STEADY LOVE FOR THE PRESIDENT

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STEADY LOVE FOR THE PRESIDENT

Novoe Vremya, No. 5, February, 2001, p. 11

A year after Vladimir Putin became acting president of the Russian Federation, his popularity rating is still incredibly high. According to polls in late January, 66% of respondents took a positive view of his performance as president; only 11% of respondents disapproved of it, and 23% were uncertain. Actually, this is Putin’s highest approval rating since he became head of state. The only time Putin’s approval rating was higher was in November and December 1999, when he was prime minister and victories in Chechnya were the most frequent – then Putin’s approval rating reached 74%. Then it fell to 62% by the time Boris Yeltsin transferred his office to Putin.

RUSSIA MAKES SOME CHANGES IN CHECHNYA

Vek, No. 5, February, 2001, p. 2

Nikolai Patrushev, head of the Federal Security Service (FSB), said recently that all of Russia’s security services should coordinate their efforts to resolve the problem of Chechnya. The federal government has already taken a number of measures – such as transferring responsibility for the operation in Chechnya to the FSB, and giving real power to Akhmad Kadyrov’s government.

The first move seems quite logical and long-overdue. After large-scale military activity in Chechnya was over, the campaign entered a phase requiring special forms and methods of fighting, which are actually the province of the FSB. However, it is doubtful that this decision has been supported with the necessary material resources. With all due respect for the professional skills of the Russian security services, it should be mentioned that not only skills but numbers are of great importance here. The federal commandos are opposed by about 2,000 well-trained and well-equipped Chechen rebels, who are almost openly supported by local residents.

The transformation of Kadyrov’s government into a real ruling body in Chechnya seems to be concession from Russia to the demands of the Parliamentary Assembly of the Council of Europe. Still, the lengthy disputes about whether to turn Chechnya into a region with a Russian governor-general, or to set up a government run by ethnic Chechens who are loyal to Moscow, has ended in with the choice of the second option. Paradoxically, most Chechens preferred the first option – since they have every reason to anticipate that power in the hands of ethnic Chechens would be overly influenced by various clans. Thus, the government of Chechnya, which is supposed to run Chechnya in peace, is likely to become another powerful source of dissent.

WEAPONS FOR EXPORT

Finansovaya Rossia, No. 3, February, 2001, p. 5

According to the Wall Street Journal, in 2000 Russian arms sales revenues were $3.7-3.8 billion, which is 10% higher than in 1999.

Officially, Russia’s defense sector is now comprised of about 1,700 enterprises. Of these, 40% are state unitary enterprises and joint stock companies with 100% state participation; 30% of enterprises do not involve the state at all; and the rest have various forms of ownership. Total defense sector output in 2000 was only 22% of Soviet output in 1990.

The major buyers of Russian weapons are India, China, and Zanzibar.

However, according to Konstantin Makienko, deputy director of the Strategy and Technology Analysis Center, this year Russia will need a great deal of investment in its defense sector. Makienko says: “At present, we are mostly selling aircraft, tanks and submarines equipped with weapons. As a rule, according to inter-governmental agreements on supplying military hardware, we also sell the technology to produce these, which allows our main customers to produce their own hardware from our models. Eventually, they will stop buying our products. Hence, at present this very profitable market sector is being reduced; at the same time, another sector is appearing on the market: electronics, optics, and other components, which we are not very good at making, and in which we are most unlikely to be competitive with the acknowledged leaders – the US and Japan.”

It could turn out that Russia’s arms exports success in 2000 is only temporary, rather than long-term, as would be preferable.

IRANIAN PRESIDENT TO VISIT RUSSIA

Kontinent, No. 3, February, 2001, p. 5

In March, President Mohammad Hattami of Iran will visit Russia. Defense Minister Igor Sergeev has recently visited Iran. Moscow and Tehran have similar views on many international issues. Iran has announced it is ready to support Russia’s initiative to establish a global monitoring system over non-proliferation of missiles and missile technology. Iran also supported Russia’s position on the ABM Treaty.

Paradoxically enough, most of the weapons and military hardware used by the Iranian Army are made in the USA. After the 1980-88 war with Iraq was over, Iran actively started upgrading its armed forces.

According to experts, the value of Russian arms exports to Iran may soon approach $2-8 billion.

WORLD WIDE WEB ENTANGLES RUSSIA

Novoe Vremya, No. 4, February, 2001, p. 11

Internet use is gradually expanding Russia. To start with, it should be noted that over the past decade the number of homes with phones has almost doubled, and about 57% of Russian citizens now have a phone line.

As yet, not many Russians can afford a computer: only 10% of Russian families have computers at home. However, this only partially limits people’s access to the Internet: many people use computers and the Internet at work, at school, or at Internet cafes. One way or another, 8.3% of adults – over 9 million people – have used the Internet at least once. There may be the same number of Internet users under 18, but they are not included in opinion polls.

PRESIDENT MAY DISMISS NAZDRATENKO

Nezavisimaya Gazeta, February 3, 2001, p. 3

Federation Council Speaker Yegor Stroev does not rule out that Primorye Governor Yevgeny Nazdratenko may be the first regional leader whom President Putin will dismiss. At the same time, Stroev notes that according to the new law, the procedure for dismissing a governor may be started only after a corresponding decision by a prosecutor’s office, and after a court decision.

In Stroev’s opinion, “the situation with the energy crisis in Primorye is not that simple, and Nazdratenko is not the only one to blame.” He adds, “Overall, debts to Primorye amount to 2 billion rubles. The military owes Primorye 870 million rubles, and the federal government owes about 600 million rubles. These are debts for electricity. I think prosecutors will have enough work this time.”

LATVIAN PRESIDENT READY TO MEET WITH PUTIN

Nezavisimaya Gazeta, February 3, 2001, p. 1

President Vaira Vike-Freiberga of Latvia has confirmed her readiness to meet with President Vladimir Putin. She says she is looking for the appropriate signal from Russia. She emphasizes that one of Latvia’s foreign policy priorities is to restore friendly relations with Russia. The Latvian president also notes that Latvia aims for integration into the European Union as soon as possible. Besides, it will pay close attention to its relations with NATO.

RUSSIA ON THE BLACKLIST

Segodnya, February 3, 2001, p. 1

The FATF black list of states refusing to cooperate in combating money laundering consists of only 15 countries – mainly small island states such as Nauru, as well as the Philippines, Lebanon, and Russia. If Russia keeps ignoring FATF’s recommendations, in June 2001, when experts of this organization assemble for a meeting, sanctions may be imposed on Russia. For instance, the FATF may officially advise investors not to deal with Russia. However, Russia’s official representatives have reported to FATF that in March the Duma will start considering a bill on strengthening measures against money laundering.

“We are keeping a close eye on Russia’s efforts in this area,” said Jose Maria Roldan of FATF. “We aim to cooperate with all nations which take a constructive approach to filling in the gaps in their legislation.”

RJES BOARD OF DIRECTORS VERSUS ANATOLY CHUBAIS

Kommersant, February 3, 2001, p. 1

On February 2, the Board of Directors of Russian Joint Energy Systems (RJES) approved amendments to the bylaws of the electricity monopoly. These amendments considerably extend the powers of the Board of Directors, and bring RJES chief executive Anatoly Chubais under the almost complete control of the Cabinet.

The essence of the amendments that will be presented to the RJES shareholders’ meeting on April 28 is that the Board of Directors will be able to control all the most important decisions of RJES managment. From now on, Anatoly Chubais will not be able to make such large purchases as Ren TV (a TV company worth tens of millions of dollars) without approval from the Board. The Board of Directors will also intensify its control over subsidiaries of RJES. Now, such decisions are made by a simple majority of votes on the Board of Directors; after the amendments go through, it will be necessary to have a two-thirds majority.

The regulations of RJES will be brought into compliance with the new law on stock companies, which is now being edited by a coordination commission consisting of members of the Duma and the Federation Council. Soon the final draft of the bill will be issued and passed by Parliament and the president.

Thus, Chubais’ position is weakening. Besides the amendments to the RJES regulations, Chubais has some other problems. Putin recently named Chubais as one of those to blame for the energy crisis in Primorye. The Cabinet certainly agreed with the president. Presidential economic advisor Andrei Illarionov is against Chubais’ restructuring plan for RJES. Although the Cabinet has supported Chubais’ plans in principle, now it may also heed the opinion of the State Council commission, which is working on an alternative program for restructuring RJES.

THE COURT IS READY TO COMPROMISE

Kommersant, February 3, 2001, p. 1

The Judicial Council of Russia has proposed to the president and parliament that the jury system should be introduced throughout the country, and the accused should be allowed to conclude bargains with the law. At the same time, the judges request that the public prosecutor’s office should not have the right to bring suits on behalf of companies, and public prosecutors should have equal rights with attorneys.

The resolution of the Judicial Council came as a response to the judicial reform plan presented by Dmitry Kozakov, deputy head of the presidential administration (see our article about this, dated January 30). Some proposals in this plan were a real breakthrough in the process of improving the legal system. For example, the proposal to introduce trial by jury; as well as the proposal to introduce the option of plea bargains, under which an accused person who admits guilt can expect the judicial process to be simplified and punishment to be mitigated.

In the resolution adopted yesterday, the Judicial Council supported these proposals. As for the issue of plea bargains, the Judicial Council came up with an even bolder proposal than Dmitry Kozak, who wanted this to be applicable only to minor crimes, punishable by no more than two years of imprisonment. The judges, however, consider it possible to use plea bargains for crimes carrying a penalty of up to six years of imprisonment.

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