzova, a critic who works at the Vaganova Academy, formerly the Imperial Ballet School, where Balanchine soaked up the influence of Marius Petipa and Michel Fokine, said she was surprised by City Ballet's emotional depth but tempered her praise. "Sometimes they didn't hold the line, or there was a stray elbow or wrist, but then again it shows that they're not a soulless machine," she said after a performance. "It turns out deep psychologism is accessible to American dancers." In perhaps the ultimate compliment, she compared the performances of Maria Kowroski of City Ballet and Ulyana Lopatkina of the Kirov in the same role in "Symphony in C," saying, "They are both the best." St. Petersburg audiences already embraced Ms. Kowroski for her performance as a guest with the Kirov in "Swan Lake" earlier this year. The City Ballet will be performing through Tuesday night. The tour is part of the Balanchine centennial celebration this season and next. He was born Georgi Melitonovitch Balanchivadze in St. Petersburg in 1904. The City's Ballet visit is also the culmination of the conductor Valery Gergiev's annual Stars of the White Nights Festival, which has been especially grand this year in honor of the city's 300th anniversary. The Royal Ballet and the Hamburg Ballet, directed by John Neumeier, preceded the City Ballet. At the Maryinsky Theater, large banners advertising Nestlé, a corporate sponsor of the festival, decorate the foyer. Howard Solomon, until recently the City Ballet's chairman, was instrumental in getting the company to Russia. He was visibly moved just before the first notes of Tchaikovsky's "Serenade for Strings" sounded and the curtain went up on "Serenade," with City Ballet's Darci Kistler in the lead. "Balanchine chose her to be prima ballerina when she was 16, just 16," Mr. Solomon said. Inna Sklyarevskaya, a dance critic who did research on Balanchine, was also impressed by Ms. Kistler. "She revealed some facets to the piece that I hadn't seen before, with her serene smile accompanied by Tchaikovsky's dramatic music," she said. "This is a foundation of Balanchine. It's cinematic. Music manifests the essence." Vadim Gayevsky, a leading dance historian and critic who came from Moscow to see the City Ballet, had witnessed both of Balanchine's visits to the Soviet Union. "We've gotten used to Balanchine," he said. As he watched the troupe rehearse Robbins's "Glass Pieces" set to Philip Glass's music on Friday, Mr. Gayevsky reminisced, recalling the Soviet audience's embrace of Allegra Kent, Diana Adams and Arthur Mitchell, particularly Mr. Mitchell, who perplexed them at first because they had never seen a black classical dancer. Today, he said, the male presence in City Ballet's corp de ballet is stronger than in the past. He also said that American critics are "very severe" in their criticism of City Ballet; these critics wish it danced as it did in the 1960's, he said. "For the theater to continue existing for 20 years after its leader's death is a miracle," he said. "Mr. B. is gone. Things have to change." In 1972 City Ballet's performances were relegated to the Lensoviet Palace of Culture, but Soviet authorities were unable to stifle the power of Ballanchine's dance. Balletomanes here seem to measure their life in ballet highlights, like Baryshnikov's leaps and Balanchine's visits. "It was a feast for us when Balanchine came in 1972," Eva Tseitlina said after opening night. A tiny woman with a wizened face and twinkling eyes, she has attended the Kirov with religious fervor since the 1940's. "We didn't have this kind of ballet. Balanchine was so touching with his corps de ballet. He presented each of them with flowers." On Friday Ms. Tseitlina stood near the stage door and stared lovingly at City Ballet dancers as they exited the theater. Rosemary Dunleavy-Maslow, the company's main ballet mistress, and Sara Leland, another ballet mistress on the staff, are the only two people on the tour to have accompanied Balanchine on both his trips to St. Petersburg, then called Leningrad. The first tour coincided with the Cuban Missile Crisis in 1962. The second lasted for weeks in 1972 and covered several Soviet cities. Sitting in the elegant wood-paneled bar of the Hotel Astoria, they recalled a strict off-hours schedule, sinister secret police and dancers fainting backstage from a monotonous diet of cabbage and bread. This time company members have enjoyed fine meals with caviar, nights at the hotel casino and an impromptu disco cruise down the Neva River. "It's like Europe here now, like Paris, all the outdoor cafes," Ms. Leland said. But one thing hasn't changed, she said: many of the theater's toilets are still just holes in the floor. The production stage manager Perry Silvey, who had worked in the Maryinsky Theater twice since 1991, described backstage "moments when you feel like you're in a Dilbert cartoon." Stage left and stage right mean opposite things to the theater's carpenters and electricians, who are typically at war. While some backstage equipment is state of the art, some dates to 1947. Maryinsky carpenters built two piano platforms to City Ballet specifications for John Adams's "Hallelujah Junction" choreographed by Mr. Martin. But when the company arrived the pianos were not ready. The performances themselves have had some unusual if not comic moments. During the matinee's intermission today the first flute disappeared, and the conductor, Andrea Quinn, could not begin because the flutist had taken his score as well. The musician turned up about 15 minutes late, delaying the beginning of the second ballet, Balanchine's "Symphony in Three Movements." On opening night Mr. Gergiev stretched an intermission to 45 minutes when he took the orchestra upstairs to rehearse. St. Petersburg's 300th anniversary celebration was intended to restore this former imperial capital's luster, so revered by Balanchine. He left the Soviet Union in 1924, as Stalin ascended to power and set about crushing the remnants of artistic freedom and czarist splendor. (Balanchine eventually joined the Monte Carlo-based Ballets Russes and in 1933 accepted Kirstein's invitation to come to the United States). Now the Petersburg in Balanchine and the Balanchine in Petersburg are being rediscovered and reassessed. "Just walking on the streets, I think imperial, diamonds, the huge building and streets," said Wendy Whelan, who performed with Jock Soto in the "Rubies" of the Maryinsky's production of Balanchine's "Jewels" in February. "Going into the churches here, I've seen how hands are held on icons and I realize that's how we hold our hands. I get a feeling of his spirituality here." Mr. Soto added, "It all comes together." ******* #15 St. Petersburg Times August 5, 2003 Russia Still Hesitant on Ratifying Kyoto By Greg Walters SPECIAL TO THE ST. PETERSBURG TIMES The Soviet Union and its successor states have never been renowned as great champions of environmental causes. However, an ironic twist of history means that the fate of the Kyoto protocol, the highest profile attempt to date to safeguard the future of the world's environment, now rests squarely on Russia's shoulders. In simple terms, if Russia ratifies the Kyoto Protocol, it comes into force. If not, the protocol dies. The protocol aims to control atmospheric levels of greenhouse gases, which many scientists say are the root cause of global warming, by making countries responsible for their emissions. To come into force, the protocol must be domestically ratified by 55 or more of the countries that signed it and that, collectively, produced 55 percent of the world's total greenhouse-gas emissions in 1990. Despite signing the protocol on Nov. 12, 1998, the United States, which produced 36 percent of 1990 emissions, declared in 2001 that it would not ratify it, claiming that reducing greenhouse-gas emissions would hurt its economy. With the next-highest 1990 emissions, at 17 percent, Russia therefore became the de facto arbiter of the protocol's fate after the U.S. withdrawal. At least publically, Russian officials have appeared enthusiastic about ratifying the protocol, adopted on Dec. 11, 1997, at a meeting of the United Nations Framework Convention on Climate Change in Kyoto, Japan. Russia signed on March 11, 1999. In September 2002, Prime Minister Mikhail Kasyanov told the BBC that "we consider that ratification will take place in the very near future." Almost a year later, there is little sign - if any - of progress. So what is causing the delay? "It's a rather serious document," Oleg Pluzhnikov, deputy head of the Energy Ministry's Ecological Department, said in an interview on Friday. "Nothing [about the protocol] has been obvious from the very beginning." Pluzhnikov suggested that the hold-up has been caused by bureaucratic thoroughness - but that this thoroughness has yielded "very positive results." "We believe that ratification can still happen in the near future," Pluzhnikov said, although he declined to be more specific. To many observers, Russia's reticence to ratify the Kyoto Protocol is all the more puzzling given that the country stands to benefit from an economic windfall if the protocol comes into force. According to the terms of the protocol, countries that now produce lower greenhouse-gas emissions than in 1990 can sell their "surplus" - the difference between 1990 emissions and the current level - to overproducing countries to bump up those countries' emissions limits. Russia currently pumps some 30 percent less greenhouse gases into the atmosphere than the Soviet Union was in 1990, meaning the Kyoto Protocol effectively provides the country with an instant international commodity - if it ratifies the treaty. A "pessimistic" estimate by Natalya Olefirenko of the Moscow office of environmental pressure group Greenpeace put Russia's potential earnings from quota selling at at least $20 billion. Pluzhnikov, however, said between $1 billion and $2 billion is more realistic. Some critics say Russian authorities are stalling in hopes of getting an even better deal. "Both President Vladimir Putin and Prime Minister Mikhail Kasyanov promised ratification, but appear to be taking their time, evidently wishing to gain some further advantages," Viktor Danilov-Danilyan, director of the Russian Academy of Sciences' Institute of Water Problems, wrote in an article for RIA Novosti on July 22. The advantages could include a guarantee that countries seeking credits will purchase from Russia before other countries with a surplus, or would provide Russia with "clean" technology to help keep its emissions low. However, Igor Leshukov, director of the Institute for International Affairs, St. Petersburg, said Russia is unlikely to get further concessions. "Russia already got the maximum," he said in a telephone interview on Wednesday. "I can hardly imagine what type of better deal you could get." According to Leshukov, the problem is the nature of the bargain to be struck, rather than its terms. "In any country, politics is about money, but normally it's about real money," he said. "Russia does not consider this money [from quota trading] substantial or real. It's more or less virtual." Leshukov also said that Russia may be only partially to blame, and that the European Union may be less enthusiastic about the Kyoto Protocol than it appears. "Kyoto is suspisciously lacking from the EU-Russia energy dialogue," he said, noting that, when Putin and British Prime Minister Tony Blair met for talks in June, Kyoto was conspicuously absent from the agenda. "This means that the EU doesn't consider Kyoto a priority, contradictory to its official declarations. Otherwise it would press Russia harder," Leshukov said. Like any drawn-out political question in Russia, however, there is also at least one conspiracy theory - in this case, the American connection. The argument goes that, should the protocol come into force, the United States could face pressure as the lone industrialized foot-dragger. Therefore, it has a key interest in blocking the protocol, and may be maneuvering behind the scenes to stop Russian ratification. "It's entirely possible," said an American environmental policy expert, who asked that her name be witheld. "And anything that they might be doing would definitely be done below the radar. I'm sure they wouldn't want to be seen as pressuring Russia." Both U.S. and Russian officials denied the allegation. "We think nations should independently evaluate whether ratification of the Kyoto Protocol is in their national interest," a U.S. State Department official was quoted as saying in an article in the Wall Street Journal on July 16. "As far as I know, there is no [U.S.] pressure," the Energy Ministry's Pluzhnikov said. For Leshukov, though, these three factors would be enough to explain the delay. "Insufficient interest in Europe, lack of interest on the side of Russia, and some maneuvers on the side of the United States" spell immobility for the protocol, he said. Greenpeace's Olefirenko, however, laid the blame firmly on Minister for Economic Development and Trade German Gref. According to Olefirenko, the requisite documents have been ready for a year, but Gref is deliberately holding them up. "The Russian Ministries and governmental agencies headed by the Ministry of Economic Development either have showed their inability to prepare a minimum set of papers required for ratification, or have been deliberately sabotaging the process," she wrote in an email last week. "In any other country, such a situation would have triggered a thorough investigation, because corruption can be the only thing standing behind these delays." Whatever the reason for the delay, ratification may, in fact, be just a matter of time. The first piece of the puzzle, wrote Danilov-Danilyan of the Russian Academy of Sciences, is realizing that "nothing is done quickly in Russia." ******* #16 Nezavisimaya Gazeta August 5, 2003 UNITED RUSSIA IS THE RICHEST AND THRIFTIEST PARTY It does not spend party funds on conferences or publicity Major political parties submitted financial reports for 2002 Author: Valery Tsygankov [from WPS Monitoring Agency, www.wps.ru/e_index.html] WE HAVE OBTAINED COPIES OF THE FINANCIAL STATEMENTS OF UNITED RUSSIA, THE COMMUNIST PARTY, THE LDPR, YABLOKO, THE PEOPLE'S PARTY, AND THE UNION OF RIGHT FORCES FOR 2002 - AND CHECKED THE FIGURES AGAINST REALITY. RUSSIAN ORGANIZATIONS AND COMPANIES DONATED ALMOST 400 MILLION RUBLES TO UNITED RUSSIA IN 2002. The Taxes and Duties Ministry and Justice Ministry have analyzed financial reports submitted by political parties. No faults were found. We have obtained copies of the financial statements of United Russia, the Communist Party, the LDPR, Yabloko, the People's Party, and the Union of Right Forces for 2002 - and checked the figures against reality. Naturally enough, United Russia turned out to be the richest. It does not have any "individual" sponsors; all funds were raised by organizations and companies. Russian organizations and companies donated almost 400 million rubles to United Russia in 2002. The People's Party with 115.202 million rubles is second, the Union of Right Forces with 52.793 million is third, and Yabloko with 45.312 million is fourth. All of these parties are mostly sponsored by organizations and companies too. Even Vladimir Zhirinovsky's LDPR is financed by companies, but the LDPR ended up with just over 17 million rubles. As for the Communist Party, it is mostly sponsored by individuals. Judging by the available accounts, United Russia was the least profligate: they show that it didn't spend a single ruble in 2002 on congresses or conferences. As though its congresses and conferences weren't nationwide events! United Russia's major rival, the Communist Party, spent 108,300 rubles on its own congresses and conferences. Yabloko forums cost twice as much. Even publicity for its activities did not cost United Russia anything. The party never paid anything for information, commercials, publications, or printing. Even the LDPR admitted in its financial report that publicity consumed the lion's share of the party budget (14,919,600 rubles). Neither did other political parties economize on publicity. On the other hand, the accounts show the interest of United Russia in its own rating and it personnel. The party spent 106.293 million rubles on opinion polls and personnel training at the Russian Academy of Civil Service. At the same time, charity was not United Russia's strong suit. Yabloko donated almost a million rubles to the poor, the People's Party a similar sum, the Communists over 300,000 rubles, and United Russia 51,000 rubles. At the same time, United Russia leaders cost the party budget 140.831 million rubles. Communist bosses cost the party almost 1.5 million rubles. The People's Party spent about 90 million on its leaders. Yabloko leaders did not get a single ruble from the party treasury. Assets and property of United Russia are estimated at 254.395 million rubles. The party's offices on Banny Pereulok in Moscow account for over half that sum. Communists' assets are worth just over 65 million rubles, including two buildings in Moscow, one in Cherkessk and one in Ufa. Yabloko bought apartments for its activists and functionaries in Elista, Ufa, and Irkutsk (assets and property of the party amount to 12.5 million rubles). The People's Party does not own any real estate, but its assets amount to 9.605 million. Property of the LDPR is worth just over 300,000, judging by the available figures. The Taxes and Duties Ministry and Justice Ministry must have taken the figures at face value. These structures do not doubt that the meager sums given in financial reports are sufficient for the federal parties when they maintain their popularity and run for the Duma and regional legislatures. In any case, political structures' accounting is as non- transparent as it was before the law on political parties. Most functions and campaigns are financed from unknown sources and in unknown amounts. Property and assets are registered in the names of the third persons. Lists of sponsors are provided just for the record - meager sums and obscure companies. Mikhail Khodorkovsky's example has not been followed. Major corporations remain secretive about their political preferences. Russia has not yet matured to the point where fund raising is legitimate and open. ******** #17 Gazeta August 5, 2003 WHO IS TAKING A BITE OF THE APPLE? The list of potential political forces behind Yabloko Sans Yavlinsky is quite lengthy Author: not indicated [from WPS Monitoring Agency, www.wps.ru/e_index.html] THE FOUNDERS OF A NEW MOVEMENT ARE CALLING FOR GRIGORI YAVLINSKY'S RESIGNATION AT THE YABLOKO CONGRESS SCHEDULED FOR SEPTEMBER: DUE TO WHAT THEY ALLEGE IS A FINANCIAL-POLITICAL CONSPIRACY WITH THE OLIGARCHS, USURPATION OF POWER WITHIN THE PARTY, AND THE POPULIST NATURE OF YABLOKO ACTIVITIES. A new political movement has appeared: Yabloko Sans Yavlinsky A NEW STRUCTURE APPEARED ON THE RUSSIAN POLITICAL ARENA LAST WEEK. ITS NAME IS QUITE REVEALING - YABLOKO SANS YAVLINSKY. THE FOUNDERS OF THE MOVEMENT ARE CALLING FOR GRIGORI YAVLINSKY'S RESIGNATION AT THE YABLOKO CONGRESS SCHEDULED FOR SEPTEMBER: DUE TO WHAT THEY ALLEGE IS A FINANCIAL-POLITICAL CONSPIRACY WITH THE OLIGARCHS, USURPATION OF POWER WITHIN THE PARTY, AND THE POPULIST NATURE OF YABLOKO ACTIVITIES. THE NEW MOVEMENT HAS CAUSED A STIR ON THE RIGHT. Grigori Yavlinsky did not make any official statements regarding the new movement. In the meantime, several days before appearance of Yabloko Sans Yavlinsky, Irina Khakamada of the Union of Right Forces quite earnestly spoke of an alliance between the Union of Right Forces and Yabloko for the purpose of overcoming the 5% barrier. Yabloko activists are determined to close ranks in the face of the new threat. Last Saturday, however, Igor Rabinovich (head of the Bashkortostan regional branch of Yabloko) brought up the matter of who might be interested in the appearance of Yabloko Sans Yavlinsky - saying the list might include United Russia, the Communist Party, or even the presidential administration. This quite vague list enables analysts and political scientists to venture all sorts of theories, and even suspect the presence of some third force interfering with the arrangement of forces on the right. It is clear already that Yabloko is centering its parliamentary campaign around the publicity efforts of its opponents. Financial capacities and smart political consultants have enabled the party to criticize the government more bitterly than the Communist Party, reorganize housing and utilities better than the Union of Right Forces, and fight corruption more effectively than United Russia. It is only natural to assume that any of these parties might have been interested in putting Yabloko under pressure. From this point of view, Yabloko Sans Yavlinsky is a godsend. Rabinovich's thesis that attempts are being made to present Yabloko as a party of squabblers is quite interesting, particularly in view of the scale of rotation of Yabloko leaders. It is common knowledge that Yuri Boldyrev, Vyacheslav Igrunov, Mikhail Zadornov, and about twenty other leaders quit Yabloko at one time or another because they were unable to work with Yavlinsky. This consideration supports the theory that Yabloko Sans Yavlinsky is a result of centrifugal tendencies in the current leadership of Yabloko. Previous sponsors may have severed financial contacts with Yavlinsky. Or they are about to. It is in such a situation that some third force appears, the force associated with Boris Berezovsky. Losing one political party after another, Berezovsky must have inevitably come to Yavlinsky. Viewed in this context, Berezovsky's "New Redistribution" in Kommersant looks like an offer rather than another ration of mud. It follows that establishment of Yabloko Sans Yavlinsky resembles Berezovsky's usual way of doing things. In the first place, having Yavlinsky under pressure devalues Yabloko. Secondly, the activity of the movement will identify the functionaries who are ready to turn their back on Yavlinsky the leader. Thirdly, using Liberal Russia to distract attention from his real intentions, Berezovsky can quietly but effectively build up his influence with the next Duma. Which political force is behind the new movement? Leader of Yabloko Sans Yavlinsky Igor Morozov would not comment on composition of the upper echelons of the new movement or on its sponsors. He claims, however, that the movement will support Yabloko in the elections if Yavlinsky steps down. ****** #18 The Times (UK) August 5, 2003 Blow to freedom as son follows Azeri President Robin Shepherd in Moscow Members of parliament in the oil-rich Caspian Sea state of Azerbaijan paved the way for the first dynastic succession in the former Soviet Union yesterday by appointing the President's son as Prime Minister. Ilham Aliyev, whose ailing father Heydar has held an iron grip on Azerbaijan for a decade, was confirmed in his new post by a unanimous vote. His elevation means that he is now almost certain to take over as president, possibly as soon as October. The move is yet another blow for democracy in the former Soviet Union, coming days after President Lukashenko, the autocratic leader of Belarus, signalled his intention to change the Constitution in order to run for a third term. With the exception of the three Baltic states of Latvia, Lithuania and Estonia, which are due to join the European Union next year, not one of the 12 other former Soviet republics has emerged from totalitarianism into anything resembling Western-style, liberal democracies. Of those 12, three are ruled by outright dictators, six are effectively one party states and two are governed by powerful presidents who permit only limited political opposition. Moldova is something of an exception in that it operates a parliamentary system, albeit with a limited opposition. Events in Azerbaijan yesterday were prompted by the President's failing health. He was reported to be close to death in a Turkish hospital over the weekend and, as Prime Minister, his son is now constitutionally empowered to take over his duties should he become incapacitated. The beleaguered Azeri opposition has called the move a de facto coup and analysts said that it confirmed a picture of democratic fragility across the former Soviet Union. "These countries have failed to create stable politics based on institutions, so they rely on personalities," Sergei Markov, director of the Institute of Political Studies in Moscow, said. "Politics is clan-based in Azerbaijan. Civil society does not exist. Political culture is very patriarchal. People see the State as a big family and want a father at its head." With only a brief period out of power in the late 1980s and early 1990s, President Aliyev has been exactly that for Azerbaijan for more than three decades. Born in 1932 in Nakhchevan, home of the now dominant "Nakhchevan clan", he rose through the ranks of the KGB to become the head of the Azeri Communist Party and, until he was dismissed by Mikhail Gorbachev in 1987, was the first Muslim to sit in the Soviet Politburo. He made a comeback in 1993 and was widely credited with bringing stability to the country and ending the fighting with neighbouring Armenia over the disputed enclave of Nagorno-Karabakh. Assuming that the new Prime Minister does take over from his father, his handling of Nagorno-Karabakh may be his greatest challenge. The original ceasefire, after a war that caused 35,000 deaths, left ethnic Armenians in control of almost 15 per cent of Azerbaijan's territory, an outcome deeply resented by most Azeris. Last month, Azeri troops clashed with Armenian forces on the border, leaving up to seven dead. Analysts say that the need for Azerbaijan's leaders to remain on good terms with Western oil companies, including BP, will be a restraining factor. Oil accounts for around 90 per cent of the country's exports, almost 90 per cent of foreign direct investment and 40 per cent of state budget revenues. "Oil is the backbone of the Azeri economy," Leila Butt, an Azerbaijan analyst at the Economist Intelligence Unit in London, said. "Oil companies would be wary of extending investments if Nagorno-Karabakh erupted into war again." President Aliyev's succession plans for his son have been laid over several years, but have accelerated recently because of his ill-health. He has long suffered from heart problems and twice collapsed after sudden falls in his blood pressure during a televised broadcast in April. Other leaders in the Caucusus and Central Asia have been more concerned about hanging on to power for themselves, and that has involved some extraordinary political manoeuvring. President Niyazov has cultivated a bizarre personality cult in gas-rich Turkmenistan. While presiding over brutal repression of opponents, he has also taken the title of Turkmenbashi (Father of all the Turkmen) The Great. He has renamed January after himself and now considers himself a prophet. He is, needless to say, president for life. In Uzbekistan, President Karimov brutally suppresses any opposition. Leaders of Kazakhstan, Tajikistan and Krgyzstan, the other Central Asian states, have taken less flamboyant but equally decisive routes to holding on to power. All have extended their terms of office via referendums that were widely reported to have been rigged. While Russia and Ukraine, the two most populous former Soviet republics, have so far eschewed such blatant affronts to democratic principles, both have been sharply criticised for heavy-handed policies towards opposition groups and the independent media. Georgia and Moldova have the best records, although the former's political system is strongly weighted towards the presidential incumbent. ******* Web page for CDI Russia Weekly: http://www.cdi.org/russia Archive for Johnson's Russia List: http://www.cdi.org/russia/johnson With support from the Carnegie Corporation of New York and the MacArthur Foundation A project of the Center for Defense Information (CDI) 1779 Massachusetts Ave. NW Washington DC 20036