Kommersant, September 1, 2001, p. 2 EV

Another phase of the military reforms was completed yesterday. The Trans-Volga and Urals military districts became one. Now, as the General Staff believes, Russia has gained a powerful force in the direction of Central Asia. Yekaterinburg has been selected as the location for the new district headquarters. Colonel-General Alexander Baranov, who headed the Urals district, will command the troops. Former Trans-Volga district commander, Colonel-General Anatoly Sergeyev, is on leave.

General Staff representatives told us: “The merger of the two districts was a necessary and inevitable process. The situation in Russia and the CIS has prompted the creation of a single powerful grouping of troops in the Central Asia strategic direction.”


Kommersant, September 1, 2001, p. 3 EV

According to residents of the Vedeno district of Chechnya, a large-scale special operation has begun in the Vedeno and Kurchaloi districts. The federal troops are bombing and shelling the remnants of the separatist groups which were defeated near Vedeno. Vedeno district military commandant Victor Shevelev says guerrilla leader Shamil Basayev has been seriously wounded; but this information remains unverified as yet.

Question: Yesterday the guerrillas announced on their website that they will be celebrating the so-called day of re-establishing the Chechen state by destroying the commandant’s office and parading through Vedeno. September 6 is just a few days away. Are you preparing for defense?

Victor Shevelev: On the contrary, we have move into the offensive. Almost all divisions are taking part in the current operation in the Vedeno and the neighboring Kurchaloi districts, although the basic work is being done by aviation and artillery. The guerrillas are hiding in the mountains and forests near Tsa-Vedeno and Dyshne-Vedeno. At night they enter these towns and try to contact some residents. But these are just wretched remnants of the guerrilla bands. Their main forces, headed by Khattab, have gone to the Kurchaloi district in the flatlands.

Question: Which of the field commanders remain in the Vedeno district?

Shevelev: None of those who have been active here lately.


Vremya, September 1, 2001, p. 3

Not all the State Council members are satisfied with their status. Deputy Prime Minister Valentina Matvienko proposes to change it, by amending the constitution. There is no way to tell yet how realistic a prospect this is for the senators to gain such “legalization” of their activity. At any rate, such a statement may be viewed as the Cabinet’s first attempt at introducing any changes to the constitution. It is widely thought among the opposition that if the door to constitutional change is opened once, a storm of quite non-liberal changes could follow.

However, if Matvienko is speaking for the Kremlin in offering such radiant prospects to the State Council, and if these do come to pass, it would be the first time the Cabinet has dared to embark on constitutional change. In that case, the tide of constitutional amendments is very likely to reach the regions.


Nezavisimaya Gazeta, September 1, 2001, EV

This week saw a session of the State Council, devoted to reforming the education system of Russia. We asked some experts whether this means that the education reforms have started, or whether no radical changes in this area are to be expected, since the regional leaders prefer to call this process “modernization” instead of “reform”.

Duma Deputy Vladimir Ryzhkov: “I believe that we can speak of the beginning of the education reforms, since what the State Council was discussing is reminiscent of the Herman Gref program presented last year. Thus, we can say that all the structures have been set into motion: the Cabinet and the regions. And now we can expect corresponding bills in the Duma. I guess the year 2001 can be considered the start of radical reforms in education.”

Valery Khomyakov, Applied and Regional Politics Agency: “I believe this matter should make some progress, since, on the one hand, our education system is at a fairly high level, but on the other hand we do have serious problems. We have entered a new century, and we have to change something in this sphere. That is why the outcomes of experiments which will be conducted in some regions – on a 12-year schooling system, on standardized nationwide assessment – will be very interesting. The question is which of the regional leaders will agree to conduct these experiments. I think Katanandov, being a member of the state commission on education reform as well as a member of the State Council, will agree. We will watch the experiment in Karelia. And there will also be elections. This is closely connected with the reforms.”

Mikhail Krasnov, Indem Foundation: “I don’t know much about the substance of what was discussed by the State Council, so I cannot tell you whether it means reforms or not. But reforms don’t usually begin in such a way. Such discussions are only of political importance, and it is only one of the initial stages of the reforms. Reforms begin only when laws are correspondingly changed, or new bills are passed by the Duma. That is why until radical changes are reflected in laws, it is impossible to speak about the start of the reforms.”


Nezavisimaya Gazeta, September 1, 2001, EV

During yesterday’s session of the trilateral commission on regulating social-trade relations, a draft budget for the Social Insurance Fund (FSSR), Compulsory Medical Insurance Fund, and other extra-budgetary funds for 2002 was discussed. Head of the Independent Trade Unions Federation Mikhail Shmakov declared that the draft budget of the FSSR for 2002 had some serious drawbacks, connected with distributing revenues of the common social tax. These defects are to be resolved before the Duma debates it in the second reading. The commission also considered the process of preparing a general agreement between the government, the trade unions and employer associations for 2002 to 2004. Shmakov insists that a new general agreement between the trade unions and the government should be prepared before the federal budget for next year is passed. He was also very displeased with the Cabinet, which did not consult commission representatives while preparing the draft budget. Coordinator of the employers association Oleg Yeremeev supported Shmakov, and as a result, representatives of the trade unions decided to send a corresponding statement to Prime Minister Mikhail Kasianov and President Vladimir Putin.


Argumenty i Fakty, August 29, 2001, EV

State-sector employees can do business well enough. In 2000 their earnings amounted to almost 100 billion rubles, which is nearly as much as envisaged in the budget for assistance to the regions. Leasing state-owned buildings provided some 90% of the entire revenues.

Moreover, state-run financial institutions also possess the right to open accounts with commercial banks. Nobody knows the precise sums of money deposited in those accounts.

Legally, the number of paying students must not exceed 25% of the total number of students. Sometimes, however, illegal earnings exceed legal ones by dozens of times. For instance, the Russian Agency for Patents and Trademarks manages to earn by 68 (!) times more than the real money allocation from the budget while Gosstandart earns by 13 times more. How is this done? Hologram-making is among sources of earning extra money. According to Economic Development Minister Herman Gref, “All audio, video and computer equipment must be marked with holograms. The cost of such a hologram is about 23 kopecks, while they are sold to businesses for 5.83 rubles. The Spetsznak company, authorized by the Gosstandart of Russia, is an operator of the system of marking.

All kinds of state-run institutions earn money, even those which, reasonably speaking, must not charge fees for services – for instance, branches of the prosecutor general’s office and courthouses… In prisons cheap manpower is exploited and joint ventures are constituted. Even an ordinary police station has official illegal earnings: a certain payment is charged for issuing passports, keeping up public safety. Police orchestras are invited to play at birthday parties of tough businessmen.

Some 40% of the money earned through this is handed out as extra payment.


Finansovaya Rossiya, August 30, 2001, p. 1

Despite the summer stabilization of prices, in 2001 inflation is still higher than in 2000, due to rapid growth of rates for services (by 23.4% over the past seven months). In particular, the rates for housing services have increased by over one-third. From January to August the prices for coal increased by 17%, for electricity by 18%, rates for cargo shipping by over a quarter while the gas has become by one-third more expensive.

The point is that the government promised inflation would be 18%. However, prices rise quickly toward the end of the year, and this year’s inflation rate has already caught up with last year’s inflation level.

The Cabinet cannot permit this to happen: the 2002 budget envisages inflation of only 10%. By the end of the year the growth of prices must be retained at the level of 1% in a month, as promised by the Economic Development Ministry. Thus, the fall must clear up completely whether the government’s monetary policy was a success this year.


Novoe Vremya, No. 34, August, 2001, p. 15

Since it is thought that in August 1991 democracy gained the upper hand over an attempt to restore an authoritarian system, it is interesting to know how Russian people envision democracy. Asked what does living in a democratic state mean for us, 38% of respondents replied it is “confidence in tomorrow”, 24% answered that this primarily means “observance of human rights, and respect for the individual”. And 23% think it means “living in peace and concord”, and 21% more assume that a democratic state is a state run by the people, where the “people live well”. Respondents were given the option of choosing two answers.

Taking into consideration these criteria, 54% of respondents say that Russia is overall not a democratic state, 14% think it is a democratic state and 32% could not decide. Perhaps a slight disregard for free elections as a significant aspect of democracy is due to the fact that many people do not believe that their participation in the election can change anything (23% of respondents say it can, but 60% more say it cannot, with the remaining 17% having no particular opinion).

Most of all, people want peace and order, whether it is called democracy or something else. People’s attitudes toward party-building as a part of democratic process is rather skeptical.


Vek, August 31, 2001, p. 2

Appointing Anna Belova, senior vice president of Modern Business Technologies consulting firm, as deputy roads and transport minister has prompted plenty of rumors and theories among specialists.

It is known that in the early 1990s Belova dealt in conversion projects in the Vympel association, which specializes in producing antimissile defense systems. After that, she worked in the US Chamber of Commerce & Industry as chairwoman of the transportation committee. Over the past three years she has been working with Russian auditing and consulting companies UNICON and Modern Business Technologies. It is also known that she was in the consulting group the Roads and Transport Ministry invited to assist with developing a draft project of the reform.

Belova’s appointment has become a new step in strengthening a hierarchy of power, as some sources report. She is likely to become the master’s eye in the Roads and Transport Ministry. A necessity to strengthen the state’s influence on the Roads and Transport Ministry was stressed in the report of the State Auditing Commission. The report says that a recent inspection has disclosed a system of intermediary firms, which embezzled some 10% of the state expenditures allocated for reconstruction of the Oktyabrskaya Railway.

The new deputy minister is supposed to cooperate actively with the United body for rate regulation and provide for unbiased data on the industry’s profitability.


Profil, August 27, 2001, EV

The ROMIR agency has done a poll asking: is it necessary to introduce control over information in Russia’s media? An overwhelming majority of respondents (71.9%) agree on the whole, it is necessary. Another 22.1% of respondents hold otherwise, and 6% of respondents don’t know.

Asked which topics clarified in the media require censorship most of all, 34% replied that it is necessary to establish control over the topic of violence and cruelty in printed editions and TV programs. Other 12.1% of respondents think that the topic of political extremism needs control. Some 8.4% consider controlling erotica to be significant, whereas 25.5% more are against pornography in the media.