Johnson's Russia List
#9215
3 August 2005
davidjohnson@erols.com and
davidjohnson@starpower.net
A CDI Project
www.cdi.org

[Contents:
   1. Vedomosti: Anna Nikolaeva and Maksim Glikin, PUTIN MAKES A SLIP
OF THE TONGUE. His sole achievement in Finland. Putin's statement
revives speculations about a third term in office.
   2. Politichesky Zhurnal: PUTIN TO CREATE CONDITIONS FOR SMOOTH
POWER TRANSFER - EXPERT. (Vyacheslav Nikonov)
   3. Bloomberg: Russia Probes Kasyanov as Kremlin Seeks to `Choose'
Putin Heir.
   4. AFP: Only 22 percent of Russians support war to prevent Chechen
independence: poll.
   5. Izvestia: Georgy Ilyichev, THE WAR IN CHECHNYA WILL LAST
ANOTHER 20 YEARS. Citizens don't believe peace will come to the
Caucasus any time soon. Opinion poll reveals attitudes to the situation in
Chechnya.
   6. Moscow Times: Greg Walters and Valeria Korchagina, ABC TV Barred
 From Russia.
   7. RIA Novosti: Foreign Ministry clarifies gripe with journalist who
interviewed Basayev.
   8. RIA Novosti: Russian Expert Says Media Will Learn Lesson From
ABC's Accreditation Loss.
   9. Dimitri Klementov: RIA Novosti poll re Basayev interview.
   10. Moscow Times: Yulia Latynina, Words Versus Body Counts.
   11. FBIS Analysis: Moscow Assails ABC TV Interview With Basayev.
   12. Mosnews.com: Beslan Mothers Do Not Want Putin to Visit Siege
Commemorations.
   13. National Public Radio (NPR): Russian political campaigning.
   14. Nezavisimaya Gazeta: New Electoral Law Reinforces 'Faceless
Mechanism' Of Power.
   15. RIA Novosti: Kremlin: In need of patriots.
   16. Nezavismaya Gazeta: Russian Levada Center Accused of Rigging
Poll Data.
   17. Los Angeles Times: Kim Murphy, Russia Steals the Scene.
Patrons are lining up for domestic films years after the industry was given
up for dead. Some bill it as a backlash against Hollywood.
   18. Trud:  Gennadi Yastrebtsov, WHO BENEFITS FROM THE
PETRODOLLARS? Why the oil export boom isn't benefiting the Russian
economy.
   19. St. Petersburg Times: Vladimir Kovalev, Human Rights Groups:
Police Ignore Extremists.
   20. AP: Rights activists accuse Russian authorities of fabricating
terrorism cases.
   21. The Times (UK): Jeremy Page, Kasparov makes opening move
in quest for Russian revolution.
   22. Interfax-AVN: Ministry Source: 40 Percent of Russian Defense
Industry Enterprises Losing Money.
   23. Wall Street Journal: Guy Chazan, U.S. Risks Russia's Ire In Drive
to End Georgia Feud.
   24. www.fednews.ru: RADIO INTERVIEW WITH VLADIMIR SOKOLIN,
HEAD OF THE FEDERAL SERVICE FOR STATE STATISTICS, MAYAK
RADIO. (re agricultural census)
   25. www.fednews.ru: RADIO INTERVIEW WITH VLADIMIR MAU,
RECTOR OF THE RF GOVERNMENT ACADEMY OF NATIONAL
ECONOMY ON CURRENT ECONOMIC TRENDS IN RUSSIA, RADIO
OF RUSSIA.
   26. Lynn Berry: The Moscow Times is looking for an opinion page
editor.]

********

#1
Vedomosti
August 3, 2005
PUTIN MAKES A SLIP OF THE TONGUE
His sole achievement in Finland
Putin's statement revives speculations about a third term in office
Author: Anna Nikolaeva, Maksim Glikin
[President Putin's response when asked if he wants to remain in
power after 2008: "Even if I did want that, the Constitution forbids
it. In my view, the most important thing for Russia now is
stability, which can only be achieved if we abide by the law and
observe the provisions of the Constitution.]

      President Putin would like to stay on for a third term, but the
Constitution prevents him from doing so. This admission, made by
Putin in Finland yesterday, overshadowed all issues in Russian-
Finnish relations - especially since Putin's visit to Finland hasn't
yielded any benefits for Russia.
      Putin has been asked about a possible third term in office many
times before. In December 2003, at a meeting of the Council of
Legislators, he said it was "time to stop all talk of any need to
amend the Constitution." In October 2004, during a live television
interview in Ukraine, he added that "the most important thing at
present is stability." Putin went on to say: "Stability can only be
ensured by observing the law. And the one law serving as a
foundation for everything else is the Constitution. The Constitution
allows no more than two consecutive terms. And I will be guided by
that." In April 2005, during a visit to Germany, he promised he
would not amend the Constitution which forbids "three consecutive
terms," but noted that there is no ban on "three non-consecutive
terms." However, Putin also added that he was "unsure" whether he
would want to do that.
      At yesterday's press conference in Finland, one journalist
asked whether Putin wants to stay on as president after 2008. "Even
if I did want that," Putin replied, "the Constitution forbids it. In
my view, the most important thing for Russia now is stability, which
can only be achieved if we abide by the law and observe the
provisions of the Constitution. There is still plenty of time before
2008. I'm sure that a great deal will be achieved in that time, in
areas including relations with Finland."
      A presidential administration source told us: "Putin's
statement contains nothing new, even though he has allowed for the
possibility that he might want to remain in office. Putin only
confirmed, yet again, that his priorities are the law and
stability."
      Until now, however, Putin has never permitted even a hint at
wanting to remain in power.
      Alexander Kantor, psychoanalyst and member of the World Council
on Psychotherapy, says that yesterday's statement can be interpreted
as indicating Putin's true desires: "It may have been a slip of the
tongue. Press conferences make Putin nervous, leading him to make
these slips - remember how he once mixed up 'Zionism' with 'anti-
Semitism.' The structure of the phrasing may indicate a conflict
between the desires of his ego and the demands of his superego. The
role of the superego could be played by the Constitution, public
opinion, and the West."
      Political analyst Alexei Makarkin says Putin is letting it be
understood that he has a "reserve option." His main course of action
is still to select and promote a successor, but "the successor
option has turned out to be very complicated": the elites still
can't reach consensus on a candidate, and then "the successor would
have to be given publicity."
      Sergei Markov, director of the Political Studies Institute,
says Putin's statement was "a message to those who have watched a
power-struggle unfold between two factions in Putin's inner circle."
The first faction wants Putin to remain in power; the second wants a
successor. In Markov's opinion, Putin's statment in Finland sent "a
message that he is siding with the second faction."
      Andrei Ryabov, an analyst with the Gorbachev Foundation, says
Putin's statement "offers some hope" for those who maintain that his
term as president should be extended. In Ryabov's view, this would
not involved any direct amendments to the Constitution, but some
other "institutional solutions" - such as establishing a real union
state with Belarus.
      Viktor Sheinis, who was among the authors of the present
Constitution, says that those who want Putin to stay on as president
might attempt to find a loophole in the phrase barring three
consecutive terms in office. One possible option would be to elect a
"place-warmer" president for one term, who would then step down in
favor of Putin. Or the legislature could permit the incumbent to run
again if the first round of voting is declared invalid; some United
Russia members have already proposed such an amendment to the
Constitution. "Either option is possible," says Sheinis. "This
contradicts the spirit of the Constitution, but not the letter of
it. In the present political circumstances, the authorities can do
anything they please to the Constitution."
      Putin's indication that he might want to remain in office made
his visit to Finland memorable, since there are no other
achievements to show for it - and none were planned. "This is a
routine visit, and the agenda for the talks is very modest," a
presidential administration official warned. Putin was not
accompanied by any government ministers or business leaders.
      Translated by Olga Petrova

********

#2
Politichesky Zhurnal
August 1, 2005
PUTIN TO CREATE CONDITIONS FOR SMOOTH POWER TRANSFER - EXPERT
[from RIA Novosti's digest of the Russian press]

Presidential decree granting additional powers to governors allows the
regional leaders to coordinate the work of federal agencies in their
territory. This is a fundamental change in the system of federative
relations showing that Putin plans to create conditions for a smooth
transfer of power within the current political system. This is the opinion
expressed by Vyacheslav Nikonov, head of the Politics foundation, to the
weekly Politichesky Zhurnal.

He said that he saw in the current situation elements of the parliamentary
republics that exist in many countries where the head of state represents
the majority in the legislative assembly.

During his first presidential term, Vladimir Putin addressed the main task
of consolidating power. He has largely fulfilled this task; the new system
of forming the authorities entails the creation of a single vertical
structure of power, the political scientist said. "The president can trust
the governors he nominates more than the elected ones." The next stage is
to grant these people the powers of the federal authorities that have been
incorporated in the president's vertical structure.

"By doing this, Putin apparently plans to create conditions for a smooth
transfer of power within the current political system and lineup of
political forces," Nikonov said. In his opinion, the president's latest
moves will largely prevent the creation of a regional opposition. The
president will share responsibility for the situation in the country with
the governors whom he potentially views as part of a "greater government,"
the foundation head said.

The situation now is fundamentally different from the early 1990, when
Russia was extremely decentralized. Now it has attained a point when its
development is hindered by an excessive involvement of the federal center
in regional affairs.

********

#3
Russia Probes Kasyanov as Kremlin Seeks to `Choose' Putin Heir

Aug. 3 (Bloomberg) -- Russian President Vladimir Putin, who has to step
down in 2008, is being accused by opposition leaders of trying to handpick
his successor.

Former Prime Minister Mikhail Kasyanov in June said he may run for
president in the 2008 election and might seek to form a coalition of
opposition parties. Four weeks later, prosecutors began probing allegations
Kasyanov bought a home from the state for less than 2 percent of market
value while in office.

The Kasyanov investigation shows how Putin's administration is determined
to choose Russia's next president, said Margot Light, an analyst at the
London School of Economics. A Moscow court in May sentenced billionaire and
Putin opponent Mikhail Khodorkovsky to nine years in prison after he was
convicted of fraud and tax evasion.

``As soon as anyone looks like they are going to create political
opposition to Putin, a case starts against them,'' said Light, a professor
of international relations. ``This shows the Kremlin will not only choose
the successor, but also the contenders.''

Concerns about Russia's commitment to democracy may slow efforts to
strengthen ties to western nations, said Alexei Makarkin, an analyst at the
Center for Political Technologies in Moscow. After Khodorkovsky, 42, was
convicted, U.S. President George W. Bush said it appeared the Russian
courts were being used for political purposes.

`Antidemocratic Means'

The Kremlin uses ``antidemocratic means'' to maintain power and ``knows it
can't win a fair election,'' Khodorkovsky said on his Web site yesterday.

Kasyanov, 47, is suspected of buying a $27 million country home and 11
hectares (27 acres) of land for about $384,000, Oleg Mitvol, deputy head of
the Natural Resources Ministry's inspectorate, said July 11.

``I have no doubt the systematic, libelous campaign opened against me and
based on lies and distorted facts is part of the general strategy to clear
the political field,'' Kasyanov said in a July 25 statement.

The Kremlin, which denied involvement in the Khodorkovsky case, said Putin
has nothing to do with the Kasyanov probe.

``Such viewpoints are disappointing because they don't reflect reality,''
said Dmitry Peskov, a spokesman for Putin.

`Kremlin Afraid'

Other opposition leaders said Kasyanov was only being investigated because
he may be a threat to the succession.

``Any real candidate risks falling into the same situation as Kasyanov,''
said Sergei Mitrokhin, a deputy chairman at Yabloko, the country's oldest
liberal democratic party. ``The Kremlin is afraid of Kasyanov because he
has international contacts and authority and they want to discredit him
before world opinion.''

The Russian constitution requires Putin, 52, to step down when his second,
four-year term ends. Putin yesterday said he ``might like to'' stay past
2008, if not for the constitutional ban.

Putin's probable successor is being chosen through a power struggle between
as many as four factions inside the Kremlin, said analysts including Andrei
Piontkovsky, director of the Center for Strategic Studies in Moscow.

``The one thing that unites the Kremlin now is the desire to prevent any
candidate out of their stable from even running for president,''
Piontkovsky said.

The Kremlin managed the March 2004 elections, partly by using state-owned
television stations to bolster Putin's image, the Vienna-based Organization
for Security and Cooperation in Europe said after the vote. Regional
leaders pressured citizens to vote for Putin, and six regions had
``implausibly'' high voter turnout, the group said. In Chechnya, 94 percent
of registered voters cast ballots, with Putin garnering 92 percent of the
vote.

Putin received 71 percent of the national vote.

Repeat of 2004

``The Kremlin is seeking to repeat the 2004 elections, where you had very
weak opposition candidates that served the purpose of making it look like a
democratic vote,'' said Makarkin at the Center for Political Technologies.

Kasyanov may not be the candidate to take on the Kremlin.

He wouldn't get more than 3 percent of the vote today because most people
are ``indifferent to him,'' said Yuri Levada, director of the Moscow-based
Levada Center, which conducts opinion polls.

``Russians will not go to the streets for another person, even if it's a
popular politician'' because they are politically passive, Lavada said.
``They will do it only if you take away something from them, like their
pensions.''

Putin Popularity

Putin's popularity rating dropped to a record 32 percent in January after
the government changed the state pension program to give people cash
payments instead of free medicine and transport.

His rating was 42 percent in July, according to the Levada Center's monthly
survey of 1,600 Russians, which has a margin of error of 3.4 percent.
Emergency Minister Sergei Shoigu was the second-most popular, with support
from 17 percent of those polled.

Kasyanov isn't the only opposition figure facing obstacles.

Former chess Grandmaster Garry Kasparov, who quit chess to create an
opposition political movement, last month said government officials
obstructed his tour of Russia's south. Officials in the city of Vladikavkaz
forced Kasparov, 42, to cancel a meeting because they said the curtain fell
down in the hall he rented, Kasparov's organization said on its Web site.

Kasparov in April said he wanted to create ``real democratic opposition''
to Putin's ``dictatorship.''

*******

#4
Only 22 percent of Russians support war to prevent Chechen independence:
poll
AFP

MOSCOW Aug 2-Just 22 percent of Russians support the war against Chechen
separatists and a less than a third think that the Kremlin will manage to
end the conflict soon, according to polls published Tuesday in the Izvestia
newspaper.

A poll by the Levada Centre, which is seen as close to the liberal
opposition against President Vladimir Putin, found that 22 percent backed
any method, including war, to prevent Chechnya leaving Russia.

However, 24 percent said they would be happy to see Chechnya go its own
way, 17 percent did not care much, and 15 percent said were ready to
overcome initial opposition to such a move. Another 13 percent believed
Chechnya was already outside of Russia.

A poll by the more pro-Kremlin Public Opinion Foundation, also published in
Izvestia, found little optimism over chances for peace in the tiny, mostly
Muslim region of the mountainous North Caucasus.

Only 28 percent thought peace could be achieved in the near future, while
51 percent said it could not.

The polls were carried out in late March for the Public Opinion Foundation
and in June for the Levada Centre, but published by Izvestia Tuesday to
mark the sixth anniversary of a 1999 raid by Chechen warlord Shamil Basayev
into the neighbouring province of Dagestan.

The militants were repulsed from Dagestan in heavy fighting. Soon after,
tens of thousands of Russian troops poured into Chechnya, starting the
second war against independence fighters and Islamic militants in a decade.

Putin has repeatedly claimed that the war is finished, but both Russian
forces and Chechen rebels suffer frequent casualties. Basayev said in an
interview broadcast on a US television channel last week that he was ready
to use any methods, including terrorism, to continue resistance.

*********

#5
Izvestia
August 3, 2005
THE WAR IN CHECHNYA WILL LAST ANOTHER 20 YEARS
Citizens don't believe peace will come to the Caucasus any time soon
Opinion poll reveals attitudes to the situation in Chechnya
Author: Georgy Ilyichev
[In a poll done by the Levada Center this summer, only 23% of
respondents agreed with the statement that peace is being
established in Chechnya, while 68% said that Chechnya is still at
war. What's more, only a fifth of respondents said that military
operations ought to continue.]

      Today marks six years since an incursion into Dagestan by
Shamil Basayev and Khattab's militants launched the second war in
Chechnya. In the Kremlin's opinion, this war has long since ended;
President Vladimir announced the completion of "the military stage
of the counter-terrorist operation" as far back as April 18, 2002.
But this is one of the rare cases when the opinion of citizens
diverges radically from the opinion of their elected head of
state: the overwhelming majority of Russian citizens are convinced
that the war in Chechnya is still going on.
      In a poll done by the Levada Center this summer, only 23% of
respondents agreed with the statement that peace is being
established in Chechnya, while 68% said that Chechnya is still at
war. What's more, only a fifth of respondents said that military
operations ought to continue. A quarter said they would be glad to
see Chechnya break away from Russia, a third said this might
happen, and 13% said it has already happened.
      The Levada Center's polls are often accused of having an
anti-Kremlin slant. However, figures from the Public Opinion
Foundation (FOM), a polling agency that has never been suspected
of disloyalty to the Kremlin, confirm that now, as in 1999, most
Russian citizens consider the situation in Chechnya "abnormal" and
do not believe it can change in the immediate future.
      FOM pollster Svetlana Klimova says: "The only change we have
recorded in the past six years is this: the proportion of
respondents who believe the situation in Chechnya is getting worse
has fallen from 20% in 2004 to 7% now. But there are no other
grounds for optimism: Basayev is still active, and terrorist
attacks are still continuing."
      Two mutually exclusive viewpoints on the second war in
Chechnya are popular among political analysts.
      Mikhail Rogozhnikov, deputy director of the Social
Forecasting Institute: "Without a doubt, the war has ended in
victory for the federal political and military authorities. The
largest and most aggressive hotbed of terrorist intervention has
been suppressed. The costs associated with suppressing it are due
to the unfortunate condition of our armed forces, and the fact
that any war on a country's own territory wounds the spirit of the
people."
      Alexei Malashenko, an analyst with the Carnegie Moscow
Center: "The main outcome of the second war in Chechnya is the
fact that it's still continuing. We're going around in circles:
once again we're hearing talk of military action being the only
solution, and talk of intervention from abroad. Meanwhile, the
present situation in the Caucasus is clearly worse than what we
had in 1999. People are being killed every day - if not in
Chechnya, then in Dagestan. The situation in the region is more
unstable, and no one seems to have come up with any qualitatively
different methods of achieving peace."
      According to Malashenko, Akhmad Kadyrov, the first Moscow-
loyalist president of Chechnya, said shortly before his death last
year that "the war will last another 20 years."
      "And he should know," says Malashenko.
      "Russian citizens don't believe the guerrillas are Chechnya's
biggest problem," says Klimova. "In their opinion, both the
federal and the Chechen authorities have a material interest in
seeing the war continue. The prevailing impression among the
public is that if the authorities really wanted peace, it would
have long since been achieved."
      Translated by Alexandra Zajtseva

********

#6
Moscow Times
August 3, 2005
ABC TV Barred From Russia
By Greg Walters and Valeria Korchagina
Staff Writers

U.S. television network ABC's future in Russia was put in jeopardy after
the Foreign Ministry on Tuesday said it would not renew the accreditation
of ABC journalists following the broadcast of an interview with Chechen
warlord Shamil Basayev.

The ministry said in a statement that it would not "renew accreditations of
this television company's staff after they expire." It was not clear from
the statement, however, whether the decision would bar the network from
reporting in Russia or affect only reporters currently working in the
country.

Officials at ABC, the U.S. State Department and the U.S. Embassy in Moscow
said late Tuesday that they were trying to clarify the Russian government's
position. Andrei Babitsky, the Radio Free Europe/Radio Liberty reporter who
interviewed Basayev, expressed shock at the ministry's announcement.

The ministry said that contact with ABC should be viewed as "undesirable"
by all government agencies, and described the interview as "supporting the
propaganda of terrorism" and containing "direct vocal calls for violence
against Russian citizens."

The ministry's announcement came two days after Defense Minster Sergei
Ivanov said his own ministry would regard ABC as "persona non grata."

In the interview, aired by ABC's "Nightline" program late Thursday night,
Basayev acknowledged that he was a terrorist and repeated earlier
statements that he might order more attacks similar to the one last
September in Beslan that left more than 330 people dead.

Tom Casey, acting spokesman for the U.S. State Department, said on Tuesday
in a Washington briefing to reporters that the U.S. government was trying
clarify the situation with Russian officials. "[W]e believe that ABC as
well as all other members of the media should have the opportunity for
freedom of expression and have the right to report as they see fit," Casey
said, according to a State Department transcript of the briefing.

Babitsky conducted the interview with Basayev in Chechnya in June. The
Russian government declined an opportunity to take part in the "Nightline"
program, ABC has said.

ABC's Moscow bureau chief, Tomasz Rolski, said the ministry's announcement
had come as a complete surprise.

"It's completely unclear to us," he said, speaking by telephone from ABC's
offices in New York. "Nobody informed ABC directly. The Foreign Ministry
has not sent anything over."

ABC first opened its Moscow bureau in 1963, and Rolski said the agreement
allowing ABC to work in Moscow was open-ended and did not have to be
renewed.

Rolski said his own accreditation from the Foreign Ministry was due to
expire in November, and that the accreditations of the other 10 ABC
staffers in Moscow would also expire in the coming months. He said that
prior to airing the Basayev interview, ABC had received complaints from the
Russian Embassy in Washington, the Kremlin and the Foreign Ministry. He
said ABC had not received any response to the network's offers for Russian
officials to appear in the program.

Babitsky said he did not "quite understand" the Foreign Ministry's
reaction, which he said was "not particularly wise and is harmful for
Russia's image."

"Nightline" host Ted Koppel's remarks regarding Basayev "were pretty much
in line with Russia's official position," Babitsky said.

Babitsky said the Foreign Ministry's reaction was particularly surprising,
as "the Kremlin was warned by the U.S. State Department that the interview
was coming out two weeks prior to the event."

A spokeswoman for the State Department's European bureau confirmed late
Tuesday that a message was passed to the Foreign Ministry, but said their
counterparts already knew.

If the Foreign Ministry "hadn't put out such an big reaction now, the
interview would have been forgotten by now," Babitsky said.

An official at the U.S. Embassy in Moscow, who asked not to be named due to
the sensitivity of the issue, said the embassy was "trying to establish the
facts. ... If this is true, we regret the decision. We understand the
Kremlin's sensitivity on this issue, and while we do not support the media
providing a public platform to terrorists, the U.S. government had no
authority to prevent ABC from exercising its constitutional right to
broadcast this report."

Asked about the difference between showing Basayev in Russia and Osama bin
Laden on U.S. television, the official said, "Bin Laden is frequently shown
on U.S. television. We don't support that either, but it's the stations'
constitutional right to do that. We urge the Russian government to maintain
open lines of communication with all media representatives."

The New-York based Committee to Protect Journalists called on the Foreign
Ministry to "reverse its decision immediately."

"This action reflects the Kremlin's growing intolerance of any kind of
criticism, especially in regard to its actions in Chechnya," CPJ executive
director Ann Cooper said in an e-mailed statement Tuesday. "The Russian
Foreign Ministry is clearly trying to intimidate foreign journalists into
censoring their news reporting on the war in Chechnya. We call on the
ministry to reverse its decision immediately."

Babitsky said he had not expected the authorities to go as far as kicking
ABC out of Russia. "I suppose the anger was caused not by the actual
interview, but by the fact that as a result of this interview the law
enforcement and special services ended up in a ridiculous situation," he
said. "Using taxpayers' money for the past six years, they are unable to
catch Basayev, and yet a journalist talks to him. ... It is rather odd that
journalists are made responsible for the inefficiency and professional
incompetence of the law enforcement agencies."

*********

#7
Foreign Ministry clarifies gripe with journalist who interviewed Basayev

MOSCOW, August 3 (RIA Novosti) - The Russian Foreign Ministry said
journalist Andrei Babitsky was not properly accredited to interview
terrorist Shamil Basayev for the U.S. TV channel ABC.

"To carry out journalistic work within the Russian Federation,
accreditation is needed from the Foreign Ministry. Also, to carry out
investigative work within a zone in which counter-terrorism operations are
underway, you need accreditation from the Interior Ministry. Babitsky had
neither."

ABC aired the Basayev interview on July 28 after requests from Moscow to
scrap the feature.

The Russian Interior Ministry said Tuesday that the Russian accreditation
of ABC staff will not be renewed.

"Russia, taking into account all of the circumstances of the airing of the
interview with internationally recognized terrorist Shamil Basayev, and the
obvious support being given to terrorist propaganda directly calling for
violence against Russian citizens, has decided that on the expiry of the
current accreditations of the employees of this television channel, they
will not be renewed," a ministry statement said.

The Russian Foreign Affairs Ministry also said that contact between the
television channel and any Russian governmental organizations or
departments is undesirable.

Andrei Babitsky is an employee of the Russian radio station Svoboda.

"The circumstances surrounding the arranging and conducting of the
interview still need to be clarified with his employer," the ministry
statement said.

*********

#8
Russian Expert Says Media Will Learn Lesson From ABC's Accreditation Loss
RIA Novosti

Moscow, 2 August: The mass media will draw a lesson from the consequences
of the American TV company ABC's showing of an interview with (Chechen)
terrorist (leader) Shamil Basayev, a Russian expert believes.

"They don't need such unpleasantness. Is it worth it? The interview with
Basayev is not something you can be proud of. I don't think that other
television companies or radio stations will repeat such a 'feat',"
Aleksandr Konovalov, the leader of the Institute of Strategic Assessments
and Analysis, told RIA-Novosti.

After the broadcast of the interview with Basayev by ABC, the Russian
Foreign Ministry decided not to continue accreditation for the company's
employees.

Konovalov believes that as a whole this will not influence cooperation
between Russia and the USA.

The expert supposes that ABC has not been deprived of the opportunity to
work in Russia for ever. "Never say never (in English) ('Never say
never')," Konovalov said. "I think ways will be found (to return
accreditation to ABC)."

********

#9
From: Dimitri Klementov <DKlimentov@msn.com>
Subject: RIA Novosti poll re Basayev interview
Date: Tue, 2 Aug 2005

RIA Novosti would like your views on the ABC Nightline interview with
Shamil Basayev.
Please send your responses to the questions below to DKlimentov@msn.com.
The deadline is Thursday, August 4.
----------

1. How would you characterize the airing of an exclusive interview with
Shamil Basayev by ABC Nightline?
A)   A proper thing to do corresponding to the right of the public to know
B)   An irresponsible act of negligence and show of double standards in the
age of global war on terror
C)   Direct collaboration with terrorists, provision of a mouthpiece to
convey their instructions and solicit funding
D)   Other_______________________________

2. What should be the appropriate reaction of the Russian government in a
situation like this?
A)   Ignoring it altogether
B)   Stripping the media outlet of accreditations
C)   Closing the outlet in Russia and expelling the foreign staffers
D)   Other______________________________________

3. Was an explanation by the US authorities /the essence of which - the
government cannot influence the programming/, acceptable?
A)  Yes, the US media is completely independent from the authorities and
the government has no means and should not even try to influence the
editorial policies or make its views known to the media execs.
B)  No, the government, when it needs to do so, finds ways to have a say in
editorial policies or at least express its dissatisfaction with certain
views or news made public by the media.
C)  Other________________________________

4 How would you characterize the fact that the journalist, who interviewed
Basayev is on the US government payroll /he works for Radio Liberty/Radio
Free Europe/?

*********

#10
Moscow Times
August 3, 2005
Words Versus Body Counts
By Yulia Latynina

When the ABC program "Nightline" aired journalist Andrei Babitsky's
interview with Chechen terrorist Shamil Basayev, it made Defense Minister
Sergei Ivanov see red. The Defense Ministry has troops in Chechnya,
including two military intelligence battalions: Zapad, which is under the
command of Hero of Russia Said-Magomed Kakiyev, and Vostok, which is under
the command of Hero of Russia Sulim Yamadayev. Yamadayev's men recently
distinguished themselves in a violent raid on the peaceful civilian
population in the village of Borozdinovskaya.

You would think that the defense minister would be out there pledging to
nab Basayev as fast as possible so that he would stop giving interviews to
journalists and start giving testimony to investigators. But no. Instead,
the ministry's retribution promises to be far more terrifying. From now on,
the U.S. channel's single Moscow journalist will be banned from all
ministry briefings. This is it, folks. ABC will never recover from the blow.

The interview scandal has its roots in the peculiar nature of the Russian
authorities. Those in power in Russia today are former KGB men. These
chekists are running businesses, interfering in politics and tapping many a
wire. But somehow they can't manage to keep track of Babitsky, who lives in
Prague and has long been a thorn in their side.

The authorities had a chance to catch both Basayev and Doku Umarov, whom
Babitsky has interviewed in the past. They had at their disposal the means
to catch them if they didn't want them to talk to the press, such as the
Vostok battalion or the FSB's elite Alfa unit. But just because the FSB
can't seem to get the job done does not mean they should take it out on
journalists.

An interview is not an act of terrorism. Terrorists do not use words to
make their points; they use dead bodies. Basayev is a terrorist not because
of what he says but because he kills people.

You can understand why the authorities reacted to the interview the way
they did. They had to react somehow, and better to condemn its broadcasters
than to discuss its content. For example, Basayev was wearing a T-shirt
emblazoned with the word "Anti-Terrorist" and said that Russian policies in
Chechnya were terrorism, which makes him an anti-terrorist.

This might sound almost reasonable if it weren't for one small "but." Let's
not forget that back in 1999, Chechnya was for all intents and purposes
independent. Regardless of how terrible the war was before the Khasavyurt
accord and no matter which side committed more atrocities, Chechnya had
practically gained its freedom. There were no Russian troops, but only
President Aslan Maskhadov and roadblocks manned by criminals who robbed
passersby in the name of Allah. Basayev, like many a military leader in
peacetime, was threatened with political oblivion.

When did Chechnya lose its hard-won freedom? When Basayev and his men
attacked Dagestan. Some believe that this invasion was orchestrated by the
Kremlin: It got Vladimir Putin the presidency and returned Basayev to the
limelight. I would not go so far as to suggest a conspiracy. But at the
very least Basayev sacrificed his homeland's freedom to satisfy his own
ambitions.

A person who orders a sniper to take out a terrorist holding a detonator is
just as responsible for the ensuing explosion as the people who planted the
explosives to begin with. In much the same way, Basayev, by invading
Dagestan, shares the blame for the second Chechen war with the Russian
authorities.

Yulia Latynina hosts a political talk show on Ekho Moskvy radio.

**********

#11
FBIS Analysis: Moscow Assails ABC TV Interview With Basayev
August 2, 2005

Radio Liberty's controversial correspondent Andrey Babitskiy (see box,
below) said he conducted the interview inside Chechnya in early June. It
aired on ABC's Nightline program on 28 July. Babitskiy said afterward that
he had entered Chechnya in June to interview rebel Vice President Doku
Umarov, ( 1) and that he had been surprised to have the opportunity to
interview Basayev as well (, 30 July)

Babitskiy and Basayev (Newsru.com, 29 July)

Basayev (Utro.ru, 29 July)

   & nbsp;

National TV network newscasts on 29 July treated the ABC broadcast -- and
the outraged Russian reaction -- as their top story of the day, giving it
about half of their total air time (Channel One, Rossiya TV, NTV, RenTV, 29
July).

. The newscasts highlighted official protests by the Russian Embassy in
Washington and the Foreign Ministry in Moscow, both before and after ABC
aired Basayev's interview.

. They also featured numerous Russian officials and observers, as well as
US and other foreign figures, deploring the ABC broadcast and accusing the
US Government of a "double standard" on terrorism.

. Deputy General Prosecutor Nikolay Shepel said Russia had proof of
Basayev's links to al-Qa'ida (Channel One, Rossiya TV, 29 July).

. Pro-Moscow Chechen President Alu Alkhanov charged ABC with "promoting
terrorism" (Channel One, Rossiya TV, NTV, 29 July), and State Duma member
Gennadiy Gudkov said it was "popularizing terrorism" (, 29 July).

. Foreign Ministry spokesman Boris Malakhov accused ABC of "outrageous
disregard for the standards of responsible journalism and of common human
values." He said the broadcast was "difficult to reconcile" with US and
Russian antiterrorism efforts (Channel One, Rossiya TV, 29 July).

Observers charged that by permitting ABC to broadcast the interview, the US
Government was departing from the principles of the global war on
terrorism. Others suggested that the broadcast would negatively affect
bilateral ties.

. The Foreign Ministry claimed the ABC broadcast violated UN Security
Council Resolution No. 1373 banning "any form of support, active or
passive" for terrorists, as well as the declarations of the 6-8 July G-8
summit in Scotland (NTV,,, 29 July;,, 1 August).

. State Duma Deputy Speaker Mikhail Grishankov said that Russia would have
to fight international terrorism alone, without help from the US (NTV, 29
July), and that the ABC broadcast had "discredited the idea of uniting
countries in an international antiterrorist coalition" (, 29 July).

. The government newspaper cited unnamed Foreign Ministry sources as saying
the Ministry's demarche to US Charge d'Affaires Daniel Russell over the ABC
broadcast was an "extreme measure" that "signaled a distinct worsening in
relations" (30 July).

Some alleged the ABC broadcast proved the US was deliberately using the
Chechen insurgency to weaken Russia.

. Chechen State Council Chairman Taus Dzhabrailov said it was part of a
Western "strategy" to cause Russia's "collapse" (Interfax,, 29 July).

. Nationalist Duma member Konstantin Zatulin claimed the "US political
elite" saw the Chechnya conflict as a "splinter in Russia's body" that it
could use to make Moscow "more compliant" (, 29 July).

Several observers noted the US Government had objected to the airing of
statements by Usama Bin Ladin by Al-Jazirah TV and other media (Channel
One, Rossiya TV, 29 July;, 1 August).

. Anatoliy Safonov, Russian presidential envoy for the struggle against
terrorism, said Moscow's complaints about the ABC broadcast paralleled
Washington's complaints to the Qatari Government over Al-Jazirah's
broadcasts of Bin Ladin statements (Interfax, 29 July).

. Channel One showed Akram Husam, the head of Al-Jazirah's Moscow bureau,
who accused the US of a "double standard" and said Al-Jazirah had been
banned from Iraq for broadcasting an interview with Bin Ladin (29 July).

. NTV recalled that after the 11 September 2001 attacks, Condoleezza Rice,
then US national security adviser, called on the media not to "offer a
platform to terrorists" and that her request was "met with understanding"
(29 July).

. Aleksandr Konovalov, head of the Institute for Strategic Assessments and
Analysis, called the ABC broadcast a "not very good step and a not very
partner-like gesture. . . . It is the same as if we published interviews
with the organizers of the 11 September terrorist acts in the US" (, 29
July).

On 30 July, the independent and frequently nationalistic daily suggested
Moscow should retaliate by airing an interview with Bin Ladin on
state-owned Rossiya TV. On 31 July, NTV reported that an unnamed Moscow
publication was already "preparing an interview with Bin Ladin."

. Military journalist Viktor Baranets had already reported that he was
waiting for the answers to a series of questions he had submitted to Bin
Ladin through an intermediary, arguing "If Shamil Basayev can give an
interview to a national US TV channel, why shouldn't Bin Ladin have the
right to perform the same 'service' for a major Russian newspaper?" (, 30
July).

Russian state TV reported the US State Department explanation that ABC is a
private company over which the US Government has no control and that, under
the First Amendment, the US Government could not ban the broadcast of the
Basayev interview (Channel One, Rossiya TV, 30 July). However, official
sources rejected that argument.

. argued that, since Babitskiy is an employee of the US Government-funded
Radio Liberty, the US Government is responsible for his actions, which it
said represented the "official strategy and policy of the US leadership"
(30 July).

. Konstantin Kosachev, chairman of the Duma International Affairs
Committee, called on the US Congress to remedy the "defects in American
law" that allowed ABC to air the interview (Rossiya TV, 29 July).

. State-owned Channel One's anchor, Yekaterina Andreyeva, took issue with
Nightline anchor Ted Koppel's explanation that he has interviewed many
reprehensible characters in the past. Andreyeva argued that, in previous
cases, criminals had already been apprehended and imprisoned when Koppel
interviewed them, while Basayev is still at large (29 July).

On 31 July, Defense Minister Sergey Ivanov ratcheted up the dispute by
declaring ABC personnel to be "persona non grata" at the Defense Ministry.
The Foreign Ministry said it would not withdraw ABC correspondents'
accreditation but "would not be surprised" if other Russian government
agencies followed the Defense Ministry's example and "severed ties" with
ABC (Channel One, Rossiya TV, RenTV, NTV, Center TV,, 31 July).

. Opposition oligarch Boris Berezovskiy's observed Ivanov's order was the
first such action by the Russian Government since the fall of the Soviet
Union, and predicted it would be seen abroad as "yet another attempt by
Russian authorities to infringe on freedom of speech" (1 August).

Some officials said Russian authorities wanted to question Babitskiy about
the interview, and a few threatened legal action against him ( i,, 1
August).

. Southern Federal District Presidential Representative Dmitriy Kozak said
Babitskiy should be prosecuted for failing to inform the authorities of
Basayev's whereabouts (NTV, 29 July).

. Nationalist Duma faction leader Dmitriy Rogozin said Russia might demand
that the US make Babitskiy available for questioning (Ekho Moskvy Radio, 29
July) and that his "cooperation" with Basayev was "itself a crime" (, 29
July).

. Duma Deputy Speaker Lyubov Sliska called Babitskiy a "terrorist's
accomplice" and said he should be arrested (Interfax, 29 July;, 1 August).

Some opposition figures and media took issue with the official reaction,
saying Moscow's outrage over the ABC broadcast interview was misplaced and
predicting the official bluster would have little effect on US or Western
attitudes.

. Speaking on the editorially independent Ekho Moskvy Radio, oppositionist
chief editor Dmitriy Muratov said Russian officials were using the flap
over the ABC broadcast to distract attention from their own behavior during
the Beslan hostage crisis and from their failure to catch Basayev (29 July).

. Democratic Union leader Valeriya Novodvorskaya said Russian officials'
attitude showed they "absolutely do not recognize freedom of the press"
(Ekho Moskvy Radio, 30 July).

. The Yukos-owned website asserted the US has no "double standard" and that
the US Government was not protesting broadcasts of Bin Ladin or al-Zarqawi
statements on the Al-Jazirah and Al-Arabiyah TV networks. It argued it was
the media's job to interview newsmakers like Basayev (29 July).

. reported that ABC and the Western media in general were "not frightened"
by Moscow's "loud indignation," which it predicted would win no sympathy in
the West for its position on Chechnya (1 August).

. Independent opined that Babitskiy and Koppel were "biased" and were doing
"dirty work," but that the Basayev interview was nonetheless a useful
reminder to Russian citizens to be vigilant against terrorists (1 August).

Andrey Babitskiy, a Russian citizen now resident in Prague, has gotten in
trouble with Russian authorities before over his coverage of the war in
Chechnya. During the battle for Groznyy in early 2000, he was the "only
foreign journalist in the city." Russian troops detained him and, under
still-unclear circumstances, handed him over to a group of Chechen rebel
fighters. He escaped or was released, and then made his way to Makhachkala,
Dagestan, where Russian police again arrested him. He was convicted of
using false documents to check into a hotel there (NTV, 27 September 2000;,
ITAR-TASS, 6 October 2000; ITAR-TASS, 13 December 2000;,, 1 August 2005).

In September 2004, authorities prevented him from going to North Ossetia to
cover the Beslan hostage crisis. After searching his luggage at a Moscow
airport for explosives -- and finding none -- police arrested and jailed
him anyway for disturbing the peace (, 3 September 2004).

( 1) A Russian-language transcript of Babitskiy's interview with Umarov
appeared on the Chechen rebel websites (15 July) and (19 July).

*********

#12
Mosnews.com
August 3, 2005
Beslan Mothers Do Not Want Putin to Visit Siege Commemorations

The relatives of victims of last Septemberâs Beslan school siege do not
want to see President Vladimir Putin or any high-ranking officials at the
ceremony to mark the first anniversary of the tragedy, the head of the
Beslan Mothers committee Susanna Dudiyeva told Ekho Moskvy radio station.

ãWe would not like to see at the memorial events those whose professional
or military duty was to save the children and who failed to fulfill their
task due to their incompetence and lack of responsibility,ä Dudiyeva said
in an interview.

ãBefore seeing Putin here, we wanted to meet him in a different place, we
have a lot to discuss with him. We asked him to receive us more than once.
Now no one is waiting for him at the school,ä she went on.

Dudiyeva also said that the victimsâ families objected to the presence of
those with whom the hostage-takers had wanted talks, namely former North
Ossetian President Aleksandr Dzasokhov, Ingush President Murat Zyazikov,
presidential aide Aslanbek Aslakhanov and former Russian Interior Minister
Vladimir Rushailo.

ãRushailo must not think that he took a back seat (after leaving the
ministerial post). They (hostage-takers) were calling for Rushailo but not
for (childrenâs doctor Leonid) Roshal to come to the school,ä she said.

Federal Security Service Director Nikolay Patrushev, Interior Minister
Rashid Nurgaliyev, former North Ossetian security chief Valeriy Andreyev
and some other people are also not wanted by the Beslan Mothers, Dudiyeva
said.

ãThey did virtually nothing, and what they did was unsatisfactory. We saw
the results. We do not want to see those people in Beslan. Our children
were waiting for them, but we are not,ä she said.

The commemorative events will take place in Beslan on Sept. 1-3.

*********

#13
National Public Radio (NPR)
August 1, 2005
Russian political campaigning

STEVE INSKEEP, host: We're going to go next to Russia where some political
campaigns are well under way, even though Russia's next parliamentary
elections are not scheduled until 2007, and the presidential vote doesn't
take place until the following year. It's never too really. Opposition
parties are trying to get organized and to articulate their views on talk
radio, but the Kremlin seems to be finding creative ways to neutralize any
challengers, as NPR's Martha Wexler reports from Moscow.

MARTHA WEXLER reporting: Under current Russian law, Vladimir Putin can't
run for re-election as president of Russia again. As yet, there aren't any
serious candidates to succeed him. Last February, his former prime
minister, Mikhail Kasyanov, hinted that he might want to run and he had
harsh words for the policies of his former boss. Now Kasyanov is under
criminal investigation.

Unidentified Man: (Russian spoken)

WEXLER: A Russian prosecutor explained that the former prime minister is
suspected of improper acquisition of real estate. The Kremlin isn't taking
any chances with parliamentary elections either. The pro-Putin United
Russia party that currently controls the Duma recently pushed through a new
election law that makes it harder for small parties to win seats. Analyst
Yuri Fyodorov says the Kremlin is nervous.

Mr. YURI FYODOROV (Analyst): After the events in Ukraine, in my
understanding, what are the top echelons of Russia's political elite are
really panicked. They're afraid of mass protest rallies, which may have
unpredictable results.

WEXLER: And Fyodorov says this is why the Kremlin has now targeted the
opposition Rodina, or Homeland party, best known for its nationalist views.
Homeland made a surprisingly strong showing in local elections last year.
Fyodorov and other political watchers here say the Kremlin encouraged a
renegade Homeland politician to form his own faction under the same name.
Fyodorov says the intent was to sow confusion at the polls.

Mr. FYODOROV: Well, ...(unintelligible) two regular parties' rank-and-file
person will be absolutely disoriented ...(unintelligible).

WEXLER: Russians see some irony in this. They say it was the Kremlin that
created Homeland in the first place to lure voters away from the
still-strong Communist Party. Now the leader of the original Homeland
party, Dmitry Rogozin, is challenging his former sponsors in the Kremlin.

Mr. DMITRY ROGOZIN (Homeland): (Through Translator) We believe the main
problem in Russia is that state power is weak. And it is weak because it is
absolutely corrupted. That's the difference between us and United Russia.

WEXLER: If Putin's inner circle is trying to curb Rogozin's Homeland party,
as many observers allege, the measures pale in comparison to the recent
moves against other opponents. The government simply banned the National
Bolshevik Party, a more marginal group, that combines nationalism with
calls for social justice. Dozens of National Bolshevik members are on trial
for an act of civil disobedience, entering a government building without
permission. They face five years in prison. Then there's the tale of chess
champion Gary Kasparov and his misadventures on a recent tour of the
provinces. Kasparov believes it's hopeless to form another political party,
so instead he's drumming up support for a non-partisan United Civil Front.

Mr. GARY KASPAROV (Chess Champion): (Through Translator) We have to unite
people of all political stripes who understand what a threat the Putin
regime poses. We have the simplest political program. We want free
elections, freedom of address, independent courts.

WEXLER: Kasparov had to struggle to deliver this message on his tour. The
airport in the southern city of Rustov refused to let his plane land.
Restaurants wouldn't serve him. Hotels said they had no rooms. And he was
constantly followed. Children threw eggs at him. As for the traditional
liberal camp of professional politicians here, they continue to squabble,
but one young independent Duma deputy, Vladimir Ryzhkov, still hopes to
unify the so-called democrats.

Mr. VLADIMIR RYZHKOV (Independent Duma Deputy): (Through Translator) You
know, de Gaulle once said if a person agrees with you 80 percent, he's your
ally. Our democratic parties agree on 90 percent of the issues and still
remain enemies. I think it's a matter of political culture.

WEXLER: And as long as that remains the culture in Moscow, it will benefit
President Vladimir Putin and United Russia.

Martha Wexler, NPR News, Moscow.

********

#14
New Electoral Law Reinforces 'Faceless Mechanism' Of Power

Nezavisimaya Gazeta
August 2, 2005
Report by Aleksandr Samarina: "An Absent-Minded Robot is Inclined to Take
Make Simple Decisions"

A new electoral law comes into force tomorrow. Let us remember: we are
talking here about substantial changes to the character of future
campaigns. In particular, henceforth voting will be solely on the basis of
party lists; there is a most rigorous prohibition on blocs; and citizens
will be able to participate in public gatherings at most twice per year.

"Of course, this will be a victory for bureaucracy", believes Institute of
Applied Politics director Olga Kryshtanovskaya. "There is no other system
like ours anywhere in the world. A person does not know the people for whom
he or she is voting. What is more, he or she may vote for some Shoigu or
other who is not ultimately going to represent his party in parliament.
People vote for a faceless mechanism, and the parties are turning into a
bureaucratic system that controls this process".

Meanwhile, in parallel to the process of regulating procedure rumors are
growing stronger about a simultaneous postponement of the dates of several
campaigns. Some politicians and spin doctors believe that parliamentary
elections will actually be held this year. By way of an example I recall a
recent statement on this theme by the leader of the Communist Party of the
Russian Federation (KPRF) Gennadiy Zyuganov predicting corresponding
changes to the Constitution. The country's leading politicians are
exhibiting a very high level of activity and this, plus the fact that they
are clearly in no hurry to go on vacation, seems to promise dramatic shifts
on the political playing field. The elections to the Moscow City Duma - and
there are many indications that they will be postponed until spring instead
of being held in December as scheduled - are also becoming the object of an
increasing amount of scandal. In particular, observers have been surprised
by the unusual behavior of the city's deputies - no sooner had they been
released on vacation than they reconvened to discuss their own pension
provision and that of the mayor.

Kryshtanovskaya explains the incomprehensible of the politicians by a
desire on the part of the state apparatus "to do away with the elections
completely or to make them purely decorative" - along with a simultaneous
recognition of the impossibility of seeing this wish fulfilled: "Orange
revolutions show that the people will not accept this situation - the
people want to vote. Nor will the international situation permit a
cancellation of the elections. In addition, there must be some kind of
system for the. And finally there is the problem of legitimacy. After all,
even during the Soviet period elections were never cancelled to ensure that
the decisions of the authorities bore some semblance of legitimacy".

It may be assumed that the contradictions that are visible to observers are
only the tip of the iceberg. Kryshtanovskaya notes that the apparent
disagreements conceal a deep-seated and fundamental absence of any
agreement that reflects a struggle between bureaucratic groupings. The
immovability of the Constitution is a thing of the past and will no longer
help this struggle in any way it serves only to stimulate it. It would
appear that the ant hill that has been disturbed by the authors of the
current changes is beginning to live according to its own laws. What
appears to us to be chaos is in fact nothing more than the development of
mechanisms and decisions relating to a major issue - the problem of the
continuity of the present regime.

Kryshtanovskaya notes that as soon as the Constitution starts to change,
"the resulting effect is similar to an avalanche - all the political
players begin to pursue their own interests. While the unshakeable system
created under Yeltsin still existed, nobody made any attempt to bring it
down. As soon as the question of changing the electoral system arose (after
Beslan), this set in motion the process of developing the political system
that will be used in 2008. What we are seeing today is not even a dress
rehearsal - it is the real thing".

According to the analyst, Kremlin staffers are now examining two approaches
to the resolution of the problem. One part of the presidential apparatus is
defending the idea of a parliamentary republic, while other officials who
are no less influential are supporting the most simple solution -
reappointing Putin for a second term. As far as this scenario is concerned
they will explain to people that there is no other way and place rigorous
emphasis on the lost inviolability of the Constitution.

The fuss surrounding parliamentary and local elections is important
inasmuch as it ensures the voting that is necessary in 2008. There must be
obedient deputies. There must be obedient parties that will not allow
dissent into their ranks and will not bring free thinkers into the Duma as
single-mandate candidates. Control is on the line, and although the
controllers do not have a particularly clear idea of the instruments
available for influencing "those on the fence", the goal will ultimately
become clear and put everyone in their places.

In actual fact the process of organizing the future mechanism is quite
complex. In order to select one main option a host of accompanying problems
must be resolved. For example, the possibility must be envisaged - and
prevented - if the choice falls on a parliamentary republic) that the
nominal president might take decisive steps towards strengthening his own
power.

The present system seems to be growing increasingly complex. The press and
the opposition face a rapidly growing number of restrictions; every gesture
of party functionaries is being regulated; intricate PR moves are being
thought up (and just as rapidly abandoned). However, it is no secret that
the more complex a system is, the more weak spots it contains and the more
difficult it is to control without causing damage to its fine tuning.
Perhaps that is why our modern domestic political system reminds us with
increasing frequency of an absent-minded robot, whose right hand has only a
vague idea of the functions of its left hand. Let us recall the newly
sprouted wings of United Russia that almost immediately fell away... There
is a sense that the mechanism of power is being formulated by fumbling in
the dark.

Meanwhile, the result of all this insanity may well be that society reverts
to its point of departure, to the old forgotten but time-honored Soviet
version of the legitimization of power. There have recently been many
discussions about the need to elect the president of the Duma. If this
scenario is taken as a foundation, since the creators of the new order have
a constitutional majority to hand that is always ready for action, all that
will be left for them to do is to fill the building on Okhotnyy ryad with
400 workers and peasants, diluted by dozens more "representatives of the
intelligentsia", and embark upon the process of electing the heir to the
throne.

********

#15
Kremlin: In need of patriots
August 2, 2005

MOSCOW. (RIA Novosti political commentator Vasily Kononenko.) President
Vladimir Putin's recent meeting with leaders of the youth movement Nashi
("Us") was unexpected by many, but nevertheless indicative of his domestic
policy.

  Putin asked activists of the self-styled "anti-fascist" movement to help
the country deal with problems among young people such as alcohol and drug
addiction, and recent increases in ethnic and religious hate crime. The
president's patriotic sentiments were quite conspicuous, and he tried to
share them with the commissars (as they call themselves( of one of the
country's most radical youth organizations.

Remarkably, the meeting took place shortly after the government adopted a
new Federal Target Program, "Patriotic Education of Russian Citizens,
2006-2010." According to Alexei Zudin, a leading political expert and head
of political programs at the Center for Political Technologies, this
background suggests that the authorities could be afraid of something.

Question: It seems that the authorities have suddenly become very anxious
about patriotic education of young people. Why has this problem become
topical after ten years in the doldrums?

Answer: The main reason is that a pro-active foreign edge has appeared in
Russian domestic processes. This is related to the geopolitical expansion
of the West, the so-called "color" revolutions, and changes of power in the
CIS, where young people played a crucial part. Besides, we should not
forget about help provided to these revolutions by foreign countries, first
of all the United States. So, the authorities' interest in patriotic
education of young people is pragmatic. In my opinion, it is a positive
development, because to be implemented, any project requires a practical
need, not only ostensible administrative interests. You can even say that
the idea of "sovereign democracy," of real state sovereignty, depends on
who manages political processes in the country: Internal or outside forces.

Q.: Are you saying that foreign forces could interfere in Russian politics?

A.: It is possible. The thing is that certain technologies have appeared;
we can call them "revolutionary" technologies. They have proved that they
are successful. And they can be copied. Under these circumstances it would
be a serious error for the authorities and politicians not to use such
technologies. However, the experience of the "color" revolutions shows that
change can take place only under certain domestic conditions. Still, these
conditions should be studied thoroughly in order not to make a mistake.

For example. At the end of 1999, enormous demand for elite change appeared
in Russia. The systemic opposition - the Fatherland - All Russia bloc, with
its inertial thinking - decided that if there was demand, it would get
power with no effort. But we saw how the Kremlin managed to reign in the
political revolution that was meant to destroy it. This is called seizing
the initiative under the well-known formula: "If you cannot prevent
changes, lead them."

Q.: Does this mean that young Russians are becoming politically active
against their own will?

A.: Certainly, the outside factor I have named is the determining one. But
there are also inner demands among young people. Polls show that young
Russians are more apolitical compared to society in general. The gap is
about 10%. But surveys have revealed another significant factor: When asked
joining a political organization, young people demonstrate more willingness
than older generations.

Q.: Let us get back to patriotic education. What ideals can be used today
to bring up younger generations of Russians? After all, it is no secret
that in the last 15 years young Russians have looked only up to the West.

A.: The time of promiscuous orientation toward the West has gone. Public
opinion in this country has changed drastically. Attitudes toward the West
are now more distanced, more skeptical and more realistic. People are not
hostile toward Europe or America. But they need universal modern values
complemented with national values. This is first of all true about young
people who want to live and work in Russia. This group is the most natural
choice for shaping the new patriotism. Unlike Soviet methods of instilling
patriotism, today we can talk about forms of work that exclude sacrifice.
The most relevant project in this respect is work for a better life in
Russia.

Q.: The Nashi youth movement puts forward quite controversial mottos, such
as a "younger ruling elite," and a "personnel revolution," They call
themselves "the country's managers," nothing less. Could this lead to a
conflict between generations?

A.: A Kremlin official has been even more outspoken: "Let us give you the
country..." In fact, all these mottos and promises of the authorities
simply respond to the demands of young people. We can call it social
mobility. That is, there is demand for conditions for self-realization. Now
words must be accompanied by deeds. As for controversies, all political
activities are based on the principle of separating "ours" and "not ours."

**********

#16
Russian Levada Center Accused of Rigging Poll Data

Nezavismaya Gazeta
August 3, 2005
Article by Valeriy Fedorov: "A Murky Wave"

The use of sociological studies for political propaganda purposes has not
been news in Russia for a long time now, unfortunately. No major election
campaign in the last 10 years has avoided manipulations (at times
successful) of sociological data. Each time the result is a rejection of
sociologists by the mass media, politicians, and voters and a prejudice
against them; for a time it becomes almost unseemly to talk about ratings.
Sociologists record losses in reputation.

This happens regularly and has already become like an inevitably repeated
drama that cannot be prevented -- it can only be survived. And so the
inevitable risks can be prepared for and reduced to a minimum. How should
this be done? Russia's prestigious scientific research centers with their
long operating experience long ago worked out the rules that they follow so
as not to have their own reputations tarnished too much in the heat of
political campaigns and not to damage the public opinion poll market as a
whole. So surveys and reports of little known firms and tiny firms that are
often set up specially for such a case are already becoming the traditional
tool of political manipulations. But the attempts of political manipulators
to involve market makers of the Russian public opinion market in their
intrigues never stop.

Not only financial proposals which are often very difficult to refuse come
into play, needless to say. The entire, very extensive arsenal of devices
and methods of persuasion, including ideological ones, is used. How can you
refuse a person who, like you, represents the good of Russia, and in
addition is even willing to support the researcher on a material basis? And
just what will happen if the ideological-political values publicly declared
by such a manipulator coincide at some point with the views and beliefs
preached (completely sincerely, we assume) by the head of a major
sociological company?

But will the fruits of this "kinship of the souls" make several
ideologically close and financially dependent Internet and print
publications generally known? An explosive mixture of political technology
and sociology is formed that has altogether destructive consequences for
both the political field and for the research market when it blows up.

Unfortunately, that is exactly what we are in fact observing now. The
long-time sympathies of the head of the Levada Center (Levada-Tsentr) for
representatives of the liberal-Westernizer political camp is no secret to
anyone in the professional milieu. In this connection no one is confused
about whose orders this organization will carry out in the coming election
either.

The hope remained, however, that sociologists from such a famous center
would comply with at least the most fundamental rules of political hygiene.
And there was also the illusion that the actual season of political
manipulations with sociological data that traditionally coincides with
federal elections would open no earlier than in a year or a year and a half.

Both hopes can now be abandoned: the manipulations have already begun; they
are extremely crude; and there are more of them every month. And the print
and Internet publications get the raw material for them with enviable
regularity at precisely the Levada Center.

For a start: with a reference to the Levada Center, some newspapers and
Internet publications recently reported that Vladimir Putin's popularity
rating had reached its "historical minimum" -- 38%. Later the Levada Center
disavowed this "sensation." But the "historical minimum" was bandied about
from every possible angle, and this set phrase undoubtedly has settled
firmly in the minds of readers and listeners. And when a month later the
Public Opinion Foundation published the latest data on Putin's confidence
rating, the phrase just automatically appeared on the pages of newspapers
this time.

Does anyone care that the 24% confidence rating (formulating the question
like this: "Please name several contemporary politicians whom you have a
positive attitude toward, whom you trust") differs very little from, say,
the January result (25%) and certainly is not outside the 4% "corridor"
typical of the last seven months? Well now, such a thing certainly cannot
be called anything but an "unprecedented decline." Only not in the rating,
but in the professionalism of its newspaper interpreters.

The next incident. According to Levada Center polls (posted on the website
of Mikhail Khodorkovskiy's press center, by the way), the former YuKOS head
would garner 8% of the votes if he were to run for president. Admittedly,
the respondents were offered no other alternative figures. The Internet,
which belongs to the owners of YuKOS, compared the data of this poll with
the data of the Public Opinion Foundation on a broad list of possible
candidates for president. But the first sentence is a glaring one: "Putin
and Khodorkovskiy would be in the second round of the 2008 presidential
election." Tying together the data of the two different polls done by
different firms using different methods is like comparing apples and
oranges. But who really thinks about that at such an enlightened Internet
publication?

An even cruder procedure has been used in relation to the United Russia
party. The Levada Center presents a poll on the topic: what political
forces do respondents sympathize with -- Communists, democrats, patriots,
or the "party of present power"? The "party of present power" receives 12%,
behind even the eternal anti-leaders, the democrats. The result: the mass
media report an unprecedentedly sharp decline in United Russia's popularity
rating. Admittedly, however, electoral ratings of that same Levada Center
suggest the opposite -- there in June of this year, United Russia garners
38% of the votes of the respondents. After all, sympathies for
ideological-political directions and willingness to vote for a particular
party are by no means one and the same thing. But which of those
fast-writing people would undertake to seek such a rating on the Levada
Center website?

The description of this type of manipulation could go on a long time.
Finally there is one more very distinct, vivid example. Elections to the
Moscow City Duma are not far off. There are not a lot of candidates for
power in the capital -- it requires too many resources. The chief figures
are known, just as Muscovites' sentiments are known. The supporters of the
incumbent Mayor Yuriy Luzhkov -- the city organization of United Russia --
hold the best positions in these elections. Hence, their rivals need to
somehow show voters that they stand for something too.

And here the Internet information agency Regnum publishes the notice: "Only
businessmen and people with large income support the policies of the Moscow
authorities." It follows from the text that Muscovites are very unhappy
with the city government; and of the Moscow leaders and politicians who
participate actively in the life of the city, the main ones who are well
known to Muscovites are Vladimir Resin and Aleksandr Lebedev. The real
client who ordered this "study" can be figured by anyone who remembers just
the list of participants in the 2003 mayoral election. So then who did it?
Who wanted to participate in the first political-sociological manipulation
to sublimate a candidate's popularity rating?

Regnum writes: VTsIOM (All-Russia Center for the Study of Public Opinion)
conducted the study. Then at VTsIOM's demand it issues retraction: the
Levada Center, it turns out, actually conducted the poll. But who among us
reads retractions? What most people remember is VTsIOM-Moscow-Lebedev. And
thereby the latest new method of manipulation of public opinion is
discovered -- one using someone else's name and stealing someone else's
symbolic capital. Political technologists can thank the client and the
agent for the know-how -- it will undoubtedly be used many times again by
imitators in the vast spaces of Great Rus and the near abroad.

But just who is responsible for the misinformation? In our view, we have
here the repetition and procedural development of the linkage "sociological
data -- tendentious interpretation of them -- retraction." At least four
times in two months -- that is no longer a coincidence, but a sign of a
paid-for PR campaign and an ugly political game with a cynical director
that the audience does not see. A game in which there may be many more
losers than might appear.

Eating up the symbolic capital that Russian sociology still has is perhaps
the most dangerous result of such a game for our profession. Studies
conducted by the TsIRKON Group and the 7/89 Association at the start of
last year show that at this point Russia's citizens still trust the data of
sociologists. Seventy-six percent of Russians polled adhere to the
viewpoint that the results of polls reflect the real opinions of citizens.
Fifty-one percent of those polled do not agree with the assertion that
"polls are often fabricated and published to have an impact on people."
Only 28% agree with that assertion.

So workers of the sociological guild have an enviable pool of popular
trust. It is that symbolic capital than can be lost. Which in fact will
happen if manipulations of sociology from respected firms that they do not
put a harsh stop to become regular. And it is very difficult in this
situation to understand the clearly suicidal, from the professional
standpoint, gesture of their colleagues.

You can be certain that attempts to use sociology for manipulative purposes
will continue to be made. Sociologists still have a very rare and precious
resource -- the trust of the population. There will many more wanting to
take advantage of this trust to convert it into political dividends. And
only if sociologists no longer permit themselves to be dragged into such
games will the mistakes and the manipulations already made serve as a kind
of "inoculation" that will protect them from the destructive, suicidal
temptation in the future. Let us hope that that is in fact what happens.

*********

#17
Los Angeles Times
August 3, 2005
COLUMN ONE
Russia Steals the Scene
Patrons are lining up for domestic films years after the industry was given
up for dead. Some bill it as a backlash against Hollywood.
By Kim Murphy
Times Staff Writer

MOSCOW Ð It's a typical Moscow night. Our hero, Anton, has just drunk a
glassful of warm, thick pig's blood (an unpleasant but necessary
preparation for hunting vampires). Then he gets stopped by one of the beefy
militsiya who are the scourge of every Muscovite who has ever ventured into
the streets fueled by a shot of something strong Ð and that would be quite
a few.

Roughed up by the arrogant officer demanding his dokumenti, Anton
delicately upchucks. With a horrified response Ð "What are these kids
drinking these days?" Ð the officer sends Anton along on his mission
against the forces of darkness.

Then the question is, who really is the hero? Anton, the morally
compromised watchman of light? Or the wise, pleasure-seeking creatures of
the night he pledged to keep in check? Which one would you choose?

Stylishly shot, brooding, ambiguous and Russian to the core, the 2004
fantasy-action film "Night Watch" has helped ignite a cinema renaissance
that is reviving the nation's legendary film production facilities and
challenging Hollywood's supremacy in the Russian movie market.

A decade ago, the post-Soviet film industry was all but officially
pronounced dead. The famous Mosfilm studios, once home to such directors as
Sergei Eisenstein and Andrei Tarkovsky, had packs of stray dogs running in
the nearly empty halls.

Then, last summer, "Night Watch" opened simultaneously on an unprecedented
325 screens and earned more money in Russia than "The Lord of the Rings:
The Return of the King," "Troy" and "The Day After Tomorrow." It outdrew
the American film with which it is most often compared, "Matrix
Revolutions," by more than a third.

It apparently wasn't a fluke. In February, an improbable historical
adventure set during the 1877 Russo-Turkish War, "Turkish Gambit," broke
box office records, bringing in $19.2 million and edging out the latest
"Star Wars" installment as well as "Alexander." Not bad for a war most
Americans have never heard of.

The figures aren't big compared with domestic receipts of American
blockbusters, which just get started at $100 million. What is unexpected is
that these films are out-earning American blockbusters in Russia. Receipts
were negligible for domestic productions just a few years ago.

The phenomenon has come on the heels of a wave of movie house construction
across the country and is as much a story of marketing as movie production.
Audiences in places as disparate as Russia, Poland, Hungary and Turkey are
beginning to signal an occasional preference for domestic fare, cast with
familiar faces in recognizable locales, over films from Hollywood.

Whether the films have international legs will become apparent this year,
when "Night Watch," which has earned $16.3 million in Russia, is scheduled
to hit the United States in the first major American release of a Russian
motion picture.

Fox Searchlight Pictures has also optioned the sequel, "Night Watch 2:
Chalk of Fate," which director Timur Bekmambetov is shepherding through
postproduction. He plans to shoot the final part of the trilogy in English,
in the United States.

"American films since the silent era have dominated the world market. They
just made more, and bigger, and better," said Anna Franklin, a longtime
critic and expert on East European film based in Moscow. "But they always
made most of their money in the U.S., and foreign sales were just icing on
the cake. All that changed in the '70s, when American budgets started
getting so high they absolutely had to make money on the international
markets to meet the budget."

The growing domestic sales figures in Russia and elsewhere represent a
change, if slight, in the substantial European market share the U.S. has
locked in over the last decade. That domination is the result of years of
aggressive marketing and distribution agreements along with the commercial
appeal of U.S. films.

"There's been a real backlash," Franklin said. "People are bored and tired
of all these American films. People in Turkey, in Poland and in a lot of
countries have started producing their own domestic blockbusters, and these
blockbusters are beating the American films at the box office."

The Russian share of the box office in Russia and neighboring Ukraine more
than doubled from 2003 to 2004 to 11.6%, with hits that included
"Antikiller 2" and "72 Meters," a patriotic submarine drama that plays out
less ignominiously for the government than did the real-life story of the
118 sailors who died aboard the Kursk in 2000.

The Russian share so far this year is even bigger, at 18%. In the Czech
Republic, domestic films took 24% of the box office last year. Although
"Return of the King" led the pack, four Czech films finished in the top 10.

In Turkey this year, domestic films have captured 60% of theater
admissions. Six of the 10 most popular films are domestic. "Gora," the top
Turkish film of 2004, generated $18 million.

The figures are perhaps most significant here in Russia because of the
earnings potential they represent Ð an estimated 300 million people speak
Russian as a first or second language Ð and because they signal a great
comeback.

After the 1991 collapse of the Soviet Union, a world-renowned cinema
industry that had produced such masterpieces as Eisenstein's "Battleship
Potemkin," Tarkovsky's "Solaris" and Sergei Bondarchuk's "War and Peace"
with 100% state support suddenly found itself cut off at the knees, without
financial resources.

Many of the 2,000-odd state-run theaters across the country fell into
sordid disrepair, and some were converted into auto dealerships. Filmgoers,
revolted by the condition of most movie houses, turned to television or
pirated videos of American films. One of the strongest moviegoing markets
in the world Ð Russians went to the cinema three times as often as
Americans on average Ð had evaporated.

American movies predominated at the surviving theaters, averaging nearly 80
releases a year through the late 1990s.

Mosfilm, a grande dame of the filmmaking world, spun into a steep decline,
its 98 acres in the heart of Moscow eventually overgrown with weeds and its
soundstages vacant.

"There were empty corridors · inhabited by packs of stray dogs," said Karen
Shakhnazarov, director of this year's "The Rider Named Death" and the man
who, as director of Mosfilm since 1998, is credited with bringing the
state-owned studio back. "It was a totally mystical sight."

Russian "art" films continued to be made. Nikita Mikhalkov's 1994 film,
"Burnt by the Sun," won a best foreign film Oscar. But virtually no one in
Russia saw them until they came out on video.

The turnaround began in 1995, when Kodak, against all odds, opened a glitzy
theater in the heart of the capital, the first truly modern movie house in
Russia. It had snack bars, even Dolby stereo. Tickets reached $15 and more,
and people lined up to buy them.

Since then, a cinema building boom has continued unabated. New multiplexes
have sprouted up in the sprawling shopping malls on Moscow's periphery and
in the regions, from Novosibirsk to Nizhny Novgorod.

Today there are 713 screens in 420 cinemas across Russia, and there may be
four times that many built in the next two years. Ticket sales have leaped
from $18 million in 1999 to $268 million last year.

To be sure, Hollywood has raked in the biggest share of the box office. The
Russian market grew from a paltry $10 million in 1999 for U.S. filmmakers
to more than $215 million last year. Since 2003, Russia has been one of the
top 15 markets in the world for American films.

Television drama is making a comeback as well. Last year, 3,000 hours were
produced. In fact, "Night Watch" and "Turkish Gambit" were originally made
as TV miniseries by powerful, state-owned First Channel, then transferred
to the big screen when the cinema boom hit.

The sound production for "Night Watch" was done in Los Angeles, but the
bulk of postproduction and special effects on that and "Turkish Gambit" was
completed in modernized facilities at Mosfilm, which has enjoyed a
renaissance of its own.

"When I became the director of the studio, we were 20 or 30 years behind
the rest of the world in terms of technology and equipment. But there was
nowhere to take money from," Shakhnazarov said. "No one was lining up to
give us a bank loan. No one even believed that restoration of Mosfilm was a
viable task."

The studio head turned to the one asset he had, the amazing library of
Russian classics gathering dust. Many of them, especially old comedies,
still had earnings potential on TV.

"All the money we were getting from selling these movies to television we
would invest in renovation of the fleet. We were buying cameras, lights Ð
we didn't have anything. We tried to purchase top-of-the-line, and
implement only the breakthrough and innovative technology in our work," he
said.

"Gradually, step by step, we started seeing new movies getting made at the
film studios."

Today, Mosfilm is turning a profit. Russian film managers hope to lure
American crews to Moscow and organize Russian-American coproductions.

Shooting is underway on the first full coproduction, Roland Joffe's
"Captivity." The psychological thriller is being filmed on a Mosfilm
soundstage with an American cast and a Russian production company, Ramco,
which has partnered with producer Mark Damon's Foresight Unlimited.

"The barrier for attracting important American and international production
to Russia had been a formidable one," Damon said. "I realized that in order
to break this down, we would have to come to Russia with a very strong
director, a strong project, a strong cast, and once they saw that a film of
this level, this kind of talent, was shooting in Russia, all the barriers
would come down.

"And in fact, they have. I have received so many proposals from all over
Hollywood: 'Are you interested in shooting in Russia?' "

The shooting has not been without hitches. The Russian boom operator
couldn't understand the dialogue well enough to position the mike; the
camera, bought for Russian productions, which do not shoot direct sound,
had to be outfitted with a makeshift noise shield; the set itself had to be
designed by e-mail while Joffe was still in New York.

"I would say that some of the problems we've had would probably negate the
budget saving [of shooting in Russia]," Joffe said. "We've had to bring in
a few more skilled people than we thought we would have to.

"But I think that's a good thing rather than a bad thing. Because it's only
when you work out some of the teething problems that the studio can
actually get itself together."

"Night Watch" and "Turkish Gambit" producers Konstantin Ernst and Anatoly
Maximov at First Channel credit Mosfilm's upgraded facilities for their
ability to deliver films that look much like high-tech Hollywood
productions for a fraction of the expense.

"Night Watch" cost just $4.2 million. "Turkish Gambit" was shot for $3.5
million. Its huge, "Gladiator"-like battle scenes were filmed with a few
extras multiplied many times over by computer imagery.

Yet the budgets for promoting the films may have reached $7 million each,
say Russian cinema insiders. The big opening weekends were attributed
largely to a U.S.-style marketing strategy that encompassed print,
billboard and television advertising along with gimmicks like T-shirts and
coffee table books.

Another key part of the equation was a deal with Russia's infamous DVD
pirates that provided rights to legal production of "Night Watch" DVDs at a
discount in exchange for delaying the DVD release for four weeks after the
theatrical one. (In Russia, pirated DVDs often go on sale the day the movie
opens.)

As a result, the movie has sold more than 1 million legal copies on DVD,
perhaps four times the usual rate for a U.S. blockbuster in Russia.

The promotional campaign wasn't hurt by the fact that First Channel was
able to deliver free news and entertainment program tie-ins. Or that after
years of heading the nation's premier television outlet, Ernst and Maximov
knew exactly what kinds of films would appeal to their target audiences.

In fact, Maximov said he was surprised to see a U.S. audience respond so
enthusiastically to the intense, morally nuanced "Night Watch" when it
showed at the Tribeca Film Festival in New York this year. (The film also
screened at the Los Angeles festival in June.)

Its portrayal of a millenniums-long contest for supremacy between the
forces of darkness and light is told not only in an exotic Moscow setting
but with a distinctly Russian point of view, as Maximov sees it.

"In this film, the light ones are standing for repression, for
self-control, for not letting themselves go," Maximov said. "And the dark
ones are free. They're the ones who are doing what they want to do and
urging others to do what they want to do. They're saying, 'Guys, you won't
have another life. Take your chance. Do it.'

"America at its core stands for this principle of individual freedom, that
the meaning of human life is the realization of personal freedom. Somehow,
you feel the light ones represent Russia," he added. "In the end, the movie
glorifies repression and questions the idea of freedom Ð not a very
American message."

Still, Fox is betting that Americans will watch it.

In an e-mail interview, Fox Searchlight President Peter Rice said, "The
groundbreaking combination of mythic storytelling and awe-inspiring visual
FX makes 'Night Watch' an audacious, original movie experience that will be
enjoyed by audiences around the world, regardless of language."

BOX
On screen in Russia

American films have been a hit at the box office in Russia and some of its
neighbors,* although the domestic industry is enjoying a renaissance.
Top-grossing films for the weekend of July 22-24:
Title (country of origin) Weekend gross Total gross Days in release
1 Fantastic Four (U.S.) $390,890 $1,862,969 11
2 Monster-in-Law (U.S.) 384,440 1,465,419 11
3 The Interpreter (U.S.) 344,255 415,705 4
4 The Longest Yard (U.S.) 261,169 328,928 4
5 Mr. and Mrs. Smith (U.S.) 205,079 8,162,382 42
6 War of the Worlds (U.S.) 150,702 9,922,573 26
7 Fool (Russia) 131,084 154,175 4
8 Dreaming of Space (Russia) 81,836 696,681 18
9 Les PoupŽes Russes (France) 30,896 131,435 11
10 Guess Who (U.S.) 18,845 695,710 32
Source: Box Office Mojo
Data are for Armenia, Belarus, Kazakhstan, Moldova and Russia

********

#18
Trud
August 3, 2005
WHO BENEFITS FROM THE PETRODOLLARS?
Why the oil export boom isn't benefiting the Russian economy
Author: Gennadi Yastrebtsov
[It's certainly ridiculous for us to expect benevolence from oil
barons. Whatever our oligarchs might say about the priority of
state interests and corporate social responsibility, in reality it
all comes down to trying to maximize their profits and minimize
their taxes.]

      The Federal State Statistics Agency (Rosstat) reports that
oil production volumes rose by 2.9% in the first half of 2005 in
comparison to the same period of 2004, reaching 229.88 million
tons. Citizens would be justified in asking why fuel prices keep
rising, if the oil output is growing? According to the Moscow Fuel
Organization data, over the past seven months the retail prices of
OL92 and OL95 gasoline in Russia have increased by 10%, and
wholesale prices by 30%.
      According to Vasily Petrov, an analyst with the Strategic
Developments Center, another fuel price increase is expected in
autumn. The managers of oil companies are at a loss: the going up
of petrol at domestic market is an objective process, the direct
consequence of high oil prices in the countries, where petrol is
exported from Russia. Nobody will sell that remained in Russia at
a sacrifice.
      It's certainly ridiculous for us to expect benevolence from
oil barons. Whatever our oligarchs might say about the priority of
state interests and corporate social responsibility, in reality it
all comes down to trying to maximize their profits and minimize
their taxes.
      The hunger for profits drives companies to use the whole bag
of tricks and sometimes to break the law. According to Igor
Artemiev, head of the Federal Anti-Monopoly Service, a number of
oil companies have conspired criminally to increase fuel prices
groundlessly. Federation Council Speaker Sergei Mironov agrees:
"The fact that domestic gasoline prices have increased immensely
has a harmful impact on other sectors and accelerates inflation."
It is good that politicians understand this. It is bad that the
right words don't influence the actual state of affairs and
materialize into decisions and laws serving the public interests.
It is in place to recall that that the natural resources,
according to the Constitution, are state property and belong to
the whole people. But that is purely a declaration. Private
companies close to the authority in the Yeltsin-era captured all
rich oil fields for a fraction of their value. Shares-for-loans
auctions have become an ugly monument to legal nihilism and
predatory practices. And now exporting hundred million tons of
Siberian oil, private stockholders don't even think of
compensating the government investments in the branch, made in the
Soviet period.
      According to the famous analyst Vladimir Popov, nowhere in
the world the government does indulge its oil companies to such
extent. Royalty- a solid government take from oil output - reaches
50% in developed countries. The rates of tax payments on profit of
oil companies are from 50% to 80%. It is the way to extract the
natural resource rent under the normal conditions of market
management. It is fair to say the West producer is inclined to
strip dividends in the documents, using transfer pricing. But the
tax administrations fend off these tricks. And our legislation not
without the Duma lobbyists' influence, hasn't yet have the
mechanism of impoundment of rent revenue for the treasury.
      Independent experts estimate that extracting oil and
delivering it to export terminals costs Russian companies $6-7 a
barrel. Allowing for the understated transfer prices, the tax
burden of the oil industry would amount to 25% and net profits to
50%. In the USA, Britain, or Norway the state takes 70%. It's a
myth that our resources are inexhaustible. Though Russia ranks
first as far as the natural gas stock is concerned, it ranks
seventh as far as oil stock is concerned, which is inferior to
Saudi Arabia, Iran, Iraq, Kuwait, Venezuela... In BP's latest
statistical survey of the global energy industry, the figures are
overwhelming. Russia's proven oil reserves amount to 9.9 billion
tons - only 6.1% of world resources. According to the Western
experts, the existing reserves of natural gas will be exhausted in
80 years and oil reserves in 21 years.
      How are we using those oil reserves? In line with the
principle of "after us, the flood." The mining tax makes our
companies skim the cream off the richest diggings and undermines
competition and concernment of the producer in oil exhaustion from
seams. The companies are actually free from payments for
hydrocarbons recovery. Geologic exploration obviously falls behind
and threatens to put the oil industry on mean rations.
      It is absurd, taking into consideration incredibly high oil
profits. Where are they?
      Petrodollars are flowing to offshore zones. State officials
overlook that, as well as the barbarous use of reserves. Over the
last 12-13 years, 250,000 oil-wells have been taken out of
production, with 3 billion tons of oil abandoned in their depths.
      Oilers consider that the main obstacle in the way of more
efficient work is the flat tax schedule on mining operations. It
has placed companies in a dilemma: either to act at a sacrifice or
to be restricted by extracting "light oil."
      This is only a half-truth.
      The Auditing Chamber is preparing tools for the new version
of the law on subsoil resources. It proposes equipping oil-wells
with special measuring devices which will begin to inform the
Federal Service of Natural Resources Monitoring of the output
volumes on a real-time basis. According to Auditing Chamber
spokesman Alexander Belyakov, this measure is essential.
      The inspections show that a number of companies have
unjustifiably low operating efficiency at their well sites. For
instance, TNK-BP extracts only half of the possible oil output
volume and without exhausting the well site to the end turns to
the recovering on easier sites.
      Deputy Natural Resources Minister Anatoly Teomkin says that
SamaraNeftegas, a subsidiary of YUKOS, has violated license
agreement terms, failing to pay extraction taxes to the tune of
over 92 million rubles. The subsidiaries of Rosneft break the
terms of subsoil resources management. Everybody knows it, but it
doesn't matter.
      Abroad, our oligarchs are treated harshly. The other day,
Canadian media reported that a court in the Virgin Islands, where
a great many Russian off-shore companies are registered, orderd
Roman Abramovich to reveal his assets to the amount of $1 million.
Analyst Yevgeny Gavrilenko comments: "Most likely, Abramovich's
companies are securely hidden in off-shore zones. De jure, they
may be owned by different people. To conceal one's business is the
main game of Russian oligarchs and Abramovich plays it better than
the others."
      The paradoxical fact that excessively high oil profits can
hamper economic growth inevitably disturbs those who have to
manage the economy. The GDP growth rate is slowing. The increase
in foreign currency reserves, the Stabilization Fund, and the
federal budget's accounts due to favorable export conditions, in
combination with accelerating outflow of private capital, only
makes the situation worse. And Russia's economy remains primarily
reliant on raw materials, even though oil export revenues might
serve as a launching pad for developing high technology and
science-intensive industries.
      Translated by Alexandra Zajtseva

**********

#19
St. Petersburg Times
August 2, 2005
Human Rights Groups: Police Ignore Extremists
By Vladimir Kovalev
Staff Writer

The City Prosecutorâs Office is siding with extremist groups that promote
racial hatred in St. Petersburg and has ignored warnings about their
activities from local anti-fascist organizations, a group of human rights
advocates said Thursday.

The advocates have tried to prevent the publication of a number of
extremist newspapers and books that openly call for violence against
non-Russian ethnic groups but have been met by deaf ears at the
Prosecutorâs Office, the activists said.

ãThe St. Petersburg Prosecutorâs Office is simply covering up Nazi
organizations. The police donât react in a proper way,ä Ruslan Linkov, head
of the St. Petersburg branch of the Democratic Russia party, said at a
briefing held in St. Petersburg on Thursday.

ãIt could happen that soon the authorities will not be met by an ÎOrange
Revolution,â which is what scares them, but a ÎBrownâ one, with a wave of
fascism crushing Russian society,ä Linkov said.

Extremist books are sold openly in the city center, including in Dom Knigi,
located on Nevsky Prospekt, the cityâs main street, Linkov said. ãI went to
the store together with the police, pointed at certain books and they
bought them to conduct an investigation. I havenât heard anything from them
for months,ä he said.

Earlier this year the City Prosecutorâs Office declined to initiate a
criminal case against a number of extremist papers publishing in the city.
At the same time the prosecutorâs office issued an official warning to the
newspaperâs editors recognizing the fact that the papers are spreading
racial hatred.

The weak reaction of the Prosecutorâs Office to extremist literature and
newspapers can be explained by the influence of a pro-extremist wing within
the law enforcement system at both local and federal levels, Linkov said.

One problem stems from prosecutorsâ increasing affiliation with the Russian
Orthodox church, despite the constitutional separation of church and state,
said Yury Shmitd, a St. Petersburg-based lawyer.

ãEarlier in this year the prosecutor general [Vladimir] Ustinov said that
it would have made sense to organize praying rooms in regional prosecutorâs
offices across the country in order to increase the moral level of
employees. What are they going to pray for there? Maybe theyâre going to
atone for their sins,ä Shmidt said at the briefing.

The City Prosecutorâs Office representatives slammed the remarks made by
the human rights advocates.

ãThis is an absolute bucket of rubbish,ä said Yelena Ordynskaya, the
spokeswoman for the City Prosecutorâs office in a telephone interview on
Friday.

ãWhat evidence do they have? Can they find any other arguments besides
this? What is this? Do they name any particular people that these groups
contain? There are only groups of investigators, each responsible for a
particular field of work and no other groups in the City Prosecutorâs
Office,ä she said.

ãAs for a praying room, we donât have one in the St. Petersburg
Prosecutorâs Office,ä Ordynskaya said.

Opposition movements operating in St. Petersburg said the work of the
Prosecutorâs Office is selective with the clear aim of burnishing the
authoritiesâ image rather than prosecute real crimes, representatives of
Yabloko party said at the briefing.

ãJust try to imagine if literature or publications were on sale on each
corner in St. Petersburg with bad words about President Vladimir Putin? How
long would they stay on sale?ä said Boris Vishnevsky, a member of the St.
Petersburg Legislative Assembly.

**********

#20
Rights activists accuse Russian authorities of fabricating terrorism cases
AP
August 3, 2005
MARIA DANILOVA

Leading Russian rights activists have accused authorities of fabricating
criminal cases and falsely prosecuting people on Islamic-extremism charges
in an attempt to show successes in fighting terrorism.

The campaign, launched after September's school hostage seizure, targets
mostly Russian Muslims as well as Uzbeks, Tajiks and Kyrgyz residing in
Russia, Vitaly Ponomaryov, head of the Central Asia program for the rights
group Memorial said Tuesday.

Activists accused Russian agencies of illegally allowing Uzbek security
officers to operate on Russian territory and to detain suspects.

"If one fights against terrorism ... by placing innocent people in custody,
the number of terrorists and extremists will not decrease, and most likely
it will encourage recruitment of additional forces into their ranks,"
Memorial activist Svetlana Gannushkina said.

A spokesman for the Prosecutor General's Office declined to respond to the
accusations, saying a statement would be issued later.

Russia has been hit by a series of terrorist attacks in recent years,
including a simultaneous bombing of two passenger jets, a suicide bombing
outside a Moscow subway station and the hostage seizure at the school in
Beslan.

Gannushkina said Russian and Uzbek authorities had detained 14 people in
the central Russian city of Ivanovo in June on charges of involvement in
the May unrest in the eastern Uzbek city of Andijan.

Uzbek troops violently suppressed an uprising in Andijan on May 13, later
calling it a revolt by Islamic radicals. Since then, Uzbek authorities have
been seeking the extradition of suspects from Russia and Kyrgyzstan.

Gannushkina contended, however, that only one detainee was in Andijan
during the uprising, while the rest were acquaintances or business
partners. One detainee is a Russian citizen, while another one is a Kyrgyz
citizen who traveled to Ivanovo from Turkey to trade textiles, she said.

Citing unnamed officials close to the investigation, Ponomaryov also said
that Uzbekistan issued extradition requests nearly one month after the men
had been detained, meaning they were held in custody unlawfully.

Ponomaryov said a Memorial study conducted in some of Russia's 89 regions
showed at least 23 extremism cases involving some 80 people have been
fabricated since last fall. But he said the real number is estimated to be
much higher.

Yelena Ryabinina, an activist with Civil Assistance, a group advocating
refugees' and migrants' rights, said a man in the Siberian city of
Nizhnevartovsk was sentenced to two years for being a member of Hizb
ut-Tahrir, an Islamic organization outlawed in Russia.

The man was arrested after he sent open letters to Prosecutor General and
Chairman of the Supreme Court saying he believed Hizb ut-Tahrir was a
peaceful organization, she said.

Prosecutors later appealed for a harder sentence and the Supreme Court
ordered a retrial.

Gannushkina warned that such a campaign was highly dangerous for a country,
in which approximately 20 percent of the population describe themselves as
Muslims.

*********

#21
The Times (UK)
August 3, 2005
Kasparov makes opening move in quest for Russian revolution
The chess champion is campaigning to prevent President Putin from standing
for a third term
By Jeremy Page

IF CHESS is mental torture, as Garry Kasparov once said, then Russian
politics has not been much kinder to him since his dramatic debut this year.

In the past five months he has been hit over the head with a chess board,
roughed up by police, pelted with eggs and tomato ketchup, and bombarded
with verbal abuse.

All this after he announced in March that he was retiring from competitive
chess to dedicate himself to the political fight against President Putin.

Mr Kasparov, 42, is not used to being the underdog, having dominated chess
since 1985 when he become the youngest world champion.

Yet, far from being intimidated, he is throwing himself into the toughest Ð
and riskiest Ð contest of his life with all the flair and aggression that
made him the greatest chess player to date.

ãThereâs only one chance for this country Ð if the regime collapses,ä he
told The Times. ãIf the Government doesnât change, then we must change the
Government.ä

Unlike most of Mr Putinâs opponents, he is not talking about running in the
next parliamentary elections in 2007 or standing for president in 2008.

He is travelling around Russia calling openly for a peaceful revolution
like those that rocked Georgia in 2003 and Ukraine last year. The trigger,
he predicts, will be an attempt by the Kremlin to change the constitution
to allow President Putin to serve a third term instead of stepping down in
2008.

ãNext year the country will go through a political crisis which will decide
the future of the country,ä he said. ãWeâre talking about mass protests.ä

Such talk is highly provocative Ð if not seditious Ð when the Kremlin has
spent much of the past five years silencing political opponents.

In May Mikhail Khodorkovsky, the oil tycoon, was jailed for nine years in
what was widely seen as punishment for meddling in politics.

Then Mikhail Kasyanov, a former Prime Minister, became the target of a
corruption probe last month after hinting at running for President in 2008.

So far, the worst Mr Kasparov has suffered is being hit on the head with a
chess board by a youth activist in April and roughed up by police outside
the courthouse where Mr Khodorkovsky was on trial in May. ãI hope that if
something really goes bad, weâll hear more than mumbling from the West,ä Mr
Kasparov said.

In public, Russian officials have responded to his challenge with disdain Ð
dismissing him as a political non-entity who appeals only to the West. Many
political analysts agree, saying most Russians have not heard about his
campaign and would not support him because of his Caucasian and Jewish
roots. He was born in Azerbaijan to an Armenian mother and a Jewish father.

But at the same time, officials are going to extraordinary lengths to
prevent such a respected celebrity from entering the political fray.

That much became clear when Mr Kasparov went to southern Russia in June to
drum up grass-roots support in Dagestan, North Ossetia, Stavropol and
Rostov.

ãUnlike my critics, I go to the Russian regions,ä he said. ãItâs the only
way to learn the situation in my country because the media is under the
Kremlinâs strict control,ä he said.

In Dagestan, local authorities blocked him from meeting refugees from
neighbouring Chechnya and even tried to stop him giving prizes at a
childrenâs chess tournament.

In North Ossetia, a meeting with Beslan residents in a cultural centre was
cancelled after officials hastily arranged a showing of the cartoon
Madagascar there. Then he was hit with eggs covered in tomato ketchup in
Vladikavkaz, the regional capital. Local officials accused him of trying to
exploit last yearâs Beslan school siege, even though the victimsâ mothers
said that they were keen to meet him.

At his next stops, in Stavropol and Rostov, the airports refused to let his
charter plane land. Hotels in Stavropol would not accept him and meetings
in both places had to be held outside after the venues developed
ãtechnicalä problems.

Mr Kasparov says that he believes local authorities were under orders from
Mr Putinâs representative in the region, Dmitry Kozak. ãIf they act in this
way, they are scared of anyone talking with the people,ä Mr Kasparov said.
ãIf people donât like my ideas, fine, but at least let them speak with me.ä

Mr Kasparov dabbled in politics in the 1990s and, early last year, was
voted chairman of Committee 2008: Free Choice, a liberal group dedicated to
ensuring the next presidential election is free and fair.

But his real political awakening came after the Beslan siege, when the
Kremlin announced plans to abolish direct elections for regional governors.

This year he formed his own, more militant, group called the United Civil
Front.

ãItâs extreme because the situation is extreme,ä he said. ãThe Government
is violating the Russian constitution and limiting our rights to influence
the electoral process.ä

MEET THE KING

Born April 13, 1963, in Baku, Azerbaijan

November 1985 Beat Anatoly Karpov to become the youngest world champion at
22

2000 Lost world title to Russian grandmaster Vladimir Kramnik. Retained
world number one ranking until 2005

1996 Beat Deep Blue, IBMâs supercomputer, but lost to its upgraded version
the following year

March 2005 Retired from chess to devote time to Committee 2008: Free
Choice, campaigning against Government of President Putin

THEY SAY

ÎIâm a grandmaster but an awful lot of people are grandmasters these days.
Kasparov and I have the same title, but itâs a different planet.â
Jonathan Rowson, British chess champion, July 2005

ÎThe future of chess lies in the hands of this young man.â
Mikhail Botvinnik, former world champion (when Kasparov was 11)

ÎIf Kasparov won, he would feel like a god afterwards, and if he lost, his
dejection and rage would resist all forms of consolation.â
Fred Waitzkin, American writer, on the 1990 Kasparov-Karpov match

ÎForget the prize money. The fate of humanity is on the line, at least in
Garry Kasparovâs head.â
Maurice Ashley, the only African-American grandmaster, on the Deep
Blue-Kasparov final in 1997

HE SAYS

ÎI have done everything I could in chess and more. Now I plan to use my
intellect and strategic thoughts in Russian politics.â

ÎI believe that the country is moving in the wrong direction, therefore it
is necessary to help Russia, to help Russian citizens, to make the country
comfortable, just and free.â

ÎI devote a certain amount of time to Russian politics, as every decent
person should do who opposes the dictator Vladimir Putin.â

March 2005

*********

#22
Ministry Source: 40 Percent of Russian Defense Industry Enterprises Losing
Money

MOSCOW. Aug 2 (Interfax-AVN) - Up to 40 percent of defense industry
enterprises are working at a loss, a source in the Ministry of Industry and
Energy told Interfax-Military News Agency on Tuesday.

"Even though the defense industry's general 2004 balance was positive,
profits retained a tendency towards declining from 2002 to 2004," the
source stressed.

The number of detrimental enterprises in the defense industry amounted to
40 percent last year, he said. More than 10 of them are on the verge of
bankruptcy or already subject to bankruptcy procedures. "The situation is
especially tense in the ammunition branch, where more than half of the
enterprises are detrimental," he noted.

The source said that bankruptcy procedures were applied to 134 defense
industry organizations, including 99 enterprises which are on the list of
strategic organizations. Five enterprises had to be disbanded.

The general list of Russian defense industry enterprises consists of 1,265
items, the source concluded.

*********

#23
Wall Street Journal
August 3, 2005
U.S. Risks Russia's Ire In Drive to End Georgia Feud
By GUY CHAZAN
Staff Reporter of THE WALL STREET JOURNAL

TBILISI, Georgia -- Mikhail Saakashvili, Georgia's pro-Western president,
said he is counting on a new U.S. diplomatic initiative to help him
reassert control of two breakaway regions that for more than a decade have
resisted Georgian rule.

But the higher U.S. profile in the Caucasus could fuel fresh tensions with
Moscow, which long has backed the separatist governments and steadfastly
opposed any outside intervention to restore Georgian authority there.

In an interview, Mr. Saakashvili described Washington's new policy of
engagement as a "turning point." "We have a political understanding that
something should be done and that there can be some kind of U.S. role," he
said. But he stressed any American moves had to be "together with the
Russians."

Georgia long has sought Western help to regain Abkhazia and South Ossetia,
regions harboring age-old ethnic and territorial grievances with Tbilisi
that fought and won secessionist wars against its forces in the early 1990s.

U.S. officials confirm the White House intends to play a more active role
in ending the conflicts. That demonstrates Washington's growing commitment
to Georgia, a key focus of President Bush's democratization agenda since a
popular revolution there nearly two years brought Mr. Saakashvili to power.
During a visit to Tbilisi in May, Mr. Bush told cheering crowds that
Georgia's territorial integrity must be respected.

The U.S. has criticized Moscow for backing the separatists, saying they
fuel instability. Russia supports the regions economically, has sought to
influence elections, and has issued Russian passports and pensions to
residents there. Meanwhile, the Ossetian government is largely made up of
Russian citizens -- who constitute a tiny minority of its population --
according to U.S. officials.

But the decision to get more involved in conflict resolution here comes as
Washington and Moscow compete openly for influence in other parts of the
former Soviet Union. Last week, Uzbekistan evicted the U.S. from a military
base that had been crucial to American operations in Afghanistan. The move,
which gave a big boost to Russia, followed Washington's criticism of the
May shooting deaths of hundreds of Uzbek protesters in the town of Andijan.

Mr. Saakashvili has made reunification a key priority, but so far his
record has been mixed. Last year he brought another insubordinate region,
Ajara, back into the fold without bloodshed. Then, last summer, skirmishes
broke out in South Ossetia after Georgia sent its army into the region. It
later withdrew under international pressure, but has sealed its borders
with South Ossetia to curtail smuggling.

Meanwhile, tensions have continued to rise, both with Russia and the
separatist authorities. Last month, Mr. Saakashvili accused "Russian
citizens" of organizing a February bomb attack in the Georgian town of Gori
that killed three policemen. Russian officials dismiss the allegations.

The interview with Mr. Saakashvili took place after his talks in Tbilisi
with Matt Bryza, U.S. deputy assistant secretary of state, who will lead
U.S. mediation efforts on Abkhazia and South Ossetia. The Georgians
recently put forward a detailed peace plan for South Ossetia, though Mr.
Saakashvili admitted there is little chance of any immediate progress on
Abkhazia.

A senior Bush administration official said any U.S. mediation would closely
involve the Russians. "We want to make sure we're not seen as muscling in
where we're not necessarily wanted," he said.

Russia has said any resolution must come through peaceful means, and the
Kremlin often has worked behind the scenes to achieve peace. It helped
broker the deal with Ajara, and in May agreed to withdraw from two
Soviet-era bases on Georgian territory by 2008. But officials in Moscow
said a greater U.S. role in the region could antagonize Russia. "The U.S.
is inclined to take on the view foisted on them by Georgia. It's not
neutral in these conflicts," said Konstantin Zatulin, a Russian lawmaker
and foreign-policy expert.

*********

#24
RADIO INTERVIEW WITH VLADIMIR SOKOLIN, HEAD OF THE FEDERAL SERVICE FOR
STATE STATISTICS, MAYAK RADIO, 15:15, JULY 29, 2005
Source: www.fednews.ru

Anchor: This is Panorama. I am Vladimir Averin. Our guest is the head of
the Federal Service for State Statistics, Vladimir Sokolin. Good day, and
welcome.

Sokolin: Good day.

Anchor: When the head of a federal agency comes to our studio, it becomes
clear that we should discuss issues that affect the whole country. In our
case, the interest and the occasion have coincided: an agricultural census.
By the occasion I mean that you are preparing the census and have even
conducted a test census in some regions. And the interest means that urban
citizens do not understand why this is necessary. And we also know since
Ilf and Petrov that statistics knows everything. Doesn't the existing
statistical practice that we used to have in the former Soviet Union and
that we have now in Russia is not enough to understand what is happening in
agriculture?

Sokolin: When you said "urban citizens" I understand you meant the people
who live in Moscow and St. Petersburg because if we take such cities as
Kazan, Ryazan or Kaluga, a large number of people who live in such
relatively small regional capitals have their own subsidiary holdings, they
keep cattle and large vegetable gardens. I must say that people like that
who have individual subsidiary holdings, not farmers, produce more than 50
percent of all agricultural products in the country.

Anchor: And they will be counted, too.

Sokolin: We are not going to count the population. The purpose of the
agricultural census is to study the potential of Russia's agricultural
sector. Over the past 20-25 years, very big changes have occurred in the
national agricultural sector, and in order to develop a correct agrarian
policy and understand who needs support and how much, we need objective and
correct information about the condition of our agrarian sector.

Unfortunately, when you speak about Soviet statistics, indeed, we conducted
such censuses on a regular basis, but the last census that covered
individual subsidiary holdings took place in 1985. Twenty years have passed
since then. The country has changed.

Anchor: We all know what kind of time it was.

Sokolin: That doesn't need to be discussed. There is a big difference
between the Soviet agricultural policy and the agricultural policy we are
implementing now. And I must say that the situation in the agrarian sector
is quite controversial. As a result of the changes that occurred after the
disintegration of the Soviet Union, Russia has produced enough grain to
meet its own needs. We haven't had a grain problem. Those who remember
Soviet times must remember that even in the middle of the 1980s the
government classified information about our grain crop because we had to
buy large amounts of grain abroad. Today Russia exports grain.

Anchor: And yet there is a lot of talk about agriculture being on the verge
of collapse.

Sokolin: I want to say that agriculture is not a single plant- bed where
cucumbers grow. If we have a certain situation in plant breeding, we must
understand how stable this situation is because we do not use fertilizers
anymore. On the one hand, it's good because we can grow more or less
ecologically safe vegetables. But on the other hand, we must understand how
long our soil can produce and whether we are not heading for a dramatic
decline.

The situation in animal husbandry is unfortunately diametrically opposite.
The decline there is close to zero, i.e. the decline is coming to an end.
But unfortunately we do not see an upsurge in cattle-breeding.

Since our statistical base is in extremely bad shape, we need to conduct
this census.

Anchor: You are talking about the situation in plant- and cattle-breeding
and in agriculture in general, which means that you have certain
statistics. So, why do you need a new study?

Sokolin: I can tell you why. The problem is that the statistical base that
we have at the national level gives us a certain picture with a margin of
error of 2 to 3 percent. But in order to elaborate a sound and
purpose-oriented agrarian policy, knowing the overall picture is not
enough, it is also necessary to understand what is to be done, where and
how. And I must say that we cannot get a more detailed picture out of these
statistics today. We cannot give the Agriculture Ministry the information
that would allow it to work out a long-term agrarian policy.

Anchor: When the monetization law was adopted, it turned out that we did
not have a register of benefit recipients in regions, and many mistakes and
faults and problems occurred because it was not clear how much money needed
to be spent. Hence overspending.

Sokolin: This is a good example. On the whole, there are 45 million or 49
million benefit recipients in the country, and no one questioned that
figure. But no one knew how many people were entitled to which benefits. In
other words the more detailed information we needed, the more inaccuracies
occurred, and this resulted in overspending.

The implementation of the monetization law will give us data on how many
benefit recipients we have and their category. But we can't wait for a
similar law to be passed for agriculture.

Anchor: It is always better to know first and then spend.

Sokolin: Especially since agriculture is very important and serious sector
for the country. And we cannot wait anymore. We must do this work now.

Anchor: The mechanism is what is interesting. For example, when the
nationwide census was conducted, every thing was more or less clear: a
person comes and asks me questions. And I answer these questions. Then this
information is processed. But when we are talking about agriculture -- I
understand that a census taker can come to a household, and the owners
certainly have some documents as to how big the plot of land is, they will
go to farmers and collective farms where they have survived. For example,
we know that a lot of land is idle even though it wasn't used before. So,
how are you going to account for them? And then you said that we do not
introduce fertilizers any more. So, a student or a pensioner won't be able
to decide anything with such a questionnaire. It takes a specialist to do
that. What are the criteria for doing this?

Sokolin: These are very interesting questions. I must say that an
agricultural census is a much more complex task because of the factors you
mentioned. Unlike the nationwide census for which we developed the
methodology and questions ourselves with the help of scientists, in this
case our partner is the Ministry of Agriculture with all of its structures,
veterinary doctors and so on, and they are helping us create tools that
will be clear even for pensioners and students.

The census-takers, even there will be fewer of them than in the nationwide
census, will go from door to door in cities, on the outskirts and in the
rural areas. This is why this work will take a month, not a week as in the
case of a nationwide census because they will have to talk to people and
fill out all forms properly. You are right, this is very complex work, and
we will use the services of agriculture specialists who work in the
countryside.

Anchor: After the nationwide census many governors complained that their
population turned out to be smaller, and therefore they were entitled to
smaller subsidies and so on. You are going to cooperate with the Ministry
of Agriculture that has a vital interest in this census, and hypothetically
speaking, this agricultural census may be used to serve the Ministry's
needs.

Sokolin: I must say that we have reached a complete understanding with the
Ministry of Agriculture, and we are not going to embellish the picture.

Anchor: But you can draw a blacker picture so that the Ministry could get
more money.

Sokolin: The purpose of the census is to give us an actual picture, a
correct and objective picture. When we conducted a test census and reported
its results to the Agriculture Ministry -- we selected four regions, and
chose two districts in each region. And I must say that only several
indicators in these eight districts differed by 10 and more percent. But
when we took each concrete district and e ach concrete indicator separately
the difference was two or three times and the situation in different
district and regions turned out to be diametrically opposite.

We can't develop an agrarian policy if we do not know where we tread,
whether it's a quagmire or a highway. I think Vasily Gordeyev has built a
good, a very good team and it helped us with the census. So, this is a
serious customer that has an interest in this. By the way, two days ago we
began the first all-Russian meeting with agrarian specialists, that
involves both statisticians and agriculture specialists. And I heard two
very interesting things from Gordeyev and Gennady Kulik. The first one if
that Russia has 10 percent of plough land.

Anchor: We've got a telephone call.

Q: Hello, I am Alexander Vladimirovich from Voronezh. This census is under
way in our region, too. If a farmer works well, authorities immediately
burden him with taxes. Kulakov is our governor. Now imagine, if you take
the census, people will simply abandon their land.

Anchor: Thank you for the question. Apparently this topic is in everybody's
mind. The first question I asked Vladimir Sokolin before we went on air was
that everybody remembers the 1962 census when all cows, goats and hens were
counted in every household and taxes were imposed immediately. So, this
question from Voronezh is quite logical because people fear that he will
come and count and they will then have to pay such taxes that it will be
easier for them to slay their cattle and abandon their land.

Sokolin: We are aware of such concerns. We will use all mass media,
television, ratio and the press during the year while we prepare the census
to explain to people that unlike all the previous censuses this one pursues
no fiscal purposes. Absolutely none. The purpose is that the state wants to
understand what kind of agricultural capacities it has, who has land and
cattle and so on, in order to work out an effective agrarian policy. This
is the main purpose of the agricultural census. And I would like to use
this opportunity to assure everybody once again that the same concerns were
expressed before the nationwide census. And it was said that the census was
for statistical purposes only. And we are saying this again now.

Just a week ago the President of Russia signed the Agricultural Census Law,
which was adopted by the Federal Assembly. When it is published, and we
will certainly promote its publication, all people will be able to read
about the purposes of the agricultural census. No fiscal purposes are
mentioned there. It states only statistical purposes.

Anchor: Which will come first? Will the law be published first and then the
census will begin?

Sokolin: That's right.

Anchor: What is the timeframe?

Sokolin: The census will take place in a year from now. So, we have a year
to prepare.

Anchor: Here is a question from Svetlana: "Will cats and dogs be counted
during the census?"

Sokolin: They certainly won't.

Anchor: What about rabbits, hens and turkeys?

Sokolin: The census will take place in July of next year. And it will focus
mainly on land and the crops sown on this land. As for animals, we will be
interested in cattle, rabbits and fowl.

Q: I often travel around the Moscow region and Russia in general and see
how much plough land stands idle or has grown with weeds. I think it's not
a secret. What will happen to this land after --

Anchor: Let us draw the line between jurisdictions. The purpose is to
account for what we have and where we have it. The decision what to do
about it will have to be made by others.

Sokolin: This is outside our jurisdiction. But I would like to answer the
question that we discussed two days ago. I said that Russia has 10 percent
of the world's plough land, but our population is 2 percent of the world's
population and is shrinking. And another thing. We will visit about 24
million households during the agricultural census because 24 million
households have more or less big plots of land and produce 50 percent of
all agricultural products in the country. In the US, all agricultural
products are produced by two million farmers. Do you see the difference?
And so the question is, what should we do with this weed-grown land? And
who should do it? Will we preserve the existing system or will we need to
work out a new policy to encourage farmers and so on? This is a very
serious question, and I am not prepared to answer it now.

Anchor: But this raises a series of questions. Russia is about to join the
World Trade Organization. And one of the questions we have received to our
pager is whether the agricultural census is in any way connected with our
accession to the WTO?

Sokolin: Indeed, there is a certain political aspect to it because most
civilized countries conduct agricultural censuses. This is one of the
requirements put worth by FAO, the Food and Agricultural Organization of
the United Nations. When we signed the first agreement with the EU many
years ago in Corfu, it had an article requiring us to harmonize our
statistics with EU statistics.

And one of the articles dealt with agricultural censuses because this
information, irrespective of the country, must be available to everybody to
create statistical transparency in order to understand what is happening in
agriculture. We promised to conduct an agricultural census several times,
but never did. And our partners began to doubt if we were not doing it on
purpose in order to avoid transparency on these matters.

Actually, this is not the main requirement for accession to the WTO, but
just one of them. And it requires us to conduct such censuses on a regular
basis. By the way, such a big country as China also had to conduct an
agricultural census when it was joining the WTO.

Anchor: They can also use more census takers.

Sokolin: Do you know how many census takers did they use? Seven and a half
million.

Anchor: And how many can you use?

Sokolin: We will have about 200,000 to 250,000, but they had seven million
census takers who needed two months to complete the work. And they did it.
By the way, President Putin said in one of his first addresses that the
country should take inventories on a regular basis. This is a normal
practice for all countries that regularly conduct economic, population and
agricultural censuses. It's an established practice. We are only beginning
to do it. We conducted a population census in 2002. Now we are going to
conduct an agricultural census. We also plan to conduct an economic census.
However, our people are not yet ready to accept such regularity and need to
be educated.

Anchor: I think we have to answer all the questions we have received.
Unfortunately the list is so long that we won't have time. And I am being
told that we have also received very many telephone calls, which we won't
be able to answer today. Maybe we will have to meet again and answer these
questions.

Sokolin: We can do it.

Anchor: We were talking with the head of the Federal Service for State
Statistics, Vladimir Sokolin. Thank you.

*******

#25
RADIO INTERVIEW WITH VLADIMIR MAU, RECTOR OF THE RF GOVERNMENT ACADEMY OF
NATIONAL ECONOMY ON CURRENT ECONOMIC TRENDS IN RUSSIA, RADIO OF RUSSIA,
10:30, JULY 28, 2005
Source: www.fednews.ru

Anchor: My friends, I welcome everyone who is now listening to Radio
Russia. My name is Vitaly Ushkanov and the program is called Persona Grata.
Treading is seldom useful. For instance, if you have a good crop of vine
and suddenly decide to make wine from grapes by the old method used by
grandfathers, you may tread on it. But otherwise doctors keep telling us
that movement is life. And there are examples galore to show that lack of
movement may threaten not only individuals, but entire countries even if
they happen to have a rich history. Our guest today is Vladimir Mau, a
prominent economist and rector of the Russian Government's Academy of
National Economy. Welcome, Vladimir Alexandrovich.

Mau: Good day.

Anchor: Only recently we were all in a very optimistic mood about Russia.
It seemed that the country was about to hit the road of economic
prosperity. But now there is a growing feeling that we are marking time or
anyway are moving forward very slowly. Are there grounds for feeling that
way or is it all to do with emotions?

Mau: This is largely a psychological question, a question to social
psychologist rather than to an economist. For instance, a foreigner who has
not been in Russia for several years sees that it is a totally different
country, and that the change has by no means been for the worse.

Those who live here and observe the child growing, as they say, on a daily
basis, naturally see not only positive trends, but some serious problems,
especially if we compare our development over the past several years. If
you compare current economic rate of growth with the 1990s, naturally, we
are growing at a pretty decent pace. At the time the economy was
contracting, but the growth rate today is a bit lower than several years
ago. And it does give cause for some concern.

I would say that it is dangerous to read too much into figures. Yes, of
course, a slowdown of economic growth may reflect ineffective economic
policy, the problems we are not tackling as skillfully as we would like to.
But the other side of the problem is that what is important is not the rate
of growth for its own sake but movement towards modernization of Russia,
greater effectiveness and diversification of the structure of the Russian
economy. That is far more important than figures. I think it is happening
too slowly and this is what causes greater concern than the rate of
economic growth in itself.

Our dossier: Vladimir Alexandrovich Mau, rector of the Academy of National
Economy under the Government of the Russian Federation. Born in Moscow on
December 29, 1959. Graduated from the Plekhanov Institute of National
Economy, Moscow. Worked at the Economics Institute, the Institute of
Economic Policy and the Institute of Economies in Transition. He was
adviser to the prime minister in the government of Yegor Gaidar. In 1997 he
headed up the government's working center for economic reform.

In 2002 he was elected rector of the Academy of National Economy under the
Russian government. He is a Doctor of Economic Sciences and a Professor. He
has more than 400 research papers to his name as well as numerous
publications in this country and abroad. He taught at Moscow State
University, at Oxford and Stanford Universities. Vladimir Mau's research
interests include the history of economic thought, political problems of
the economy and the history of Russian reforms. He has the title of Merited
Economist of Russia.

Mau: You know, there is a joke and at the risk of offending the
representatives of the fair sex -- not that there is anything indecent
about it. The joke goes like this: A little pamphlet entitled Logic lies on
a table in a library. And next to it is a tome entitled "Feminine Logic,
Part I." If you speak about the logic of modernization, the logic of
political and economic development, I think it would take more than one or
two such tomes.

Modernization is a topic you can discuss endlessly and, as Lenin put it, it
is as inexhaustible as the atom. True, he was speaking about matter, not
about modernization.

Naturally, it is a very complicated process. It is much more complicated
than what we experienced at the macroeconomic level in the 1990s --
macroeconomic stabilization, transition from crisis to growth. In the early
1990s Yegor Gaidar used to say that the tasks facing us, macroeconomic
stabilization, for all that they are painful, are in general tasks for
fools, they are intellectually simple. He meant that many countries had
managed to solve these tasks and how they solve them is known. They are
painful politically and socially, they call for determination, political
responsibility, a readiness to eschew populism in order to avoid a high
rate of inflation, replace decline with growth. But I repeat, tens of
countries accomplished it in the 20th century, and many did it successfully.

The tasks that face us today are of a much more individual character. To
paraphrase Tolstoy, all the countries come to their misfortune or economic
catastrophe in approximately the same way, but they reach economic
prosperity in their own individual ways and nearly always an attempt to
copy the experience of one successful country in another leads, if not to
catastrophe, then to the marking of time, as you have put it, simply
because there are too many nuances. In that sense, by the way, economics is
akin to medicine. It is not for nothing that many early economists were
doctors. You see, all organisms are approximately similar, but a good
doctor always treats the patient and not the specific disease, according to
textbooks. As a doctor friend of mine said he who tries to treat himself by
the textbook risks dying from a misprint. This is quite applicable to the
solution of modernization problems.

Anchor: Our modernization has its specific features. Can you think of
successful examples of countries' modernizing?

Mau: Yes, there are successful examples, but they are outnumbered by
unsuccessful ones. One has to be aware of it. For example, a number of
European countries in the 19th century. The US started from a very backward
base in agriculture and it solved these tasks in the 19th century. Germany
and Japan started at the time when they were in deep crisis accompanied by
painful humiliation of these nations. And in the second half of the 19th
century when the West simply forced Japan to open up and through military
occupation after the Second World War. As one scholar said, one really had
to humiliate a nation in order to make it develop so swiftly. But of
course, that is a very radical recipe.

Of the recent examples Ireland, Estonia and apparently Spain, and
naturally, Finland are achieving very interesting results. Finland
conducted and other countries are conducting very interesting, profound
structural reforms, moving very quickly from the industrial to the
post-industrial system, to a high-tech economy.

China is often held up as an example of modernization, but this is not
quite a relevant example. In terms of its economy and social structure and
the tasks that it is tackling, China is reminiscent of Russia in the late
1920s. China is a country which is solving a modernization task, of
transition from agrarian production to an industrial economy. It is a very
interesting experience, but I repeat, we have already gone through that
stage. We do not face the task of industrialization, like China does now.

Anchor: You have mentioned humiliation. Deputy head of the Kremlin staff,
Vladimir Surkov, said in an interview with the German magazine Der Spiegel,
and I quote: "Technical and intellectual solutions should be sought in the
West. The idea that we are inventing something entirely new is absurd. We
should become apprentices." It is not humiliating to become an apprentice,
but it seems to me that not all the representatives of our elite today are
ready to forego their ambitions. Do you agree?

Mau: Yes and no. Of course, the approach you have quoted is more
understandable and attractive to me than statements such as "we shouldn't
ape the West and learning foreign languages is bad for you," I have even
heard such statements. Because learning a foreign language leads to no good
and so on.

Yes, undoubtedly, developed democracies, the market Western democracies
have a lot of useful things to offer. But one has to bear in mind that
foreign experience is more useful at the current stage for knowing what
should not be done rather than what should be done. One can say very
clearly what steps, above all, populist macroeconomic steps and in
politics, renunciation of democracy -- what steps may lead to crisis or a
catastrophe. But refraining from these steps is a necessary but not a
sufficient condition for economic success.

Some fine-tuning is required which is different for every individual
country. With your permission I will make two digressions with examples.
Going back to the last 15 years in our history we see three stages in our
development, our modernization. First, the stage of macroeconomic and
political stabilization, and there Western experience was highly relevant.
I repeat macroeconomic stabilization is conducted more or less similarly
everywhere, with some technical nuances. That was in the 1990s.

The first three years of the 21st century were the stage that saw the
creation of modern economic institutions, modern economic legislation, the
tax, banking legislation, the Civil Code and the Land Code, and so on.
Foreign experience also comes in very handy here, although it is not as
simple as at the stage of stabilization. Experience of civil and tax
legislation varies, there is Anglo-Saxon and Continental law. It was clear
that it was necessary to study Western models, going back to what Vladislav
Surkov said. But it was necessary to adapt them better to the traditions
and specific features of Russian development.

Now that these questions have been solved, we have more or less fair
economic legislation, but there is no happiness again. And it is true.
Because it transpired that there is a number of very serious problems that
impede economic growth and that cannot be solved with the help of this
experience.

There are two groups of problems. One is the effectiveness of our political
institute. The fundamental problem of our economy lies not in the economic
field but in the effectiveness of what is called the protection of people,
the protection of property, the enforcement of contracts and legislation,
the judicial and law enforcement system, and the military system. Their
efficiency is much more important for economy than what is written in the
law. If macroeconomic stabilization can be achieved without efficient
courts and police, the Civil Code, bankruptcy legislation, tax legislation
and all the rest of it cannot be effective without an efficient law
enforcement system and contract enforcement. And this cannot be done using
cliches. No one can give a recipe of how to eradicate corruption. Many
countries have had to deal with this problem, some with more success,
others with less success, but it is always an intimate process. Sometimes
they resorted to executions, sometimes to persuasion. By the way experience
shows that executions do not help. So every country has to find its own
solution.

The other group of problems is connected with human development. If the
condition of political and law enforcement institutes is a brake that needs
to be removed, the engine or the fuel that has to propelled the country
forward from industrial to post-industrial economy is people. The
successful experiments of the last 50 years were based on intensive
investment in human resources not in industry or notorious priorities,
industrial or some other, but in people. People who have invested heavily
in the state can decide themselves what is more important for their
country. As a rule their decision is always correct. First of all these are
education and healthcare. Even I have a doctoral degree I will say that
education and healthcare is much more important than investment in science
because it is first of all man who thinks in science and only then comes
science proper.

The problems of healthcare and education can be borrowed from other, even
though effective, Western models than, say, judicial reform. Russia, just
like the West, has approached a serious social crisis. GDP in Russia is
smaller. There is less money, and the crisis in Russia is more obvious
because the country does not have sufficient resources to solve education
and health problems that exist everywhere, including in the majority of
Western countries. So why is that? The reason is that the existing social
sphere originated in Europe, especially in Germany at the end of the 19th
and at the beginning of the 20th centuries. When a modern social welfare
state was being created at that time, it was being created in conditions
when the majority of people lived in the countryside and did not really use
social support, when the population grew rapidly, the number of young
people exceeded the number of the elderly, thus making it possible to take
money from the young and redistribute it for the support of the elderly.

Now the developed world, not only Russia, is on the verge of demographic
crisis: the indigenous population is aging, which increases the burden on
young people immensely. As a result, the tax burden on young people
increases, forcing them to flee, just as they flee Scandinavia because
Scandinavia is not ready to redistribute such a huge amount of resources in
favor of those who need them. Or the system is beginning to break down, as
it happens in Germany and Saxon countries which have more money and can
make the crisis less visible. But serious economists and philosophers say
that this is the last such decade.

This is why we cannot copy this situation from the West. If we find
effective modern mechanisms for post-industrial education and health
organizations, this will give us a huge comparative advantage, a source of
additional dynamism that the most developed countries don't have. We are
the trailblazers. Very few people have realized that. It's not joyful news
because it is tremendous responsibility and big risks. But at the same time
there are huge opportunities if we deal with these questions seriously and
make a leap forward.

Anchor: I understand that by modernization you mean not just individual
problems like the renovation of fixed assets in industry or education
reform, but a comprehensive approach toward problems that are facing the
country.

Mau: You are absolutely right. Speaking about the problems and complexities
in the history of Russian modernization that is 300 years old and dates
back to Peter the Great, the problem has always lain in the lack of
comprehensiveness in Russian modernization. We always started with the
military, where we were more or less successful. And we modernize the
economy through the military sphere. Sometimes we succeeded sometimes not,
but even when we did succeed result was one-sided. Then there was hope that
we would eventually get to the political sphere but we never did. As a
result we have backward political institutes with a more or less modern
economy and a very modern army.

Anchor: And there is also culture, which is financed by the leftover
principle.

Mau: It depends. The 300-yeara-old experience shows that reform by the
Chinese model -- economy and the army at first and then political
institutes -- is extremely ineffective and fraught with serious crises, not
only the collapse of the Soviet Union but also a crisis like the one that
happened in the second half of the 19th century. Alexander II tried to
carry out a more or less comprehensive reform, but it too focused on the
economy and the judiciary and only partly touched the political sphere. He
did not have time to begin serious political and constitutional reforms.

It is rumored that on the day of the assassination he planned to sign a
manifesto on limited constitutional rights. It may be true or it may be
not, but they did not do it. It would be very dangerous to speak about
using the Chinese experience or the experience of those who think about the
problems of our country not in terms of three or five years but in a much
longer term. China provides a very relative experience. It is rumored that
Chou En-lai, a well known premier of the Chinese government, was asked on
the occasion of the 150th anniversary of the French Revolution what its
results and role were. And he said that too little time had passed to make
final conclusions.

I would say that we will be able to judge the success of Chinese reforms
only after they have carried out successful political modernization.
Economic modernization alone only creates more political tension. Of course
it generates bigger economic growth in two or three decades, but I am
afraid that this will only raise the price that eventually will have to be
paid.

Anchor: So the goals are clear, the objectives are determined, so let us
get down to work. What are the big risks and dangers that will confront
Russia on this road?

Mao: I will begin with what I always say, even though it's not so obvious.
First of all we must be wary of a cornucopia of resources. We must
understand that there are no countries that could make a big socioeconomic
breakthrough with the abundance of resources. I don't mean land or
diversified resources like in the US in the 19th century, but mainly fuel
and energy resources and mineral resources. There are no such countries.

Norway's experience is not an example. I want to remind those who don't
remember this that Norway obtained these resources while being a very
developed country, with very developed political institutes and a
transparent decision-making system. But even in Norway economic and social
conditions have been deteriorating since the discovery of oil and gas
fields. Because when you have a lot of cheap money, you don't bother taking
care about economic institutes of the quality of the budget policy.

All other examples are unfortunately negative. There is a classical example
of Southeast Asia and Africa. Both regions were poor after WWII and at
pretty much the same level of development, and many world luminaries
claimed that Africa had a great future because it had oil, diamonds and the
entire Periodic Table. The fifty years after the war -- even more -- have
shown that everything is the other way around. Not because the Asian
dictators were smarter than the African bandits. Both were dictators and
bandits, but the African dictators could steal from the costs, as they say,
and replenish their accounts in Switzerland and elsewhere with their
natural resources, while the Asian ones had only one resource, the
productivity of their people's labor. In that sense, the problem of the
accounts of, say, former Asian dictators may be as important as that of the
accounts of African dictators, but at least these accounts stemmed from
economic growth and not economic stagnation.

Natural resources is a very serious risk, a very serious danger because an
abundance of cheap money unconnected with the growth of labor productivity
is objectively a disincentive to economic growth because of the notorious
Dutch disease. In other words, the flow of cheap money into the country
strengthens the national currency more than necessary as a result of which
domestically produced goods become less competitive. That undermines the
quality of economic policy. If you have a lot of money, what's the point --

Anchor: Every person knows that from his or her own experience.

Mau: What's the point of having experts? We can pay up if the need arises.

Anchor: That is a great risk, but is it the only risk?

Mau: It is a very serious risk which is peculiar to our country.

There is, of course, the problem of the quantitative dimension of economic
growth. For all the importance of doubling the GDP as the overall indicator
we should understand that it is an indicator that should reflect the
results and not be managed on a day-to-day basis. It is possible to
increase the growth rate. I mean not only on paper. And I am not talking
about cooking of statistical books, which is also a possibility. It is
realistic to increase the growth rate -- in the future, through a severe
economic crisis. For example, to repeat the path of the Soviet Union. It is
all too easy to increase state investments, especially in the fuel and
energy sector, to muster a high rate of growth in the coming years. But the
result will be still greater dependence on world prices and the danger of a
serious crisis. We have been there before, in the 1970s- early 1980s. That
is also a serious problem that demands attention. The non-comprehensive
nature of modernization which we have mentioned, the real complexities of
the development of the human capital, reform of the social sphere -- all
these are very serious problems involving risks. But I repeat that, to
inject an optimistic note, these are the problems of a growing economy, not
the problems of a declining economy.

Anchor: Let us end on that cheerful note. I have three more short
questions. What trait of the Russian character will help us on this road of
modernization?

Mau: Our ability to ignore laws and our inclination to creativity. The
industrial world is a world of Germany or Japan, it's a world of people who
strictly abide by laws and instructions issued by the conveyor. The
post-industrial world is a world of people who can break the laws, not
criminal of course, it's a world of big risks because the breaking of laws
can either bring benefits or cause catastrophes. But we have entered a
world that is much less stable than the world as we knew it in the 20th
century. It's a world of risks.

Anchor: And which trait can be an obstacle on this road?

Mau: Our propensity for neglecting laws. It is always very important to
differentiate between the laws that must be obeyed and the laws that must
be broken.

Anchor: And the last traditional questions. Where are you going to spend
your vacation this summer or where have you already spent it?

Mau: As always I hope to vacate in Russia, north of Moscow, in Kizhi and
Valaam.

Anchor: We were talking with Vladimir Mau, Doctor of Economics and the
Rector of the Russian Government Academy of the National Economy. Thank you
finding time and coming here for this interview.

Mau: Thank you for the invitation.

********

#26
Date: Tue, 2 Aug 2005
From: Lynn Berry <berry@imedia.ru>
Subject: The Moscow Times is looking for an opinion page editor

The Moscow Times is looking for an opinion page editor. This editor is
responsible for:
1) working with the paper's columnists, contributors and cartoonist;
2) soliciting comment pieces on issues in the news;
3) translating some opinion pieces from Russian into English;
4) producing the daily pages.

The job requires an in-depth knowledge of current Russian political and
economic issues. Journalism experience is desirable.

Please send cover letter and CV to Editor Lynn Berry at berry@imedia.ru or
by fax: (7-095) 937-3393.

Lynn Berry
Editor
The Moscow Times
Tel. (7-095) 937-3399
Fax (7-095) 937-3393/94

********