MORE RUBLES TO THE DOLLAR

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MORE RUBLES TO THE DOLLAR

Moskovsky Komsomolets, August 16, 2000, p. 3

Today the ruble exchange rate started to fall. The Central Bank was not trying to prevent its fall, and made no significant interventions. The market, which has been longing for a drop in the ruble for the past two weeks, has now got it.

During trading the ruble rapidly fell against the dollar by 13 kopecks; but as soon as the rate reached 27.80 rubles to the dollar, the situation on the Exchange stabilized and the exchange rate halted at a level of between 27.80 and 27.83 rubles to the dollar. Dealers must have become frightened that the Central Bank was preparing a trap for them. As a result, the average exchange rate stopped at 27.74 rubles to the dollar – the ruble had fallen by only five kopecks – when the Central Bank announced the results of the day’s trading and the new exchange rate.

Nevertheless, the currency market is still confused, and the Moscow Inter-Bank Currency Exchange is still wondering if the Central Bank is planning to set another trap, or whether it is deliberately being a passive observer of the speculation. Central Bank Chairman Viktor Gerashchenko recently said he guaranteed the ruble’s stability; however, at present a weaker ruble is more profitable – not only for currency dealers, but for domestic producers as well – otherwise foreign products will again flood Russian stores, and the Russian manufacturers will not be able to compete with them.

If the Central Bank remains passive, by the end of the week the exchange rate will have reached 28 rubles to the dollar. Thus, analysts’ predictions for the second half of August will be fulfilled. The spare ruble resources of commercial banks allow their dealers to speculate on the dollar.

FIGHTING ON BORDER BETWEEN KYRGYZSTAN AND UZBEKISTAN

Izvestia, August 16, 2000, p. 1

According to official reports of the Kyrgyzstan Defense Ministry, as a result of air strikes by Kyrgyz aviation, the gathering of militants has been broken into several small groups. Bolot Djanuzakov, Secretary of the Kyrgyzstan Security Council, has announced that in Tajikistan, near the Kyrgyz border, there are up to 800 militants from the Islamic Movement of Uzbekistan. The armed gangs could launch an incursion into Uzbekistan or Kyrgyzstan at any moment.

On Friday, Russian President Vladimir Putin will meet with presidents of Central Asian republics. At the meeting they will discuss security along the southern borders of the CIS.

Kyrgyzstan, Tajikistan, and Uzbekistan are not eager to involve Russia in their “domestic” problems. They intend to do without their great northern neighbor. On August 15, in Hudjant in northern Tajikistan, an operative group was set up to coordinate joint activities to find and destroy the terrorist gangs. This group includes representatives of law enforcement agencies of Kyrgyzstan, Kazakhstan, Uzbekistan, and Tajikistan.

CHECHEN GUERRILLAS SUFFERING FROM LACK OF MONEY

Moskovsky Komsomolets, August 16, 2000, p. 3

Chechen guerrillas have great problems with money, since payments in dollars are getting rarer. Instead of the promised thousands of greenbacks, battlefield commanders pay their mercenaries about $20-30 a month. Naturally, guerrillas are going over to other field commanders, those who have money. Currently, the only field commander with money is Khattab. He commands three to four thousand people, and only one-tenth of these people are Chechens. Khattab no longer pays any heed to Chechen field commanders, and determines the tactics of war against Russia himself. Khattab’s five deputies are Arabs and Turks.

However, Khattab does not intend to fight in Chechnya forever, especially when the slack financial flow from the Muslim world disappears. His subordinates are saying that Khattab intends to leave Chechnya by autumn, since the Russian special forces are hunting him. His close subordinates are feeling no better. More than half of his 700 Afghan instructors have gone home already.

SNIPER AIMING AT PUTIN’S WINDOWS

Komsomolskaya Pravda, August 16, 2000, p. 3

Two weeks ago, employees of the Interior Ministry’s Main Department for Combating Organized Crime found a sniper’s rifle, several automatic guns, pistols, and silencers in a room at the Rossiya Hotel in Moscow. Valentin Stepanov, an assistant to the security manager of the hotel, brought a bag with this ammunition into this room a month before.

Stepanov has been charged with illegal storage of weapons. According to the Criminal Code, he may be sentenced to three years imprisonment and a large fine. Currently, the suspect is in the Butyrka detention cells. According to reliable sources, he is not changing his story. He says he was walking along the corridor, saw the bag, and then locked it in the room. Being not a curious person, he did not look inside. However, Valentin Semenov is actually not a naive person. He is a retired colonel of the General Staff of the Armed Forces, served in various special services for several years, and speaks two foreign languages.

There are not many conjectures about the motives of the crime. Despite the fact that the pistols were brand new, these weapons were not meant for sale. According to expert estimates, this is a set of arms of a major terrorist. In all likelihood, the ammunition was just waiting for a proper moment, in this room facing the Kremlin.

THE PLOT OF THE WEEK: A HUNDRED DAYS OF VLADIMIR PUTIN’S PRESIDENCY AGAINST THE BACKGROUND OF A TERRORIST ACT ON PUSHKIN SQUARE


The president has taken some time out, the newspaper reported at the beginning of the week: “In full conformity with the traditions of the Russian political and business elites, Vladimir Putin has taken leave.” An important stage of “life after Yeltsin” has been reached: a hundred days of Putin’s presidency (and a year of Putin at the helm of power). The press has been very active lately, but the whole week through horrible shots of the terrorist act on Pushkin Square prevailed over political analysis. Curiously enough, practically no one (at least, soon after the terrorist act) tried to regard the event as an organic part of the current political situation. As pointed out, as far as the terrorist act was concerned, “analysts were silent, only reporters worked”. Reports from the scene of the tragedy and from the Sklifosofsky Institute where victims have been treated, suggestions concerning the reasons for the explosion with subsequent refutations, a report about two Caucasians being arrested and then released, pictures of suggested criminals and reasoning that people with such sinister appearances had no chances of bringing explosives as far as the center of the city – this was what the media was full of.

Only the newspaper stated that “big-time politics found itself among the victims of the terrorist act on Pushkin Square”. Without mentioning Putin, however, the newspaper remarked that the “iron fist” whose power has been actively strengthened lately, seems to be working in the wrong direction: “An iron cage for terrorists which has been often spoken of after the explosions in Moscow in 1999 was never built.” Citizens found out that they are absolutely defenseless in the face of aggression whereas the best analysts of the Kremlin, along with “iron fists”, are redistributing property, fighting with oligarchs and governors, constructing a new command chain, bringing the media to heel and are involved in other “urgent” matters. It is no surprise that experts from the Serbsky Institute, as the newspaper reports, forecast a new nationwide “wave of fear”, even more powerful than the previous one.

The newspaper argues with . It remarks that “no security service can provide absolute guarantees when fighting terrorism” and that terrorists can be done away with only if the relevant services act “without hysterics and with the help of citizens who are always on the alert”. To all appearances, the immortal recipe of “no one can save the drowning but themselves” is again imposed on people. Still, the newspapers were unanimous in citing the president’s words: “This crime will find an adequate response”, having pointed out that it seems to be overly laconic.

All of this made remark when comparing the coverage of the Moscow events by the Russian and Western press: “There is a feeling that the explosion on Pushkin Square left us on different sides of the barricade”. quotes headlines from influential Western newspapers: “Bloody Anniversary” (The Times), “Exposed Demagogue” (Der Standart), etc. Of course, The Times holds, one bomb will not completely destroy hopes which have been planted into the West this year, but “A breath of graveyard cold swept over Putin after the terrorist act”. Having cited this phrase, made a sad remark: “Only a year ago, we could afford to publicly say practically all we thought about the situation in the country, about the president, and about Putin.”

This week reminded us of the most memorable media phrases of 1999. : “What are we coming to? The president of a democratic Russia has named the incumbent head of the Federal Security Service his successor… We can classify this action by Boris Yeltsin as an insult to public opinion…” : “A successor has been officially named, in contradiction to all norms of our relatively authoritative constitution. Thus, the tradition of “succession” has been actually introduced…” : “Possibly, the suggestion that Putin may be elected president of Russia is one of Yeltsin’s wildest political fantasies…”

Now the situation has drastically changed, continues: “No one seems to have been deprived of any liberties, but it would suffice to take a look in a Russian newspaper and in a foreign one to recall the forgotten proverb about two different worlds.” Russia seems to be turning into “a lonely island in the international information ocean,” the newspaper concludes.

At the same time, does not see anything odd in the new manners of journalists and the political elite. The newspaper explains that not everyone has such powerful information support as Vladimir Gusinsky, head of Media Most, which is why some do not dare to express regret that they supported Yeltsin when he was elected for his second term in office (“If we had known whom he would make his successor, we would have supported Zyuganov”). reminds its readers of the past and analyzes how the Russian notion of a “true president” has changed over the past ten years. At first, political observer Alexander Tsipko writes, many were convinced that one of the moral leaders, for instance Solzhenitsin or Sakharov, should lead the country (by the way, this meant two different ways of development). Then, people turned to “reliable economists”, like Chernomyrdin or Luzhkov. After August 1998, the time of the cautious Yevgeny Primakov came. He managed to stabilize the situation in Russia. Today former presidential hopefuls perceive the power shift of the last year as incredible injustice: “Lebed is still shocked. When he speaks about Putin and his reforms, he flushes. For two months now, Nikolai Fyodorov has been trying to prove that he is wiser than the new president, he knows the Constitution and the nature of the multi-national Russia better. As for Zyuganov, when Putin is mentioned, he hides under the same disguise as his former “perennial enemy”, Igor Malashenko. Putin who seems to have come from nowhere causes similar irritation in the CPRF leadership and the NTV administration.” However, in Tsipko’s opinion, Putin’s emergence could have been predicted: “A security service official should have come to power after Yeltsin due to the nature of his regime, as it was.” This was inevitable in order to preserve the power and the country.

Putin is no worse than anybody else, the political observer believes. “He was, at least, ironic about his own career growth”. On the whole, Tsipko concludes, it is not worthwhile expecting great minds to come to power: “Presidents are no different from ordinary people. They are people who do their job. It will be great if Putin does his job well and honestly. I hope that he will preserve his energy and sense of humor until the end of his presidency.”

also holds that Putin’s coming to power could have been predicted. In the opinion of the newspaper, the situation can be explained by the syndrome of national humiliation, characteristic of Russians. It is even more powerful than that of Germans, “since here we are dealing with the collapse of a Great Power.” Dreams of bringing order to the country created the atmosphere of waiting for a “Napoleon”, a savior of the fatherland. However, the newspaper remarks, there are Napoleons and Napoleons. There was Napoleon I, the Great Napoleon, and Putin is not like him at all: “He is not a great warlord by nature and does not possess any literary talent, either.” It would be more proper to compare him to Napoleon III, the “minor” Napoleon. Like him, Putin launched a colonial war, divided the country into seven administrative districts, decided to establish the State Council which is reminiscent of the French history.

Putin, as holds, is supported by Russia’s new ruling elite: “bourgeois bureaucracy” typical for a colonial state where colonial officials (“Soviet bureaucrats in our case,” the newspaper explains) were the first to emerge. Then, having privatized all they could grasp, these officials became bourgeoisie. It is of interest that not long ago clans deriving profits from exporting Russia’s natural resources to the West were the strongest, the newspaper continues. However, recent scandals with the Russian money being laundered in the West and fluctuation of oil prices made these people feel the uncertainty of their position. This is why Russia’s new ruling elite “expects the “Russian Napoleon” to keep in check hired workers and, if necessary, suppress their protest, on the one hand, and ensure an economic growth, on the other.”

The weekly suggests quite a different approach. It maintains that the principal advantage of the new president is that he is a sealed book for both politicians and political analysts. And we must resign ourselves to this fact. Putin is a former officer of the main department of the KGB whose profession is “mind games”. Intellect is his main weapon, along with the ability of remaining closed from everyone, including colleagues. Those who decided to make an obscure KGB officer Yeltsin’s successor failed to properly assess him, maintains. The weekly is very cautious when speaking about Putin’s supposed plans, but it presumes that his final goal is a “democratic legal state”. An authoritarian stage is unavoidable on the way to this state. In order for the readers to correctly assess all warnings on this score, suggests that they define their relation toward such notions as “us” and “them”: “We” are those who, actually, have nothing to lose and who have no reason for fearing the Russian legislation, and “they” are all the rest.” The weekly expresses certainty that Putin’s plans will find support among all of those who “hate Yeltsin’s regime and hate those who were at the helm of power under Yeltsin.” There are many of such people, writes, “and the money of all oligarchs will not suffice to buy at least a third of them.” Moreover, the president’s rating can be easily raised up to 70%, if necessary: “It will do to prosecute Berezovsky, for instance, and there are many “public favorites” apart from him.” This is why only “very brave adventurers or people who have no notion of what the reality is about” can dare to seriously confront Putin, all the more so since no one knows the president’s real intentions, holds.

In the opinion of , the Russian elite can be classified into three categories, depending on their reaction to the prospects of a “new order”. Some become loyal retainers of the new master (the Unity movement, for example), others try to “keep up appearances”. This is easy, points out, it is enough to turn a blind eye to restrictions on civil rights and pay principal attention to other aspects of the president’s activity (fighting with the governors’ despotism, oligarchs’ embezzling of the national values, etc.). “Such a reaction is widely spread and strikingly decent people can be met in various dubious groups supporting Putin.” There is a third reaction, when people appeal to national interests trying to defend themselves: “It is impossible to seriously struggle without appealing to people, but it is ridiculous to regret the loss of your fortune in front of people.” People must be convinced that the whole matter is about the fate of democracy, the future of the country, etc.

Of course, writes, Gusinsky and others are defending their business. “But they are also defending something else – their dignity, their rights, justice, the freedom of speech.” Even Berezovsky’s opposition, in the opinion of the newspaper, can be regarded as this type of reaction. As for the possibility of an efficient consolidated opposition to the leadership emerging, states that it can emerge only when a certain amount of fear caused by the presidential authoritarianism accumulates in society. If there is no such fear (as was the case under Yeltsin), the elite has no reason for speculating about curbing the ruler’s power. If the fear becomes too great, the elite “will start to think about its own survival, and they will suppress one another in panic”. This is why the amount of fear must be moderate. From the point of view of the newspaper, this is the amount of fear we can currently observe in Russia. A North Korean regime can hardly be built in this country, considering that Putin’s opportunities are limited, in the opinion of : “No one seriously believes that he wants to nationalize large enterprises and put all governors and oligarchs in jail.” Putin, as the newspaper puts it, is capable of causing fear, but “this is not panic and paralysis”.

The newspaper holds that the elite problem is almost the only one solved by Putin during his year at the top of the Olympus of state power. And he handled it rather “humanely”, without sensational dismissals. He chose another method which is much more effective: creating new agencies instead of old ones. For instance, federal districts headed by presidential envoys were created in addition to 89 regions led by governors. “Thus a new frame is being built into the old, disorderly system,” the newspaper writes. This is why dissolution of the Federation Council and depriving governors of their economic independence as a result of the passage of a new Tax Code should be regarded as “logical building of a new power frame”. The Duma, points out, has been turned into a machine for official passage of decisions sent “from above”. The new Federation Council will also be a purely formal agency. “This is the way parliamentary and public politics came to an end,” the newspaper writes. “People who were noted for their public speeches, from Zyuganov and Zhirinovsky to Vladimir Ryzhkov and Yavlinsky feel completely lost now.” However, the political landscape will be leveled further: the Kremlin intends to pass a law on parties which will make it possible to reduce the number of candidates to the minimum and, consequently, make the work of the Duma more controllable.

It turned out to be even easier to bring oligarchs to heel, the newspaper holds: “Three days in the Butyrsky detention center for an oligarch and tax prosecution for several others turned out to be enough to make capitalists, once almighty, gladly welcome the Council for Enterprise headed by the prime minister and created specially for them.” Similar changes were observed when Yeltsin replaced Gorbachev. “If Putin does not succeed in anything apart from changing actors and scenery within his term in office, history will repeat, and his kingdom will melt like a mirage,” warns.

During the hundred days of his presidency, writes, Putin “has completely destroyed the policies pursued by Yeltsin and his retinue during his second term in office.” In everything, apart from the absence of sensational dismissals, Putin is a complete antithesis to Yeltsin.” Yeltsin gave as much sovereignty to regions, as they could “digest”. Putin started the federal reform with appointing presidential envoys to coordinate the activity of regional leaders and crowned a hundred days of his presidency with a draft budget where taxes are distributed in favor of the federal center with the ratio of 70:30. As for oligarchs, Putin also managed to make matters clear: he did not oppress them to the end, but frightened them: “At least, most of them do not call themselves oligarchs any longer and promise to the authorities to behave themselves.” In the opinion of , Putin has been consistently acting in accordance with the following principle: “politely listen to everyone knowing for sure what decision will be made.” The newspaper states that Putin’s accomplishments during a hundred days in office would suffice for a whole president’s term. “The objectives the new leadership has set itself are normal and even decent. But there are no guarantees that the methods chosen are right and that the objectives will not change in the process of implementation of reforms,” the newspaper writes.

In another article, tries to find an explanation for a complete lack of public interest in regards to the creation of an anti-authoritative political movement (with the pretentious name “Civilization”). The newspaper is not surprised that Gennady Zyuganov and Irina Khakamada unanimously called Berezovsky’s idea ridiculous: “This was their response to Berezovsky’s attack in their direction.” At the same time, it seemed insulting when Vyacheslav Volodin, deputy head of the Fatherland-All Russia faction, stated that Berezovsky’s initiative is nothing but “a new tactic step by the oligarch who is catastrophically losing his political influence.” Political analysts were also skeptic about Berezovsky’s new idea. The newspaper quotes the words of Andrei Piontkovsky who holds that “irritation and resentment can be felt in Berezovsky’s polemics with the Kremlin” and that the “entrepreneur” (not “oligarch”!) does not aspire to break up with Putin. On the contrary, his goal is to prove that he is still useful for the president. Berezovsky, the newspaper emphasizes, does not try to frighten Putin with opposition, but suggests cooperation: “We do not intend to destroy the leadership, we are going to strengthen them and I am sure that Putin clearly realizes that he needs such opposition.” However, neither Putin, nor the Russian establishment have demonstrated this, for the moment.

The president’s leave is short, and the principal directions of the upcoming “autumn attack” have been already defined: to continue the administrative reform, to bring regional laws in conformity with the federal ones (in particular, the creation of a state register for all normative acts is planned), to form the State Council whose principles still remain undefined, to pass a law on political parties. Also, as states, order will be brought to the “information field”: the state intends to change the owners of NTV and ORT, controlling the former via Gazprom and establishing direct control over the latter. quotes some anonymous official of the presidential administration as saying: “We want Berezovsky and Gusinsky to leave the information field… I think, in autumn this task will be accomplished.”

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