Rossiiskaya Gazeta, March 16, 2000, p. 7

The Security Council is not very optimistic about the existing international situation. It sees that threats to Russia’s national security have been multiplying.

Russia is being pushed out of the zones of its traditional interests, and this process was particularly visible in 1999. First and foremost, this concerns the events in Yugoslavia. Playing the roles of prosecutor, judge, and executioner all rolled into one, NATO disregarded the UN, OSCE, and Russia. An international crisis followed, and we are just beginning to get out of it now.

It stands to reason to assume that NATO is out to ensure its own security and unquestioned leadership based on military superiority.

The US Administration is revising its views on global strategic stability. The Americans say that the ABM Treaty (1972) remains a cornerstone. At the same time, they are doing all they can to build a strategic missile defense system on their own territory – which is explicitly banned by the Treaty. Washington wants Russia to accept amendment of the ABM Treaty. Moscow does not want to participate in the destruction of global strategic stability, which would be inevitable if the Treaty is broken. In this Russia has the support of Belarus, China, and most other countries. The Clinton Administration is backed up by Latvia, Micronesia, and Albania.

Creation of an American missile defense system would mean the militarization of space. It would also mean significant breakthroughs in the latest and very expensive military technologies. All of that would inevitably result in a new arms race on an unprecedented scale.

Creation of a missile defense system in the United States would completely curtail strategic arms reduction and limitation processes. That may mean an end to negotiations on a moratorium on nuclear tests, on nonproliferation of nuclear weapons, and on regimes of international control over proliferation of arms.

The question of ratifying START II, a treaty signed in 1993, is a serious problem aggravating Russian-American relations. This issue is an argument frequently used by those who clamor for the creation of a national missile defense system. We hope that the Duma will ratify the treaty this year. A great number of politicians have made their careers on this issue over the last seven years. The Russian leadership will do everything in its power to have START II ratified. The first hearing is scheduled for March 21.

Russia needs support for its reforms. We are being denied this support. These days, 99 anti-dumping and other limiting procedures are in effect against Russian exporters all over the world. First and foremost, they concern export of metals, textiles, and nitrogen-based fertilizers. Our estimates show that Russia is swindled out of up to $2 billion per annum because of these practices. Russia is not yet recognized as a country with a market economy. Membership in the World Trade Organization is tied to discrimination. Allocation of loans is tied in with political demands, more and more frequently.

Terrorism is one of the most pressing problems these days. We should admit that the Russian leadership underestimated its importance. Still, advanced countries did so as well. This threat has already been transformed into an act of aggression. The world community has underestimated the scale and worldwide scope of the threat presented by international terrorism. Slavery exists on the territory of our country, on the threshold of the third millennium. The counter-terrorist operation will be taken through to its logical conclusion. Cooperation within the framework of the CIS is of paramount importance. A decision to establish a counter-terrorist center in Moscow was made at the latest CIS summit.

Question: The new national security concept does not rule out the possibility of Russian contingents participating in operations abroad. What is meant by that?

Sergei Ivanov: This refers to peacekeeping operations. Unlike the United States, we do not announce for the whole world to hear where the zones of our interests are, though the CIS is of course a priority. We believe that Russia’s role as a peacekeeper should focus on the CIS. Russia should participate in peacekeeping operations in other countries only in exceptional circumstances (Kosovo is an example).

Question: What is Moscow’s stand on the issue of formation of defense alliances?

Ivanov: Defense alliances are envisaged in the military doctrine, a document which will be debated soon. The CIS is no longer an integral structure. That is why we view countries like Belarus, Armenia, Tajikistan, Kyrgyzstan, and Kazakhstan as our major allies.

Question: Your opinion of arms exports?

Ivanov: In principle, we should trade with everyone who is not on the international “black list”. We cannot trade with Iraq because of the sanctions. At the same time, we should establish such relations with Libya. If we do not reconquer the Libyan market, it will be lost to us for good, because Western companies are already moving in. There are no countries under embargo in Latin America, we should trade with them as well. Peru, Chile, and Ecuador are interested in Russian-made weapons as well. We will sell arms to China, but we would not want them to be used in the “Taiwan problem”. By the way, we view Taiwan as a part of China.

Question: How can you comment on Putin’s words about the possibility of joining NATO?

Ivanov: The acting president said that he did not rule out the possibility of joining the Alliance. It was a hypothetical answer to a hypothetical question. It was not a campaign gesture, you know. If NATO evolves into a political organization and replaces the OSCE, which we believe is barely competent nowadays, why not? Provided Russia is accepted as an equal, of course. Provided it has a say in the matters under discussion. If our relations in NATO should develop like they did with regard to Kosovo, then the question becomes pointless…


Komsomolskaya Pravda, March 16, 2000, p. 4

Here are a few figures. Specialists under 30 years of age are something of a rarity at Russian defense sector enterprises these days. The average age of qualified workers and managers in the military-industrial complex varies between 50 and 70 years. Most of them work out of pure enthusiasm these days. The equipment is 60% obsolete. Specialists say that within the next few years the defense sector will slip into a technological coma. With a truly colossal effort, it will still be able to design new weapons – but will not be able to manufacture them.

According to Viktor Ilyukhin, leader of the movement “In Support of the Army, Defense Industry, and Military Science”, our defense industry is being destroyed deliberately and quite professionally. The army desperately needs new kinds of weapons, but defense procurement is steadily reduced. Recently the government forwarded a characteristic draft law to the Duma. Some provisions of the federal budget are supposed to be amended. Specifically, “protected” items of defense procurement are supposed to become ordinary items. In other words, the military-industrial complex will be the last to be financed if the draft law is adopted.

It was not the Pentagon that forwarded this draft law to the Duma. If the Russian defense sector survives the blow, by some miracle, the authorities have a more devious technique of destruction. It is called artificial bankruptcy.

“Bankrupt” enterprises of the military-industrial complex end up in the hands of Western companies, for a song. This is how Siemens purchased 10 per cent of the shares of the Elektrosila enterprise in St. Petersburg, and almost 20 per cent of the shares of the Leningrad Metal Works. Both enterprises are considered “closed”, i.e. their products are vital for national security. According to some reports, up to 75 per cent of the shares of Perm Motors were bought by an American company using dummy corporations as a front. What does it need these shares for? This is a logical investment, from the point of view of destruction of a rival. The PS-90A, the latest engine manufactured by Perm Motors, can easily compete with the best that foreign companies have to offer on international markets. Logically, the money received for the shares should have facilitated completion of the work on, and certification of, the PS-90A. Alas, the best Russian engine has not been certified yet for some reason, and the new liners will be probably equipped with Western engines.

Viewed against this background, the leak of scientific and technical secrets to the West seems like child’s play. Everything ends up in the West: from the technologies of manufacture of turbines, to technical data on new equipment.

The Russian military-industrial complex is mostly working for foreign armies these days. Seventy per cent of weapons and military hardware are exported. Five per cent of output goes into the general economy, and only a pitiful 25 per cent goes to the army. To tell the truth, the chronic funding shortage is so serious nowadays that exports are probably the defense sector’s last chance. So it would be logical to expect exports to be facilitated. Unfortunately, logic had little if anything to do with the actual state of affairs.

Aleksei Shalunov, Senior Vice President of the Defense Sector Enterprises Assistance League: It took me thirteen months to complete all paperwork demanded for a contract with India. I had to collect 97 (!) signatures and approvals from 13 (!) ministries…

Ilyukhin believes that only urgent and dramatic measures can salvage the situation: we need a ministry for the defense industry, and we must have a law on the budget pertaining to arms expenditure implemented. The Duma should form a committed for the defense industry. A special commission comprised of deputies, senators, and ministers should be set up to handle problems of the military-industrial complex.


Komsomolskaya Pravda, March 16, 2000, p. 2

According to Sokolin, during the first two months of 2000 industrial output was 13% higher than in the same period of 1999.

Senior Deputy Prime Minister Mikhail Kasianov reports that the Finance Ministry was successful in 1999. Budget revenue and expenditure was an improvement on target levels, for the first time in years. Revenues of the treasury were double those recorded in the crisis year of 1998.

Rumors began last week that the government would have to borrow money from the Central Bank in order to pay debts to Western creditors. This would mean printing more money. In February, however, revenues exceeded target figures yet again. Kasianov is sure that the state will not ask for any loans from the Central Bank in March.

The Finance Ministry does not conceal the fact, however, that the record revenues in 1999 are a purely statistical achievement. Taking the price-leap in the wake of the crisis into consideration, we see that in 1999 the treasury ended up with 4% less revenue than in 1998. Moreover, the treasury was mostly filled with money strong-armed from Gazprom, RJES, and the oil industry.

Independent analysts say that a similar policy is being implemented now. The industrial growth is not high enough to produce revenues to cover all expenditures promised during the election campaign. Unlike Kasianov, pessimistic economists say that inflation and a fall of the ruble are inevitable in April and May. More money will have to be printed in any case, even though there is money in Russia. According to the State Statistics Committee, the public has almost $17 billion stashed under its mattresses, more than 50% of the entire federal budget.


ORT (Russian Public Television), News program, March 15, 2000, 15:00

Acting President Vladimir Putin advocates establishing a single structure in Russia aimed at protection of small and medium businesss from bureaucratic tyranny.

Putin: The problem lies in a selective approach, and unfair attitudes and attention to large and small businesses. The former have been in the center of attention for years, the latter are ignored by the authorities. I’m constantly asked to give my opinion of oligarchs. If that means a combination of state powers and business, then my attitude is negative. If the matter concerns support of business on the whole, or a dialogue with businesses, large ones included, then it is positive.

I do not think it would be fair if the state deals with and talks to only large-scale businesses.


Russian Television (RTR), “Vesti” program, March 15, 2000, 13:00

Defense Minister Igor Sergeev says that the federal forces should destroy all guerrillas in the Chechen mountains before spring. Sergeev emphasizes that closing the borders with Georgia, Dagestan, and Ingushetia is the most important task at present.

In the meantime, the guerrillas trapped in the settlement of Komsomolskoye are viciously defending the village against the tightening ring of the federal troops. The settlement is to be thoroughly searched today.

According to the military, there are about 18 criminals still in the village, including their commander Ruslan Gelayev. He is being searched for by trained dogs. Komsomolskoye is Gelayev’s native village. Some reports indicate that he, his wife, and their neighbors are hiding in a basement.


Russian Television (RTR), “Vesti” program, March 15, 2000, 13:00

The upcoming presidential election has altered the work schedule of the lower house of parliament. Today Duma deputies resolved to move their trips to the regions forward by a week (from March 24 to March 17). The decision was attributed to the fact that many deputies are working as campaign representatives for presidential candidates, and need to be on the campaign trail the following week.

Communists staged a rally near the Duma today. The slogans included the traditional demands for putting Boris Yeltsin on trial and preventing the sale of land, and some for the resignation of Putin.

The plenary session today was rather quiet. Deputies adopted a number of amendments to the Criminal Code and to the law on weapons. Previously vetoed by the president, the draft law “On federal program for development of education” was adopted. According to the document, Russian schools will transit from a ten-year system to a twelve-year system.

Previous article