DIALOG CONTINUES

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DIALOG CONTINUES

Vremya MN, May 25, 2002, p. 3

On May 24, Presiden Vladimir Putin and President George W. Bush met with participants of the Russian American Banking Dialog. According to Sergei Leontyev, head of Prombusinessbank, both presidents were given a list of practical recommendations for reforming Russia’s banking system. The recommendations were drawn up by Russian and American bankers and can be viewed as supplementary to the joint strategy of the government and the Central Bank regarding the banking reform. According to Leontyev, the presidents were proposed to set up a consultative council under the Central Bank (CB) for encouragement of the banking system of Russia. Leontyev has said, “The presidents’ reaction was positive. Bush inquired about results of the work of American banks in Russia, and Putin noted that these recommendations would be counted with in the course of the further reformation of the banking system in Russia.” Senior Vice President of the CB Andrei Kozlov, who participated in the Banking Dialog too, has confirmed that the CB will thoroughly consider the recommendations and use them in its work. As has turned out, the authors of the recommendations argued on only one item out of 27: conditions of work of foreign banks in Russia. Kozlov has said, “The CB is against foundation of branches of foreign banks in Russia.” In his opinion, foreign banks should enter the Russian financial market by means of setting up subsidiary banks. Kozlov has also stressed that “the dialog is going on.”

THE US OFFERS RUSSIA $16 A BARREL

Kommersant, May 25, 2002, p. 2

On May 24, Vladimir Putin and George Bush signed a statement according to which large-scale American investments would be made in Russian fuel and energy sector. The US will support expansion of Russian oil companies on international markets. Washington also actually agreed with establishment of price brackets for Russian oil with the lower limit of $16-18 a barrel.

Stability of oil supplies to American market is one of the main priorities of American foreign policy. Washington does not want to depend on political situation in the Middle East and pricing blackmail of OPEC anymore. The US needs to diversify its oil imports on account of Russia. However, two things are necessary to make these supplies big.

First of all, it is necessary to ensure stability of the world oil prices. If prices are low supplies to the US are not profitable for Russian companies. Hence the joint Russian-American statement said that the parties would reduce instability and increase predictability of the international energy markets and reliability of international supplies of energy resources. According to unofficial information, the US agreed that the lower limit of oil prices should be set at $16-18 per barrel. Of course, this is lower than the limit requested by Russian oil companies, namely $20 a barrel. At any rate, this is better than nothing.

Second, it is necessary to increase oil production in Russia substantially and to broaden opportunities for oil transportation abroad. Fulfillment of this task requires huge investments. American and Canadian oil companies are prepared to invest both in oil production and oil infrastructure. The joint statement said that the parties would contribute to investments for further development and upgrading of Russian fuel and energy sector and would broaden access of Russian supplies to international markets.

Thus the Moscow summit ended with a real energy breakthrough. Russia will receive large-scale investments in the fuel and energy sector and stable oil prices, and the US will receive stable supplies and oil prices acceptable for American economy.

RUSSIAN POLITICIANS ON RESULTS OF THE RUSSIAN-AMERICAN SUMMIT IN MOSCOW

Kommersant, May 25, 2002, p. 2

Vladimir Pekhtin, leader of the Unity Duma faction: Putin and Bush have determined the essence of the new relations between Russia and the US. This is not fixation of contradictions but a search for fields for cooperation.

Vyacheslav Volodin, leader of the Fatherland-All Russia Duma faction: I’ve understood that a new era of our relations has come. For the first time the presidents of the two countries talked about economic relations. However, it is not clear how the promises of the American president will be kept. It is concrete actions that prove a sincere friendship.

Boris Nadezhdin, Senior Deputy Chairman of the Union of Right Forces Duma faction: They haven’t agreed on anything noteworthy. I had expected some sensations from this meeting, but I haven’t heard anything but announcements that we should befriend each other. The presidents of the US and Russia has also touched on the problem of chicken legs.

Grigory Yavlinsky, leader of the Yabloko Duma faction: The main point is that the presidents have signed the Declaration on New Strategic Relations between Russia and the US. This is much more important than START, which is merely technical in the current situation.

Gennady Raikov, leader of the People’s Deputy Duma faction: I wouldn’t say that we have become friends, for you can’t make friends in one day. But we have become partners.

Vladimir Zhirinovsky, Deputy Speaker of the Duma: It is necessary to understand that signing of the treaty was not the main event of the meeting between Putin and Bush. The main point is that the mistrust for one another is over. In 1989, the Berlin Wall was destroyed, and now Bush and Putin are destroying the wall of mistrust between Russia and the US built during the cold war.

Andrei Kozyrev, former foreign minister of the Russian Federation (1990-1996): I’ve understood that they have agreed to agree. Finally the two presidents intend to seek a way out from the present dead end.

ASLAN MASKHADOV INTENDS TO GAIN CONTROL OF GROZNY

Kommersant, May 25, 2002, p. 4

On May 24, the regional operative headquarters for the counter-terrorist operation in the North Caucasus reported that President of Ichkeria Aslan Maskhadov has ordered Al Galsumov, a petty field commander, to lead the gangs acting in Grozny.

Over the second Chechen campaign, Grozny has been unofficially controlled by several Chechen field commanders. The most notorious of them was Arbi Baraev, who was killed in June 2001 during a special operation arranged by the Federal Security Service (FSB). He was succeeded by 27-year-old Timur Avtaev. Probably the death of Baraev’s successor made Maskhadov gain control of Grozny. However, Chechens do not believe this. Commander of the Chechen Special Police Musa Gazimagomadov has announced, “Everyone knows that Maskhadov does not control Grozny. Most of Grozny’s guerrillas are not subordinate to Zalimkhan Akhmadov, a Wahhabi who has nothing to do with Maskhadov.”

THE DEATH PENALTY

Rossiiskaya Gazeta, May 25, 2002, p. 1

In recent days there has been a noticeable increase in talk of lifting Russia’s current moratorium on the death penalty. The reason for this: terrorist attacks.

This is a particularly sensitive issue in Dagestan. There, in the town of Kaspiisk, 43 people were killed and 129 injured in an explosion on May 9. The people of Dagestan are weary of living in constant stress and fear. Hence, many politicians in Dagestan, including members of parliament, have spoken out in favor of resuming carrying out death sentences. They have found some support outside Dagestan. The parliament of North Ossetia has supported the resolution issued by the State Council of Dagestan. North Ossetia has also experienced several terrorist attacks recently. A memorandum on this issue has been sent to President Putin and the speakers of the Duma and the Federation Council.

In this case, the parliament has come into conflict with the regional leader: Alexander Dzasokhov has spoken out sharply in opposition to the plan proposed by the parliaments of Dagestan and North Ossetia. Dzasokhov has been opposed by Vladimir Semyonov, his counterpart from Karachaevo-Cherkessia, who supports the harshest possible penalties for terrorists and all others who place no value on human lives.

Neither is there consensus on this issue among regional legislatures. The St. Petersburg parliament has opposed a statement issued by the Stavropol parliament in support of lifting the moratorium on the death penalty.

Actually, even the Council of Europe hasn’t managed to reach consensus on this issue. Viktor Orban, prime minister of Hungary, has spoken out in favor of bringing back the death penalty there. Orban is convinced that as the battle against terrorism expands, attitudes to capital punishment may change radically; and it can’t be ruled out that Europe might support the stand taken by the United States, where the death penalty is still used.

In the meantime, President Putin, who is opposed to capital punishment, has recently signed ten pardons based on humanitarian grounds.

MUTUAL INTERESTS

Rossiiskaya Gazeta, May 25, 2002, p. 3

Deputy chairperson of the Duma security committee: The new agreement bears witness to the fact that both sides have approached it in a very balanced and scrupulous manner. Therefore, I see no reason to doubt that it is in Russia’s national interests. But I must note that the Americans have not behaved very diplomatically: even before the agreement was signed, they revealed its contents, essentially trying to cut off any avenues of retreat for Russia.

Vladimir Pekhtin, leader of the Unity faction: Military confrontation is too great a drain on resources – economic, intellectual, political resources. Signing the treaty on cuts to offensive nuclear weapons will help Russia free up substantial resources and redirect them toward resolving its urgent economic and social problems.

In signing the agreement, the presidents have confirmed that Russia and the United States do not pose a threat to each other; they have shown that they are ready for a high level of military-strategic partnership.

The most important aspect for Russia is that this agreement unties Russia’s hands in deciding on the configuration of its nuclear arsenals.

What we need to do now is cut military arsenals and expand our mutual interests. During bilateral talks between our national leaders, we have always paid more attention to disarmament, leaving economic issues in second place. We ought to reverse that.

MORE ON RELATIONS BETWEEN RUSSIA AND THE UNITED STATES

Rossiiskaya Gazeta, May 25, 2002, p. 3

Vladimir Kremeniuk, deputy head of the US-Canada Institute at the Russian Academy of Sciences:

The treaty on cuts to offensive nuclear weapons shouldn’t be viewed as a victory or a defeat for either side. It’s simply the most that Russia could have hoped for.

Whatever may be said about it, the agreement really does facilitate a substantial reduction in the level of confrontation. It also creates opportunities for further work in this area, including joint efforts to prevent proliferation of weapons of mass destruction and limiting development of missile defense systems.

On the other hand, it’s no secret that we would have liked to see more: namely, a clear sense of heading toward consolidation of partnership between Russia and the United States. But the decision of the US Congress against repealing the Jackson-Vanik amendment gives substantial reason to doubt this. There is a great deal behind this factor. It indicates that over there, Russia is viewed as a state which isn’t worth establishing proper business relations with; a state where democracy is not at all healthy, for all our assurances to the contrary.

Russia is not being acknowledged as a nation with a market economy. Therefore, we do not get certain trade advantages. Essentially, we are in a state of “steel war”, “uranium war”, and other trade wars. Promises to help Russia join the World Trade Organization are also nebulous. For our two countries, cooperation solely in the area of the international anti-terrorism effort is not enough. To have a lasting, stable relationship, we need to strengthen and deepen Russian-US trade ties.

Neither have certain other problems gone away: for example, NATO eastward expansion, the Persian Gulf, and Russia’s relations with Iran, Iraq, and China – relations which the US dislikes.

DANGER IS THE BEST RECONCILER

Profil, May 20, 2002, p. 2

The Public Opinion Foundation asked Russians what they think of relations between Russia and NATO. Answering the question whether NATO is aggressive or defensive military organization, the majority of respondents, 54%, said the Atlantic bloc is aggressive; 24% of Russians think oppositely. The majority of Russians, 62%, are positive about strengthening cooperation with NATO. At the same time, 52% of respondents think NATO threatens Russia’s security, while 31% of respondents do not think it is of any danger; 17% of respondents were unsure of their opinion.

WHO IS NEXT AFTER LEBED?

Vek, May 24, 2002, p. 3

The gubernatorial election campaign has started in the Krasnoyarsk region. Judging by everything, the Communist Party decided to take revenge in Krasnoyarsk after its candidate lost the election in the Smolensk region. Rumor has it that Sergey Glazyev, the chair of the Duma economic policy and entrepreneurship, is to stand in the elections in the region.

However, the Communist Party says it will announce its candidate no earlier than in mid-June.

Meanwhile, from May 21 candidates may start collecting signatures in their support. So far, only the chair of the Krasnoyarks regional Legislative Assembly Alexander Uss announced his intention to stand in the gubernatorial elections. Valery Zubov, former governor of the region, who lost the elections to Alexander Lebed in 1998 plans to run in the elections only if the Kremlin supports him.

Among possible candidates are also named Taimyr governor Alexander Khloponin and Krasnoyarsk Mayor Pert Pimashkov – so far none of them announced of their intention to participate in the election race.

Such extreme hesitation by potential candidates is due to the complete unexpectedness of the elections. It is not ruled out that representatives of big business in the region might also run for governor. Overall, the Krasnoyarsk gubernatorial election will be fairly complicated – the Central Election Commission has decided to keep an especially close watch on it.

RUSSIA IN FIGURES

Kommersant-Vlast, May 21, 2002, p. 6

Last year 16,000 employees of the Interior Ministry were disciplined for violating regulations; and 200 police officers were sentenced to various terms of imprisonment.

Last year the number of terrorist acts in Russia increased by 142%. Overall, 327 crimes of this type were registered in the country. As a result of actions of law enforcement bodies, 35 criminal cases against 48 terrorists went to court.

The primary budget surplus in January-April 2002 was 147.7 billion rubles, or 4.8% of the GDP. In January-April this year GDP volume was 3.086 trillion rubles, and federal budget revenues amounted to 656.7 billion rubles, which is 30.9% of annual budget targets.

From August 7, 1999 to May 11, 2002, during the counter-terrorist operation in Dagestan and Chechnya, 2,498 Defense Ministry servicemen were killed and 5,898 were wounded.

Last week the gold and currency reserves of the Central Bank of Russia totaled $34.9 billion. According to Prime Minster Mikhail Kasyanov, the reserves have never been this high in the entire history of the Russian Federation.

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